Free Republic

If you were waiting for a “black swan event” to come along and devastate the global economy, you don’t have to wait any longer. As I write this, the price of U.S. oil is sitting at $45.76 a barrel. It has fallen by more than 60 dollars a barrel since June. There is only one other time in history when we have seen anything like this happen before. That was in 2008, just prior to the worst financial crisis since the Great Depression. But following the financial crisis of 2008, the price of oil rebounded fairly rapidly. As you...

Back in November, before most grasped just how serious the collapse in crude was (and would become, as well as its massive implications), we wrote "How The Petrodollar Quietly Died, And Nobody Noticed", because for the first time in almost two decades, energy-exporting countries would pull their "petrodollars" out of world markets in 2015. This empirical death of Petrodollar followed years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling....

Propelling the rally is anticipation of the Fed’s first interest-rate increase in almost a decade, a move widely expected to come this year. The Fed is preparing to raise rates from near zero amid steady improvement in the U.S. economy and labor market since the financial crisis.

2014 has been a historic year and so will be 2015, if only because 2014 set a great deal of things in motion, but resolved none of them. I have come to the conclusion that there is a 80% chance of a massive Ukrainian attack on Novorussia next year, probably in the first part of the year. My best guesstimate is that Novorussia will probably be able to beat back this attack, albeit with great effort and big losses. The Russian economy will continue to suffer and appear to be sinking for the next six months or so at which...

Ambrose Evans-Pritchard, The Telegraph (UK) January 1, 2015America’s closed economy can handle a surging dollar and a fresh cycle of rising interest rates. Large parts of the world cannot. That in a nutshell is the story of 2015. Tightening by the US Federal Reserve will have turbo-charged effects on a global financial system addicted to zero rates and dollar liquidity. Yields on 2-year US Treasuries have surged from 0.31pc to 0.74pc since October, and this is the driver of currency markets. Since the New Year ritual of predictions is a time to throw darts, here we go: the dollar will...

Tyler Durden 12/30/2014 USDJPY has tumbled overnight back below 119.50, dragging stocks (equity futures now at session lows) and Treasury yields with it. But it appears the Gold/Yen trade that is reacting most significantly as a huge volume flushes through futures markets spiking Gold back above $1200...(snip)

My top story is the economy, and I think the Fed and Congress just signaled that something is seriously wrong, and it’s going to get worse. First off, the Federal Reserve just came out and said that it was going to be “patient” when normalizing the monetary policy. I know Wall Street is jubilant and the stock market spiked on the news, but I think this is really ominous, and it is nothing to be celebrated. To me, that means don’t expect the Fed to raise interest rates anytime soon because the economy is much worse than what they are...

"I'll give you a couple of things to look for in 2015. Fundamental economic activity as measured in areas such as retail sales, industrial production, housing starts, payroll numbers and the broadest measure of unemployment—all those numbers are going to deteriorate. The economy is going to head down as we get into reporting in early 2015. Along with that will come renewed expectations of action by the Federal Reserve to accommodate the financial system, particularly the banking system, and the combination of those factors will, I believe, help to trigger a massive decline in the U.S. dollar. As a result...

On the teetering economy and possible economic collapse, Dr. Roberts says, “We know something serious is wrong. The only provision of Dodd-Frank that has any teeth is the provision that says if the big banks are going to be casinos and gamble on derivatives, they cannot do that in the depository institution where depositors have their accounts. They have to farm it out into subsidiaries. So, if the subsidiaries get into trouble, the subsidiaries have no access to depositors’ money. This is the only real reform part of Dodd-Frank. Citigroup got put into the recent spending bill, the repeal of...

Mike Bird December 17, 2014 After a brutal sell-off Tuesday, the ruble shot up in early trading Wednesday morning, rising by nearly 7%, from 68 to the dollar to 63.16 at 8:09 a.m. GMT. The rise came as the Russian finance ministry intervened in the currency market, according to Bloomberg. That means it's selling off a chunk of its dollar reserves to buy rubles, driving the currency's value up. By 9 a.m., though, the exchange rate fell back to where it started, and the ruble is falling again: down 0.68% at 68.51 as of 10:15 a.m. GMT. Here's how the...

We all know that the American energy revolution, led by the new technologies of hydraulic fracturing and horizontal drilling, has created a flood of new shale-oil and natural-gas production that has overwhelmed world markets and driven prices down by roughly 40 percent. End-of-week crude oil closed near $57 a barrel, and the national average gasoline price finished at $2.60. No matter what the naysayers are trying to sell, the new energy reality is unambiguously good for the U.S. and global economies. There may be some dislocations among countries, sectors, or companies, but the overwhelming impact is positive. In fact, the...

"... if you had a big derivatives bust that brought down JP Morgan or Bank of America, there is no way there is going to be collateral left for the FDIC or for the secured depositors. This would include state and local governments. They all put their money in these big banks. So, even though we are protected by the FDIC, the FDIC is not going to have the money. . . . This makes it legal for these big 30 banks to take our money when they become insolvent. They are too-big-to-fail. This was supposed to avoid too-big-to-fail, but...

Calling a secretive government operation to strangle politically out-of-favor businesses “more dangerous” than the IRS targeting scandal, a congressman with a background in banking is preparing to introduce legislation to kill the Obama administration initiative. “I believe this activity is probably more dangerous and more disastrous than that of the IRS scandal because this is running people out of business for no reason and it’s harming livelihoods, incomes [and] families,” Rep. Blaine Luetkemeyer, R-Mo., said today in an interview with The Daily Signal. Luetkemeyer, a member of the House Financial Services Committee, was comparing the Department of Justice’s Operation Choke...

The U.S. dollar is on a roll. The dollar index, which measures its value versus a basket of other world currencies, is at a four-year high. John Mauldin, best-selling author and chairman of Mauldin Economics says, get used to it. Mauldin believes the dollar is going to keep rising and “get a lot stronger than anyone can imagine.” He says, “We are going to be trading stronger against nearly every currency.“ In other parts of the world, currencies are slipping as the U.S. dollar strengthens. Central banks in Europe and Japan are shifting policies to fight slowing growth and fend...

Allows direct business between Canadian dollar and Chinese yuan, cutting exchange costs. Canada and China have signed a reciprocal currency deal that's expected to dramatically boost exports. The hub will foster far easier trade between the Canadian dollar and the Chinese yuan, also known as the renminbi. It makes Canada the first country in the Americas to have a deal to trade in the renminbi.

Ruble Rout Accelerates as Russia's Central Bank Stands Aside Reuters Nov. 06 2014 18:15 Last edited 21:33 The Russian currency plunged almost 4 percent against the U.S. dollar Thursday amid relentless selling pressure after the Central Bank announced it was limiting market interventions to defend the ruble. The ruble dropped to 46.7 versus the dollar early evening in Moscow, a historical low, while also falling below the mark of 58 to the euro for the first time ever. The declines mean the ruble has fallen over 40 percent against the greenback since the start of the year.

Elena Holodny November 5, 2014 Gold is getting crushed. Again. The yellow metal is at $1,140 per ounce, down by about 2.3%. It got as low as $1,137. This is the lowest level since April 2010. Gold has been dropping to new lows for several weeks as the dollar has strengthened. Oil is another commodity that is tumbling again. WTI crude oil prices dropped as low as $75.84 per barrel shortly after 5 a.m. ET. Brent crude touched $81.63. While this is great for consumers, this is troubling for the oil producers, who may be forced to idle unprofitable projects....

Republicans rode a wave of voter discontent to secure control of the U.S. Senate and strengthen their grip on the House of Representatives in a punishing blow to President Barack Obama that will limit his power in his last two years in office. Financial markets saw the election results as a cause for optimism. Similar situations in the past have often sparked U.S. stock market rallies.

Julia La Roche October 31, 2014The Federal Reserve ended quantitative easing this week. And soon it'll start tightening monetary policy with interest rate hikes. This is coming as central banks in the rest of the world maintain loose monetary policy or even go as far as to loosen monetary policy further. All of this is bullish for the US dollar relative to other major currencies. Business Insider recently asked the smartest people in finance for what they considered to be the "most important charts in the world." Without hesitation, former global macro fund manager Raoul Pal sent us a long-term...

If you go to different websites or listen to certain radio hosts, there is a lot of discussion of "economic collapse", "dollar collapse" or "petrodollar collapse" and so forth. They make it sound like we will end up like the Weimar Republic with people carrying their worthless money in wheelbarrows. I am not an economics expert (nor do I play one online), but are we really heading for collapse or is it all a bunch of talk? I know we have a huge debt problem, but we keep printing money. How long can this keep going? I am confused! Any...