Is This the Tipping Point?

Via Birch Gold Group

Is This the Tipping Point?

From Peter Reagan at Birch Gold Group

After almost 15 years of Fed-fueled cheap money offered at near-zero rates that was leveraged into overinflated speculative bubbles, the lights are on, the crowd is dispersing – and the party might finally be over.

At an actual party, it’s easy to know when it’s time to say your goodbyes. The hosts turn the music off, start looking at their watches and taking away the snacks.

In this metaphorical party, though, how do you know when it’s over?

Analysts describe the end as a “Minsky Moment,” defined as:

the onset of a market collapse brought on by the reckless speculative activity that defines an unsustainable bullish period. Minsky Moment is named after economist Hyman Minsky and defines the point in time where the sudden decline in market sentiment inevitably leads to a market crash. [emphasis added]

The two most important words there, I think, are “sudden” and “inevitably.”

Experts from JP Morgan think the moment is now:

Bank failures, market turmoil and ongoing economic uncertainty as central banks battle high inflation have increased the chances of a “Minsky moment,” according to JPMorgan Chase & Co.’s Marko Kolanovic.

In the past week, investors have contended with several U.S. bank bailouts, market volatility, the collapse of Credit Suisse and the European Central Bank’s 50 basis-point rate hike. Continue reading “Is This the Tipping Point?”

Tommy Robinson will be the UK’s tipping point

Guest Post by Joshua Winston

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I remember cycling through the streets of South London on that blood-soaked day five years ago when Lee Rigby was killed. Riot vans screamed and hurtled past me. I’d no idea what was going on. It wasn’t until I got home that I saw there was an attempt at a beheading on the streets of South London, which explained the riot vans. I was traumatized, along with any other normal and sane human being who watched the murder unfold. The raised and bloodied hands of the devout Muslim who tried to behead Lee. The knife. The interview he gave.

Continue reading “Tommy Robinson will be the UK’s tipping point”

EU ABOUT TO GET A BAD CASE OF GAS

So let me get this straight. Obama and the nattering nabobs of NATO are threatening Russia with economic sanctions. Meanwhile, Europe is entirely dependent on Russian oil and natural gas to run their societies. Even the U.S. imports 200,000 barrels of oil per day from Russia. The American and European oligarchs can certainly make Russia feel pain by freezing assets and hurting their currency, but at the end of the day, they will still have the oil and gas in the ground.

If I was a betting man, I think our old friend China might just take some of that oil and gas off of Russia’s hands and provide some short term liquidity to old Vlad.

I wonder how the booming American economy will function at $150 per barrel oil? Maybe Obama can ramp up those student loans and subprime auto loans to save the country.

This little political incident has all the makings of a tipping point in the decline of the teetering American Empire. The rise of China/Russia has never been more evident.

But at least we gave out multiple Oscars to slave films and gay films to prove we are progressive. We got that going for us.

 

It Begins: Gazprom Warns European Gas “Supply Disruptions” Possible

Tyler Durden's picture

We had previously warned that Putin’s “trump card” had yet to be played and with Obama (and a quickly dropping list of allies) preparing economic sanctions (given their limited escalation options otherwise), it was only a matter of time before the pressure was once again applied from the Russian side. As ITAR-TASS reports, Russia’s Gazprom warned that not only could it cancel its “supply discount” as Ukraine’s overdue payments reached $1.5 billion but that “simmering political tensions in Ukraine, that are aggravated by inadequate economic conditions, may cause disruptions of gas supplies to Europe.” And with that one sentence, Europe will awaken to grave concerns over Russia’s next steps should sanctions be applied.

 

It would appear this is the most important map in Europe once again…

 

 

Some recent history…

In late January, Ukraine asked Russia for deferral of payments for gas supplied in 2013 and in early 2014. President Vladimir Putin said Ukraine’s debt totalled $2.7 billion then.

and then…

On March 1, Gazprom’s spokesperson Sergai Kupriyanov said the gas holding could cancel its gas supply discount for Ukraine as its overdue debt for gas reached $1.5 billion. This figure includes debts not only for last year’s supplies, but also for the current deliveries.

 

The situation with payments is worrying,” said Andrei Kruglov, Gazprom’s chief financial officer.

Ukraine is paying but not as well as we would like it to. We are still thinking about whether to extend the pricing contract into the next quarter based on current prices.”

And now today…

Russia’s gas giant Gazprom said on Monday it did not rule out possible disruptions of gas supplies to Europe over Ukraine’s political situation.

 

Simmering political tensions in Ukraine, that are aggravated by inadequate economic conditions, may cause disruptions of gas supplies to Europe,” the monopoly said in its materials, adding that it would do its utmost to reduce export risks.

 

“We will further invest into other export-oriented projects such as South Stream and will enhance our LNG (liquefied natural gas) production and export capacity. We also increase our access to underground gas storage facilities in Europe.”

 

Andrei Kruglov, Gazprom’s chief financial officer, said at the moment Russia had been supplying gas to Ukraine according to schedule, although the latter failed to fulfil its debt obligations.

With that last sentence providing exactly the ‘real world’ cover Gazprom needs to cut its supplies “through” Ukraine and thus to Europe…

And, as The Guardian notes, this would…

not the first time Russia has used gas exports to put pressure on its neighbour – and “gas wars” between the two countries tend to be felt far beyond their borders. Russia, after all, still supplies around 30% of Europe’s gas.

 

In late 2005, Gazprom said it planned to hike the price it charged Ukraine for natural gas from $50 per 1,000 cubic metres, to $230. The company, so important to Russia that it used to be a ministry and was once headed by the former president (and current prime minister) Dmitry Medvedev, said it simply wanted a fair market price; the move had nothing to do with Ukraine’s increasingly strong ties with the European Union and Nato. Kiev, unsurprisingly, said it would not pay, and on 1 January 2006 – the two countries having spectacularly failed to reach an agreement – Gazprom turned off the taps.

 

The impact was immediate – and not just in Ukraine. The country is crossed by a network of Soviet-era pipelines that carry Russian natural gas to many European Union member states and beyond; more than a quarter of the EU’s total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines. Austria, France, Germany, Hungary, Italy and Poland soon reported gas pressure in their own pipelines was down by as much as 30%.

Short of an actual war, the consensus appeared to be, Europe’s gas supplies are unlikely to be seriously threatened (since Putin relies on those revenues)… that is clearly about to change with Gazprom’s comments.

As the following image from Agence France Presse (created at the end of last year) indicates, things are about to get a lot more problemati for Germany, France, and Italy…