As we kickoff trading on Friday, one of the greats in the business just warned we’ve reached the monetary endgame of the biggest bubble in the history of the world.
“The Trajectory Is Clear”
October 18 (King World News) – Peter Boockvar: “China’s economy continued to decelerate in Q3 as they reported GDP up 6% y/o/y vs 6.2% in Q2 and vs the estimate of 6.1%. This is the slowest pace of growth since I have data back to 1992. Now it’s highly likely that growth is even slower as we know what China does with its data but either way the trajectory is clear.
China also revealed some data on how the quarter ended in some select areas. Retail sales in September rose 7.8% y/o/y as expected but up slightly from the 7.5% pace in August. Industrial production off the slowest pace since 2002 in August, rose 5.8% y/o/y in September, above the estimate but likely stimulus juiced. Fixed asset investment ytd up 5.4% was about in line with the estimate but that’s a growth rate that is one tenth from the lowest since at least the late 1990’s. Let’s be clear, China’s economy was and is slowing irrespective of the tariffs and will continue to do so. Tariffs though helped to messy the situation even further for both them and us.
On the softer than expected GDP print the Shanghai comp closed down 1.3% and with the H share index lower by .5% and this helped drag down most of the region’s stock markets. Copper though is higher for a 2nd day and the Euro STOXX 600 is little changed.
Kuroda: “BoJ Needs To Continue Massive Easing”
To the dismay of BoJ Governor Kuroda but to the delight of Japanese consumers, especially ahead of the Oct 1 hike in the value added tax, September CPI ex food and energy rose .5% as expected and down from .6% in August. The last time this stat had a 1 handle was early 2016 and imagine how much yen has been printed since to buy bonds and Japanese stocks. And what lessons have been learned from this epic policy failure? None. Kuroda yesterday said the “BoJ needs to continue massive easing” and that they “will ease without hesitation if risks rise.”
That said by Kuroda, they’ve finally realized that banks need a yield curve to survive, 20+ years later and after a 90% drop in bank stocks, JGB yields continued higher. The 10 yr yield overnight rose 2 bps to -.13%, the least negative since mid July. In turn, European bonds are selling off with the German 10 yr yield higher by 2.3 bps to -.39% and US Treasuries are following with a rise in yields. I’ll repeat my belief again that we’ve reached a monetary endpoint in Japan and Europe after they’ve blown the biggest bubble in the history of the financial world.
“A Poison In The World’s Financial System”
It was July 26th, 2012 when Mario Draghi said he’ll do “whatever it takes” to save the euro. He certainly succeeded in doing so but at the cost of killing the European bond market and in turn bleeding the region’s banks. Today Christine Lagarde was officially voted in as the next head of the ECB in a tenure that will begin on November 1st. Good riddance Mario Draghi and the negative rate regime you helped to perpetuate, a poison in the world’s financial system.
James Turk’s powerful audio interview has now been released where he discusses exactly what to look for in the gold and silver markets, mining shares, the coming crisis, the U.S. launching QE4 and much more, and you can listen to it immediately by clicking here or on the image below.
Fred Hickey – Gold’s Correction May Be Over
READ THIS NEXT! Fred Hickey – Gold’s Correction May Be Over As Surprise $60 Billion A Month QE Program Is To Combat Shadow Banking Crisis CLICK HERE TO READ.
More articles to follow…
Legend Connected In China At The Highest Levels Says Gold Price To Hit New All-Time Highs CLICK HERE TO READ.
European Analyst Just Warned “Perfect Gold Storm Coming” – Target $10,000 CLICK HERE TO READ.
Major Update On The Gold & Silver Markets CLICK HERE TO READ.
Art Cashin – Yes, The Fed Is Engaged In QE And It Is Larger Than It Was In 2013! CLICK HERE TO READ
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