rpt-GMTP-2015-06-Peek

1 June 2015 Edition Restricted & Confidential Copyright 2015 Gordon T. Long All Rights Reserved [email protected]

WAR ON CASH Is the War on Cash Just an Extension of the War on Gold?

GMTP DATA FILE INDEX

GLOBAL MACRO TIPPING POINTS - JUNE 2015

5/26/2015


WAR ON CASH Is the War on Cash Just an Extension of the War on Gold?

GLOBAL MACRO TIPPING POINTS - JUNE 2015

TIPPING POINTS .................................................................................................................................... 30

GLOBAL MACRO: RISK ASSESSMENT .................................................................................................................................. 30 POSITIONAL FRAMEWORK: "WE ARE HERE!".................................................................................................................................................... 30 LIQUIDITY is Neither WEALTH nor COLLATERAL ................................................................................................................................................ 31

Our Assessment ................................................................................................................................................................................................ 31 James Rickards Global Risk Assessment ........................................................................................................................................................ 44

MACRO MONITORING INSTITUTIONS ................................................................................................................................................................. 92 LATEST FROM THE MONITORS ..................................................................................................................................................................... 92

RESEARCH OF NOTE .................................................................................................................................................................................. 96 NEW-MONITORS - Lagarde warns of lopsided global growth ................................................................................................................ 96 NEW-MONITORS - OECD Cuts Global Growth Projections Again .......................................................................................................... 97 NEW-MONITORS World Bank Global Growth Outlook ....................................................................................................................... 98 MONITORS - World Bank warns 100M Unemployed, 447M Working Poor, 600M Required for Population Growth Alone ................. 99 MONITORS - World Bank Says 300M Young People neither Working nor Studying ............................................................................. 100 MONITORS - IMF warns of new threats to global economy due to excessive risk taking ...................................................................... 101

BIS ................................................................................................................................................................................................................... 103 NEW-BIS - BIS Slams The Fed: The Solution To Bubbles Is Not More Bubbles ....................................................................................... 103 NEW-BIS - Former BIS Chief Economist: "The System Is Dangerously Unanchored................................................................................ 103 NEW-BIS - Even the BIS Is Shocked At How Broken Markets Have Become ........................................................................................... 106 NEW-BIS - Perhaps The BIS Can Share Its Next "Debt Trap" Warnings With Its Own Board Of Directors First ...................................... 109 NEW-BIS - The Next Time The BIS Wants To Warn About Monetary Kool-Aid, Bubbles, Lack Of Liquidity Or Complacency ................ 112 NEW-BIS - "Low Volatility Everywhere" - BIS Sounds Alarm Alert On Pervasive Complacency Masking Systemic Shocks .................... 113 BIS - BIS warns on 'violent' reversal of global markets ............................................................................................................................... 118

WEF WORLD ECONOMIC FORUM ............................................................................................................................................................ 122 CHARTS OF NOTE ..................................................................................................................................................................................... 122

NEW-WEF Global Business Risks ........................................................................................................................................................ 124 NEW-WEF The 2015 Global Risk Landscape ...................................................................................................................................... 125 NEW-WEF Evolving Risk Landscape (2007-2015) .............................................................................................................................. 126 NEW-WEF Global Risk Exposures By Region ..................................................................................................................................... 127

SITUATIONAL ANALYSIS ..................................................................................................................................................................................... 128 RESEARCH WE FOLLOWED ......................................................................................................................................................................... 128 CHARTS OF NOTE ......................................................................................................................................................................................... 130

NEW The economic balance of the world is shifting ................................................................................................................................... 130 NEW Global Conflict Intensity is heating up ................................................................................................................................................ 131 NEW World Conflict Map ............................................................................................................................................................................. 132 NEW World Conflict Map Details .............................................................................................................................................................. 133 NEW Global Conflict & Protest Intensity ...................................................................................................................................................... 134 NEW Deutsche Banks Key Global Risk ...................................................................................................................................................... 134 NEW Political and Financial Risk Now Outnumber Real Economy Risks .................................................................................................. 135

RESEARCH OF NOTE .................................................................................................................................................................................... 136 NEW Global Conflict Intensity Spikes To 7-Year High ................................................................................................................................ 136 NEW These Are 2015's "Black Swans" According To SocGen .................................................................................................................. 137 NEW "Globalization Is Turning In On Itself And It Is Each Man For Himself" ............................................................................................. 138 Putin Unleashes Fury at US Follies in Major Pivotal Speech ................................................................................................................... 141 Putin Warns Of Risk of Major Conflict, Says Dollar Losing Reserve Currency Status ............................................................................... 142 Putin Accuses U.S. of Blackmail, Weakening Global Order ....................................................................................................................... 143

REFERENCE PAPERS Position Reminders Lest We Forget ................................................................................................................... 146 FOURTH TURNING ACCELERATING ....................................................................................................................................................... 146 AMERICAS GLOBAL RETREAT ................................................................................................................................................................ 157 THE OLD WORLD ORDER IS OVER ......................................................................................................................................................... 160 THE DEMOGRAPHIC THREAT TO DEVELOPED NATIONS ................................................................................................................... 161 THE RISK CONTINUUM ............................................................................................................................................................................. 164 GLOBAL TRENDS THE SIX FRAMING MEGATRENDS ........................................................................................................................ 166 GLOBAL THEMES TEN STRUCTURALTHEMES FOR STRATEGY ..................................................................................................... 168 DEBT SATURATION - A COLLAPSING PONZI SCHEME......................................................................................................................... 170 WINTER 2015 EVENT RISK DOMINATES ........................................................................................................................................... 172

GLOBAL MACRO: RISK SIGNALS ......................................................................................................................................... 179 GEO-POLITICAL RISK Tensions & Conflicts ..................................................................................................................................................... 181

YEMEN ............................................................................................................................................................................................................ 181 CHARTS OF NOTE ..................................................................................................................................................................................... 181

NEW-YEMEN Strategic Position ........................................................................................................................................................... 181 NEW-YEMEN al-Houthis and Saleh Concentrations ............................................................................................................................ 182 NEW-YEMEN The Decisive Storm Coalition ...................................................................................................................................... 182 NEW-YEMEN Global Oil Chokepoints .................................................................................................................................................. 183


NEW-YEMEN Middle Eastern Oil Production & Chokepoints .............................................................................................................. 183 NEW-YEMEN Chinese Import Countries & Oil Routes ........................................................................................................................ 185 NEW-YEMEN Major Crude Oil Trade Flows in the South China Sea .................................................................................................. 186 NEW-YEMEN Regional Territorial Claims in the South China Sea ...................................................................................................... 187

RESEARCH OF NOTE ................................................................................................................................................................................ 188 NEW-YEMEN Risk of World War between NATO and Russia on Ukraine Escalation as Yemen Bombed for Third Day ................ 188 NEW-YEMEN Yemen Ground Invasion by Saudi, Egyptian Troops Imminent .................................................................................... 190 NEW-YEMEN Middle East Proxy War: Presenting The Massive "Decisive Storm" Coalition.............................................................. 193 NEW-YEMEN Saudi Arabia Imposes Naval Blockade on Red Sea Strait, Deploys 150,000 Troops ................................................. 194 NEW-YEMEN Another Middle East War Breaks Out: Saudis Begin Bombing Yemen, US Military Taking Action ............................. 196 NEW-YEMEN Presenting The Theater Of War; Who Controls Yemen? ............................................................................................. 201 NEW-YEMEN US-Armed Rebels Force Yemen President To Flee Country As Saudis Prepare For War .......................................... 203

UKRAINE EAST/WEST CONFLICT The New Colder War ..................................................................................................................... 208 RESEARCH WE FOLLOWED ..................................................................................................................................................................... 209 RESEARCH OF NOTE ................................................................................................................................................................................ 215

NEW-UKRAINE - Putin Is Becoming A "Vulture" Bond Investor ............................................................................................................. 215 NEW-UKRAINE - West Further Infuriates & Antagonizes Russia with Debt Restructuring Pressures................................................... 216 NEW-UKRAINE - Congress Approves Funding for Ukraine Arms Shipments ........................................................................................ 220 NEW-UKRAINE - US Taxpayers to Fund Ukraine Bailout via Bond Guarantee ..................................................................................... 224 NEW-UKRAINE - Congress Approves Funding for Ukraine Arms .......................................................................................................... 225 NEW-UKRAINE - White House Explains Where Your $1.3 Billion Went In Ukraine ................................................................. 228 NEW-UKRAINE - Putin Says Attempts To Tip Nuclear Balance Don't Scare Russia, Moscow Will Uncover "Schemes" ..................... 231 NEW-UKRAINE - Putin Security Council Slams Obama Attempts at "New World Order" ...................................................................... 232 NEW-UKRAINE- A Russian Viewpoint ................................................................................................................................................ 234 NEW-UKRAINE- This Is What Is Really Taking Place Behind The Scenes Of The Second US-Russian Cold War ............. 248

ISIS .................................................................................................................................................................................................................. 250 ISIS THE SUNNI / SHIA /KURD PROBLEM ............................................................................................................................................ 251

NEW-ISIS - Obama Says ISIS War Powers Request Not About 'Another Ground War' ........................................................................ 255 NEW-ISIS - President Obama Explains His "Boots On The Ground" ISIS-War Strategy ....................................................................... 255 ISIS- Kobani Overshadows Larger Battles .............................................................................................................................................. 256

SYRIA .............................................................................................................................................................................................................. 259 RESEARCH WE FOLLOWED ..................................................................................................................................................................... 259

NEW-SYRIA - Syria "Welcomes" Larger Russia Presence ................................................................................................................ 260 SYRIA - This has the Earmarks of the Kennedy Ear "Cuban Missile" Crisis .................................................................................. 261 SYRIA - Syrian War You Are Not Being Told About ........................................................................................................................... 262 SYRIA - 25 Quotes .................................................................................................................................................................................. 263 SYRIA - What Coalition? ........................................................................................................................................................................ 266 SYRIA - US Supporting Fully an "Al Qaeda Operation" ..................................................................................................................... 268 SYRIA - Decision Already Taken to Bomb Syria ................................................................................................................................. 270 SYRIA - Market Patterns Before and Immediately After Conflict Begins ................................................................................................ 278

SOUTH CHINA SEA TERRITORIAL PROBLEMS ......................................................................................................................................... 280 GEO-POLITICAL RISK - Social, Economic & Financial ........................................................................................................................................ 283

NEW-GREECE - Greek Energy Minister Slams "Unscrupulous, Imperialist" Germany, Seeks "Bold Alternatives" In Russia ...................... 283 NEW-GREECE - Greece Prepares To Leave ................................................................................................................................................. 285 NEW-GREECE - Greek Deputy FinMin Confirms Athens Is "Prepared For Rift" With Europe ...................................................................... 287 NEW-GREECE - Will Greece Call A Referendum On Euro Membership?..................................................................................................... 288 NEW-GREECE - What Greece Owes, And More Importantly - When! .......................................................................................................... 291 NEW-GREECE - BofA's Modest Proposal For Greece: "A Negative Shock May Be Necessary" ................................................................. 294 NEW-GREECE - On Greek "Independence Day", Creditors Prepare To Seal Athens' Fate ......................................................................... 297

GEO-POLITICAL RISK Global Governance Failure ........................................................................................................................................... 300 ASIAN INFRASTRUCTURE INVESTMETN BANK A Threat to World Bank and US$ Reserve Status ..................................................... 300

RESEARCH WE FOLLOWED ..................................................................................................................................................................... 300 CHARTS OF NOTE ..................................................................................................................................................................................... 303

NEW-AIIB Demanding Infrastructure .................................................................................................................................................... 303 RESEARCH OF NOTE ................................................................................................................................................................................ 304

NEW-AIIB - The Nepo-Cold War, The World Bank and the AIIB Threat .................................................................................... 304 NEW-AIIB - Washington Blinks: Will Seek Partnership With China-Led Development Bank ................................................................. 306 NEW-AIIB - China "Is Not Another US", Does Not Seek "Yuan Hegemony" .......................................................................................... 307 NEW-AIIB - Obama administration proposes co-financing projects with new Asian Infrastructure Investment Bank.... 309 NEW-AIIB - Qatar, Jordan, Oman, Kuwait AND Saudi Arabia have applied Goodbye Petrodollar! .................................................... 312 NEW-AIIB - Obama continues to be humiliated by the rising anti-dollar alliance ................................................................... 314 NEW-AIIB - Did De-Dollarization Just Reach Escape Velocity? ............................................................................................................. 316

EMERGING BRICS ALLIANCE NEW MULTI-POLAR WORLD .................................................................................................................. 320 MULTI-POLAR-Money Supply The New World Economy ....................................................................................................................... 320 MULTI-POLAR-Financial Globalist Impose Monetary Hegemony .............................................................................................................. 322 MULTI-POLAR-Financial Globalists Controlling the Political Process ........................................................................................................ 324

ADVANCING GLOBAL FINANCIAL REPRESSION ....................................................................................................................................... 327 HENRY KISSINGER CALLS FOR NEW WORLD ORDER (NWO) ............................................................................................................... 329

KISSINGER- Henry Kissingers World Order ............................................................................................................................................ 329

GLOBAL MACRO: RISK LEVELS ........................................................................................................................................... 332 AGGREGATED GLOBAL FINANCIAL RISK INDEX ............................................................................................................................................. 332

NEW-BANKING RISK - LIBOR-OIS SPREAD ................................................................................................................................................ 333 NEW-BANKING RISK - TED SPREAD ........................................................................................................................................................... 333 NEW-CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS ....................................................................................................................... 334


NEW-CREDIT RISK - EU CREDIT DEFAULT SWAPS .................................................................................................................................. 334 NEW-CONSUMER RISK - HOUSING - RATE OF CHANGE ......................................................................................................................... 334 NEW-ECONOMIC RISK - ECRI LEADING INDEX ......................................................................................................................................... 335 NEW-INFLATION RISK - MONEY SUPPLY GROWTH - M3 ......................................................................................................................... 336 NEW-INFLATION RISK - MONEY VELOCITY ............................................................................................................................................... 336 MONETARY RISK - BANK LIABILITIES ......................................................................................................................................................... 337 NEW-COST OF MONEY RISK - INTEREST RATES .................................................................................................................................... 337

AGGREGATED RISK LEVEL ................................................................................................................................................................................ 338

TIPPING POINTS ..................................................................................................................................................................... 340 NEW-CHANGES TO RANKINGS Q2 2015 ........................................................................................................................................................ 340 NEW-CHANGES TO RANKINGS - Longer Term Benchmarks ............................................................................................................................ 342 NEW-CHANGES TO ROADMAPS - Longer Term Trends ................................................................................................................................... 343 NEW-CHANGES TO RANKINGS - Longer Term Benchmarks ............................................................................................................................ 344 TIPPING POINTS: TOP 5 FOCUS - APRIL 2015 ................................................................................................................................................. 347

NEW-I - RISK REVERSAL .............................................................................................................................................................................. 347 NEW-II - GEO-POLITICAL EVENT RISK ........................................................................................................................................................ 348 NEW-V - CHINA HARD LANDING .................................................................................................................................................................. 349 NEW-III - JAPAN DEBT DEFLATION ............................................................................................................................................................. 353 NEW-IV - EU BANKING CRISIS ..................................................................................................................................................................... 354

GLOBAL MACRO: ECONOMIC OUTLOOK ............................................................................................................................ 361 ECONOMIC WARNINGS....................................................................................................................................................................................... 361

IMF WARNS .................................................................................................................................................................................................... 361 NEW- IMF Warns of Permanent Stagnation ................................................................................................................................................ 361 IMF sees risk of new eurozone .................................................................................................................................................................... 363 IMF Tells Central Europe to Spend More .................................................................................................................................................... 366 Japanese & Spanish Debt Unsustainable ................................................................................................................................................... 369 Global Recovery Faltering, Reduces Global Growth to Just Above 3% Global Recession Level .............................................................. 371

BIS WARNS ..................................................................................................................................................................................................... 373 NEW-BIS WARNS - Former BIS Economic Advisor Warns on European QE ..................................................................................... 373 Monetary Policy At Its Limits ........................................................................................................................................................................ 385

WORLD BANK WARNS ................................................................................................................................................................................. 386 Social Unrest Stems from Shrinking Disposable Income. Jobs are the central issue. ..................................................................... 388

G20 WARNS Need to Add $2T in Economic Activity & Tens of Millions of Jobs ........................................................................................ 390 RESEARCH WE FOLLOWED .............................................................................................................................................................................. 391 CHARTS OF NOTE ............................................................................................................................................................................................... 394

NEW-CHART: Global Stock of Debt Outstanding Grows By $57T Since Financial Crisis .................................................................... 394 NEW-CHART: Decade-Long Central Bank FX Reserves Surge Nears End ............................................................................................. 395 NEW-CHART: Global Business Equipment Investment ............................................................................................................................ 396 NEW-CHART: EM versus DM Credit Risk ................................................................................................................................................... 397 NEW-CHART: MSCI World P/E versus EM P/E ........................................................................................................................................... 397 NEW-CHART: Emerging Capital Flows & Currency Moves ...................................................................................................................... 398 NEW-CHART: Falling Real GDP of Emerging Versus Rising Developed Economies ............................................................................ 398 NEW-CHART: Domestic Bank Credit of EM versus DM ............................................................................................................................ 399 NEW-CHART: Regional Resilience Score Differences Since the Financial Crisis ................................................................................. 399 NEW-CHART: US Macro index at a New 6 Year Low. ................................................................................................................................ 401 NEW-CHART: There is a Problem in Global Credit .................................................................................................................................... 401 CHART: Serial Disappointments & Ratcheting Down of Global Growth ................................................................................................. 402 CHART: Continuous Weakening of Global GDP Estimates ...................................................................................................................... 403 CHART: Reduced Demand Pressures on Energy Prices .......................................................................................................................... 403 CHART: Reduced Demand Pressures on Commodities ........................................................................................................................... 404 CHART: Global Corporate Profit Trends ..................................................................................................................................................... 404 CHART: Stunning Growth in Debt of Developed Economies since Dotcom Bubble Burst .................................................................. 405 CHART: Worlds FDI Flooding Into Financial Products versus Productive Assets ............................................................................... 406 CHART: Growth of Asian Middle Class Dominates Next 20 Years ....................................................................................................... 407 CHART: Global Domestic Demand Growth ................................................................................................................................................ 407 CHART: Global Asset Markets Reflecting a Major Demand Shock Has Hit ............................................................................................ 408 CHART: World GDP 2014 Economic Growth Estimates ........................................................................................................................... 408 CHART: World GDP versus World MSCI Stock Index ............................................................................................................................... 409 CHART: Baltic Dry Perspective Slowing Global Aggregate Demand Growth Rate ............................................................................ 410 CHART: World Trade versus Central Bank Balance Sheet Growth ......................................................................................................... 410 CHART: Falling Global LEI (Leading Economic Indicator) ....................................................................................................................... 411 CHART: World GDP Economic Forecast 2014 ........................................................................................................................................... 412 CHART: World GDP Economic Expectations versus MSCI Equity Index ............................................................................................... 412 CHART: Fiscal Adjustments Required Deficit Reductions for Fiscal Sustainability .......................................................................... 413 CHART: Shifting Global GDP Share ............................................................................................................................................................ 414 CHART: Over $10 Trillion Pumped Into Global Economy by Developed Economies ............................................................................ 415 CHART: Eventually All this Debt Must be Rolled over or Paid Out ......................................................................................................... 415 CHART: Future Economic Growth a Sub 2% Trend .................................................................................................................................. 416 CHART: Debt and Fiscal Drag Are Significant Factors Affecting Global Growth .................................................................................. 416 CHART: Slowing Global Aggregate Demand Shows in Shrinking FDI .................................................................................................... 417 CHART: Liquidity Drain in US in 2H 2014 ................................................................................................................................................... 418


RESEARCH OF NOTE .......................................................................................................................................................................................... 419 NEW-GLOBAL OUTLOOK The Global Liquidity Squeeze Has Begun ...................................................................................................... 419 NEW-GLOBAL OUTLOOK Biggest Worry" Is Dramatic Decline In Bond Market Liquidity, Prudential Says ........................................... 422 NEW-GLOBAL OUTLOOK 2015 Macro Outlook Proving to be Volatile..................................................................................................... 423 NEW-GLOBAL OUTLOOK 2015 Macro Outlook Forecasts Hinge on a Deteriorating US Economy ........................................................ 426 GLOBAL OUTLOOK 3 of 10 Largest Economies Have Fallen into Recession .......................................................................................... 427 GLOBAL OUTLOOK This is the Biggest Risk to the World's Economy ..................................................................................................... 430 GLOBAL OUTLOOK What is global market turbulence telling us? ............................................................................................................ 434 GLOBAL OUTLOOK Darker Outlook Has Bond Market Rethinking Odds of Economic Downturn ........................................................... 437 GLOBAL OUTLOOK The Last Days Of The Growth Story? ....................................................................................................................... 439 GLOBAL OUTLOOK The Last Days Of The Growth Story? ....................................................................................................................... 441 GLOBAL OUTLOOK - THE ECONOMIC ROADMAP AHEAD: It Isn't That Complicated! ............................................................................ 442 GLOBAL OUTLOOK - 20 Signs That the Global Economic Crisis Is Starting To Catch Fire ................................................................ 447 GLOBAL OUTLOOK - Problems Erupting Everywhere (Signs of Implosion) ......................................................................................... 449 GLOBAL OUTLOOK - Global Debt Crosses $100 Trillion, Rises By $30 Trillion Since 2007 ................................................................ 452 GLOBAL OUTLOOK The US as the Global Consumption Engine to See Sub 2% Trend Growth .................................................... 455 GLOBAL OUTLOOK - Credit Fueled Globalization in Retreat .................................................................................................................. 458 GLOBAL OUTLOOK - Rogoff's Sovereign Debt Default Levels ............................................................................................................... 460 GLOBAL OUTLOOK - Imbalances Continue to Increase Along With Financial Fragility .............................................................................. 463 GLOBAL OUTLOOK - A 67 Million Jobs Gap .............................................................................................................................................. 465

ECONOMIC CUTS ................................................................................................................................................................................................. 469 CHARTS OF NOTE ......................................................................................................................................................................................... 469

CHART IMFs Delusional Forecasting Record 3 ................................................................................................................................... 469 CHART IMFs Delusional Forecasting Record 2 ................................................................................................................................... 472 CHART IMFs Delusional Forecasting Record - 1 .................................................................................................................................... 472

IMF To Slash Economic Growth Forecast... AGAIN - Still Full of Hockey sticks ............................................................................................ 472 IMF CUTS ECONOMIC OUTLOOK ............................................................................................................................................................ 478

OECD CUTS ECONOMIC OUTLOOK AGAIN!............................................................................................................................................ 488 OECD CUTS ECONOMIC OUTLOOK ........................................................................................................................................................ 490

GLOBAL MACRO: INDICATORS ............................................................................................................................................ 493 GLOBAL TRENDS ................................................................................................................................................................................................. 493

CHARTS OF NOTE ......................................................................................................................................................................................... 493 NEW-GLOBAL TRENDS Consensus 2015 World GDP Growth Expectations ................................................................................... 493 NEW-GLOBAL TRENDS US Macro Continues to Plummet ................................................................................................................. 493 NEW-GLOBAL TRENDS GLI Momentum & Global Industrial Production Both About to Go Into Contraction ............................ 494 GLOBAL TRENDS Changes in 2014 2015 Profit (EPS) Forecasts By Country/Region ............................................................. 494 GLOBAL TRENDS Changes in 2014 2015 Profit (EPS) Forecasts By Sector ............................................................................. 495 GLOBAL TRENDS G7 Long Run GDP Growth Rates (PPP Weighted) .............................................................................................. 495 GLOBAL TRENDS Falling Population Growth Rate in Developed Economies ................................................................................. 496 GLOBAL TRENDS Falling Labor Productivity Rate in Developed Economies .................................................................................. 497 GLOBAL TRENDS Falling Workers Per Retiree in Developed Economies ............................................................................................. 497

RESEARCH OF NOTE .................................................................................................................................................................................... 498 GLOBAL TRENDS The curse of weak global demand ............................................................................................................................ 498 GLOBAL TRENDS Is economic growth permanently lower? Do We Have Secular Stagnation ........................................................... 502 GLOBAL TRENDS - The Facts are Clear - the US Standard of Living is Falling ................................................................................. 506

GLOBAL EMPLOYMENT....................................................................................................................................................................................... 507 CHARTS OF NOTE ......................................................................................................................................................................................... 507

CHART Global Employment Rates ........................................................................................................................................................ 507 CHART Global Unemployment ................................................................................................................................................................. 508 CHART Global Unemployment EU Comparison ................................................................................................................................... 508 CHART Unemployment in Advanced Countries .................................................................................................................................. 509 CHART Global Labor Participation Rates ............................................................................................................................................ 509 CHART Global Youth Unemployment By Country ........................................................................................................................... 510 CHART Global Chance of Finding a Job Within Year ......................................................................................................................... 510

RESEARCH OF NOTE .................................................................................................................................................................................... 511 GLOBAL UNEMPLOYMENT - The Beginnings of the Welfare Myth Unwind ........................................................................................ 511 GLOBAL UNEMPLOYMENT - The Unsustainable Welfare Myth ............................................................................................................ 513 GLOBAL UNEMPLOYMENT - Global Financial Sector Job Cuts ............................................................................................................... 515

GLOBAL SENTIMENT ........................................................................................................................................................................................... 517 CHARTS OF NOTE ......................................................................................................................................................................................... 517

NEW-GLOBAL SENTIMENT Global Consumer Confidence Down In Q4 2014 ................................................................................. 517 NEW-GLOBAL SENTIMENT Global Consumer Confidence by Country ........................................................................................... 518 NEW-GLOBAL SENTIMENT Global Consumer Confidence Improves the Most In North America ............................................... 519 NEW-GLOBAL SENTIMENT Recessionary Sentiment Increases in Latin America ......................................................................... 520 NEW-GLOBAL SENTIMENT North America Reports Strong Increase Y-o-Y for all Confidence Indicators ................................. 521 NEW-GLOBAL SENTIMENT Consumer Confidence Decreases in 63% of European Markets....................................................... 522 NEW-GLOBAL SENTIMENT Consumer Confidence Decreases in 71% of Asia Pacific Markets ................................................... 523 NEW-GLOBAL SENTIMENT Consumer Confidence Decreases in 71% of Latin America Markets ............................................... 524 NEW-GLOBAL SENTIMENT Consumer Confidence in Saudi Arabia, Pakistan Falls...................................................................... 525 NEW-GLOBAL SENTIMENT Consumer Confidence High in Sub-Saharan Africa ........................................................................... 526 GLOBAL SENTIMENT Global Business Activity Future Expectations ............................................................................................. 527 GLOBAL SENTIMENT Global Jog Prospects Reach 50% - First Time In 7 Years ........................................................................... 527 GLOBAL SENTIMENT Global Consumer Confidence by Country .................................................................................................... 529 GLOBAL SENTIMENT Global Consumer Confidence Trends by Country ....................................................................................... 530


GLOBAL SENTIMENT Northern American Spending Intentions Rise According to Nielsen ......................................................... 531 RESEARCH OF NOTE .................................................................................................................................................................................... 532

GLOBAL SENTIMENT Global Business Confidence Collapses To Post-Lehman Lows ........................................................................ 532 GLOBAL SENTIMENT The State Of Economic 'Misery' Around The World ........................................................................................... 534 GLOBAL SENTIMENT Highest Level Since 2007 ................................................................................................................................ 538 GLOBAL SENTIMENT - Complacent ........................................................................................................................................................ 539 GLOBAL SENTIMENT - Complacent ........................................................................................................................................................ 541 GLOBAL SENTIMENT - Nielsens Global Consumer Confidence, Concerns & Spending Intentions ........................................................ 542

GLOBAL CONSUMPTION ..................................................................................................................................................................................... 553 CHARTS OF NOTE ......................................................................................................................................................................................... 553

GLOBAL CONSUMPTION Rising Consumer Prices are Hurting Global Demand ........................................................................... 553 GLOBAL CONSUMPTION Global Home Prices Are Rolling Over ..................................................................................................... 553 GLOBAL CONSUMPTION Real Domestic Demand US, Japan & EU .............................................................................................. 554

RESEARCH OF NOTE .................................................................................................................................................................................... 555 GLOBAL GROWTH ............................................................................................................................................................................................... 555

CHARTS OF NOTE ......................................................................................................................................................................................... 555 NEW-GLOBAL GROWTH Global Leading Indicator Swirlogram Gets Worse ..................................................................................... 555 GLOBAL GROWTH Global Leading Indicator Signals Contraction ......................................................................................................... 556 GLOBAL GROWTH Eurozone PMI and GDP .......................................................................................................................................... 557 GLOBAL GROWTH World PMI Rankings ................................................................................................................................................ 558 GLOBAL GROWTH Global Leading Indicator Has Now Rolled Over ...................................................................................................... 559 GLOBAL GROWTH Global PMI Business Surveys Fall .......................................................................................................................... 559 GLOBAL GROWTH Baltic Dry Index Collapses 50% .............................................................................................................................. 560 GLOBAL GROWTH Global Slowdown on Verge of Contraction.............................................................................................................. 561 GLOBAL GROWTH - GDP Forecasts Continue to Be Taken Down........................................................................................................... 561 GLOBAL GROWTH Global Leading Indicator Goldmans Swirlogram Getting More Serious ......................................................... 561 GLOBAL GROWTH Global Industrial Production Rolling Over ............................................................................................................. 562 GLOBAL GROWTH Consensus 2014 GDP Forecast - Differential ......................................................................................................... 563 GLOBAL GROWTH G10 Macro Change ................................................................................................................................................. 563

RESEARCH OF NOTE .................................................................................................................................................................................... 564 GLOBAL GROWTH - World's Busiest Freight Route Rates Plunge To 2014 Lows ................................................................................... 564 GLOBAL GROWTH - Goldman Global Leading Indicator Drastically Revised, Collapses into "Confirmed Slowdown" ............................ 565 GLOBAL GROWTH - The Wal-Mart Measure or How the US Consumer Is the Global Engine .......................................................... 567 GLOBAL GROWTH Potential of a Global Recession Mounting ............................................................................................................ 568 GLOBAL GROWTH What the hint of a Fed Taper Did to Global Growth Estimates....................................................................... 572 GLOBAL GROWTH - Uneconomic Energy Problematic ......................................................................................................................... 574 GLOBAL GROWTH - Global Growth Cycle ................................................................................................................................................. 576 GLOBAL GROWTH - Global GDP Contribution .......................................................................................................................................... 577 GLOBAL GROWTH - Slowing Global Growth - Air Cargo Shipments ........................................................................................................ 578

GLOBAL CREDIT .................................................................................................................................................................................................. 579 CREDIT CYCLE - HY Leading the Way ........................................................................................................................................................ 579 CREDIT CYCLE - Reversal Ahead ................................................................................................................................................................ 582

GLOBAL MACRO: MONETARY POLICY & CENTRAL BANKING .......................................................................................... 585 GLOBAL CENTRAL BANKING ............................................................................................................................................................................ 585

RESEARCH WE FOLLOWED Global Banking Risk .................................................................................................................................... 585 CHARTS OF NOTE ......................................................................................................................................................................................... 588

NEW-CHARTS Consensus Fed and ECB Rate Hike Projections ....................................................................................................... 588 NEW-CHARTS Global Monetary Policy Stance & Bias ....................................................................................................................... 589 NEW-CHARTS Global Government Bonds Trading With Negative Yields ....................................................................................... 590 NEW-CHARTS Lack of Inflation in Europe ........................................................................................................................................... 590 NEW-CHARTS Two Sides of Inflation Commodities, Inflation Breakevens and UST Curve (5-30s) .......................................... 591 NEW-CHARTS Quantitative e Easing No Longer Drives Commodity Prices ................................................................................... 592 NEW-CHARTS De-Leveraging Average Industrial Debt-Percentage of GDP ................................................................................ 592 NEW-CHARTS Sovereign Net Issuance After Central Bank Issuances ......................................................................................... 593 NEW-CHARTS Sovereign Net Issuance After Central Bank Issuances ......................................................................................... 593 NEW-CHARTS Falling Global Bond Rates Continue in Q1 2015 ....................................................................................................... 594 NEW-CHARTS The Road to NIR (Negative Rates) ............................................................................................................................... 594 CHARTS Central Bank Policy Rates ..................................................................................................................................................... 595 CHARTS Days of Chinese Credit-Driven Growth are numbered ....................................................................................................... 595 CHARTS Major Central Bank Assets versus GDP Forecast .............................................................................................................. 597 CHARTS Major Central Bank Y-o-Y Balance Sheet Growth ............................................................................................................... 597 CHARTS Cumulative Change in Central Bank Balance Sheets Since 2008 .................................................................................. 598 CHARTS Global Central Bank Assets versus World Equity Prices .................................................................................................. 598 CHARTS Cumulative Change in Central Bank Balance Sheets Since 2000 .................................................................................. 599

RESEARCH OF NOTE .................................................................................................................................................................................... 600 NEW- CENTRAL BANKS - The $100 Trillion Global Debt Ponzi Scheme ............................................................................................. 600 NEW- CENTRAL BANKS - The Backstop of Modern Finance Is About to Implode ............................................................................. 601 NEW- CENTRAL BANKS - What does NIRP Tell US About Global Risk of Deflation? ........................................................................ 602 NEW- CENTRAL BANKS - In Denmark You Are Now Paid To Take Out A Mortgage .......................................................................... 605 NEW- CENTRAL BANKS - The Beginning of the End of the $100 TRILLION Bond Bubble ............................................................... 606 NEW- CENTRAL BANKS - The $100 Trillion Reason Why Central Banks Are Terrified of Debt Deflation ....................................... 608 NEW- CENTRAL BANKS - The year of Dollar Danger for the world ...................................................................................................... 610 NEW- CENTRAL BANKS - Commodities, Inflation Breakevens and Yield Curve Sending Clear Warnings ..................................... 615 CENTRAL BANKS Economic policies are diverging in the developed world as deflation looms ............................................................ 619


CENTRAL BANKS Central banks can't raise growth potential, says ECB's Weidmann ......................................................................... 621 CENTRAL BANKS Axel Merks 2014 Outlook ....................................................................................................................................... 622 CENTRAL BANKS - Japan May Eclipse China Again, as Largest Holder of US Treasuries .............................................................. 625 CENTRAL BANKS - Austerity Now Officially Dead Public Policy ........................................................................................................... 626 CENTRAL BANKS - A Serious Shortage of Quality Collateral - A $10T US Problem Over 10 Years ............................................... 627 CENTRAL BANKS - Global Balance Sheet Expansion .......................................................................................................................... 629

NEW-WAR ON CASH ..................................................................................................................................................................................... 634 NEW-WAR ON CASH Elliott Waves Report on the War on Cash ........................................................................................................ 634 NEW-WAR ON CASH The "War On Cash" Migrates To Switzerland...................................................................................................... 639 NEW-WAR ON CASH Chase Joins the War on Cash ............................................................................................................................. 642 NEW-WAR ON CASH Largest Bank In America Joins War On Cash ..................................................................................................... 644 NEW-WAR ON CASH Citigroup's Gold "Expert" Demands A Cash Ban ................................................................................................. 646

NEW-SWISS PEG ........................................................................................................................................................................................... 650 NEW-SWISS PEG Swiss Peg Failure First Central Bank To Lose Control .......................................................................................... 651 NEW-SWISS PEG Swiss Peg Failure The Financial System Broke Last Week .................................................................................. 653 NEW-SWISS PEG Swiss Peg Failure Keynesian Contral Banking is Destroying Money & Markets ................................................... 654

TROUBLING DEVELOPMENTS ..................................................................................................................................................................... 658 TROUBLING DEVELOPMENTS Insider Says Central Banks Making it Up as They Go! ....................................................................... 658 TROUBLING DEVELOPMENTS 2007 Redux: Total public and private debt levels are 30pc higher in the advanced economies...................................................................................................................................................................................................................... 659 TROUBLING DEVELOPMENTS Polish Pension Confiscation: Coming to a Theater near You .......................................................... 662 TROUBLING DEVELOPMENTS Global Tax Overhaul .......................................................................................................................... 664

BOE - UK ............................................................................................................................................................................................................... 665 CHARTS OF NOTE ......................................................................................................................................................................................... 665

UK Dissent within BOE Set to Continue ............................................................................................................................................... 665 RESEARCH OF NOTE .................................................................................................................................................................................... 665

UK - BOE Faces Labor Market Conundrum as Wage Growth Stalls .......................................................................................................... 665 UK - Mark Carney and "Flexible Inflation Targeting" ............................................................................................................................. 667

FED - US ................................................................................................................................................................................................................ 669 CHARTS OF NOTE ......................................................................................................................................................................................... 670

NEW-CHARTS Feds QE History versus UST 10 Year Yields ............................................................................................................ 670 NEW-CHARTS Fed Balance Sheet Growth .......................................................................................................................................... 670 CHARTS June 2015 Fed Rates Hikes Diminish ................................................................................................................................... 671 CHARTS Inflation Expectations 1 Yr, 5010Yr, 5Yr/5Yr ..................................................................................................................... 671

RESEARCH OF NOTE .................................................................................................................................................................................... 672 NEW-US MONETARY - Humphrey Hawkins Testimony - Yellen Secures More Flexibility for 'Patient' Fed.................................... 672 NEW-US MONETARY - Audit the Fed Yellens Testimony .................................................................................................................. 674 NEW-US MONETARY - Criticism by Architect of Japanese Quantitative Easing of Fed Policy ....................................................... 683 US MONETARY - CAPITAL DISTORTION - Global Acceptance of the Bernankean Theory ............................................................... 686 US MONETARY - FINANCIAL REPRESSION - The Suspension of Price Discovery ........................................................................... 689 US MONETARY - The Fed is stuck in a QE Trap .................................................................................................................................... 692 US MONETARY - 2nd Worst Decade In US Growth in Over 220 Years (And Getting Worse) ........................................................... 694 US MONETARY - Mathematically, The Fed Can Only Fail ..................................................................................................................... 696 US MONETARY - QE Standing Between Inflated Equity Markets and A Recession .......................................................................... 702 US MONETARY - QE Programs versus S&P 500 Movements ............................................................................................................... 703 US MONETARY - BAML Warns If The US Economy Does Not Significantly Accelerate Now, It Never Will ..................................... 705 US MONETARY - Debt Increases $1 Trillion in One Year ...................................................................................................................... 707

GLOBAL ABE-NOMICS The Road Ahead ....................................................................................................................................................... 710 CHARTS OF NOTE ......................................................................................................................................................................................... 710

NEW-JAPAN Japan Heads Back towards Deflation ............................................................................................................................ 710 JAPAN The Third Arrow of ABE-Nomics -I ........................................................................................................................................... 711 JAPAN The Third Arrow of ABE-Nomics II ......................................................................................................................................... 712 JAPAN Japanese Households Remain Pessimistic ............................................................................................................................ 713

RESEARCH OF NOTE .................................................................................................................................................................................... 714 NEW- GLOBAL ABE-NOMICS - Japan Shocked To Find Abenomics Is Destroying Its Middle Class ...................................................... 714 NEW- GLOBAL ABE-NOMICS - "Godfather" Of Abenomics Admits Japanese Policy "Is A Ponzi Game ................................................. 717 GLOBAL ABE-NOMICS Monetary Expansion Extremely Difficult to Stop Once Started ........................................................................ 718 GLOBAL ABE-NOMICS Monetary Policy Below the Event Horizon ................................................................................................... 721

BOJ JAPAN ......................................................................................................................................................................................................... 723 CHARTS OF NOTE ......................................................................................................................................................................................... 723

JAPAN Japans Inflation Pressure Ebbs Away......................................................................................................................................... 723 JAPAN BOJ QE Expansion In Context Debt Monetization ................................................................................................................... 724 JAPAN Japanese Trade Balance ............................................................................................................................................................. 725 JAPAN Japanese Real & Nominal Household Income ............................................................................................................................ 725 JAPAN CPI Shoots To 3.3% Y-o-Y ......................................................................................................................................................... 726 JAPAN Japan Government Investment Fund Asset Reallocation ..................................................................................................... 726 JAPAN Falling Real Rates as Financial Repression Takes Hold ....................................................................................................... 726 JAPAN Real Wages Plummet as Financial Repression Takes Hold .................................................................................................. 727

RESEARCH OF NOTE .................................................................................................................................................................................... 728 JAPAN - "Godfather" Of Abenomics Admits Japanese Policy "Is A Ponzi Game ...................................................................................... 729 JAPAN - How a Limo Ride With Paul Krugman Changed the Course of Abenomics ................................................................................. 731 JAPAN - Kurodas Former Boss Urges Ditching of BOJ 2% Inflation Target .............................................................................................. 734 JAPAN - No Way Out But to Expand the Monetary Base ....................................................................................................................... 736 JAPAN - BOJ to "Own" 100% Of GDP In 5 Years .................................................................................................................................... 737 JAPAN - Adjusted trade deficit the worst in Bloomberg's 20 year history .......................................................................................... 740


JAPAN - Some Policies Have Clearly Hit the Limit ................................................................................................................................. 742 JAPAN - Foreshadows Next Global Crisis .................................................................................................................................................. 743 JAPAN - Japan's Prime Minister Shinzo Abe prepares to print money for the whole world ....................................................................... 748 JAPAN - Shinzo Abes Monetary-Policy Delusions ..................................................................................................................................... 749 JAPAN - BOJ Governor Job Suddenly Available in Historical "Abenomics U-Turn" .................................................................................. 752 JAPAN - Japanese Economic Policy Goes The Full Ponzi ......................................................................................................................... 753

PBOC - CHINA ....................................................................................................................................................................................................... 755 CHARTS OF NOTE ......................................................................................................................................................................................... 756

NEW-CHARTS Bank Loans in China accelerating at the fastest pace since Financial Crisis. ............................................................... 756 NEW-CHARTS China Reduces Bank Reserve Ratio .............................................................................................................................. 756 NEW-CHARTS Speculation Takes Hold of Sky Rocketing Chinese Stock Market ................................................................................. 757 NEW-CHARTS Falling Chinese Government Revenue Growth .............................................................................................................. 758 NEW-CHARTS Falling National New Residential Housing Starts ........................................................................................................... 758 NEW-CHARTS China and Asia Residential Property Tracking US Housing Bubble .............................................................................. 759 NEW-CHARTS Real Chinese Rates versus Cuts .................................................................................................................................... 759

RESEARCH OF NOTE .................................................................................................................................................................................... 760 NEW-CHINA MONETARY - China's "Animal Spirits" May Call For "Draconian" Measures To Curb Rally, UBS Says ............................. 760 NEW-CHINA MONETARY Is China Beginning to Panic as it Lowers Reserve Ratio ............................................................................. 762 NEW-CHINA MONETARY - Liquidity evaporates in China as 'fiscal cliff' nears......................................................................................... 764

ECB EU ............................................................................................................................................................................................................... 770 NEW-RESEARCH WE FOLLOWED ............................................................................................................................................................... 770 CHARTS OF NOTE ......................................................................................................................................................................................... 771

NEW-CHARTS Welcome to the EUs NIRP ........................................................................................................................................... 771 NEW-CHARTS Negative Swiss Government Bonds ............................................................................................................................... 772 NEW-CHARTS Negative Swiss Government Bonds ............................................................................................................................... 772 NEW-CHARTS UK & German Total Return Indices ................................................................................................................................ 773 NEW-CHARTS ECBs Dilemma of Digging Up Enough Debt .................................................................................................................. 773 NEW-CHARTS Nearly $2T European Nonds Trading With Negative Yields........................................................................................... 774 NEW-CHARTS Total National Debt Germany versus Industrial Country Average (ex-Germany) ....................................................... 774 NEW-CHARTS The Fastest Growing Asset Class NIR Products ......................................................................................................... 775 CHARTS Euro-Area Output Still Slightly Below Pre-Crisis Levels ........................................................................................................... 776 CHARTS 5 Year Inflation Swaps Suggests Deflation in the EU .............................................................................................................. 777 CHARTS Euro-Area Inflation Rate on the Decline Since 2011 ................................................................................................................ 777 CHARTS Euro-Area Inflation Expectations Decline ................................................................................................................................. 778 CHARTS Euro-Area Private Sector Loan Creation .................................................................................................................................. 779 CHARTS Euro-Area Money Supply, Private Sector Lending Growth ...................................................................................................... 779 CHARTS Euro-Area 10 Yr Sovereign Bond Yields .................................................................................................................................. 780 CHARTS Slovenia May BE the Next EU Debt Hotspot ............................................................................................................................ 780 CHARTS Spain & Portugal NPL ............................................................................................................................................................... 781 CHARTS ECBs Turn to Expand Its Balance Sheet ................................................................................................................................. 782 CHARTS ECBs Balance Sheet Contracted Y-o-Y ............................................................................................................................... 782 CHARTS Expect Major ECB Policy Announcement in Q2 2014 .............................................................................................................. 783 CHARTS ECB Set to Stay on Hold as Inflation Seen Lower ................................................................................................................... 784

RESEARCH OF NOTE .................................................................................................................................................................................... 785 NEW-EU MONETARY - NIRP Is A Flawed Economic Concept ................................................................................................................. 786 NEW-EU MONETARY - NIRP ..................................................................................................................................................................... 788 NEW-EU MONETARY NIRP - Yield scarce as the world turns negative ................................................................................................. 792 NEW-EU MONETARY - XXXX .................................................................................................................................................................... 795 NEW-EU MONETARY - XXXX .................................................................................................................................................................... 795 EU MONETARY - Draghi Key Statements .................................................................................................................................................. 796 EU MONETARY - Draghi throws ECB door open to money printing as global prospects dim ................................................................... 796 EU MONETARY - Economic Recovery Too Weak for ECB to Avoid New Action ...................................................................................... 799 EU MONETARY - Euro-Area Data Deterioration Points toward QE ........................................................................................................... 800 EU MONETARY - EU Version of QE Coming -> UST Purchases To Drive Euro Down ............................................................................ 803

MACRO MONETARY INFLATION ..................................................................................................................................................................... 805 CHARTS OF NOTE ............................................................................................................................................................................................... 805

NEW-CHARTS The Fall of Hyperinflation & the Rise of Deflation ............................................................................................................... 805 NEW-CHARTS Falling US Consumer Price Index ....................................................................................................................................... 805 CHARTS Global Consumer Prices are Rising Significantly ......................................................................................................................... 806

CHARTS Global Country Inflation Rates .................................................................................................................................................. 806 CHARTS Two Worlds if Inflation EM and DM ....................................................................................................................................... 806 CHARTS Developed Country Inflation Rates ........................................................................................................................................... 808

RESEARCH OF NOTE .................................................................................................................................................................................... 809 NEW- INFLATION Martin Armstrongs Explanation of Monetary Inflation........................................................................................ 809 INFLATION - Asset & Property inflation means shops have to pay higher rents with higher product prices ............................................. 811

GEO-ECONOMIC INSTABILITIES ........................................................................................................................................... 813 GEO-ECONOMIC INDEX ...................................................................................................................................................................................... 813 US$ RESERVE STATUS & ERODING INFLUENCE.....................................................................

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