Published on Jun 21, 2019
More indications of the growing financial exit to avoid the predictable response from totalitarian moves by Beijing. [Backstory – Backstory] Now we see reports growing of mass financial moves out of Hong Kong, as billionaires see the looming shadow of Red Dragon closing in…
HONG KONG (Reuters) – Some Hong Kong tycoons have started moving personal wealth offshore as concern deepens over a local government plan to allow extraditions of suspects to face trial in China for the first time, according to financial advisers, bankers and lawyers familiar with such transactions.
One tycoon, who considers himself potentially politically exposed, has started shifting more than $100 million from a local Citibank account to a Citibank account in Singapore, according to an adviser involved in the transactions.
“It’s started. We’re hearing others are doing it, too, but no-one is going to go on parade that they are leaving,” the adviser said. “The fear is that the bar is coming right down on Beijing’s ability to get your assets in Hong Kong. Singapore is the favoured destination.”
Hong Kong and Singapore compete fiercely to be considered Asia’s premier financial centre. The riches held by Hong Kong’s tycoons have until now made the city the larger base for private wealth, boasting 853 individuals worth more than $100 million – just over double the number in Singapore – according to a 2018 report from Credit Suisse.
The extradition bill, which will cover Hong Kong residents and foreign and Chinese nationals living or travelling through the city, has sparked unusually broad concern it may threaten the rule of law that underpins Hong Kong’s international financial status.
Hong Kong’s Beijing-backed leader, Carrie Lam, has stood by the bill, saying it is necessary to plug loopholes that allow criminals wanted on the mainland to use the city as a haven. She has said the courts would safeguard human rights. (read more)
As predicted Singapore and Tokyo will be the primary benefactors of large scale shifts in financial wealth. The investing class always leads the way. You don’t have to be a geopolitical expert to see what is coming over the horizon. The trick is to make the exit quietly and re-position assets ahead of the rush for the exits.
The best days of Hong Kong are in the rear view mirror. The combination of President Trump’s geopolitical trade pressure upon Beijing, and the natural tendency of China to respond with over-the-top totalitarian tactics (subtlety cast asunder), will mean a crushing and oppressive Red Dragon will soon step in to block the escape doors.
The Red Dragon is going to do what the Red Dragon does.
Thus begins the phase when corporate interests, particularly multinationals, recognize at its core China is a communist state-run, controlled-market, system.
The reaction from China is immensely predictable; and creates a downward spiral. If any corporation is perceived as working against the interests of the state; the state will take control of the corporate interest. What western business interest would want to do business within China when that reality is the landscape of every economic decision?
The willingness of China to self-immolate is the golden arrow in President Trump’s economic quiver. The inability of China to modify itself based on downstream economic outcomes is the inherent weakness… Overlay that weakness with the zero-sum outlook and you get this quote from Chinese State-Run broadcast:
…“If the US wants to negotiate, our door is open. If you want to fight, we will fight to the end.”…
Think about the logical reality of this statement as expressed. Put another way: ‘if you agree to our terms we will work with you; however, if you don’t agree to our terms, we will self destruct.’ That’s the economic reality of the zero-sum dragon mindset. This inevitable position is what CTH has been outlining for several years.
China has no cultural or political space between peace and war; they are a historic nation based on two points of polarity. They see peace and war as coexisting with each other.
Chinese engagement stems from a belief that opposite or contrary forces may actually be complementary, interconnected, and interdependent in the natural world, and they may give rise to each other as they interrelate to one another. However, it must benefit China.
Trump is applying Chairman Xi’s own “us -vs them approach” toward confronting China. The supply chain investment Beijing needs to sustain itself is now being controlled by elements outside China. Beijing responds by attacking those in the international community who control the investment.
This will not end well for China.
Keep watching,… as time goes along and more companies, and nations, slowly walk toward the exits with China. There is just too much inherent financial risk. The first loss is the best loss.
Re-Posted Jun 14, 2019 by Martin Armstrong
The Bank of International Settlements under Basel-III changed the status of gold as a reserve asset effectively on April 1, 2019. Gold used to be viewed by the banks as a risky asset and classified under “Tier-3”, which meant it was considered risky and could only be carried on the books at 50% of the market value for reserve purposes. Naturally, gold has historically been classified as a Tier 3 asset because its value fluctuated. To the extent that the value was reduced for reserve status by 50% ensured that there was little incentive for banks to retain gold as a reserve asset regardless of their beliefs.
Since the BIS reclassified gold as a “Tier-1” asset, its value is now no longer reduced but is reflected as 100%. Now people assume banks will run out and buy gold. The problem is that it is not a fixed price on the balance sheet but it is regarded only as a 100% of market value. While some claim that this makes Gold a “riskless” asset in the eyes of world banking authorities, they fail to note it is market value. Cash does not fluctuate $1 is still $1 regardless of what it buys.
Banks are NOT in a mad rush to buy gold and shift their reserve asses when they cannot employ gold in the banking business. True, there was once upon a time when banks cherish gold reserves but that was when gold was fixed on a standard. It will by no means increase confidence in any bank or the system as a whole. Gold remains illiquid insofar as a reserve asset is concerned.
While there is no incentive for banks to load up on gold even if it is a Tier-I asset from a banking and economic standpoint since we are not on a gold standard and its value will fluctuate unlike cash reserves, There is another reason why a small portion would make sense to retain in gold outside of the United States especially in Europe. The reserve status that is Tier-I in Europe would be bonds of all member states of the EU. There is obviously a risk in that respect.
These standards, collectively called Basel III, compare a bank’s assets with its capital to determine if the bank could stand the test of a crisis. Capital is required by banks to absorb unexpected losses that arise during the normal course of the bank’s operations. The Basel III framework tightens the capital requirements by limiting the type of capital that a bank may include in its different capital tiers and structures.
Because not all assets have the same risk, the assets of a bank are weighted based on the credit risk and market risk that each asset presents. For example, take a government bond may be characterized as a “no-risk asset” and given a zero percent risk weighting. On the other hand, a subprime mortgage may be classified as a high-risk asset and weighted 65%. So Basel III considering government debt as “no-risk” is a little foolish when we look into the years ahead.
Gold will offer a neutral bank with respect to government debt holdings, but it will still not provide a stable base of an asset since it will fluctuate rather than the immediate currency base. Gold will offer a hedge against sovereign debt among European banks more so than America.
Earlier today President Trump welcomed Indy-500 winning team Penske to the White House, along with winning driver Simon Pagenaud. [Video and Transcript]
[Transcript] THE PRESIDENT: Hi, everybody. (Applause.) Congratulations. (Applause.)
Thank you very much. It’s a great honor to introduce the winner of the Indianapolis 500, Simon Pagenaud. And he is an incredible racer. I happened to be watching that one because my friend is somewhat involved with racing. As you know, Roger Penske is — there’s never been anybody like him, I can really say.
We meet a lot of great athletes. And if they win a major three or four times, that’s a big deal. He won 18 Indianapolis 500s. And he was here a few months ago for the Daytona. You won the whole thing with NASCAR, right? And I love NASCAR because they endorsed me. (Laughter.) I think it’s the first time (inaudible) ever endorsed a candidate. The whole league endorsed me. So they — we like NASCAR, too.
But this is an incredible machine. And the job that Simon did, if you saw that, that was talent and it was a lot of courage, because I wouldn’t do it, I will tell you. I’m not going to do it. Even for that trophy. (Laughter.) Maybe for that trophy, I would do it. That’s a great trophy.
But, Simon, I just want to congratulate you.
MR. PAGENAUD: Thank you.
THE PRESIDENT: That was an incredible job. (Applause.)
Roger, come on over. The great Roger Penske. Nobody like him. (Applause.)
(A helmet is presented.)
THE PRESIDENT: I could use it. I could use it for them. (Laughter.) Makes my life easier.
MR. PAGENAUD: (Inaudible.)
THE PRESIDENT: Would you like to say something?
MR. PAGENAUD: I would just like to say that it is — as a Frenchman, it’s such an honor to represent my country here today in the biggest race in the world. And especially being invited to come to the White House with President Trump is a phenomenal achievement. But it’s also an honor for my whole team, Team Penske, the entire organization. We’re very proud to be here today. So, a big thank you. We want to offer you this helmet —
THE PRESIDENT: That’s beautiful, thank you.
MR. PAGENAUD: — to thank you very much for your gesture to have us here.
THE PRESIDENT: And we’re going to find a great spot. (Applause.) And I want to thank all of you guys. And I know when you took those tires off and refueled, and all of the other things you had to do, with — without that, it’s not going to work, right?
MR. PAGENAUD: Exactly.
THE PRESIDENT: And you were setting records. And I think it’s beautiful. I think it’s really brilliant. They actually had you a couple of times in slow motion doing the tires and the fueling and everything else. It was a brilliant thing to watch. So I just want to congratulate everybody. And — special. Really special job.
And Roger has been my friend for many years; we know each other well. And just every year, it’s another one, another one. And I know how hard it is to win the Indianapolis 500. When I see — when I see countries — Japan and Germany and so many countries — spending tremendous amounts of money trying to win that race, and you won it 18 times. That’s incredible. That’s incredible. So I just want to congratulate you, Roger.
MR. PENSKE: Thank you, Mr. President.
THE PRESIDENT: Would you like to say something?
MR. PENSKE: Yes. I think, Mr. President, it’s obviously an honor to have our people in the capital today. And, to me, it’s all about team. It certainly couldn’t be done without the people behind us. And I want to thank you for your team and what you’re doing for our country, and the people who are in our military, and certainly first responders. Thank you very much.
THE PRESIDENT: Well, our country is doing really well, Roger. And I think probably, in many ways, never better. It’s never been better. Our military is being rebuilt. We have equipment that even you’d like, I’ll tell you. We have some great equipment. We make the best in the world, and we’re stocking up.
And unfortunately — hopefully, we’ll never have to use it, but it’s a good thing to have. In fact, the more of it you have, and the better we are. Our military is at now a new level — very soon to be a new level like we’ve never been before. And we make the best equipment in the world, and now we’ll be getting it in and getting it into the military. And they appreciate it. And economically, we’re doing fantastically well. So it’s been great.
I spoke with Governor Cuomo about the helicopter accident in New York. We have a lot of our great folks over there, working very closely with New York City, New York State. And it’s a big tragedy. There will be a report in a little while as to what happened and why it happened. But a very, very sad event. The pilot was killed, as you know. But we’ll have a full report on that soon. But the federal people are working with the city and state people, and they’ll have a full report very soon. Thank you very much.
Q Any reaction to John Dean’s testimony, Mr. President? Mr. President, is there any reaction to John Dean’s testimony today?
Q Have you been watching it?
THE PRESIDENT: Look, John Dean has been a loser for many years. So I’ve been watching him on one of the networks that is not exactly Trump-oriented, and I guess they paid him a lot of money over the years. No, John has been a loser for a long time. We know that. I think he was disbarred and he went to prison. Other than that, he’s doing a great job.
Q Mr. President, Mexico’s foreign minister says there was no secret agreement beyond what was announced on Friday. What do you mean in your tweets?
THE PRESIDENT: Well, we have an agreement on something that they will announce very soon. It’s all done. And they have to get approval, and they will get approval. If they don’t get approval, we’ll have to think in terms of tariffs or whatever. But it’s just another aspect of what we’ve done. It was all done because of the tariffs and because of the relationship that we have with Mexico. I spoke with the President yesterday. And, by the way, I was with the President of France the other day, too.
MR. PAGENAUD: I saw that. Yes.
THE PRESIDENT: And he’s a great guy. Emmanuel. He’s a great guy.
So we had a great conversation the other day. And I think you’re going to see some real action. It’s sad that, when you think of it, Mexico is doing is more for the United States, as of now, than Congress. And, specifically, the Democrats, they have to get their act together. They have to work and get something done because you got a tremendous problem at the border. You have people pouring in. And it means crime. It means drugs. It means so many other things.
We’re building the wall. We’re going to have close to 500 miles of wall built by the end of next year. That’s a lot. And we’re moving along very rapidly. We won the big court case, as you know, the other day. And that was a big victory for us.
So a lot of good things are happening. But I want to thank Mexico. And we do have one other thing that will be announced at the appropriate time. But they have to get approval from their legislative body.
Q What is it?
Q Why are the Mexicans denying it then?
THE PRESIDENT: I don’t think they’ll be denying it very long. It’s all done.
Q Mr. President, you hinted earlier in that CNBC interview that you may not — you’d actually go ahead and impose tariffs if Xi doesn’t show up for the G20.
THE PRESIDENT: We’ll see what happens. I think President Xi —
Q Would you be personally insulted if Xi doesn’t show up? Would you be insulted?
THE PRESIDENT: No. I’m never insulted. I’ve learned not to be insulted. I think President Xi of China — great relationship with him — I think he’ll be there. We are scheduled to talk and to meet. I think interesting things will happen. Let’s see what happens.
Right now, we’re getting 25 percent on $250 billion worth of goods. That’s a lot of money that’s pouring into our Treasury. We’ve never gotten 10 cents from China. Now we’re getting a lot of money from China. And I think that’s one of the reasons that GDP was so high in the first quarter, because of the tariffs that we’ve taken in from China.
We always have the option to raise it another $300 billion at 25 percent. And the 25 percent could be much higher than 25 percent.
But Roger Penske said, “That’s enough.” Twenty-five percent is enough. (Laughs.) Bernard — Bernard said, “That’s enough,” too. Right? (Laughter.) It’s not bad. You like those numbers, right?
Q Mr. President, do you have a message —
THE PRESIDENT: Yes.
Q Mr. President, some of your allies have said that if Democrats open up an impeachment inquiry, that it could actually help your reelection chances. Do you agree with that?
THE PRESIDENT: Well, I hear that too. But you can’t impeach somebody when there’s never been anything done wrong. We have a no collusion. We have no anything. There’s no obstruction. There’s no collusion. There’s no anything.
When you look at past impeachments, whether it was President Clinton or — I guess, President Nixon never got there; he left. I don’t leave. There’s a big difference. I don’t leave.
We did nothing wrong except create the greatest economy in the history of our country. We did nothing wrong except rebuild our military like nobody has ever seen before. We’re doing a great job. Our country has never been stronger.
And I think that having Simon here and Roger here is a tremendous honor for me. And these are champions. These are the people I like. These are great, great champions. Thank you. (Applause.)
Published on Sep 7, 2011
Re-Posted May 31, 2019 by Martin Armstrong
on Sept 12th 2013 you wrote about the ‘Return of the crusades’. Now, 6 years later, with the massive migrant crisis still ongoing, a lot of people consider leaving Western Europe bc Sharia law is looming everywhere. Mohammed takes the first place for baby names in many countries, sharia law spreads, kindergartens don’t serve pork anymore, Easter festivities in school get canceled bc of Ramadan, rapists and even murderers don’t go to jail bc neither the executive nor the judicative has capacities anymore to even open a trial and so on. At the moment, it looks as if Western Europe will become a caliphate within the next decade or two. With Migrants still flooding the continent and the birth jihad, it seems Europeans/Christians will vanish in the foreseeable future. I would like to know what Socrates has to say about this… will there be a counterstrike? Or a religious war? Right-wing parties rise everywhere, so the Europeans ARE fed up. But is there even enough TIME to turn things around…?
What do the cycles say?
Thx and cheers,
ANSWER: Unfortunately, the cycle of religious tension is also due in 2021/2022. The first recorded persecution of Christians took place under Emperor Nero who blamed them for setting the great fire in Rome. The base cycle on a major shift in religion turned up in 1990, which was 224 cycles of 8.6 from 64 AD. Add pi, 31.4 years, and we arrive at 2021/2022. Nevertheless, there was also rising tension with Islam itself. This I laid out in the 2015 Cycle of War report. When the economy turns down, that is when tensions rise. There was the religious war in Christianity known as the Byzantine Iconoclasm, which existed between about 726 and 787 AD. The peak before the war came 72 cycles of 8.6 from the Nero persecution of 64 AD. Then 96 cycles later we come to Martin Luther in 1517 when he posted 95 theses on the church door in the university town of Wittenberg. Cyclically right on time, in 1534 King Henry VIII declared himself to be supreme head of the Church of England. This resulted in a schism with the Papacy and began the events known as the English Reformation.
It appears we are building toward 2021/2022 when things are going to begin to get heated on a religious basis.