Drugs,
Prostitution, Violence Plague Oil Boom Towns Gone Bust - (www.zerohedge.com) With
crude prices reeling from the effects of geopolitical wrangling and surging
production, it’s a tough time to be a resident of an oil boom town. Although
drilling in areas like North Dakota’s Bakken oil patch has generated hefty
revenues for once quiet communities, it’s also led to an increase in crime. As
the Washington Post noted last year, “the arrival of highly
paid oil workers living in sprawling ‘man camps’ with limited spending
opportunities has led to a crime wave -- including murders, aggravated
assaults, rapes, human trafficking and robberies -- fueled by a huge market for
illegal drugs, primarily heroin and methamphetamine.” While this would be
a rather undesirable situation under any circumstances, collapsing crude prices
are beginning to leave some towns cash-strapped, which means less resources to
dedicate to things like deterring crime. Meanwhile, production isn’t slowing down,
which means boom town populations aren’t declining alongside revenues.
According to NPR, this dynamic is leaving some communities with a
combination of decaying infrastructure, less money for public schools, and
inadequate manpower to combat sharply higher crime rates. This comes as
monthly expenses like rent skyrocket in the face of surging demand.
Mexico
Steps Up Peso Support to Stem Currency’s Slide - (www.bloomberg.com) Mexican
policy makers stepped up support for the peso, with plans for at least $3
billion of dollar sales through June, after the currency sank to a record low. The
central bank will sell $52 million a day over the next 60 business days with no
minimum price, the nation’s currency commission said Wednesday. The new
intervention is in addition to a program started in December of $200 million of
dollar sales that happen whenever the peso weakens by 1.5 percent or more from
the previous day. The central bank also will scale back the pace at which it
has been accumulating foreign reserves. The currency jumped the most in a
month. While the central bank’s new sales represent a fraction of the $57
billion of daily turnover in peso trading, they signal a growing discomfort
among policy makers with the currency’s slump. The exchange rate had weakened
as lower oil prices damped the outlook for foreign investment, while the prospect
of higher U.S. interest rates curbed the appeal of emerging-market assets.
Euro
Racing to Record Drop as Draghi QE Purchases Depress Yields - (www.bloomberg.com) The
euro’s slump pushed it toward its biggest ever quarterly decline versus the
dollar as European Central Bank purchases of sovereign debt sent bond yields to
record lows across the region. The shared currency has weakened 12.8 percent
this year, with almost three weeks before the quarter ends, eclipsing the 10.6
percent decline during the credit crunch in the third quarter of 2008. The euro
dropped to an almost 12-year low Wednesday as ECB President Mario Draghi
reiterated the central bank’s commitment to boost inflation, while the 1.1
trillion-euro ($1.2 trillion) quantitative-easing program entered its third
day. Demand for U.S. Treasuries surged. “It has been a pretty sharp move,” Eric
Viloria, a strategist at Wells Fargo & Co. in New York, said by phone.
“It’s just going back to these broader market themes of expected Fed tightening
in the U.S. and continued monetary easing in the euro zone. That’s also been
reflected in bond markets.”
Rickards:
It Will Be "Too Late" To Get Gold When Monetary Collapse Arrives – (www.dailyreckoning.com) Investors
almost say to me, ‘You know, Jim, call me up at 3:30 the day before it happens
and I’ll sell my stocks and buy some gold.’ First of all, it doesn’t work that
way for the reasons I just explained, but secondly, you might not be able to
get the gold and that’s very important to understand. When a buying panic
breaks out, you know, and the price starts gapping up, not $10.00, $20.00 an
ounce per day, but $100.00 an ounce then $200.00 an ounce and then all of
sudden, it’s like up $1,000.00 an ounce and people say oh, I got to get some
gold. You won’t be able to get it. The big guys will get it, you know, the
sovereign wealth funds, the central banks, the billionaires, the
multibillion-dollar hedge funds, they’ll be able to get it, but everyday
investors won’t be able to get it. You’ll find that the mint stops shipping it.
That your local dealer has run out so there’ll still be a price somewhere.
You’ll be able to watch the price on television, but you won’t actually be able
to get the gold. It’ll be too late.
Ukraine
wins IMF approval for $17.5 billion to rescue economy - (www.chicagotribune.com) The
International Monetary Fund approved a $17.5 billion loan program for Ukraine
to help the former Soviet republic stave off default amid a conflict with
pro-Russia rebels. The IMF's executive board, which represents the 188 member
nations, gave the go-ahead for the four-year program, Managing Director
Christine Lagarde said in a statement on Wednesday. The aid is part of what the
Washington-based lender and Ukraine's government hope will be a $40 billion
package, including aid from the U.S. and European Union and a prospective $15
billion in savings to be negotiated with Ukraine's bondholders. The financing
offers a lifeline to an economy that the government expects to shrink as much
as 11.9 percent this year, as the conflict in the eastern part of the country
hobbles its industrial capacity. The funding, which replaces a two-year package
from last April, also marks a deepening of the IMF's involvement in the worst
standoff in Europe since the end of the Cold War.
Delight or Dread as Euro Falls - (www.nytimes.com)
Germany Won’t Negotiate With Greece Over Compensation for Nazi Atrocities - (online.wsj.com)
Dollar
surge poses policy dilemma for Fed - (www.ft.com)
China’s local government debt: Defusing a bomb – (www.economist.com)
China’s local government debt: Defusing a bomb – (www.economist.com)
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