## GILDED QUOTES
“Our job is to control exactly what people think.” ~ Zbigniew Brzezinski (Trilateral Commision leader, architect of global fascist state known as the New World Order)
“I hope that the world will choose a democratic world order, a post-West one, in which each country is defined by its sovereignty.” ~ Sergey Lavrov (Russian foreign minister)
“[Regarding whether Trump is deeply dependent on the goodwill of bankers still for his business activities,] we don’t know. As Soros partially funded one of his casino hotels and maybe more, as Adelson partially funded his campaign, as key Zio Bankers appear to fund his needs, plus his son-in law is a good friend of nutter Yahoo and the Mossad thugs, any thinking person is smelling the roses here. When you have a mercurial stink pot like the Fed and Zio Banks, unless you are mindlessly naive, it merits smelling possible contamination. This Trump is no Nelson Mandela. I will support and credit him for each good action, but hold him at arm’s length also. Trump is very much a work in progress study.” ~ John (anonymous member of British House of Lords)
“The G-20 should complement this growth recovery programme with a plan to build a cooperative monetary system that reflects emerging economic conditions. This new system is likely to need to involve the Dollar, the Euro, the Yen, the Pound, and a Renminbi that moves towards internationalisation and then an open capital account. The system should also consider employing gold as an international reference point of market expectations about inflation, deflation, and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.” ~ Robert Zoellick (World Bank, November 2010)
“A Nixon Era memo was released a few weeks ago. It stated that the United States would go off the Gold Standard, but also, the futures markets would be set up to cause volatility so as to take away incentive for hoarding the precious metals. The entire COMEX was created to do exactly what the memo described. The memo was from over 45 years ago.” ~ Donald Pato (colleague on Team Jackass)
“Suppose a central bank is worried about rising inflation and decides to raise interest rates. But the government has a huge debt with a short maturity. By raising short-term interest rates, the central bank raises the debt service burden for the government. At some point, people realize that the government cannot support the debt burden without going back to the central bank to print more money. This is a tipping point, and then you are in hyper-inflation.” ~ William White (former chief economist of the Bank for International Settlements, except the US has been in this situation already for six years)
“The hardest power struggle of all, though, will be over control of the Federal Reserve Board. On that front, the announced resignation last week of two top Fed officials, Board of Governors member Daniel Tarullo and top Fed lawyer Scott Alvarez means that, when combined with existing vacancies Trump will be filling, the Trump regime can now take effective control of the Fed. The last President to pull off a feat like that and not get assassinated was Andrew Jackson, but Trump has the backing of the US military so he might just pull it off. Since the globally traded USDollars have been shifted now towards a system centered on China, it increases the chances that the US will be issuing Treasury Dollars separate from International Dollars, possibly within a few months. This will also, as mentioned at the top of the article, mean a total revamp of the international financial and political architecture. However, this will have to wait until the power struggles in the US and China are completed. The next big moves on a global level will probably be seen in March and not during this month. On a final note, we are hearing that, behind the scenes, the Chinese and Americans are cooperating in the fight against the Nazi faction of the Khazarian mafia.” ~ Ben Fulford
“For China, gold’s strategic mission is to support the internationalization of the renminbi and be a strong support for China’s goals of becoming an economic power and realizing the Chinese Dream. Gold is the only product that holds properties of a commodity and currency. It is the most trusty asset on which modern fiat currency can be based. From a historical perspective, gold has played an irreplaceable role in times of financial and geopolitical crises and in protecting a country’s economic security. It is this unique nature and function of gold that give it a glorious and holy role to play during the revitalization of the greatness of the Chinese people and the realization of the Chinese Dream.’’ ~ Song Xin
“I received an email this morning from a respected precious metals sector and economic analyst who is warning that based on the indicators he surveys, the credit spigot was turned off shortly after the election. Year over year money supply growth has slowed to 5.4%. It had spiked considerably before the election. When money supply growth drops below 5%, that is when markets bust. The last time this occurred was 2007 when Bernanke tried to tighten a bit. We know what happened in 2008.” ~ Dave Kranzler
“Get prepared because we are going to have the worst economic problems we have had in your lifetime or my lifetime. When that happens a lot of people are going to disappear. In 2008, Bear Stearns disappeared. Bear Stearns had been around over 90 years. Lehman Brothers disappeared. Lehman Brothers had been around over 150 years. A long, long time, a long glorious history they have been through wars, depression, civil war. They have been through everything and yet they disappear. So the next time around it is going to be worse than anything we have seen. A lot of institutions, people, companies, certainly governments and maybe even countries are going to disappear. I hope you get very worried. When you start having bear markets, one bad thing happens and another bad thing happens, and these things snowball. Just like in bull markets, good news comes out then more good news comes out, the next thing you know you are five or six or seven years into a bull market. Well bear markets do the same thing. So we have a lot of bad news on the horizon.” ~ Jim Rogers
“For 2016, international merchandise trade statistics point out China has net imported roughly 1300 tons of gold, down 17% from 2015. The importance of measuring gold imports into the Chinese domestic gold market, which are prohibited from being exported, is to come to the best understanding on the division of above ground reserves in and outside the Chinese domestic market.” ~ Koos Jansen (Bullion Star)
“[A staggering] $600 billion in the United States for instance goes into the repurchase of company stock, whereas before, investment in the real economy might have been a more lucrative choice.” ~ Bill Gross (refer to stock buybacks by corporations)
## FRAUD LIST WITH CRIME SCENE
◄$$$ THE USGOVT HAS MORPHED INTO A GIGANTIC GROUP OF CRIMINAL ORGANIZATIONS, AT TIMES FEATURING INTERNAL COMPETITION… THE ONSET OF THE FASCIST BUSINESS MODEL SINCE YEAR 2001, WITH FULL SPECTRUM DOMINANCE, INVITED THE CRIMINALITY SINCE NO PROSECUTION HAS BEEN REMOTELY IN EFFECT… THE REALITY IS THAT COMMISSIONS ARE USUALLY CREATED IN THE USGOVT TO COVER UP THE CRIME AND TO BURY THE EVIDENCE… TRUMP HAS A CHALLENGE TO SHED THE LIGHT OF JUSTICE ON ANY CRIME SCENES. $$$
JACKASS WISH LIST FOR INVESTIGATIONS
1, Voter fraud, including Diebold machines
2. Hillary treason, racketeering, and pedophilia
3. Vaccine poison & cancer agents
4. Bank heist on 9/11, Pentagon attack of USArmy Accounting Office
5. Gold audit, location of Fort Knox gold
6. Chemtrails by Bush Group
7. Fracking contamination to US water table by Halliburton
8. Israeli defense contract thefts
9. Kickbacks & campaign fraud for defense contracts
10. Pedofilia, child sex rings, child murders by elite
11. Derivative involvement in USTBond market corruption
12. Involvement of Exch Stabilization Fund in most global financial markets
13. USGovt role in Afghan heroin production
As per item #13, consider DouglasM, a former USMarine with direct experience in the opium fields. His account is an eye-opener. He was kind enough to write to the Jackass a note to recount his first-hand experience. Let him tell about the USGovt official involvement in opium production. His note is taken verbatim. He writes. I wanted to comment with regard to opium production in Afghanistan. I worked there in 2004-2005, and was asked to participate in poppy Eradication program. It paid very well. However, nothing came of it beyond the few photo ops the officers took to depict US eradication of the poppy fields, which is complete farce as you are aware. The photos show the fields set ablaze by marauding drug police saving the world from the heroin scourge. Well, poppy patches are always set ablaze after the opium has been harvested from the plants, as it re-nourishes the ground among other things.
There was an article in National Geographic from the late 1980s about Afghanistan, where they described opium production in detail. Once the seed pods begin to mature, workers go through the fields making incisions on the round seed pods after the white flower has dropped. A milky white substance is exuded from the incision, which once exposed to the air, turns black. Workers then go through the next day scraping the gum from the pods and continue this process until they dry up. The opium gum is collected, placed in rectangular wooden forms, and sun dried into very hard blocks of opium. The size of the form determines its weight. Afghanis never had the knowledge nor chemicals to produce heroin. So the opium was shipped overland to places such as Turkey for refinement. Since the US invasion of course, they have trained and supplied the Afghanis with the expertise and chemicals. From a business standpoint, it is much more efficient. The USDept Homeland Security (DHS) was established as the main logistics company to move the heroin product. Their big planes were in and out of Kandahar Air Base like cars on a freight train. Of course they did carry US mail and packages our folks in country were sending and receiving. Some troops and civilian contractors did send minor amounts of Afghani hashish back to the loved ones, taking advantage of the fact that packages were never checked.
I am a Former Marine and have a wide and varied background. I am currently driving a flatbed tractor trailer, after deciding I would like to see the US and be paid for it. The job gives me the ability to gather intell, and I declare that things are certainly not right with the nation. As well, unfortunately driving the highways and by-ways has reinforced my notion that truly, the bulk of the population is fucking retarded.
◄$$$ BIGGEST ROBBERY IN HISTORY: HOW THE NAZIS STOLE EUROPE’S GOLD… TAKE A STROLL DOWN THE PATH OF THE LAST GREAT WAR… IT HAD MANY MOTIVES, OR ELSE BANK HEISTS WERE CONDUCTED DURING THE CHAOS. $$$
The Basel Boyz in Switzerland were busy during World War II. They worked with the Nazi High Command in stealing the central bank gold in one nation after another, most victims in Eastern Europe. The gold was sent to Switzerland, to the fascist high banker command center, which orchestrated much of the war effort. The coordination among the Basel Nazis and the London bankers, together with the US bankers, is well recorded. Such details in Western history have endured revision and deletion. No stolen gold has ever been returned. See the Univ Pennsylvania Wharton website (HERE). The 9/11 event was yet another fascist grand bank heist, conducted also with confusion. Some things never change, as the patterns remain the same, only the environment changes.
## GOLDEN NUGGETS
◄$$$ COST OF INSURING FRENCH GOVT DEBT AGAINST DEFAULT STANDS AT THE HIGHEST LEVEL SINCE 2013… THE PROBABILITY OF DEFAULT WITHIN FIVE YEARS HAS ALMOST DOUBLED IN FEBRUARY ALONE, ALTHOUGH A VERY LOW FIGURE… THE FRENCH BUST IS GUARANTEED. $$$
The cost of insuring French Govt debt against default rose to its highest level in more than three years. The angst over an unpredictable presidential race is reaching fever pitch with national riots in France, the EuroZone's second biggest economy. Five-year credit default swaps (CDS) on French Govt debt rose to around 67 basis points (=0.67%) according to data from Markit. That translates to about a 5.5% probability of a French default within five years, compared to 3.0% at the start of February. See Reuters (HERE).
It might not really matter what the cost of insuring French debt is, since the bust in France is a foregone conclusion. The German Bundesbank President Weidmann just kicked Draghi in his oversized testicles so hard that the arrogant Prince from the Euro Central Bank will not recover from the blow. Germany just said enough is enough, and will no longer work together on the EuroCB agenda. Prince Draghi will have to operate alone on his hyper monetary inflation game which has recently featured corporate bonds. It was a grand FU given from the German porch. The French nation is set for a collapse and catharsis event. After the meltdown and RESET, it will still have fine food, good hunting, and a beautiful city of lights. Its absurd welfare and pension state will fade away though. They might be the first nation in the EU to conduct a nationwide cleanup of its Arab Human Garbage dumped on the nation by Team Soros and the EU fascist commissioners.
◄$$$ SPAIN SETS A STRANGE PRECEDENT WITH FORMAL CHARGES MADE AGAINST ITS CENTRAL BANKERS IN COURT. $$$
First, Iceland, and now Spain has taken on the big bankers responsible for financial calamity. The country’s highest national court charged the former head of the Spanish central bank, a market regulator, and five other banking officials. At issue is a failed bank resulting in the loss of EUR millions for smaller investors. The case is a side show which will go nowhere and amount to nothing. Member central bankers take orders from the Euro Central Bank, and they are untouchable. See Activist Post (HERE).
◄$$$ THE WORLD’S FIRST BITCOIN BANK HAS OPENED IN THE AUSTRIAN CAPITAL OF VIENNA… IT EXCHANGES BITCOIN FOR EURO CURRENCY. $$$
The world’s first dedicated BitCoin bank has opened in the center of the Austrian capital Vienna. It is designed to make buying and selling BitCoin easier and safer than other personal face-to-face options. The digital currency outlet is owned and managed by a local Blockchain startup BitTrust and is named simply Bitcoin-Bank. Their ATM machines exchange BitCoin for Euro currency, and vice versa. Customers can also obtain information about the virtual currency. See the article from Hang The Bankers on SGT Report (HERE).
◄$$$ KYRGYZSTAN WANTS EVERYONE TO SAVE 100 GRAMS OF GOLD… ITS CITIZENS QUICKLY HAVE PUT 140 KG GOLD INTO SAVINGS DRAWERS. $$$
A landlocked nation wedged between China and Kazakhstan in Central Asia is embarking on an experiment with no precedent globally. The leaders are working to shift national savings from cattle to gold. Kyrgyzstan is one of the first former Soviet republics to adopt a new currency and to permit its free trade. Its central bank wants every citizen to diversify into gold. Governor Tolkunbek Abdygulov admits his dream is for every one of the six million citizens to own at least 100 grams (3.5 ounces) of the precious metal. The nation stands out in an odd way, as gold is its biggest export item. The central bank governor stated “Gold can be stored for a long time. Despite the price fluctuations on international markets, it does not lose its value for the population as a means of savings. I will try to turn the dream into reality faster.” In the two years that the central bank has offered bars directly to the population, about 140 kilograms of bullion have been sold and kept as household savings. See Bloomberg (HERE).
◄$$$ INCOME INEQUALITY HAS GROWN MUCH WORSE SINCE 9/11 AND THE INSTALLATION OF THE FASCIST BUSINESS MODEL… THE BOTTOM 50% OF AMERICANS ECONOMICALLY ARE IN COLLAPSE MODE… THE ABSENT GOLD STANDARD SPAWNED THE INFAMOUS FINANCIAL ENGINEERING, A GRAND FAILURE ON BOTH FRONTS, FROM A SOCIAL AND ECONOMIC STANDPOINT. $$$
In the United States between 1978 and 2015, the income share of the bottom 50% fell to 12% from 20%, the beneficiary being the top 1% in a grand sanctioned siphon. Such is not the case in other nations on the move. The privileged connected top 1% have seen their wealth double, while the disenfranchised bottom half have seen their wealth cut in half during the last four decades of financial engineering and absent Gold Standard arbiter. Speculative funds is readily available for the wealthy, while necessary funds are often denied for the masses. Capital formation is a lost science in the United States. In China, where a marked rise in income inequality has been noted, the bottom 50% saw their income go up by 401% during the same period. Even in developed France, a nation certainly in disturbance, the bottom 50% saw their income grow by 39% in these past decades. Therefore the United States stands out as the worst in income disparity trends. It is not a coincidence that the ugly trend is a side effect of the Fascist Business Model, or tremendous waste with military spending. See Market Watch (HERE).
## CRIMINAL BANKS IN DESPERATION & HERESY
◄$$$ A MARCH INTEREST RATE INCREASE BY THE USFED IS NOW SUDDENLY ON THE TABLE AS THE LUNACY CONTINUES… THE USECONOMY IS STUCK IN A VICIOUS RECESSION AND THE USDOLLAR IS ALREADY EXTREMELY OVERVALUED… THE HERETICS ARE DEFENDING THEIR INTEGRITY, BUT THEY HAVE NONE. $$$
The bond market has responded like monkeys on a leash to a speech last week by Fed Chair Janet Yellen. She gave hawkish testimony about an unexpectedly strong inflation print when speaking to the USCongress. Last week derivatives traders had priced at 42% probability that the USFed raises rates at its March 14-15 meeting, up from 24% on February 6th. The chair who speaks like a moron under a table full of false assumptions, mentioned that waiting too long to tighten policy would be unwise. Shivers! While traders are still pricing in only two rate hikes for 2017, expectations are starting to catch up to the USFed projections for three increases this year, a swing in market sentiment that risks driving USTreasury yields even higher. The economist fools cited strong consumer spending to help justify a rate hike. Heresy and stupidity abound. Consumption does not drive growth, but rather business investment. Besides, consumer spending does not cause price inflation, but rather central bank control of fast monetary growth.
The gaggle of banker and economist fools, driven by the Fascist Business Model, all overlook a vicious economic recession with no hint of recovery which has lasted over eight years. The USFed is stuck without options. The USEconomy is trapped in a terminal recession, whereby a rate hike would slow it down further. The US exports are already at risk from a high USDollar, whereby a rate hike would damage the export trade even more. The USFed is forced to defend the integrity of the currency due to deep damage done by QE monetary policy. Any rate hike rate would have to be reversed by hidden means like within the Reverse REPO mechanisms, which is what they did in December 2015 with a fake rate hike.
Benchmark two-year Treasury yields reached their highest level since late December after USDept Labor data showed the consumer price index rose 0.6% in January, the most since February 2013. Compared with the same month last year, costs paid by Americans for goods and services rose 2.5%, the most since March 2012. But the adjustments are the key, and falsification of the CPI index is legendary. The actual price inflation has been running between 7% and 10% for several years. The odds of a Fed rate increase in March have risen to 30% from 20% previously, according to a cadre of economists within the prestigious criminal Goldman Sachs Group led by chief shaman Jan Hatzius. These economists drink their own kool-aid and consume large tracts of federal feces called official data. They are the fascist bankers who act as uber-lords and high priests for economic dogma. See Bloomberg (HERE).
◄$$$ WALL STREET IS CAUGHT IN A LOOP, POURING MONEY BACK INTO THE OIL & GAS SECTOR… THINK DOUBLE DOWN IN VEGAS STUCK IN DESPERATION… THEIR ENERGY PORTFOLIOS ARE GIGANTIC AND TOXIC, LARGE ENOUGH TO KILL THE BIG BANKS… FOR THE LAST TWELVE MONTHS, THE USFED AND USDEPT TREASURY HAVE BUILT A FLOOR ON THE OIL PRICE AT THE $50 LEVEL… THE BIG BANKS ARE DESPERATE FOR A RECOVERY, BUT NONE IS COMING, PUNCTUATED BY THE IRAN-IRAQ OIL DEAL…. ADD THE CRUDE OIL MARKET TO THE LIST OF RIGGED MARKETS… THE USGOVT AND USFED ARE SUPPORTING THE OIL PRICE, LIKE A LAST BASTION DEFENSE OF THE DEAD PETRO-DOLLAR. $$$
Crude oil cannot seem to rise past the $50 handle. US-based oil inventories are flush, with a near record increase in a recent week. A huge increase of 13.8 million barrels was seen. The impetus is clearly Wall Street banks, pushing up the oil price using the usual paper control mechanism with USFed aid. Energy traders pin hopes on delusions like a surprise drawdown in gasoline stocks and other baseless chatter. The abnormal crude stock increase took inventories close to 80-year record levels at 508 million barrels. The mark serves as another bit of impeding evidence that should worry oil bulls. No economic recovery is within view in North America or in Europe. But the oil market is not deterred, since Wall Street cheers it on and the USFed pumps without end. However, they cheer in desperation as their credit portfolios are a total wreck. The size of their impaired portfolio is sufficiently large to kill the US banks again, just like in 2008.
Signs of optimism abound, without basis. The big banks need a rally to avoid a ruin of the same magnitude as the mortgage bust following the Lehman kill. Wall Street is pouring the most money into oil & gas companies in the US since at least year 2000, according to Bloomberg data. In January alone, drillers and oilfield service companies raised $6.64 billion in 13 different equity offerings. Sentiment has shifted. Some sense of cleaning the decks of dead projects is perceived. A great culling has occurred. Yet the sector is still running on very slim profit lines. Trey Stolz is an analyst at the investment banking firm Coker & Palmer. He stated, “The mood is absolutely different. Go back to a year ago and the knife was still falling. But today, it feels much, much better.” It might feel better to the players, due to the big bank cheers and occasional paper lifts to price done in collusion with the chief syndicate office at the USFed. But the price support is not real.
Moreover, the energy sector is garnering the new funds. The money raised for these US energy firms represented 70% of the total $9.41 billion in new energy equity issued across the globe in January. Big Finance is ready to pour money back into the oil & gas sector and they are doing it mostly in the US. It is unclear how much of the funds comes from hidden QE efforts disguised by the USFed, but it is large. The industry should see more activity this year as companies rush to conclude deals ahead of the anticipated rebound (which will not occur). But fascists cannot control the winds and the waves. A new report from Moody’s Investors Service predicts that M&A activity will rise substantially in 2017. All the big players are expecting either a crude oil price recovery or an economic recovery, or both. They seem delusional. The sentiment in the oil patch continues to improve. The oil price has not rebounded in any sense, as it is just elevated and moribund. A record net long position is on the table from hedge funds and other money managers, an incredible build-up in bullish bets on oil. Big money is on the table, all at risk. Any dose of reality and the oil price drops hard, taking down $billions in Wall Street investments. See Zero Hedge (HERE).
George of the COMEX shared his thoughts, since an area of his expertise. The big banks, the big funds, they are already all in, and long, heavily long. The wave started last February 2016 when the USFed & Exchange Stabilization Fund (USDept Treasury) went ballistic intervening in both in equity and oil markets. Their activity was so far over the legitimate line that less than a month later, emergency USFed meetings were called to legalize it. In fact the ESFund was expanded last March officially so as to prop up oil contract purchases. The USGovt and entire big US bank sector are desperately supporting the oil price, like a last bastion defense of the dead Petro-Dollar. The USFed in a huge way overstepped its bounds to save its member banks. The entire Wall Street bank sector is at risk of implosion due to their toxic energy portfolios. The list of rigged markets has expanded from the gold and bond and stock markets, to the housing and now the crude oil market.
George concluded with a stern commentary. “There are no free markets left. Those investment banks and big funds who are gunning equity markets higher also know the USFed & ESFund must stay with them. The know that because if oil falls back hard down to the $30s, no matter how hard and fast they push it up, the whole thing implodes. If it gets any momentum on the down side, they will never be able to stop it. The duo have put a massive floor heavily supported at the $50 oil level. That is the magic number. A recent drop to $45 scared the hell out them. They will not let that happen again. The US nation is deeply stuck, fully committed to a total command and control economy where markets are ruled with an iron fist, just as the Soviet Union did 30 plus years ago. Only now we have authorized and grown accustomed and dependent on $trillion market interventions which can and often do occur daily to lock in the desired pricing. No free markets exist. It is all done for national security reasons, as in bank sector viability. Remove the USDollar support and all markets drop like stones. These are truly dangerous times.” Back several years ago, the Jackass used to regularly refer to the USFed, the Wall Street banks, and USGovt control rooms as the American Politburo. Who true! Still true!
◄$$$ ROTHSCHILD BANK IS UNDER CRIMINAL INVESTIGATION OVER MISSING $4 BILLION IN GLOBAL CORRUPTION PROBE… HUGE TRANSFERS TO THE MALAYSIAN GOVT FUND ARE UNDER SCRUTINY, WITH THE GLOBAL INVESTIGATION INVOLVING AT LEAST SIX COUNTRIES… BIG MONEY IS MOVING TO CARRY OUT SOME HIDDEN ELITE AGENDA, POSSIBLY INVOLVING GOLD HOARDS. $$$
Last year the veil of invincibility seemingly came off the secretive Rothschild banking empire. The elite thug Baron David de Rothschild and his company the Rothschild Financial Services Group were indicted by French prosecutors for allegedly defrauding British pensioners in a grand embezzlement scheme. Two months ago, reports swirled that the Swiss branch of the Edmond de Rothschild Group admitted being the target of a French criminal probe. The latest has the Luxembourg unit of Rothschild banking empire under investigation by the Luxembourg state prosecutors office. The focus of the allegation was a dispatch of hundreds of $millions to an account at a bank in Luxembourg that originated from 1Malaysia Development Berhad (1MDB). It is a Malaysian Govt bank.
The fund, 1MBD, was established by Malaysian Prime Minister Najib Razak in 2009 as a government investment fund. There have been widespread accusations of corruption surrounding Razak after $1 billion dollars in deposits into his personal bank accounts were revealed. The more recent deposits totaled hundreds of $millions into the same state fund 1MDB, according to the Wall Street Journal. Scummy fraud abounds with motivated elite transfers, until now protected under the Rothschild name. Influence peddling occurs, possibly related to gold hoard movements. The Luxembourg investigation stems from an international probe of money that has flowed from the Malaysian Govt investment fund. It is at the center of various worldwide corruption probes. Clearly the Roths are using the Malays as bagmen in influence payoffs.
The Luxembourg unit of Edmond de Rothschild Group, a private bank that manages money on behalf of wealthy clients, said it is cooperating with an official investigation of fraud at a high level. The Roths are being cornered. The Luxembourg investigation widens the probes of 1MDB already underway by authorities in Switzerland, Malaysia, Singapore, Hong Kong, and Abu Dhabi (UAE). Swiss authorities estimated in January that 1MDB-related losses from misappropriation could reach $4 billion. The Luxembourg prosecutor said its case was connected to the investigation in Switzerland.
The Edmond de Rothschild Group oversees roughly $164 billion in assets. The private bank and asset management firm to the elite was founded by Edmond de Rothschild in Paris in 1953. Son Benjamin de Rothschild succeeded his father as head of the group in 1997. Last year, Benjamin appointed his wife Ariane as chairwoman of the executive committee. The Swiss unit traces its roots to the acquisition of Banque Privee in Geneva in 1965. The history of the Rothschild banking empire stretches much farther back in time, like to the Napoleonic Wars and nefarious deeds in London. See The Free Thought Project (HERE) and the Wall Street Journal (HERE). The pessimist realist in me believes that the investigation will fizzle and come to a halt with no attention or coverage, with bribes and murder threats behind the closed doors. Such is the Roth style.
◄$$$ BANK RUNS HIT GREECE… EVEN WHILE UNDER CAPITAL CONTROLS, THE GREEKS WITHDREW EUR 2.5 BILLION IN 45 DAYS… THE IMPASSE WITH CONTINENTAL BANKERS CONTINUES TO FESTER… VOLUMES OF YANKED CASH FROM BANKS DO NOT RIVAL THE 2014 PERIOD… AN IMPRESSIVE EUR 36 BILLION IN CASH IS BEING KEPT IN HOMES AND BUSINESSES, OUT OF THE BANKS, DUE TO DISTRUST… NOTHING HAS BEEN RESOLVED. $$$
Delays in the talks between Greece and its lenders have brought back the crisis atmosphere. The vast gulf between the Intl Monetary Fund and the European lenders, combined with the Greek Govt reluctance to accept additional austerity measures, have increased uncertainty among citizens. A great impasse continues, like a festering wound. They are responding in the usual mild panic manner. Motivated by political and economic insecurity, they have initiated bank runs again, withdrawing deposits in big volume, like EUR 2.5 billion in the last 45 days from Greek banks. All this occurred under restrictions. Capital controls limit the Greeks to withdraw a maximum of just EUR 1800 per month. That means a few million Greek citizens are pulling money out of the banks. Greater allowances are given to citizens who brought their cash back to the banks after June 2015, during the last crisis round. Nothing was resolved in Greece. Nothing is ever solved in the Western nations in the banking sector, since money is fake, since central banks are ruthless, since big banks are fraud centers, since the economies are in tatters.
The bank run is not new. It started a few months ago. Beginning of February, Greek websites for economic news had reported that more than EUR 1 billion was withdrawn in the full month of January 2017, a small amount compared to the recent past. According to a report of November 2015, more than EUR 120 billion left the Greek banks during the years of the crisis, with EUR 45 billion exiting the banks during the twelve months from November 2014 to November 2015. Eighty percent of this amount, which is a staggering EUR 36 billion, have been kept in homes, company safes, or in bank safety boxes. No trust exists in the banks, not after the last chapter. They fear bail-in confiscations.
According to newspaper Eidiseis, the huge volume of cash withdrawals in the last 45 days has put bankers on high alert. Business loans and mortgage loans, amounting a total of EUR 500 million euros, has suddenly turned sour, as in impaired, officially called non-performing. The delay in any formal agreement does not stop the people from yanking cash, nor the businesses from slowly failing. The Union of Greek Banks has stressed that the government and the lenders should reach a compromise. See Keep Talking Greece (HERE).
◄$$$ SOUTH KOREAN HOUSEHOLD CREDIT EXCEEDS $1 TRILLION IN 2016 ON HOUSING BOOM… CREDIT CARD EXTENDED DEBT IS A BIG FACTOR, UP OVER 11% IN THE LAST YEAR… LOANS FROM NON-BANKS GREW SHARPLY. $$$
South Korea’s household credit reached record high 1,344.3 trillion won (=US$1.172 trillion) last year. The annual gain of KRW 141.2 trillion set a record, amidst the housing boom financed by cheap interest rates. Household credit surged 11.7% on the year to a record high of KRW 1,344.3 trillion at year end 2016. Such debt includes household loans from banks and non-banks as well as outstanding credit card balances. It increased by KRW 47.7 trillion from the third quarter, registering another quarterly high volume. The surge in household credit is largely due to a bubbly booming property market fueled by low interest rates. The housing market heated up last year as new apartment offerings around southern Seoul fueled speculation by the wealth amid lack of investment options. Loans by non-banking institutions accelerated, having also risen by 17.1% to KRW 291.3 trillion from the previous year as result of toughened bank loan regulation. Loans from commercial banks reached KRW 617.4 trillion, up by KRW 53.7 trillion from the previous year. Its 9.5% annual growth is a contributing factor as well, but a smaller factor. See Korean Pulse News (HERE).
## GOLD STANDARD & DUAL UNIVERSE
◄$$$ GREAT CHALLENGES REMAIN ENORMOUS AND DAUNTING… THEY RELATE TO BLOATED USGOVT BUDGETS AND THE FEDERAL DEFICIT, THE INADEQUATE NATIVE INDUSTRY YIELDING THE TRADE DEFICIT, AND SOURCING OF GOLD RESERVES FOR A LEGITIMATE NEW USDOLLAR. $$$
Without any doubt in my mind, the Eastern answer to endless monetary printing which covers both USGovt deficits and aggressive waged war across the globe will be Russia & China & Iran (possibly India too) joining forces with gold-backed RMB and Ruble currencies. The movement will kill the USDollar in its current trade payment function, which will force the hand of Washington to produce a new Scheiss Dollar for domestic purposes. The fallout will slam the US banking system, and the Western banking system in general. The result will be a grand challenge to the USGovt to complete three requirements, or else certainly fall into the Third World.
1) The United States must vastly reduce the $1.2 trillion federal deficit. The Medicare costs are outrageous and with no controls. The military budget cannot be justified. Police action, global aggression, and war fabrication cannot continue.
2) The US must develop industry in order to reduce the $550 billion trade deficit. The outsourcing of industry for 30 years has come to bite the nation hard. The USEconomy has grossly inadequate industry. The pain is seen with household income and the trade deficit in hemorrhage.
3) The US must source 10,000 tons of gold with or without ceding control of broad national policy. The sourced tonnage would stand at immediate risk with the current trade deficit in the very first year.
The first objective must involve scaling back sharply the military complex, and cutting back on ridiculous medical policy, like an artificial knee or hip in every garage (household). The second must involve a national movement toward free trade zones and tremendous ambition toward new company creation with export emphasis. The third might involve some lost sovereignty, surely foreign investment, maybe even carpetbagging.
◄$$$ THE TRADE DEFICIT ENDANGERS THE ENTIRE USECONOMY AND ITS FUTURE VIABILITY… REVIEW THE SIMPLE MATH ON THE DEFICIT AND CONSEQUENCE FOR ASSET FORFEITURE… THE DEFICITS AND GOLD INSOLVENCY INDICATE NOT JUST CURRENT INSOLVENCY, BUT FUTURE FORFEITURE OF RESERVES OR HARD ASSETS… OUR FUTURE SOLVENCY IS GONE, AT LEAST FOR THREE TO FIVE YEARS UNTIL IN BALANCE. $$$
Truly desperate measures might be called for regarding the US currency and any potential gold backing. The numbers are horribly out of favor, after four decades of growing imbalances and profound abuse. The depth of the problem is hard to fathom. Consider some simple napkin arithmetic. One ton of gold has a value of $42 million at the $1300/oz price. The national trade deficit is $550 billion per year. Therefore the US would forfeit 13,000 tons gold in the first year without any change to the export equation. Backing a new USDollar with gold would make it vulnerable to forfeit in the first year. Leasing a giant hoard of gold would both put banking policy under foreign control, and leave the new financial landlord’s gold at risk of forfeit. Conclude the United States is in a horrible bind, which calls for incredible ingenuity and innovation for any solution. The supposed exorbitant privilege has turned against the nation with a hardly free credit card. Indentured servitude seems the future path. The heavy handed policies by the USGovt with both war and FATCA in banking have earned the ire of almost the entire community of nations. No national security is anywhere remotely in view, just powerful Third World dynamics and countless adversaries.
◄$$$ CATO OFFERED A SUMMARY OF THE USGOVT CRACK ANALYSTS AT THE NATIONAL SECURITY AGENCY… THEY EXPECT A DUAL FINANCIAL UNIVERSE TO EMERGE, WITH THE WEST CONTINUING WITH THE FAULTY USDOLLAR SYSTEM, AND THE EAST ADOPTING A NEW SOUND CHINESE RMB SYSTEM WITH NEAR-TERM POTENTIAL FOR GOLD BACKING… THE NSA ANALYSTS EXPECT THE USD SYSTEM TO FALTER AND THE RMB SYSTEM TO FLOURISH, BUT THE COMPETITION TO ENDURE FOR A FEW YEARS. $$$
CATO sat down with the Jackass on a few occasions to pass on the dual universe theory. We have both been in frequent conversations about whether the USDollar system and set of platforms would collapse, only to be replaced by the Chinese RMB, with future potential soon for a sturdy gold backing. He expects, and the security agency analysts expect, a keen competition to endure. The Jackass disagrees on the viability of a dual universe if one side has a valid sound gold backing to the trade and banking systems. The main advantage for the USD platform continuation seems to be inertia, which is lost in the case of collapsing platforms from insolvency and corrupt derivative fortification. No USD-based financial markets exist anymore, all rigged and controlled. CATO related the following, his thoughts, his commentary, his viewpoint, formed into verbage by me with full diligence and respect to his version.
The USDollar is definitely on the way out. It could be described as toxic but still is widely used, and will continue to be used for a very good reason. The Chinese RMB is not established sufficiently, and will not have significant volume in trade payments or banking functions for a few more years. The guys in Beijing might make it a high priority to build and to use their non-USD platforms. I wish them luck, because it will take a lot longer time than people think. The sharp analysts at the National Security Agency believe we are moving toward a dual universe very soon, if not already. The main core of trade and banking will remain in the USDollar terms, used principally by the West. The alternative system, surely more sturdy and sound, will be centered on the RMB and possibly the Ruble. They might even back them implicitly by gold. But the Eastern nations plus a few Emerging Market nations will need a couple years at least in order to bring their system up to speed with some meaningful volume. The Eastern platforms as you call them will win in the end, but in the meantime we will have a dual universe of USD and RMB. It will not always be in competition as much as preference shown to the West or to the East.
The USDollar platforms are rotten, toxic, and insolvent, but we have the machinery to sustain them like some Intensive Care ward with emergency rooms scattered across the world. This is our specialty, sustaining systems. The major central banks will keep the USD on life support, ugly as it will be. These platforms we depend upon will eventually fail, and fall apart, ending up in a crumbling mess, but the breakdown will occur over the passage of time. That is just the way it will be, since the RMB solution (even with gold backing) will take time to develop, to mature, to be used, and to build confidence. The Eastern platforms lack volume, and are a regular disappointment every year in their progress. CATO got personal. “So your newsletter will continue for much longer than you might think before the USD collapse, you crazy bastard. This battle is for global control and survival and will continue for longer than you expect. But I love you and so do a couple NSA guys. They think you do good work, and they watch your skinny ass.”
◄$$$ REACTIONS TO THE DUAL UNIVERSE CONCEPT BY TEAM JACKASS… THE USGOVT NSA CONSTRUCT OF A DUAL UNIVERSE SEEMS NOT TO BE PLAUSIBLE… THE USGOVT PERSPECTIVE REQUIRES CONTINUATION OF THE BROKEN BANKING SYSTEM… IT ALSO IGNORES THE EXTREME FAVOR TO BE GIVEN TO A GOLD-BACKED SYSTEM, COMPARED TO THE CORRUPT USDOLLAR SYSTEM CURRENTLY OPERATING WITH FLAWS… BUT THE BREAKDOWN REQUIRES MORE TIME, WHICH IS AGREED. $$$
The Voice dismissed the dual universe concept. The following are his response, with minor edits. Interesting comments from CATO and curious observations from NSA, but they are unfortunately typical for US-based analysts. What is not understood well [from the perspective within the United States] is that the entire system will implode, taking all and everything down with it. It will be sophisticated barter systems that will step into the void and reduce any monetary component in trade by 98%. One needs to understand the Paradigm Shift and its overall impact on humanity in order to grasp what is coming. And don't forget, that Gold & Silver will be the only asset surviving since it is going to reprice itself as it has done for thousands of years. We are weeks or months away from the shit hitting the fan, not years.
EuroRaj made a simple point, which cannot be refuted. “Possible, but with a very low probability because one platform [RMB in East] would have gold backing and another [USD in West] would not. Personally, I cannot see any business wanting to hold USDollars for selling goods if there is nothing backing it, while the Chinese implicitly or explicitly provide gold backing.”
Sky Crane made numerous excellent points, circling the wagons before dismissing the central premise. The following are his response, with minor edits. The current system will not fade away over a few years. Instead it will be challenged while fractured. The fallout from the USDollar losing its currency reserve status will continue in powerful ways for a few decades. Only the Americans believe they have lots of time to make adjustments. The current leaders know that is folly. So much tweaking and queering of the natural market forces has gone on for so long that the pent-up energy to correct the system is very dynamic and powerful. When it is released it will not be manageable at first. The suppressed forces will have a recoil effect of unknown consequences and tremendous power. The RESET has its own agenda and momentum. Expect loud disagreements and open hostility about debt reconciliation with the USGovt $20 trillion debt. Once begun, the changes will be governed by ambient conditions, and the effects of all the manipulations to date will burn the whole fiat paper currency system. We have followed these events and manipulations for years.
Sky Crane continued. Surely our observations indicate that CATO is looking at or reading from the executive script at the official USG think tank. At best we will have an amount of disruption commensurate with the stupidity of all those US machinations. So CATO is wrong in my humble opinion. As I see it, the USGovt and USFed have made colossal errors for the last eight years. In so doing, it has created a big problem that is not going to afford them years to fit into the new paradigm. No Eastern nation and perhaps no Western nation would want to wait years while the United States tries to get its shit together, when as the leading economy all they did was strive to install their US version of the New World Order. They ruined it all for the entire world, while working the globalist fascist agenda since 9/11. The US will have to earn their leadership back the honest way, and it might never happen. The US is in serious disarray at home as well, which in its own right could require decades to re-balance. No one will follow them as the world leader again for a long time based on their recent record. The US has not made many real friends over the last 30 years. They still believe they are the exceptional nation with full spectrum dominance. Fixing that should take many years.
## USDOLLAR RESERVE STATUS THREATENED
◄$$$ CHINA CONTINUES DUMPING USTREASURYS AT A FEVERISH PACE, GREATER THAN EVER BEFORE…THEY FIGHT HUGE CAPITAL OUTFLOWS FROM THEIR COUNTRY, ALONG WITH OTHER STRONG FACTORS… JAPAN HAS DUMPED USTBONDS IN A BIG WAY FOR FIVE STRAIGHT MONTHS… NATIONS ARE RE-EVALUATING THEIR ROLE AS USGOVT CREDITOR… REBUILDING US-INDUSTRY AFTER 30 YEARS OF OUTSOURCING WILL MAKE FOR MANY ENEMIES, WITH GRAND RESENTMENT… THE HOST NATIONS WILL BE DEPLETED TO SOME EXTENT, BUT NOT AS BADLY AS THE US-NATION WAS (SEE DETROIT). $$$
China’s holdings of USTreasurys declined by the most on record last year, as the world’s second largest economy dipped into its FOREX reserves to buttress the Yuan currency. As the US largest foreign creditor, Japan trimmed its holdings for a second straight year. The latest USGovt report showed China held $1.06 trillion in USGovt Bonds, Notes, and Bills in December, up $9.1 billion from November but down $188 billion from a year earlier. It was the first monthly increase since May. As owner of the world’s biggest foreign exchange reserves, the Peoples Bank of China (PBOC) has burned through a quarter of its war chest since 2014 in an effort to underpin the Yuan and to offset capital outflows from the country. Chinese sales have been a contributing factor toward making borrowing costs higher for the USGovt, as the 10-year yields rose to 2.6% last year, from as intermediate low of 1.3 percent. Tom di Galoma is managing director at Seaport Global Holdings. He stated, “China is a massive player in our market, and can move the markets whether they are a buyer or seller. If 10-year yields are going to trade to 3% this year, China will be the catalyst.” What goes unsaid is that the powerful derivative machinery is under great strain to maintain control of the vast bond market during high volume dumping episodes.
The Chinese FOREX reserves fell for a seventh straight month in January to $3.0 trillion, the lowest level in almost six years. The official drawdown has been driven by the PBOC intervention in currency markets, domestic banking system problems, and the global economic recession. Without doubt, the biggest US creditors are re-thinking their role in financing USGovt debt amidst the prospect of bigger deficits and more inflation under President Donald Trump, the prospect of higher interest rates pushed by the US Federal Reserve, and the prospect of more open hostility from the USGovt toward nations which benefited from the forfeit of US industry in past decades. Rebuilding US industry after 30 years of outsourcing will make for many enemies, with grand resentment. A few key nations will see some industrial removal, but doubtful much depletion.
Japan’s portfolio of FOREX reserves decreased for a fifth consecutive month in December, falling by $17.8 billion to $1.09 trillion. Their holdings declined by $31.6 billion last year. General global flows were cited. The report on international capital flows showed net foreign selling of long-term securities totaled $12.9 billion in December. It showed a total cross-border outflow of $42.8 billion, including short-term securities such as Treasury Bills and stock swaps. Total foreign ownership of USTreasurys in December amounted to about $6.0 trillion, down from $6.15 trillion a year earlier. They are the greatest currency manipulators in modern history. China garners much attention for reserves accumulation, but Japan owns almost twice the savings in the form of FOREX reserves compared to China. See Bloomberg (HERE).
◄$$$ LONG-TIME USGOVT VASSAL STATE JAPAN PLANS TO BYPASS THE USDOLLAR AND SWIFT SYSTEM IN ORDER TO TRANSACT USING THE CHINESE CIPS SYSTEM IN INTER-BANK SETTLEMENT... THE RIVAL CIPS SYSTEM FEATURES LOWER COSTS AND FASTER TRANSACTIONS… THE TIDE IS SHIFTING QUICKLY IN THE OPPOSITE DIRECTION TO THE USDOLLAR… QUIETLY JAPAN IS JOINING FORCES WITH CHINA IN THE ALTERNATIVE FINANCIAL PLATFORMS. $$$
Ever since China began to duplicate Western financial institutions in 2013, more and more nations have begun matriculating towards the East. In doing so, they move away from the USDollar hegemony. One of the most important of these new platforms is the Cross-Border Interbank Payment System (CIPS), promoted and developed by China. It functions for the RMB the same way SWIFT does for the USDollar in bank transactions. Yet unlike the way SWIFT charges for swaps when nations must use the USD as a middleman, CIPS allows for much lower transaction fees and the convenience of bypassing the US currency through direct bilateral currency settlement. The USGovt has been charging fees like a toll taker for decades, while enjoying its reign as the world's singular reserve currency. That reign is coming to an end, or at least it faces competition.
As the world continues to seek alternatives to the USDollar, even to reject the USD and the old financial model of a singular reserve currency, more countries are seeing the benefits of transacting in the CIPS system, and in a bilateral environment generally. Here is the critical point, made often by the Jackass in previous years. Once enough of foreign nations decide to follow this new economic model being laid out from Beijing, and build the critical mass needed to bypass the USD in actual functions, then the global reserve currency status will simply fade away via defacto consent. The result will be many forced changes, an alteration in the balance of financial power, and a reform of the many abusive Western institutions that have run the global financial system for decades. The Jackass has called it the Global Paradigm Shift, which will usher in the Gold Standard in trade, banking, and currency.
Removing the USDollar standard, and thus denying its exorbitant privilege, will put the United States at great risk of falling into the Third World. Some critics regard such words as exaggerated. They are not. The US will eventually be compelled to defend its own wretched horrendous fundamentals, which include a $1.2 trillion national deficit and a $550 billion trade deficit. Such factors usually result in a long sequence of currency devaluations, once the new domestic currency is launched. The Jackass has called it the New Scheiss Dollar, since it will be lucky to retain 20% of its value three or four years after its launch. See Daily Economist (HERE).
The Japanese have begun to latch onto the new Chinese-led CIPS payment system alternative to the Western SWIFT system. Hiroshima Bank and 13 other Japanese regional banks will connect to an interbank payment network that enables direct RMB payments wired to mainland China. The move will lower transaction fees and boost convenience for customers. Joining the CIPS system will lower costs and reduce the processing duration. Juroku Bank and Joyo Bank are also among the Japanese banks taking advantage of the system introduced by the Peoples Bank of China. They will be connected one by one after the end of the Chinese New Year holidays, using the intermediary Bank of Tokyo Mitsubishi UFJ, which connected to the system last year. Previously, payments to mainland China had to be processed by clearing banks such as those in Hong Kong, often routing through Western banks in a slow process. CIPS can cut costs by several dollars per transaction. Payments can be completed on the same day if certain conditions are met. See Asia Nikkei (HERE).
◄$$$ IRAN IS MOVING AWAY FROM THE USDOLLAR IN STEPS… THE PERSIAN STATE COULD EMERGE TO PROVIDE UNLIMITED POTENTIAL FOR GOLD AND BITCOIN… THE EURASIAN TRADE ZONE IS SEEING A THIRD LEG COME INTO POSITION, WITH CHINA, RUSSIA, AND IRAN FORMING A FOUNDATION… INDIA WILL BE NEXT AS A KEY LEG… THEY ARE DEFIANT AGAINST THE UNITED STATES IN GENERAL, AND THE USDOLLAR IN PARTICULAR… THEY SEEK A BETTER TRADE PAYMENT UNIT AND BANKING RESERVES VEHICLE… THEY ARE EVALUATING GOLD AND BITCOIN. $$$
Almost from the moment that President Barack Obama shipped Iran over $100 billion worth of cash, gold, and other frozen assets that the US had illicitly controlled during their decade long sanctions against the Islamic State, the Middle Eastern oil power began forging a new policy in which they would completely divest themselves from the USDollar. They saw the need to protect themselves from any future attempts by the USGovt in using the reserve currency as an economic weapon. Foreign seizures of Iranian assets has been shown an easy task, defended by SWIFT control and naval howitzers. Additionally, Iran has not favored any transition towards the Euro currency as a standard replacement. Hence the opened door for the government to find alternative mediums of exchange that are outside the dominion of Western central banks.
As Iran has moved in steps away from USDollar usage, BitCoin has emerged as a potential substitute. It lacks gusto from volume and breadth. The crypto-currency could thrive in a country where more than 50 million people are connected to the internet, one would expect. In the wake of US President Donald Trump’s travel restrictions on seven countries including Iran, the governor of the Central Bank of Iran announced last month that the USDollar will be replaced with a stable reserve currency more frequently used in foreign trades. Two possible options have been cited, exclusive Euro currency usage and the choice for Iranians to select from multiple currencies. He did not mention the Chinese RMB currency, which seems a natural given their extensive energy sales with the sprawling industrial giant. Watch in time for Iran to use both the Euro and RMB in reserves management.
The announcement has caught the attention of the country’s first BitCoin exchange, BTX Capital. It sees Iran as a market with potential to grow. Ganesh Jung is CEO of Draglet, which developed an exchange platform used by BTX Capital. He stated, “The market is massive. A large population with a high proportion connected to the internet means there is a lot of completely untapped market potential.” But obstacles abound. Iranian and Islamic law designates currency as being only physical money and coins. Hence the use of BitCoin would likely be limited to official government and bank settlements, which occur in a digital capacity through the SWIFT transaction system. This leaves backing their domestic currency with other assets. It is possible that Iran might become the first nation in 46 years to back their currency with a precious metal in order to protect it from the effects of the USDollar, and to avoid interference from the USGovt.
The Eurasian Golden Triangle is taking shape. William Engdahl is a super geopolitical and energy analyst. He stated, “We are seeing the emergence of a true Eurasian Golden Triangle with China, Russia, and Iran as the three key points. With the stated plan to route the Silk Road rail infra-structure to assist the mining of new gold for currency backing of the Eurasian member states, including now Iran with its significant own unexploited gold, the hyper-inflated, debt-bloated Dollar system is gaining a formidable positive alternative, one committed to peace and development.” Notice how the top analysts regard the USDollar as associated with war and economic ruin. The USGovt defends the corrupt USD and its fraudulent monetary expansion for domestic benefit by means of war. The impact from QE and the bond monetization initiatives is to destroy capital. Both attributes are hallmark traits of a fascist state.
In the past year, foreigners have been selling more USDollar reserves than they have been buying, with Japan and China dumping nearly $1 trillion over the past 12 months. Furthermore, with all signals pointing towards the Euro currency collapse once elections in France, Italy, and the Netherlands take place, Iran is looking to be well prepared for the next monetary system to emerge. It could be Gold, BitCoin, or a combination of both. See Daily Economist (HERE) and Russia Today (HERE).
◄$$$ THE PETRO-DOLLAR SYSTEM HAS STOOD FOR 45 YEARS… IT HAS DECAYED INTO TATTERS… A NEW DISRUPTIVE MODEL WAS FORGED IN 2014 WHEN IRAN SOLD INDIA OIL PAID IN GOLD, BUT DELIVERED FROM TURKEY… GRADUALLY EMERGING IS THE GOLD TRADE NOTE, FIRST IN OIL PAYMENT THEN LATER IN GENERAL PAYMENTS FOR SHIPPED GOODS… IT IS EVOLVING WITHIN THE CHINESE MARKET FROM RUSSIAN ENERGY SALES, ALL CONDUCTED OUTSIDE THE USDOLLAR SPHERE. $$$
## GOLD TRADE NOTE COMING INTO VIEW
◄$$$ THE GOLD TRADE NOTE IS GRADUALLY COMING INTO VIEW, ITS FORM WITHIN STRUCTURED CONTRACTS IS TAKING SHAPE AS COMPONENTS… THE PETRO-DOLLAR HAS ALMOST COMPLETELY VANISHED, WITH DISMANTLED SUPPORT MACHINERY… THE PETRO-YUAN IS ESSENTIALLY HERE IN ITS INFANCY, IN RUDIMENTARY FORM… THE LEAP TO THE GOLD TRADE NOTE WILL BE EASY, ONCE THE PIECES ARE ALIGNED AND IN PLACE… BUT ITS LAUNCH REQUIRES A BOLD FINAL STEP. $$$
The Gold Trade Note inception could be coming into view, structured within existing trading vehicles and platforms. The Russians and Chinese appear to be forming the basis for the payment vehicle within the oil trade. Consider it as a formal reflection of the Iran-India gold for oil trade, on an expanded more efficient scale.
Bilateral Oil for RMB Sale + Shanghai Gold Exchange = Gold Trade Note
This triangle is precisely what China and Russia are doing now. Russian Oil & Gas is being sold for Chinese Yuan, and then Yuan is traded for Gold at the Shanghai Gold Exchange. The trade is not complex at all. Oil for RMB then for Gold, creating a transaction payment in gold terms. The part unclear is posted margin in the form of gold bullion to confirm and seal the transaction. The immediate implication is that the Chinese RMB will have a quasi-gold link. The original model used might have been developed with the Iranian oil sales to India, the payment completed using Turkish gold. Such gold for oil trade appears to have been commonly executed from year 2014 onward. The Jackass has been expecting that the Gold Trade Note would be structured in a clever way, using swap contracts in major global commerce. Its inception has been slow on arrival. It might be taking form in the triangle cited as the working template. Oil is the biggest commercial trade item. Soon comes the RMB-based contract for crude oil, traded in Shanghai. It will surely cause big waves, a major disruptive event. Then the stage is set finally.
Examine the many components for the demise of the Petro-Dollar, the fading importance of the USTreasury Bond, the chronically suppressed Gold market, and the emerging structure of the oil trade among the Eastern superpowers. Grant Williams lays it out in wonderful style. It is important to step back, to observe the key pieces to the puzzle, to notice the decayed elements, to notice the new fortified elements, and to make conclusions on the direction of the path, which ultimately will lead to the Gold Trade Note. It will be used initially to make payments for massive oil shipments. Later it will be used to make payments for massive container vessels, and for what are called dry shipments (like grain, cement, lumber, ore). Finally it will be used to make payments for construction projects and service contracts. The Gold Trade Note is en route to supplant and to replace the USTreasury Bill within the global payment system. The USDollar has been incredibly abused, with monetary printing used to cover USGovt deficits, to redeem toxic bonds held by Wall Street banks, to justify the US trade deficit, and to finance endless wars. The USDollar has been the basis of an unlimited abused credit card to supply the USEconomy, which lacks industry. Given the USDollar role as global currency reserve, the USDollar abuse cannot stand much longer. Its days as King Dollar are very limited. Its throne has had the legs kicked out from under it. Examine the components in key events.
PETRO-DOLLAR SYSTEM HAS BEGUN TO BREAK DOWN. Saudis sell crude oil in USDollar terms. They accept the USTreasury Bills as payment, and keep surpluses in USD form, never to convert outside the USD. The USGovt sells weapons to the Saudis, and put the Kingdom under the USMilitary protection. The correlation between the Saudi USTreasury holdings and the crude oil price has broken down. The inverse correlation between the USDollar currency index and the crude oil price has broken down.
USTREASURY BONDS HAVE BEGUN TO LOSE THEIR STORE OF VALUE. Since the 1970 decade, the total foreign holdings of USTreasurys went from near nothing to over $6 trillion in the span of over 40 years. Nations needed to hold big quantities of USTBonds and USTBills with which to purchase crude oil. In the last three years, foreign FOREX reserves have been gradually in decline. The reasons are many, such as falling oil price, falling commodity prices, global recession, and disgust for USGovt fiscal policy and for USFed monetary policy, along with US warmonger actions.
A GRAND BACKFIRE OCCURRED IN RESPONSE TO THE IRAN SANCTIONS, WITH BARTER TRADE. Starting in May 2012, Iran began to sell a portion of its energy products to China for RMB currency, bypassing the Petro-Dollar entirely. In turn Iran used the RMB to purchase Chinese goods and services. The trade was worth around $25 billion per year. China then decided on a policy shift, no longer to accumulate FOREX reserves, with the finger of toxic blame pointed at the USGovt. The great reduction of USTBonds had commenced. Iran and China had begun their barter trade. The United States responded by labeling Iran a terrorist nation.
THE IRAN BACKFIRE AMPLIFIED WITH THE INDIAN OIL FOR GOLD SALE. Regional neighbor India agreed to purchase Iranian crude oil in 2014. The deal was clever, and sidestepped the blockheaded Obama Admin sanctions. India bought the oil, but paid with gold bullion acquired from Turkey. The gold was delivered then to the large banks in Iran, which were not subject to restrictions. Only the Iran central bank was under restrictions. Crude oil was sold on a large scale basis, no USDollars at work in the transactions. With barter and the oil for gold sales, the elements were coming into shape for the Gold Trade Note. The nefarious bullies in Washington had been outwitted while giving the death sentence to the Petro-Dollar, and a death warrant to the USDollar.
THE RUSSIAN OIL TRADE WITH CHINA WAS THE RESULT OF THE UKRAINE WAR, WHILE SHANGHAI SET UP SHOP WITH THE GOLD EXCHANGE. Consider it another gigantic backlash from yet another illicit war. The USGovt and Israel kicked off the fascist coup in Kiev Ukraine, but the joke was on the Petro-Dollar, again a victim of severe blows to the pecuniary groin. The Russians began both massive oil & gas sales with China, paid in RMB. Also and very significantly, the energy pipeline construction to connect the two Asian nations was put under mega-contract. The construction would be paid in USTreasurys held by China. The great dumping had begun in earnest, called Indirect Exchange since third party cash was used.
NEXT CAME THE INTRODUCTION OF THE SHANGHAI GOLD EXCHANGE. Despite its limited price impact, the global gold flowchart has undergone radical change. Already, places like Tokyo, Seoul, and Dubai are opening physical gold markets. They strive to link their nascent markets for bullion to the Shanghai exchange which has rapidly become the largest physical delivery market in the world.
A CONFLUENCE OF EVENTS LED THE SAUDIS TO HASTEN THEIR SYSTEMATIC SALE OF USTREASURYS. The Saudi income stream was reduced by the sharp decline in the oil price. Their war spending with the Yemen War also escalated, the hidden motive being to replace rapidly declining Saudi oil reserves. The kingdom had to dump USTBonds in order to finance their deficit. They even began to issue bonds for sale to foreigners, a first event. Then in summer 2016, the USCongress saw fit to permit lawsuits against the Saudis for their role in the 9/11 attacks. They had no role, but the USGovt insists on creating scapegoats to cover the insider fascist role in the event, which was a gigantic bank heist at the World Trade Center. The upshot was that the Saudis accelerated their USTBond sales. The Petro-Dollar was being dealt a series of deadly blows. The fall of the House of Saud has been assured, one of the most vicious fascist draconian backward regimes in modern history, and America’s buddy.
Meanwhile the Arab monarchies were all under great financial strain, with deep deficits the common factor. The Voice expects all Arab oil monarchies to fall, except Oman. The disjointed desperate Arabs could not set output limits, unable to agree on the nameplates or lunch menu at OPEC meetings. But they continue to arrive in Vienna for meetings, because the prostitutes are so lovely and delicious. At $1000 per pop, that menu was always well stocked.
IN THE LAST 40 YEARS, THE FOREIGN HELD USTREASURYS WENT INTO OVERDRIVE. The total foreign USTBonds grew to multiples of global oil output in value. Meanwhile from the opposite perspective, the official (mythical) USGovt gold reserves became dwarfed by gigantic volumes of the floated USTBonds in global cupboards. During the Reagan Admin, USTreasurys were backed 132% by the market value of the country’s gold reserves. Today, the amount has fallen to 4.7% only. The globe is awash in toxic USTreasurys, the infamous black hole often cited in the Hat Trick Letter. Demand has dried up for USGovt debt securities. Thus the advent of QE by the USFed, the phony demand, the US-based central bank buying the USGovt debt. Witness debt monetization, Third World style.
THE MAJOR SURPLUS NATIONS ARE ACCUMULATING GOLD BULLION, AS THEY REFUSE THE USTREASURYS OF PAST FAVOR. Russia has been adding to its official gold reserves, selling off their USTBonds during the conflict over Ukraine. In doing so, Russia fortifies its Ruble currency with actual hard assets, namely gold. The USGovt adds to its colossal debt, having discarded its gold reserves, yet calls Russia weak. Also, China has been adding to its official gold reserves, under similar circumstances. A key switch can be noted. During the first seven months of 2016, China imported about 30.5 million metric tons of Saudi oil, a 0.4% decrease over the previous year. By comparison, China imported about 29.5 million metric tons of Russian oil as an impressive 27% increase over the previous year. China has notably moved toward the Russian energy embrace, while both nations added to their gold reserves.
IN THE OIL MARKET, THE CHINESE ARE TAKING STEPS ALSO, JUST LIKE WITH THE SHANGHAI GOLD EXCHANGE. Important financial channels are being constructed. China has moved to become the #1 oil importer globally, overtaking the United States last October. They are working on creating an RMB-based oil contract which would compete against the West Texas and Brent contracts, even the St Pete Russian contract. The new oil contract will signal the death of the Petro-Dollar finally. The delays continue but the outcome is written.
Grant Williams concluded, “In the interim, China has supplanted the United States to become the world’s biggest importer of oil, which serves to increase both its importance in the oil markets and the likelihood of it launching its own Yuan-denominated contract at some point in time. So, the world’s largest exporter of oil [Russia] is now dealing with the largest importer [China] directly in Yuan and it has the ability to convert those Yuan proceeds into physical Gold through the Shanghai exchange, which the data suggest it is doing as fast as possible. Currently, the bilateral oil for gold trade is only available to what the US would no doubt consider a basket of deplorables in Iran and Russia. But just think what happens once that fully convertible oil contract is up and running? Suddenly, the availability to price oil in gold is available to everybody and, given rising Saudi/US tensions and the Middle East nation’s recent rededication to providing political and strategic support to China, it is easy to see why this would be attractive to the Saudis, for example.”
Williams surmises that the strong oil price decline in the last two years indicates that crude oil is in the process of being priced in gold terms. Availability of gold in Shanghai has changed the paradigm. The pendulum that swung hard for over 40 years is about to swing back in the other direction. Consider the three major asset classes, namely gold, oil, and USTBonds. With an annual production of $170bn, gold is by far the largest metal market by value. However, that figure is overwhelmed by the oil market which is 10 times larger at $1720 billion, on an annual production basis. The USGovt in collusion with the USFed produces a ripe $1200 billion in USTBonds each year, plus another $400 odd billion in covered redemptions. The paper asset is in huge abundance, if not a global glut. Such is the nature of the USTBond black hole. The conclusion is simple, that the gold market is under-valued, that the gold price suffers from a scarcity in value. The gold price will rise sharply in the coming few years in a tremendous correction for the 40 years of abuse with the gauche crooked inelegant Petro-Dollar, a Rockefeller contrivance.
See the Gold Trade Note evolution and appearance with structure, as laid out by Grant Williams, on Zero Hedge (HERE). Take it one step further. The Russians as primary oil producers have the ability to sell oil in RMB terms, to accept the Chinese currency and to purchase gold at the Shanghai Gold Exchange. Soon the Chinese can better organize their oil purchases from other nations like Iran or Brazil or Mexico, maybe even Iran or Israel (natural gas), and pay in RMB terms. The vendors can turn around and do the same, convert the RMB into gold in Shanghai. The Petro-Dollar has been effectively replaced with the mechanisms of a Petro-Yuan erected on the Gold table. The Chinese are putting in place a link between oil and gold, once again like before the Bretton Woods Gold Standard was violated by Nixon in 1971. The Gold Standard is emerging, with respect to the oil market.
The next step to standardize the entire global commerce with gold payments can be fashioned in much the same way. The Gold Trade Note is coming into view, carved and sculpted by Chinese hands within the transacting of Russian oil, inspired by the motive to center trade on sound money. In time, ships bearing containers and dry goods will be paid in gold terms. It might be done with the RMB in intermediary function, but the potential for conversion to gold will be everpresent soon. The gold-backed Petro-Yuan will serve as the caretaker standard on an intermediary basis. The USTreasury Bond in its entirety is being deeply contaminated by the QE hyper monetary inflation programs that have damaged the USD integrity for six years running. The Gold Trade Note will serve as the all-in-one contract, the efficient omnibus contract which will gain global acceptance.
The move away from the USDollar is also hastened by two important factors, which annoy the community of nations, large and small. The USGovt tax compliance reporting called FATCA is cumbersome, costly, and obstructive to the banking business. The USMilitary wars with economic motive but using hidden ISIS support is vicious, lethal, and has led to thousands of civilian deaths. Both factors work to bring nations into coordinated efforts away from the USDollar and toward the Gold Trade Note. The process takes time and courage.
## GOLD WITHIN GLOBAL MONETARY REVOLT
◄$$$ TRUMP HINTS AT GOLD TRADE SETTLEMENT NOTE WHEN MENTIONING A FAIR FINANCIAL SYSTEM… HIGHLY DISRUPTIVE NEW TRADE PAYMENT INSTRUMENTS ARE INDICATED. $$$
US President Trump is citing new financial systems in the near future. He could be giving hints indirectly to the coming Gold Trade Settlement within global commerce. He mentioned directly currency devaluation, saying that very soon the world will all be on a level playing field with a fair system that is coming. It could occur sooner than people think. See the YouTube (HERE). What he described could fit the description of the Gold Trade Note, which makes sense to arrive before any gold-backed currencies. The Jackass admits to a little wishful thinking, but the pieces are coming together, and the initial splash is most likely to come with trade payment platforms and new instruments. They will be highly disruptive. The USDollar will be challenged, and perhaps overturned. The globe might see an interim period where the USD is phased out, or a parallel universe.
◄$$$ THE TRUMP ELECTION GOLD RALLY HAS HEDGE FUNDS RIDING THE CREST, EVEN IF THEY REDUCED THE NET LONG POSITION A BIT… GOLD IS BENEFITING FROM THE TRUMP DEBT EXPANSION AND THE EUROPEAN ANGST TOWARD UNION BREAKUP. $$$
Gold bulls seem skittish among the hedge fund community. They reduced their wagers on a bullion rally for the first time recently, showing caution after some decent gains in the corrupt COMEX price. Not even Federal Reserve Chair Janet Yellen’s outlook for higher US interest rates has been enough to disrupt the gold party. Of course, the USFed is full of more bluster than action. Investors snap up the metal as a store of value amidst concern that President Donald Trump’s fiscal policies will expand government debt, against a backdrop of gold advocates in his cabinet. The anxiety over anti-establishment candidates in this year’s elections in the Netherlands, France, and Germany has also sparked demand for gold as safe haven during crisis times. These nations favor exiting the European Union.
Walter (Bucky) Hellwig is senior VP at BB&T Wealth Mgmt, which has $17 billion under management. He stated, “Any indication that there could be more exits from the EU could make money come into gold, any sign of potential European instability. There are also concerns about the US deficit because Trump’s fiscal policy is going to be very aggressive, and that could also benefit gold.”
Funds reduced somewhat their gold net-long position as they showed some caution. It is defined as the difference between buys and shorts, bets on a price increase versus those of a decline. The funds had net longs trimmed by 10% to 67,982 futures and options contracts in the week ended February 14th, according to CFTC data. The fund position remains 65% up this year. See Bloomberg (HERE).
◄$$$ GREENSPAN FAVORS THE GOLD STANDARD AS PROTECTION FROM THE CRISIS HE HELPED TO CREATE… HE BLAMES POLITICS FOR THE FAILURE OF THE FINANCIAL SYSTEM IN PROGRESS, WHICH IS SATURATED BY DEBT… BOTH ARE GUILTY. $$$
Sir Alan Greenspan crawled out from under a rock recently, as an advocate for gold as a device to protect the financial system from the effects of his own tenure as Fed Chairman. He expanded debt like a bandit and became a folk hero during the stock market boom from 1000 to 6000 on the DJIA index. He speaks like a fool about price inflation risk to come, when it arrived years ago. But he does advocate the Gold Standard as a structural device to protect during crisis times. Greenspan cited directly the risk of rising inflation, with possible significant increases which will push upward the price of gold. The irony is deep, since he warns about a crisis he created. Now he advises on protection from the crisis from his own hands. He believes the Gold Standard would help mitigate risks of an unstable fiscal system. He published an article in the World Gold Council’s Gold Investor February issue.
“Today, going back onto the Gold Standard would be perceived as an act of desperation. But if the Gold Standard were in place today, we would not have reached the situation in which we now find ourselves. We would never have reached this position of extreme indebtedness were we on the Gold Standard, because the Gold Standard is a way of ensuring that fiscal policy never gets out of line. There is a widespread view that the 19th Century Gold Standard did not work. I think that is like wearing the wrong size shoes and saying the shoes are uncomfortable! It was not the Gold Standard that failed; it was politics.” This is quite an unusual and powerful statement by Sir Alan. He used the term Gold Standard six times in a single breath, and accused politicians of causing the current crisis. The big issue is debt saturation and debt abuse with resulting asset bubbles in every venue from debt abuse. The US nation has relied upon asset bubbles for 20 years to generate tainted wealth. It is all coming undone in a grand paper crash. See Kitco (HERE).
Greenspan really is a grand hypocrite. During the Greenspan Fed, he justified the financial engineering and praised offset debt risk via derivatives right before the subprime mortgage bust occurred. He left office, opened the door for Bernanke, who dealt with the mortgage crisis that ensued. Greenspan back in 2001 seemed desperate to have homeowners rework their mortgages, and to take home equity loans. He lowered rates to prevent a housing bust on his watch, which would have immediately followed the tech-telecom stock bust in 2000. He spoke in obfuscations and was revered, even though the financial crisis which has endured for nine years all began during his tenure at the US Federal Reserve. The current crisis has his fingerprints all over it. So he is not the savior, but the perpetrator. He is a hypocrite, but he is correct that the Gold Standard is required during the massive cleanup project required to remedy the mess he created.
◄$$$ GREENSPAN EXPECTS THE EUROPEAN UNION TO COLLAPSE WHILE THE GOLD PRICE SURGES… THE GOLD STANDARD WILL BE PART OF THE REMEDY, EVEN THOUGH ITS INSTALLATION WILL BE SEEN AS AN ACT OF DESPERATION… EXACTLY, AS IN DEFEAT OF BOTH THE FASCIST E.U. AND THE KEYNESIAN SPONSORED DEEP DEBT ABUSE BY CENTRAL BANK FRANCHISE SYSTEM. $$$
The former head of the US Federal Reserve, Greenspan has warned the Euro is on the verge of collapse, saying he has grave concerns about its future. He was referring to the Euro currency. But if its flagship Euro currency fails, then the union will also fail. The revered economist Alan Greenspan says it is time for the European Central Bank to come clean about the state of the economy. He made indirect accusation that EuroCB chief Mario Draghi scrambles to save the flailing institution. Greenspan, age 90, served as the chairman of the USFed from 1987 to 2006. Some choose to rewrite history and to say that he predicted the scale of the US subprime mortgage scandal which precipitated the global financial collapse. Instead Greenspan presided over the building crisis, opened the gates for the debt abuse, justified its structural legitimacy, and bolted out of town before the great bust, while being knighted by the Queen of England for the great job in the vast destruction. As investors turn to gold in an effort to stem their losses, Greenspan perceives it only as a matter of time before the EuroZone collapses.
Greenspan told Gold Investor magazine, “The European Central Bank (ECB) has greater problems than the Federal Reserve. The asset side of the ECB’s balance sheet is larger than ever before, having grown steadily since Mario Draghi said he would do whatever it took to preserve the Euro [currency]. And I have grave concerns about the future of the Euro itself. Northern Europe has, in effect, been funding the deficits of the South; that cannot continue indefinitely. The EuroZone is not working." These are bold accusations and a sign of a grand rift between the USFed and the Euro Central Bank. He has called the European Union experiment a failure.
The Euro currency has been plagued with scandal after scandal, including a Bank Stress Test last year showing that many of the 19 member nations are facing unprecedented debts. Banks and financial firms have fallen after passing such ridiculous politically motivated tests. The Stress Tests were equally flawed and absurd in the United States. Mario Draghi is facing serious pressure as the fears over Euro collapse grow. Greece is currently in the midst of yet another financial crisis with bank runs in progress. Meanwhile Europe's oldest bank, Banca Monte dei Paschi di Siena, is on the verge of a vanishing act in Italy. It urgently requires a massive bailout, and not the regular series of minor patches. Even Germany's largest lender Deutsche Bank is facing a crisis of huge proportions, as it struggles to keep hidden its shadowy assets book. Its visible book is plagued with non-performing loans.
Greenspan expects the British Exit from the EU to almost certainly trigger a collapse of the EuroCB, despite ironically the UK not using the Euro currency. However the EU is dependent on the UK for income as it tries to monopolize the business operations of 28 members states. He added, "The BREXIT is not the end of the set of problems, which I always thought were going to start with the Euro [currency] because the Euro is a very serious problem." That is interesting, since while at the USFed, he never saw a problem with the Euro currency of the European Union structure. He is not on record as seeing any problem with the Euro during his tenure. Greenspan says that investors are seeking safe havens including precious metals, since no trust exists in the banking system. He sees no way for countries to continue to borrow in their current pattern, referring to sovereign debt which the Draghi ECB has been buying. He actually indicated that Quantitative Easing (QE) is not working, a failure in monetary policy. He concluded, “I view gold as the primary global currency. Today, going back onto the Gold Standard would be perceived as an act of desperation. But if the Gold Standard were in place today, we would not have reached the situation in which we now find ourselves. We cannot afford to spend on infra-structure in the way that we should." Althought the quote is cited above, it bears repeating. Greenspan sees gold as part of the solution, as a grand arbiter to prevent crazy debt expansion and lethal asset bubbles.
The USFed likes regularly to accuse the Euro Central Bank of being out of step, on the wrong path, with too much volume in support, while the USFed is in precisely the same position, but with multiple $trillions in well hidden derivative support. The two major central banks are operating in parallel, even up to their new corporate bond support. They participate in mutual massive USDollar Swap on a routine basis. They are joined at the cancerous hip. The hypocrisy is overwhelming.
Although a hypocrite, although the crisis was built on his watch, although he justified the financial engineering, the comments by Greenspan are valuable. They signal a turning, a great shift in sentiment among the smarter elements of the Elite. He calls the Euro currency a failure. He calls the EuroCB chief Draghi as doing desperate actions. He calls QE a failure with unbridled debt as no remedy. He advocates the Gold Standard as part of what is to come, namely the Global Financial RESET. Such are very big changes in the wind. See UK Express (HERE). Alan Greenspan made an astute observation. He believes it is difficult to judge whether the USEconomy is in a durable recovery, or merely a shift into stagflation. He cannot admit the fierce economic recession that has endured for eight years. Doing so would earn him criticism by the establishment who worships him. He ushered in the Global Financial Crisis that the elite in the banker cabal desired, which was necessary as they saw it, for installing the Global Fascist State. It has been interrupted, or so it seems. See Financial Times (HERE).
◄$$$ RUSSIA AND CHINA ARE DUMPING USTREASURYS, WHILE BUYING GOLD FOR RESERVES… GOODBYE PETRO-DOLLAR, HELLO GOLD STANDARD, WHICH WILL EMERGE IN THE EAST… THE USTBOND IS A BLOATED DEBT FUELED BLACK HOLE, WHILE GOLD IS DEBT-FREE AND HISTORICALLY TRUE MONEY… A POLICY OF GRADUAL DE-DOLLARIZATION IS CRUCIAL IN ORDER TO SHIELD ASIAN NATIONS FROM WESTERN ECONOMIC WARFARE… RUSSIA & CHINA ARE MAKING ADJUSTMENTS IN LINE FOR THE EURASIAN TRADE ZONE. $$$
Russia and China both favor Gold over the USD. Neither Moscow nor Beijing believes that USTreasury Bonds are a safe haven or store of value. It is no longer in their national interests to hold them. The Bloomberg analyst made some excellent comments. Zhuo Zhang explained that Russia and China are selling their USD-based FOREX reserves, and are buying up all the gold they can get their hands on. He wrote, “As they sharply increase their gold reserves, China and Russia are selling off their USTreasurys, with their hunger for the metal coming amid a strict diet excluding dollars. Gold is appealing to these countries because it shields them from the US government's ability to control the value of their holdings. Gold is a country-less currency. A continuing trend of reserve buildup and Treasury sales might weaken the dollar and pressure gold prices higher. China and Russia have officially added almost 50 million ounces of gold to their central banks, while selling off more than $267 billion of Treasurys.”
Both Eastern superpower nations are busy fortifying their own Ruble and RMB currencies, which are increasingly being used for bilateral trade. A year ago, Moscow became China's top crude exporter under agreement to accept Chinese Yuan for its large scale oil shipments. It was a super energy deal that altered the balance of power. The Kremlin realizes that despite the risks, a policy of gradual de-Dollarization is crucial in order to shield itself from Western economic warfare. Of course China is in the same position. These countries are not simply dumping the USDollar. They are preparing their countries and positioning their currencies for trade within the expanding Eurasian Trade Zone. The fact that growing demand for gold could lead to a weakened dollar is definitely an extra grand insult to Washington. Maybe a weak USDollar would allow American manufacturing to blossom. Maybe US retail chains will someday again sell US-made products and put a smile on Sam Walton’s face (founder of Walmart, whose original slogan was MADE IN AMERICA). No nation can thrive selling foreign-made finished products on a widespread scale. See Russia Insider (HERE).
◄$$$ IN THE LAST SEVEN YEARS, A RIPE 3000 TONS GOLD HAS BEEN EXPORTED FROM WESTERN NATIONS TO THE EAST… FULLY 50% OF WESTERN CENTRAL BANK GOLD IS GONE… THE PARADIGM SHIFT IS WELL ALONG, AND A STEALTH GOLD BULL MARKET IS IN PROGRESS. $$$
The sovereign gold market is very unclear. Central banks and the Bank For Intl Settlements in Basel Switzerland go to great lengths to tell the world absolutely nothing about their gold dealings. All transactions are carried out covertly and no central bank ever has an official audit of their gold holdings. The last US audit was during the Eisenhower Era in the 1950’s. Ron Paul has been pushing for an audit but to no avail. President Trump might follow through and instigate an audit. He might have the intention, but when he finds out that a major part of the US 8500 tons of gold is not there, it will all go quiet. No country wants to reveal that the gold is gone, as in stolen or misused officially. There has been pressures for audits in France and Germany in later years, but this has had no effect. The stories are well reported, studied, and examined. Germany took five years to repatriate 647 tons of gold, a remedy for a theft under the smooth label. Bullion Banks will hypothecate the same gold many times. They will collude with London to steal Arab gold. The Swiss refiners are involved, recasting stolen gold bars for remarked Asian standards in kilogram form with a couple more 9’s in the purity.
Amazingly, 3000 tons of gold go East annually. As preface, consider that South African gold mine output fell by nearly 70% in recent years. Yet the Rand Refinery, their national jewel, increased output by triple in volume. They are the primary receiver of gold output from the distressed African region that includes Congo. One cannot rely upon national mine output data. The entire picture, including refinery output, along with import flows must be considered in the analysis.
Focus upon the purchases of the Silk Road players, namely India, Turkey, Russia, and China. Since year 2009, these countries have bought almost 20,000 tons gold. That is just under 3000 tons annually. The figure is astounding, given that the annual volume is greater global mine production during these years. So just four countries have absorbed annual mine production in the last seven years. In addition, substantial accumulation has taken place by other countries and by individual investors. One should suspect that a major part of the supply covertly has come from central bank activities. No gold stockpiles exist anywhere. Since 2011 when gold made a peak of $1920 per oz in price, the propaganda has blasted that no demand for physical gold has been the case. During the last six years, between 4000 and 4500 tons gold have been refined annually, all of which has been absorbed by the market. There are no stockpiles of gold anywhere. The current situation is a stealth gold bull market. The price premiums reflect the bull in numerous anecdotes for big purchases. The common price premium is around 80%. See Patriot Rising (HERE).
◄$$$ ANDREW MAGUIRE BELIEVES A SHORT CIRCUIT AT THE COMEX IS APPROACHING, LIKE MAYBE THIS YEAR. $$$
London gold trader Andrew Maguire believes a COMEX (aka CRIMEX) price reset could actually occur this year, due to the influences of the physical market. He thinks the internal mechanisms are short circuiting, and that paper market algorithms have gone awry. Too many paper claims sit chasing the single gold ounce. Such cannot stand. See Silver Doctors (HERE).
◄$$$ THE GERMAN GOVT RECLAIMED ITS GOLD RESERVES, A LONG SLOW PROCESS SHROUDED WITH FALSE STORIES AND UNDECLARED MOTIVES… THE BUNDESBANK HAS COMPLETED GOLD REPATRIATION FROM THE NEW YORK FED, THREE YEARS AHEAD OF SCHEDULE… NEW SUPPLY HAS REPLACED THE STOLEN GERMAN GOLD. $$$
It seems to the casual alert observer that the German Govt cooperated with the New York Fed in gold thefts of the German gold reserves. The Germans decided not to make a big stink with ugly publicity a few years ago. So they agreed to allow gradual shipments from apparently new gold supply, in order to repatriate the German gold reserves sitting in the NYFed. They were obviously rehypothecated, a nice euphemism for stolen and used improperly without permission. The process has been completed. The Jackass suspects some stolen Arab gold was used in the process. Back in 2011 or so, a German delegation from their Parliament was turned away in New York, when they wanted to view their gold reserves in stored vaults for the last 20 to 40 years. The Voice thought a while back (like two or three years) that the German Govt might have been preparing for gold reserve accumulation toward introduction of a gold-backed Nordic Euro currency. See CNN Money (HERE) and Zero Hedge (HERE). Also follow the gold trail, as the world’s second largest hoard of gold left the United States. See Silver Doctors (HERE).
◄$$$ ARIZONA AND UTAH ARE MOVING LEGISLATING FOR DECLARING GOLD AS MONEY… THE STATE MOVEMENTS PROCEED IN DEFIANCE TO THE USDOLLAR AND WALL STREET FASCIST MONETARY LEAD… THE USGOVT IS BEING CHALLENGED FOR ITS UNION ON THE FINANCIAL FRONT. $$$
Trends are full of intrigue. The major Japanese banks are to join the CIPS financial clearing system, bypassing the US-led SWIFT system and therefore the USDollar. Witness a geopolitical and financial earthquake. Watch soon the other nations in the BRICSA bloc join and participate. China will use the CIPS system within its Silk Road projects and growing portfolio. Expect the same with the Asian Infrastructure Investment Bank led by China. Watch for Great Britain even to join, as they see the writing on the wall, thus straddling both the Western and Asian systems. Then the story about Germany completing its gold repatriation, three years ahead of time. The hastened timetable might be due to the pressures on Germany's largest bank, the deeply troubled insolvent Deutsche Bank.
Other clues indicate that something is up, something big in progres. Recall that last year the US state of Texas had legislated the creation of a state bullion depository. The defiant Texans wish to repatriate their own bullion stocks from the New York Fed to its new bullion depository. Talk persists for Texas to secede from the union. Add Arizona and Utah to that mix, at least tentatively. The Utah state bill sets the stage for creation of a state gold depository, thereby encouraging the usage of precious metals as money. Also, an Arizona Committee passed a bill to support sound money. If both states pass their measures, then two American states could build state bullion depositories. They are making a statement that the USDollar is fake money, unsound money, corrupt money, even toxic money. They are indirectly placing blame for the current financial crisis on the USDollar and its reckless imprudent management. They strive to affirm that Gold & Silver are specie money, as in constitutional money and legal tender. See Giza Death Star (HERE).
◄$$$ RISING LABOR COSTS HAVE SERIOUS IMPACT ON THE WORLD’S LARGEST GOLD MINER… RISING COST STRUCTURE NOT SUPPORTED BY PRICE… BARRICK GOLD OUTPUT IS IN DECLINE, BUT UNIT LABOR COST PER OZ GOLD IS RISING… JUST ONE MORE PIECE OF EVIDENCE THAT Q.E. MONETARY POLICY AFFECTS THE TANGIBLE ECONOMIES. $$$
Barrick Gold is a criminal enterprise, the world’s largest mining firm, but it is worth studying since its microcosm is so large, indicative, and exemplary. While certain mining costs, like energy, have declined since the price of oil plummeted from over $100 per barrel in 2013 to an average $43 in 2016, quite the opposite has taken place with the cost of labor. Barrick Gold is paying much more in labor to produce an ounce of gold metal than it did just five years ago. For example, Barrick Gold only paid $1.5 billion in labor costs to produce 7.8 million ounces (moz) of gold in 2010. However, this cost component increased significantly in 2015, as Barrick paid $1.86 billion in annual payroll to produce 6.1 moz of gold. While the labor cost increased $360 million in 2015 versus 2010, total gold production declined by 1.7 moz.
Using the annual payroll data from Barrick Gold’s Sustainability Reports, one can see the ugly trend in the chart. Barrick’s annual payroll has continued to decline since 2012. However, its production has also declined even more. Do the calculations. Divide the annual Barrick payroll by volume in ounces of gold produced, to arrive at the Unit Labor Cost per ounce. The labor costs have increased per ounce of gold produced. The DOLLAR image (in purple due to my color reversal) at the bottom of the bars represents the labor cost per ounce, and the BLUE portion of the bar is the annual price of gold. It is a complex bar chart by SRS Rocco, but his sturdy efforts are always of high value and deeply appreciated. In 2010, Barrick paid $192 in labor costs per ounce of gold compared to $304 per ounce in 2015. Thus, unit labor costs per ounce of gold have increased 58% in just five years. From a different perspective, labor costs were only 15.7% of the gold price in 2010, compared to 26.2% in 2015.
Review their recent history. Barrick produced 7.8 moz of gold in 2010 versus the 6.1 moz in 2015. Therefore their overall rising labor costs on top of falling economies of scale have conspired to put more pressure on the Barrick bottom line. The Jackass wishes them a spectacular failure with shareholder lawsuits. See SRSrocco Report (HERE).
◄$$$ FOURTH QUARTER SAW A SURGE IN SHIPMENTS OF LARGE MINING EQUIPMENT… THE WORST FOR THE OVERALL MINING INDUSTRY APPEARS OVER. $$$
The painful four year decline in large equipment deliveries hit bottom in early 2016. Since that time, the trend has improved though still dire. Shipments of large mobile surface mining equipment shipped during the last calendar quarter increased almost 35% by unit volume, with aggregate value increasing by 28% versus Q3. These gains came on top of significant improvements during the July-September quarter. Coupled with a numerous other markers within the mining industry, the worst appears over. Possibly the overall industry is at the beginning of a sustainable growth cycle.
This data is the result of direct reporting of individual machines shipped by the leading manufacturers of large mining trucks, electric/rope, and hydraulic shovels/excavators, wheel loaders, crawlers, and wheel dozers, blast-hole drills, and motor graders. Data is collected by The Parker Bay Company. They report on the Parker’s Bay Surface Mining Equipment Index. It topped at 175 at the beginning of year 2012, and hit the multi-year low of 27 in 2Q2016. For the entire period from 2007 to 2011, the index ran between 70 and 120. The decline in shipments over the last four years was extreme. The gains during the second half of 2016 appear quite modest. Some sectors have yet to project significant improvements in their 2017 sales. Even still, these results are the first clear gains that point to an end to relentless declines. The Index, which tracks shipments of only the largest mobile equipment delivered to the largest surface mines worldwide, covers mines and machines that produce a significant share of the world’s coal, copper, iron, gold, and other minerals. See Mining (HERE).
## PRECIOUS METALS ON VERGE OF BREAKOUT
◄$$$ BO POLNY FORECASTS A HUGE BREAKOUT MOVE IN GOLD & SILVER BEFORE THE MONTH OF MAY… FANTASY ABOUNDS… HE CALLED THE BOTTOM IN GOLD LAST DECEMBER CORRECTLY… HIS NEXT BOLD FORECAST SEEMS WILD AND AGGRESSIVE, SINCE NO INTERMEDIATE TERM CONFIRMATION. $$$
On 16 December 2016, Bo Polny stated with conviction that gold had bottomed at $1124 and would go no lower. He was correct to the exact day and price. Then on 10 February 2017, Polny posted a video indicating Gold & Silver were ready to break out in price. He described a new dawn for the precious metals. Last week, silver finally pushed over the $18 level, in what seems a prelude to more breakouts. Gold will follow. He foresees a major move upward with a confirmed breakout having been registered. He wrote, “A price explosion follows in the days and weeks ahead! Gold will be over $2000 and Silver over $60 by May 2017, if not sooner. The fear-provoking gold analysts Armstrong and Dent will once and for all be proven incorrect! Fasten your seat belts!” See Silver Doctors (HERE). Agreed on Harry Dent being a dolt. He knows demographics and seems a one-trick pony with no comprehension of the Global Paradigm Shift.
Upon examination of the Polny analysis (chart shown above), the Jackass concludes the bottom was effectively called. It is nicely rounded, and tested last December. The Trump election victory and inauguration has confirmed the turnaround. However the powerful breakout depends upon chart analysis with the multi-year downtrend using the $50 peak in 2011. To be sure, a breakout has occurred from the enduring intermediate low and bottom formation. The resistance at the $20 level will be formidable, unless a magnificent shift occurs, on the back of a newly formed global paradigm. The Jackass prefers a more cautious charted downtrend line, which will be penetrated to the upside soon enough. The charts to follow will use the peaks in the last four years.
For an interesting review of the silver price, and why price is not really important, check out the Silver Phoenix. He foresees the time in the not too distant future, when there is no price. Rather, in the absence of cash, silver & gold cannot be bought. The Jackass agrees with such a scenario, with gold also. See Silver Phoenix (HERE).
◄$$$ SILVER LOOKS GREAT ON AN INTERMEDIATE BASIS, WITH REVERSAL LOOKING RELIABLE… IT IS LEADING THE PRECIOUS METALS CURRENTLY… WAY TOO EARLY TO CALL IT A BREAKOUT… SIGNIFICANT RESISTANCE AT THE 20 LEVEL, YET AHEAD… NO HISTORICAL BREAKOUT FROM THE POWERFUL DOWNTREND CAN BE HERALDED UNTIL ABOVE THE 20-24 RANGE. $$$
◄$$$ SILVER LOOKS PROMISING IN THE SHORTER TERM WITH A BREAKOUT HAVING OCCURRED… HISTORICAL BREAKOUTS CANNOT BE CONFIRMED UNTIL INTERMEDIATE BREAKOUT AND SHORT-TERM BREAKOUT ARE BOTH REGISTERED… MOVING AVERAGES INDICATE CONFIRMATION OF REVERSAL AND JUST THE SHORT-TERM BREAKOUT. $$$
◄$$$ GOLD IS BIDING TIME, LIKELY TO FOLLOW THE SILVER LEAD… IT LOOKS POSITIVE BUT STILL HEAVY RESISTANCE OVERHEAD… THE GOLD REVERSAL IS IN THE VERY EARLY STAGES. $$$
◄$$$ GOLD LOOKS POSITIVE IN THE SHORTER TERM, BUT VERY MUCH BOUNDED BY THE INTERMEDIATE CHANNEL… GOLD AWAITS A SHORT-TERM MOVING AVERAGE BULLISH CROSSOVER… HUGE RESISTANCE UP TO 1350-1375. $$$
◄$$$ CRUDE OIL IS UNDER STRICT CONTROL BY WALL STREET, VERY EVIDENT IN ITS LACK OF MOVEMENT (SHOWN IN RED BOXES)… IT IS NOT BIDING TIME, BUT RATHER A RIGGED MARKET… HIDDEN SIGNIFICANT DOWNSIDE RISK FROM FUNDAMENTALS RELATING TO ECONOMIC RECESSION AND RESUMED SUPPLY FROM IRAN… WALL STREET BANKS ARE FACING POSSIBLE ANIHILATION IF OIL PRICE FALTERS, AND HEADS BACK TOWARD THE 30 HANDLE… THE 50 LEVEL IS BEING DEFENDED VIGOROUSLY (TO THE DEATH). $$$
## ECONOMY STILL HOBBLED
◄$$$ US WHOLESALE INFLATION SAW ITS BIGGEST MONTHLY GAIN IN FOUR YEARS… BLOCKHEADED ADVOCATES OF INTEREST RATE HIKES ARE POUNDING THE TABLE AGAIN, ASSUMING AS FIXED IN PLACE THE BOND PURCHASE INITIATIVES AT THE USFED… THEY ACCEPT AS GIVEN A SLUGGISH RECOVERY, WHEN REALITY IS A VICIOUS MULTI-YEAR RECESSION… THE WRENCH IN THE WORKS IS GREATER FISCAL DEFICITS FROM THE TRUMP RECONSTRUCTION… ANY RATE HIKE RISKS A SYSTEMIC BREAKDOWN AND SIDETRACKED TASK OF REBUILDING THE NATION’S INDUSTRY. $$$
US wholesale inflation continued its upward trend in January, recording its largest monthly gain in more than four years, according to the USDept Labor. The Producer Price Index, which measures prices from the business seller perspective, rose 0.6 percent in seasonally adjusted figures. It was the largest such gain since September 2012. The upward price pressures were lower when the more volatile categories of food, fuel, and trade were excluded. Of course the nitwit compromised economic analysts got it wrong, with a consensus forecast of 0.3 percent on the PPI. Excluding food and energy, the index saw a monthly gain of 0.4 percent. Year over year, the PPI figure was unchanged at 1.6 percent, which is unadjusted since a full annual cycle. The rise was due to more factors than just relaxed energy prices. Jim O'Sullivan is chief US economist at High Frequency Economics. He wrote to clients, “In short, [the PPI was] fairly strong and not just because of energy. The core measures continue to show some acceleration, even if the latest data were exaggerated a bit by volatile trade margins.”
The large sequential monthly gain supports views among blockheaded and heretical US monetary policymakers that further interest rate increases may be necessary in 2017 to contain inflation. Their destructive corruption and stupidity is appalling and shocking. The central bank has stood pat since raising rates in December for the first time in a year. However, it was a fake rate hike, with a hidden Reverse REPO aspect to increase big bank leverage, nothing more. The nutty conventional thinking has the USFed refraining from raising rates too quickly for fear of interrupting a fragile recovery. The corrupt august body has taken a different view toward the likely course of monetary policy in 2017, citing greater uncertainty with the new Trump Admin. It has promised more debt for the infra-structure projects, against a backdrop of reduced taxes and relaxed regulation. Any interest rate hike risks worsening the recession and causing a bank derivative accident. Such derivatives support the corrupted rigged bond market, where rates are managed. The ambitious Trump project would result in greater economic activity from capital formation in about two or three years.
The sound money advocates, who do not embrace the debt explosion from Keynesian failed policies, might have a different view toward monetary policy. Instead of a rate hike, it might be wise to halt the $70 to $80 billion per month in QE bond purchases. Let the bond market drive the process, probably in rate hikes. The financial sector must adapt to more normal dynamics. The QE policy skews everything, and distorts the stock market as well. The wrongful assumptions include continuing QE bond buys and continuing the absurd perception of a sluggish economy. Financial engineering has worked to destroy the US nation. The USEconomy has been stuck in a vicious recession for over seven years. Evidence begins with the jobless rate over 22% (refer to Shadow Govt Statistics), the decline in home ownership, the rise in Food Stamp users, the rise in homeless tent cities, and inequitable wealth distribution. More perverse evidence is seen in the easy recruitment of vagabonds for hire in Soros NGO groups to enter demonstrations and riots against the current administration. They want the return of the Free Stuff Movement from the displaced legions of Obama supporters. See Yahoo (HERE).
◄$$$ HOUSEHOLD DEBT UP BY THE MOST IN A DECADE… HOME LOAN DEBT HAS COME DOWN SINCE THE LEHMAN CHAPTER OF 2008… BUT THE BIG COMPONENTS IN HOUSEHOLD DEBT ARE CAR LOANS AND STUDENT LOANS, NEITHER OF WHICH HAS ANY CONTROLS IN PLACE… THESE ARE NEW BULGES IN DEBT CANCER… THE ABUSE IN UNDERWRITING LAST DECADE WAS IN HOME LOANS, BUT DURING THIS DECADE IT IS IN CAR LOANS… THE BUST WILL BE IN CAR AND STUDENT LOANS. $$$
The total amount of debt held by US households climbed in 2016 by the most in a decade, driven by increases in credit card debt, car debt, and student loan debt. Its fourth quarter surge saw the highest amount of mortgage originations since before the financial crisis hit in 2008. Total household debt climbed by $226 billion in 4Q2016 and by $460bn for the year, according to a report from the New York Fed. Total household debts currently stand at a mere $99bn below the all-time peak of $12.7 trillion set in 3Q2008, just as the system began to crash. The New York Fed estimates that debt is highly likely to set a new record in 2017. The nation learned almost nothing from the 2007-2008 crisis, the newly formed crisis just a twist of the past one ten years ago. With the housing market nearly buried, the abuse turned elsewhere.
Total household borrowing today stands at 67% of nominal (unadjusted) gross domestic product, when measured against the broader economy. Compare the figure to about 85% of nominal GDP in 2008. William van der Klaauw is an economist at the NYFed. He said, “Debt held by Americans is approaching its previous peak, yet its composition today is vastly different, as the growth in balances has been driven by non-housing debt.” Same crisis level, different twist evident, while the nation’s neighborhoods are notably poorer. Fewer people are driving cars with any positive equity, a bizarre Third World attribute.
It might actually be the case that many households are beginning to move past the severe crisis from ten years ago. However, the financial crisis is far from over, as it has different victims on this round. Consider some positive trends. Households shed nearly $1.5 trillion in housing debt between 2008 and 2013, through a combination of foreclosures and paying down debt. New mortgage originations plunged from between $600 and $700 billion per quarter throughout 2006 and 2007 to less than $300 billion per quarter in 2013. Underwriting of loans has improved, except in the car sector. Loans to borrowers with credit scores below 620, considered subprime for their high risk to repay their debts, fell by more than 90%. Subprime home loan originations at the end of 2016 were more than 80% lower than in 2007. So even though the numbers are still big, the populace might have learned something, or else been blocked from the abuse. In the last quarter, overall mortgage originations again topped $600bn for the first time since 2007.
Here is the major new trouble spot, an eyesore at best and a cancer at worst. The biggest force driving household debts higher over the past decade has come from student and car loans. A decade ago, there was less than $500bn in student loans. The sum surpassed $1 trillion for the first time in 2013, and stood at $1.3 trillion in the fourth quarter. The reasons are many. School tuitions rise every year. The parents are less able to foot the tuition bills. The USGovt has extended more lax credit to colleges and universities. Thus a growing numbers of students borrowed for college years, with higher costs.
Car lending fell during the the 2008-2009 years, but began to rise by 2010. Car related debt has surpassed the $1 trillion level for the first time in 2015. Households had $1.2 trillion in outstanding car loans at the end of 2016. Car lending has been driven in part by low rates, while at the same time liberal loan terms are available to even the riskiest borrowers. What abuse existed in the 2000 decade for home loans in ridiculous reckless insane lending and underwriting, the abuse moved to the car loan sector in this decade. The usual six-year or even eight-year loans are somewhat standard. The car loans are in negative equity ground in the first few months. The Wall Street bandits and harlots package the car loan tranches with phony ratings, and shove them in the asset backed securities dominated by home loans. Some reckless underwriting occurred from ten years ago, just different grounds in the car sector. The bust is coming, but this time in car loans and student loans. The bust will be smaller this time around, but still massive enough to call it a crisis. The big risk is to topple banks that were severely weakened in the Lehman chapter.
◄$$$ PAYLESS PONDERS THE SHUTDOWN OF 1000 STORES… THE SHOE RETAILER HAS HIRED CONSULTING FIRMS TO RESTRUCTURE ITS DEBT… PAYLESS HAS SUFFERED DEBT DOWNGRADES RECENTLY… THE ENTIRE RETAIL SECTOR IS IN SHAMBLES, EXCEPT FOR THE ONLINE NICHE. $$$
Payless Inc is involved in formal talks with its lenders over a restructuring plan as it contends with an unsustainable debt load. The plan includes shutdown of about 1000 stores. The discount shoe retailer could quickly be forced into filing for bankruptcy if unable to reach a deal with the creditors. A decision on whether to restructure in or out of court may be reached as soon as this month. The retail chain has hired Guggenheim Partners to help in the effort. In addition, the retailer hired law firm Kirkland & Ellis LLP to look at options for its $600 million debt load. Payless is the latest retailer to face hard times as a result of declining mall traffic. The company’s largest troubled debt component is a $520 million term loan due in 2021. The loan, which was last quoted above par value in July 2014, trades around 50-52 cents on the dollar.
Traditional chains are struggling because of the quickening shift to online shopping offered by competitors led by Amazon, and other trendy retailers who have adopted the online route to business growth. Several retailers are in dire straits. They include JCrew Group, Claire’s Stores, Gymboree, Rue21, and True Religion Apparel. These companies were identified as the most troubled companies on the Standard & Poor Global’s list of retailers on negative outlook. Moodys Investors Service and S&P both cut the ratings of Payless loans in February, pointing to revenue declines and mounting debt leverage. Moodys in its report highlighted the company’s high leverage and limited access to funds.
Payless was acquired by private equity firms Golden Gate Capital and Blum Capital Partners in 2012, as part of a split of publicly traded Collective Brands Inc. The company was originally founded in 1956 in Topeka Kansas. It currently has more than 4400 stores in 30 countries and employs more than 25,000 people. Hence, the 1000 stores at risk of shutdown represent 23% of the base store count. See Bloomberg (HERE).
◄$$$ NEIMAN MARCUS WAS DOWNGRADED INTO DEEP JUNK AS S&P FORECASTS CONTINUED WEAKNESS… FITCH EXPECTS THE RETAIL SECTOR TO REPLACE ENERGY AS THE MOST DISTRESSED IN 2017. $$$
In early February, Standard & Poors downgraded Neiman Marcus by a shocking three notches to CCC-plus from B-minus, moving it deep into junk territory. The S&P statement cited its poor operating performance in recent quarters, for badly weakening its credit metrics. The outlook is negative, meaning the agency could downgrade again in the medium term. Helena Song is the S&P credit analyst. She stated, “Trends such as weak mall traffic, highly promotional retail apparel environment, and cautious consumer spending continue to weigh heavily on the Neiman Marcus operating performance and EBITDA. We believe these meaningful industry headwinds, both secular and cyclical, will likely hinder meaningful EBITDA recovery, and as such we project adjusted leverage in the low 10x range and interest coverage in the high-1x area over the coming year." The negative outlook offers a 33% chance it could downgrade again over the next year. Fitch Ratings made a dire comment. The rating agency stated in January that it expects the retail sector to replace oil & gas as the most distressed sector in 2017. They forecasted the retail-only default rate will jump to as high as 9% in 2017, up sharply from its current 1% level which is calculated on a trailing 12-month basis. See MarketWatch (HERE). As footnote, EBITDA stands for earnings before interest, taxes, depreciation, and amortization (of debt).
All the US department stores are rotting on the vine. The chain is known often as Needless Markup, its nasty nickname, earned for high prices without justification. Online competition plus the wretched economy has wrecked them. Big names such as Macys, Sears, and Circuit City are already dead.
◄$$$ UNITED STATES SUFFERS FROM CRUMBLING INFRA-STRUCTURE… THE ENTIRE US-NATIONAL STRUCTURES HAVE BEEN NEGLECTED FOR OVER A GENERATION… BUDGET SPENDING NATIONALLY HAS BEEN PRIMARILY FOR WELFARE SYSTEMS AND WARS… SEVERE NEGLIGENCE HAS LEFT THE US-NATION BANKRUPT AND BROKEN… TRUMP WANTS TO ADDRESS THE PROBLEM WITH $1 BILLION IN INFRA-STRUCTURE PROJECTS… HE IS WISE TO ASK FOR FOREIGN HELP… TIME FOR AMERICAN FOREIGN AID DURING A TIME OF NATIONAL EMERGENCY, AS IN DIRECTED TO AMERICA TO BENEFIT AMERICA. $$$
Michael Snyder covered the topic capably from the Economic Collapse. Previous generations of Americans conquered an entire continent and erected the greatest system of infra-structure that the world had ever seen, but now thousands of extremely impressive projects are decades old and in desperate need of repair or upgrade. They have been neglected, as the US seeks new enemies and fabricates new wars, to fund the flush military industrial complex. The near catastrophic failure of the Oroville Dam in California is a perfect example of disrepair. We should be constructing the next generation of infra-structure projects for our next generation. Instead we struggle with basic maintenance for the national system of roads, bridges, tunnels, and ports. The tech telecom structures are in good condition, funded by corporations. Our crumbling infra-structure has become a joke to much of the rest of the industrialized world. Sadly, this is just another symptom of our long-term economic collapse.
Snyder is incorrect when he stated, “We simply are not able to put as much of our money toward infra-structure as previous generations of Americans did, and as a result we have a giant mess on our hands.” Wrong! We have had plenty of funded projects, but the outsized proportion have been destructive in nature, in the form of military weapons. We as a nation have been seeking wars, creating enemy nations, just like today with respect to Russia. The entire Ukraine conflict is blamed on Russia, but it was a NeoCon Nuland project and cost the USDept State $5 billion. Think of how many bridges could have been repaired with $5bn, and the spending was hidden from public view amidst severe bellicose propaganda. The USGovt has ass-backward priorities, whereby defense (military aggression) comes first, and the country’s structures come last, whereas capital spending toward ease of new business creation is never even considered. The following are 11 deeply alarming facts about America’s crumbling infra-structure can be identified.
#1. According to the American Road and Transportation Builders Assn, nearly 56,000 bridges in the United States are currently structurally deficient. The number of vehicles that cross those bridges totals 185 million per day.
#2. More than one out of every four bridges in the United States is over 50 years old, most never having had major reconstruction work.
#3. America does not have a single airport that is considered to be in the top 25 in the world.
#4. The average age of America’s dams is now 52 years.
#5. Not too long ago, the American Society of Civil Engineers gave the condition of America’s dams a D grade.
#6. Overall, the American Society of Civil Engineers said that the condition of America’s infra-structure as a whole only gets a D+ grade.
#7. Congestion on our highways costs Americans approximately $100 billion a year in wasted fuel and time.
#8. According to the USDept Transportation, over two-thirds of our roads are in dire need of repair or upgrades.
#9. In order to completely fix all of our roads and bridges, it would cost around $800 billion.
#10. Federal spending on infra-structure has decreased by 9% over the past decade.
#11. According to Bloomberg, projected that by year 2025, shortfalls in infra-structure investment will subtract as much as $3.9 trillion from USEconomic activity.
The citizens of the US nation can no longer take for granted safe drinking water or electricity supply. Sewer systems, water pipes, and water treatment facilities all over the nation are aging and are in desperate need of repair. The exact same charge could be made about our power grid, whose capacity cannot handle extremely hot days of summer. It has not kept pace with the population growth. The power grid is exceedingly vulnerable to an electro-magnetic pulse event. The estimated cost to harden the grid against an EMP event would be about $2 billion, but our politicians refuse to spend the money. They fund wasteful weapons systems easily.
Meanwhile, President Trump is completely correct when he says that our airports look like something that you would see in a Third World country. Most of our airports are at least several decades old, showing their age badly. The mass transit around the country looks woeful and a generation obsolete. While other nations such as Japan and China are investing huge amounts of money into high-speed railway systems, the US is stuck with the truck and highway solution, and have pathetically earned gridlock as the reward. The country’s ports, schools, waterways, parks, and more suffer from a similar rundown condition. Trump’s instincts are exactly correct, when he works toward a national $1 trillion project to upgrade the nation’s infra-structure. Watch him have trouble raising committed funds, but worse, watch the defense budget not be reduced to accommodate the plans. The problem is that the US nation is flat broke. We are $20 trillion in debt, and we are adding more than a $trillion to that total every year. The next problem is the source of funds to conduct renovations. It is easy for liberals to say that we should raise taxes, but to squeeze the US consumers is foolish and counter-productive. Two-thirds of the country is living paycheck to paycheck. We just learned that US household debt has risen to a grand total of $12.58 trillion. The nation requires a vast national project of capital formation and new business formation, best done via free trade zones in every state.
Once upon a time, America was the wealthiest nation on the entire planet and we could afford to construct bold, new infra-structure projects from coast to coast. But after forfeiting the majority of our industry, and directing heavy spending to weapons and war, the US has neglected its interior structures. Our national long-term economic collapse is manifested precisely in this manner. The national priorities for spending are totally insane and out of kilter. As CEO Jack Ma of Alibaba stated at the Davos Banker Barbecue in Switzerland last month, known as the Davos Economic Forum, the USGovt wasted $15 trillion in military spending in the last 25 to 30 years waging war and destabilizing numerous nations, with nothing to show for it. Actually the US has much to show for such misdirected wasteful disgusting spending. The US has enemies around the world, some of whom are USGovt creditors, and the US nation is falling apart structurally from gross negligence. The Jackass has been harping on these exact points for 12 years in the Hat Trick Letter. The other item not mentioned by Snyder is that the US has a $550bn national trade deficit, which means every year capital is further drained from the depleted nation, undermining the potential for repairs. Even the most responsible presidents spent like madmen fools on defense during the last generation. Refer to Reagan. Being a strong nation requires fixing your on cities, and the task starts at home. See Silver Doctors (HERE).
Thanks to the following for charts StockCharts, Financial Times, UK Independent, Wall Street Journal, Zero Hedge, UK Independent, Bloomberg, Business Insider, Calculated Risk, Shadow Govt Statistics, Market Watch, and many more.