Major Outflows Face Britain Before #Brexit

Billions of pounds taken out of the British economy amid fears of Brexit

Investors are taking fright as the referendum nears

Investors are moving billions of pounds in assets out of British currency and assets ahead of the European Union referendum, new figures suggest.

Around £65bn left the UK or was converted into other currencies in March and April, the largest amount since the economic crash.

In the six months to the end of April, £77bn was pulled out of British pounds, compared to just £2bn in the six months to the end of last October.

The figures, published by the Bank of England, are consistent with investors worrying that the pound is due for a sharp fall should Brexit to occur.

Because financial markets are prone to collective panic, investors’ views are the main factor in determining whether the pound will actually fall. Any perception that a fall was about to take place could end up becoming a self-fulfilling prophecy.

In February, HSBC warned that 20 per cent could be wiped off the value of sterling were Britain to leave the EU. In May this figure was corroborated by the National Institute for Economic and Social Research. 

 Independent

Why Britain Is Edging Toward ‘Brexit’  

From an economic perspective, Britain appears to benefit from immigration. Immigrants from Europe pay substantially more in taxes than they receive in benefits. And Britain appears to need more workers. Its unemployment rate is 5.1 percent. More revealing, the country’s employment rate, which records the proportion of people between 16 and 64 who are working, is 74.2 percent, the highest level since comparable statistics began to be tracked in 1971.

The Logic of Paper Money, Debt, and Gold  

Central banks want debt based currencies because they are easily created. Consequently the currency in circulation and total debt drastically increase and prices follow, sooner or later. Compare the cost of medical care, college tuition, an ounce of gold, a gallon of gas, a six-pack of beer, or a week’s groceries today versus the cost for the same items in 1971. Massive debt, caused by politicians and bankers, also acts as a drag on economic growth. To create more growth the conventional answer is stimulus and more debt, which, at best, delays and aggravates the excess indebtedness problem. Bad policy produces bad results.

More Young Adults Are Living With Their Parents  

Indeed, 71 percent of German women and 83 percent of men between ages 18–24 live at home. Once they near their thirties, those numbers plunge—to 9 percent of women and 18 of men—but that’s because almost half of that demographic is married or cohabitating, compared to 31.6 percent of their American counterparts.

 Yellen  Says Latest Jobs Report Raises Questions About Economic Outlook 

Janet Yellen speaks at a World Affairs Council of Philadelphia event on Monday. Federal Reserve Chairwoman Janet Yellen affirmed Monday that the central bank won’t be raising short-term interest rates until new uncertainties about the economic outlook are resolved. Her comments, delivered at the World Affairs Council of Philadelphia, echoed conclusions investors drew Friday after the release of disappointing job market data . Ms. Yellen and other officials still believe they will be gradually lifting rates because they expect the economy to improve. However, a rate increase at the Fed’s policy meeting next week is now effectively off the table. An increase in July is possible but has become less likely, and a September move is possible if economic data show the economy is rebounding by then. Her comments represented a shift from less than two weeks ago, when she confidently said a strengthening meant the Fed likely would […]

 wsj.com

Could #Trump Trigger Global Economic Collapse?

Janet Yellen had the perfect response to a question about Donald Trump causing a global economic crisis

Federal Reserve Chair Janet Yellen spoke in Philadelphia on Monday.

The topic, of course, was the economy and monetary policy and the question of when the Fed will raise interest rates. (Short answer:It's unclear.)

After giving her prepared remarks, Yellen took questions from the crowd at the World Affairs Council of Philadelphia.

The final question put to Yellen, naturally, was about Donald Trump, the presumptive Republican presidential nominee.

A gentleman asked Yellen a question regarding commentary the person — who was not a member of the media — had heard on the morning and Sunday political shows (think "Meet the Press" and "Morning Joe") about the potential for a Trump presidency to cause "an economic crash all over the world" because of how the rest of the world sees Trump (namely: as a loose cannon).

This gentleman asked simply, "Is this a possibility?"

Yellen laughed, and said only: "I'm sorry, I've got nothing for you. We're focused on our jobs."

Back in May, Trump said that in business he had borrowed knowing that you could "pay back with discounts," which is another way of saying your lenders won't get all their money back.

And while issuing the high-risk debt of a casino company might allow for this possibility, Trump floated this idea with respect to US government debt, considered the safest and most liquid noncash asset in the world.

Business Insider 

Why OPEC’s Inaction Didn’t Harm Oil Markets  

Oil storage levels fall. But the losses were quickly regained on June 2 as the fundamentals continue to provide some reassurance. Storage levels in the U.S. fell by another 1.4 million barrels, the first time that the U.S. has posted consecutive weeks of declines in a long time. Also, U.S. oil production fell by yet another 32,000 barrels per day last week – the losses continue to mount and output is down by more than 900,000 barrels per day from last year’s peak at nearly 9.7 mb/d. The oil markets were buoyed by these figures, pushing WTI and Brent back towards $50 per barrel following the disappointment from Vienna.

China's Debt Load Is (Much) Higher Than Previously Thought, Goldman Says  

Of particular issue is the rise in opaque loans given noises surrounding China's circular financing schemes, which involve banks lending to non-bank financial institutions (NBFIs) as opposed to directly to companies. While this "round-tripping," as Goldman dubs it, does help boost bank profits, it also means more investments on bank balance sheets and more money meandering through the financial system as opposed to moving into the real economy through an increase in M2 money supply.

The Mushroom Farmer Versus Drug-Resistant Superbugs 

Thanks to their strong antimicrobial properties, secondary metabolites have long been exploited in medicine for use against infections. Penicillin and ethanol are both products of fungal metabolites. Lovastatin and cyclosporine, too. Focused on defending his mushrooms, Cotter at first didn’t see any medicinal potential in his discovery. But after two years of experimenting, it clicked: If his mushrooms could grow tailor-made weapons against any other types of fungi, would it be possible for them to do the same against any type of bacteria, too?

Bank of Scotland warns of further North Sea pain after ‘severe’ oil slump 

North Sea oil companies are poised to make even deeper cuts to the embattled workforce this year as almost half say that costs need to fall further to manage the aftermath of the oil market crash. The Bank of Scotland has warned that nearly a third of companies are planning further job cuts to survive the slow recovery from sub-$30 a barrel oil prices seen earlier this year. The bank’s annual oil sector survey shows that 43pc of companies are planning cost cutting even after sweeping job losses and a dramatic pullback in investment last year. The Bank of Scotland’s Stuart White said “there are still choppy water to navigate”. “With oil prices currently hovering around the $50 mark there is hope that prices have bottomed out and have begun to slowly and modestly recover. Many businesses however, undoubtedly face more difficult decisions on cost savings, jobs and investment,” […]

 peakoil.com