SPECIAL DUTCH TREAT: Amira Willighage puts in display some sheer beauty of music with a classical performance. She is from Holland. She sings the classic aria "O Mio Babbino Caro" by Giacomo Puccini from the 19th Century work. The setting was a open-air symphony in Maastricht, in the Netherlands, under the conductor Andre Rieu. See YouTube (HERE) and prepare for an emotional experience. It is extremely moving and utterly impressive. Contrast to hot dog eating contests, wet T-shirt contests, heavy metal concerts, quality concerts offset by Satanic symbols, and rap episodes on stage in the United States. Sorry, could not resist since so unimpressed with the culture of my native land. Europe is surely a cut above the US in sophistication and elegance, except for the buffoon Prince Draghi at the Euro Central Bank and the gang of EU Commissioner pedafiles. Try to recall what we were doing when only nine years of age. The Jackass was busy climbing trees, making snow forts, reading "Treasure Island" and other adventure books, erecting a basketball hoop, beginning a newspaper route as paperboy, saving for my first bicycle, stealing a kiss from Mary Alice McShane, and honing baseball skills to serve for the next 40 years.
## KEY QUOTES
"It is easier to fool someone then to convince them they have been fooled." ~ Mark Twain
"The International Monetary Fund joining the Asian Infrastructure Bank is much like say, a 95-year old woman entering a college fraternity party. Just an observer." ~ odd Hat Trick Letter client
"Water is the oil of the 21st century." ~ Andrew Company (August 2008)
"Journalism is one of the devices whereby industrial autocracy keeps its control over political democracy. It is the day-by-day, between elections propaganda whereby the minds of the people are kept in a state of acquiescence, so that when the crisis of an election comes, they go to the polls and cast their ballots for either one of the two candidates of their exploiters." ~ Upton Sinclair (in "Brass Check" 1919)
"There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorships without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties take away from them, but will rather enjoy it, because they will be distracted from any desire to rebel by propaganda or brainwashing, or brainwashing enhanced by pharmacological methods. And this seems to be the final revolution." ~ Aldous Huxley (author of "Brave New World" in which the futuristic drug Soma could be interpreted as cocaine, alcohol, anti-depression meds, anti-anxiety meds, thorazene, and ritalyn)
"Could JADE HELM simply be a code phrase for: Jade = Chinese / Oriental / Eastern and Helm = Leadership / High Level Take-Over / Captain. Or in other words, performing activities in preparation for the period of time right before or immediately at the time of China taking control in tribunal leadership. It just strikes me as JADE HELM being words with a strong purpose, and not simply words chosen by the fascist managers even if with an acronym meaning." ~ Marquis Donald (HTLetter client in Louisiana)
"Why is it that the man on the street prepares more to avoid rain on his head, shirt, and shoulders with an umbrella, but not to protect life savings? It makes no sense to me, and like this unprepared man, millions of reckless people will suffer significant losses to their life savings out of ignorance, lack of protection, and absent study. They do not know what either capitalism or money are anymore. They trust leaders unworthy of trust." ~ the Jackass
"Grave concerns exist that the Federal Constitutional Court (the highest German Court) has rendered opinions in matters related to trade recently. This gives a very strong indication that the TTIP trade agreement with the United States will find itself entangled in the courts. It will eventually be trashed and thrown out. We shall see. Europe is no longer a good operations base for any kind of business." ~ German corporate executive client
"Many Swiss bankers and lawyers are paying a severe but justified price for their past illegal activities. They have lost jobs, have low or no incomes, and cannot leave Switzerland for fear of being arrested. Their banks have abandoned them. We should not feel sympathy for them, since these people are the primary cause for the banking problems we have. Greed led them, and now they cannot accept the tragedy that is befalling them due to their poor moral characters. They have been systematically hurting millions of others while enjoying decades of protection. They had a fantastic life and sensational incomes, all based on illegal activities which their banks unfortunately allowed them to continue. The criminal actions have gone on for generations in some cases. Now it has all fallen apart and they have nowhere to go, virtual prisoners in their own land. Revelations slowly arrive in the main media as well. Banks and bankers are struggling badly, more so in Switzerland. The banking sector is in ruins, and many class action lawsuits are in progress, all kept quiet." ~ ManfredS (HTL client in Switzerland with keen eye on their banking industry)
"In the construction world, the work project volume is increasing but margins still are dead. This is backwards from normal healthy cycles in the past. It is odd because the move from the bottom always allowed margin expansion. Not this time. Normally, the top of the cycle is when the profit margins start to erode. Firms at the top tend to add fat in the form of extra employees, occasional research, and more materials in inventory. To worsen top conditions, new competitors enter the ripened market. This time around, fat is not being trimmed as much, while new entries continue to arrive. Profit margins are less right now, with the typical reaction to feed the fat rather than to cut it, citing worker loyalty, with open concern of losing good talent. We are not seeing the excesses reduced, or the removal of weak competitors. They are not dying off. There is no typical healthy rolling around the bottom of the cycle, as leaner companies respond with less competition and improved bottom line profit margins. Distortions have occurred from living off cheap money, altering the reaction usually seen to the cycle as it relates to margins, and even leading to bids skewed low. The entire cycle is an unfixable mess. Older firms have stronger balance sheets and more reserves from the past strong cycle. Newer firms have lower capital costs, which actually support their mistakes and wrong-footed bids on projects. New firms are aided in entering the market from cheap money, which should not enter in a normal cycle. The hidden factor is the cheap money altering the cycle on profit margins. Therefore, beware of a systemic crash and some kind of implosion." ~ the Prince (HTL client in Massachusetts)
"The East versus West antagonism and threat of war could simply be great theater, possibly so. However, I put my faith in the Gold Standard, and hope for the rest to fall in line equitably. My father taught me there is always a higher authority, like with the truly independent spirits and people who emerge with their own private businesses. Best to keep in mind that Gold makes the best arbiter. We will surely see what comes, since Gold will inevitably arrive as the global standard again. The fiat currency experiment is coming to an end, a very fraudulent, violent end. The elite will always rule, but we can put more trust in leadership which abides by the gold arbiter." ~ the Jackass
"Soon their captives will taunt them with ridicule and scorn. They will mock them, saying, 'WHAT SORROW AWAITS, YOU THIEVES! NOW YOU WILL REAP WHAT YOU DESERVE FOR WHAT YOU STOLE! YOU HAVE BECOME RICH BY EXTORTION. HOW MUCH LONGER CAN THIS GO ON?' Suddenly, your debtors will take action. They will turn on you and take all you have, while you stand trembling and left helpless. Because you have plundered many nations, now all the survivors will plunder you as victim. You committed murder and stolen from the multitudes. You have filled the towns with violence, and shed men's blood. You have destroyed lands and cities and everyone in them." ~ Book of Habakkuk (2: 6-8 Old Testament)
"European Union policy has destroyed Ukraine and damaged Europe. The chief interest of the United States is to prevent coordination between Germany and Russia. Resultantly Ukraine has lost the great part of its industry. Today, the country is a bankrupt state, where people go hungry, shiver, and have salaries lower than people have in Ghana. Furthermore, the US and Britain sending military advisors and delivering weapons is not a matter of supporting the peace process, but of torpedoing it. But do you now envision sanctions against the US and Britain?" ~ Sahra Wagenknecht (charismatic VP of the German Left party and German MP)
"Thoroughly enjoyed your Crisis Coverage Update for April. A bit more than 20 years ago, I was employed as a field chemist for a very large hazardous waste management firm. My company was awarded a sizeable project through DRMO to package and transport for destruction a plethora of ungodly materials produced and/or stored at the Aberdeen Proving Grounds in Maryland. I spent the better part of a year preparing for shipment of various failed biological and chemical experiments, from binary nerve agents, to genetically altered microorganisms. The part that really freaked me out was handling the several tons of what I can only assume were the results of cloning experiments. They included oddly and perversely shaped (possibly designed?) creatures that resembled everything from rudimentary mollusk forms to higher level primates with interesting additions. It was truly spooky. But I was young, naive, and was just interested in collecting a paycheck." ~ MikeS (a Hat Trick Letter client in Virginia)
"Has anyone actually looked around and noticed what a scabrous sight American towns and cities present these days? There are places here in the old Yankee Northeast that Borat would be ashamed to call home. We live amidst so much delaminating plastic, it is a wonder that virtually everybody does not have cancer. The squalor is awesome, and to make matters worse, we are even too lazy to clean up the stuff that is just lying around on the ground, and certainly too lazy to try to grow anything in that ground if it did not promise to grow up looking like a pepperoni stick or a corn dog. America's moment of getting kicked to the curb by other nations is at hand. I do not think it will be a kinetic war, not right away. But it will be a hearty financial beat-down, and many of the members of our insane clown posse in Europe are going to feel the beat-down, too. America tried, at the very last moment, to join the new BRICs development bank. Who finally decided that? Barack Obama? John Kerry? Jack Lew: the Three Stooges? Get Gold, if you can." ~ James Kunstler (Europe will split before the beat-down is too severe, thus isolating the US, which resembles the Third World)
"China is going to set up a real tight linkage with Moscow, with Turkey, with Hong Kong, with India, and with Dubai. These nations are going to set up the Eastern Gold Network in a rival gold market under Chinese direction, and replace the Western corrupt market centered in London and New York. Big changes are coming, highly disruptive changes, global shifts. The Global Paradigm Shift will have as its center the gold market." ~ EuroRaj
"All the markets make no sense any longer. Gold and Silver are the only assets to protect one's wealth, and that is why our funds are in those metals. I cannot tell you when the system will melt down, but melt down it will." ~ Eric Sprott
"A high-level European diplomatic source has confirmed to Asia Times that German chancellor Angela Merkel's government has vigorously approached Beijing in an effort to disrupt its multi-front strategic partnership with Russia. In no way will Beijing entertain or respect such a blatant counter-productive political gesture from Berlin. The entire Chinese juggernaut is developing its pan-Eurasian New Silk Road project, which will eventually involve close ties with both Germany and Russia. Amazingly, Merkel acts as an ambassador to undermine German export businesses, in a futile strategy steeped in pure insanity. The German industrial captains must remove her. It is highly likely that as a US puppet, she will resign in calendar year 2015. Look for the post to be left vacant as a message to the Untied States of Amerika." ~ the Jackass
"Late stage speculative runs are often fueled by short squeezes. As deteriorating fundamentals and underlying vulnerability begin to manifest, short positions and bearish derivative bets are initiated as both directional speculations and market hedges. At the same time, prolonged bullish cycles ensure upside momentum and general bullish inertia. Blow-off tops can be the result of a confluence of policy measures to ward off collapse and an expansive pool of speculative finance that has profited greatly from gaming policy." ~ Doug Noland (of Prudent Bear)
"If companies cannot fail, that means somebody else cannot start. You are looking at a petrified forest rather than dynamic capitalism." ~ Jim Grant
"The rising USDollar is killing the global debt structure, while Zero Interest Rate Policy is killing the global financial structure, while Quantitative Easing is killing the global capital structure." ~ the Jackass
"If foreign leaders do not realize that all of them are screwed by the USGovt when their usefulness has run out, then they are idiots. The past examples are too numerous to cite. To deceive and secure the relationship, the initial advantage and profit is usually rather sizeable. They fail to anticipate that the gains are later to be stolen or defrauded back to the US & UK masters. Recall the Saudis have had their gold stolen, while the stack of USTreasury Bonds has turned toxic. These foreign leaders, often puppets, do not think down the road several years. They regard themselves as highly important, serving a higher purpose, only to wallow in arrogance. Later they are left dead in a ditch or hanging from a rope." ~ a cynical enlightened Hat Trick Letter client (prefers anonymity)
"Rich Illinois farmlands are poisoned, and so are municipal waters & rural wells. After moving back to my birthplace in central Illinois from living in Flagstaff AZ for 40 years, I was disheartened to learn of the poisoning of the land and water in IL by Monsanto's Roundup. Plus the farmers are not making it financially on the GMO seed model devised by Monsanto. The GMO crops must be sprayed all summer long because GMO is not working. Farmers are ripping out a great many trees to get a little more farmland but much of that land is too low and swampy to grow good crops. They call the company MONSATAN, but still believe it is the only way to farm. I have found one small organic farm here. It is a shame what they have done, having poisoned the land, the water, and their families and friends. Cancer in this town is sky high, and people are still drinking the poisoned water until the town puts in a pipeline to an adjacent town. It is not like it was with my grandfather as a farmer. He was self-sufficient with cows, chickens, orchards, horses, alfalfa, corn, and soybeans. In the Great Depression his family was virtually unaffected. When the crisis peaks, these farmers will not be able to feed themselves, let alone the community. They only have corn and soybeans, no other animals, all fences are gone. It is disgusting." ~ Hat Trick Letter client in Illinois
"In the public sphere we can find strong evidence that a new system has been agreed upon in principle. When China announced its Asian Infrastructure Investment Bank, the cabalists in Washington told their allies not to join. Since then, Australia, Brazil, Canada, England, France, Germany, South Korea, Russia, etc have all announced they would join. This forced the Intl Monetary Fund and the World Bank to also announce their support. In other words, the secret controllers of the Federal Reserve Board have lost control." ~ Ben Fulford
"Consider the analogy. The USD is like King Dollar dead lying prone on the global stage. Gas fills his chest cavity from the unchecked bacteria growth, giving off the heavy gas. After time (like now) the body floats and rises from the gas buildup. It aint strong, but rather dead and decomposing. Before long, the body must be disposed of, so as to avoid contamination of the entire global stage." ~ the Jackass
"Greece & Turkey as twin crowbars to divide Europe, after the US & EU Commission caused the initial split in Ukraine." ~ the Jackass
"The mania phase of this secular bull market is still very much in front of us. My feeling is that the next leg of this bull market will start in earnest sometime in the next 12 to 18 months. Like in 2016, and I think it is going to extend into 2019. At that point you are going to see a real mania developing. The catalyst for this coming mania is going to be China. The Shanghai Gold Exchange is eventually going to become a real casino. It has to do with the fact that China today is the largest consumer of gold. China is pushing really hard for the Shanghai Gold Exchange to become the premier gold exchange in the world in terms of the turnover of physical gold. With the middle class in China growing every year by a huge amount, the Chinese consumption of gold will also continue to dramatically increase. China, along with India, is already the dominant force in gold. We all know the propensity of the Chinese to gamble, and so at some point the Shanghai Gold Exchange is going to become a gambling casino. This will cause the price of gold to really skyrocket. It is not going to happen in America, and it is not going to happen in Europe. It is going to happen in China. You will likely see gold prices that you never dreamed of. You are right about the opportunities that you see today." ~ Pierre Lassonde (founder of Newmont Mining, former Chairman of the World Gold Council, current Chairman of Franco Nevada)
"China wants to have dominion over Asia. China wants a certain level of control over monetary policy with nations whose debt it holds in reserves. These are the two crux points that dictate further geopolitical directions." ~ MitchellY (HTLetter client in Hong Kong)
"Now key to what happened in 2008, which was really just a tea party compared to where we are headed in my view, which will likely occur in 2015. Key to that financial hiccup and the recession that followed and all the emergency measures by all the central banks, was hitting the wall as interest rates steadily rose." ~ William Kaye (Pacific Alliance Group, Hong Kong)
"They did a family tree of the Saudi Royals. If you do a family tree of your family, it is rather vertical. That is not how it works with Saudi Royal families. Abdullah had something on the order of 28 wives. So he had a family from 28 women. Therefore the battle for control of the leadership will include numerous half-brothers, many from smaller branches that have been denied power, control, and privilege for a generation. They want payback, revenge, and a slice of the pilfered national wealth. The battle will result in the royal family being overturned, sure to include an element of popular uprising toward participation. Many people want remedy for businesses stolen by the royals in appropriations. These are horizontal family trees. These are more like weed gardens than trees, the weeds soon to be plucked and discarded. The barbarians are at the gate in neighboring Yemen." ~ the Jackass
## EXTREME EVENTS ON HORIZON
◄$$$ THREAT OF SANCTIONS LOOMS AGAINST THE UNITED STATES IN THE FUTURE... THE USGOVT HAS TURNED ROGUE, WITH GLOBAL WARS TO DEFEND THE TOXIC USDOLLAR, WITH MONETARY POLICY RESEMBLING ZIMBABWE, WITH BOND FRAUD PROTECTED BY THE COURTS, WITH DERIVATIVES TO SUPPORT USGOVT DEBT VALUATION, WITH RIGGED FINANCIAL MARKETS GALORE TO SUSTAIN THE ENTIRE SYSTEM, WITH EXPORTED GMO MONSANTO SEEDS, WITH EXPORTED FRACKING METHODS (CONTAMINATION), WITH VIRAL KILLER VACCINES, WITH NSA ESPIONAGE, WITH STOLEN FOREIGN OWNED GOLD, WITH HUMAN ORGAN TRAFFICKING, WITH SALES OF NERVE GAS, WITH USAGE OF DRONES TO KILL CIVILIANS, WITH TARGET PRACTICE MURDER OF CIVILIANS BY HELICOPTER, WITH ASSASSINATIONS OF HEADS OF STATE, AND MUCH MORE... THE CONSEQUENCES WILL BE DIRE IN FUTURE YEARS, NOT THE FAR DISTANT FUTURE. $$$
The indictments are vast and lengthy, worthy of the most egregious national crimes ever committed by an industrial nation upon the world. Omitted are many crimes committed against the US population, like murder of news reporters, like infiltration of peaceful movements (Occupy Wall Street), like menacing action against peaceful demonstrations, like thefts of bank accounts, like tossing men out of windows at bank buildings for knowing too much.
Expect in the future a grand wave of retaliation to be comprehensive for crimes committed against numerous foreign nations, followed by isolation and quarantine. The Jackass believes that people should expect the following reactions: warning of limits on acceptance of USTBills in trade settlement, limits on US imports (thus supply shortages), a halt on all USMilitary weapons transfers, a halt on US-developed vaccines, a halt on usage of US debt ratings agencies, a halt on all entry by Halliburton and BlackWater personnel, severe limits on US news syndicated stories, imposed limitations on US-bank transactions, severe limits on entry by USDept Treasury agents, severe limits on entry by USMiltary soldiers. Lastly, and best of all, refusal on all compliance with the vast array of meddlesome USGovt bank rules like FATCA.
The Voice added much more serious implications on retaliation at a global level. He expects the United States to suffer severe ignominy, quarantine, liquidation, and a type of tribunal control. He anticipates sanctions to be imposed on the US in similar fashion to those placed on Persia. Other sanctions to be expected: a cutoff from SWIFT bank transactions, Western Union being blocked globally, the same for US-based VISA and MasterCard, closure of all foreign USMilitary barracks & ports & airports (and possible liquidation sales to creditors), ban on Apple i-Phones and US computers and software (due to eavesdropping chips), ban on all GMO foods by Monsanto, travel ban for all US politicians and members of government, freezing of US assets in all foreign countries except Canada, restrictions on visa requirements for US citizens traveling to Europe (except to the United Kingdom). Doubters among the observers might be extremely surprised to see not only what is possible, but what actually occurs. The crimes against humanity by US elite are without precedent in human history. These are fascists from the nazi core, who entered the US nation as part of Operation Paperclip only to take control one generation later. Witness the bitter fruit of the Fascist Business Model.
◄$$$ WEB BOT ANTICIPATES A BIG DISRUPTIVE EVENT VERY SOON, WHICH WILL CHANGE THE WORLD MUCH LIKE 9/11 DID... THE 2001 EVENT CHANGED POLITICS AND BANKING... THE UPCOMING EVENT COULD CHANGE THE CURRENCY SYSTEM AND GIVE GOLD PRE-EMINENCE. $$$
As preface, the Jackass gives 75% to 80% credibility to the validity of the following story as an actual forecast. It could occur. The Web Bot analyst Cliff High tipped off the 9/11 event by a couple months, foretelling of a military operation which would result in the world changing (possibly forever) on the political front. He uses global monitor of internet messages, stories, and other communications with keyword recognition and frequency analysis to make certain conclusions, with timing. Now the Web Bot analyst is saying a major event is coming. He points to the COMEX Gold price as soon to be lost by the banker cabal in control. He again says the result will be the entire world changing (possibly forever), but this time on the currency front with vast implications. The concept of money will change, he forecasts. The major event coming is well overdue.
Cliff High scans hundreds of millions of web areas daily, searches for high emotional exchanges. He focuses on is the metals in the current research. He has been calling for two steps. The first, he feels is very close. He lumps timing into immediate, short-term, and long-term. Data has a singular step up in price, then two weeks of quiet, and then a second step. He reports data to support China going public on its vast gold holdings. Cliff defines immediacy data to mean a day, a month, or two months. His past efforts on timing have been very good. He foretold the 9/11 event spot on, with a preview of what he called an important highly disruptive military event one to two months in advance. See Half Past Human (HERE). The timing matches loosely the post-Chinese New Year disruptive events, and the buildup recently with the AIIBank, which the Jackass has cited.
◄$$$ WALMART PLANS TO SHUT DOWN SEVERAL STORES FROM TEXAS TO FLORIDA FOR PLUMBING PROBLEMS, SURELY A SUSPICIOUS REASON OFFERED... SEEMS LIKE A POSSIBLE EVENT COMING, LIKE FOR FEMA CONTROL CENTER USAGE... VETERANS TODAY CALLS IT A HOAX. $$$
WalMart has announced a seemingly very bogus reason for closing stores from Texas to Florida. They are to be closed for six months, involving hundreds of workers. Indications are that five stores are involved in the extended shutdown. All stores affected are supposedly damaged by plumbing problems. It reminds the Jackass of the infamous Plumbers in Watergate, with possible indirect reference as a bad joke. Either some serious supply chain challenges plague the company, or else it could be a USDept Homeland Security issue, since WalMart is an official USGovt FEMA logistics center during emergency actions. Some wonder if JADE HELM is coming into view, a leaked event. See Investment Watch (HERE) and InfoWars (HERE). It could just be the USEconomy is stuck in a full blown vicious recession that is better described as an obscured depression, with a JADE HELM chaser on homeland sprinkler. WalMart announced 2200 job cuts, hardly evident of any recovery. Also, significant cuts in Food Stamps benefits has been seen, while stores under-perform noticeably. See CNN Money (HERE) and YouTube video (HERE).
Watch for a potential attack against all resistance movements. JADE (Joint Assisted Deployment & Execution) with HELM (Homeland Extermination of Local Militias) could be the first widely applied fascist program that could lead to martial law. An economic collapse almost assures a radical change in government structure. Gordon Duff quotes Veterans Today, calling the entire JADE HELM project more fear porn. Ben Fulford calls it a White Hat operation, implying that these WalMart stores might have underground tunnels connecting to FEMA storage depots. Think weapons or viruses, maybe even underground cities. Possibly the project is a reverse terror slam against the evil banker cabal, to cause a grand setback. Ben Fulford reported his perception of the WalMart store closures. The stores are curiously located near USMilitary bases. His CIA sources claim underground bunkers are being built under these stores for the Elite to hide in. However, a Pentagon source claims the stores are being prepared as distribution centers for food and other essentials in preparation for a shutdown and reboot of the banking system. Time will tell which of these sources is correct. Think RESET shock.
◄$$$ THE PUTIN 10-DAY BREAK APPEARS TO HAVE BEEN A STRATEGIC SESSION, WITH FOCUS ON RUSSIAN PROTOCOL, AND ALSO WITH FOCUS ON GLOBAL DEVELOPMENTS... THE GLOBAL PARADIGM SHIFT APPEARS TO BE VERY CLOSE IN ACTUAL INAUGURATION, THE LONG AWAITED RESET. $$$
The data is sketchy but worth repeating since sources are very reliable. It is impossible to verify, but here are the conjectures by very informed smart folks. Putin was focused on changing his protocol routine. That meant change in security ranks on staff, change in commute travel logistics, change in banking operations, a move to nationalize the central bank, even usage of body doubles for secondary level functions. Further, Russia made moves toward formal Crimea integration, funding with rules and guidelines. A major obstacle to the Russian Economy and its development has been big banks. They are being cleaned up.
The persistent rumors involve much more. It is reported that Putin was in attendance of some high security, highly secretive, and extremely important future chapter meetings with heads of global power, not heads of state. The report focused on an extended conference with the White Dragons, the Chinese Communist Party leaders, certain Russian oligarchs, certain German industrial titans, the Rockefellers, the Vatican heads, and other various Western Elite players. The hint was that the Western players were invited in order to inform them of significant changes to come, as in Global Paradigm Shift. They were invited as observers. Think in terms of the Currency Reset and return to the Gold Standard in some form. The shift in power might be imminent.
◄$$$ THOUSANDS PROTESTED AGAINST US-EU FREE TRADE DEAL ACROSS EUROPE, URGING A STOP TO TRANS-ATLANTIC TRADE & INVESTMENT PARTNERSHIP... A FEW HUNDRED THOUSAND EUROPEANS TOOK TO THE STREETS TO EXPRESS THEIR OPPOSITION TO A PROPOSED FREE TRADE DEAL BETWEEN THE UNITED STATES AND THE EUROPEAN UNION... THE EU IS READY TO FRACTURE, THE VASSALS ENERGIZED. $$$
The Jackass has a simple viewpoint, that the ramrod effort on the Ukraine War with Russian sanctions, conducted unilaterally by US-EU dictators, has led to a backlash manifested in both the AIIBank creation and the TTIP trade union opposition. Resistance has focused on the two bodies. Overall, demonstrations occurred as 734 events in 46 countries across 5 continents. Rallies were planned in 200 cities across Germany. Resistance against the Trans-Atlantic Trade & Investment Partnership (TTIP) and the Comprehensive Economic & Trade Agreement (CETA) on EU-Canada unification has been surprising universal. The claim of allowing easier flow of goods & services betwen Europe and North America clouds the true motive by corporations to seize power over patents, farm seeds, internet, courts, and more.
The cities hosting anti-TTIP demonstrations included Munich Germany, Vienna Austria, Brussels Belgium, London England, Lille France, Helsinki Finland, and Prague in Czech Republic. The protests also covered Italy and Spain. The European bodies in opposition object to their ability to regulate financial markets, to label genetically modified (GMO) food, and much more. Expect the unelected EU Commission to coerce their Parliament, and the USCongress to proceed on Fast Track without debate. Even the UK Parliament slammed TTIP with surprising hostility. See Sputnik (HERE & HERE). Below is shown the protests in Barcelona Spain. The Jackass believes both TTIP and TPP are dead.
## INTRO SHORT SUBJECTS
◄$$$ BUBBLE MARKETS EVERYWHERE, A DIRE SITUATION... THE WARNING SIGNAL IS THE EXTREME LEVELS FOR HIGH YIELD JUNK BONDS, WHICH NEVER DEFY GRAVITY FOR LONG (SINCE UNSTABLE)... ALL TYPES OF STOCK INDEXES SIGNAL HIGH RISK OF CORRECTION FROM OVER EXTENSION. $$$
Investors have chased yield like fools, and in so doing have built a dangerous situation with the high yield junk bonds. These bonds have soared in the last five years since the Lehman milestone event, with the yields not so handsome anymore. In fact, the popular Merrill Lynch High Yield index has risen since the 2009 low from 400 to 1060 without interruption. That is a 165% gain without pullback. It has risen since the 2007 pre-Lehman mark from 600 to 1060 without interruption, which itself is a 77% gain without pullback. High Yield debt is due for a 20% to 30% decline at minimum, which is typical. Brokers are suggesting the yield, ignoring the risk, always taken by surprise. A list of billionaires and very savvy investors have been either exiting or preparing to exit. The list is long and includes Carl Icahn, George Soros, Stanley Druckenmiller, Sam Zell, Ray Dalio, Kyle Bass, and even the familiar figure Alan Greenspan. Another few names have been very recently added.
The famed hedge fund manager Paul Tudor Jones said the current "market mania will end in revolution, taxes, or war" which made the news. He cited the gap between the Elite 1% and the rest of America, and how "the gap between the US and the rest of the world cannot and will not persist. We are in the middle of a disastrous market mania." Attribute the mania both to QE with its wrecking of business capital, and to ZIRP with its misallocaion of capital. Even Dallas Fed Governor Richard Fisher called the USFed overly accommodative, and investors as lazy for relying on the Fed in the free punch bowl. The USFed, not profits, drive the stock market. He called the financial markets hyper overpriced. The time has come for self-protection and removal of funds from the paper tables before a gale force winds arrive.
Bill Holter of Miles Franklin concluded with the following. "No, what we have coming is a collapse of everything we have worked for and everything we have built and saved over our own lifetimes and that of our ancestors. All of our financial markets are connected and none will be spared. Another aspect is all foreign markets and their economies are tied together with everyone else's. You could say 'WE ARE THE WORLD!' Nothing will be left unaffected. The only thing you need to know and understand is this. Gold has always been money and always ultimately seen to be the most liquid safe haven on God's green Earth. Man has never before in history been involved in a more dangerous and all engulfing mania based on a Ponzi Scheme. It matters not when nor how it ends, because it will end badly. What matters is how you are positioned when it does." See Miles Franklin (HERE). Check out the overly extended stock indexes for the Nasdaq 100, the Russell 2000, and the Wilshire US REIT (real estate investment trust) in the chart below.
◄$$$ USFED PREPARES TO DEEM MUNICIPAL BONDS AS HIGH QUALITY LIQUID ASSETS, ALLOWING BANKS TO MEET ASSET REQUIREMENTS... IT IS A DESPERATE MOVE, WHICH COULD LEAD LATER TO MONETIZATION IN BAILOUTS OF CITIES... BLESSED ROT IS NOT HEALTHY TISSUE, BUT IT MIGHT SOON BE SPRINKLED WITH USFED HOLY QE WATER. $$$
In a change of position, the US Federal Reserve will after all permit the big US banks to use some municipal bonds to meet new rules on bank reserve allocation. Previously they had excluded debt issued by cities and states when approving liquidity rules in September. The USFed decision is only a partial bank sector victory, since the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp have no plans currently to abide by the USFed guidelines. At issue is the treatment of municipal debt in order to hold high quality liquid assets toward funding their operations for 30 days. The OCC offices have indicated concern over municipal bonds being easily traded, as in No Bid condition lacking liqudity. The FDIC position affects only a few banks. See Wall Street Journal (HERE). The Jackass has been expected USFed coverage of the vast pools of toxic Muni Bonds for two years. It appears close to reality.
◄$$$ PENSION FUNDS AND INSURANCE FIRMS GLOBALLY ARE UNDER STRAIN... THE ULTRA-LOW INTEREST RATE IS KILLING THEM STRUCTURALLY... THE RULES MAKERS ARE ATTACKING THEIR OWN DOMAIN. $$$
Meanwhile, at the US homeland the pension funds and insurance firms are selling their bonds and other interest rate securities. They cannot earn a sufficient yield to pay out pension obligations and insurance claims. They are selling their core, their nut. Pensions payouts will be reduced by 35% soon, blessed by the USCongress in legislation. Insurance costs are rising by similar amounts across the land, the stories everywhere. So the torrent of sovereign bond sales continues. It is a dumping ground on assets with wrecked field. The USFed and Wall Street must lap up the dumped bonds, now a US phenomenon. Such is the nightmare of reduced Money Velocity, a consequence of the Zero Interest Rate Policy. It is killing the system.
The pension problem is universal. Economics Professor Martin Elling at the Univ of St Gallen in Switzerland cites a shortage of GBP 55 billion (=US$82 bn) in professional pension funds financing by year 2030. The Swiss system requires by law for funds to pay an annuity to pensioners, equal to 6.8% of the total volume of savings on an annual basis. Pressure on their occupational pension schemes, which account for CHF 800 billion (=$840 bn) of assets, has worsened. In 2015, officials recently introduced a tax on cash accounts and a reduction in government bond yields. The entire pension system is breaking. The Zero Interest Rate Policy means death of the social system. See Vesti Finance (HERE).
◄$$$ THE COMING MULTI-$TRILLION LOSS IN PAPER WEALTH IS NIGH... THE US-PUBLIC HAS FOLLOWED THE CENTRAL BANK AS PIED PIPER, FACING UPCOMING WEALTH LOSS IN HUGE AMOUNTS... THE CORPORATE CASH ARGUMENT IS A RUSE, SINCE THE NEW DEBT ACCUMULATION IS DOUBLE THEIR CASH RISE. $$$
The public should follow China's and India's lead, and put family wealth in gold. Instead, they persist in following the Wall Street paper route, destined to end in ruin. They never learn, sheep always, sheared evermore. John Hussman has a nose for trends in finance, and is not bashful in making bold statements on the sequence of significant events that mark change. He wrote the following. "Financial assets now represent over 82% of the net worth of both households and US non-financial corporations (data: Federal Reserve Z.1 Flow of Funds). Except for periods where total net worth had itself retreated (for example, 2008-2010), the concentration of private net worth on financial assets, rather than real assets or productive capital, has reached the highest extreme in history in recent years. In our view, this is just temporarily overvalued paper masquerading as something durable. The previous extreme (again, outside of periods where net worth itself had retreated) was not surprisingly in Q1 of 2000. We are rather helpless observers to this, as we were prior to the last financial crisis, and as we were prior to the technology collapse, despite the same conviction each time that the imbalances and elevated valuations would end badly.
There a strong correlation between private net worth and US market capitalization [Jackass: ever since the advent of IRA & 401k funds in 1980s]. Examining the data, we find that the change in private net worth per dollar of change in US market cap is actually about 1.5 times. That means that stocks have not only a direct impact on total private net worth, but an indirect effect, as many privately held assets such as corporate debt and junk bonds are also correlated with stock price fluctuations. At about $23 trillion in US non-financial equity market capitalization, and over $100 trillion in total US private net worth, a standard, run-of-the mill bear market decline in stocks on the order of 30% would likely be associated with total paper losses in the private sector on the order of $10 trillion.
Meanwhile, much has been made about cash on the sidelines held by corporations, where the sum of currency, bank deposits, and foreign deposits of US non-financial corporations has surged by $700 billion since 2008. What is typically left out of this observation is that the debt of those same corporations has surged by $1.5 trillion over the same period. As my friend Albert Edwards and his colleagues have demonstrated, much of this debt issuance has been used to finance stock repurchases instead of expanding investments in productive capital. While this process may feel right in an environment of low interest rates and a belief in permanently rising stock prices, it has made corporate balance sheets much more vulnerable to debt refinancing risk down the road, particularly if earnings fall short or credit spreads rise as they have in prior cycles." A brilliant summary once again by Hussman. The consensus views are that stocks will rise without end, and that corporate cash awaits to push more stock demand. Wrong on both counts! A massive wealth wrecking ball comes, and corporate debt will show itself in defaults. See Hussman Funds (HERE).
◄$$$ VERY SLOW POLICE RESPONSE TO LONDON DIAMOND DISTRICT HEIST, DIRECTING SUSPICION TO INSIDE JOB POSSIBLY INVOLVING POLICE (MAYBE BANKERS)... THE KEY ELEMENT IS THE NON-RESPONSE BY POLICE TO THE INTERNAL ALARM... EITHER ROT FROM TOP TO BOTTOM OR INCOMPETENCE ACROSS THE BOARD... MANY SAFETY BOXES WERE NOT INSURED, AND MANY BUSINESSES WILL FOLD FROM THE LOSS. $$$
It was an Easter weekend diamond heist. The burglars entered from the elevator shaft, and drilled through six feet (two meters) of concrete. The heist was done by three members dressed in fluorescent vests and hard hats. They calmly carried bags and wheeled garbage bins into a high security storage facility in London's diamond district. Hatton Garden is the center of Britain's diamond trade, hit by several audacious robberies in the past. The amazing part is that they undertook two full nights of digging labor. After two nights of painstaking work, they left with the contents of dozens of 72 safety deposit boxes. The methodical robbery has fascinated Britain, while putting police on the defensive. The facility is used by many local dealers to store jewelry. The event was monitored by cameras, yet no response, as seemingly nobody noticed. The alarm went off but the police did not respond. Some wonder about an inside job. The absence of insurance indicates no loss to the financial district, if indeed it was an inside job. The usual blame is of expert Eastern European thieves, reminiscent of the ubiquitous lone gunman or the ever-present Islamic terrorist.
The Daily Mirror newspaper quickly published surveillance camera images showing the thieves in action. The footage shows several men, their faces covered with dust masks, entering and leaving the building repeatedly over the Easter weekend. The London Metropolitan Police released still images of what it called three highly audacious suspects. The London lore for robbers is almost comical. Under the headline Diamond Geezers, the Daily Mirror dubbed one red-haired raider in the video footage as Mr Ginger, another as Mr Strong, and a third wearing expensive shoes as The Gent. Detective chief inspector Paul Johnson said the burglars entered the building late on Thursday, April 2nd and left the next morning. They returned on Saturday night and left Easter Sunday morning. The value of the stolen booty is slowly being revealed, in the neighboring of 200 million British Pounds, in what is called the UK's largest diamond heist ever. The diamonds are expected to be re-cut (much like stolen gold bars, recast) and distributed across Europe. For the many victims, the loss has been compounded by the absent insurance. Some businesses will likely shut down, unable to absorb the loss. Others, including professional jewellers, lost so much their businesses could soon fold. See ITV (HERE).
The police force has acknowledged that a burglar alarm at the Hatton Garden Safe Deposit facility was triggered just after midnight on April 3rd, the start of the holiday weekend. However, surprisingly nobody was sent to check on it. The crime was not discovered until businesses reopened on Tuesday following Easter holiday. The police might have been busy on Easter egg hunt preparations, like in coloring or hiding eggs, maybe eating chocolate bunnies. Consider an expert viewpoint. John O'Connor, former head of the Scotland Yard armed robbery squad, told the BBC that the thieves appeared professional and well-prepared, but police had been utterly incompetent in not answering the alarm call. See CTV News (HERE) and NBC News (HERE) and The Guardian (HERE).
Curiously, the public regards diamonds to have value, but not gold. Priorities are odd in the modern fascist Western world. The police might have been distracted by plans to knock down doors of homes in search of gold coins. They might have been busy planning to crack heads at the next scheduled popular demonstrations against the Elite 1% gangsters. It seems like a very long delay in response, or better described as no response. First suspicion is that the police authorities might be involved. Second is that bankers did it, and shared booty with police. Maybe not, maybe just wrong priorities by Keystone Cops. The finance dons knew the site was not insured, and could have hired the three men.
◄$$$ CHINA'S AMBITIOUS MT EVEREST TUNNEL IS UNSETTLING INDIA... GOLD MINING COULD BE A SIDE VENTURE FROM EXTENDED VEINS... ONE MUST WONDER IF NEPAL HAS SOME GOLD AMBITIONS, WITH EVEN A SPIRITUAL VEIN. $$$
The Jackass has argued for a full year that India should mine gold in the Himalayan foothills, as surely vast gold deposits lie awaiting discovery and exploit. In addition, probably considerable silver, copper, iron, and other key metals await. India has the capital, the equipment, the expertise, and the need. Instead, it seems China might work to capture some of the vast Himalayan mineral wealth from the backside, the eastern portals. It is hardly clear. The Himalayan tunnel will surely have numerous side veins for gold and other valuable metals. Discoveries would be secondary to building a vast tunnel system. The mining could possibly be initiated in capital formation as side ventures for the expansive railway. It might enjoy a large amount of funding, all done under the cover of AIIBank investment. The infrastructure fund will have some secondary benefits, to be sure.
The Silk Road cannot and will not be interrupted. However, an interesting project has captured some attention. China is pursuing some tangent projects that have aroused suspicion, and by the Jackass some excitement. The new Silk Road economic belt spans Central Asia and Europe. One proposed endeavor might raise the anger of neighbor India. The India Economic Times reported that China plans to build a 6540-km strategic high-speed rail link between Tibet and Nepal passing through a tunnel under Mt Everest. It will be a very ambitious tunnel indeed. The project plans could raise alarm in India about Beijing ambitions toward growing influence in its neighborhood.
The Beijing press (China Daily) quoted Wang Mengshu, an expert at the Chinese Academy of Engineering, as saying the project will proceed despite expected engineering hurdles. "A proposed extension of the Qinghai-Tibet Railway to the China-Nepal border through Tibet would boost bilateral trade and tourism, as there is currently no rail line linking the two countries." So they lean on the cover of commerce. The Mt Everest projects are sketchy. The railway is expected to be completed by year 2020 without cost estimates. A 1956-km long Qinghai-Tibet railway is already said to link the rest of China with the Tibetan capital Lhasa and beyond. Wang cited major challenges due to elevation changes and tunnel lengths. Very long tunnels are expected to be part of the project. Expect China to bring in Swiss engineers, the world's best. Expect to hear the name of Qumolangma Mountain, which is the Tibetan name for Mt Everest. The rugged terrain of the mountainous terrain is expected to keep in check the rail link to a maximum speed of 120 km per hour in certain segments.
It appears that commerce motives will bring the highly independent Western border nations into the fold, or at least into linkage. Wang claims the project is being undertaken at Nepal's request, and that China has already begun preparatory work. The story is told that Losang Jamcan, Chairman of the Tibet Autonomous Region, informed formally to Nepalese President Ram Baran Yadav during his visit to Tibet's provincial capital Lhasa last month, that China plans to extend the Tibet railway to Kermug, the Chinese town nearest to Nepal border. At that point a border trade port has been built. Besides Nepal, China had earlier announced plans to extend its Tibetan rail network to Bhutan and India. During his recent visit to Nepal, Chinese Foreign Minister Wang Yi had asked the officials to conduct a feasibility study to extend the rail network to Kathmandu and beyond. Beijing recently increased its annual aid to Nepal to $128 million from $24 million. See Asia Times (HERE).
◄$$$ CHINA AND KAZAKHSTAN SIGNED $23 BILLION IN DEALS FOR THE SILK ROAD ECONOMIC BELT PROJECT... THE KAZAKH BRIGHT ROAD WILL MESH WITH THE CHINESE SILK ROAD, AS CHINESE DEALS WILL GO BEYOND INFRASTRUCTURE PROJECTS AND EXTEND TO INDUSTRIES. $$$
China is to expand its economic ties with an important partner for its Silk Road Economic Belt project. The constructive rivalry between China and Russia over Kazakhstan development has taken a move upward. The Kazakh Prime Minister Karim Masimov was in China recently. He and Chinese Premier Li Keqiang oversaw the signing of 33 deals worth an impressive $23.6 billion. Xinhua Net reported the deals to include projects in industries related to steel, non-ferrous metals, sheet glass, oil refining, hydropower, and automobiles. President Xi wishes to enhance cooperation on the Silk Road Economic Belt, a Chinese initiative to create a vast trade network linked East, Central, and South Asia to the Middle East and Europe. To entice potential partners, China is offering funding for infrastructure development through both the newly created Asian Infrastructure Investment Bank and the separate Silk Road Fund. Together, those two initiatives will eventually provide $140 billion in funding for infrastructure projects. The Kazakh plan has been dubbed Bright Road in a November 2014 speech by President Nursultan Nazarbayev. Almost all funds will be USTreasury Bonds, in more Indirect Exchange dumping.
Chinese Xi has stressed the complementary nature of Bright Road project with the Silk Road Economic Belt initiatives. At the time, pledges were made by Kazakhstan to fund $3 billion worth of infrastructure projects each year, for up to three years. Chinese companies are making a bid to become the driving force in Kazakhstan's industrialization, which will go beyond infrastructure projects and extend to industries. Of keen interest are plans to devote $477 million toward joint projects with China, such as the trans-border free trade zone centered on Xinjiang's city of Khorgos. At the same time, China is eager to access natural resources in neighboring Kazakhstan, which has 7.6 times the German land mass in size. See The Diplomat (HERE). Reference Kazakh land mass of 2.72 million sqkm versus Germany at 357 thousand sqkm, in order to appreciate the size of the former Soviet Republics and their potential resources to tap. The German specialty is to produce tremendous economic activity on given cuts of the land itself is impressive.
◄$$$ NEGATIVE INTEREST RATES HAVE LEFT BIG BANKS IN AN AWKWARD POSITION OF OWING MONEY TO HOLDERS OF MORTGAGES IN PORTUGAL AND SPAIN, WITH ITALY NEXT IN LINE... THE SYSTEM IS TOTALLY OUT OF KILTER ALREADY, THE FLASH POINT IN SPAIN. $$$
The vast majority of mortgages in Portugal, and a huge number in Italy and Spain are tied to Euribor. The negative interest rate climate has raised the possibility of big banks owing money to home owners over the borrowing rate. Conditions are upside down. In Spain, the event has actually occurred. Tumbling interest rates in Europe have put some banks in the inconceivable position of owing money on home loans to borrowers. Bankinter is the first example, the 7th largest bank in Spain, whereby the bank actually has been paying some customers interest on mortgages. The bank deducts the amount from the principal owed by the borrower, rather than a cash payout. The nation relies upon an interest rate benchmark tied to the Swiss currency, which has dipped into negative territory. Interest rates have been falling sharply, in some cases into negative territory, since the European Central Bank last year introduced measures designed to spur the EuroZone Economy. This distort all facets instead.
The distortions have rendered the financial stage a comedy. Spain, Portugal, and Italy use Euribor as the base interest rate for many loans, especially mortgages. In Portugal, the central bank recently ruled that banks would have to pay interest on existing loans if Euribor plus any additional spread falls below zero. Expect hedging by means of futures contracts. The Euribor rates threaten to enter negative territory. The six-month rate is currently at 0.078% as of last week. See Wall Street Journal (HERE). Observer a perverse financial environment. The central bank franchise system led by ZIRP and QE has caused deep distortions and dried up markets, not to mentioned wrecked economies. The banks are paying homeowners to occupy homes. The system is upside down, where central bankers are in dire need of being shot in the head, to bring about more clear thinking.
◄$$$ AFGHAN OPIATE PRODUCTION INCREASED 40-FOLD DURING THE OFFICIAL USMILITARY OPERATION... THE PROFITS BUY A LOT OF GOVERNMENTS, IN ADDITION TO MERCENARIES TO WAGE MORE WARS. $$$
The truth is coming out on the USGovt role in Afghan heroin production. It might take the Russians with some European help to publicize the story. The USMilitary with Langley supervision has created a vertically integrated business structure that produces at least 1300 tons of heroin per year, at a profit of at least $600 billion annually and possibly over $1 trillion annually. Then again, the cost structure is not well known. The Jackass has argued for several years that costs are covered by the USGovt deficits, while profits go directly and exclusively to the banker cabal, the Queen of England, and the Vatican. The great deceivers in WashingtonDC argue that the rise justifies bigger budgets to deal with the problem, which most Americans gobble up like veritable morons. See Sputnik (HERE). The banker cabal can buy a lot of government with the obscene profits, such as national leaders and Parliament committee chairmen, and military heads. The banker cabal can wage some new wars like with ISIS and in Ukraine, using mercenaries. The banker cabal can fund more virus vaccine killers. The Bush Family can buy an entry ticket into the cabal membership, while providing murder for hire services (see Malaysian Airline). Some informed corners report that the Bush narco funds have spawned a fleet of advanced space craft and bases within the solar system, including the backside of the moon. Think reverse engineering of alien craft, with no invention, just extreme copycat. The overriding Jackass concern is that narco money will be used to bribe government leaders with narco fund cuts into permitting their economies to falter, even collapse, while the people suffer with lost jobs and vitality. The evidence is overwhelming on this factor being active.
Speaking of corrupt war motives, consider that American Graphite Technologies Inc (AGIN) has Ukraine connections. It is a business focused on the new wonder substance graphene. It is easily molded, strong as steel, sensitive to light, and is expected to be the object of 3D printing. In March 2014 it closed a secondary stock issuance, with a key bypass on SEC rules. Before the war in May 2013, AGIN planned to partner with three Ukrainian research institutions: National Academy of Science of Ukraine, National Science Centre, and Kharkiv Institute of Physics and Technology (KIP). Their goal was to explore the potential of 3D printing with graphene. Three months later, the company announced it had reached a deal with the Kharkiv Institute on its project named P600, which will be to research the properties of graphene as working material for 3D printing. Many substances have been considered, but graphene appears the clear winner. It is central apparently to the EUR2bn Human Brain Project linked to Univ California Berkelely, focused on advanced robotics. See OSNet (HERE).
## ALTERNATIVE PLATFORMS IN REVOLT
◄$$$ THE FINAL LIST OF 57 NATIONS JOINING THE AIIBANK AS FOUNDING MEMBERS IS IMPRESSIVE, BUT HAS A BLATANT OMISSION OF THE AMERICAN HEMISPHERE... EXPECT LATIN AMERICA TO JOIN IN A SUDDEN RUSH, BUT LATER WHEN CHINA OPENS THE DOOR... THE OCCUPIED NATION OF JAPAN IS ALSO MISSING, AS IS RIVAL NATION TAIWAN. $$$
Notably missing are Canada and Mexico. Central and South American countries are all missing with the exception of Brazil. It appears all of North America, Central America, and the majority of South America have been excluded entirely. Lackey state Japan faces isolation in its own region. The key global nations of United States and Japan will be left behind. The China-led Asian Infrastructure Investment Bank (AAIB) has officially approved 57 nations as prospective founding members. The Asian Infrastructure Investment Bank will operate independently from the US-dominated offices, agencies, rules, channels, and platforms. Consider it a global revolt. Founding members have priority over nations that sign up later since they will be involved setting the rules for the bank. Unconfirmed reports said North Korea's application was rejected. Taiwan said it would try later to join the institution as a regular member.
The United States and Japan, two of the world's biggest economies, did not apply to join. The Chinese state media said the prospective founding nations had started talks on AIIB drafted rules, which will be finalized and signed in meetings starting next month. The Ministry of Finance said last night that the bank's charter would be signed by the end of June and its first president would be appointed on merit once the AIIB had been formally established. The AIIB is seen as a potential competitor to global financial institutions such as the US-led Intl Monetary Fund and World Bank. It is much more. It is the worldwide initiative to kick the King Dollar off its throne, and to turn its subjects into Chinese partners.
Final list of 57 founding member of the AIIB in alphabetical order are: Australia, Austria, Azerbaijan, Bangladesh, Brazil, Brunei, Cambodia, China, Denmark, Egypt, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Iran, Israel, Italy, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Lao, Luxembourg, Malaysia, Maldives, Malta, Mongolia, Myanmar, Nepal, Netherlands, New Zealand, Norway, Oman, Pakistan, Philippines, Poland, Portugal, Qatar, South Korea, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Turkey, UAE, United Kingdom, Uzbekistan, Vietnam. If the observer does not detect United States isolation, then the observer is deaf dumb and blind. See Xinhua Net (HERE) and South China Morning Post (HERE). The new economic order is born of old economic disorder.
◄$$$ REACTIONS TO THE USGOVT BOYCOTT OF THE AIIBANK HAVE ROLLED IN FROM SEVERAL KEY PARTIES... ALL EXPRESSED CHAGRIN... LARRY SUMMERS ADMITS THE USGOVT DEFEAT AND LOST GLOBAL LEADERSHIP ROLE, BUT WITHOUT ADMITTING BOND FRAUD ABUSE, CENTRAL BANK INFLATION ABUSE, AND WAR DEFENSE OF THE TOXIC USDOLLAR. $$$
While the United States has been the dominant global economic power of the last 50 years, the point is that now countries all across the globe are seemingly falling over themselves to be more closely aligned with China. They must perceive the US as being a significant military player to disrupt, but in no way an economic player to develop progress with global trade.
Hank Paulson believes the USGovt has made a serious error in not joining the AIIBank, but that the USCongress would find it hard to vote in favor of any bill that cooperates with China. He viewed the actions of the current administration with regret on the matter. The former Treasury Secretary in the Bush II Admin has a long history of solid relations with China. He sees the nation moving in reverse. See China Daily (HERE).
The USGovt bungled handling of AIIBank, claims Madeleine Albright. She was Secretary of State in the Clinton Admin, and also served as UN Ambassador from the United States. Albright said the Team Obama screwed up on the entire project, in her words. She pointed to China's frustration in dealing with the USCongress delays on IMF funding and the voting rights issue. See Want China Times (HERE). The Obama Admin has bungled everything on the foreign tables uniformly and universally.
Lawrence Summers took the lethal blow to the US hegemony to a new level, with an op-ed piece to the highly visible Washington Post. He outlined the message in bold terms, writing "This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system." The former head of the National Economic Council in the Obama Admin and Harvard Univ president cited a major wake-up call for the United States has been given, as a new chapter opens. He painted a picture of US isolation and failure of statesmanship. Summers blasted ahead. "I can think of no event since Bretton Woods comparable to the combination of China's effort to establish a major new institution and the failure of the United States to persuade dozens of its traditional allies, starting with Britain, to stay out. This failure of strategy and tactics was a long time coming, and it should lead to a comprehensive review of the US approach to global economics. With China's economic size rivaling that of the United States and emerging markets accounting for at least half of world output, the global economic architecture needs substantial adjustment. Political pressures from all sides in the United States have rendered the architecture increasingly dysfunctional." The United States is no longer a superpower or global leader, the end of a long era having come. The gravity of the message is sinking in.
In his post, Summers has some policy prescriptions for US lawmakers. He pointed a finger at bipartisan foundation in the many failures of state. Hats off to Summers in making a bold brave statement, despite his past failure at every single post he has held. See Washington Post (HERE) and Business Insider (HERE & HERE) and Russia Today (HERE). The Obama Admin and USCongress together have fallen on their faces, tripped over their own feet, vomited on their laps, and looked absurdly incompetent on the geopolitical stage. To compound the shame and glorious embarrassment, the Obama Admin arrogantly pronounced that the global trade rules should be written by the USGovt. So stated the global hegemon. See Sputnik News (HERE).
◄$$$ MANY ARE THE REASONS WHY THE AIIBANK IS A VERY BIG DEAL... THE ALTERNATIVE PLATFORMS ARE BEING CONSTRUCTED, AND BEING POPULATED... THE CURRENT SYSTEM IS COLLAPSING... THE GOLD STANDARD IS COMING INTO VIEW, FIRST IN TRADE RAMPS. $$$
The biggest disappointments for the USGovt on the parade to enter the AIIBank conference room were to see Great Britain, Germany, France, South Korea, Saudi Arabia, and finally Israel join. The significance of the new IMF/WB replacement is huge. Not only has the bank naturally attracted the Asian countries, but it has attracted many Western countries, including the US closest allies. These key nations entered the AIIB room against USGovt lobbying efforts, followed by public rebukes from Washington. The conclusion was the first instance where the world collectively has directly gone against Washington directions under pressure. More big challenges remain, such as setting up the clearing system to directly compete with SWIFT bank transactions. Yet another is the BRICS bank, which the Jackass believes will become a processing house to convert USTreasury Bonds and other sovereign junk bonds into Gold bullion. Next comes establishing the independnce of the Shanghai gold market, with RMB-based gold contracts and actual physical metal delivery. Being prepared is the buffer between the East and West, designed to protect the Eastern Hemisphere from the financial collapse of the Western Hemisphere. Clearly, the platforms are being constructed to move toward the Gold Standard, first by trade and later by currency. In the process, the USDollar will be discarded as global reserve currency and the US nation will risk falling into the Third World. See Miles Franklin (HERE). Expect every platform to include the USDollar, but in a sidecar manner for continuity, with a perverse unstated motive to permit a USD window to be in place for dumping $trillions in USTreasurys. They will be sold to pay for projects and to load the central banks with Gold bullion.
EuroRaj offered his viewpoint. The AIIBank appears to be the new Bretton Woods agreement. It will lead to the return of the Gold Standard, which will stabilize the global financial system following the Lehman event, the ZIRP distortions, and the QE inflation episode. It calls for the new net trade settlement in Gold, and will push aside the current USD-based system, which is entirely dysfunctional. In due time, the old USD structural system will collapse when 1) the USFed re-initiates QE openly, 2) Greece forces insolvency on the EuroCB and IMF, and 3) the derivatives complex brings down the commercial banking system. It has become a question of when, not if it will finally happen, since the replacement system is coming into place, soon up and running.
◄$$$ JAPAN WILL CONTINUE TO TIPTOE CLOSER TO JOINING CHINA'S AIIB... TOKYO OFFICIALS MUST CAREFULLY HANDLE THEIR AMERICAN MASTERS, WHO SPECIALIZE IN PENSION FUND THEFT, MURDER THREATS, AND CONJURED EARTHQUAKE EVENTS. $$$
The Japanese media networks are reporting movement on Japan's possible membership in China's Asian Infrastructure Investment Bank (AIIB). The item will be on the agenda in upcoming meetings with US and Japanese heads of state, and backroom meetings with officials like the finance ministers. The central banks routinely have discussions, the USFed pulling BOJ control levers. Furthermore, Tokyo and Beijing will discuss the issue of AIIBank membership during upcoming bilateral talks. They will be the first talks between the two countries in three years, done at finance minister level. The discussions are scheduled for June and will likely be held in Beijing. Japanese officials are openly citing the project and its practical application. They say the share of total capital to be contributed to the AIIB fund is expected to be based on a member nation nominal GDP. Under this formula, Japan could contribute between $1.5 and $3 billion to the institution. Former Japanese Prime Minister Yasuo Fukuda also stated that Japan would be a bully if it chose to snub the Chinese-led effort to fund infrastructure projects across Asia.. See Asia Times (HERE).
German Chancellor Merkel is a murky figure. She has urged Japan to join the AIIBank, as Germany and France have done. The US lackey operating out of her Berlin office appears to be fighting the loyalty oath pledged to the US masters in whatever limited ways possible. She is a great disappointment inside Germany and Western Europe, but a bright light outside of Europe. She has urged the completion of the Turkish Stream gas pipeline in Eastern Europe. Lately she has been pushing the free trade zone between Russia and Germany on one side of her mouth, while parroting the US sanctions narrative related to the Ukraine War on the other side of her mouth. Merkel is no leader, but rather an elite Washington banker tool, in direct conflict with her nation's entire industrial base. See Sputnik News (HERE & HERE) and Asia Times (HERE).
## USDOLLAR SYSTEMIC DEATH & DECAY
◄$$$ ALL MODERN WARS ARE BEING WAGED TO PROTECT THE KING DOLLAR STATUS... THE RIGHT TO CONTROL MONEY IS THE RIGHT TO COVER TOXIC BONDS AND TO SELF-DEAL IN WEALTH GRANTS... WITNESS WAR TO CONTROL THE PRINTING PRESS, AS THE UNITED STATES HAS LOST BOTH SUPREMACY AND PRESTIGE... IT IS NO LONGER A SUPERPOWER, JUST A CRIMINAL BULLY. $$$
The entire financial world experienced upheaval since the Gold Standard was abandoned 44 years ago. Precious metals are deeply involved as the traditional supra-national world currencies. In 1971, the US ended the Bretton Woods Agreement by closing the Gold Window, and placed the world on an entirely fiat reserve currency which the US controlled. The Petro-Dollar renewed and fortified that control, with a Saudi alliance put in its place. That quasi puppet alliance has been dismantled in the last year. Since the US makes monetary policy to suit its own banking cartel agenda, the resulting stress placed upon the rest of the world has become unacceptable to many other countries. A global revolt has been in place since QE commenced. Some nations, in particular Russia and China, are in a position to push back against this hegemony. The Chinese Yuan can quickly displace the USDollar to become #1 world reserve currency, or at least compete with it side by side.
The Triffin Dilemma points out the gradual weakness of the primacy in a global reserve currency. The concept draws upon the requirement that nations must provide huge supply of currency to meet banking needs and sovereign credit extensions, which thus leads to enormous deficits for the host nation, like the United States. The result is debt surplus and reduced value of the global reserve currency, which is observed in a sort of systemic debt suffocation. See English Pravda (HERE). The Jackass adds that the host nation for the global reserve must defend it, the military and sentry duty costs to be staggering. Notice that half the USGovt $18 trillion in deficits is from war costs.
Say goodbye to US supremacy. It has been a few years since any respectable media called the United States a superpower. Owning a strong military with intrusive activity in many corners of the world does not in itself constitute a superpower, any more than a big bully in the school yard is a community leader, any more than a nasty abusive teacher is a professor emeritus. See the National Interest (HERE). Ironically, in the wake of the Lehman failure and the installation of ZIRP & QE, the United States has lost its supremacy. The monetary policy undermined global stored wealth, inviting stern mobilized reaction. The aware nations have easily concluded that the global dominance by the United States has ended in shame. All prestige has been lost. What remains is a grand multiple crime scene with sponsored thefts, murders, and virus attacks. See Global Research (HERE).
◄$$$ THE $9 TRILLION SHORT THAT MAY SEND THE DOLLAR EVEN HIGHER IS GLOBAL DEBT PLACED IN USD TERMS... THE USDOLLAR OWES PART OF ITS STRENGTH TO THE URGENT NEED FOR THE WORLD TO REPAY A MOUNTAIN OF DEBT... MANY ARE THE THE CROSS CURRENT FACTORS OPERATING WITHIN THE FOREX FUNERAL PARLOR FOR FIAT PAPER CURRENCY... THIS IS END STAGE RUMBLING OF THE MOST UGLY VARIETY... EMERGING MARKET DEBT AND DISMANTLED DERIVATIVES WILL CONSPIRE TO BURY THE CURRENT FOREX CURRENCY SYSTEM. $$$
Investors speculating toward a fizzle of the USDollar rally could be overlooking a major factor that will keep it going. There is tremendous pent-up demand for the USDollar, which will underpin several months or possibly years of continuation. It is much like a stay of execution on death row. The world is structurally short the global currency, due to massive borrowings by nations at or near the zero bound on interest rate. Sovereign and corporate borrowers outside America owe a record $9 trillion in USD terms. Enormous repayments are to come due in coming years, according to the Bank for Intl Settlements show. Another strange trend has begun to show itself. The central banks, which had reduced their holdings of the USD in recent years, are starting to reverse course. They are creating more demand. The USD share of global foreign reserves shrank to a record 60% in 2011 from 73% ten years earlier. It has climbed back to 63 percent last year.
The entire Emerging Market (EM) debt problem will create more USD demand, unless the debt defaults. Then the portfolio item is burned. Investor and former Intl Monetary Fund economist Stephen Jen expects normalcy in debt repayment and thus a strong USDollar demand factor to remain at work. The Jackass expects a string of debt defaults, due to the poor global economy and accelerating decline. The result will be profound stress on the existing FOREX vapor foundation for global currencies, of which the USD is the standard bearer. The pressure for a new Gold Standard will be intense, to be realized on the trade side. The big black swans are swimming in EM nations, heading for the Western ponds (financial markets), where their feces will jam the system totally. While Emerging Market debt lies on one side, the fractured derivatives from the broken Petro-Dollar framework lie on the other side. The currency FOREX system is doomed in the immediate sense. See Bloomberg (HERE).
In January, the Bank for Intl Settlements (BIS) issued a working paper which stated the following. "World debt had reached above 210% of global GDP by 2013, up from 180%, much of it in greenbacks that have since risen in value. The world has taken on a huge amount of dollar-denominated debt in recent years, but with the pace of global economic growth lagging the rate of increase in borrowing, the burden of the total debt is rising. Borrowers are left to seek dollars in their attempts to obtain the currency in which they must try to fulfill their obligations. Since 2008, banks and bond investors have increased the outstanding US dollar credit to non-bank borrowers outside the United States from US$6 trillion to US$9 trillion." In other words, if a nation like Brazil had a $1 billion debt, and their Real currency fell by 15%, the debt balance has risen to $1.15bn to add to the burden, at the same time their economy has weakened. The story is repeated in dozens of countries. Debt defaults will occur, maybe before 2015 ends. The equivalent figure in 1998 was only just over $2 trillion, the year of the Asian Meltdown. The global debt has become more of an unsustainable burden which is likely to show itself in a few months.
The world is over-extended. Furthermore, the Western banking system has a bigger problem, one extended from the Lehman situation. It has gone unaddressed. William White is chairman of the economic and development review committee of the OECD. He stated, "Most central banks know that our economies do not face a liquidity problem but a solvency problem linked to excessive debt accumulation." The central banks, led by the USFed, addressed liquidity problems at the start of the global financial crisis in 2008, by pumping money into the system. The central banks have spawned a debt saturation and suffocation problem, and end of the road. Lenders no longer expect to be repaid on debt. A great paradox has come into view.
Neal Kimberley concluded, "Cheap Euros and Yen are fine, but they are the wrong currencies and so have to be exchanged for the dollars that are needed. The dollar has risen in value. Having recognized the changed situation, central banks and indeed those global borrowers of dollar debt, have begun to act rationally to ensure that they have access to the greenbacks they need, as and when they need them. The dollar's rise will continue because, at the heart, it is a debt management issue." The Jackass reminds that debt default in a string of events changes such perspective. Smaller nations will not be given access to funds. See South China Morning Post (HERE).
◄$$$ IMF HAS TOLD REGULATORS TO BRACE FOR GLOBAL LIQUIDITY SHOCK... LOAN QUALITY IN THE WESTERN FINANCIAL SYSTEM IS VERY POOR, AS THE ZERO RATE HAS CAUSED SYSTEMIC DEGRADATION IN CREDIT PORTFOLIOS... THE WORLD HAS CHASED LOW QUALITY YIELDING SECURITIES... WITNESS A REDUX OF SUBPRIME CRISIS, WHERE THE ENTIRE SYSTEM IS LEHMAN. $$$
An illusion of liquidity has confounded financial markets across the world. Some of the worst excesses seen on Wall Street in modern times have been spawned, the Intl Monetary Fund has warned. History is repeating itself. Investors are borrowing cheap money to buy shares on the US stock market at a torrid pace. The subprime chapter of 2006 has returned to life, having gone systemic this round. The same sorts of financial engineering that preceded the last two financial crises has shown as current plague. In their Global Financial Stability Report, they warned "Margin debt as a percentage of market capitalisation remains higher than it was during the late-1990s stock market bubble. The increasing use of margin debt is occurring in an environment of declining liquidity. Lower market liquidity and higher market leverage in the US system increase the risk of minor shocks being propagated and amplified into sharp price corrections. A prolonged low interest rate environment will pose severe challenges for a number of financial institutions. Weak European mid-sized life insurers face a high and rising risk of distress. The failure of one or more mid-sized insurers could trigger an industry-wide loss of confidence. The industry has a portfolio of EUR 4.4 trillion in assets in the European Union, with high and rising inter-connectedness with the wider financial system. A large mark-to-market shock could force life insurers into asset reallocations and sales that could engulf the financial system." Greek debt defaults could trigger the event.
The IMF describes a global subprime crisis in redux. Nothing was reformed. No big bank liquidations were permitted. Instead, free money was ordered, and USGovt deficits have been covered by monetary inflation (like in Zimbabwe). A disaster awaits. The agency identified clear signs that underwriting standards are deteriorating in a pervasive search for yield. It is like the entire financial system has become a gigantic junk bond or subprime bond. The entire system has Lehman traits. The so-called Covenant-light Loans offering poor protection for creditors now make up two thirds of all new leveraged loans in the United States. One third of all sovereign bonds in the EuroZone carry negative yields. This is causing havoc for money markets and for the life insurance industry, which find themselves locked into commitments stretching out for thirty years that are becoming untenable. The massive pile of oily rags merely needs a lighted match. The central banks are juggling lighted match sticks while walking a tightrope. See UK Telegraph (HERE).
◄$$$ THE REVERSE REPO MARKET SIGNALS A MAJOR STRAIN ON THE DERIVATIVE NICHE... A MELTDOWN HAS BEEN IN PROGRESS FOR MONTHS, CENTERED ON THE PETRO-DOLLAR DISMANTLE... A WIDER DERIVATIVES COLLAPSE IS IN PROGRESS... THE BIG BOYZ ARE FACING A MASSIVE MARGIN CALL... THIS CRISIS IS BIGGER THAN PAST CRISES, BUT BETTER HIDDEN. $$$
A reverse repurchase agreement, the infamous Reverse REPO, is an open market operation in which a security is sold to an eligible counter-party with an agreement to repurchase that same security at a specified price at a specific time in the future. Think of it as an official bridge loan. A Herculean effort has been underway for months by the USDept Treasury Working Group on Financial Markets to prop up the US Stock market and to maintain a suppressive cap on Gold. The effort is urgent since a massive derivatives meltdown is occurring behind the scenes. It began with the Petro-Dollar being dismantled, seen in an oil price plunge and USDollar rise. The Jackass has called it a death march, a lift prior to death, a gaseous floating cadaver. The USDollar Swap market was depicted as under extremely heavy strain in the last couple months. The Reverse REPO activity reveals broadening instability. The Boyz cannot keep the problem covered up. Notice the urgent rise in REPOs.
That graph shows the USFed activity on Reverse REPO operations among foreign Central Banks and big foreign banks. Liquidity strains are greater now than in each past crisis. The key is relief sought, likely on derivative collapse. In 2008 it was the Lehman failure. In 2011 it the USFed Operation Twist. In 2015 it is the Petro-Dollar dismantle, a vast project. The central banks are urgently trying to prevent the system from collapsing. The evidence seems obvious, that the massive operations are to inject USTreasurys as collateral into the global banking system, used as preferred collateral against derivatives positions. Witness a global margin call for the banker cabal, the Big Boyz. When a major financial player entity such as a large bank or hedge fund takes on a derivatives bet, it is required to post collateral. The design is to protect the counter-party from a decline in the value of the position (bet). As usual, the USTreasurys are regarded as pristine, the preferred rigorous collateral. The casino is collapsing.
## PETRO-DOLLAR & OIL SECTOR IMPLOSION
◄$$$ OIL-RICH NATIONS ARE SELLING OFF THEIR PETRO-DOLLAR ASSETS AT RECORD PACE... THE DEATH OF THE PETRO-DOLLAR IS IN PROGRESS, A SLOW EXCRUCIATING EPISODE... ITS FRONT END CONTAINS ASSETS, WHILE ITS BACK END CONTAINS THE DERIVATIVES. $$$
With the oil price in the $50-$60 range per barrel, Saudi Arabia and major oil producing nations (OPEC et al) are executing plans to reduce their vast Petro-Dollar reserves. In other words, they are selling their assets derived from oil sales. Nations like Angola are burning through their savings at a record pace. The global market liquidity is undergoing a shock. As a result, surely an unintended consequence, strain on other toilet paper assets will rise to cause hue and cry. Low USTreasury Bond yields mean smaller nations have less income derived from bonds, and therefore must sell off the core assets. The poor global economy means their deficits are rising. If crude oil and other commodity prices remain depressed, the trend will cut demand for everything from European sovereign debt to US stocks and real estate, as producing nations seek desperately to fill holes in their domestic budgets. The shock is well noted. "This is the first time in 20 years that OPEC nations will be sucking liquidity out of the market rather than adding to it through investments," said David Spegel. He is head of emerging markets sovereign credit research at BNP Paribas in London. The phenomenon was cited in recent Hat Trick Letters. A climax comes from stress.
Witness the death of the Petro-Dollar, a long drawn out exercise akin to medieval bloodletting. The USDollar is doomed as global reserve currency, while pundits speak of a strong USD like stupid monkeys slapping at typewriter keyboards, their heads are firmly up their rectums. Debate has come on the ultimate outcome of a flood of Petro-Dollars being dumped. This is the front end, the back end being FOREX derivatives tied to the crude oil price. Be sure that tremendous deception comes on the volumes, the impact, and the result. The IMF curiously seems to have it right. They warn that a discharge of Petro-Dollars indeed matter, because they are significant enough to turn market sentiment as flows switch direction. See Bloomberg (HERE) and Zero Hedge (HERE).
◄$$$ ROCKEFELLERS ARE SIDE-STEPPING THE RUSSIAN SANCTIONS IN THE SAKHALIN PROJECT... THEY HIDE BEHIND THE RUSSIAN LANGUAGE PRESS WITH CONTINUED SHARING OF TECHNOLOGY. $$$
Rockefellers do not publicized their participation, but Rosneft expressed gratitude to their partner. The oil giant Rosneft completed the drilling of the longest well in the world at the consortium project in Sakhalin-1. Such was the O-14 well in the Chayvo field. The length of the well was 13.5 km, half a kilometer longer than the previous record holder in the Z-40 hole, also drilled within the Sakhalin-1 project. The entire drilling took Rosneft took 156 days. Here is the zinger. In a public statement, Rosneft CEO Igor Sechin stated, "This well [represents] the continuation of the successful implementation of our outstanding project. I am grateful to our partners at the company Exxon Mobil, through the use of drilling technology which made possible this achievement." See the original news on RT in Russian (HERE). Sanctions do not apply to Exxon Mobil, which now owns more land claims in Russia than in the United States.
◄$$$ GOLDMAN SACHS HAS ADMITTED OPEC IS NOT THE PROBLEM... THEY CONCLUDE THE UNITED STATES MUST CUT OIL OUTPUT... MORE FACTORS WILL PUSH THE OIL PRICE DOWN, LIKE ARRIVAL OF IRAN'S OIL SUPPLY. $$$
The burden for restoring the oil price back to an equilibrium lies squarely on the shoulders of countries like the United States, and not on the OPEC nations, a top Goldman Sachs analyst told CNBC. Michele Della Vigna is head of European energy research at Goldman Sachs. She claims that non-OPEC oil producers had created the over-supply in the market which has weighed down prices. Refer to the marginal producers in the shale sector, such as in the Bakken region. An amazing 87% of new oil output since 2008 has come from the shale sector, much of which is tied to the US oil patch. See CNBC (HERE).
It is looking obvious that China and Saudi Arabia brought down the oil price to kill the Petro-Dollar. Motives are not clear, but the Jackass has been claiming the US abandoned the Saudis, stole their gold, undermined their kingdom politically, and now are laying blame for the 9/11 attack on them. The Gulf of Mexico production was capped, due to the Halliburton sabotage, in order to leave it in place. It will be viable at a future date. Observe Goldman Sachs throwing in the towel. The US is finished. The GSax corrupt corner is kissing ass to buy more time to position themselves. Notice the sequence. GSax admitted blame for higher oil price. Then came an historical deal unleashed to bring Iranian oil onto the market. It will surely drive down the oil price further. The USGovt socialist officials will claim it is great for consumers, while they conceal their fascist directives toward sounding martial law. It sounds like GSax is pushing for a quick and swift US collapse. The big picture should give warning that lower oil means even higher USDollar exchange rates. The stress in the system could work to kill the USDollar as global reserve currency. The rising USD is killing the global debt structure, while ZIRP is killing the global financial structure, while QE is killing the global capital structure. This is game over except for the music.
◄$$$ SAUDI ARABIA ANNOUNCED THE BIGGEST OIL PRODUCTION SURGE IN 30 YEARS, AT RECORD OUTPUT LEVELS... THEY ARE THE WORLD'S LOW-COST PRODUCER... THEY TARGET THE MARGINAL SHALE SECTOR IN THE UNITED STATES, A GENUINE ECONOMIC ATTACK. $$$
Saudi Arabia is the undisputed leader of OPEC. The nation increased daily oil production by 658,800 barrels in March, reaching an average of 10.294 million barrels per day. Data is from OPEC secretariat in Vienna. The volume has exceeded the kingdom's previous high level of 10.2 million barrels per day (bpd) set in August 2013. Output will continue around 10 million bpd, claimed Saudi oil minister Ali al-Naimi. The sheer size of the Saudi growth is equal to about half the daily production in the US Bakken shale formation in North Dakota, it should be noted. The shale oil field is estimated to have the most oil reserves in the US. The region is shutting down rapidly. The Saudis appear to be struggling to maintain a certain stable income level during a falling price scenario. In mid-April, the London-traded Brent prices has risen by nearly 6%, settling near $63, the highest mark since December 18th. Oil prices in 2015 have experienced a relative bounce, following the major 50% bust in the last six months of 2014. At end of year, Brent crude went below $45 for the first time since 2009. Other major factors on oil prices in 2015 have been the conflict in Yemen, the possible emergence of Iranian oil to the market upon lifted sanctions, and continually rising stockpiles from the US. See Russia Today (HERE).
◄$$$ CONTRAST TO MASSIVE CUTBACK IN TEXAS DRILL RIGS... THE OIL SECTOR WILL LEAD THE USECONOMY INTO A RECOGNIZED DEPRESSION... HISTORY HAS NEVER SEEN SUCH A SUDDEN FALL OFF THE CLIFF. $$$
The latest manufacturing outlook index from the Dallas Fed plunged again in March, to minus 17.4 from minus 11.2 in February. A big factor was the energy sector and massive cutbacks in activity. The price of oil has acted like a gigantic wrecking ball in the oil patch. Only two times in history has the price of oil fallen by more than $50 in a six month period. One was just before the financial crisis in 2008 marked by the Lehman failure. The other has just happened, in progress. As a result of crashing oil prices, the rash of oil rig shutdowns in the United States has hit at a blistering pace, a fall off the cliff. In fact, almost half of all oil rigs in the US have already shut down. Wolf Richter reported that in the last week of March, drillers idled another 41 oil rigs, according to Baker Hughes. Only 825 rigs were still active, down 48.7% from October. In the 23 weeks since, drillers have idled 784 oil rigs, the steepest decline in the history of the data series. The chart is more than a bust, but rather hitting a wall at 100 miles per hour while drunk on fracking. It is a sector death event. See Alt Market (HERE).
◄$$$ CHAIN REACTION OF SHALE SUBPRIME FAILURES IS COMING FAST... REVOLVER RAIDS BY BANKS TO WITHDRAW CREDIT LINES HAVE RETURNED... JUST LIKE WITH THE HOUSING MARKET IN 2006 AND 2007, THE RAIDS ARE OCCURRING IN THE OIL SECTOR... IT SPELLS DOOM, AND MUCH WORSE DAMAGE TO COME... DEBT DEFAULT EVENTS ARE RACKING UP, AS ARE SOME DEBT RESCUES VIA MERGER ARE FASHIONED... THEY WILL MOSTLY GO BAD, IN TIME. $$$
Back in late 2006 and early 2007, as the first cracks began to show in the housing and mortgage finance market, an early harbinger of extreme damage was related to pulled credit lines. The banks gradually yanked finance availability under secured revolving credit facilities to companies across the USEconomy. The lack of liquidity became an avalanche in reverse, which swept away Lehman Brothers, Fannie Mae, and AIG. The greatest financial crisis in history was born, leading to the greatest sequence of bailouts of the history of capitalism. Worse, the crisis eradicated capitalism, since no big bank bailouts are permitted, and federal deficits are covered by monetary inflation. The analysts at the time gave a name for bank actions, where company CFOs were called to inform them of severe cuts to secured credit facilities. They called them Revolver Raids. The infamous revolver raids are back, but in the energy sector this time around. Just like seven years ago, another sector facing death by drowning in $trillions in subprime debt. Companies in the energy sector have suffered a revolver raid, as credit lines vanished as a result of the collapse in oil prices. Bloomberg reported, "Lenders are preparing to cut the credit lines to a group of junk rated shale oil companies by as much as 30% in the coming days, dealing another blow as they struggle with a slump in crude prices."
Conditions will worsen quickly. Easily a dozen firms face trouble finding backup financing. They will one by one be making gloomy announcements. It comes at a critical season. April is a crucial month for the industry, since it is the month when lenders are due to recalculate the value of properties. The energy companies have staked them toward loan collateral. The assets are suddenly seen in a horrendous light, with lower oil prices. The banks will cut credit to the lending capacity, sure to result in shutdowns of projects and shuttered businesses. The oil output will turn to drops in the barrel. In the balance lies $billions in reduced funding for dozens of companies that relied on debt to fund drilling operations in US shale basins. They face a downward spiral, even as banks face debt default and their own losses. Two phases apply. First is the unsecured funding phase, which is done, reliant upon ZIRP and its free money spigot. Second is the secure funding phase, having begun and nearing full swing. The secured capital crunch is here, like a Grim Corporate Reaper.
The armada of secured lenders or bondholders will be taking control of energy projects and abandoned fields, as keys are handed over. Then these firms will suffer their own damage with certain failures and subsidiary collapses, even buyouts and mergers. Unlike the housing & mortgage market, the damage will be observed rapidly. Publicly traded firms must disclose dire debt news to investors within four business days, under the US-based Securities & Exchange Commission rules. Their dried credit lines must be disclosed right away. In underwater home loans, the banks carried the dead loans by contrast.
The list of companies dying on the credit vine is long, for only announcements in the last couple months. Sabine Oil & Gas Corp became one of the first company to warn investors that it hit the credit wall. They admitted substantial doubt about their ability to continue operations. Last year Sabine, the Houston-based exploration and production company, merged with Forest Oil Corp. Early this month, they informed investors that $2 billion of loans and other debt are at risk of default. Another company is Samson Resources, which informed investors of a possible Chapter 11 bankruptcy filing. The firm based in Tulsa Oklahoma cannot repay its credit line, a default to come. Samson had been acquired from a $7.2 billion deal in 2011 by a team of investors led by KKR & Co. It had a current debt burden of $3.9 billion as of December 31st. Its sponsors are on the hook, the entire deal gone sour.
Strangely, the revolver raids explian the surge in equity and bond issuance seen in recent weeks. The investors for the new issuance must be dumber than fence posts. Energy companies issued more than $11 billion in stock in 1Q2015, more than ten times the amount from 1Q2014, as per Bloomberg data. The mergers have begun in rescue. Breitburn Energy Partners announced a $1 billion deal with EIG Global Energy Partners in early April, in a credit rescue. The private equity firm EIG, with an energy focus, agreed to buy $350 million of Breitburn's convertible preferred equity and $650 million of debt notes. Unless the crude oil price returns toward the $100 level, all this new debt will never be repaid. It will all go bad, in time. See Zero Hedge (HERE). The ZH article in January was also foreboding (HERE).
◄$$$ SUBPRIME DEBT IS UNIVERSAL ACROSS THE USECONOMY. $$$
The entire national financial structure has been converted to subprime junk, while the nation has become a giant Ponzi Scheme. The process began with the housing market, then the car market, then student loans, and now the marginal oil sector. The control switches read ZIRP & QE, with PPT and HFT as backup. See Plunge Protection Team and High Frequency Trading. The USEconomy is on life support with debt breaking down. The subprime meters are flashing as debt systems break down. See Market Oracle (HERE & HERE & HERE). Professor Kotlikoff of Boston University has warned of collapse of the US-centric financial system. It is just a matter of time, the inevitable to occur. See Before Its News video (HERE).
## GREEK DEBT CRUNCH CLIMAX
◄$$$ THE GREEK GOVT HAS ISSUED A DECREE THAT FORCES LOCAL GOVERNMENTS TO TRANSFER CASH BALANCES TO THE CENTRAL BANK, AS DEBT TO THE INTL MONETARY FUND AND MONTH-END SALARY PAYMENTS COME DUE... THE NATION IS PARALYZED WHILE ASSET SEIZURES ARE THE RULE... ATHENS HAS INITIATED RAIDS OF PUBLIC HEALTH COFFERS IN THE HUNT FOR CASH. $$$
The new dictum is a confiscation of cash reserves currently held in commercial banks. They must transfer fund to the central bank, thus raising EUR 2 billion (=US$2.15 bn). The strapped strangled nation must meet its debt obligations, like the repayment of a EUR 770 million tranche owed to the IMF on May 12th. The Athens officials and European creditors remain deadlocked with time running out. They must unlock aid to avert a default on the EUR 313 billion in total Greed debt obligations. Disarray is the order of the day. No 2015 budget targets have been set, nor policies to meet them. Some interesting data has come into view. The Greek Bond credit default swap suggests an 81% chance of Greece being unable to repay its debt in five years. The meter read 67% on March 1st. Officials threaten snap elections and referendums if the debt talks stall further. Patience is surely wearing thin in this long dragged out debt conflict. The Dutch Finance Minister Jeroen Dijsselbloem told De Telegraaf newspaper that the situation can be isolated. He reminded that Greece will eventually run out of cash (and assets to seize), their economy comprising only 2% of the European Economy. He is writing an obituary. See Bloomberg (HERE).
The Greek Govt has raided the coffers of its public health service and the Athens metro (transportation) as the dragnet for funds expanded. Athens faces a EUR 1.7bn bill for wages and pensions at the end of March. Athens has scrounged up more than EUR 600 million of cash held by state-owned corporations, including contributions from the Athens metro company, the state electricity supplier, PPC, and the Athens water utility. About EUR 300 million in EU subsidies due to farmers has been diverted to cover salary payments to civil servants. The Greek banks are playing a dangerous rollover game in USTreasury Bills in recent auctions. The external debt payments can no longer be covered by Greek banks, prohibited by new rules. See Global Economic Analysis (HERE). Look for China to pursue strangled farms.
◄$$$ GREEK BONDS USED AS COLLATERAL HAVE BECOME THE HIDDEN SOURCE OF FINANCIAL RISK, VERY MUCH IN DOUBT LIKE A TREE READY TO FALL... BIG EUROPEAN BANKS LIE AT EXTREME RISK... DRAGHI PUSHED THEM TO DUMP EURO-BONDS TO THE EURO CENTRAL BANK... HOWEVER, MUCH IMPAIRED DEBT REMAINS ON THE BANK BOOKS... OFFICIAL POLICY IS TO PROTECT THE BIG BANKS, NOT GREECE. $$$
The situation in Greece boils down to the single most important issue for the finacial system, namely collateral. Modern financial theory dictates that sovereign bonds are the most risk free assets in the financial system. Countries tend not to go bust. Since the Lehman failure (killjob), the modern theory has been turned upside down. The entire financial system, in particular Europe, has devoted sovereign bonds (USTreasurys, German Bunds, Japanese sovereign bonds) as the senior most asset pledged as collateral for hundreds of $trillions worth of contracts. They fortify the inherent financial structure. Sovereign bonds, including the bonds from bankrupt countries such as Greece and even Spain and Italy, serve as cogs for the primary collateral underlying the structure. Lost amidst the conflict over budget austerity measures, asset pledges and seizure, calculation of Debt to GDP ratios, extension of loan terms, and payments due, is the real issue of ripple effects. The creditors, such as big Euro banks, must prepare for the fallout from having used Greek sovereign bonds as collateral. Think huge trees falling on the buildings during the storm, after being hollowed out.
Before the second Greek bailout, the Euro Central Bank swapped out all of its Greek sovereign bonds for new bonds that would not suffer loss. Around 80% of the bailout funds went to big EU banks which were Greek bond holders, not the Greek Economy. The controversial LTRO-1 and LTRO-2 which took place in December 2011 and February 2012 permitted European nations and banks to dump sovereign bonds onto the EuroCB balance sheet in exchange for cash. These programs resulted in financial entities and nations dumping over EUR 1 trillion in sovereign bonds onto the now toxic balance sheets.
The Greek debt quagmire actions achieve little to aid Greece. The challenge addressed in the sequence of bailouts focused upon insuring that the EU banks that were using Greek bonds as collateral were kept whole. The current negotiations in Greece come down to the important point, of whether a potential Greek debt restructuring will affect bondholders throughout the financial system. Greece wants this, but the Euro banks do not. Either a partial debt forgiveness or a debt default seems inevitable, the delay of the Grim Reaper obvious. See Zero Hedge (HERE). Both the USFed and EuroCB balance sheets are wrecked, spilling over with toxic paper, as they served as buyers of last resort.
◄$$$ GREECE IS DRAWING UP CONTINGENCY PLANS TO NATIONALIZE BANKS, AND TO BRING IN PARALLEL CURRENCY... PLANS HAVE BEGUN FOR THE DRACHMA RETURN... ATHENS PREPARES TO MISS THE IMF PAYMENT BUT TO MEET EURO CENTRAL BANK PAYMENT. $$$
To piss on the IMF but kneel before the EuroCB speaks volumes on the dead IMF office. The new Syriza Admin plans plans if necessary to shut down the nation's banks, to nationalize them, to issue IOUs across the board, and to make plans for a return to the Drachma currency. Joining the European Union has left the nation devastated, a kitchen with an empty cupboard unable to prepare dinner. They even usurped farm subsidies, eating the seed corn. Reforms have been enacted in wide sweeps, causing deep disruption and public anger. The international creditors have not been impressed with attempts at reform. Pensions have been a particular bone of contention with the country's creditors. Greece spends 17.5% of its GDP on pensions, more than any other country in Europe. That is an amazing achievement, since France is the pensioner paradise with early qualification and generous payouts.
The Athens mindset has changed since the elections in January. The EU creditor offices might not grasp that the political landscape has changed. The creditor side of the table must make substantive concessions if they wish to prevent a disastrous rupture of monetary union, an outcome they abhor. An anonymous source put it well. "They want to put us [Greeks] through the ritual of humiliation and force us into sequestration [forced budget cuts]. They are trying to put us in a position where we either have to default to our own people or sign up to a deal that is politically toxic for us. If that is their objective, they will have to do it without us." The Greeks are simply running out of cash, and running out of assets to convert, and running out of funds to raid. See the Intl Business Times (HERE) and UK Telegraph (HERE).
◄$$$ JAMES TURK OFFERED HIS ASSESSMENT ON GREECE... THE GREEK BANK RUNS ARE ACCELERATING INTO A FULL-BLOWN PANIC... TURK DOES NOT EXPECT GREECE TO LEAVE THE EURO MONETARY UNION, AS CYPRUS DID NOT LEAVE... BUT GREECE WILL BE HOBBLED OR CRIPPLED... THE DEBT MERRY-GO-ROUND IS GRINDING TO A HALT. $$$
The following are James Turk's remarks, founder of Gold Money and expert financial auditor. The run on bank deposits in Greece has been fierce. From peak deposits of EUR 240 billion six years ago, deposits have fallen to EUR 130 billion today, with about EUR30bn of this decline in the past three months. The bank run is gathering momentum. A crossover critical juncture approaches, where the total amount of deposits in Greek banks will fall below the balance owed to the EuroCB. Ironically, the Greek debt situation has been out of the news for months, even though the situation has turned dire. The press is bored with the ongoing saga story. Greece is broke. After Athens might survive the mid-April payment deadlines, it faces more grand hurdles in coming months that will be insurmountable. The Greek banks have been rolling over domestic sovereign bills in the EUR2bn range. Two upcoming bills are different, pending over EUR 500 million owed to investors outside Greece. They want repayment ugently. Turk incorrectly anticipated a Greek debt blowup before April 14th, which has not happened.
The EuroCB has purchased from European banks almost all of the Greek debt securities held on their books. The Europeans repeated the Lehman drill but with a twist. The difference is that bank bail-ins might be conducted like in Cyprus. Some costs of debt payment will be supported by depositors. Turk expects some bond holder losses for investors, forced to accept losses. Whether partial default or forgiveness, it matters not. The global impact could be felt with the related writedowns. In an insane sequence, numerous fund managers have been purchasing Greek Govt debt, in search of the high yield offered. They ignore high risk of partial default, thus sudden haircuts. These madmen are betting that the ECB will not let Greece collapse. However, events in the last few months indicate that the ECB, the IMF, and the EU Commisioners are forcing Greece into bankruptcy. Some form of debt default is unavoidable. A circular debt scheme is coming unraveled.
For years, the Greek Govt has been kept afloat by the Greek banks. Athens would issue short-term Treasury Bills which the Greek banks would buy. The funds incoming to the government kept its head above water. Athens spent this money as rapidly as it came in. The Greek banks would use these newly issued Treasury Bills as collateral to borrow money from the ECB. These borrowings occurred in cycles with significant volume. The volume has risen more than EUR 10 billion in just the last month to over EUR70bn today. The Greek banks have not been borrowing from the ECB by choice, but rather out of desperation. They are caught in a death spiral, losing deposits, stuck with bad loans, while the Greek Economy withers away. The degraded situation has forced the ECB's hand. Time has run out. If the ECB does not pull the plug on Greece on this round, they will very soon. Turk concluded, "Greece will not leave the Euro, just as Cyprus has not left the Euro. But Greece will be hobbled by the ECB repeating what happened in Cyprus. There is an ebb and flow to the markets. This mess in Greece is an indication that the tide is turning, and turning in favor of the precious metals, particularly when their prices are measured in terms of Euros." See King World News (HERE). The Jackass disagrees with Turk, as my firm expectation is for Greece to leave the common Euro union and seek Drachma devaluation while enacting Eastern trade deals. But it will take time, pain, and more riots.
◄$$$ CENTRAL BANKS ARE DUMPING THEIR EUROS AMONG FOREIGN CURRENCY RESERVES... THE EURO CURRENCY RESERVE STATUS IS JEOPARDIZED AS CENTRAL BANKS DISCARD EURO-BONDS IN DROVES... CAPITAL FLIGHT OCCURRING VIA CURRENCY CONVERSION TO USDOLLARS IS A FACTOR LIFTING THE USDOLLAR... IMPLOSION AGAIN SUPPORTS THE USD. $$$
The economic quack doctors claim that Quantitative Easing has helped Europe to achieve its economic targets, and brought stability to the sovereign bond markets. Both claims are big fat lies. The evidence is hard to see. More visible is the harsh decay to the long-term viability of the Euro currency. It has been tarnished as any secondary global reserve currency during the maelstrom. Central banks cut their Euro denominated holdings by the most on record in year 2014. The Euro now accounts for only 22% of worldwide reserves, down from 28% before the regional PIGS debt 2010 crisis began in earnest. Their USDollar and JapYen holdings have both climbed, as per IMF data. The QE initiatives remove the justification to invest in EuroBonds, while the Euro currency is falling apart. Some big European bank analysts like Daniel Fermon of Societe Generale Paris see no floor for the currency for now. Big money is flowing out. EuroCB Prince Draghi added more deception into the mix. In early April, he actually stated that the decline in Euro holdings has made the Euro exchange rate weaker, thus rendering the EuroZone more competitive economically. Moron Jacob Lew at US Treasury Secretary stated the same drivel. Both continental economies and financial structures are collapsing, the real truth. Notice one more factor that provides lift to the USDollar, the sinking flagship in the FOREX fleet of vacuous currencies. See Bloomberg (HERE).
◄$$$ PRINCE DRAGHI HAS AN ANGRY SLEEK TEUTONIC RODENT BITING AT HIS LEG... A GERMAN BANK HAS FILED LAWSUIT AGAINST THE EURO CENTRAL BANK... THE GERMAN DISSENSION GAINS MOMENTUM, WITH BATTLES TO BE FOUGHT IN COURT. $$$
A climax has been reached as a German bank has filed a lawsuit against the Euro Central Bank. The Landeskretitbank Baden-Wurttemberg (call it LBW-Bank) has lodged a formal protest, since it will fall under the new regime whereby the ECB would assume supervision over at least 100 financial institutions in the EuroZone. The LBW-Bank is arguing the cost to comply with the newer and stricter bank rules is too much to bear for a bank which sports a low-risk business profile. Despite having over EUR 30 billion in assets (threshold for banks to warrant supervision), LBW-Bank claims they do not warrant entry on the ECB watch list. The region of Baden-Wurttemberg provides a direct guarantee. Apparently, the cost to comply with the ECB requisites could reach EUR 5-10 million per year, a burdensome amount for a bank generating just EUR 100 million in net profit. The banking lords are smothering their vassals. The lawsuit initiated in March will be an important test case for both sides as several other smaller banks find themselves in a similar smothering position. The case was brought before the European Court of Justice. Expect a slow procedure. Moreover, the EuroCB could grant an exception to the bank's statute, leading to more requests for a status review. See Zero Hedge (HERE).
◄$$$ EURO BASIS SWAPS KEEP FALLING HARD... A LOW PRESSURE ZONE HAS BEEN RECORDED, WITH NO ALARM BELLS HEARD. $$$
Speculators are aligning heavily against the Euro. Their net short position remains close to its previous all time highs from a few years ago. Experts conclude that something is odd about the recent move in Euro basis swaps. Last time a similar move occurred, there was a palpable sense of panic in the markets, with European bank stocks plunging, bond yields in peripheral EuroZone nations soaring, and Gold rising to almost $2000 per oz. The only similarity in the current chapter is the clear Euro currency weakness. Worry is nowhere. Complacency rules. But usually such traits precede the next round of panic. In fact, bonds yields in Spain and Italy are sitting at record lows and European stock markets are robust. The high flying USDollar has caused a broadbased false sense of security. To be sure, the high US-DX index poses a problem for many sovereign and commercial borrowers, many of whom are European bank clients. See Zero Hedge (HERE).
## RUSSIA THE ROBUST
◄$$$ THE RUSSIAN ECONOMY CONTINUES TO CONFOUND EXPECTATIONS, WHILE THE OBAMA ADMIN SPEWS PROPAGANDA OF ITS WEAKNESS AND ABUSES DEBT RATING AGENCIES AGAINST RUSSIA... THE RUSSIAN ECONOMY IS FAR MORE ROBUST AND DIVERSIFIED THAN THE PAID RESEARCH RUBBISH HAS BEEN PORTRAYING... THE WAR HAS A KEEN FINANCIAL SIDE. $$$
The West fell for its own propaganda when it imposed the sanctions against Russia. The backfire with the Kremlin ban on agricultural output has been very harmful, much like shooting off a leg on the European body. Most analyses on Russia are rubbish based on nonsensical constructs, founded in propaganda and wrong data. President Obama has been doing far more boasting on baseless claims that reality justifies, in turning the war into some queer personality contest of chest pounding. The Kremlin out-maneuvers the White House at every corner. The ostentatious gestures display a hollow message, obscuring how Putin is the master strategiest. Obama holds no cards, not even nuclear cards, surely no financial cards. The Man from Vlad has outwitted the US-EU axis of fascists at every turn, in the EU food ban, in the East Ukraine front, in the Gazprom pipeline, in the Turkey-Greece connections, in the Cyprus naval base, in South American food supply, and more. The war is an embarrassment that even Head Fascist Wizard Kissinger admits is a failure. The fast declining Ruble currency has rebounded in such a way as to take away the once felt euphoria by the Western clown leaders. Lastly, the ratings agencies betrayed their founding principles by fashioning bogus reports. They permitted themselves to be used (played) by the Obama's White House henchmen as instruments of economic war.
The Russian Economy has not weakened much at all, but the USEconomy faces a depression even before the fractured oil sector. Almost no analysts (except the Jackass and sparingly few others) expected that the Russian Economy would be this resilient and become practically immune to the sanctions. Their economy has more industry perhaps than the United States does. It is much stronger, more diversified, and far more modern than the Western narrative insisted in doctored paid rubbish posing as analysis published last December. The fundamental fallacy that lured the West was founded on how sanctions would be an easy game, indeed a gross misconception. The West plays a futile game, mainly for its own domestic audience of numbskulls. See Russia Insider (HERE). The Russian Ruble has extended its rugged rebound with a surge in the last month, part of resilience since November. See Zero Hedge (HERE). Beware of upcoming strength of both Chinese RMB and Hong Kong Dollar when the FOREX currency shocks hit hard.
◄$$$ THE MERKEL ANTI-RUSSIAN FRONT IS FALLING APART.. A GROWING LIST OF EUROPEAN COUNTRIES OPPOSE AN EXTENSION OF ANTI-RUSSIAN SANCTIONS AND DISAGREE WITH THE GERMAN POLICY TOWARDS RUSSIA... OPPOSITION GROWS ACROSS ALL OF EUROPE... BLOWBACK COMES NEXT. $$$
The voice of reality is being heard in Germany. The German online newspaper Die Freie Welt (The Free World) reported that attempts to save European unity are doomed to fail. The Finland leaders are breaking off. During her recent visit to Helsinki, German Chancellor Angela Merkel tried to convince the Finns to further follow the anti-Russian course. She relied on the tired theme of common EU policy towards Russia (even if wrong and self-defeating). Merkel risks a split in EU regarding anti-Russian sanctions, according to the German Media. The call for a common position on sanctions seems absurd and hopeless. Growing opposition to the economic sanctions has arrived in Finland. The opponents have successfully exploited the negative impact of sanctions and called for a dialogue with Russia. They stress decades of close economic ties.
Finns are not the only ones who criticize Merkel's tough stance towards Russia. In fact, Greece, Hungary, Spain, Italy, Slovakia, Cyprus, and Austria are also expressing discontent about the anti-Russian sanctions under which they suffer more than other EU countries. Sanctions against Russia are a counter-productive American game which will produce serious blowback consequences, as seen in numerous other war venues. See Sputnik News (HERE) and Russia Today (HERE). German farmers have so far lost EUR 600 million from Russian reverse sanctions, with far more to come. Expect the Chinese to arrive as carpet baggers in the next few months to purchase farm businesses in Southern Europe. The move will set off a firestorm of protest. See Sputnik (HERE).
◄$$$ KREMLIN HAS LOOSENED THE IRAN SANCTIONS WITH A $20BN BARTER DEAL, AND AN ARMS DEAL TO FOLLOW... RUSSIA HAS COMPLETED THE EURASIAN REGIONAL ARC ALL THE WAY TO CENTRAL ASIA. $$$
Barter is king with the Eurasian Trade Zone. No nation conducts more barter than Iran, as their trade with China is nearly $150bn per year versus the officially stated $50bn (rough terms). A barter deal has been mixed with a weapons sale. Recall that Iran is a primary site for Russian-made advanced Sunburn missiles, which are one generation ahead of the aging US-made Cruise missile. The Sunburn boasts much greater speed and accuracy, a lethal combination. Russian leader Putin signed the presidential decree to supply S-300 missiles to Iran, in addition to the kickoff of the $20 billion oil-for-goods swap deal between Russia and Iran. Moscow has liberated Teheran from the curse of sanctions. It effectively signifies the end of the sanctions program against Iran. The geopolitical chess piece has been fortified by knights, as the ramifications are quickly seen. Coming into view is a stronger Russo-Iranian strategic axis.
In the bigger picture, a profound effect is noted. A wide arc stretching from Central Asia through the Caucasus and the Caspian to the Middle East proper can be seen on Eurasian security. To be sure, the United States is staring at a catastrophic setback in its regional policies on several fronts. Without doubt, Iran is a pivotal state and a key chess piece. One by one, the US-EU tag team of idiots and clowns are losing important ground. Expect Moscow and Beijing to coordinate their moves on Iran. The Chinese President Xi Jinping is due to pay a visit to Iran soon. Curiously, the Chinese officials had openly hinted that there could be some dramatic announcements during the visit. Some posit that the news will focus on Iran, with respect to having taken a great leap forward toward induction into the Shanghai Cooperation Organization. See Asia Times (HERE).
◄$$$ RUSSIA COURTS GREECE, WHICH WILL CHANGE THE DYNAMICS OF THE ENTIRE EASTERN EUROPE FRONT AND MEDITERRANEAN OUTLET... BIG ENERGY INVESTMENT WILL COME... OBSERVE WESTERN EXPLOIT VERSUS EASTERN PARTNERSHIP, AS GEOPOLITICAL CHESS PIECES ARE IN MOVEMENT. $$$
Some counter psychology might be at work. A Russian funding loan that helps Greece remain in the European Union could work to the Kremlin advantage. It would permit Greece to block or prevent any new sanctions by votes cast in the cockeyed EU Parliament, or at least interfere with any extensions of existing sanctions against Russia. Again, small loan with big payoff in the asymmetric world of economic battle. The Voice outlined three major advantages that Russia seeks in the Greek courtship. They are each highly significant toward changing the regional dynamics.
1) Off-shore oil & gas development, with a raft of new contracts from Russian energy firms and other contracts (like energy plants)
2) Bosporus straight control, and assured security for open ocean naval access
3) Russian & Chinese bridgehead in the Southern European part of the Mediterranean Sea, including naval bases
4) Greece will be in a position to serve Russian food needs, perhaps using Turkey as a portal, in defiance of sanctions.
New deals and contracts between Russia and Greece open enormous doors for Russia to acquire shipping ports and vessels with Chinese partners. It is only natural to expect military naval ports to spring up, and thus to complement the Tartus naval base in Syria. The courtship of Greece represents a major strategic move for the Eastern superpowers, while at the same time a massive blunder by the European Union. The EU commissioners and big European bankers are far too focused on asset plunder and finance games, as opposed to commercial positions and military chess piece movement. Once more, the West sticks with its plunder motive while the East reverts to commercial partnerships, the pattern evident across the entire globe for the last two decades. The Jackass views the pattern as part of the Western demise pathogenesis. The Eurasian pivot remains in progress. See Zero Hedge (HERE).
◄$$$ TURK STREAM CONNECTION TO GREECE-RUSSIA LINK IS COMING INTO FORM... RUSSIA HAS A SWEETENER IN CASH OFFERS FOR KEY GREEK ASSETS, WHICH WOULD AID IN THEIR CASH CRUNCH... THE KREMLIN WILL REQUIRE KEY TACTICAL PIECES FOR KEY AID... THE PIVOT EAST IS VISIBLE. $$$
Russia is ready to offer Greeks cash in return for key assets. Synergy is forming. The Kremlin is willing to provide cash-strapped Greeks a credit line and even discounted energy supplies, but with motive to gain tactical ground. Prime Minister Alexis Tsipras met with Putin to work the deals. In return for the cash plus discounted natural gas, Russia would seek certain assets such as the Greek gas company DEPA. Stakes in train operator TrainOSE and seaports in Athens and Thessaloniki are also potential targets. Little known is that Russia is Greece's largest trading partner on account of its huge trade in natural gas. The energy sector is of keen interest. The Greek energy minister has invited Russian companies to explore natural gas & oil reserves off the country's eastern coast. In return, Greece has indicated it is willing to hook up with the Gazprom new pipeline planned though Turkey, known as Turkish Stream. Expect much greater development of offshore energy deposits, which will lift the Greek Economy.
The overtures by the new Greek Govt led by Tsipras and Yanis Varoufakis toward Moscow have raised concerns that the nation has begun an important pivot eastward in search of alternatives sources of finance and commerce. It strives to avoid bankruptcy, or to emerge from it. Ahead of his visit, Tsipras condemned economic sanctions imposed by Europe on Moscow as a road to nowhere, in his words. The new courtship between Athens and Moscow indicate a clear undermine and further fracture of the non-existent united EU front against Russia. They probably realize the US-EU fascists were the instigators in Ukraine. The rest has been transparent and futile propaganda. The EU Parliament stooges called the Tsipras gambit east as unacceptable. Expect anger to harden the lines against Greek aid by the EU bank moguls. But lines of credit are on the table, while in fact the cause for Ukraine War is viewed increasingly as unacceptable. The press source Kommersant newspaper quoted an anonymous Russian government source as saying the possibility of granting Greece new loans would be weighed against Russia receiving particular assets in Greece. A win-win situation is emerging. See the UK Telegraph (HERE).
Greece and Hungary have endorsed plans to build a new Russian gas pipeline. The EU unity is nowhere to be seen in the eastern states of Europe. They strive to bypass the sanctions and to position themselves for the next chapter after the EU folds. The two nations had their foreign ministers, Nikos Kotzias and Peter Szijjarto, add their names to a declaration on the Turkish Stream project. Contracts were signed in Budapest on April 7th, with counterparts from Serbia, Macedonia, and Turkey. The text declares that they "expressed support to create a commercially viable option of route and source diversification for delivering natural gas from the Republic of Turkey through the territories of our countries to the countries of Central and South Eastern Europe." This is a clear green light for Turkish Stream. See EU Observer (HERE).
◄$$$ GREECE WILL BECOME AN EFFECTIVE RUSSIAN GAZPROM PARTNER, WHILE THE EU SEEKS TO BOOT THEM OUT... THE CONTRAST OF FINANCIAL BONDAGE BY EUROPEAN BRASS VERSUS COMMERCIAL PARTNERSHIP BY THE KREMLIN IS STRIKING. $$$
The Turkish Stream gas pipeline project makes Greece an important and useful partner for Russian Gazprom, despite the country's financial problems. The newly re-routed pipeline will diversify natural gas shipments to Europe away from Ukraine, thus making Greece a transit hub for European gas delivery. Some regard Greece as a real estate landlord for lease in the geopolitically critical deal, more than a capital player. Although not an ideal alliance partner, its geographic location will be essential for the gas companies of Russia and Turkey. In the process, Athens will receive tolls for valuable income. Natgas could lift Greece by the boot straps economically. The Turkish Stream gas pipeline could help Greece become one of the main energy distribution centers in Europe. See Russia Today (HERE) and UK Times (HERE).
◄$$$ RUSSIA & GREECE WORK TO PUSH WESTERN EUROPEAN BANKS OFF STAGE... RUSSIA PREPARES AN END TO THE GREEK FOOD EMBARGO IN A MANEUVER TO SPLIT GREECE FROM THE HARMFUL POLICY. $$$
Russia has drafted a number of proposals that could end the embargo on food products from Greece, according Russia's Economic Development Minister Aleksey Ulyukayev. The statement was made in the presence of Greek Prime Minister Tsipras. Details are forthcoming. Several proposals regarding the embargo are in active discussion. Russia is also considering canceling the food sanctions against Cyprus and Hungary, according to a parliamentary leader. The Greek Economy has been hit especially hard by the ban, since over 40% of Greek exports are to Russia. In 2013, more than EUR 178 million in fruits and conserves were exported to Russia, according to the Incofruit-Hellas agency. Until the ban, Russia had served as Greece's biggest single trading partner worth $12.5 billion in 2013, more than double the 2009 figure. The rescinded policy is mutually pursued. On March 3rd, Greece sent a formal letter to the Russian food watchdog Roselkhoznadzor requesting the temporary restrictions on certain agricultural and fish products be lifted. A Kremlin kitchen wedge is seen in action. The Russian agricultural food ban applying to EU countries is not due to expire until August 2015. It includes meat, fish, chicken, cheese, milk, fruit, and vegetables. The motive is crystal clear. The leaders from Athens wish for their nation to distance itself from other EU members, as they work to strike a chord of cooperation with Moscow. See Russia Today (HERE).
◄$$$ GAZPROM JUST ACQUIRED A 49% STAKE IN A VIETNAM ENERGY FIRM, WHICH SHOULD OPEN THE OFF-SHORE PURSUITS... THEIRS IS A LONG COASTLINE... VIETNAM JOINED THE ASIAN INFRASTRUCTURE BANK ALSO. $$$
Russian Prime Minister Dmitry Medvedev claims that all of the principle aspects in creating a free trade zone between the countries of the Eurasian Economic Union and Vietnam have been agreed. With dispatch during his visit to Vietnam, the Russian and Vietnamese sides signed several agreements on energy cooperation. Among the documents signed was a memorandum on mutual understanding between Russia's Gazprom and the Vietnam Oil & Gas Corp. The mutual corporate heads signed a document on the main conditions toward purchase of a 49% share in Binh Son Refining & Petrochemical Company. The deals went further. Gazprom Neft and Petro-Vietnam signed the main provisions of the agreement on the acquisition of Gazprom Neft share in the Vietnamese refinery Dung Quat. They also signed a memorandum on cooperation between Russia's Inter Rao Export electricity company and the Vietnamese North Power Service JSC for the purpose to modernize power plants in Vietnam. Furthermore, an agreement on cooperation between Russian Railways and the state-owned Vietnam Railways company was made concerning rail service. The Eurasian Trade Zone has branched to Southeast Asia, far more than into Europe so far. Little recognized in the West is that Vietnam has huge off-shore energy opportunities, owing to its lengthy coastline of about 1200-1300 miles (=2000km). See Sputnik News (HERE).
◄$$$ RUSSIA WILL BUILD JORDAN'S FIRST NUCLEAR POWER PLANT... RUSSIA IS EXPANDING FROM IT BASE IN EGYPT AND THE BATTLE ZONE IN SYRIA ALONG THE MED SEA COAST... THE HAPLESS USGOVT WILL LOSE CONTROL OF THE MIDDLE EAST IN THE CENTRAL SEA ZONE. $$$
In late March, Russia signed a $10 billion agreement with Jordan for the construction of the country's first nuclear power plant. Jordan currently has no domestic energy sources, as it struggles to meet a growing electricity demand. The deal between Russia's state-run Rosatom and the Jordan Atomic Energy Commission was signed in Amman. The contract is for the construction of a two-unit 2000 megawatt power plant facility in the north of the country by 2022. Russia has become the leading nuke plant developer in the world today, with projects across the globe. Therein they earn important income. See Russia Today (HERE).
## GOLD CONTAINMENT AT END OF ROAD
◄$$$ THE STATISTICAL CORRELATION BETWEEN MONTHLY YEN AND MONTHLY GOLD SINCE AUGUST 2011 HAS BEEN AN ASTONISHING 96 PERCENT... THE CORRELATION BETWEEN THE YEN AND S&P500 STOCK INDEX WAS NEGATIVE 97 PERCENT... WITNESS EXTREME CONTROL. $$$
The quiet remote control center for Gold suppression and US stock levitation might be located in Japan. Craig Hemke (aka Turd Ferguson at TFMetalsReport) has established an intriguing relationship in the post-2011 relationship between the Japanese Yen, Gold, and the S&P500 stock index. The brilliant diligent self-effacing sage stated, "The price of Gold is now largely determined solely by fluctuations in the Yen. So, if you are baffled why fundamentals do not seem to matter, it is because fundamentals do not matter. There are very few human traders of size left, and the computers control everything. In this environment, arcane notions such as Supply & Demand and company fundamentals are insignificant. The primary driver to these markets are changes to the USDJPY [exchange rate]. Control that and you control everything else." The Bank of Japan is a USFed outpost and control center. Their nation is occupied by the USMilitary. If a banker steps out of line, he is threatened by local assassins hired by Langley.
The smoothed graphs of monthly Yen and monthly Gold are similar. Over the last eight years of gold prices rallying and crashing, the statistical correlation (rho) has been about 74 percent. Since the all-time high in gold prices in August 2011, the Yen-Gold correlation has been an astonishing 96 percent. The Wall Street agents, the USFed control center, and the Bank of Japan outpost work in unison, coordinating their actions. Similarly, the smoothed graph of monthly Yen and monthly S&P500 stock index shows a near perfect inverse correlation. The statistical correlation over the same eight years has been about negative 49 percent. Since the all-time high in gold prices in August 2011, the Yen-S&P correlation has been a negative 97 percent. The Jackass can attest that anything over 80% correlation comes from either a scientific lab or a tightly controlled experiment. Any rho reading of over 40% is highly unusual in marketing research, emphatically so. We are seeing extreme control in gold suppression and stock levitation. Ditto on the smoothed Silver and smoothed Yen over the last eight years, with the correlation at 80 percent. It is at 97 percent since August 2011. More blatant control.
The amazing correlations subsequent to the August 2011 reinforce the analysis by Craig Hemke. The central banks watched Gold hit an all-time high of nearly $2000 per ounce, setting in motion quickly a harsh controlled retaliation with all control rooms overheated. The High Frequency traders and other insiders heavily shorted Gold and the Yen while they bought the S&P500. Witness the strong one-way trade since then. The tight linkage is vividly clear for almost four full years. Hemke concluded, "Anyone worried about a renewed drop in Gold should only be concerned with two things: Can the Bullion Banks find a steady supply of readily deliverable gold at prices below $1150? Is the Japanese Yen going to make even deeper lows?" See Silver Seek (HERE). These graphs almost perfectly coincide.
◄$$$ STEPHEN LEEB BELIEVES GOLD MIGHT GO TO $18,000 PER OUNCE IN PRICE... THE BIG FACTOR COULD BE THE IMF-SDR BASKET, WHICH CHINA MIGHT DIRECT TO INCLUDE GOLD... FIRST IT WILL INVITE THE CHINESE YUAN, THEN LATER GOLD... THINK TROJAN HORSE BY FORCE... GOLD WILL BECOME A PRIMARY BANK RESERVE ASSET, AND PROBABLY BE INCLUDED IN THE REFORMED IMF BASKET... THE GOLD STANDARD IS COMING INTO VIEW, BUT IN STEPS... WHEN IT ARRIVES, EXPECT NON-LINEAR JUMPS IN PRICE. $$$
A recent meeting in Dubai UAE took place with various ministers and economists. One of the leading British economists claimed it was an inevitable that Gold would become part of a global Special Drawing Rights (SDR). More hints on the gold role in monetary function came from the Bank for Intl Settlements, which in 2013 hinted that the sturdy timeless yellow metal would eventually qualify as a top-tier item in the banking reserves system shelves. It would provide a structural liquidity buffer. The Cyprus ambush, the Syrian blockade, and the Ukraine coup all have contributed to further gold price suppression during geopolitical distractions. When the BIS deems Gold as currency or legitimate reserves, all parties would add to its demand in a global storm. The Western banks must be restored, a process delayed. Sooner or later, the BIS will bless Gold as currency. Perhaps the event comes in response to Shanghai actions to elevate Gold. In the meantime, the BIS is fast losing its luster and prestige, and with it power. Leeb believes the BIS succeeded in delaying the Gold price rise only. The argument made by Leeb complements well the point that enormous increases in money supply since 2008 justify an enormous rise in the price of Gold, in order to balance the two concepts. Given that a big suppression has occurred since the late 2011 peak, a massive non-linear (jump) price rise in Gold is overdue.
Stephen Leeb expects Gold to officially become a currency once again. "The significance of what the British economist just said in Dubai is that Gold will most likely become part of a global currency, as part of the IMF's SDR. If gold is included in that basket, which right now includes the Dollar, the Yen, the Euro, the Pound and probably [soon] the Yuan, then Gold will once again officially become a currency. Once you include Gold along with all of these other fiat currencies, everyone is going to want to own gold because that is the ultimate currency. The paper fiat currencies can be created at will, but there is a limited amount of physical gold in the world. So Gold will be the true safe haven that everyone will want to possess.
The implications of this are far-reaching. The price of Gold may not begin to soar immediately because the Chinese and other nations in the East may still want to accumulate more. But even though the BIS has delayed the inevitable, when Gold gets the official blessing as a currency, what you will have is a combination of paper currencies and Gold. This will also mean Gold has to be radically repriced to the upside. Gold has already shown in the last century that it will out-perform other commodities, keep up with other key assets, and act as a true safe haven when commodities are not necessarily doing well. The bottom line is that we are now headed toward a monetary system in which Gold will have a very important role. When you consider that the total value of all the Gold in the world is dwarfed by global trade or any other metric you can imagine, you are looking at a situation where the price of Gold is going to skyrocket many times higher than its current price. What I am saying is that the price of gold will eventually trade above the Dow, which is currently at 18,000 per ounce." See King World News (HERE). Regard the IMF inclusion of Gold as a mid-station maneuver by China, en route to the Gold Standard return in both currency and trade.
◄$$$ SHANGHAI INTERNATIONAL GOLD EXCHANGE HAS COME TO LIFE... ITS ROLE IN FREEING GOLD FROM THE CHAINS AND BONDAGE WILL BE CLEAR IN TIME... SHANGHAI WILL BE LIFTED AS A GLOBAL GOLD MART. $$$
In September 2014, the Shanghai Gold Exchange (SGE) was formally launched. After a slow start, the volume of the physical kilobar contract (iAu99.99) has transcended all other SGE contracts in early April. This attraction portends major activity to come. The primary goals are to facilitate gold trading in renminbi (RMB), to improve price discovery in RMB terms, and to internationalize the RMB. The Chinese consider gold as an indispensable component of China's financial market. Key to manifest the over-arching goal must be to internationalize the RMB-Gold market. The Chinese international gold exchange will quickly enter its adolescence. The Shanghai Gold Exchange chairman Xu Luode said he considers the construction of an offshore international gold market in the Shanghai Free Trade Zone as essential for the cross-border usage of renminbi. It will be launched to enable brisk trade among the global offshore investors. The goal is to lift Shanghai into an international gold exchange trading market with global influence. See Bullion Star (HERE).
◄$$$ NEW FOFOA POST INDICATES COMPLETE REVERSAL IN GLOBAL BANKING, WHERE GOLD TAKES THE LEAD ROLE... HARD ASSETS WILL RULE THE ROOST IN COMING MONTHS, WITH PRECIOUS METALS IN THE CONTROL SEAT... THE PARADIGM SHIFT WILL BE MANIFESTED IN THE GLOBAL RESET, DELAYED AND DREADED BY THE WESTERN CABAL. $$$
The Jackass is not a supporter of FOFOA (Friend of Friend of Another, originally), as the real brilliance was with Another and then Friend of Another. The view has been firm that FOFOA is often arrogant, usually mediocre, and tends to ride the wave of his predecessors. That aside, FOFOA made a very strong point. What follows are his points, my edits. The Reset is coming, as banking, finance, trade will change significantly soon in how they are conducted. The events are not only inevitable but probably on our doorstep. Read between the lines to see that the Asian Infrastructure Investment Bank (AIIB) has been set up to conduct the transformation. A good example will be large infrastructure projects that will be based on equity sharing between the lender and the borrower on fair terms. They imply usage of Gold for the largely Eastern central banks. All developed world corporations, public or private, will ultimately be forced to borrow globally in gold terms rather than within the pliable USD/EUR/JPY regimes they enjoy. This will put Emerging Market (EM) banks and corporations at a massive advantage, unless they join the gold train.
When the USDollar hyper-inflates, productive assets of real value will hold value. However, in addition to physical assets, other items like patents, copyrights, royalties, and technology will also hold value well. The painful decline in relative value will be cash, currency, savings in a bank, debt, and stock equity shares of all kind across the globe. Variations will be seen, depending on the currency. Certain equity will hyper-inflate with the currency, but precious metals and other productive real assets will rule the day. FOFOA concluded, "Bottom-line: Gold will provide the equity after the Reset and allow savers of the past regime to earn a very decent living. The Emerging Market world will increase their consumption and quality of life, as they shed their Gold while the developed world will work like slaves to earn their Gold back." Hence the Reset is a role reversal tool, as part of the Global Paradigm Shift. See FOFOA blog (HERE). What he describes is Gold used to recapitalize the global economy, an urgent necessity. The West must re-industrialize. To begin the process, the EM nations will convert their FOREX reserves into Gold, and upend the balance of global banking power.
◄$$$ MAGUIRE REPORTS THAT THE HSBC GOLD VAULT CLOSINGS ARE FOR REAL... HE SUMMARIZES HOW CHINA WRESTED CONTROL OF THE GLOBAL BANKING ANCHOR IN GOLD... CHINA HAS ENOUGH GOLD IN CRITICAL MASS, THUS TO PERMIT THE NEXT STAGE IN LIFTING THE GOLD PRICE IN A SIGNIFICANT MANNER... THE WESTERN BANKERS ARE CORNERED, WHILE CHINA HAS TAKEN CONTROL, SETTING THE RULES... THE EASTERN GIANT HAS DIVIDED THE WEST FOR CONQUER. $$$
Andrew Maguire of the London banking center discussed how the gold futures tool is used in price suppression, and how the Chinese used the device to drain the West of significant amounts of gold bullion at bargain prices. The Chinese have been aware of central bank gold rehypothecation for several years. Backwardation in the gold price structure signals extreme shortage. Physical demand has grown markedly in recent years, to further compound the problem facing the banker cabal. The physical markets are altering continents, the control for which are increasingly being lost by the Western bullion banks. Maguire confirms that HSBC has indeed shut down its gold vaults, and closed all safety deposit facilities for gold storage. The motive was in part to force movement of gold held on deposit, but motive extended much further. He did not discuss the cutting of lines to raid SPDR Gold Trust gold bars.
Maguire stated, "Selling Gold means you are long the Dollar. So the recent dollar strength has given the Peoples Bank of China (PBOC) the perfect window to divest these worthless dollars for real gold. China has now accumulated enough physical Gold that they are nearing the point where they will seek to revalue the price of gold significantly higher. This is now obvious as they are openly putting up billboards about a gold-backed global RMB currency [like in Bangkok Thailand]. We have reached the inflection point where China is close to revaluing gold significantly higher, which will be an earth-shaking event. They will do this by surprising global markets when they announce their real reserves. This will be the knockout punch that floors the Western paper market game, run by the LBMA Ponzi participants.
The Western central banks have cornered themselves, realizing too late that the PBOC have stealthily dislodged the Western central bank's golden anchor. The PBOC has already gained this major victory and is already implementing the next phase of a Divide & Rule strategy, drawing in non-US Western central banks such as Britain, France, Germany, Italy, Australia, Luxembourg, and several others, into the new Asian Infrastructure Investment Bank (AIIB). The Chinese are now setting the rules, and the United States is demonstrating how it views China as an enemy by opposing this Chinese initiative, viewing it as a shot across its hegemony bow." See King World News (HERE).
◄$$$ NEARLY 90% DECLINE IN AG-AU SHORT INTEREST IN THE PAST FOUR MONTHS... THE DATA DOES NOT LIE, BUT THE STORY TOLD IS UNCLEAR... TO BE SURE, THE GROUND IS SHIFTING UNDER OUR FEET. $$$
Notice a truly huge drop in gold short interest, also in silver short interest, like close to 90% since November. Something very big is surely brewing. Bear in mind that the banker cabal, which participates in the paper market while making the rules, can always alter their position with a quick increase. The shorts could quadruple in one to three weeks quickly. George of the COMEX pitched in. He stated, "Not only has volume dropped way off, but you need to look at this a little closer. Notice the long open interest dropped faster than short open interest. Therefore on a net basis, the shorts as a percentage have grown, which of course empowers them even further in low volume situations." He describes extreme volatility conditions.
◄$$$ MEXICO MINE ROBBERY IS FINALLY OUT IN THE OPEN... VICTIMS SUCH AS SILVERCREST, PAN AMERICAN SILVER, AND MCEWEN MINING HAVE COME FORWARD TO PUBLICIZE THE FACTOR... THE PRACTICE OF LYING ON MINE OUTPUT WILL CHANGE... MINING SITES AND TRUCKS ARE EASY TARGETS IN AN UNSTABLE JURISDICTION. $$$
The scattered reports are arriving fast and furious. The Jackass first cited the Mexican cartel thefts in mid-2013, and finally the factor has surfaced in the alternative press. The mining firms have been lying about robberies, calling them lower mine output. A Jackass personal friend and mining analyst was a victim of such an incident in Mexico, his face put in the dirt with a boot on his neck, a machine gun hovering above. He has not returned to Mexico. The mining firm group was terrified, but the local Mexican guide on hire talked their way out of it. The cartel was tipped off, in pursuit of a rival captain in exactly the same type of black US-made SUV. Nobody was harmed, but all were terrified.
Silvercrest Mines has unofficially reported to be a victim of drug cartel criminal actions. Armed bandits strode in and stole a large quantity of company dore bars at gunpoint at its Santa Elena Mine in Sonoros Mexico. The Pan American Silver mines were held up at gunpoint at La Colorada in Mexico, located between the cities of Zacatecas and Durango. The Spanish language business magazine Milenio reported a recent robbery at La Colorada mine, when 150 bars of silver & gold dore bars were stolen with a metal value of $3 million. The site of the theft was one of their larger internationally owned Mexican mines. Its annual production ranges between 3.5 and 4 million ounces of silver per year. To be sure, the site has a paid security structure in place, hardly the tiny unguarded operation. Lastly, McEwen Mining reported an armed robbery at their El Gallo I mine in Sinaloa Mexico. An estimated 900 kg of dore bars (gold bearing concentrate) containing an estimated 7000 ounces of gold were stolen from the refinery. Value is around $9 million. Expect zero recovery by the Mexican authorities. Insurance coverage should offset some of the loss. No deaths occurred at any of the three sites, as operations will continue. The cartel groups do not wish to disturb future opportunities for additional thefts, which will be almost as easy. Mexican drug cartels are some of the most violent and bold bandits on earth. See Finance Yahoo (HERE).
◄$$$ IMPORTS OF SILVER BULLION INTO TURKEY SURGED TO THE HIGHEST LEVEL SINCE AT LEAST 1999 IN MARCH... THE GOLD IMPORTS DID NOT RISE IN A SIMILAR SURGE. $$$
The news bears watching, to see if a trend develops. It is a very unusual event, since between 2002 and 2006, the average monthly silver imports had been varying around 15 tons, less than one third the March level. See Jesse Crossroads (HERE).
◄$$$ INDIAN GOLD IMPORT EXPLODED IN MARCH... IMPORT DUTIES ON GOLD WERE REMOVED IN DECEMBER 2014... THE OFFICIAL DATA MIGHT JUST REFLECT A REDUCTION IN SMUGGLING, AND A RISE IN STANDARD CHANNEL FLOWS. $$$
Early March data indicated India has already imported over 130 tons of gold in the month. The trajectory suggests total gross March import could result in 150 tons of gold. The strains on Current Account Deficit and coincident pressure on the Rupee currency brought about hikes in import duty and the standard business 80/20 rule on commercial gold usage. Most restrictions have been lifted. The restrictions imposed by the Indian Govt on the gold trade energized significantly the smuggling cartels with all due consequences. Official gold imports fell drastically, wiping out their revenues collected from movement of the yellow metal across borders. In May 2013 Indian gross gold import accounted for 168 tons, but by September 2013 a multi-year low was reached at 15 tons. Premiums in India, over London spot prices, skyrocketed to a staggering 25% level. Great disruption ensued. The market is returning to normal. The Indians love gold, have always loved gold as a savings device, and they have been taking great advantage of the artificially low gold price with tremendous demand. See Bullion Star (HERE). Reports on reduced smuggling will come in ensuing months.
◄$$$ INDIA LUSTS AFTER 3000 TONS OF GOLD FROM TEMPLES TO MEET PHYSICAL DEMAND... ACCOMMODATION OF WESTERN BANKER CABAL MIGHT BE INDICATED IN MONETIZATION METHODS... ALLEVIATION OF EXPORT DEFICIT SEEMS NOT BE TO SOLVED BY SUCH POLICY... THE TONNAGE TO TAP IS EXAGGERATED... THE MARKET UNDER THE TABLE IS HUGE IN INDIA, WELL ESTABLISHED FOR CENTURIES... CITIZENS WILL NOT REVEAL THEIR GOLD HOLDINGS... DISTRUST IS THE TRADITION, ALONG WITH TAX AVOIDANCE... INDIA FACES A CRITICAL MOMENT... IT MUST EMBRACE THE RISING EASTERN AXIS, OR ELSE FALL INTO DEEP DECAY WITH THE WEST. $$$
The story is that Indian bank officials wish to tap the staggering private gold supply, to coax it into the banking system, to monetize it, to give interest yield from it, and to basically pull it out of cold storage and to integrate it into the system. The challenge faces extreme obstacles and opposition, not well explained by the Western press. Expect great resistance, maybe even a violent reaction. The nation's temples house 3000 tons of gold, and Indian officials want to use it to meet physical demand, thereby reducing gold imports which have disrupted their entire financial system and economy. See News Doctor (HERE). If Westerners scribe the article, they do so out of extreme ignorance for all things Indian in commerce.
First, the Jackass will make a few points. If not careful, the Indian Govt could cause an insurrection by the masses. Modi and the banker class will likely earn extreme anger from citizens like a blasphemy call. It could be that the prime minister is attempting to create an open door for hidden movement of gold to London, currying favor, winning points, averting Western terrorism like marketplace explosions and chemical plant fires. To be sure, sizeable loans might be set up with gold as collateral. The borrower must be made suspicious that the collateral could be easily sold into the market, to benefit the trade deficit and to aid the London criminal bankers. The Indian borrower would not be able to recover the posted collateral, thus extreme anger would come later. The gold certificates would be designed for earning interest, but in all likelihood will never achieve high volume in India. The nation has distrusted paper wealth for a thousand years. The policy if managed badly could result in Modi facing a violent reprisal.
EuroRaj has main ties to India. He knows the nation very well, having come from the region. The following are hit thoughts, my edits for flow. Modi is starting to show signs of cabalist tendencies, or at the minimum he is implementing policies friendly to the cabal at the margin. Indian people, whether in business or farmers, will not take the bait. Even the illiterate farmer will not go for paper gold. The process of gold monetization in India is a non-starter, a laughable concept. It requires parties corrupt enough to implement it. The fear of God and even bad Karma factors are a big thing which will prevent even the corrupt politicians from implementing it. Stealing money, taking bribes is one thing, but stealing gold from a temple is another. The 3000 tons is a grand exaggeration, since temple gold will stay put rigidly. Expect in coming months that almost no temple gold entered the banking system.
EuroRaj continued in a description of the vast underground Indian market for commerce which has been established for 100 years. Businesses in India borrow money from a bank to make a paper profit. These paper profits are then suppressed, so as to avoid paying taxes. The true profits are hidden via accumulation of gold. Even if taxes are paid, the remaining profits are saved in gold. The moment gold is declare to a bank, the tax authorities come knocking on the door, and demand to know the source of income used to acquire the gold. Then comes confiscation and legal hassles. Essentially once the gold in possession is made known to the banks, as in publicly known, it is gone! Gold in India will always stay underground due to an utter lack of trust in the political and banking system. It is their tradition. Any party who is politically connected, any successful business in India, will benefit from faciliated paper loans, while the politician and the banker both take their cut. Tradition rules in India, and the system will not be altered. Expect no changes to temple gold. It will remain in place and be defended with extreme force, maybe even violent reaction.
EuroRaj concluded with some final thoughts on his native land India, which will be forced to bow to the Russia-China-Iran axis, after a generation of toeing the Anglo-American line. "Delusional, Prime Minister Modi thinks that he can confront China by courting the Anglo world led by the United States and United Kingdom, but which includes Israel, France, Canada, Australia. The strategy is coming up empty while China is marching on. Hopefully, wisdom will dawn on Modi and other leaders, or else India will be left behind in the Third World, where the Anglo world is destined to fall. Crony capitalism that never left India is very much still present with the Modi Admin. The recent Rafale arms deal is being done with backdoor bribes." See Rediff (HERE).
◄$$$ THE KITCO POOL APPEARS NO LONGER BACKED BY PHYSICAL PRECIOUS METALS... KITCO HAS BEEN A FRAUD, BUT JACKASS WANNABEES KNEW THAT SINCE 2011. $$$
Joshua Gibbons is the Guru of the SLV Bar List, an analyst with open eyes. He has exposed the Kitco Gold Pool accounts. He incriminates Kitco. "In short: Kitco used to state that the Kitco Pool was 100% backed by physical precious metals. The metal backing it was owned by customers; the metal backing it was not part of Kitco's assets; and the metal backing it was segregated from Kitco's own assets. I no longer see any evidence that this is still the case, and Kitco has not responded to my requests for more information. I strongly urge anyone holding the Kitco Pool to read the article, and push Kitco for answers to the questions listed in the article. At this point, I believe most Kitco Pool customers think that the pool is 100% backed by physical metals as described above. As the article details, this appears to no longer be the case (and Kitco has refused to confirm what they previously stated). I would urge people to spread the word, as I see no signs that Kitco has been letting their customers know about this material change to the Kitco Pool." See All About Silver (HERE). Kitco has been a fraud for a few years, complete with endorsed nonsensical propaganda spouts.
Thanks to the following for charts StockCharts, Financial Times, UK Independent, Wall Street Journal, Zero Hedge, Business Insider, Calculated Risk, Shadow Govt Statistics, Market Watch, and more.