## KEY QUOTES
"It is a bit like the few days before capitulation in Berlin in May 1945. The gold market situation is changing by the hour. A brutal wake-up call is coming soon for many people. In some locations there is certain gold supply and in others there is none whatsoever. Consider it a bit like food availability in Africa." ~ the Voice
"A Liberal Paradise would be a place where everybody was guaranteed employment, free comprehensive healthcare, free education, free food, free housing, free clothing, free utilities, and only law enforcement has guns. Believe it or not, such a place does indeed already exist: It is called Prison." ~ Sheriff Joe Arpaio in Arizona (prisons happen to be extremely costly, like all socialist systems)
"A huge conflict exists with respect to the Intl Monetary Fund and China, which largely funds it. The US and Western bankers run its policy. Expect in some way, the Chinese will shut the putrid place down. After the IMF betrayal of RMB inclusion, next comes vengeance, organized by Beijing and delivered via the many BRICS Alliance nations. They dominate global manufacturing and production. Anticipate widespread required usage of Chinese RMB in trade settlement, which will isolate the USDollar and force diversification out of USTreasury Bonds in banking systems. This is the ninth inning, and the United States is far behind on the debt score, its trademarks exhausted (by QE itself), its batters depleted but still trying to use paper bats, the bench empty (drained by outsourcing), and the crowd still cheering in total ignorance. When the crowd leaves the stadium after the USDollar loss, they will fall into a strange fog without footing or secure homes under the din of martial law. It is called the Third World." ~ the Jackass
"I am tired of observing people commit financial suicide. I firmly believe the government gravely under-estimates the national rate of inflation, the number also plagued with bias and statistical manipulation. It is universally assumed that the government's rate of inflation is accurate. It simply is not. This blind acceptance is one of the main reasons people are reliant on the government entitlement programs that are bankrupting our country. Over 50% of Americans are dependent on the government entitlement programs to get by. This is horrible. Americans that rely on this statistic are falling behind financially more and more every year. Individual purchasing power is sinking in quicksand, and people are unable to maintain their current lifestyle. Salaries and portfolios must increase more than the numbers reported by the CPI, more than the numbers by the Chapwood Index. That is how you keep up. It is about time someone does something about this tragedy and stands up for the people. That is why I put this index together." ~ Ed Butowsky (founder of the Chapwood CPI index that shows US price inflation around 10% level year after year)
"In my youth, I too entertained some illusions, but I soon recovered from them. The great orators who rule the assemblies by the brilliancy of their eloquence are in general men of the most mediocre political talents. They should not be opposed in their own way, for they have always more noisy words at command than you. Their eloquence should be opposed by a serious and logical argument. Their strength lies in vagueness. They should be brought back to the reality of facts. Practical arguments destroy them. In the council, there were men possessed of much more eloquence than I was. I always defeated them by this simple argument, that two and two make four." ~ Napoleon Bonaparte
"If you are neutral in situations of injustice, you have chosen the side of the oppressor." ~ Desmond Tutu
"Thinking is the hardest work there is, which is probably the reason so few engage in it. Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young." ~ Henry Ford
"It is strange that people take up crime, when there are so many legal ways to be dishonest." ~ Alphone Capone (notorious US crime family boss)
"I never heard about the Austrian School of Economics before, although I am from Austria. Indeed, I studied economics in Vienna. Unfortunately it is not taught in Austria anymore. The Austrian School of Economics talks about our monetary system and the consequences of our monetary system. From my point of view, as I have said at the beginning, we are not in a cyclical crisis. We are in a systemic crisis. We are in a crisis of our monetary system." ~ Ronald Stoeferle (economist from Austria, with late awakening)
"The Western Elite are losing their entire paper money fortress, the patches applied annually having accomplished nothing. The debt foundation is collapsing, in inevitable manner. The East can destroy it at any time using the potent Gold weapon, laying it to waste. First they will use the broom to push the USDollar off stage. The broom is RMB trade settlement, and the coup de grace would come later, in Gold Trade Standard. The primary losers will be Wall Street banks and massive pension funds. The next stage will isolate the USD more and force the USFed to do much greater volume in QE purchases in the open, soaking up dumped USTreasurys on a massive scale. We are finally in the 9th inning now, serious crunch time, the climax sequence having engaged. The GLOBAL RESET will be felt like a turning of the entire tables, a tremendous disruption of unprecedented historical meaning." ~ the Jackass
"Not accommodating China's wishes suggested by the IMF for the Yuan today was a huge error. We are almost there in terms of the timing you seek (for release of gold). The economic global war is raging out there right now. Since March of 2013, gold has been in the cartel's control. They will lose it and the next move in gold is to new highs." ~ Jim Sinclair
"I am now predicting that we are going to see a global stock market crash before the end of the year. [Major crashes are also coming to] the German DAX, the London FTSE, the French CAC, Shanghai, and the Nikkei in Japan. There is going to be panic on the streets from Wall Street to Shanghai and from the United Kingdom down to Brazil." ~ Gerald Celente (Trends Research)
"As China has expressed it, the aim is to enable the Eurasian countries along the Silk Road to increase the gold backing of their currencies. That sounds very much like some clear thinking. Far-sighted governments are thinking of creating a stable group of gold backed currencies that would facilitate orderly trade free from Washington currency wars. The COMEX gold futures market in New York and the Over-the-Counter trades cleared through the London Bullion Market Assn do set prices which are followed most widely in the world. They are also markets dominated by a handful of huge players in the six LBMA gold clearing banks: the corrupt JPMorgan Chase bank, the scandal ridden UBS bank of Zurich, the Bank of Nova Scotia, ScotiaMocatta [begun as] the world's oldest bullion bank which began as banker to the British East India Company (which ran the China Opium Wars), the scandal ridden Deutsche Bank, the scandal ridden Barclays Bank of London, HSBC of London [serving as] the house bank of the Mexican drug cartels, and the scandal and fraud ridden Societe Generale of Paris." ~ William Engdahl (control rooms are crime centers)
"Nixon's arrival as president was the back end of the US Nazis killing Kennedy. After abrogating the Gold Standard, Nixon then installed the super nazi Kissinger as Secretary State, the lead foreign policy post. He installed the Petro-Dollar defacto standard. The events are all in sequence, agreed upon within the murder conspiracy. The industrial outsource trend followed. The narcotics business became engrained, in support of global fascism and deep perversion. Opposite a communist is always a fascist. The last decade saw the gutting of the housing market, the fraud of the bond market, the controls in all financial markets, and the asset bubble in the USGovt debt market, marred by endless war in defense of the flawed corrupted toxic USDollar. Thus began in my book the US Nazi legacy, starting with elimination of Kennedy in favor of Nixon. The result has a climax in the Fascist Business Model following the inside job on 9/11, and later the failed state seen today." ~ the Jackass
"A meaningful comparison in our new crazy world. When the USDollar is replaced, the situation will resemble the movie Trading Places. The United States will be suddenly become a drunk Dan Aykroyd in a Santa outfit, and China will become Eddie Murphy in a business suit working in a big office in the reversal. The orange juice futures in the movie translates to the USDollar and its toxic Treasury Bond buggy. The overall effect will be something like a nuclear detonation, on a financial Hiroshima scale." ~ MarkD (Hat Trick Letter client in South Korea)
"The Big C from the East will say FU to USA, install RMB globally in defiance of the IMF, rely upon BRICS & SCO, while the SNAFU in USTB continues where QE gave the buck a TKO, assuring the USD will go RIP and belly up, even go MIA, but not ASAP, despite all ESF and HFT heroics, the timing clue maybe found in failing ATMs and even in rising CDS." ~ Jackass (a more formal imitation of Adrian Cronauer in the movie "Good Morning Vietnam" with acronyms gone wild)
"Expect the Chinese to react in a very different way than can be expected by Westerners. The stage will be unexpected. The window will be unexpected. The chosen weapon will be economic and socio-political. The action will be perceived as a special version of Chinese water torture. The upcoming sequence of events is sure to be incredibly dangerous and filled with extreme risk and deep intrigue, but not really for those who operate in the know." ~ the Voice
## TIANJIN BLAST AS GAME CHANGER
◄$$$ CONSIDER THE EVENT A STRATEGIC ATTACK AND ENORMOUS IMPORTANT LOGISTICS AND DATA CENTER WITH SUPER-COMPUTER FACILITY NEARBY... IT COULD BE A FUKUSHIMA REDUX... THE TRADE WAR HAS TURNED INTO A HOT COMMERCIAL WAR... EXPECT A RESPONSE BY CHINA, BUT NOT A SIMILAR VIOLENT ATTACK, MORE LIKE AN RMB VOLLEY TO DISPLACE OR ISOLATE THE TOXIC USDOLLAR... IT APPEARS THE LANGLEY BOYZ ARE WORKING WITH THE CHINESE ISLAMICS, WHO FIGHT FOR INDEPENDENCE. $$$
Very likely a Fukushima strategic attack and beginning of more violent hot commercial war. Solid motive and target established in the process, in the most important business logistics data center in China. The attack has left hundreds dead, far more than admitted by the Chinese Govt. Three thousand cars in inventory lots have been destroyed along with primary building sites. Tianjin is major tech data hub with massive Tianhe-1A super-computer facility that serves the major tech enterprises, a primary logistics center for data. The facility is located just a few kilometers from the blast site. The huge computer weighs 150 tons and covers 1000 square meters in footprint. It has been temporarily shut down for maintenance, for full examination of the facility that houses it, like for cracked walls and loose cables. The impact point was the port, which houses the fiber optic connections to the super-computer center. The entire several square miles was the overall target.
At first it was unclear, maybe the target was an industrial plant, even the huge car plant. Now clear to me the primary target was the super-computer center and port facilities. The car plant was ancillary damage. The logistics center serves as primary database source for distributed data on businesses, banks, energy projects, space projects, and military office (including computer hacking). The Tianjin port hub operates 25 port facilities for iron and gold shipments, serving 11 inland regions. The trilateral strategic economic sphere on Tianjin, Beijing, Hebei was dubbed by President Xi as a national priority and prized development. Consider the Tianjin blast a tactical hit. One must wonder how China will react when it concludes the attack had key assistance by the West, especially the the micro nuclear explosive element, and the sodium cyanide (direct from Langley sources) with vast chemical depot exploded. It was like several Iraq chemical sites rolled into one big event. See the video by Mary Greeley (HERE).
Focus on the computer site. Tianhe-1A can perform 2.57 quadrillion computing operations per second, and was recognized as the world's fastest computing system in 2010, according to a biannual Top 500 supercomputer list. China has shut down supercomputer Tianhe-1A due to the blast in Tianjin. The huge Tianhe-1A, located at the National Supercomputing Center in Tianjin, is just a couple kilometers from the blast center. The shockwaves shattered windows at the center and caused collapsed ceilings inside the building, according to the center's staff. The supercomputer was still running smoothly immediately after the blast, said Liu Guangming, director of the center. Protected by a reinforced computer room, the supercomputer and its database remain intact, they claim. Most giant computers have massive fortresses for enclosures, but still some minor damage is very likely. The big damage is to connecting fiber optic lines. Liu and his staff said they decided to manually shut down Tianhe-1A half an hour after the blast due to security concerns. See Xinhua Net (HERE) and PC World (HERE). In the aftermath, the USGovt blocked export of Intel Xeon chips for usage in all Chinese super-computer projects. See Unhived Mind (HERE).
◄$$$ TIANJIN HIT WAS POSSIBLY THE WRATH OF THE ISLAMIC UYGHURS IN A VIOLENT INTERNAL CHINESE BACKLASH... IT WAS AN ORGANIZED BOLD ATTACK FROM A GROUP THAT WILL NOT BE SUPPRESSED... THE GROUP HAS RECENTLY ENLISTED LANGLEY COOPERATION, LIKE AN AL-QAEDA BRANCH. $$$
Once again the fingerprints of Langley, the global plague in narcotics and terrorism and assassinations. The Jackass has a solid internal source, a reporter scoop, thanks to MattK. Enter Jim Garrow, a foremost expert of internal Chinese activities, for his account. On August 11th, huge explosions in a warehouse district sent up massive fireballs that turned the night sky into day, killing over 100 people and injuring hundreds in the Chinese port city of Tianjin. While speculation as to the cause has not been discussed by the Chinese Govt, overall information has been reasonably accessible to the international press. Some blame is going to the Muslim Uyghur terrorist group, which strives for independence. Harken back to January 2014, when Muslim Uyghur terrorists carried out triple explosions in China, and twelve jihadists were killed dead in an ensuing battle with police. Two months later in March, about two dozen Uyghur separatists slashed scores of people with knives at a train station in southern China, killing 29 and leaving 143 people wounded. They are very much in the news, very much known for their deeds, and have a mission. The Islamics claim to be victims of decades with repeated slaughter by the hands of the Chinese Govt, but the Uyghurs appear to have just taken their revenge. An internal war in China has just been declared, according to Garrow. See Instigator News (HERE).
The Jackass had an opportunity to ask the Hat Trick Letter client to pass on direct questions to Garrow, with whom he is in contact. He replied to my questions. Garrow stated in unequivocal manner that John Brennan as CIA director supplied the sodium cyanide to the Muslim terrorists inside China. Langley also supplied logistic support to the Uyghurs. Our Boyz once more are involved in the deep angle. Other reports, apart from the Garrow account, indicate that the Tianjin explosion was carried out by Pentagon laser space weapon in retaliation for Yuan currency devaluation. See Natural News (HERE). Garrow disputes this account. The evidence on the ground indicates explosives at the port and at the car plant, where chemical depots were exploded. The consensus is for several origins of explosions. One must wonder if after the initial ground explosions, an overhead laser weapon added to the conflagration. Expect the Chinese to conduct their own detailed investigation, just like the Russians did for the airliner attacks over Ukraine.
◄$$$ TIANJIN HIT (ECHO OF FUKUSHIMA?) IN A BLAST SEEN FROM SPACE SATELLITES, WHERE A CHEMICAL SILO EXPLODED AND DESTROYED AN INDUSTRIAL PLANT, A FEW THOUSAND CARS, AN ENTIRE PORT FACILITY... IT DAMAGED CONNECTIVITY TO A SUPER-COMPUTER CENTER... THE ENTIRE AREA IS THE MOST CONCENTRATED CHINESE STRATEGIC CENTER IN THE COUNTRY. $$$
## INTRO SHORT SUBJECTS
◄$$$ CULTURAL MARXISM IS MAKING QUIET INROADS TO THE UNITED STATES, IN AN INFUSION THAT EXPLOITS THE ECONOMIC WRECKAGE... SOCIALISM HAS TAKEN HIDDEN ROOT IN THE UNITED STATES WITH THE MASSIVE WELFARE STATE... WAR IS ABUSED AS A COMMERCIAL TOOL... THE MARXIST MOVEMENT HAS ADVOCATE IN PRESIDENT OBAMA, WITH NO PUBLICITY. $$$
The Cultural Marxist Strategy reflected in this article is the popular Activist Handbook, a primmer relied upon by their advocates. They operate and fan out across the United States, in adoption of the "Rules for Radicals" espoused by Saul Alinsky, a Chicago figure and Obama hero. Of course, the Kenyan who arrived as Manchurian Candidate would never admit as such, since he preaches change to believe in, like wrecking the nation and spreading socialism with Islam over the charred ruins. See Carrying Capacity (HERE). What Bush Junior started, the Kenyan pretender has finished, the wreckage of a nation once proud for its cradle of liberty and capitalist crucible. The Marxist followers incredibly do not comprehend they are marxists, who stand alongside the fascist bankers and weapons merchants with full salute.
◄$$$ TEXAS HAS LAUNCHED THE GOLD-BACKED BANK, CHALLENGING THE FEDERAL RESERVE... COMMERCIAL LENDING COULD BE DIRECTLY AFFECTED, AS IN REVITALIZED... RETALIATION IN TEXAS COMES NEXT. $$$
The State of Texas is setting up a gold-backed bank with commercial purposes. It will allow depositors to bypass the controversial Federal Reserve System and its fiat currency for banking and commerce. Under the measure, passed overwhelmingly by lawmakers and signed in mid-June by Republican Governor Greg Abbott, state officials will establish and operate the Texas Bullion Depository for anyone who chooses to deposit and trade in precious metals. The implications are as big as Texas. One must admit, the state is bold and fiercely independent. Some observers believe the act signals an eventual attempt to secede from the Union, while other claims the state is merely preparing for a financial platform breakdown, even setting up fortifications for financial Armageddon. The alternative to the deeply corrupted and secretive syndicate banking methods could be magnificent in scope. The current traditional banking and monetary system are toxic and sclerotic, viewed by the public with growing suspicion. Some experts claim the effect of facilitated usage of sound money in commerce could be far-reaching. Its installation would be like a powerful hurricane clearing the land, or maybe a nuclear event when derivative dissolution is considered.
Among other immediate effects, the law creating the first state level gold-backed bank in the nation, House Bill 483, will involve repatriating about $1 billion of Texas gold from New York. Conflicting news reports and official statements say the state's precious metals stockpile is being held either by HSBC in New York, or by the more powerful New York Fed fortress. The latter is a privately owned outfit cloaked in secrecy with immense power over the USGovt and its national economy. The next task for Texas state officials will be to select a home for the Texas depository. The Jackass suggests on the border in the middle of the Rio Grande River. See New American (HERE).
◄$$$ TEXAS CHEMICAL WAREHOUSE EXPLOSION & FIRE, AS PREDICTED BY THE JACKASS IN POSSIBLE RETALIATION FOR THE GOLD INITIATIVES IN TEXAS SUCH AS THE GOLD DEPOSITORY CREATED... MORE EXPLOSIONS COULD OCCUR. $$$
Rack up another unusual oddball correct Jackass forecast. Last month, in the Hat Trick Letter report and in public radio interviews, a preview was given for a Texas refinery explosion as vengeance by the USFed central bank and its Wall Street cadre of banker criminal fraud kings and killers. It happened but with a twist, as a smaller chemical depot fire was triggered. It was not a giant refinery, which would have been an order of magnitude more damaging and costly. Close enough. Be on the lookout for a Texas refinery explosion, which might still occur in addition to this event. The basis of the forecast was the Texas Gold Depository project. It would become a gold vault for private investors in the Western Hemisphere, modeled after the one in Singapore. The Texas Legislature demanded a repatriation of its $1 billion in gold bullion held at the New York Fed. My firm belief is Texas (like Libya, Germany, Netherlands) will never see the gold again. The chemical depot fire in Conroe Texas near Houston is modest in size. These forecasts are really easy when the violent players in Washington, New York, and Langley are seen for what they are, namely murderers, fraud kings, arsonists, warmongers, and genocide practicioners. See CBS News (HERE) and Russia Today (HERE). The previous unorthodox correct forecast was for a skein of dead mid-level bankers, due to the absent justice and large exposure by active mules and eyewitnesses for banker criminality and derivatvie losses.
Two additional events are worthy of mention. The Texas Attorney General was indicted under securities fraud in a surprise case. It is not clear whether the case has any merit, or just a nuisance attack by the federal government henchmen. Also, the electricity went off in southwest area of Houston in the last week in late July. No explanation was given. Let's see how far this escalates for vacant arrests and other outages. Hat Trick Letter clients report the state as having widespread awareness. More people in Texas know something big is going on, better than in other locales. Feds should remember not to mess with Texas. Recall that Sam Houston never wanted Texas to join the union. See Yahoo (HERE).
◄$$$ SOROS IS LEAVING RUSSIA... THE COUNTRY IS BEING ABANDONED BY FOUNDATIONS IN THE NEAR FUTURE BECAUSE OF ITS PLACEMENT ON THE LIST OF UNDESIRABLE ORGANIZATIONS. $$$
Svetlana Gannushkina is the head of the committee Civil Assistance. She reports the Soros Foundation has ceased to accept applications for grants. "I am afraid that the Soros Foundation is leaving Russia. They are very worried if we will be able to finish existing projects, if we will lose the opportunity to work with committed money." The list of exiting foundations is growing. It includes the Soros Foundation, the MacArthur Foundation, Freedom House, and other organizations. The prestigious MacArthur Foundation announced that it would stop its activities in Russia. The Open Society Institute, founded by George Soros, supports programs in education, culture, arts, health, and civic initiatives. The organization has headquarters in New York and Budapest, with offices in 30 countries. Many observers regard the Soros gang to have equally beneficial and evil pursuits and projects, both in balance. It will be interesting to see if Asian or Arab foundations will enter the Russian society for such projects.
◄$$$ BLACKWATER HAS BEEN HIRED TO PROTECT CHINESE MINING INTERESTS IN AFRICA... THE CONFLICT ZONE IS OF EXTREME RISK AND DANGER FOR MURDERS AND GOLD THEFTS IN TRANSPORT. $$$
Ivan Lo is an intrepid researcher. He investigated China's activity across Africa, and quickly discovered a Hong Kong publicly traded logistics firm run by former Blackwater founder Erik Prince. The vile figure Prince is the chairman of the company which provides logistic services. It has been hired by Chinese mining firms to protect their interests in Africa. The nastiest and most evil mercenary outfit of the West is working with China closely. The author explained, "Prince's new organization, Frontier Services Group, of which he is Chairman, is an African focused security and logistics firm that is publicly listed in Hong Kong. Most importantly, its investors include Citic, the Chinese Government's investment arm, which holds key positions on the board of directors. Johnson Ko Chun Shun, a wildly successful Chinese entrepreneur, is also a major backer behind Prince's company. Prince's role is to mitigate the logistics and security risk for the Chinese investments in Africa. While he says he is open to work with other nations, his main financial backer is the Chinese Govt. Obviously, this is a good partnership for the Chinese Govt, as its military lacks the skill set and combat intelligence of Prince. With competition and potential sabotage from other Superpowers expected to intensify, Prince gets a healthy cut for providing logistic services unmatched by any other outfit in the world. If you do your research on Blackwater, as I have, you will see that its ability to protect diplomats and important assets was unmatched. Blackwater never once lost an asset in over 100,000 missions for the Pentagon. Prince knows the security and logistics game better than anyone in the world." Strange bedfellows indeed, and not all too encouraging a signal. However, the Chinese are practical, and have enormous investment interests in Africa to protect. They are actively tapping the Congo for its gold and other mineral wealth, all aspects under high risk. Imagine an enemy of the Roman Empire employing a wing of the Praetorian Guard for a modern comparison.
◄$$$ RUSSIAN HACK ON PENTAGON TAKES DOWN JOINT STAFF EMAIL IN A SOPHISTICATED INTRUSION, IF NOT DEMONSTRATION... THE FREE SCALE ANTI-HACKING CHIP MIGHT BE RELEGATED TO THE BACK SEAT. $$$
To be sure, the electronic and technological war has begun. The game is on. The Russians have already given demo's of their radar jamming and target system jamming capability in the Black Sea, which unnerved and worried the Pentagon brass at the highest level. Now Russia is credited with an intrusion of the highest level USMilitary email comm systems. The breakin is being called the most sophisticated in military history. The Russian KGB always had great technology, not in dispute. Since 2008, the Kremlin has hosted ET offices and benefited from their technology. The Jackass suspects more ET tech at work in the Pentagon email attack.
One must harken back to the second Malaysian airline crash, a mass murder event. To think Rothschild grabbed the best embedded semi-conductor chip for anti-hacking protection, which at the time was regarded as the Western world's most advanced device to prevent intrusions. The FREE SCALE chip was acquired without competition or other bids by uber-lord Sir Jacob Rothschild, the Satanist king, by means of hiring the Bush Team to carry out the airliner crash and murder event. He paid $11 billion for the entire company, which featured no competitive bids. Other owners of the chip were onboard the airliner, presumed dead, maybe even working in a Diego Garcia AFBase prison. Acquisition of the special chip was called an inherited capture, when actually stolen at the point of a gun. More importantly, the braggadocio of its being the most advanced anti-hacking chip might be in deep dispute, following the Pentagon high brass email intrusion. See Breitbart (HERE) on the breakin. See World Truth (HERE) on the FreeScale chip background, which was reported in the Hat Trick Letter several months ago.
◄$$$ BOEING IS THE FIRST EX-IM CASUALTY, AS IT LOST A MAJOR DEAL DUE TO CREDIT WOES... THE EXPORT-IMPORT BANK OF THE UNITED STATES HAS SEEN ITS LICENSE EXPIRE AT END JUNE... FALLOUT COMES NEXT. $$$
The USCongress simply went home, without responsibly managing the Ex-Im Bank fate. Boeing has been particularly vocal about its plans to go offshore. They are actively considering a move of key corporate elements to other countries. Chairman Jim McNerney claimed the firm would never consider such a decision before the craziness on Ex-Im, and its virtual abandonment. The aircraft company lost a deal worth several hundred $million in mid-July after the buyer backed out, citing Export Import Bank concerns. The commercial satellite provider ABS reneged on a major contract, due to funding uncertainty. The Export-Import game is treacherous, as buyers are increasingly finding themselves with two left feet, or with no place to stand. Their credit is not assured. The hard truth, hardly ever revealed, is that Boeing's buyer has no credit and is likely to default. If there was a deal, it would really have been corporate charity to keep labor employed. Bottom line, there was no business sense to Boeing's deal or else lots of banks would have entered. See Zero Hedge (HERE).
◄$$$ GOLD PRICE IS RISING IN THE MINOR CURRENCIES WHICH HAVE SUFFERED DAMAGE, LIKE WITH THE BRAZIL REAL… GOLD IS RISING IN THE FALLING CURRENCIES... NEXT COMES DIVERSIFYING OUT OF USTBONDS IN THE SMALLER COUNTRIES, AND INTO GOLD BULLION. $$$
The gold price surely is falling in terms of major protected managed controlled currencies like the USDollar, the Euro, and the British Pound. The rest of the world is suffering from currency decline, capital outflows, export trade decline, and unstable financial markets. However, a glow can be detected. The gold price is rising in terms of these falling currencies, thus providing a rich secure safe haven for investors like in Brazil and India and South Korea, even Russia. The movement out of smaller domestic currencies lifts the USDollar, but it also lifts Gold in domestic terms. Next comes the step when smaller nations diversify out of USTreasury Bonds in their banks, and force the Gold price up in USD terms. See ApliGraf (HERE) for the gold price in Brazil Real currency terms.
◄$$$ USGOVT PRESSURE ON CREDIT UNIONS TO SHARE IN THE BAIL-IN CONFISCATION PLANS... SEEMS CLEAR TO CREATE A NATIONAL POVERTY SITUATION WITH VAST LOSS OF WEALTH IN A UNIFORM APPLICATION. $$$
A Hat Trick Letter client had a recent interaction with his small credit union. He had a long conversation with them face to face at their office about their regulatory oversight concerns. During the course of their conversation, after a resolved matter, he inquired about bail-in protection on private bank accounts. He argued that the smaller financial institutions should be clear, since no derivative exposure. The bank manager surprised him with some comments on federal pressures. The manager told my client that the USGovt has been pressuring the credit unions and smaller banks to conduct a bail-ins of 35% in uniform nationwide cuts on all private accounts, even though the credit union has no derivative exposure. The bank manager complained with pushback to the federales, saying they have no capital requirement pressures. The USGovt wants the nation to suffer uniformly applied wealth loss. Apparently, the USGovt does not care, it does not matter. Regard the initiative to be part of the overall strategy to impose national poverty to the United States and its citizens. The account cuts might coincide with a New Scheisse Dollar launch and instant devaluation. The public is not informed of anything, mere debt vassals and worker lackey dross.
◄$$$ KATHERINE ALBRECHT AND RFID CHIPS, THE MOVEMENT TOWARD HUMAN IMPLANTED ID CHIPS... THE MICRO-CHIPPED WORLD AND ITS ADVENT HAS BEGUN TO TAKE ROOT, WITH THREATS OF LIBERTY TO INSTALL GLOBAL FASCISM. $$$
For a frightening tour into the world of electronic tracking, meddlesome marketing, and public acceptance of computer chips located in credit cards and human wrist bracelets (soon left arm by the shoulder), follow Katherine Albrecht. She provides a very thorough tour that includes banks, corporations, agencies, and the gradual creep of Big Brother who wishes to track the people like cattle. The majority of the people seem willing subjects as fenced residence with tracking devices. See YouTube (HERE).
## IRAN TREATY FALLOUT
◄$$$ USGOVT SECURES THE GCC BACKING FOR IRAN NUCLEAR DEAL... SCORE A VICTORY FOR KERRY AS PEACEMAKER... THE GULF EMIRATES HAVE DECLARED PEACE WITH IRAN, LEAVING THE TEHRAN LEADERS WITHOUT HOSTILE IMMEDIATE ENEMIES... IRAN IS FREE TO JOIN THE EURASIAN TRADE ZONE... RISK OF USGOVT BEING MARGINALIZED CONTINUES, DUE TO RMB OIL ANGLE. $$$
A very significant meeting took place in Doha Qatar in early August, with a successful diplomatic outcome. US Secretary of State John Kerry met with the foreign ministers of the Gulf Cooperation Council, a key group of Gulf emirate nations. The result was described as an unmistakable diplomatic victory for the Obama Admin, but more importantly a victory for those who strive for peaceful resolution, detente from constant friction, and not war. The USGovt has secured the support of the GCC states for the Iran nuclear deal, which also signifies a constructive realignment in the Middle East politics. The thorny issues extended from regional security with respect to Iran are being ironed out. The odd man out is Israel, which never desires peace or dialogue or treaties with Arab nations, nothing constructive ever. The perspective from India is quite relevant. In the Gulf region, millions of Indians live and work in important projects and in thousands of households. The GCC community is a major economic partner for India, the site of much employment. The adjustment is to create a new reality centered upon Iran's integration with the international community in a constructive manner. Aside from the motive for the USGovt to pursue the detente, many factors are at work. The US side has explained its cautious optimism.
The US has achieved an agreement, in which the GCC states accept the raison d'etre of engaging with Iran. They accept Iran's existence and role. The Qatari foreign minister Khalid al-Attiyah has called for a serious dialogue with Iran. He said, "We should have a serious dialogue with our neighbor, the Iranians, and [---] lay down our concerns from both sides, and solve them together. Iran is our neighbor in the region." To this end, Qatar hosted a visit from the Iranian Foreign Minister Mohammad Javad Zarif in August, in an outreach mission. The conclusion take by some analysts is that the GCC states have forfeited their right for a role in the dynamics of bilateral US-Iranian engagement with respect to the West in general, while Washington hopes to play the role of moderator in Iran-GCC relations within the fractious Gulf region.
The notion that the US is disengaging from the Middle East within the Gulf region must be adapted. To be sure, the Iran deal multiplied the US policy options available, expanding diplomatic latitude. The risk remains that the US will become a marginalized player after the Gulf oil producers accept RMB in payment for oil shipments to Asia. A key point to watch is weapons sales to the emirates in the Gulf, which have been made with China recently, not the US. Colleague Craig McC made the excellent geopolitical point. "The Iranian deal is also a victory for Russia & China as it paves the way for Iran to join the SCO security group, even to become a critical player in the Eurasian Trade Zone once the gas pipelines are completed." See Indian Punchline (HERE).
◄$$$ IRAN NUCLEAR DEAL HAS SOME QUICK BENEFITS... THE BANK SANCTIONS ARE SLOWLY TO BE LIFTED... THE IRONY WILL BE HOW THE IRAN TREATY WILL LIMIT THE USGOVT, EVEN TO ISOLATE IT, A BULLY FINALLY DISARMED IN THE GULF REGION... THE USGOVT IS DISARMED, NOT IRAN... THE DEAL HAS PUT FOCUS ON THE CONTINUED OBSTRUCTIONS IN BOTH MIDDLE EAST AND ASIA BY WASHINGTON, THE OTHER REGIONS WITH US ABUSES OF POWER. $$$
Government representatives from France, Germany, and Serbia have traveled to Iran since the July 14th agreement. The meetings have raised the prospect of banking and trade sanctions on Iran to be lifted, possibly by the end of this year. Removing the onerous financial blockades is an important step toward normalizing relations with Iran. The Jackass has some key observations on the nuclear deal generally. The Iran Nuclear Deal might easily isolate the United States in a strange boomerang, after Washington is forced to put down its financial weapons. Worse, expect some betrayals. The pattern has been clear over the last two decades. Washington dishonors all treaties and accords it helped to build, when violations serve the US interests. See NATO treaties with Russia for the most glaring examples. See the abuse of NATO in usurping European power, subjecting national presidents and prime ministers under the military wing, as in the NATO Supreme Commander. See the Minsk 2 Agreement, which Washington dishonors on a daily basis with its criminal fascist regime as partners in Kiev Ukraine. See the trade deals worked with Asia and Europe, jammed down their throats with no debate permitted, and corporate bribery in every office. The outcome of the Iran Nuclear Deal is to put the USGovt in a straitjacket, not Iran, while putting the spotlight on Washington under greater scrutiny. The outcome is that Washington is given notice for no further violations of Iran, either with banks or major commercial projects, even communication lines.
Recall the USGovt continues to obstruct the Iran Gas Pipeline to Syria, and the other major pipeline to Pakistan. The USGovt is not an honest broker in the entire Middle East and West Asian regions, and will continue to be a major obstruction, but with more attention focused on its devious and nefarious practices and policies. Recall the USMilitary still floods Iran from the north with heroin. The outcome of the important deal will be that China rules the roost in the Persian Gulf, with Russia operating in the shadows on crude oil policy. The Petro-Dollar is dead, and Eastern superpowers are moving into the control room at the GCC community center. China must have ordered the Saudis and Iran to repair relations and to play nice.
The limitations placed upon the USGovt will actually result in isolation, once the RMB oil payment window is opened. The isolation is a critical component of falling into the Third World, once the US launches its New Scheisse Dollar. The United States has lost an incredibly large amount of prestige and political capital. It can recover some, but the US remains deeply distrusted for its role in fomenting war and supporting hidden terrorism. The chess game has changed, with the US losing a major piece, the queen. The Saudi Kingdom is at great risk from the Yemen neighbor, and the USGovt can only watch. The Saudis might request US assistance, but the US is attacking the Saudi house by means of the ISIS weapon. In pushing the Arab Spring, the lunatics in Washington have lost all their friends in the region.
## USDOLLAR REMOVAL IN TRANSITION
◄$$$ JOHN KERRY VOICED CONCERNS THAT WASHINGTON MIGHT LOSE EUROZONE SUPPORT FOR ANTI-RUSSIA SANCTIONS... THE WAKE-UP CALL OF LOSING EUROPE AND FACING US ISOLATION HAS DAWNED ON THE YANKEE FASCISTS... A REJECTED USDOLLAR IS NEAR ON THE GEOPOLITICAL STAGE. $$$
John Kerry appears to be the poster boy apologist for Yankee Fascism and herald for its failure. He is arguing that if the Iran Nuclear Pact is rejected, the USDollar will lose its prized reserve status. He openly fears lost European support for the wrong-footed Russian sanctions. A parting of ways by Europe might result quickly in US isolation, abandoned trade pacts, even growing irrelevance of the NATO Alliance structure, but in slow motion. Such loss would mean nations of the world discard the USTreasury Bond toxic debt securities from their banking systems. The result would be the US falls into a slippery slope toward the Third World, having to create and defend a domestic Dollar with fundamentals worse than most African nations. Kerry might indeed be correct about European member nations growing weary of the US hegemon. Europe will not commit economic suicide under marching orders by Washington with the infamous goose step. While Kerry might be wrong about any consequences linked to Iran detente, he might have put the finger on the hottest button of all, loss of USDollar reserve status and rejection of the USTBond in banking systems. Consider it the geopolitical death penalty, like a father taking away a credit card for a psychopath son on a crime spree. See YouTube (HERE).
◄$$$ GLOBAL RESERVE CONCERNS AND BURDENS ARE BEING RECOGNIZED, AS THE USDOLLAR LIMITS GROWTH AND ADDS TO DEBT HEADWINDS... THE GLOBAL RESERVE STATUS INHIBITS THE USGOVT ABILITY TO DEBASE THE CURRENCY, DURING THE CLIMAX OF THE RACE TO DEBASE... THE CASE IS BEING MADE, COMING TO THE FORE, FOR THE USGOVT TO SHED ITS RESERVE CURRENCY STATUS IN ORDER TO ACHIEVE GROWTH AND DEBT RELIEF, TO REBUILD THE INDUSTRIAL BASE AND SAVINGS LEVEL... THE IRONY IS ALMOST A TRAGIC COMEDY... IT IS THE RECIPE FOR GREECE EXITING THE EURO, WITH SIMILAR RATIONALE. $$$
Enter new research. It argues that what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits, and inflating financial asset bubbles. To put the USEconomy on track, the government needs to drop its commitment toward the USDollar reserve currency status. The reasons are articulated by Kenneth Austin, a USDept Treasury economist, in the latest issue of the Journal of Post Keynesian Economics. If the viewpoint were deemed hostile to Wall Street, the essay never would have been published. This is not just a matter of one academic writing one article. Austin's analysis builds off work by the economist Michael Pettis and more notably by the former Federal Reserve chairman Benjamin Bernanke.
Common currency warfare dictates that various countries such as China, Singapore, and South Korea routinely suppress their currency relative to the USD in order to boost their export trade, both to the United States and other nations. They buy lots of USDollars, sometimes with printed domestic currency, which drives down their exchange rate, and thus makes their exported products cheaper. It has been commonly called Competitive Devaluation, even a race to the bottom of the economic toilet. The down side is to lift import costs, often the important energy costs like in Japan. To support this process, these countries benefit by suppressing their consumption which boosts their national savings. They save more and consume less than other countries in the adjustment. Other indirect effects take the savings incentive out of the US hands. In 2013, the US trade deficit was about $475 billion. Its deficit with China alone was $318 billion. In effect, the USGovt passively permits the practice, since it keeps the USD elevated in its primacy and permits zero cost war. The entire outsourcing of labor that began in the 1980 decade kept the deficits at a high stable wrecked level. As side effect, the US has accumulated huge deficits and built in huge consumption. It is a broken nation from the reserve privilege and consequence. Worse, it has used the credit card in war games, earning international ire and resentment.
Austin concludes that the US labor market is a magnificent victim from the USD global reserve role. He estimates that six million jobs in 2008 were lost as a result, many being high wage manufacturing jobs that are most vulnerable to changes in exports. He did not touch the nasty topic of foreign worker VISA's granted by the Obama Admin which undermine the US worker class, thus leveling the playing field (decimating the field of players). He concludes that de-throning King Dollar could be easier than people expect. For example, the USGovt could enforce rules to prevent other countries from accumulating too much of our currency. In fact, there is current precedent today, the action taken to avoid exporting jobs. Most recently, Japan took intervention measures to hold down the value of the Yen when central banks in Asia and Latin America began to purchase Japanese debt.
The interim risk is for rising USD-based interest rates, if fewer players end up demanding USDollars. Pettis observed, "Countries with balanced trade or trade surpluses tend to enjoy lower interest rates on average than countries with large current account deficits, which are handicapped by slower growth and higher debt." The exception is when QE is in place, wrecking both the bond market and the entire global capital base in gradual but powerful corrosion. Outsourcing is erosion, but QE is corrosion. The great offset comes from higher import prices until the weakened manufacturing base responds, wage stagnation until the labor market benefits from capital expenditure, and debt defaults until the trade deficit is put back into balance. The United States suffers from the worst imbalances in the history of mankind, yet makes the rules, establishes the patterns, and wages the wars. Time is running out on this charade.
The sacrifice is necessary, even urgent, and must be done to bring about more and higher quality jobs, more stable recoveries, less asset bubble dependence, and a revitalized manufacturing sector, as well as peace among nations. The privilege of having the world's reserve currency is one that the United States can no longer afford. In the global race to debase, reserve currency status is a curse. What comes is the Gold Standard on the trade ramps, followed by the Gold Standard in the banking system. See Zero Hedge (HERE).
◄$$$ TEN REASONS THE GLOBAL FINANCIAL STRUCTURE IS ON THE VERGE OF COLLAPSE, WITH THE DOOMSDAY CLOCK ONE MINUTE BEFORE MIDNIGHT... ON THE OTHER SIDE OF THE BREAKDOWN WILL BE THE REMOVAL OF THE USDOLLAR FROM THE TOXIC FIELD, AND RETURN TO THE GOLD STANDARD. $$$
As preface, never overlook the primary factor for the imminent financial system collapse. They lie in economic performance and monetary policy, both a wrecked zone. The USEconomy is stuck in deep recession of at least minus 4% growth for six straight years, despite four years of QE hyper monetary inflation of the worst kind. Several other key factors can be identified as extreme warning signals. See Zero Hedge (HERE).
1) China slowdown in industrial production, and in their construction sector
2) Commodity price decline has been uniform, a reflection of global recession
3) Resource sector credit crisis linked to mining and oil projects globally
4) Dominoes begin to fall among emerging markets, with an absence of safe havens to sink reserves outside the USTreasury Bonds
5) Credit markets suffering damage, starting with high yield debt, now LIBOR rates are rising
6) Interest rate shock could come after six years of controlled zero bound rates
7) Bull market in global stocks is the third longest on record, pushed by central banks with free money in pure Africa style
8) Overvalued US market with absurd valuations in the face of recession.
◄$$$ WESTERN WORLD ECONOMY HAS RUN OUT OF TIME, WHILE THE ELITE HAVE TURNED INTO A PANIC. $$$
After reviewing the dire signals founded in the US Stock Market, the extraordinary rise in the monetary base (money supply), the rapid decline in Money Velocity, and the long bottoming process for the controlled Gold market, Robert McHugh concludes the game has run out of time, the control rooms weakened badly, the platforms in truly bad condition. See Kitco (HERE). He did not even need to mention the gold shortage from two decades of price suppression.
An executive within the Alternative Energy sector claims the Elite insiders are in a panic. They are losing control. Their domain is cratering. It is late in the game. The Western Elite are losing their entire paper money fortress based upon a debt foundation which is defaulting rapidly. With the debt collapse goes their power base. The East can kill the Western system at any time using the gold weapon, but with sustained losses of their own in paper based reserves. The next deep damage will come when the Chinese, with BRICS Alliance nations in tow, use the broom to push the USDollar off stage. The broom is RMB trade settlement. The loud gong will be the Gulf Emirate nations accepting RMB in payment for oil shipments. The OPEC is a neutered organization, but the King Dollar has no working throne and the robes are removed even as the court is disbanded. See SGT Report video (HERE).
## IMF GLOBAL RUCKUS
◄$$$ IMF SAYS MORE WORK NEEDED ON THE YUAN RESERVE CURRENCY DECISION… THEY FELL BACK ON A NEED TO DO MORE RESEARCH AS JUSTIFICATION... IT WAS A LAME EXCUSE AND GRAND INSULT TO CHINA... RETALIATION BY THE CHINESE SEEMS INEVITABLE AFTER THIS MOVE IN BETRAYAL… VENGEANCE BY CHINA COMES NEXT IN SEVERAL WAYS. $$$
The Intl Monetary Fund said the Yuan trails its global counterparts in major benchmarks and that significant work in analyzing data is needed before deciding whether to grant the Chinese currency reserve status. Bear in mind the Western benchmarks are all tilted by QE and extreme central bank market rigging. Every major IMF country is in QE mode with heavy bond purchases, a perversion of the SDR basket itself. The IMF staff members also opened the door for a potential future approval by September 2016, near the time when Chinese President Xi Jinping hosts a meeting of Group of 20 leaders next year. At issue is inclusion of the Chinese RMB in the basket of currencies that comprise the official Special Drawing Rights. Inclusion would open the door to widespread RMB bonds being inserted in banking system reserves. The IMF said postponing the change would make the transition to a new basket smoother. How spineless, lame, and weak, a grand insult to a proud nation and new industrial leader nation.
China wants the associated respect from the Yuan to join the USDollar, Euro, Yen, and British Pound in the SDR basket. Interestingly, France has called for including the Yuan, while the United States has urged China to keep moving toward a flexible exchange rate and executing financial reforms in order to qualify. While the IMF reserves judgment, the Chinese will move forward on their own version of global reform, which will leave the United States gasping for breath and hurtling down the chasm. See Bloomberg (HERE). China should hit the global stump and demand an end to QE, since an African monetary policy. They should bring attention to the deeply flawed USDollar foundation in perversion.
Everything the USGovt has done since Lehman has backfired in a huge way, with no exception. Just a Leviathan stall tactic on IMF delays, to hold onto power as long as possible. Fortunately, the AIIBank (development bank) and the BRICS bank (to be gold central bank) have a different opinion. Fortunately, the CPS (counter to SWIFT) and Union Pay (credit card) offer an alternative. The IMF is soon to be short circuited, and left to react during a USTreasury Bond crisis. The Chinese have formally rebutted the IMF. Beijing claims their financial reform plans to be sufficient in supporting the RMB inclusion into the Special Drawing Rights basket. See Xinhua Net (HERE). In a catering move, the IMF has called China's new Yuan midpoint mechanism a welcome step, but with much more reform required. The mechanism helps to set the daily reference rate for the Yuan, by allowing market forces to have a greater role in determining the exchange rate. See Reuters (HERE).
◄$$$ THE CHINESE CENTRAL BANK MOVED TO DEVALUE THE YUAN BY 1.9% IN THE WAKE OF THE IMF DECISION AND SAGGING EXPORT TRADE... THE LONG-HELD TIGHT REIN LINKED TO THE USDOLLAR HAS ENDED, SET UP IN JULY 2005... EXPECT MORE PBOC DEVALUATIONS OF THE RMB CURRENCY TO COME, SINCE THEY NEVER COME WITH ONE TINY MOVE... HYPOCRISY ABOUNDS IN THE WEST, WHILE THEY ARE VULNERABLE TO THE RMB DEVALUATION AT THE INDUSTRIAL COMPETITION LEVEL. $$$
China's central bank devalued its tightly controlled currency by 1.9%, not a large move. The world's second largest economy has endured growth declines and a horrible bear market in the stock market. Chinese authorities claimed the change would help drive the currency toward more market driven movements. A shift toward a lower valued currency could assist their export trade at a time when many other efforts to boost the economy have not proven very effective. With the policy change, the RMB value will be fixed, based on how the Yuan closes in the previous trading session. The central bank said in a statement that the Yuan's midpoint has diverged quite a bit from the market rate for a relatively long time and that it was time to make the midpoint more responsive and aligned with the market. See Market Watch (HERE).
The currency adjustment is only the beginning, the first salvo by China as a result of the IMF's recent decision to defer the Yuan inclusion. Clearly China is being pushed too far, dictated on reforms while the USFed is stuck in the zero bound (ZIRP Forever) corner while locked in permanent hyper inflation (QE to Infinity). The scandalous heretical destructive Western financial policies stand in stark contrast to China's often reasonable approaches. It should be noted that China has racked up multi-$trillion debts within their system. Next is RMB global standard for trade settlement. Expect the USDollar to face deep challenges. Expect the USTreasury Bond to be isolated for the kill. Think vengeance more than just reaction.
George of the COMEX pitched in. The United States said FU to China on the world stage. As of this point, no need to adhere to any IMF standards and guidelines in the future. The Chinese have stood by the USDollar exchange rate like good citizens, while Japan and all of Europe devalued by 20-30% or more. Now it is their turn. The US business were hurt by the Euro devaluation. If China devalues for real, especially with another step or two, both European and American businesses will be train wrecks in just a quarter or two. The US-based debt abuse for more mergers & acqusitions, even big corporate stock buybacks, is a real travesty. But China must work on its continued reforms with ZIRP & QE firmly in place. Where is the study and research on the twin wrecking balls toward the global economy? Not a harsh word is spoken in the US about skyrocketing corporate debt accumulation or bigtime drawndowns in cash. Hypocrisy abounds, when China is rebuffed by the IMFund. Expect vengeance in ten different ways.
EuroRaj added a few summary nuggets, his point, my edits. China had for years been strongly pegging its currency to the USDollar (the narrow band). The USFed's implicit monetary tightening via hike talk is being transmitted to the USEeconomy. It has curbed domestic demand and acted as a catalyst for global growth slowdown. The USFed knows this and is probably playing its last trick. Chinese businesses are also not being allowed to plan long-term by virtue of the USFed policy, which is also creating USD volatility. Once the world starts accepting the Chinese Yuan (RMB) as currency for trade settlement, global growth will pick up in a very big way. This is the sunshine. To this end, the IMF decision was delayed to cause further pain. Expect China to react forcefully, boldly, broadly, and frequently, with many friends following its lead.
◄$$$ MAJOR STRATEGIES ARE BEING PREPARED, TESTED, FLOATED, AND SOON TO BE EXECUTED... THE USGOVT HOLDS NO CARDS, EXCEPT BOND FRAUD, WAR, VIOLENCE, AND SANCTIONS, LIKE TRUE FASCISTS... THE CHINESE HAVE NUMEROUS POWERFUL OPTIONS... WATCH FOR THE RMB TRAIN TO ATTRACT A LARGE FOLLOWING, NOT JUST EASTERN NATIONS... THE RMB ALREADY HAS SIGNIFICANT MOMENTUM AND KEY FACILITIES. $$$
George of COMEX fame pitched in. He raises the potential point of a planned September rate hike. If done, it would be the last trick right in front of SDR talks held at the Intl Monetary Fund. They could attempt to build a crescendo of crisis, like the Asian Meltdown. It would light a fuse on a scuttle event for the USS Dollar ship, the derlict at sea which appears strong but leaks and lists badly. The ship is carrying weapons on one side and narcotics on the other, with fraudulent bonds below deck. They might believe the United States is protected and reinforced by powerful financial machinery, whereas the less defended Asian markets are vulnerable with their suddenly higher debt. He raises the specter of a 1998 redux, only much bigger broader and more destructive. The audacity of the US to simply say the Yuan will not be considered in the SDR basket in October is truly incredible. One must wonder if the Chinese have figured out they will never be permitted inside the club, at least not in a meaningful way. They might devise a little October treat as Eastern response for the United States, by means of a prompted crisis which results in a discarded USDollar, and adopted RMB in trade. Consider that the Chinese might attend the IMF meeting, and respectfully ask the entire group for the Yuan currency (aka RMB) to be considered in the basket. When denied, the Chinese finance ministers and central bank officials could walk away, then order a sizeable RMB devaluation.
Look for the BRICS Alliance to play the RMB card in trade payment requirements. Then they might link the RMB to Gold in a pegged backing with some cover clause. The entire plan would serve as a global execution of the USDollar, but a broad fix to the Chinese stock market. Like with QE bond purchases, the maneuver would attrack a huge mountain of world capital. It would wreck any Western company competing with Chinese companies. All major nations would have to adopt the quasi-RMB standard in trade. Refusal would mean reduced import shipments at the docks. The East will counter-attack the USDollar and all the terrorist attacks with a RMB and Gold weapons, reinforced by SWIFT alternative (CPS) and Union Pay (credit card) and independent credit rating agencies. The tidal wave has almost begun.
The Jackass responds further. The IMF decision is a turning point. The USTBond is exposed as toxic, supported by ZimDollar policy, and faulty. The Chinese will surely devalue the Yuan further, versus the USDollar. They will permit the USD to die from a lethal rise which is amplified by further lifts in policy. They will let the King Dollar die of oxygen deprivation at extreme heights. The Chinese will force the Gold price to rise versus the RMB, along with some key devices to force it up like with RMB-based gold futures contracts. The Beijing maestros will force the RMB to be standard in global trade settlement, including Gulf Arab oil. The powerful commodity card can be played, which will draw in every commodity producing nation of the world. The BRICS Alliance nations will follow the RMB wagon train lead, using the commodity channels and port facilities to adopt and install an alternative standard.
The result will be a global rejection of the USDollar, massive dumping of USTBonds, and exposure of the USFed and colossal QE volume unmasked. The USGovt will be pushed into a corner, and launch a domestic only New Scheisse Dollar. It too will be laced with fraud in its primary foundation. The RMB train will attract numerous Western nations determined not to fall into ruin like the United -States. The Yuan Swap Facility and the few key RMB Hub Centers will keep the momentum of the transition RMB Standard moving strong. The Chinese financial planners have effectively been creating platforms and planting seeds for almost ten years. Recall once more that China focuses upon trade and commercial ties with tangible projects. The USGovt focuses on accepted toxic bond purchases, continued weapon sales, support for sanctions and pipeline obstructions, and constant undercut of terrorist activity to destabilize, while gold reserves are stolen (from friend and foe alike). The latest US exports have been GMO foods by Monsanto, fracking by big energy firms, and fascist trade unions. Let the Yankee Fascists be exposed, unmasked, denutted.
◄$$$ BILL HOLTER ON IMF DECISION... THE WEST INSULTED AND HUMILIATED THE CHINESE, WHO WILL RESPOND AT AN OPPORTUNE TIME... HOLTER EXPECTS THE CHINESE TO BEGIN DUMPING USTBONDS EN MASSE, THUS FORCING THE USFED TO VASTLY INCREASE ITS QE VOLUME SO AS TO SOAK UP THE SUPPLY ON THE TABLE... RELUCTANCE TO RADICALLY LIFT THE QE VOLUME WOULD RESULT IN THE COLLAPSE OF THE USTREASURY COMPLEX AND THE USDOLLAR, FOLLOWED BY ALL MAJOR FINANCIAL MARKETS. $$$
Bill Holter always has competent profound observations and solid analytic points to make. The following are his points, my edits for flow and trimmed extras. Shock of all shocks, the IMF announced the Chinese Yuan will not be admitted into the SDR until at least September 2016. The gold community is stunned and cannot properly assess the impact or consequence. The Chinese data release about adding 600 tons of gold reserves was intended to frame them as polite with the West, to maintain club membership. The silly side to expose the bogus data is seen by noting that China has been importing 600 tons every three months. The IMF decision was a rebuke, and a global visible humiliation. The Chinese are a very proud people, who never respond calmly to such insults, especially on the global stage. Make no mistake, they will retaliate but in their own way and with their own patient timing. When the US financial market next undergo convulsions, like this autumn, expect one of two responses from the Chinese. They will either come public with a true and very large number for their gold holdings, or they will threaten to and actually dump significant USTreasury Bonds and other USDollar holdings, or both! Expect their response to be timed when we are tired, dejected, or vulnerable for maximum effect.
Whether recognized or not, the United States is locked in a financial war with nearly the rest of the entire world. To exclude a rising China into the SDR makes no sense, and further widens the imbalances. No upside advantage comes from the IMF decision. It probably does not even buy time or postpone the inevitable. The action of poking the hornets nest may actually accelerate the collapse. The Jackass prefers the analogy of poking at the Dragon's eyes.
Some possibilities arise as the two retaliatory options mentioned above. First, were China to come clean and admit they have 10,000 tons of gold (or much more), the Yuan would immediately strengthen and infringe upon USD territory as a settlement currency. This could be how the RMB trade settlement card is played, with extreme power and a golden carpet. Markets would quickly do the math and understand if China has this much gold, they are in a lead spot globally. China could even permit an audit publicly and count the bars out in the open surroundings like in their Beijing Olympic stadium. Then would come the challenge for the West to demonstrate their gold holdings. The Gold Wars would ensue.
Another extremely likely situation could emerge. If the Chinese decided to sell some of their USTreasury holdings, the USFed could let the market absorb the dumped bonds and allow interest rates to rise. Bond prices would crater. (The Jackass adds that if China starts to dump USTBonds, then many among the BRICS Alliance nations might also dump in earnest.) This is option A. To permit damage to the USTreasury complex is not much of an option, especially in a world where all prices are understood to be generated officially, as in controlled markets. On the other hand, option B would involve Forced Monetization. The USFed would be coerced to buy any and all USTreasurys offered by China (and other nations that follow their lead). Holter believes this is exactly what the USFed will decide they must do. A highly dangerous situation would arise, since the nations who dump USTBonds can forced the USFed to either monetize or face the immediate collapse of credit markets. All other major markets would collapse in rapid sequence. The Chinese will not do this until the time is right in their view.
The Jackass expects the massive dumping of USTBonds to occur in unison with the RMB adoption. The Chinese will hasten the global RMB trade standard in settlement, the timing perfect during the dumping process. China was not awarded the prestige of IMF basket inclusion for replenishing banking systems, since the Western currencies face an illiquidity risk. So the end-around will accomplish the same result, forcing the USFed to turn QE into a magnificent funeral parlor dirge. The Jackass adds that gigantic QE volume will encourage all Eastern nations to reject the USTBills in trade payment. Then comes the New Scheisse Dollar introduction, launched to manage the import process with payment. Afterwards comes a painful sequence of New USD devaluations. The Jackass is in complete agreement with Holter on the scenario, the effect, the response, and the threat, with some added consequences offered in rejoinder.
The Voice made a critical comment on this extremely important topic. A justification for RMB devaluation was set up in advance. "The Chinese IMF/SDR movement was a well calculated hit. They tried, and were rebuffed, but they knew that before they made the attempt. The gloves are off now and the Chinese can and will do as they see fit. The Chinese do not make hasty decisions and stupid moves. Their conception of time is very different from ours. The Chinese are facing a very serious issue. They need to increase their domestic consumption in order to reduce their export dependence. That means they need to increase disposable income for their people. That in turn will sink and finish their Communist party system and entire political and socio-economic management structure. We live in interesting times indeed." The Voice wrote the passage before the Tianjin port explosion.
◄$$$ CHINA COMPLEXITY ON FINANCE WITH RESPECT TO BLAME GAME. $$$
Just some thoughts aloud. Maybe the USFed and IMF want to blame China for a collapse. The day is close for China to widely adopt the Gold Trade Notes, with gold entering into their currency equation. The entire IMF office is scared of the Chinese future plans to push the USDollar aside, the nation's industrial strength in grand constrast to the US mountain of debt and war tones. The IMF had to halt the RMB inclusion, since the major Western currencies are badly illiquid and their props all in delicate balance. The IMF is frightened stiff of RMB usage in trade and banking. The USFed has lost its rate hike card as an option. Using the card takes away blaming China for the collapse. The virtual certainty in the next several months is the USTreasury Bond collapse and USDollar dismissal in trade payments. To be sure, the USDept Treasury, the US Federal Reserve, the IMFund, the White House, Langley, they all want a collapse in order to install martial law and to unleash the fascist state. However, they no longer will have China to blame.
## RMB INTEGRATION GAINS GROUND
◄$$$ ALBERT EDWARDS CALLED THE YUAN DEVALUATION AS INEVITABLE, AND POINTS TO ADDITIONAL MEASURES IN AN UGLY PATH... BEIJING HAS INDICATED THE BEGINNING OF NEW POLICY, NOT THE END. $$$
Edwards explained the justification of a weak economy as China's reason for devaluation. Unlike Greece or Italy, the Beijing options are many in a flexible response to a horrendous global economy which has been wrecked by the hidden QE damage. The toxic USDollar is killing capital around the world. China has responded in the first of many policy directives. The emerging markets generally are in dire straits, stuck in deep downward momentum. China will not slide with them, even though China was the biggest among those nations having successfully emerged.
With more emerging market (EM) currencies submerging, it seemed increasingly clear that the massive balance of payments deficit that has been exposed in China meant the time was rapidly approaching when China would be forced by economic reality. The global economy weakness has been draining capital from the Middle Kingdom. They would order a competitive devaluation for trade export stimulus. The recent weak industrial data was the final impetus. As the Chinese Economy is struggling and the stock market bubble has been burst, the renminbi (RMB) devaluation would not be the preferred method to address a weakening economy. But it would indeed be used. The folks at Edwards dislike the direction being taken. They should object more loudly and angrily, even vociferously, at the highly destructive QE policy put in practice for over four years at the USFed. Edwards gave the following astute opinion.
"Many had felt devaluation would continue to keep the renminbi stable while the IMF was still deliberating whether to admit the renminbi into the IMF's basket of reserve currencies (SDR). But the IMF's announcement last week to defer a decision until the autumn of 2016 may well have been sufficient reason for the Peoples Bank of China to stand aside from FX intervention and bow to the inevitable. Make no mistake, this is the start of something big, something ugly. For while the West has been heaving a sigh of relief over the past few months that deflation pressures have abated somewhat, especially at the core level, we have been emphasising that deflation has only been intensifying in Asia and that like any puss-filled boil, this deflationary pressure would soon need to be lanced." Currency adjustment is a solid prelude to more definitive action taken, done at the monetary level like in trade settlement. The USDollar will soon be pushed aside. The debt defaults and restructures will next occur at the macro level, with entire nations succumbing to the decline. When the currency foundation is debt, the remedy involves large brooms to remove the debris at the macro level, where $trillions in wealth will evaporate quickly and broadly. See ValueWalk (HERE).
◄$$$ THE PEOPLE'S BANK OF CHINA IS MAGNIFICENTLY RIGHT IN BLUNTING THE USFED, WHICH IS RECKLESS BEYOND WORDS... NO LONGER WILL CHINA PERMIT THE RISING USDOLLAR TO HARM THE CHINESE PRODUCTION ORIENTED ECONOMY... NO LONGER WILL CHINA KEEP ITSELF LINKED TO USFED MONETARY POLICY... THEY ARE FORGING AHEAD APART. $$$
The soaring USDollar rose 25% on a trade weighted basis between June 2014 and March 2015. The reasons are many, like more deceptive manipulative Taper Talk related to rate hike, the dismantled Petro-Dollar structural elements, and weakened Emerging Markets generally. The Western press is showing poor analytic quality, replete with reports that China's RMB devaluation is a sign of economic slowing. On the contrary: the fact that the Peoples Bank of China allowed the RMB to float upward with the USDollar for the past year and a half is a major cause of China's manufacturing slowdown. They are merely cutting the monetary cord with the USFed that has existed for 15 years. The Chinese made a policy error since year 2000 in linking their monetary policy to the insane policy at the USFed. They strived for stability but earned asset bubbles and bloated reserves instead. They are experiencing a slowdown in growth across the board, while the USEconomy is deeply mired in a powerful minus 4% GDP recession annually.
It is difficult to declare the overall Chinese Economy in deep trouble when the revenues of its largest retailer Alibaba are up 34% year on year. Expect Alibaba to make strong inroads in the entire Western world business sectors. Its film making subsidiary has a wild success on its hands with the latest series in "Mission Impossible" starring Tom Cruise. The Chinese are like a mountain climber team that finally cut loose a sick climber in the crew, no longer carrying it, finally to let it fall thousands of feet below. A number of analysts have been urging the PBOC to abandon the USDollar peg for a few years. They include the former chief China economist at the Bank for Intl Settlements, Guonan Ma. The Beijing officials have made a strong signal. They wish to cut loose from the insanity at the USFed, which is threatening to tighten monetary policy (rate hike) in the face of an extremely weak USEconomy. What is totally missing in the United States is capital investment and business risk taking, which monetary policy cannot fix. The ongoing permanent QE to Infinity is killing capital, wrecking the business capital base, and causing a Global Economic recession that profoundly affects the Chinese export trade. The Chinese have effectively blunted any rate hike at the USFed in a brilliant strike which was mangificently correct. Next they will rally behind the Eurasian Trade Zone to build their economies independently of the lost flagging West. See Asia Times (HERE).
Furthermore the Chinese central bank chief economist wrote in the Peoples Daily that the Yuan will not embark on a devaluation trend. It surely will. Expect a trend with more devaluations. They have several previous pronouncements, probably intended to keep the Western monetary morons off balance. Call it a reverse propaganda game. The Western central bankers, on the other hand, had warned that the subprime bond market was contained, that a Greek Govt debt default was impossible, that the USFed would hike rates in September, and that the PBOC would raise the RMB if anything (not devalue). See Reuters (HERE).
◄$$$ WESTERN PUNDITS MINIMIZE THE CHINESE DEVALUATION... THEY DO NOT SEE THE EXTREME RISK TO THE USDOLLAR AND THE ENTIRE DEBT-BASED FINANCIAL FOUNDATION... THE CLIMAX IS NOT AVERTED, BUT RATHER JUST BEGINNING... DENIAL IS STEEPED IN IGNORANCE AND FALSE ASSUMPTIONS, LACED WITH ARROGANCE AND HUBRIS. $$$
Consider an opinion, typical of the denial, scribed in the West. China's devaluation of the Yuan is seen initially as stealing growth, like from neighbors. Recall the Beggar Thy Neighbor interpretation for devalued currenies, as in no added value in a zero sum game. The largest devaluation of the Yuan in two decades sparked immediate concern that any gains made in China as a result of this action would be more than offset by the losses elsewhere. Instead, global markets are calming and the expectation that China efforts to address imbalances is consistent with their growing interest in achieving internal growth, rather than serving merely as producer of world goods.
The USDollar has stabilized. Gold has also recovered. Other commodities are expected to recover. The Western analysts anticipate a gradual return to normal. They are to be in for a surprise, if not a shock. See Futures Mag (HERE). The Jackass is a prime contrarian with an eye on paradigm shift. Given the consensus of yawns with a return to normalcy, be very concerned. The IMF betrayal will result in much wider RMB settlement in trade. The vengeance has just begun. The rejection of the USDollar will accelerate in a quiet but unstoppable way. The debt foundation underneath the entire currency system is unstable and breaking down. The banking systems have been broken for five years. The ground under the financial feet is shifting and collapsing.
◄$$$ CHINA ECONOMIC STATISTICS ARE ALL IN DECLINE (MORE LIKE GROWTH SLIDE), AN ACCURATE REFLECTION OF THEIR REALITY... WITH WESTERN CLIENT STATES IN TROUBLE, THE CHINESE EXPORT TRADE IS IN A GRAND SLIDE WITH FULL TRANSPARENCY... TIME TO REACT. $$$
To be sure, the Beijing officials might wish to import some standard fare American statistical deception devices, as they are in dire need of American gimmickry in the statistics. It is not difficult to lie like the USGovt has done for 30 years. The big acceleration occurred during the Clinton Admin on economic distortions with motive. The Chinese industrial production and retail sales have been dealing with a steady decline in their growth. This is a growth decline, not an outright decline and recession. Their growth rates are slowing. In addition, the urban fixed investment is slowing more sharply, as in building construction of offices and apartments.
◄$$$ CHINESE EXPORT DATA IS CRASHING, WHICH JUSTIFIES A CURRENCY DEVALUATION, OR MAYBE A NEW MONETARY SYSTEM... THEIR EXPORT DATA SHOULD BE REGARDED AS THE BEST GLOBAL ECONOMIC INDICATOR EXTANT... A REDUX OF THE LEHMAN EVENT IN 2008 IS OVERDUE, LIKELY TO BE AN ORDER OF MAGNITUDE WORSE, CONFIRMED BY THE BEAR MARKET IN NUMEROUS COMMODITIES. $$$
Some dire export data was registered. Global commerce is hunched over in a bad way. The Chinese export data for July just crashed by 8.3% year over year, down a huge 3.6% from the previous month before. The damage was far greater than the consensus estimate of only a 1.5% drop, and the biggest drop in four months following the modest 2.8% rebound in June. In addition, imports fell also by 8.1%, down from the minus 6.1% in June. Harken back to the Lehman meltdown event, which was previewed by a fall by many commodities into bear markets. Eighteen of the 22 components in the Bloomberg Commodity Index have dropped at least 20% from recent closing highs, meeting the common definition of a bear market. That equals the number at the end of October 2008, when financial turmoil struck global markets with extreme force. A redux is coming, but much greater and more comprehensive in scope since more systemic and the bank players are lashed together to suffer the fate simultaneously. See Zero Hedge (HERE).
◄$$$ CHINA HAS SUFFERED A CAPITAL OUTFLOW OVER THE LAST YEAR OR MORE... BUSINESS INVESTMENT GOES HAND IN HAND WITH SUCH FLOWS... IT IS THEIR FIRST CAPITAL DEFICIT IN OVER A DECADE. $$$
◄$$$ CHINA'S VERSION OF QUANTITATIVE EASING PROMOTES LENDING TO BUSINESSES WITH FILLED CHANNELS, THE OPPOSITE OF THE AMERICAN BROKEN APPROACH... THEIRS IS TO PROMOTE BUSINESS INVESTMENT, WHICH RESULTS IN TANGIBLE OUTPUT AND LEGITIMATE INCOME SOURCES FROM PRODUCTIVE MEANS... THE AMERICAN APPROACH IS TO STUFF BIG BANKS WITH MONEY FOR SPECULATIVE PURPOSES AND BAILOUTS OF TOXIC PORTFOLIOS... THEIRS IS BETTER. $$$
Chinese leaders are turning attention to the central bank for leadership in implementing numerous government programs designed at shoring up economic growth. Their methods stand in total opposite contrast to the USFed methods. The US depends upon hyper monetary inflation, directed through the Wall Street bank channels and financial market props. The Beijing approach is to direct funds into state programs with a capital investment emphasis. They have designed an adaptation of the quantitative easing policies executed by counterparts abroad. They are opening the monetary spigots, but not into bank windows, rather into projects which result in capital formation, job creation, and product output. The American clowns and crooks have it backwards, thus zero progress in any economic recovery. Just more banker fraud and asset bubbles, the great American specialties in addition to scattered war and diabetes export.
Rather than bankroll projects directly, the Peoples Bank of China is pumping funds into state lenders known as policy banks to finance government sponsored programs. Instead of buying shares to prop up a faltering stock market, it is aiding an official fund that seeks to stabilize prices. Instead of purchasing municipal bonds within the market, the central bank is accepting such notes as collateral and encouraging banks to buy the debt. The current Chinese leaders, who came to power in 2012, have chosen a path for indirect financing. The strategy has the added benefit in that it prevents the central government's debt burden from rising. A record credit expansion unleashed in 2008 is in the midst of being restructured. The new funds from the PBOC actually arrive into their real economy, unlike in the US where it ends up as speculation and covered toxic bonds (redemptions). China's policy of channeling funds into the real economy makes much more sense than the USFed's QE policies. Theirs promotes credit reinforcement. The American method promotes hyper inflation, engages in bank sector welfare, and supports criminality. See Bloomberg Business (HERE).
All is not so simple. The Chinese approach makes more sense, to be sure. However, unless and until the monetary system has a valid foundation (like with Gold & Silver), all efforts will be largely futile and a waste of time. The problem is the attack on capital and its destruction from monetary inflation, dispensed by all Western central banks from a direct role or participating role. The Chinese approach might work to shore up capital within the economy. But the Western approach has wrought extraordinary destruction to capital, and touches the Eastern Hemisphere intimately. The global economy is in a dangerous recession on a slippery slope.
◄$$$ NEW CHINESE 100 RMB NOTE OFFERS A GOLDEN COLOR SIGNAL… CHINA HAS ANNOUNCED NEW YUAN BANKNOTES DESIGNED TO FOIL THE PREVALENT COUNTERFEITERS... PAY HEED TO THE SYMBOL. $$$
The Chinese will release a new version of the RMB100 note in November 2015. Notice the image of the currency bill, and how the number 100 is gold in color. They could have chosen any of several colors, including red for Red China. The Chinese have a history of symbol usage, this time no different. They are likely giving a message. See BRICS Post (HERE).
The Chinese central bank announced it would issue a brand new version of the 100 Yuan bank note for release soon. The new bills will be loaded with next generation security features to deter counterfeiting and to enable easier reading for machines. It is the fifth set of bank notes introduced by the PBOC since 1999, the last change in 2005. The design of the new bank note will stay largely the same as the the 2005 series, but with enhanced security features. It is at the moment the largest denomination of the Chinese currency, worth only between US$15 and US$16. The world is filled like a sea with US$100 bills by comparison. The Jackass has handled a couple US$1000 bills back in the 1970 decade. The old version of the 100-Yuan note will remain in circulation following the new edition, the PBOC informed. Notice the golden 100.
◄$$$ INTERNAL TROUBLES IN CHINESE POWER STRUGGLE... POWER SUCCESSION COULD FEATURE A BATTLE BETWEEN FORMER LEADER JIANG AND CURRENT LEADER XI... THE LANGLEY ROLE IS NOT CLEAR, EXCEPT FOR DISRUPTION, VIOLENCE, AND DESTABILIZATION. $$$
The following is from a Hat Trick Letter with contacts overseas. Her words and my edits. My friend is Chinese, and reads their version of the Epoch Times publication. She stated that the Chinese Govt plans to do a series of devaluations. Her sources tell her that China is printing new 500 and 1000 RMB bills for that devaluation, because right now they only have 100 bills. So the rumor is China will do more devaluations, which will lower the value of RMB and keep their products cheap and in demand across global trade markets. She mentioned that President Xi is actually being attacked by Jiang, the previous Premier and his crew. When Xi came into power, he jailed a bunch of the Jiang crew. It is complicated. The Jiang crew brought down the Chinese stock market as a warning. They are in a battle against Xi, and want to exact revenge against the current President. The stock market hit might have been done with cooperation between the Jiang group and the CIA.
◄$$$ CHINESE PROPERTY DEVELOPERS HAVE BEEN ISSUING DOMESTIC BONDS… THINGS ARE LOOKING PROMISING IN CHINA'S DOMESTIC BOND MARKET, WHICH WILL FLOURISH IN THE COMING MONTHS. $$$
The US bond markets are collapsing, broken, propped, showing false value to the extreme. The Chinese bond market is showing surprising zest in an expansion. Nearly a dozen Chinese property developers have issued domestic bonds in order to acquire cheaper funding compared to what can be obtained in the offshore bond market. This news is given by credit ratings agency Standard & Poors. Domestic bonds offer many advantages, such as lower funding costs and zero risk from currency exchange, as bonds are denominated in RMB rather than the USDollar. Small and mid-sized developers prefer this method of funding, especially those with lower credit ratings, high funding costs, or limited access to banks, even poor connections to offshore bond markets. A remarkable CHY 70 billion worth of bonds have been issued this year. "Tapping the onshore bond market is positive overall on the developer credit profiles," stated S&P credit analyst Christopher Yip. See Asia Times (HERE). The Jackass believes it is absolutely certain that the Chinese can greatly expand their bond market in all directions, as in sovereign, corporate, and regional muni-type. The game is changing whereas the US bonds are seen as toxic, uniformly and universally propped by the rancid monetary trough.
◄$$$ CHINA'S CRUDE OIL FUTURES TO BE SETTLED IN YUAN... COORDINATION WITH SAUDI SITES IS CRITICAL, SINCE A POTENTIAL PRELUDE TO GULF OIL PRODUCERS ACCEPTING RMB FOR CRUDE OIL SHIPMENTS. $$$
Look out! Gold is not the first RMB priced futures contract in China. It is crude oil in a quiet but significant maneuver. China's crude oil futures contract is to be the country's first domestic futures product tradable by overseas investors. It will be priced and settled in Yuan, the central bank announced in late July. Overseas traders and brokers can open RMB-denominated accounts at designated banks for settlement, and the funds will be dedicated for this purpose, according a statement from the Peoples Bank of China (PBOC). Crude oil futures will be traded on the Shanghai Futures Exchange. Overseas investors can use foreign currency for margins, but the money must be exchanged into RMB for settlement, an interesting fine point distinction. Cross-border currency flow will be monitored and the futures exchange must report overseas trading every month for investors. China is a major oil purchaser with nearly 60% of its oil consumption derived from imports. The stage is set, almost in view, for the Saudis to accept RMB as payment for oil shipments. It is an inevitable development, especially after the IMF betrayal of China. The Saudis would welcome the channel to fill RMB reserves in a balancing act. The move would be a grand slap in the US face and a critical event in global finance toward displacing the USDollar. The Petro-Dollar is dead, except for impact to the Western fields and the crowd reaction from the Eastern stadium.
Many meetings between China and the Saudis have taken place in the last several months. It was a veritable lovefest sequence of conferences in mid-2014. They had planned major capital projects, lending facilities, cultural exchanges, and much more. The Jackass surmised last year that the two nations were also planning the RMB pricing of crude oil with Russian contributions, and RMB payments for Gulf region oil shipments. The pieces are coming into place and into view. The Saudis and the Gulf Emirates are waiting for the Yuan to become more standard in global finance, trade accounts, and banking. The time is fast approaching. The Saudis might be salivating for a formal connection between RMB and Gold, even possibly crude oil and gold. See Xinhua Net (HERE).
◄$$$ CHINA EXHIBITS A CAPITALISTIC ECONOMY, AS STARTUPS SHOOT UP IN RURAL CHINA, WITH MANY CHALLENGES REMAINING... THE LEADERS WISH TO MOVE TOWARD A MORE DOMESTIC DEMAND ECONOMY, LESS DEPENDENT UPON EXPORT TRADE... THEY STRIVE FOR STABILITY AMIDST MORE SELF-DETERMINATION. $$$
Startup businesses are springing up in China's countryside as the government encourages rural entrepreneurship. They do so with a string of favorable policies. The Ministry of Human Resources & Social Security recently publicized employment figures of 500 villages under supervision in 10 provinces. According to the ministry, about 13,000 rural laborers started their own businesses in the first half of 2015, up 3.1% annually. The southwestern Guizhou Province has recorded some 72,000 laborers who became their own bosses in the first half of this year, a solid 58% rise. The policy changes by the State Council in Beijing encourage migrant workers, college graduates, and discharged soldiers to return to their home towns for starting their own small businesses. The government promises quick business registration and inclusion in rural infrastructure development, roles normally set aside for the state. China appears to be embarking on a new phase of resilient growth, which relies on services, consumption, and innovation, and less on export. See Xinhua Net (HERE).
## RUSSIA ADAPTS TO ADVERSITY
◄$$$ RUSSIA'S GAZPROM DEFIES EXPECTATIONS WITH PROFIT GROWTH DESPITE SANCTIONS... THE WESTERN SANCTIONS ARE A DISMAL FAILURE, AS RUSSIA ACCUMULATES MORE GOLD AND DISCARDS USTBONDS IN ITS RESERVES... EUROPE IS BEING CUT OFF IN THE GLOBAL ECONOMY, SINKING FAST... GAZPROM IS A POWERFUL FORCE IN GLOBAL GEOPOLITICS, WHICH WILL NOT BE DENIED SINCE A VALID ENERGY PROVIDER WITH TRUE BUSINESS INTEGRITY... THE USGOVT ROGUES CONTINUE TO SHOOT THEMSELVES IN THE FEET WITH CELEBRATORY FANFARE FOUNDED IN SELF-AGGRANDISEMENT. $$$
Russia's largest gas producer Gazprom bettered analyst expectations by posting a 71% jump net profit in the first quarter. The Ruble weakness compensated for a decline in sales volumes to Europe. Natgas sales are priced in the elevated USDollar. Gazprom's prices for gas sold to Europe are technically linked to the price of crude oil, but with a time lag of several months. The lag has been beneficial to the Russian gas giant. The twisted insane sanctions resulted in a 16% drop in Gazprom's European sales volumes. Despite the obstruction, their export revenue was up 12% at RUB 543 billion (=US$8.42 bn). In other words, the EU is being cut out of the global economy as Russia marches ahead undeterred but slower. With the Ruble cut by half in value since last year, the gas giant profit rose to RUB 382.1 billion against RUB 223 billion in the same period last year. Profits in local terms are doing well.
The criminal warmonger genocide hosts in Washington who run the USGovt like a crime syndicate decided to add Gazprom's Yuzhno-Kirinskoye oil & gas field to its sanctions list against the Russian energy sector. They are the exceptional war lord criminal elite. The field was seen as key to expansion of the Gazprom-led Sakhalin-2 LNG plant, co-developed with Royal Dutch Shell, Japan's Mitsui and Mitsubishi Corp. Watch Japan defy the megalomaniacs at the United States helm. Gazprom took US$760 million and EUR 240 million in credit from Sberbank last month, plus a further $310 million from Gazprombank, without elaborating on the purpose of the loans. They are always conducting significant capital expansion. See Moscow Times (HERE).
◄$$$ CONTRAST TO RUSSIAN ECONOMY, WHICH DECLINED BY 4.6% IN THE SECOND QUARTER OF 2015... THE USECONOMY HAS BEEN STUCK IN SUCH DECLINE SINCE LEHMAN BROTHER EVENT... THE STEEP DECLINE IN COMMODITY PRICES HAS HURT RUSSIA... THE BANK COLLAPSE AND HOUSING COLLAPSE HAVE HURT THE UNITED STATES... LOWER OIL PRICES HAS SIMILAR EFFECT COMING TO THE US ENERGY SECTOR AND RELATED BANKS, THE DAMAGE IN PROGRESS. $$$
The clowns who write US-based financial rags are truly reckless and incompetent. The Russian Economy has indeed fallen, its GDP having contracted by 4.6% in 2Q2106 versus the same quarter last year. It fell by 2.2% in 1Q2016. It has sunk the most since 2009, while the ongoing oil market selloff threatens to put the country under deeper strain. The reckless analyst incompetence comes in two manners. First, the USEconomy has been stuck in a minus 4% to minus 5% recession since 2009, but its stat rats doctor the economic calculus to ignore price inflation. They call inflation to be growth. The damage to the Russian Economy is spread out amidst operating industry, while the damage to the USEconomy is from grotesque insolvency, a gutted labor market, and inadequate industry. Second, the extreme hits from the lower energy price has only recently begun to slam the energy sector, placing all banks holding their debt at risk. The debt is a vast wrecking ball scene. Let it be known, that Russia is enduring its first recession in six years after last year's currency crisis and a surge in inflation eroded consumer buying power. The sanctions imposed have given companies limited access to capital markets, although not choking it, as some wrongfooted biased analysts suggest. In contrast, the United States has been mired in a deep powerful recession for six years running, its most robust sector being weapons contractors. The big banks have essentially cut off commercial lending. See Bloomberg (HERE).
◄$$$ SAUDIS TURNING TOWARD RUSSIA FOR SOLUTIONS IN SYRIA... WATCH THE RUSSIAN INFLUENCE AS OIL BROKER GROW... THE UNITED STATES IS SET TO LOSE THE ENTIRE GULF REGION IN THE NEXT YEAR OR TWO... IRAN, SAUDI ARABIA, AND THE GULF EMIRATES WILL ALL JOIN THE EURASIAN TRADE ZONE AND DISMISS THE AMERICAN ECONOMIC DEATH MERCHANTS AND FINANCIAL FRAUD KINGS BENT ON TERROR. $$$
A Russian brokered thaw (even peace) in Syria might occur. The Syrian factions have gained the upper hand. The US objective is constant war, destabilized regimes, forced movement of gold reserves for the purpose of theft. The accidental killing of hundreds of civilians in Syria never seems to bother the US public. A Lebanese newspaper is reporting that Russia organized and supervised a meeting between intelligence chiefs of Syria and Saudi Arabia, in a brokered detente. It remains to be seen how successful, but it could well be the beginning of a massive realignment in the Middle East. See Russian Insider (HERE).
Many Western political analysts truly are blockheaded when it comes to perceptions about Russia in the entire Middle East. Some clients have inquired, wondering if Russia might someday acquire influence in the troubled region. Russia already has influence, and its impact is fast growing. Its role will become more important with the passage of time. Consider the following. Russia has major LNG deals with Qatar. Russia is greatly expanding commercial ties in Egypt. Russia is preventing Syrian conflagration, having interceded after the West committed chemical weapons deeds. Russia is preventing the theft of Syrian gold by Bush gangsters, by containing the situation. Russia is ensuring a Tartus naval port, which will continue to be useful on the eastern end of the Mediterranean, near the Greek straits. Russia is a guarantor of Iranian gas lines reaching the Med Seaports, whose construction will not be blocked indefinitely. The Russian presence in Middle East is the nail in the Petro Dollar coffin, as China will pay in RMB but the Gulf emirates will cooperate with Russia on pricing and projects.
Notice the key Saudi prince meetings in Kremlin and St Petersburg during the economic forum. Watch Iran join up with Russia, Saudi, the Emirates, and China as key elements of Eurasian Trade Zone. The Jackass firmly believes that China has convinced the Saudis to make a real detente with Iran, and enjoy a win-win situation. The United States will lose the entire region, due to its constant war, deep treachery, betrayals of leaders, endorsed terrorism, sales of toxic debt securities, theft of gold, and upcoming profound USTreasury Bond losses from emirate reserves. The entire region is in a panic on how to dispose of their $2.0 trillion in US$-based toilet paper assets. Like China, the vast nation of Russia is impossible to control by the West, especially after Putin helped the Kremlin to awaken to the reality of the Bolshevik Revolution and deep freeze executed by the Rothschilds.
◄$$$ AUSTRIAN ENERGY GIANT SEES NO ALTERNATIVE TO RUSSIAN GAS IN EUROPE... RUSSIA TO REMAIN FIXED AS KEY EUROPEAN GAS SUPPLIER DESPITE IRAN'S COMEBACK INTO THE ENERGY MARKET... ANY RESUSCITATED IRAN GAS OUTPUT WILL BE DEVOTED FOR DOMESTIC AND NEIGHBOR DELIVERY. $$$
Austrian oil & gas company OMV wants to expand its cooperation with Russia's Gazprom as part of its new strategy, claims its CEO Rainer Seele. The two firms will agree on an asset swap. Seele took over the top OMV post in July. The cooperative ventures with Gazprom include construction of two new gas pipelines via the Baltic Sea to Germany, known as Nord Stream 2, and asset swaps including the potential development of gas deposits in Siberia. Furthermore, the two companies could work together on joint projects abroad including with Gazprom's significant (but unheralded) oil subsidiary GazpromNeft.
CEO Seele defended the new Nord Stream project with claims that Europe needs additional volumes of Russian gas as a result of falling production in Britain, the Netherlands, and Germany. He boldly stated, "Europe needs Russian gas. I do not see any short-term or long-term alternatives. This should be decided by companies that import gas, not by politicians." Notice the bold confrontation of US-EU sanctions. He went further to comment on higher perceived risks in gas deliveries from North Africa, than from Russia. He emphasized the dead ends from both the Nabucco and South Stream projects which never materialized. Both were obstructed by the USGovt.
Iran was mentioned. The black sheep nation will return to the energy market. Seele does not expect Iran to become a stable nation or ample energy supplier easily. Any long-term production improvement in Iran will require significant investments. He does not anticipate any Iranian gas would come to Europe in the near future. He expects a recovery in Iran output by their gas industry will be directed at domestic consumption, with possible export to neighboring countries only. See Sputnik (HERE).
◄$$$ USGOVT AND RUSSIANS ARE NEGOTIATING THE ENDLESS WAR IN THE MIDDLE EAST IN SECRECY... THE USGOVT SEEKS COOPERATION WITH RUSSIA IN THE MIDDLE EAST, WHILE CONTINUING THE HOSTILITY WITH RUSSIA IN EUROPE... CHANGE IS COMING, DUE TO IRAN DETENTE... ISIS IS HIDDEN USMILITARY ASSET, MORE RECOGNIZED IN RECENT MONTHS. $$$
The USGovt is conducting secret talks with Russia on matters pertaining to Syria and the Middle East, done behind Europe's back. It has been reported that high ranking Russian and USMilitary officials are holding secret negotiations, designed to reduce tensions between Russia and NATO, according to a Spanish news website (Mil21.es), citing anonymous European intelligence sources. The secret talks are reportedly taking place in Northern Europe with the approval of both the Kremlin and the White House.
According to these key sources, the United States initially supported the ISIL militants in their attempt to overthrow the Syrian Govt led by Bashar al-Assad. At the same time, ISIL received significant financial support from the Arab states of the Persian Gulf, especially Qatar and Saudi Arabia, as well as logistical support from the Turkish Govt on the Syrian-Turkish border. However, the situation soon backfired on Washington. The United States became seriously concerned with the events in the Middle East after ISIL announced the creation of the Islamic Caliphate on the territories it had conquered and began to recruit jihadists from all over the world. The USGovt lost control of its asset, which it founded, trained, recruited, supplied, and led. The great change agent for the new constructive war talks with Russia is the Iran nuclear talks. They have made Israel unhappy, uneasy, and limited in intelligence data sharing with the US. Ironically, Washington finds itself in need of new allies and intelligence sources so as to keep the situation in the Middle East under control. The US will find itself alone and increasingly isolated.
Enter Russia into the White House situation room. Amazingly, Washington is reconsidering its strategy towards Moscow. It will be hamstrung by conflict in Europe vis-a-vis Russia, but cooperation in Middle East vis-a-vis Russia. The United States is a colossal contradiction, travesty, embarassment, den of lying thieves, and war crime hive. It is openly stated that the US considers the Middle East crisis much more important than Ukraine. The former is a major chess piece, the latter a severed minor artery. But the US creates constant crisis, violence, and mayhem in the Arab nations in their divide and conquer insane strategy. The Obama Arab Spring strategy has failed in every state applied, except for Libyan gold thefts of 144 tons. The ISIS (ISIL) guerrilla terror outfit is being recognized as a USMilitary asset, with which it might be losing control. See Sputnik (HERE). All beheading incidents are faked, with no blood squirting from the neck. They are a bad joke, for fomenting fear.
◄$$$ RUSSIAN CURRENCY AUTHORIZED FOR CIRCULATION IN CHINESE CITY, THE TREND GROWING EVEN WITH CORPORATIONS... MORE RUSSIAN AND CHINESE COMPANIES SWITCHING TO YUAN TRANSACTIONS... RUBLE TO YUAN TRANSACTIONS HAVE GROWN SIX-FOLD IN THE LAST YEAR. $$$
The Peoples Bank of China has officially authorized the Russian ruble to be used alongside the Yuan currency in the northeastern city of Suifenhe City. It is located inside China, on the Russian border. The statement was made by Jin Mei, deputy secretary general of the PBOC monetary policy committee. The decision is part of the benign development (their words) in switching bilateral trade operations from the USDollar to the Yuan and Ruble. The city is not minor or insignificant, but rather a major channel. The move to Ruble usage is more than symbolic. Suifeihe City is a main trade hub of Heilongjiang Province, which accounts for 80% of the export to Russia from the entire province. The Ruble has been used in shops and hotels that cater to Russian customers. No threat is seen imposed on the RMB as domestic currency, while economic ties and wider tourism will be encouraged. The bilateral currency flow is small but growing. In the first half of 2015, cross-border RMB-denominated payments between Russia and China reached $1.32 billion. In 2014, the Russian Central Bank agreed to a CHY 150 billion (=US$24.5 bn) three-year swap line with the PBOC. The facility created an additional possibility for Russian and Chinese banks and their clients to acquire access to Ruble and Yuan resources. See Sputnik (HERE).
A slew of Russian and Chinese companies have adapted more widely to RMB transactions. The volume of currency exchange operations of Ruble to RMB saw a six-fold increase in the 1Q2015 in comparison when compared to the first quarter of 2014. Total volumes are still small in magnitude. Bank accounts are also springing up in RMB inside Russia, as seen in cities like Vladivostok. More and more Russian and Chinese businesses are switching into mutual payments in the Chinese currency, claims Mikhail Oseevskiy who is deputy chairman of VTB Bank in Russia. Most Chinese companies are oriented toward transacting in USDollars, due to the significant volume of Chinese exports to the United States. However, the VTB branch in Shanghai is advising their Chinese partners on the benefits of using national currencies in mutual payments. He expects loans granted to Chinese companies, done in Ruble terms in the near future. See Sputnik (HERE).
◄$$$ RUSSIAN GAS NETWORK EXTENSION TURKISH STREAM HAS BEEN PUT ON HOLD, OR AT LEAST PENDING CERTAIN DETAILS TO BE WORKED OUT IN THE FINAL CONTRACTS... MEANWHILE, THE USGOVT HAS PRESSURED TURKEY TO SUSPEND THE PIPELINE PROJECT. $$$
Conflicting reports are circulating on the Turkish Stream project, which appears to have been put on hold. Certain key points are being negotiated. The Turkish media the Daily Sabah reported that Russia sent pipeline coordinates late, making it impractical for Turkey to approve the pact before scheduled ground breaking. A natural gas discount deal was also cited for the delay. The sweetener plan called for Turkey to build sections of pipeline that would run across its territory and receive a 10.25% discount on purchases of Russian natural gas. The Moscow press has reported the Russian Energy Ministry sent Turkey two proposals, which are pending and surely complex. One pertains to the construction of the first string, the second to the construction of all four branches. In early August, the Turkish Energy Minister Taner Yildiz was upbeat about the project. saying it was actually isolated from politics (his words). It is obviously in the political arena.
The USGovt has applied pressure to be sure, and NATO commanders will also exert their own brand of pressure. The French journalist Thierry Meyssan recently wrote that President Obama had called Turkey's president Erdogan on July 22nd, requesting suspension of the project. In a separate article, Meyssan also claimed that the Kremlin has announced that Erdogan and Putin will meet this autumn to discuss the contract fine points between their two countries. See News Doctors (HERE). At the same time, a nasty thorny factor is at work. Russian President Putin has given Turkey an ultimatim to halt ISIS support on Turkish bases. Russia is helping to defend Syria against ISIS attack, led by the USMilitary in hidden angles. See SGT Report (HERE). At risk is the narco business in the Turkish distribution point for NATO.
◄$$$ RUSSIA PLANS $2.5 BILLION GAS PIPELINE IN PAKISTAN... STATE-OWNED ROSTEKH IS SET TO ASSIST PAKISTAN TO ACCESS GAS FROM IRAN... NATGAS SERVICE TO INDIA FROM RUSSIA IS REQUIRED... SERVICE FROM IRAN TO CHINA IS REQUIRED... EXPECT CONTINUED CAPACITY EXPANSION, RATHER THAN HARMFUL CONFLICTS IN COMPETITION... PAKISTAN IS A CRITICAL ENERGY JUNCTION FOR THE EURASIAN TRADE ZONE. $$$
The contoversial Iran Gas Pipeline has been on then off, now finally on. It was interrupted in 2013 when the USGovt intervened with influence of Saudis, who cut off engineering support. The Chinese have revived the important pipeline project as funding agent, which is certain to improve Iranian ties in the region, as in with Pakistan. The United States will lose Pakistan to the Eurasian Trade Zone, especially after conducting hundreds of drone military attacks inside Pakistan, causing significant loss of civilian lives. The Russian state owned construction company Rostekh Corporation has been dubbed winner to build a 1040-km gas pipeline in Pakistan in 2017 at an estimated cost of $2.5 billion. It will be Russia's first large-scale project in Pakistan since the 1970 decade. The Rostekh construction of the pipeline will be done by means of both Russian and foreign financing, principally from China. No Western banks will be involved, due to sanctions. Therefore, when completed, no Western benefits will be won and surely firm Eastern linkage into the trade zone will occur.
In April this year China and Pakistan struck a preliminary agreement to construct the so-called Peace Pipeline from Iran to Pakistan. Teheran claims their section through Iranian lands, which is about 560 miles long, has already been completed. For many months Islamabad had held talks behind the scenes with China on the construction of the Pakistani section of the pipeline. Some analysts see a competition between Russia and China, but the Jackass sees yet more cooperation and mutual victories in trade. It should be noted, however, that the business daily Kommersant regards Pakistan as geopolitically important for Russia. The position in Pakistan must be strengthened, including in the gas transportation sector, since in the future the country is likely to become a fundamental route for transit gas to India. The Russian energy pipeline network must connect to India, and do so via Pakistan. Gas routes from Russia to India, and routes from Iran to China must be accommodated. Therefore, expect pipeline capacity expansion and more complex networks, rather than harmful interference in competition. China will clearly seek gas supply from both Russia and Iran, having a huge appetite. See Russia Beyond The Headlines (HERE).
## BOND BUST & CENTRAL BANK CHAOS
◄$$$ QE ABUSE BY THE USFED AND STEEPED LIES ARE CENTERED ON VOLUME AND CERTAIN REPO WINDOWS TO DISGUISE HUGE VOLUME OF BOND PURCHASES... THE ENTIRE BOND SYSTEM IS IRREPARABLY CORRUPTED... THE REPO WINDOW HIDES QE EXTRAS WITH NAKED BOND SHORTING LINKED TO A $1 TRILLION EXTRAVAGANZA THAT RECEIVES ALMOST NO PUBLICITY. $$$
The abuse is laced all through the USTreasury Bond market. To begin with, JPMorgan is on the hot seat, the object of some unwanted attention since it has become known that the venerable crime syndicate hive had sold over twice the total USGovt bond issuance in its worldwide offices. At one point in 2013, the Jackass came to learn that from past data, almost $4.5 trillion in USTBonds were sold by JPMorgue when only $2.2 trillion had been issued formally. Some foreign nations like Italy had been caught using each sovereign bond serial number twice in sales. These big banks never pay for their crimes, as they repeat them in other forms. Since JPM is the official USFed market agent, no consequence in criminal charges. It is given praise and more bond redemptions.
Focus on the Reverse REPO, which is highly innovative from two angles. Normally the USFed requires collateral to be placed at the REPO window, from companies seeking cash infusions on a temporary basis. Sometimes the USFed announces a ripe volume of Reverse REPO infusions into the system. They occasionally attract bad attention, but it wanes with the next fiction on strong markets and recovering economies, or even debate among fools who anticipate official rate hikes. The USFed uses the Reverse REPO to hide some of its QE volume. It is concealed QE volume, part of the biggest lie in US financial history since the USFed has generated multiple $trillions in hidden channel support, massive gushers. The key is no collateral placed on the opposite side of the window. It is neither stimulus nor minor in volume. The central bank helm is managing a gigantic volume, hidden in numerous ways. The John Q Public is none the wiser, reading the controlled fiction in financial press publications, about wondrous stimulus. In reality, QE kills capital and assures an economic collapse. It is happening before our eyes.
The related other side of the table features the Failures to Deliver on USTreasury Bonds. The Wall Street Journal and New York Times report on the phenomenon, but quickly move off the topic. To have a significant figure of undelivered USTBonds speaks of more deep criminality. It indicates counterfeit or naked shorting by Wall Street banks. They have found a way to bring in liquidity to their broken insolvent big banks, selling USTBonds they do not own, receiving the funds into the corporate treasuries, improving handsomely their cash flow, never to deliver on the product. The buyer is often none other than the US Federal Reserve, which does not force prosecution for counterfeit or bond fraud from its vassal bank accomplices in the crime of counterfeit. Other buyers must wait, since no penalty is meted out for violations. The result is a fancy pants infusion of big $billions into the Wall Street banks with no costs associated. One must wonder how they hide the funds within their balance sheets, 10-Q filings, and quarterly statements. Probably they do so by mixing it in with their ample busy narco funds within New York money center banks.
The USFed has been also concealing its QE volume by export. They have arranged since 2012 to create a group of secondary nations for second sourcing gigantic USTreasury Bond purchases. The source of funds is both Dollar Swaps for the USFed to buy USTBonds at arm's length in Europe, but also dumped Chinese USTBonds from their reserves. Some Russian held USTBonds might also be in the mix. The nations are the BLICS nations, namely Belgium, Luxembourg, Ireland, Cayman, and Switzerland. The latter is not a small nation, but probably helps to manage the slush funds from the Basel fortress. The Belgium location is important as seat of the European Commission and Parliament. The BLICS have invested in over $800 billion in USTBonds since mid-2012, almost equal to the USFed itself on its stated (lies for sure) QE volume. The official USFed understates the true QE volume by at least two-fold. Add in the derivative contract coverage, and the Jackass believes the true QE volume is perhaps 10x to 30x greater. It is an end game signal for Zimbabwe style monetary policy with grand grotesque rupture.
◄$$$ FAILURES TO DELIVER IN USTREASURYS SIGNALS BREAKDOWN AS WELL AS NAKED SHORTING ABUSE... WALL STREET FIRMS FUNNEL IN FREE MONEY WITHOUT CRIMINAL CONSEQUENCE, TO TUNE OF $40 BILLION PER DAY. $$$
The gimmicked rigged corrupted USTreasury Bond market is currently cruising along with about $40 billion Failures to Deliver on a daily basis in the bonds. This is a veritable bonanza for the Wall Street firms, probably London and Western European banks as well. It is free money, and disguised QE volume which totals over $1 trillion per month in magnitude. Yet the counterfeit receives very little publicity, since it provides ample cash flow for the broken criminal banks. Think over $1 trillion per year in free cash flow to the big broken banks. Compare to the minor $40bn per month admitted by the USFed, even the other $40bn per month by the BLICS nations in exported QE. The Failures to Deliver is 12 to 25 times larger in volume, surely hidden QE by any other name.
The USTBonds are not being bought by legitimate investors, while the USDollar is rising. At the same time, the globe is liquidating the USD-based derivatives. Doing so is leaving them with little USD general exposure. The enormous $40bn in failures to deliver come from naked shorting, principally by Wall Street banks in league with the USFed. They have found a sweet channel for pushing up liquidity via fraud, of course with full impunity. It is linked for sure with both QE and the Reverse REPO angle, to complete the loop. The USFed shoves money into the system, which finds its way to the big banks via fraudulent naked bond shorting. There is no demand outside QE of substance, except maybe for Japan. See the DTCC (HERE).
DTCC's Fixed Income Clearing Corporation serves as the clearing house for markets that trade in USGovt securities. Assume that a firm fails on a $50 million position on which it is owed $50.1 million. If the Target Fed funds rate the previous day was 1%, then the fails charge will be 2% per year, to be applied to the $50.1 million total value of the trade. The resulting charge for the firm would be $2783 for that day. It is a mere pittance, a 2% fee per year for the theft which retains 98% of the funds gratis.
◄$$$ JUNK BOND MARKET JUST BLEW UP... THE DISRUPTION TRIGGER WAS THE RMB DEVALUATION, EVEN THOUGH USTREASURYS SEEM CALM. $$$
No tipoff is offered by the US Treasury market, which remained relatively sanguine if not calm. The risky end of the bond spectrum where the junk bond market gags and squirms, it just blew up spectacularly. At the top of the blame list was the devaluation of the Chinese Yuan. It caught the corporate bond markets by surprise. The result was a sharp rise in yields, driving up bond spreads. The USFed removed risk from USTBonds but not from the rest of the bond market. Regard the effect of the Black Hole. The chart below is for yields at the riskiest end of the junk bond market, those bonds rated CCC and below. These bonds have been selling off over the past 12 months, while their yields more than doubled from less than 7.9% in June a year ago to 16.2% by last week. It is already being called a massacre. See Wolf Street (HERE).
◄$$$ SINCLAIR BELIEVES THE CHINESE CURRENCY DEVALUATION BLOCKS THE USFED INTO NO ACTION, A BLIND STUCK CORNER... CHINA HAS OBSTRUCTED ANY POSSIBLE USFED RATE CUT... A CURRENCY WAR HAS BEEN TRIGGERED BY CHINA, TO BE JOINED BY THE BRICS ALLIANCE NATIONS... THE KING DOLLAR IS AT RISK OF EXTREME RISE (THEN DEATH)... SOON THE HIGH USDOLLAR VALUATION WILL BE CALLED A GRAND PROBLEM... WATCH THE EMERGING MARKET DEBT IN USD TERMS, AT HIGH RISK. $$$
Jim Sinclair makes a great point. "The Chinese move certainly argues against any rate hike in the United States. In fact, the Yuan has risen over the last 5+ years, which has been desired by the US. I can only assume a devaluation is not desired. Any further devaluations can be viewed as against US desires and a direct shot back at the IMF & Friends. Though the devaluation is much smaller than the Swiss earlier in the year, losses into a very levered and illiquid global market will need to be absorbed. How this is done will be interesting as China just issued margins calls on many markets. China also has made capital flight more difficult recently, as some of the world's hot real estate markets will (already are) feel the pinch. Again, remember the backdrop is a very illiquid world right now!
China has lowered rates and eased monetary policy several times recently. They have outlawed short selling and done whatever they could to stem the meltdown in their markets to no avail. Devaluing [the currency] is the next logical choice. Already we see the bandwagon of reaction where Russia, India, and Thailand are all considering devaluations of their own, the currency war is going into overdrive. This is not so much about currencies as it is about market share of trade. The problem is this, the global pie of GDP and thus trade is beginning to shrink. Liquidity (remember the IMF recently warned of this) is tightening everywhere which means cash flows are shrinking. The ability to meet debt service requirements are becoming more difficult in a world saturated in debt." Watch all devaluing nations are targets of special hidden American terrorism, a process well along.
The emerging market debt is denominated in USD terms, and is rising sharply. It cannot be financed. The Eastern nations with their gaggle of Emerging Market members can default on USD debt, and kill the USDollar which is tragically caught in a high wire act. The East can deliver a counter-attack to the United States by defaulting on its debt. The rising USDollar risk is finally in full view. Look for the USD to rise further, thus removing all oxygen from its gills as it enters air way too high and thin for commercial breathing purposes.
Last month the Jackass saw a movie of no distinction, cannot remember the name. It had a clever plot. In the story a villain grabbed victims to secure them, cast shackles on the leg, and attached it to a large group of helium balloons. The person rose to the extreme heights, where he suffocated from lack of oxygen and died. Eventually the balloons popped from the pressure differential, and the dead body fell to earth. The Chinese took a rising balloon with the King Dollar tied aboard, and added some more balloons. Other nations will contribute another balloon to fasten. So far the moron analysts in the West have yet to conclude a rising USD can result in death. It will, which is precisely the Jackass forecast. The USD will rise and rise, then vanish from lack of oxygen. It must be replaced with something more grounded, which is acceptable in trade payments by producing nations. The grounded replacement will suffer a sequence of devaluations, the ticket to the US-3W.
◄$$$ KEY POTENTIAL SIGNALS OF USTREASURY BOND MARKET BUSTING ITS GORDE, BREAKING ITS SEAMS, THE WINDOWS BROKEN, THE PLATFORM LISTING BADLY, AND WALLS SHATTERING... THE POWERFUL BREAKDOWN OF THE USTBOND MARKET IS EXTREMELY CLOSE IN OCCURRENCE. $$$
- Massive foreign dumping of USTBonds from banking reserves
- High QE volume suddenly admitted by the USFed
- USTB derivative accident with $billions suddenly lost, maybe over a $trillion
- London bankers in a panic in secrecy with urgent meetings
- Ridiculous side market rates like REPO or Dollar Swap, like badly negative
- Absurd distorted data on TIC Report for major nation USTBond holdings
- Pressures suddenly from foreign central banks stating they can no longer maintain QE coordination, since harmful and even ruinous
- Struggles for foreign banking systems to keep major banks afloat
- Discussion in the open for return to Gold more widely held in banking system reserves, as a method for recapitalizing the banks
- Volatility never seen before in several sovereign bond yields
- Complaints that the high USD exchange rate is crippling the world economy
- Evidence that the high USDollar has led to an Emerging Market debt crisis
- A strong move up in the USTBond credit default swap
- Wild volume reported for Interest Rate Swap contract tied to USTreasurys
- US Stock market swoon then decline, with fast money leaving the US financial markets generally.
Rob Kirby is both colleague and friend, a savvy bond veteran, a derivative expert, and a veritable genius. He wrote, "Not quite sure if you have grasped what is involved with all the rest of the world abandoning their USTreasurys. This would involve the British, French, German, Japanese, Swiss, Dutch, Canadian banks dismantling their derivatives books, where their swap books of untold tens of $trillions are all wired to USTreasurys. Scuttling the USTreasury complex would imply insolvency, simultaneously across the board, of all these nation's banking institutions and very likely the governments of these countries. Not so sure this is going to happen anytime soon." The complexity of the current financial platforms and foundations is complex, interwoven, and longstanding. A grand collapse is in store, since the USDollar is being rejected, determined as toxic, which will dismantle the USTreasury Bond structures. Think nuclear devastation at a financial level, including the derivative cables, floating mass of disks, and whirling dervishes. The Western derivative books will not be so much dismantled as collapse gradually with growing momentum and increased visibility.
◄$$$ BLACK HOLE & FINANCIAL PHYSICS CAN BE USED TO DESCRIBE THE USTREASURY BOND MARKET... IT SUCKS IN WORKING CAPITAL AND FOREIGN CURRENCIES, LEADING TO A CLIMAX EXPLOSION... A VICIOUS CYCLE CANNOT BE STOPPED... THE FINANCIAL SECTOR NEVER LEADS A HEALTHY ECONOMY, ALWAYS FOLLOWS AND SERVES... THE USDOLLAR IS LATE IN THE END GAME. $$$
The USTreasury Bond market should be viewed as a grand black hole. It is the last asset bubble before USGovt debt default with restructure. Many observers of financial markets believed the US housing market was the final asset bubble. The Jackass warned several years ago, that NO, the last great asset bubble would be the grand USTreasury Bond market. Enter financial physics and truly powerful forces. The USTreasury Bond is acting like a gigantic financial black hole. All other bonds are being forsaken in order to hold the sovereign bond from the protected exceptional nation, in addition to many foreign currencies being forsaken in order to hold the USDollar in safety. The USTBond black hole draws in global funds with a powerful deceptive force. The QE is enforced while US$-based financial markets are supported with other grand magnificent bubbles like the US Stock market. The images below of the astronomical black hole and financial black hole are stark. The financial version also resembles a storm drain.
The black hole is made evident in the movement of other bond types. Other bonds are sold while USTBonds are bought instead. The corporate bonds are being sold in weak markets, in favor of moving the funds into the perceived safer USTBonds. The high yield corporate bonds (aka junk bonds) are in near ruins. The panicky sellers are moving the funds into the perceived safer USTBonds in a torrent. Foreign nations are moving their weaker currencies into the supposedly safer USTBonds also. The dismantled Petro-Dollar derivatives are forcing redemption of the huge contracts in USDollar terms, thus providing an artificial demand for USDollars at a time of weakness in foreign national economies. The Emerging Market nations have slower demand from the broken Western consumer economies. The foreign financial firms and corporate entities are moving funds into the supposedly safer USDollar, adding to the decline of their native currencies.
A vicious cycle has emerged, where financial factors related to the Petro-Dollar collapse push up the USD exchange rate, while foreign nations dump their own currencies in favor of the deeply damaged decaying USDollar which can only be described as toxic with an African basis of integrity. Conclude that a wide variety of economic capital is being attracted into USTreasury Bonds. It is a black hole, the climax of the Fascist Business Model which puts emphasis on the big banks. They never faced the consequence of their criminality in bond fraud, contract fraud, counterfeit fraud, and even murder to silence those who could report on the derivative losses, the Maastricht violations, and the dirty Russian money. The nexus of most crime has been London and New York. Vast bank liquidations will accompany the GLOBAL RESET, thus its resistance.
◄$$$ ATLANTA FED'S LOCKHART BELIEVES THE ECONOMY IS READY AND IT IS AN APPROPRIATE TIME FOR A RATE HIKE… MORONS RULE THE ROOST AT THE MONETARY ASYLUM… THE ECONOMIC DECLINE IS PAINFULLY EVIDENT IN SHARP DECLINE OF MONEY VELOCITY (OFTEN REPORTED)… SEEMS LIKE USDOLLAR DEFENSE AND NOTHING MORE. $$$
Atlanta Fed Governor Dennis Lockhart is a bona fide moron and economic fool. He actually went public to herald the possibility of a September interest rate hike at the USFed. He perceives a sturdy economy in recovery, surely influenced by drugs or alcohol or deep delusion. The Taper Talk was settled in late 2013. The USDollar appears to in the process of a perverse defense via rubbish nonsensical talk about a rate hike which would quickly destroy the entire USTreasury Bond market and derivative complex in support. These people in charge of the monetary asylum are corrupt at best charlatans and at worst fools, surely dispensing propaganda in support like from a toxic garden hose.
Reality bites. The USFed seems incapable to even notice the deep economic damage doled out by the falling crude oil price, and fallout effect on exposed big banks. The USEconomy is locked in a depression. The only healthy sector is military weapon business tied to endless war theaters. Despite non-existent economic growth, no evidence of wage pressures, collapse in commodities prices, and a strong USDollar damaging the domestic manufacturing sector, the monetary mavens talk about a huge stress agent introduced to the system in a rate hike. These are total hacks! The decline in business shipments and the horrendous decline in new orders is not reassuring even to the quacks who bought Economics titles in crackerjack boxes at Harvard, Columbia, and UChicago.
◄$$$ SMARTER HEADS DO SPEAK OUT AT THE USFED REGIONAL OFFICES... ALWAYS SMARTER ARE ST.LOUIS FED ANALYSTS, THE BRAIN CENTER FOR THREE DECADES... ITS VP WILLIAMSON CITES NO EVIDENCE QE HAS BOOSTED THE USECONOMY... HE FINDS FAULTS IN MAJOR POLICY ACTIONS ACROSS THE BOARD. $$$
The Federal Reserve research staff is putting some of its post-crisis actions under a magnifying glass, with conclusion of no success. In a white paper dissecting the central bank's actions to stem the financial crisis in 2008 and 2009, vice president of the St. Louis Fed Stephen Williamson finds serious fault with three key policy tenets. 1) He believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite, such as cost structure increases. 2) He believes the forward guidance given by the USFed on its intentions has instead been a muddle of broken vows that has served only to confuse. Finally, 3) he asserts that Quantitative Easing, or the monthly debt purchases that swelled the central bank's balance sheet past the $4.5 trillion mark, have almost no connection to any economic improvement.
Williamson wrote, "All of the research is problematic. There is no way to determine whether asset prices move in response to a QE announcement simply because of a signaling effect, whereby QE matters not because of the direct effects of the asset swaps, but because it provides information about future central bank actions with respect to the policy interest rate. There is no work, to my knowledge, that establishes a link from QE to the ultimate goals of the Fed inflation and real economic activity. Indeed, casual evidence suggests that QE has been ineffective in increasing inflation. For example, in spite of massive central bank asset purchases in the United States, the Fed is currently falling short of its 2% inflation target. Further, Switzerland and Japan, which have balance sheets that are much larger than that of the U.S., relative to GDP, have been experiencing very low inflation or deflation."
In other words, the market reaction in anticipation of the Pied Piper effect rules the day that brings about disaster, not the actual bond purchases. He delivered a harsh astute damning critique of Bernanke's response to the crisis. He has slammed the claimed link between QE and support of its prime directives, namely low inflation, low unemployment, and bolstered economic activity. He calls the QE results at best mixed in his words. Since he cites a GDP of 2.5%, one must ignore the rest of his argument since citing delusional fictional gimmicked growth rates is pure nonsense klaptrapp. One should know that QE is a sanctioned backdoor bailout of Wall Street banks and a Zimbabwe window to cover horrendous $trillion USGovt debts. Finally some solid criticism of the Bernanke Fed disastrous period has begun. See Zero Hedge (HERE) and CNBC (HERE).
◄$$$ THE FED WANTS TO RAISE RATES, BUT NOT WITHIN A RESPONSE TO EXTERNAL EVENT IN CRISIS... DELUSIONS REIGNS SUPREME, AS THE CRISIS UNDER THEIR FEET IS NOT WELL RECOGNIZED... A SCUTTLE EVENT MIGHT BE IN THE PLANNING STAGES, BUT WHICH WOULD ELIMINATE THE POTENTIAL TO BLAME RUSSIA, CHINA, SAUDI, OR IRAN FOR THE US-CENTERED COLLAPSE. $$$
Federal Reserve policy makers are hoping, even praying, that no unexpected domestic development or international crisis intervenes to prevent them from taking the first baby step to normalize interest rates at the Sept 16-17 meeting. They are delusional idiots. USFed officials point to a number of positive signals: the unnatural state of a near-zero benchmark rate which must end; the potential risk of financial instability which must end; an improving labor market which is not true; diminishing headwinds which is not true; and expectations of 3% growth just over the horizon which is delusional. Fed Chairman Janet Yellen, usually considered a member of the Fed's dovish faction, sounded determined to act when she testified to Congress last week. "We are close to where we want to be, and we now think that the economy cannot only tolerate but needs higher interest rates," Yellen said during the Q&A. Needs, as in the patient needs his medicine. This lady is a quack. The USFed is acutely fearful of being blamed for killing the USTBond market, but it is way too late. It is fractured. The USFed is deadly afraid of being blamed for killing the USEconomy, but it is way too late. It is broken.
That unforeseen event has arrived, leaving most central banks with a stark choice. They can let the deflationary crash run its course at the risk of blowing up the $quadrillion of interest rate, credit, and currency derivatives hidden on bank and hedge fund balance sheets. Or they can push interest rates into negative territory pretty much across the developed world. Since option number one carries a statistically significant chance of ending the modern financial era it is absolutely unacceptable to Goldman et al, and is thus a non-starter. That leaves only the second option: more of the same QE excess, but bigger volumes. Therefore the central banks will panic again. The USFed will not raise rates, but rather increase QE volume 10-fold. The USFed effectively doubled the QE volume by enlisting the BLICS central bank participation. The great global USTBond diversified dump will force the USFed to soak up the discarded bonds. It is possible the USFed will hike by 25 basis points but increase QE by triple officially. Countries that retain some control over their monetary systems will see their interest rates fall to zero and lower, while those that do not will be thrown into some kind of new age hyper-inflationary depression. Do not expect 2008 all over again, but something much stranger, much bigger, much more lethal. Expect a possibleWestern banking system collapse and emergency Reset to recapitalize with gold bullion as a reserve asset. Then comes a possible $3000/oz gold price by order and consensus agreement. It will be just the start. These are proposed concepts rather than firm forecasts.
◄$$$ VON GREYERZ PREDICTED IN TELEVISED DEBATE THAT SWISS NATIONAL BANK WOULD SEE STAGGERING LOSSES OVER A YEAR AGO... HE NOW WARNS THE USFED WILL EXPERIENCE MASSIVE LOSSES AS WELL... THEIR $4.5 TRILLION TOXIC BALANCE SHEET IS AT DEEP RISK, HEAVILY OVERWEIGHTED IN USTREASURYS... THE GREAT DEBT WRITEDOWN IS NIGH. $$$
Egon von Greyerz manages Matterhorn Asset Mgmt in Switzerland. He confidently stated, "Humpty Dumpty, in the guise of Greece, just had another big fall. I can guarantee you that all the King's horses and all the King's men could not put Greece back together again. The IMF, an important part of the Troika, made clear that they are not backing the attempt to give Greece a few more months of life support. If the IMF does not back support for Greece, neither will Germany. So the whole rescue will fail. But it is not just Greece that cannot be put together. It is the whole world. The whole world [financial structure] is broken and it cannot be mended. How can anyone expect the politicians, who created a total disaster in the world economy, to ever put it back together again? Politicians do not have a clue how to run a country, much less how to solve the world's problems.
In connection with the Swiss Gold Initiative last year, I took part in a televised debate in which I pointed out to a former president of the Swiss National Bank that the SNB was risking losing tens of billions of Swiss Francs or maybe even 100 billion Swiss Francs on its currency positions. This central banker called me a conspiracy theorist and tried to ridicule me during the debate. Well, this week the SNB just announced that they have lost 50 billion Swiss Francs in just the first six months of the year. That is over 8% of Swiss GDP! Since the Swiss National Bank still has the long Euro and long Dollar positions, they could easily lose 100 billion Swiss Francs. That would be the equivalent of the Fed losing a staggering $2.7 trillion. But it would not be unlikely for the Fed to experience that much in losses since the $4 trillion in assets they hold can never be repaid. Those kind of massive losses would be incredibly destabilizing for the global financial system." It is coming, like harvest follows the growing season, like storms follow sunshine, like night follows day. See King World News (HERE). Massive USFed losses are coming, along with massive US bank account holder losses, and massive US stock account losses. The King Dollar has lost his throne, lost his rule, lost his robe, lost his scepter, lost his phallus, and lost his prestige. Game over.
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.