Backdoc: August 25th, 2015, 1:25 am
THANKS TO THUNDERHAWK FOR HIS HUMOR AND PICS!
DEFLATION SEEKS VALUE
THE REPRICING OF MARKETS WORLD WIDE ARE NOW UNDERWAY.
DURING THIS PROCESS MANY WILL THINK THE SELL OFF IS DONE BUT TO THEIR SURPRISE A NASTY PLUNGE WILL CONCLUDE THE FINALE AROUND MID SEPTEMBER ALONG WITH THE IRAN ANNOUNCEMENT AND POTENTIAL RATE HIKE FROM THE FED.
WITH ZEROS GOING TO HEROS, IRAQI BONDS WILL BE SOLD!
BLACK GOLD CURRENCY IS THE PRIMARY REASON FOR A PLUNGING A DEFLATIONARY SPIRAL THAT IS LEADING THE WORLD INTO A "NEW GLOBAL REALITY VALUE”.
AS OIL PLUNGES IT BRINGS THE VALUE OF ALL OTHER COMMODITIES AND CURRENCIES DOWN WITH IT!
GOVERNMENTS WORLD WIDE DON’T HANDLE DEFLATION WELL AT ALL. THE SPEED AT WHICH IT IS HAPPENING IS ALSO A MAJOR PROBLEM! THE TREND IS NOT THE FRIEND OF CURRENCIES WORLD WIDE.
WITH THE FED FINALLY LOOKING TO TAKE THE DISTORTION OUT OF THE ZERO INTEREST RATE POLICY, BUBBLES WILL BEGIN TO BURST IN THESE MARKETS.
AS OIL DROPS THE PRICE OF ALL GOODS AND SERVICES NEEDS TO DROP AS WELL. THE PROBLEM IS WAGES ARE NOT SET UP TO ADJUST ALONG WITH BUSINESS COSTS. THIS CAN OR WILL LIKELY CAUSE A CURRENCY IMPLOSION! THIS IS THE ECONOMIC BOMB I HAVE TRIED TO EXPLAIN!
WHY AM I SHARING ALL THIS? GLAD YOU ASKED. BECAUSE SOMEWHERE IN THIS PROCESS THE DINAR AND OTHER EMERGING MARKET CURRENCIES WILL BE THERE TO BAIL OUT THE WORLDS FINANCIAL SYSTEM!
I THINK WE ARE APPROACHING A NARROW WINDOW NOW IN THIS PROCESS. IT IS COMING TO A CONCLUSION! LOOK FOR THINGS TO GET MUCH WORSE AND VERY QUICKLY WORLDWIDE! THERE WILL BE NO ESCAPE!
LOOK FOR A VERY SHORT TERM RALLY BEFORE WE GO LOWER! THIS IS NORMAL IN SELLOFFS..
THE FINANCIAL CARNAGE OF THIS COLLAPSE WILL BE HISTORICAL IN NATURE. TODAY AT THE OPEN OF THE MARKETS IN THE U.S. WE SAW A NEW RECORD OF THE DOW DROPPING OVER A THOUSAND POINTS WITHIN 5 MINUTES WHICH SET AN ALL TIME INTRA DAY RECORD.
I HAVE TOLD YOU THAT, “WHEN THINGS ARE THE WORST THEY ARE THE BEST”!
I LOOK TO SEE THIS UNFOLD IN SEPTEMBER AND OCTOBER! LOOK FOR THE GOVT. SHUTDOWN ON OCT. 1ST FOR A FEW DAYS AT LEAST SINCE OBAMA WILL NOT SIGN A LAW THAT DEFUNDS OBAMACARE AND CUTS BACK ON SOCIAL SPENDING!
"THE NEW GLOBAL REALITY" CAN’T AFFORD THE UNLIMITED CHECKBOOK WE HAVE SEEN IN THE PAST! THE NEW REALITY WILL HAVE ACCOUNTIBILITY!
CHINA WILL LIKELY BE THE ONE TO FIND THAT NEW REALITY VALUE FIRST! WE SEE THEM INJECTING LOTS OF MONEY TO HELP FIND SEEK THAT VALUE IN THEIR MARKETS!
TODAY WE SEE THEM INJECT 23.4 BILLION TO HELP TURN THE TIDE! ITS EXPECTED THAT THEY WILL SPEND UP TO 40 BILLION PER MONTH FOR SEVERAL MONTHS!! THIS WILL TAKE A BITE OUT OF THEIR RESERVES! OUCH!
Thunderhawk: Backdoc Alert
China's Central Bank Injects $23.4 Billion as Yuan Intervention Drains Funds
China’s central bank added the most funds to the financial system in open-market operations in six months as currency-market intervention to prop up the yuan strained the supply of cash.
The People’s Bank of China auctioned 150 billion yuan ($23.4 billion) of seven-day reverse-repurchase agreements, according to a statement on its website. That compares with 120 billion yuan maturing Tuesday, leaving a net injection of 30 billion yuan. The PBOC also sold 60 billion yuan of three-month treasury deposits on behalf of the Ministry of Finance at 3 percent, according to a trader who bid at the auction.
The overnight repurchase rate climbed to a four-month high of 1.85 percent Monday, and was at 1.83 percent as of 9:52 a.m. in Shanghai Tuesday, according to a weighted average compiled by the National Interbank Funding Center. The seven-day rate fell two basis points to 2.51 percent.
“Banks have become more reluctant to lend and we expect the PBOC to offer liquidity support,” said Liu Dongliang, a Shenzhen-based analyst at China Merchants Bank Co. “The amount was smaller than expected.”
Major banks have been seen selling dollars toward the close of onshore trading in Shanghai on most days since a surprise yuan devaluation on Aug. 11. The intervention removes funds from the financial system and risks driving borrowing costs higher unless the monetary authority releases additional cash. China’s foreign-exchange reserves will drop by some $40 billion a month for the rest of this year, according to the median of 28 estimates in a Bloomberg survey.
The monetary authority injected a net 150 billion yuan last week using reverse-repurchase agreements. It also added 110 billion yuan via its Medium-term Lending Facility.