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Oct
11

DailyMail  |  Hugo Duncan

A surge in borrowing is paving the way for another financial crisis.  The latest figures show British households have racked up unsecured debts of £203 billion on credit cards, car finance, overdrafts and other loans.

A surge in household borrowing is paving the way for another financial crisis, according to the International Monetary Fund

 

  • The IMF has warned of a new financial disaster, ten years on from the last 
  • Household debt levels have surged back to 137pc over the past two years
  • Officials now fear UK lenders could lose £30bn in the next downturn

 

A surge in household borrowing is paving the way for another financial crisis, according to the International Monetary Fund.

In a hard-hitting report published ahead of its annual meetings in Washington this week, the watchdog warned of ‘risks down the road’ from rising levels of debt.

And raising the prospect of a new financial disaster, ten years on from the last, the Fund said: ‘Higher household debt is associated with a greater probability of a banking crisis, especially when debt is already high.

A surge in household borrowing is paving the way for another financial crisis, according to the International Monetary Fund.

In a hard-hitting report published ahead of its annual meetings in Washington this week, the watchdog warned of ‘risks down the road’ from rising levels of debt. Read the rest of this entry »

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Oct
11

ZeroHedge  |  Tyler Durden

Schauble warned that the world was in danger of “encouraging new bubbles to form”.

Image result for financial bubble images

Following the disappointing for Angela Merkel and her CDU German election results, which propelled the populist AfD into Germany’s political establishment with 92 members of parliament, the first casualty was Germany’s finance minister, Wolfgang Schäuble, who in a few days will relinquish his long-held post and move on to the ceremonial role of Bundestag president. As part of his farewell tour, Schäuble – like so many other former members of the establishment- took a parting shot at the system he helped create and warned that “spiraling levels of global debt and liquidity”, as well as “new bubbles” present a major risk to the world economy.

Read the rest of this entry »

Oct
11

TheDailyReckoning  |  Jim Rickards

Russia is also part of a reported Chinese plan to install a new international monetary order that excludes U.S. dollars.

The Only Russia Story That Matters

The World Gold Council has reported that the Central Bank of Russia has more than doubled the pace of its gold purchases, bringing its reserves to the highest level since Putin took power 17 years ago.

Russia’s desire to break away from the hegemony of the U.S. dollar and the dollar payment system is well-known. Over 60% of global reserves and 80% of global payments are in dollars. The U.S. is the only country with veto power at the International Monetary Fund, the global lender of last resort.

Perhaps Russia’s most aggressive weapon in its war on dollars is gold. The first line of defense is to acquire physical gold, which cannot be frozen out of the international payments system or hacked.

Read the rest of this entry »

Oct
09

RTBusiness  |  Jorge Silva

The President of Venezuela Nicolas Maduro has proposed oil producing countries should discuss creating a currency basket for trading crude and refined products.

© Marco Bello

Venezuela ditches dollar for oil payments to dodge US penalties

“Developing a new mechanism of controlling the oil market is necessary,” he said on Wednesday at the Russian Energy Forum, being held in Moscow this week.

According to Maduro, trading paper futures has an adverse impact on the oil market, undermining attempts by the Organization of the Petroleum Exporting Countries (OPEC) to stabilize prices.

Introducing alternative currency baskets, including the yuan, ruble, and other currencies will eliminate the impact of futures trading, according to the Venezuelan president.

Maduro insisted Venezuela is dealing with its debt to Russia, and that Rosneft’s deal with Venezuelan state oil producer PDVSA is “subject to negotiation.”

“We fulfill all the obligations to Russia. If we get more favorable terms for restructuring the debt, this will be the result of a deal between the two governments,” said Maduro.

Maduro pointed out that US sanctions make it difficult to negotiate the debt issue with American debt holders.

Caracas is framing a plan to deliver its crude to alternative markets should the White House impose sanctions on trading the country’s oil, Maduro said in response to a question on the possibility of PDVSA’s default.

“Venezuela has plans A, B, C, and others. There are other international companies interested in buying oil and refined products. We will create the best terms for them,” he said.

Oct
09

PiggyBank  |  Feyi Fawehinmi

Image result for unity bank images

For a while now, economists and finance types who follow the Central Bank of Nigeria (CBN) have been sounding a low intensity alarm about the CBN’s direct funding of the Nigerian government.

Between December 2013 and April 2017 for instance, the CBN’s “claims on the federal government” went from 678 billion naira to 6.5 trillion naira ($1.8 billion to $17.3 billion)—an almost 10-fold rise. These “claims” are made up of overdrafts, treasury bills, converted bonds and other such lending. For the most part, the issue has remained an obscure one that receives hardly any attention from local media.

But then, a couple of weeks ago, the CBN finally published the personal statements of the Monetary Policy Committee (MPC) members from the July meeting [PDF] and suddenly the alarm bells started ringing. The personal statement of Dr. Doyin Salami, a well-regarded member of the MPC noted for his straight talking, said the CBN was providing a “piggy-bank” service to the federal government. Specifically, he said [page 38]:

Perhaps the most challenging of the present characteristics of the economy in Nigeria is the adoption of a quantitative easing stance by the management of the Central Bank. Monetary data shows a sharp rise in the extent of CBN financing of the government deficit.

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Oct
09

Mises.org  |  Marcia Christoff-Kurapovna

Gold is a must-have portfolio asset amid the aggressive debt levels and monetary debasement that have so unhinged the market.

Time is the soul of money, the long-view — its immortality. Hard assets are forever, even when destroyed by the cataclysms of history. It is the outlook that perpetuated the most competent and powerful aristocracies in continental Europe, well up through World War I and, in certain prominent cases, beyond; it is the mindset that has sustained the most fiscally serious democratic republic in the Western world, that of Switzerland (as demonstrated in this article). In this view, the stewardship of money, formerly known as “banking,” is a serious matter of serious wealth management and not a weird-science lab experiment of investment products ultimately designed for hedge fund managers’ tax arbitrage schemes.

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Oct
09
Oct
09

AroraReport  |  Best Way To Invest

Image result for Stock Market Crash

  NOW 1987
Special Factor Rise of Passive ETF Investing Rise of Portfolio Insurance
     
Sentiment Very Bullish Very Bullish
     
Market Rise Seems Unstoppable Yes Yes
     
Valuations High High
     
Rising Interest Rates Yes Yes
     
Earnings Rising Rising

 

Oct
09
Oct
09

Reuters  |

The Central Bank of Russia (CBR) has more than doubled the pace of gold purchases over the past decade, adding more than 1,250 tons to its gold reserves according to World Gold Council data.

In the second quarter alone, it accounted for 38 percent of all gold purchased by central banks. The gold rush has allowed the CBR to continue piling its reserves while abstaining from purchases of foreign currency (particularly, the US dollar) for more than two years.

“The sixth largest gold reserves in the world, they constitute 17 percent of the nation’s wealth,” said the report. It added that if buying continues at a similar pace, the full year increase in 2017 “could closely match” the 200 tons purchased annually in 2015 and 2016.

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