It's Official (Finally): The US Is No Longer The World's #1 Economy

It seems rather appropriate that just seven days after the US government hit a whopping $18 trillion in debt, mainstream financial media has picked up the IMF’s recent World Economic Outlook report, which puts the US economy as #2 in the world.

There’s no shortage of ostriches out there who come up with every reason in the world why this doesn’t matter.

They say, ‘oh the IMF is just reporting purchasing power parity.’ Or, ‘oh it’s the per capita GDP that it counts.’

But the obvious truth is that the US is in decline. And it’s being overtaken.

1,000 years ago when Europe was just a tribal backwater with local warlords duking it out over salt mines, Asia was the center of wealth, power and civilization.

That changed. The West overtook the East in terms of power and influence and it remained that way for centuries.

Now things are changing once again. The West, and the US in particular, is plagued by:

Insane debt levels, which the government has been accumulating at faster and faster rates, hitting an unprecedented $18 trillion in debt this past week.

Short-sighted monetary policy, from quantitative easing that has debased the currency to negative interest rates that have wiped out any reason to be smart with money.

A crippled economy, as Western nations’ oppressive taxation frightens away the productive, and handouts have created a society of dependency.

Global bullying, as the US spies on its own citizens and allies, compelling businesses and governments to terminate their relationships with the Land of the Free.

Waging endless wars, whether against nouns (‘terrorism’), plants (‘drugs’), and brown people on the other side of the planet who supposedly hate us for our freedom. If they only knew…

A population that lives in fear, as you are more likely to get shot by your own police in the United States today than to ever even see a terrorist.

It’s pretty hard to maintain the top spot when that’s what you stand for.

China obviously has its own substantial problems, but over the last several decades one thing is for certain - China (and Asia in general) is a place where production and savings are valued.

The universal law of wealth is to produce more than you consume. The West has completely broken that.

They’re trying to replace it with debt, war and intimidation. And we’re now only just starting to scratch the surface of the consequences that this brings.

History shows that every time this happens, governments in power will do anything they can to maintain the status quo and keep the party going just a little bit longer.

Do you have an obligation, simply by an accident of birth, to go down with the sinking ship?

Do you owe desperate politicians a greater share of your livelihood so they can blow it on even more war, police and spying?

Or is your primary obligation to your family and your loved ones?

The truth is that all the tools and all the resources exist to disconnect from this economic Hindenburg.

You can choose to either be an unwilling participant in its continued unraveling. Or, to be a curious spectator, having take steps to protect what you’ve worked your entire life to build. The choice is yours.

Sourced From : Simon Black via Sovereign Man blog,

Philippines expands nickel production with increasing demand from China

Incomparable level of demand from China, for nickel ore, has opened up a sizeable market for the Philippines nickel miners, to expand their export of nickel, and also poking the government to look into the underdeveloped mineral industry, and to take required steps in order to maximize the output, during this period of increasing demand.

The unpredictable, ban on the export of unprocessed nickel from the world’s largest producer of nickel, Indonesia, had left Philippines to become the provider of nickel in the world, including China, the country which uses a high amount of nickel pig iron for the production of stainless steel. The ban was issued when the government was trying to dig out ways to increase the economic contribution towards the mining sector, which was nearly 1 percent in the GDP, even with the presence of untapped mineral resources.

In the year 2013, Philippines was ranked as the biggest producer of nickel along with Indonesia, by the US Geological Survey, and the country is now increasing its output of nickel with great speed and enthusiasm. Marcventures Holdings, a Philippines based nickel miner, announced that the company had received approval from the government to expand the operations in the company’s mines. The Mines and Geoscience Beauro granted the mine with a permit to extract nickel ore from 4,799 hectares site, which Mindanao’s Surigao del Sur province.

Copper Market: ICSG expects surplus in 2015

After five years in a row of deficits, the copper market should show a production surplus in 2015, according to The International Copper Study Group.

The ICSG forecasts a deficit of refined copper this year of about 270,000 tons, before swinging to a surplus next year of an estimated 390,000 tons. In April the ICSG had forecast a surplus in 2014 of 400,000 tons.

But “operational failures combined with delays in ramp-up production and start-up of new mines, are leading to lower than anticipated growth,” the ICSG stated in its Copper Market Forecast 2014-2015 released Oct. 15 after a two-day meeting at the beginning of the week in Lisbon, Portugal.

After a growth rate of 8% in 2013, world mine production of the metal is expected to grow by about 3% year-on-year in 2014 to 18.6 million tons, and by about 7% in 2015, ICSG says.

It expects strong growth in world mine production next year “owing to additional output from expansions and new mine projects” and says “most of the new production is expected to be in the form of copper in concentrate.”

ICSG forecasts world refined copper production is likely to increase by about 5% year-on-year to 22.1 million tons in 2014 and by a further 4% to 23.1 million tons in 2015. The increases are “mainly supported by expanded capacity at electrolytic plants in China (and to a lesser extent from expanded SX-EW capacity in Africa).”

Global Lead demand may rise to 11.33 MMT in 2014: ILZSG

The International Lead and Zinc Study Group said that global demand for refined lead metal will continue to exceed supply by a modest amount in both 2014 and 2015, forecasting a deficit of 38,000 mt this year and 23,000 mt in 2015.

Global demand for refined lead metal is forecast to rise by 1.4% to 11.33 million mt this year and by a further 2.1% to 11.56 million mt in 2015, the ILZSG said.

Group added that in China, despite a further increase in automotive output and an expansion in the construction of mobile phone base stations that require industrial lead-acid batteries for back-up power, demand growth is expected to slow to 2.5% in 2014 and 2.9% in 2015.

This is mainly due to a slowing of the increase of output of e-bikes that account for a significant portion of Chinese automotive lead-acid battery sales.

WTI Crude Tumbles Back Below $66, Heads For Lowest Weekly Close Since July 2009

It appears the growth-is-back-just-look-at-the-jobs-number meme is not flowing through to the oil complex. WTI just broke below $66.00 (having earlier broken below and bounced back above) and is now down almost 1% on the week having retraced most of Monday's kneejerk dead-cat-bounce. This will be the lowest weekly close since July 2009 and down 9 of the last 10 weeks.

From surging dead-cat-bounce to slow death...

To the lowest weekly close since July 2009...

But don't worry, The White House says

• *FURMAN SAYS MOST U.S. OIL PROFITABLE AT CURRENT PRICES: CNBC

Which is just a lie...

Charts: Bloomberg

The Only Two Charts You Need To Understand The S&P 500

As long as corporations continue borrowing money to buy back their own stocks and the yen keeps dropping, the SPX will continue lofting higher. 

Why is the S&P 500 rising, even as valuations are getting stretched, profit growth is declining and sales are stagnant? Two charts explain it all. Here is a chart showing the S&P 500 companies that have been buying back their own stocks (often by borrowing cheap money to do so) and companies that haven't bought back hundreds of billions of dollars in their own stock.
 

The unmanipulated sector rose a bit, while the stock buyback crowd soared:

Here is the S&P 500, with red lines marking its recent lows:
 

Here is the Japanese yen ETF FXY, with red lines marking its recent highs. The correlation is near-perfect: when the yen drops, the SPX rises.
 

This is a function of the carry trade, in which speculators borrow money in near-zero interest-rate yen and buy U.S. stocks with the cash. The financiers make money in two ways: the buying pushes the U.S. stocks up and the decline of the yen means they can pay back their loan in cheaper yen.
 

But the correlation isn't caused by just the carry trade: it's also a function of trading computers keying on the carry trade for momentum and direction.
 

The correlation is also visible in two ratio charts: SPX-FXY, and FXY-SPX:
 

As long as corporations continue borrowing money to buy back their own stocks and the yen keeps dropping, the SPX will continue lofting higher. If either of these drivers fades or reverses, the rally in SPX will reverse, too.

Sourced From Charles Hugh-Smith of OfTwoMinds blog

Copper decline as demand in China slumps

The analysts confirm that, the decline will remain as it is or move further downward for at least 10 weeks, which will be noted as the lowest since, and the farthest decline since 2013 February.  The value of copper dugged down by 6.6 percent in the month November, and was the highest decline in the value of the metal for the last  17 months. The investors are spreading out, the weak demand for the metal in China, where the  economists have already noted down the weakest expansion since the year 1990.

China is the main consumer of copper, and therefore the decline in demand from China will harshly  affect the commodity. According to the analysts, the decline in demand for copper in China is about to grow further, deeper, and will increase the chances for future decline in the value of the  metal.

The economy of Utah, for a large extend, always depended on copper, for more than a century, as the country  depends on the ore from one of the world’s largest open pit copper mines, Bingham Canyon Mine, owned by Kennecott.