5 ‘real world’ signs of the coming Chinese apocalypse

By Pamela Heaven

From shrinking trade to stalling factories to surprise rate cuts, signs are mounting that China is headed for a hard landing.

Tuesday investors fretted as China’s imports in June grew at half the expected pace, entrenching concerns that domestic demand in the world’s second-largest economy is cooling quickly.

The news was also not a good harbinger for China first-half GDP data to be released later this week.

While economists crunch the latest numbers, Trefor Moss, writing for Foreign Policy magazine, provides “real-world signs of China’s economic malaise.”

The stimulus that China pumped into the economy during the 2009 downturn is coming home to roost for local governments.

Municipalities are being asked to repay their debts and local officials, who indulged in fancy fleets among other luxuries during the boom years, are feeling the pinch.

The city of Wenzhou is planning on auctioning off 80% of its vehicles this year, 1,300 cars, with similar fire sales being held nationwide.

About 30 people were hurt and two police cars were smashed last month when a riot broke out in Shaxi township in Guangdong province — known as the ‘world’s factory floor.’

As exporters go bust and factories cut shifts, tensions between migrant workers and locals over layoffs and wage cuts are mounting. Migrant workers are the elbow grease of China’s growth and their disaffection could be its undoing, writes Moss.

More than half of China’s millionaires are either considering emigrating or have already taken steps to do so, a survey by Bank of China and wealth researcher Hurun Report revealed. And if they haven’t moved yet they are spending their money elsewhere.

Another survey by Allianz China Life Insurance says China’s wealthy are losing confidence in the domestic market and socking money into cash and less into stock, real-estate and other investments. Sales of luxury goods inside China are down, but investment in high-end property overseas is up.

A ‘naked official’ is a term in China that refers to an official who has sent his family and money abroad and is poised to make a getaway himself. And their numbers are rising.

Chinese prosecutors say 18,487 officials, including executives from state-owned companies, have been caught during the last 12 years while allegedly trying to flee overseas with ill-gotten gains, the Los Angeles Times reports.

As Moss points out, China’s wealthy are often members of the same family, and if China really does go into recession, a lot of rich people may decide to cut and run.

China’s ports are piled high with surplus coal as businesses and citizens try to save on electricity bills. Factory production cuts have contributed to the slump in demand.

The national price of coal is down 10% since late last year, a drop that will hit the global economy and in turn cut demand for Chinese exports.

Last year pork prices skyrocketed 57% in response to the growing Chinese appetite for meat, but over the past four months that demand has slipped. So much so that the hog-to-corn price ratio which measures whether rearing pigs is profitable dipped into the red and the government had to step in. At the same time the price of eggs has shot up so quickly that shoppers now call them ‘rocket eggs’ and Chinese consumers, shaken by the faltering economy and food safety scares, are opting to grow their own food.

Iran threatens Israel; new EU sanctions take force

By Yeganeh Torbati

(Reuters) - Iran announced missile tests on Sunday and threatened to wipe Israel "off the face of the earth" if the Jewish state attacked it, brandishing some of its starkest threats on the day Europe began enforcing an oil embargo and harsh new sanctions.

The European sanctions - including a ban on imports of Iranian oil by EU states and measures that make it difficult for other countries to trade with Iran - were enacted earlier this year but mainly came into effect on July 1.

They are designed to break Iran's economy and force it to curb nuclear work that Western countries say is aimed at producing an atomic weapon. Reporting by Reuters has shown in recent months that the sanctions have already had a significant effect on Iran's economy.

Israel says it could attack Iran if diplomacy fails to force Tehran to abandon its nuclear aims. The United States also says military force is on the table as a last resort, but U.S. officials have repeatedly encouraged the Israelis to be patient while new sanctions take effect.

Washington said the EU's oil ban might force Tehran to give ground at the next round of nuclear talks, scheduled for this week in Istanbul.

Announcing three days of missile tests in the coming week, Revolutionary Guards General Amir Ali Hajizadeh said the exercises should be seen as a message "that the Islamic Republic of Iran is resolute in standing up to ... bullying, and will respond to any possible evil decisively and strongly."

Any attack on Iran by Israel would be answered resolutely: "If they take any action, they will hand us an excuse to wipe them off the face of the earth," said Hajizadeh, head of the Guards' airborne division, according to state news agency IRNA.

The missile tests will target mock-ups of air bases in the region, Hajizadeh said, adding that its ability to strike U.S. bases in the Gulf protects Iran from U.S. support for Israel.

"U.S. bases in the region are within range of our missiles and weapons, and therefore they certainly will not cooperate with the regime (Israel)," he told IRNA.

Iran has repeatedly unnerved oil markets by threatening reprisals if it were to be attacked or its trade disrupted.

The threat against the Jewish state echoed words President Mahmoud Ahmadinejad spoke in 2005, saying Israel "must be wiped off the page of time" - a phrase often translated as "wiped off the map" and cited by Israel to show how allowing Iran to get nuclear arms would be a threat to its existence.

The EU ban on Iranian oil imports directly deprives Iran of a market that bought 18 percent of its exports a year ago. The sanctions also bar EU companies from transporting Iranian crude or insuring shipments, hurting its trade worldwide.

"They signal our clear determination to intensify the peaceful diplomatic pressure," British Foreign Secretary William Hague said in a statement.

The EU sanctions come alongside stringent new measures imposed by Washington this year on third countries doing business with Iran. The United States welcomed the EU sanctions as an "essential part" of diplomatic efforts "to seek a peaceful resolution that addresses the international community's concerns about Iran's nuclear program."

White House spokesman Jay Carney said he hoped the sanctions would force Tehran to make concessions in technical-level talks with six world powers later this week.

MALICIOUS POLICIES

"Iran has an opportunity to pursue substantive negotiations, beginning with expert level talks this week in Istanbul, and must take concrete steps toward a comprehensive resolution of the international community's concerns with Iran's nuclear activities," Carney said in a statement.

The United Arab Emirates and Bahrain - foes of Iran which face it across the oil-rich Gulf - announced their own joint air force exercises on Sunday which they said would take "several days," their state news agencies reported.

In three rounds of talks between Iran and the United States, Russia, China, Britain, France and Germany, the Western powers have demanded Tehran halt high-grade uranium enrichment, ship out all high-grade uranium and close a key enrichment facility.

The talks lost steam at the last meeting in Moscow last month and there was not enough common ground for negotiators to agree whether to meet again. Officials - but not political decision-makers - meet in Turkey on Tuesday.

Washington sees the sanctions and talks as a potential way out of the standoff to avert the need for military action, but has not said it would block Israel from attacking Iran.

Tehran says it has a right to peaceful nuclear technologies and is not seeking the bomb. It accuses nuclear-armed states of hypocrisy. Officials said they were taking steps to reduce the economic impact of the new sanctions.

"We are implementing programs to counter sanctions and we will confront these malicious policies," Mehr news agency quoted Iranian central bank governor Mahmoud Bahmani as saying.

Bahmani has struggled to prevent a plunge in the value of the rial currency and steadily rising inflation as the sanctions have taken effect. He said the effects of the sanctions were tough but that Iran had built up $150 billion in foreign reserves to protect its economy.

Oil Minister Rostam Qasemi said oil importing countries would be the losers if the sanctions lead to price rises.

"All possible options have been planned in government to counter sanctions," Qasemi said on the ministry's website.

Last Friday, another Revolutionary Guards commander, Ali Fadavi, said Iran would equip its ships in the Strait of Hormuz - the neck of the Gulf and a vital oil transit point - with shorter-range missiles.

Turk - Capital Controls, Panic, The Great Depression & Gold

With tremendous volatility in global markets, today King World News interviewed James Turk out of Europe. Turk told KWN that we are headed into an extraordinarily dangerous time for both the markets and the financial system, that will end in a massive panic. Here is what Turk had to say about what is taking place: “Today was a very important day, Eric, because gold was strong while the stock markets were weak. This is a trend I expect to continue, and one that will baffle many financial analysts, going forward, that don’t understand this type of cycle.”

James Turk continues:

“I was hoping to see more strength in the precious metals at the end of last week, Eric, given the pummeling gold and silver were given. But I guess that was too much to ask for with July option expiry this week.

Having driven the price of gold and silver down to this low level, I assume the paper-shorts will try to keep prices as low as possible, in order to maximize their profit by having calls they sold expire out of the money. We've seen this happen many times over the years....

“But there has not been any change in my thinking. Gold and silver are simply testing the May lows. So far the test has been successful. More importantly, we have to keep foremost in our minds that gold and silver remain in a bull market. I keep being reminded of this fact every time I look at the news, which keeps getting worse over here in Europe.

I think Nigel Farage got it exactly right in his interview with you on Friday. He said that the leaders over here need to resort to financial ‘repression’ to keep the euro project from falling apart. Of course that is not a solution, but simply a stop-gap by panicky leaders, who don't know what to do or who listen to bad advice.

Anyway, after Nigel's interview, the Spanish government announced the imposition of various capital controls, limiting the use of cash by companies and individuals. Expect more capital controls, soon, throughout the eurozone. That will only add to the panic, which is already bubbling just below the surface.

As we know, Eric, government actions like these do nothing to solve the problem. Financial repression is never a solution. Capital controls only buy more time, but you can't do that forever. So money continues to leave the European banks. The bank runs are not disappearing. In fact, they jumped across the Atlantic to South America, where Argentine banks are rapidly losing dollar-denominated deposits.

Bank runs were a focal point of the Great Depression, but they were just part of a bigger 3-step process that has parallels to today. After the 1929 stock market crash, people moved money out of investments and put it into banks. They wanted the liquidity, and, at first, did not fear for the safety of their money on deposit. We went though this step with the Lehman collapse.

As the economy weakened in the 1930s, people started to convert their deposits into cash currency. This was the second part of the crisis, when fear for the safety of one's money became more important than liquidity. We are now at stage two in Europe, and soon will be reaching this stage in the US. The downgrade of the major US banks, last week, is bringing heightened awareness of the fragility of the US banking system, meaning they are extremely very vulnerable to an economic downturn.

Europe's economy is clearly on a downward path, and economic activity in the US is slowing too. So the third step of the process might be closer than we think. That's when, in the 1930's, people moved out of cash, and into gold.

They did so back then because even though the US dollar was still formally tied to gold, people began to understand that there was more paper outstanding than there was gold in the US reserve. They believed that the US government could not possibly keep its promise to redeem $20.67 for one ounce of gold, so they moved out of paper-currency.

Importantly, they were right. President Roosevelt eventually devalued the dollar by 69.4%, dropping the gold content of one US dollar from 23.23 grains to 13.71 grains of fine gold. He adjusted the price of gold from $20.67 an ounce to $35 an ounce.

In the 1930's, if people we lucky enough to get their money out of any of the hundreds of banks that failed, they didn't want to take any more chances, Eric. They soon realized that the paper currency in their hand wasn't much safer than when they had their money on deposit in a bank. The panic to obtain gold or silver marked the bottom of the Great Depression. The solution was a higher gold price, and that is the same solution needed today.

President Roosevelt knew the solution in the 1930s, and lowered the gold content of the dollar, thereby raising the gold price. Central planners don't like that solution because it takes away the power they now have with fiat currencies, backed by nothing but their promises, but a higher gold price is coming nonetheless. It is the only solution.”

Buy Gold & Silver Recommends Gerald Celente

Gerald Celente cannot give financial advices but he is telling you what he is doing personally , he is putting his money into the only safe heaven out there and that is Gold and Silver .He is also recommending to boycott these coming elections instead of voting for the lesser of two evils as usual . All politicians are one and the same. Vote for any, you get the same. Jamie Diamond has his cufflinks. We OWN you all. Gerald is so wise an in tune with reality. He is the hero of reason. His knowledge will set us free. Free of the fear the elites need to feed off. Where is the mafia? Um, lizards killed him. Save the truth. Save Julian of Wikileaks. Save the internet. Save yourself from the fear Washington offers Julian. TORTURE for telling truths? Who ruses us? None to choose from .Gerald gave you a high complement. With his knowing, he doesn't honor many. We should play by their rules. When they manipulate metal to lows, buy. Buy and don't sell out. They may crash metals, yet when their paper eft etc can't play off to the owners, It isn't there. All the 1% will fall. It is global. Fearlessness that will bring the "elites to their knees. To have and hold...the poor mans salvation, SILVER.. Buy low and HOLD on.

World cools towards Barack Obama

International approval of US President Barack Obama's foreign policy has dropped sharply during his term in office, a Pew Research survey suggests.

Among the 21 countries surveyed, the largest drop in approval - from 57% to 27% - was seen in China, the Global Attitudes Project reveals.

Most respondents in almost all countries opposed US drone strikes.

Despite these numbers, confidence in Mr Obama remains high among US allies, especially in Europe.

"I think where you see the real disappointment is when you deal with specific policies," said Richard Wike, associate director of the Pew Global Attitudes Project.

He added that the survey showed big gaps between expectation levels and action over Mr Obama's policies on climate change and treatment of the Israeli-Palestinian conflict.

Economic power

According to Mr Wike, confidence in Mr Obama and approval of his international policies has trended downward during the course of his presidency, but has not dropped sharply in a single year.

Besides China, the largest declines in foreign policy approval by 2012 included long-term ally Japan and neighbour Mexico.

Among five European countries surveyed both in 2009 and 2012, approval of Mr Obama's international policies dropped from 78% to 63%. In five Muslim countries surveyed in both years, the approval rate dropped from 34% to 15%. Russia also joined the countries with double-digit declines, from 40% of respondents approving US international policies to 22%, an 18% decrease.

While Mr Obama generally has higher approval ratings than President George W Bush did at the end of his second term, their approval ratings are now matched in Pakistan and Mr Obama's remain only slightly better in Lebanon.

Among the countries surveyed there was widespread opposition to US drone strikes. At least 50% of respondents in 17 countries disapproved of such strikes, with the largest percentages in the Middle East, Mexico and Greece.

In recent weeks, Mr Obama has become more closely associated with the US drone programme, with a New York Times report noting he personally approves each strike, and that the US keeps a "kill list" of potential strikes against militants.

In addition to changes in sentiment towards Mr Obama and his policies, the survey records a shift in the way economic power is perceived.

Majorities in Germany, Britain, France and Spain now regard China as the world's leading economic power, not the US. In the UK, this percentage has doubled since 2008.

Mr Wike told the BBC the US had seen a downward trend in its perceived economic power since the 2008 financial crisis and subsequent recession, despite Mr Obama receiving "reasonably good marks on global economic issues".

However, American "soft power" gets higher marks, especially among young respondents.

The American way of doing business is popular in the Middle East, with more than 50% in Lebanon, Tunisia, Jordan and Egypt saying they like this part of US image.

Majorities or pluralities in 18 of 20 countries admire US science and technology, according to the survey. American ideas about democracy are more popular among respondents under 30 in several countries, including Tunisia and China.