GLOBAL MONEY WAR REPORT
DEBASED CURRENCY COMPETITION
SOVEREIGN BOND BREAKDOWN
CENTRAL BANK DISCREDIT

* Intro Monetary Fragments
* Global Chess Side Board
* Germany Turns Eastward
* Eastern Alliance Against USDollar
* BRICS Wall Taking Form
* South Stream Gazprom Battle
 


HAT TRICK LETTER
Issue #124

Jim Willie CB, 
“the Golden Jackass”

13 July 2014

QUOTES ON MONEY

"All of these [high stakes] deals [by a long list of nations] are with the exclusion of US dollars. Each individual deal that is done is another chip away at the dollar. It is my expectation that we will hear any day now from the Saudi Arabians. They are the absolute trump card and should they announce any deal with any partner in any currency other than dollars, the day will have arrived. Should Saudi Arabia make an announcement of accepting another currency, the USDollar [index] will probably gap down 2-3 points initially and never again return to these current heights. No matter how it is spun by the press, Washington, or Wall Street, please know that life as we knew it will have changed. For us Americans, there will be no going back. In my opinion, our markets and banking system will not hold together more than two weeks after any such Saudi announcement and it could be much faster (as in the next day or even same day). This is not me crying wolf. The wolf is at the door and if you put the international pieces together, this is clear. Life inside of the United States and all over the world will change. Our standard of living will be crushed. What dollars you have left after the smoke clears will purchase far less than they do today. In my opinion it will take 10 to 20 years before our ship can possibly be righted, but never to the status that we have enjoyed so far during our lifetimes." ~ Bill Holter (the last leg on the USDollar throne is the Saudis)

"An audit of USTreasurys would be enough to bring down the system. It would reveal the real owner by nation, who has redeemed them, and how much dependence on derivatives exists. It would show where the Gold is, and who leased it, as well as who does not have the Gold. It would bring to light the influx from China at the time of the Most Favored Nation granted in 1999. It is closely guarded information. The security at the USDebt Admin facility in West Virginia is now tighter than at the Pentagon." ~ Anonymous Source

"This time is different. It is different, because the Federal Reserve’s Zero Interest Rate Policy (ZIRP) has starved investors of all sources of safe return, forcing them to accept risk at increasingly higher prices and progressively dismal long-term prospective returns. More importantly, this time is different because warning signs that appeared at every major pre-crash market peak have persisted and escalated, without resolution, far longer than they have done so historically. Reckless? Shortsighted? Probably. But like dot-com speculation, flipping over-priced houses, and getting a yield pickup by holding subprime mortgage debt on margin, reckless and shortsighted speculation always looks like enlightened investment genius until the hammer drops." ~ John Hussman

"The Emerging German-Russian Axis is where things are heading by default. With it we shall see the introduction of commodity backed currency being introduced and a global barter system being installed. The nightmare for the West is the unification of Russia and Germany. The two nations will enlist and bring along China. It is going to come for certain, since a natural process that cannot be stopped. There are some powerful decision makers and advisors on the core team that are going to see to it that the so-called Third World, especially Africa, will have all its foreign (IMF/IFC/WB) debt wiped out as a result of a fresh accounting that considers all the wealth that has been stolen from that continent in the past." ~ Voice

## INTRO MONETARY FRAGMENTS

◄$$$ IRAN AND QATAR PLAN A FREE TRADE ZONE, A CONCEPT TOTALLY OUT OF THE REALM OF POSSIBILITY FIVE YEARS AGO... BENEFICIAL RELATIONS ARE BUILDING THROUGHOUT THE ENTIRE GULF REGION. $$$

An Iranian official reported that the Islamic Republic and Qatar plan to establish a joint free economic zone, with the southern Iranian province of Bushehr and its adjacent provinces serving as the trade hub. The usual mention of Bushehr is with respect to their nuclear refinement facilities located there. Progress is in the open. Mohammad Hossein Barkhordar is a member of the Tehran Chamber of Commerce, Industries, Mines & Agriculture. He confirmed broad agreements had been reached between Iran and Qatar regarding the trade zone. It is expected that expansion of foreign trade with neighboring and regional countries will boost the Iranian Economy. Next to come is a series of joint investments and an influx of foreign capital into the country. The new trend of cooperative ventures with Qatar should extend to other Gulf emirates. Iran is regarded an excellent supplier of food and construction material, required in Qatar for their many projects. One week earlier, high level ministers and attaches conducted positive talks on methods to boost bilateral ties between Tehran and Doha in the fields of economy and commerce. See the PressTV article (CLICK HERE). No more traces of sanctions appear, as normalized trade has begun in the region. Whenever commerce eclipses or supplants war footings, all parties win. Many are benefits from reduced USGovt role in the Gulf region.

◄$$$ US-BASED ENERGY COMPANY SIGNED A MULTI-$BILLION ENERGY DEAL WITH IRAN IN THE RENEWABLE AREA (NOT NUCLEAR)... WESTERN GIANTS ARE EAGER TO ENGAGE WITH IRAN, A NATION WITH A GREAT NEED FOR CONTRATORS AND JOINT PROJECTS. $$$

The US company World Eco Energy has signed a preliminary agreement to invest $1.175 billion in plants to generate electricity in Iran. They will convert solid waste into power. The provincial governor signed the deal, which is expected will create 650 immediate jobs, with another 2000 to come over the next two to three years. Local companies from Iran plan to invest the same amount of money into the project. The Governor General explained that 80% of the workforce will be employed locally, while World Eco Energy will provide machinery, equipment, and technical expertise.

The plants will be designed to create around 250 megawatts of electricity per day, generated by burning 1500 tons of solid waste. Despite being rich in oil & gas, Iran seeks to diversify its energy sector by developing renewable energy. Last year, the country announced plans to construct three new wind farms, each with a power capacity of 350 megawatts. The wind electricity generation project is scheduled to start in September 2014. The World Eco Energy deal marks a further normalizing of relations between the US and Iran. Tehran has made steps since the New Year to curb its nuclear program, under great stress, frequent attack, and certain propaganda. The Jackass suspects they did nothing, but political pressure is off. Another item was noted in April, when the USDept Treasury awarded US-based Boeing and GE a license to sell spare parts to Iran to aid the country’s ailing aviation industry. Iran urgently needed plane parts, since much of its aging jet fleet has passed the expected service life. They needed proper replacements, a situation that lingered since 1980. See the RT News article (CLICK HERE). As the Jackass anticipated, big business has been eager to enter Iran again for large scale projects. It is happening, and will accelerate. Conflict in the region will dissipate.

◄$$$ FALSE STORY ABOUT JPM CEO JAMIE DIMON BEEN DIAGNOSED WITH THROAT CANCER... HE WILL STEP DOWN FROM HIS POST AS KING, BUT NOT ADMIT FROM THE SIEGE. $$$

The story is textbook deception. CEO Jamie Dimon at JPMorgan went public with a supposed throat cancer case, which is to force his resignation. He must undergo fictional chemo-therapy and mythical radiation treatment. The embattled executive has been on the defensive with numerous fraud and trading loss cases, now forced to step down voluntarily. Poor guy, except the story is a grand but convenient lie. One might wonder if it could be that drinking children's blood at the Lucifer altar has its deleterious side effects. However, the real word has come from a New York based client with a friend who has worked for over 20 years at the South Manhattan HQ. The Dimon story is false cover for simply exiting gracefully, and even avoiding further scrutinty before the USCongress. He has no cancer, no throat problem, and no health problem. He is clearly feeling the heat. Look for him to seek treatment at a foreign location, possibly escaping both scrutiny and subpoenas. The event is strangely timed before July 15th, at which time the Silver Fix goes away. One might wonder also if the arrest of ex-President Sarkozy in Paris France has severely rattled Dimon. More exposures, arrests, and shocks of leaders are to come. See the Silver Doctors article (CLICK HERE).

◄$$$ RUSSIAN OFFICIALS WARNED OF UKRAINE'S FUNERAL FOR SIGNING THE EU TRADE DEAL... IMMEDIATE ECONOMIC SHOCK WILL COME, LED BY CURRENCY DEVALUATION AND PRICE INFLATION, THEN SHORTAGES... THE MISSING PLANTING SEASON IS NOT DISCUSSED, A CRITICAL LOSS FOR AN AGRARIAN ECONOMY... WAR TAKES A HUGE ECONOMIC TOLL ALWAYS... THE UKRAINE ECONOMY WILL SINK LIKE A STONE... THE DEATH BLOW WILL COME NEXT YEAR WHEN SOUTH STREAM IS FULLY OPERATIONAL, INCOME FROM GAS TRANSIT IS GONE, AND UKRAINE SLIDES INTO STRATEGIC IRRELEVANCE. $$$

At quick glance, the Russian ministers overwhelm the US counterparts in professionalism, toughness, competence, and image. Sergei Glazyev serves as adviser on Regional Economic Integration. He stated bluntly, "For Ukraine, signing the agreement is economic suicide. There is no doubt that by signing this agreement, it will result in an acute devaluation of the Hryvnia [currency], an inflation surge, and in turn hyper-inflation, with a drop in living standards." Glazyev had been warning the Kiev leaders for weeks. The new fascist Kiev Govt signed a free trade agreement with the EU on June 27th. The previous government failed to sign the agreement in November 2013, leading to minority public protest and near civil war conditions that the USGovt security agencies fully supported (aka Langley), even inflamed, or actually led. The advisor Glazyev is an outspoken opponent of Ukraine joining the EU orbit. Reiterated was the stern reality that Ukraine will no longer be able to import goods from Russia duty-free. Ukraine signed the political portion of the treaty in March, but the economic features are more significant, since a path for Ukraine is set to open itself to Europe’s $17 trillion market. Ukraine's exported a quarter of its output to Russia in 2013, a total of $16 billion. Its exports to Europe were just over $17 billion, according to EU trade data.

Glazyev calculated last year, before the dispute with Russia began, that flooding Ukraine Economy with European goods could cost the country $4 billion, or 2% of its GDP. The estimate is grossly low on damage, when calculating the effect from other sector damage. The nation missed the entire planting season due to the war, the Western provinces deeply disturbed which the EU-NATO controls (not in the news). Its farmland is rich, its output huge, but not this year. For a primitive agrarian economy, it will sink very fast. The Jackass expects a 10% to 20% economic recession at least. A string of formal IMF aid requests will come, and eventually rejected since the nation has no more assets to seize, raid, steal. The US-EU lusts to capture the superb farmland almost as much as to obstruct Gazprom natural gas flow.

Russian Finance Minister Aleksey Ulyukaev perceives little value in the trade deal, as it will convert Ukraine into a second-rate EU state without any of the benefits, in his words. Ukraine is not prepared to meet European standards to engage in full-bore trade. Ulyukaev said, "By signing the Association Agreement, the country must restructure their laws to comply with European standards and open the markets. However, in return, they do not receive any influence on European legislation or policy." He referred to the cost of adopting 350 new laws and 200,000 pieces of legislation in order to present the country as equipped for trade with Europe. The lack of preparation for benefits means Ukraine is in line for severe losses out of the gate, from the Russian corridor.

Brussels implemented the Eastern Partnership initiative to incorporate six former Soviet Republics into the EU free trade zone. Poland has already joined the EU as a member state. Moldova and Georgia plan to sign the trade association agreement along with Ukraine. In contrast, Belarus has already joined Russia’s Eurasian Trade Union, and Armenia plans to join also. Azerbaijan has not made a formal decision either way. Trilateral consultations with Russia are to be held on July 11th. See the Russia Today article (CLICK HERE).

The Jackass opinion is harsh, as grand systemic failure is assured. The future South Stream (next year) and the current Nord Stream (here & now) are certain to isolate Ukraine, to deny it importance, to guarantee its economic failure. The two pipelines are the Kremlin's critical pet Gazprom projects to work around the problematic Ukraine, which has stolen natgas even while having received heavy subsidies. Russia feels powerful betrayal, to be remembered. The farm sector disruptions will continue, even as fields are fracked for natgas output, the ground water systems to be badly contaminating. Farmers will complain about water quality next year. Food shortages will accompany some level of starvation. The killing of Ukraine will expose the US-NATO plot as more sinister. In a few years, Eastern Europe might rebound a little but not flourish again. The nation will become in a hot hellspot and wasteland, a designed buffer zone. Like the Maginot Line in Belgium, the obstacles in Ukraine will be circumvented and overcome by Russia easily over time. The ravaged nation will serve as a showcase of US fascist exploit and destruction, a critical selling point for Eastern European nations to join the Eurasian Trade Zone. Such was the Putin trap for the US and West.

EuroRaj offered some summary points on the Ukraine collapse to come, or in progress. The death of  Ukraine is underway for multiple reasons:

  1. Russia refuses to supply them with gas, which means they have to take the reverse flow from Hungary. It is unclear whether doing so is legally permitted and mechanically possible.
  2. The domestic military-industrial complex used by Russia in the past has shifted base. The captured complex is antiquated, absent maintenance, and practically worthless. Any weapons of use must come from NATO (a US channel).
  3. When the South Stream is completed for Gazprom supply, and flow begins, no transit fees for Ukraine will be given. In the past, it was good and free money. The SS pipeline is expected to be operational by mid-2015.
  4. After the implicit annexation of Crimea, the Russians refuse to pay port fees to Ukraine. Also the entire Crimean business sector pays no taxes to Kiev anymore.

◄$$$ THE EUROPEAN ECONOMY IS ROLLING OVER HARD DOWN, EXCEPT FOR GERMANY... SOME WEAKNESS IS EVIDENT IN GERMANY WHILE PRONOUNCED WEAKNESS IN FRANCE CONTINUES... INFLATION IS RISING, AS ARE COSTS, SURELY CALLED ECONOMIC GROWTH IN THE SKEWED STATISTICS. $$$

EuroZone growth has slowed to a six-month low despite strengthening along the periphery where damage has been severe for five years since bond problems erupted in Greece, Spain, Portugal, and Italy. Formally, EuroZone economic growth slowed for a second month running in June, marking the weakest level since December, according to the flash reading by Markit. Growth remained robust in Germany despite being a tick lower, while the downturn in France went deeper. Elsewhere across the region, however, growth was the strongest since August 2007. The headline index covering output of both manufacturing and services, which captures the most attention, fell from 53.5 in May to 52.8, dropping farther from April 35-month high. A reading over 50 indicates growth, but as in the USEconomy, the inflation is mixed in with growth in a grand distortion. The Flash EuroZone data was seen as follows:

  • PMI Composite Output at 52.8 (53.5 in May), a 6-month low
  • Services PMI Activity at 52.8 (53.2 in May), a 3-month low
  • Manufacturing PMI at 51.9 (52.2 in May), a 7-month low
  • Manufacturing Output at 52.8 (54.3 in May), 9-month low.

Despite the slowdown, the average PMI reading for the second quarter as a whole was the highest since the second quarter of 2011. Interpret all prices as rising, all costs as being lifted, the effect falsely called growth, causing a squeeze. Output has also risen for 12 consecutive months. The rate of output growth slowed in both cases to nine-month and three-month lows respectively. The report made spurious remarks about deflation lessening its grip. They distort the rising cost effect as a positive factor, incredibly, by reducing final product price deflation. It is all Keynesian clapptrapp nonsense deception. It said, "Concerns about deflation will also be soothed to some extent by prices charged falling only very modestly, dropping to the smallest extent for over two years. However, this is in part due to rising costs, notably higher oil prices. The big concern is once again the divergent trends within the EuroZone. Although the survey suggests the region [in aggregate] should grow by at least 0.4% in the second quarter, France appears to be entering a renewed downturn after GDP stagnated in the first quarter. Germany meanwhile looks set to grow by 0.7% or more in the second quarter, albeit with signs that the upturn is starting to lose momentum again." See the MarkIt Survey article (CLICK HERE) and the Global Economics Analysis article (CLICK HERE).

◄$$$ THE GERMANS ARE BUILDING A TRANS-CONTINENTAL RAILROAD FROM THE PACIFIC TO THE ATLANTIC (COAST TO COAST), FROM VLADIVOSTOK TO ST PETERSBURG... THE SILK ROAD IS TO HAVE A NORTHERN ROUTE, TO SUPPLY EUROPE FROM THE NORTHWEST CORNER PORT... THE FRENCH MISTRAL DEAL IS A HIDDEN BRIBE USED AS A WEDGE BETWEEM THE USGOVT AND FRANCE. $$$

The trans-continental railroad is nowhere in the news. Gratitude to Jaroslav in St Petersburg Russia for an intrepid glimpse (my edits to fix second language issues). He is not a Hat Trick Letter client, just a man who knocked on the website door, offering some valued information. He wrote the following account, with heavy editing by the editor in chief. He described in addition his viewpont how the Russians are using the French ship deal to drive a wedge between US and France, with certain leveraged damage. It is working well.

"From Russia I wrote you after listening to your good broadcasts. Here is some interesting information for you to spread. We have some news in the Russian media about railroads that you do not know about, like where they are planned to start and end. The Germans are helping Russia to build a railroad from St Petersburg to Moscow with average speed of passenger train about 160 km/hour (100 mph), then from St Petersburg to Helsinki. There are many railroads from Moscow to many other cities. The most interesting developments come in 2014 after the winter. Germans will help to build a high-speed railroad from St Petersburg to Vladivostok with average speed about 500km/hour (310 mph) and length of 12,000 km (7500 miles). There are more railroads lines, which right now are under construction from Vladivostok to China. My home is in St Petersburg, where large scale construction of ports has been in progress for the last few years. We will see a tremendous flow of goods from China through Russia to Europe five years from now. There are big projects like these basic railroads which Germans helps to build.

The Mistral contract for the warship is a very interesting deal. Actually it is not a deal, but instead it is a bribe. Let me explain how. First, one ship cost about 1 billion Euros and for to break the contract another 1.5 billion Euros. It seems normal but we Russians do not make any helicopters that fit on this carrier. [Our current helicopter gunships] have many technical differences. So we must build new gunships to use the carrier ship. Secondly, we can build these ships by our own at one-tenth of the cost. Either Russia is paying 2 billion Euros for some technical documents, or it is just a bribe. Instead, it is a payment to force the Americans apart from France." Expect other helicopter contracts to populate the vessels, a catch for future deals.

One can conclude that the railway sounds like a key element in the Return of the Silk Road from Vladivostok all the way to St Petersburg, which will serve as northern route. The 500 km/hr railroad for 12,000 km must be MAGLEV (magnetic levitation), which might be slightly faster than anything in China or Japan or Europe. Therefore, the Chinese vast flow of exported products will go down to Europe through Western Russia, as St Pete will become a major distribution hub. In the backwards United States, trains struggle to achieve 100 km/hr (100 mph) as trucks serve as the antiquated backbone for distribution, but for an economy very widely dispersed. China will change that, when they take charge of re-industrializing the USEconomy. Interestingly, when the State of California opened bids for high-speed railroads across the largest continental state in the union, the project was interrupted when almost all contracts for equipment came from China. No US firms even make such transportation vehicles. The people objected, the land remaining backward. Jaroslav is a chatty fellow, eager to offer information, possibly useful in the future. Not sure of his line of work or expertise.

## GLOBAL CHESS SIDE BOARD

◄$$$ PUTIN CRITICIZED THE USGOVT ACTION AGAINST BNP PARIBAS AS RETALIATION FOR THE MISTRAL WARSHIP DEAL WITH FRANCE... THE ATTACK ON THE BIG FRENCH BANK IS LIKELY TO HAVE ADDITIONAL MOTIVES... THE FRENCH AND RUSSIANS ARE INVOLVED IN AN EXTREMELY SIGNIFICANT GOLD TRANSFER, DATING BACK 100 YEARS... MANY ARE THE MOTIVES FOR THE USGOVT TO INTERFERE WITH MATURE AND CONSTRUCTIVE RELATIONS, EVEN REMEDIARY EVENTS... THE NEXT TARGET IS DEUTSCHE BANK. $$$

Russian President Putin entered the war of words in response to the bizarre battle waged by the USGovt against France. The European nation would not back off on the Russian contract for the helicopter and armored carrier warship. Each ship carries 16 helicopters, 13 tanks, 110 armored cars, and 450 troops, along with Mistral missiles and large caliber machine guns. The ships might someday face the USMilitary, a great annoyance to the US war machine. The USGovt found a rather substantial violation by BNP Paribas (former Paris Natl Bank), and levied them a $9bn fine. Afterward, France responded to the bank attack with an announcement of training hundreds of Russian seamen to operate the French made Mistral.

Hence conclude that France is merely the latest country to admit that it chooses not to operate or exist without Russian business and significant natural gas supply. They are willing to incur the US wrath meted out on its banks. Hidden motives abound. While the US Fascists engage in scorched earth tactics, France continues to nourish a stable trade partner, which happens to supply most of Europe with its natgas. Threats by the USGovt are certain to continue unless France stays in the USD/Petro-Dollar camp, stops aiding and abetting Eurasian developments, and remains engaged in the unending US hostile rhetoric. France will most assuredly exit the USD camp in the next few months, after having already left in their minds. Divorce is always done in the mindset first, then on paper later.

On July 1st, when addressing Russian diplomats in Moscow, Vladimir Putin accused the USGovt of blackmailing France to scrap its Mistral warship contract with Russia, by offering to reduce a record $8.97 billion fine against BNP Paribas. The largest French bank agreed to plead guilty, seen in court documents, to processing almost $9bn in banned transactions involving Sudan, Iran, and Cuba from 2004 to 2012. The company will be temporarily barred from handling some USDollar transactions. Numerous other violations were part of the case, including destruction of evidence and not installing compliance methods after warnings. Putin said, "We know about the pressure which our US partners are applying on France not to supply the Mistrals to Russia. And we even know that they hinted that if the French do not deliver the Mistrals, they would quietly get rid of the sanctions against the bank [BNP Paribas], or at least minimize them. What is that if not blackmail?" It demonstrates in the open what depths the US Fascists will crawl when it fails to impose its will in the international arena even with its so-called allies. Lately, that has been in almost every instance, as Obama is an empty arrogant chair who prefers golf when he is not lying before crowds, or in hidden chambers signing executive decrees to complete the fascist state clamps.

More drama is to come. The biggest opponent of Russian sanctions in Europe is clearly Germany. The next round of retaliatory action by the USGovt against the big continental banks will be against Deutsche Bank. The punishment will surely be mixed with retaliation for continued commerce with Russia. The United States needs to prevent the Eurasian Trade Zone from capturing Europe. It is a losing battle. The US foreign policy due to continue is disastrous in all manner, from political to banking to energy to economic. Gradually, the world is realizing that Russia controls Europe, and that Europe prefers Russia on commercial grounds. The US plan appears unworkable, if not an utter disaster in the making. The big European banks will continue to offer their channels to Russia & China, even other nations, for dumping USTreasury Bonds, which is what BNP Paribas was likely involved doing on a grand scale. Putin has essentially identified revenge doled by US against its own ally.

Revenge is a poisonous elixir bound to hasten the day of retribution. Acute isolation comes to the United States. Clearly the US Fascists will isolate themselves from every single ally, all in time, including England, which will see the writing on the wall. The British will cozy up to China on the financial sector trade while not interrupting their Russian natgas supply. London will convert into a trading center (RMB Hub) as agreed upon. Also, a UK-Russia trade deal in early July is worth $18.5 billion. None of the deal was in USDollar terms. See the Zero Hedge article (CLICK HERE).

The Voice offered an opinion, which displays more complexity than meets the eye. "France is officially holding 200 metric tons of Gold from the 1917 Russian Czar's transfer to Paris. This has been in negotiations for a long time, the gold bullion to be returned to Moscow. Russia can buy the entire French Navy with the value of that Gold. We are talking about Indirect Exchange on a grand scale. No nation cares about the US any longer. The United States is still around and is most certainly an unwanted generator of constant disturbance. However, the US is not a force to reckon with any longer. The US is like the defendant before a judge who pleads in futility for mercy after additional accusations and evidence continue to pour into the courtroom. The defendant is condemned, and the game over. People of the world should feel sorry for all the misguided, blind, arrogant fools who are invested in USD assets and fail to comprehend what is coming to them. With France and Russia, like with most situations, there is always far more than meets the eye." It appears the Mistral ship deal might have been an extra gift to seal the much more important gold transfer. It has turned into a visible wedge.

More opinion from the French intelligentsia came from a distinguished pen. Sanctions against Russia are stupidity, which create a hostile climate, claims Marine Le Pen, leader of the deeply conservative National Front. She considers European sanctions against Russia to be foolish, and called for the negotiating table with Russia instead. She advocates that cooler heads prevail, using more diplomacy. She stated, "We regret that European diplomacy fails to put an end to the killing of civilians [in Ukraine]. The best way to stop this is for everyone to sit at the negotiations table. We should not treat Russia with disrespect, as we used to since the beginning of the conflict, because Russia is a major regional player. Disrespect toward Russia has possibly contributed to the severance of diplomatic relations and, in any case, prevented a diplomatic solution. We must restore communications, get everyone to the negotiating table."The fascists in WashingtonDC might consider the outspoken lady to be a terrorist. See the Voice of Russia article (CLICK HERE).

◄$$$ THE USGOVT LEGAL CREW IS SET TO ALIENATE ANGRY GERMANY NEXT, AS CRACKDOWN SHIFTS FROM BNP TO COMMERZBANK AND DEUTSCHE BANK... A LOSING STRATEGY IS PUSHING FRANCE AND GERMANY INTO THE RUSSIAN FOLD... COMMERZBANK WILL BE MESSY WITH SOVEREIGN FORCES AT WORK, SINCE THE GERMAN GOVT OWNS A STAKE... THE DEUTSCHE BANK BREAKUP WILL RESULT FROM THE PRESSURES, CAUSING MAJOR US/LONDON PROBLEMS FROM EXPOSURE OF CRIMINAL ACTIVITY (MORE BANKER MURDERS). $$$

As preface, keep in mind at all times, as the weeks and months pass, that 3000 German companies do active business in Russia. Any and all attempts by the United States to isolate Russia will result in isolation of the United States from Germany, and by consequence also from France. The Mistral warship case, when combined with the BNP Paribas punitive action, has forcefully pushed France into the Russia-China Eurasian camp. In fact the Eurasian camp can be described also as the anti-US camp. Next the failed strategy will be employed, as the pathetic USGovt amateurs and failed chess players will use the same pressures on Germany. Some have explained that the USGovt is not so much playing the Russian card with bank penalties as much as exacting taxes on the private banking sectors, in a perverse revenue source to benefit the USGovt balance sheet. The $billions are trifle amounts when considering the $1 trillion annual deficits. The BNP Paribas $9bn covers the USGovt deficit for a mere insignificant 3.3 days. It seems more sport than strategy, but also hidden motive, like interfering with the French bank in USTreasury Bond dumping by client states like Russia, China, and even India.

The divorce between the US and Germany occurs at the same time as the divorce between the US and Saudi Arabia. The damage will be severe, as the USDollar is kicked to the curb, then shoved into the dumpster. The German population was first infuriated when the New York Fed refused to return their official gold housed for secure storage. Such is the legend. Then came the Deutsche Bank scandal related to hidden derivatives in Maastricht qualification for the European Monetary Union (common Euro region) for other nations like Italy. Then came the Deutsche Bank scandal related to LIBOR, FOREX, and the Gold market rigging. Then came the scandal after NSA spying on Chancellor Merkel and certain corporate targets. Next comes the legal maneuvers once again to punish Germany's largest banks for the same kind of money laundering that BNP was engaged in, with certain alliance fractures surely to result. But Deutsche Bank was also involved in processing dirty Russian Mafiya and oligarch money through London channels. It could get ugly. As the New York Times and Reuters report, the time has come to shift away from the BNP case and focus on what will soon be the Commerzbank and Deutsche Bank fallout. As cited before, expect D-Bank to be split into six or seven separate financial firms in a major high profile breakup. Intrigue will fill the rooms, since restructure will involve deeply criminal subsidiaries, like their Bankers Trust entity.

The money laundering crackdown is bound for another European financial center in Germany. The NYTimes correctly highlights, "The Commerzbank investigation features an added twist. The bank is 17 percent owned by the German Govt. It is unclear whether as in the BNP case, which led French authorities to intervene on the bank’s behalf, the settlement talks could inflame diplomatic tensions between Washington and Berlin." The BNP case featured elite European families (described in the June HTL reports), but the Commerzbank case will feature the German Govt and powerful sovereign figures. See the Zero Hedge article (CLICK HERE). The government affiliated bank plays a unique role in the Americas. In whatever nation the banks wish to avoid the toll takers from the US SWIFT gateways, one will find Commerzbank as intermediary, like in Panama, Belize, Nicaragua, Venezuela, and even Uruguay, as well as other South American locations. Some powerful, shady, and at times slimy entities will be eager to protect their underworld or otherwise protected interests in those nations.

◄$$$ A MAJOR CHESS MOVE IS IN PROGRESS IN THE UNITED STATES BACK YARD... RUSSIA PLANS TO SPONSOR THE CREATION OF A MAJOR TRANSPORT HUB IN CUBA, AN INFRASTRUCTURE UPGRADE, COMBINED WITH A MASSIVE DEBT FORGIVENESS... A LATIN AMERICAN STRATEGY IS UNFOLDING, WHICH INCLUDES LIFTING ARGENTINA (A PERENNIAL NEW YORK EXPLOITED GROUND), AND GIVING ADDED THRUST TO BRAZIL WHICH LANGUISHES... PUTIN IS UNFOLDING AND PRESENTING HIS AMERICAN HEMISPHERE TRADE ZONE, WITH A DEVELOPMENT TABLE, WHICH WILL IN TIME EXTEND TO THE EURASIAN TRADE ZONE IN A MAJOR CHESS MOVE IN THE BACK YARD OF THE FASCIST AXIS. $$$

The hint of a BRICS Associate nation being adopted is clear, in Cuba. As preface, in response to the United States playing subversive adventure roles in Ukraine, Eastern Europe, and the Baltic States, Russia has decided to do some constructive nation building across the span of all Latin America. Cuba is a pit stop with China already entrenched in Panama and Brazil, even Canada. The nation of Brazil serves as the cornerstone for BRICS expansion into the American Hemisphere, as Canada serves the purpose up north. Witness encirclement. When Africa is brought into the Eurasian Trade Zone, along with Latin America, the encirclement will be global. The United States is about to lose Europe as ally. In fact, the US is being isolated, with not 5% of the population aware. A debt restructure agreement between Russia and Cuba is being hatched. A deal was first signed in October 2013 and draws a line under a twenty-year dispute. Cuba will benefit from a huge debt forgiveness, but the crippled nation is required to pay back $3.2 billion over the next 10 years. The initial payment from Cuba is expected in October. Look for default immediately, and more debt forgiven by the Kremlin. Some concessions might come in the form of a Russian Naval port being handed over, like in Mariel.

Russia, Cuba, and possibly other countries will pool resources for creating a major transport hub in Cuba by upgrading the port of Mariel and building a modern international airport in San Antonio de los Banos, along with a major cargo facility. Russian President Vladimir Putin gave an exclusive interview to the Latin American news agency Prensa Latina ahead of his South American tour. The itinerary is for visits to Cuba, Argentina, and Brazil.

The lead item is $31.5 billion in Cuban debt forgiveness by Russia. Cuba pledged to spend $3.5bn on a raft of significant investment projects, which Russia will select and negotiate together with the Havana syndicate lieutenants. The debt extends from the old Soviet era. The step is unprecedented, and testifies to the strategic nature of their bilateral relations, in Putin's words. Imagine a foreign nation setting foot on United States soil to forgive 90% of $17 trillion debt. An Intergovernmental Agreement was signed in October 2013, in its final stage of ratification. A multi-national commission was created, which must go beyond the intensely corrupt Fidel cabal clan in order to be effective. The Fidel Gang owns some $6 to $7 billion in hidden Swiss accounts, earned off bribes, skimming, black market activity (like shrimp sales), and running the hotel industry with slave labor. The commission has met 12 times already, around business councils as well as the Havana Trade Fair. See the map below, where the Mariel port is marked west of Havana. It will look different with a Russian flag over the naval port in a couple years.

Cash strapped Cuba has been feverishly working to restructure its debt, to stimulate its economy, and to attract investment. It began reforms in recent years by once again permitting private vegetable gardens, and more freedom to emigrate (like for baseball players, see Yasiel Puig of LA Dodgers). Three years ago Cuba restructured $6 billion it owes to China, and in 2012 Japan enabled $1.4 billion in debt forgiveness. Mexico recently forgave $478 million of Cuban debt, of which Havana agreed to pay back $146 million over 10 years. Cuba’s total debt was officially estimated at $13.6 billion in 2012 which is described as active. Other debt accumulated before the default in 1980s is referred to as passive. Cuba has remained a strong ally of Russia, with trade between the two countries at about $200 million last year. After the Soviet Union dissolved, Russia became the legal successor to Cuba’s loans. Strangely, Cuba in turn rejected the transition, claiming the debt was in a currency that no longer existed, and was to a country that had vanished. So the Putin resolution is a cleanup project from the Soviet era to push aside confusion and resentment. Putin wants a naval port.

As for project details, the projects are aimed at social and economic development of the bereft poverty stricken nation, a failure of crony communism. The average wage in Cuba is stuck at $25 to $30 per month (not per day). Offshore energy projects are in store, progress already made. Zarubezhneft started drilling the first development well in the Boca de Jaruco oilfield in August 2013. Putin is actively promoting the projects, stating "Our short-term prospects include the development of new oilfields in the Cuban offshore area. To these ends, Zarubezhneft and Rosneft engage in active cooperation with CUPET, Cuba’s state oil company." The construction of power units for the Maximo Gomez site and in East Havana is underway, with grants of Russian electric power equipment. A list of Russian companies show interest in the development of the Mariel special economic zone in Cuba. Areas include reinforced plastic goods, auto spare parts, tractor assembly, and installation of heavy equipment for the railway industry. The center piece is a major transport hub, a modern international airport with a cargo terminal in San Antonio de los Banos. The two nations wish to attract investment from third party nations. Putin emphasized that Russia also attached great importance to high technology cooperation, with plans to provide Cuba with products, services, and technologies in remote sensing and satellite telecommunications. Full turn, back to 1963. As for verification on the ground, a Hat Trick Letter subscriber in South Florida reported, "I was at a cocktail party last night with a guy who just returned from the area. Major construction was already underway, in a big way." See the ITAR-TASS article (CLICK HERE) and the Russia Today Business article (CLICK HERE). It seems like Cuba will become a BRICS Associate nation, an adopted basket case to become a showcase, and likely site of a naval port.

◄$$$ RUSSIA IS DEPLOYING A DIRECT STRATEGY TO CAPTURE AND EMBRACE LATIN AMERICA FROM UNDER THE USGOVT NOSE... IT WILL PROMOTE ACCORDS WITH THE SEVERAL EXISTING TRADE GROUPS... THE PUTIN TOUR WILL INCLUDE BRAZIL, WHERE THE NEXT BRICS SUMMIT WILL TAKE PLACE. $$$

Russia is prepared to cooperate with all Latin American associations. The Putin Global Order centers on trade, development, and cooperation. He cited the goal of a strong, economically stable, politically independent, united Latin America to fit into the emerging polycentric world order. Putin stated, "In this region, the traditions of love of freedom and respect for other nations and cultures are strong, and there are practically no serious intergovernmental conflicts or the wish to pursue the divide and rule policy. On the contrary, nations in the region are ready for joint action to protect their shared Latin American home. Integration processes in Latin America reflect to a large extent the worldwide regional integration tendencies and indicate the pursuit of political consolidation in the region and reinforcement of its influence on global affairs. It is meant as a union of all the countries on the continent, and its aim is to become a major forum for dealing with regional issues without the participation and obtrusive interference of external forces. We welcome the CELAC’s readiness to establish connections outside the region, including with Russia. Last year, Moscow saw the meeting of the Foreign Ministers of Russia and the CELAC's extended troika. Now it is important to define concrete areas of cooperation. We are ready for this work. It is vital that all these associations, as they develop their external relations, should work towards the unity of Latin American countries, and not for their separation, both politically and ideologically. We hope that consolidation of multi-lateral cooperation will be an additional factor in the successful development of our bilateral relations with Latin American partners."

Recall two years ago, Obama fell on his face at the Organization of American States conference held in Cartagena Colombia. His staff was busy with the sweet pretty gals for hire. The Latin American leaders almost unanimously declared that the US President would not be invited to the next OAS summit meeting. The door is open, and Putin enters.

Again, more statements were made to the Latin American news agency Prensa Latina. Notice the theme to counter the spread of fascism by the USGovt, to counter the divide & control used by US covert teams, to counter the constant destabilization of economies used to impose banker controls, to counter the regular interference by WashingtonDC. King Vladimir has taken aim at the US hegemony in Latin America directly, working to organize the continent. Expect it to join as extension to the Eurasian Trade Zone. Putin highlighted the role of the Community of Latin American and Caribbean States (CELAC). Talk of contact with the Russian Customs Union was made. He reaffirmed that Russia is open to substantive interaction with all trade groups in the Latin American region. That includes the Union of South American Nations (UNASUR), the Common Market of the South (MERCOSUR), the Bolivarian Alliance for the Peoples of Our America (ALBA), the Pacific Alliance, the Central American Integration System (SICA), and the Caribbean Community (CARICOM). The next stop for Putin was to be Argentina, the once thriving nation, now a socialist ruin, gutted by fascism that Kissinger fostered in the 1970 decade. Look for Argentina to receive even more important extended hand in aid, development, and revitalization. See the ITAR-TASS article (CLICK HERE). The Jackass believes the Eurasian Trade Zone refers to its inception, but the zone will become a global trade zone which excludes the United States. The penalty for fascist terrorism, criminal bank fraud, currency debauchery, and war for exploit will be isolation from the emerging global trade zone.

The tour by Putin will culminate with the BRICS summit, where the final bricks of a joint development bank will be laid. The new financial body will focus on infrastructure projects, using a budget operating a ripe $100 billion war chest. The hope and plan is to create an independent fund with Emerging Market surpluses, which bypass the controlling arms of the bankrupt but brutal Western industrial nations. The name does not fit anymore, since they have forfeited much of their industry to China and other Asian sites along the Pacific Rim, India, and Bangladesh, except of course their military complex and banking sectors. The hope and plan is to put the Intl Monetary Fund and the World Bank out to pasture, those international organizations used perrenially as financial weapons of mass control.

The BRICS countries are also expected to sign an additional $100 billion fund to steady the currency markets, an Emergency Rescue Fund. It is expected to serve as a buffer to provide for quick currency infusions needed to compensate for massive capital outflows. Think hot money exits by big investor funds and currency attacks by New York and London. The Russian finance minister Anton Siluanov has already cleverly dubbed the body as the Mini-IMF. It will invite the USGovt and UKGovt continued fury and object of scorn, if not attack. However, the BRICS nations will be busy deploying their own emerging market giant surpluses into a development and relief bank under their own control. It is a natural progression.

◄$$$ PUTIN PLANS TO VISIT ARGENTINA AND BRAZIL... MORE DEALS, MORE PACTS, AND FINALLY THE BRICS SUMMIT... PUTIN IS TIGHTENING THE LASSOO IN THE CAPTURE OF THE AMERICAS. $$$

From Havana, Putin and entourage arrived in Buenos Aires. The nation of Argentina is in grotesque disarray, with currency problems, debt suffocation, and banking strangulation where the USD has been declared an illegal refuge. The nation has been ruined by adopted socialism, an extension of the promoted fascism. The United States has a critical guiding hand in both, from many and frequent Kissinger trips in the 1970 decade, all hidden carefully from cameras. The Jackass contends that the US fascist nation grew from the seeds of the Kennedy assassination, the discard of the Gold Standard, and the placement of Kissinger in the Rasputin chair. Rumors are thick that some old WW2 Nazis remained hidden in Argentina after the war. President Cristina Fernandez de Kirchner has been very supportive of Moscow in resisting Western opposition. The two leaders aim to increase the annual $1.8 billion in trade, with energy deals the central topic on the table. One fifth of Argentina's power is provided using Russian technology. The electricity capacity for the nation will increase, due to a new multi-$billion nuclear power plant expected to be built by Russia’s state-owned energy firm Rosatom.

The last leg of Putin's Latin American tour is Brazil, where he attends the BRICS Summit and the World Cup soccer football final. He has much to discuss with President Dilma Rouseff, who has personally objected to USGovt NSA surveillance and been at the center of US wiretapping scandals. Both Russia and China are key trading partners for Brazil. The two leaders are expected to affirm a joint information security project. In Brazil at the BRICS Summit, Russian President Putin is to meet a dozen Latin America presidents in hope of striking new partnerships. This is the United States back yard, largely neglected and subjected to hidden attacks like in Venezuela. Few people comprehend the dastardly actions by the USGovt and USMilitary in Latin America.

In the 1980 decade, the soldiers defending their nation in Panama City were killed by the hundreds, when the USMilitary ran a demonstration in live battle of its laser beam weapon. The story is well covered in Panama, etched in newspapers and memory. Melted down bodies littered the streets. People still talk about it in horror. The laser weapon usage is fact, not speculation, something kept hidden from the US populace. In Caracas Venezuela, another experimental weapon is believed to have been used on the long gone dictator Hugo Chavez. It is a very powerful directed microwave beam that induces rapid cancer, but used at close range (like under 25 meters). That story is not fact, but rather more tied to speculation. The source Cato assures the weapon exists, works, and is being used. The point is that Latin America generally is very open to Eastern superpower influence for economic and commercial development after a generation of US abuse, raids, neglect, mischief, and wars. Whatever nation the USGovt touches in the entire American Hemisphere, the nation degrades rapidly. No exceptions. Such was not widely true until the 1980 decade.

## GERMANY TURNS EASTWARD

◄$$$ BERLIN OUTRAGED BY ALLEGED US SPYING, AND IN PROCESS OF CONDUCTING A GOLD AUDIT AMONG THEIR POPULATION... GERMANY IS BUILDING MOTIVES TO SPLIT FROM THE EURO CURRENCY BY FORGING STRONGER OPEN TIES WITH RUSSIA & CHINA.... THE JUSTIFICATION IS BECOMING CLEARLY LAID OUT, IN FOUR PERCEIVED INDICTMENT CHARGES. $$$

The Jackass believes Germany will break from US/UK and its USDollar fiat currency regime over four primary thorny issues. They are coming into view, highlighting fundamental commercial, philosophical, and ethical conflicts that distinguish the two nations (considering US/UK one nation). The issues center on the following key differences:

  1. Good relations with Russia and continued energy supply from Gazprom
  2. Displeasure over planned Draghi Euro Central Bank bond monetization
  3. Disgust over NSA espionage by USGovt, with benefit for US corporations
  4. Damage to German population from gold price suppression.

The damage began with the refusal to repatriation German official gold by the New York Fed. The damage ends with the USGovt NSA espionage. Germany is very angry, sufficiently motivated to part ways with the US/Anglo camp. The plan to make distance from the British & Americans appears to be well along in execution. The critical stake in the ground was the prosecution, investigation, and forced actions during the Deutsche Bank actions. The Voice has described the intense activity for the last two years, as closing all the back doors. The London Fix is being abandoned, D-Bank forfeiting its seat. The LIBOR scandal has some German ignition points. The FOREX and Gold derivatives are under intense scrutiny, again with a German hand to unwind the corrupted arenas. Acquisition of Bankers Trust around 1998 resulted in adopted fraud. The plan seem obvious, to exit the USDollar, but first to embrace the Euro as a caretaker currency platform before the Eurasian Trade Zone comes together and offers a gold-backed continental currency. The path to the Gold Trade Standard is becoming visible, the key break being the divorce between Germany and the US/UK fascists. It complements the divorce between the US and Saudis.

In the past Hat Trick Letter reports, items #1 and #2 have been addressed, focus having been on the deteriorated Ukraine situation and the antagonistic Bundesbank position. The US fictional output from destructive fracking and deceptive shale has been pledged to Europe, in a massive ruse that is vacant on its face. The German central bank has challenged the Draghi EuroCB not to embark on destructive unsterilized bond monetization. In the past, the EuroCB policy disagreements on phony bond patches and bond monetization has been the source of great conflict, even with German high court rulings against the EuroCB.

In extreme focus in the past month is item #3, which appears to be exploding on the scene. In fact, word has come that Russian Intelligence offices tipped off the Berlin officials about the USGovt NSA activity before arrests were made. The Snowden files are being used in important ways. The Central European source stated briefly, "The comical part in all this is that Russian intelligence FSB and GRU tipped the German authorities off by providing the leads." The Germans followed up quickly, and in the meantime, the German-Russian cooperation with trust develops while the German-Anglo trust withers away. The break between the Germans and the Fascists from US/NATO may be closer than ever, as history is turned on its head since World War II. See the Zero Hedge article (CLICK HERE), the Russia Today article (CLICK HERE), and the Market Watch article (CLICK HERE). As footnote, India has formally requested that the USGovt explain certain alleged spying on BJP party members and activities. The United States has fewer and fewer friends. The USGovt and its fascist megalomaniacs do not care. It is abject arrogance but maybe something more. See the Xinhua Net article (CLICK HERE). The unspoken message is the same, just like in Germany, "Hey New Delhi, screw you, we are keeping you safe."

On item #4, a national audit seems underway inside Germany. The purpose is not made clear, but the agenda seems obvious to the Jackass. The Federal Financial Supervisory Authority (BaFin) has asked German banks and investment intermediaries to formally hand over data about clients investment in precious metals until mid-July. All the depots will respond. The state wants to determine the extent of private sector German investment in Gold & Silver. The BaFin has requested copious information about client investments in precious metals from German banks and asset managers. But the requested information is only about derivatives. A national audit seems the path. They seek certain precious metals or groups of precious metals as reference value, as well as shares in precious metals. They cite the Securities Trading Act and the Capital Investment Act. Explicitly mentioned are Exchange Traded Funds, Exchange Traded Commodities and Certificates, which involve gold, silver, platinum, and palladium. BaFin has requested information from 2013, as per volumes and order size, in addition to methods recommended. The entire gold issue began as a major sore spot when the New York Fed refused to repatriate 330 tons of gold from the German official account. Since that event, it has been like pulling a thread in a sweater.

The full purpose has not been revealed, but a national audit for precious metals market losses due to corruption seems the ultimate motive. To be sure, BaFin has been making formal inquisitions on alleged gold price manipulation for more than a year now, especially at Deutsche Bank. Many believe the investigation of German gold investments could possibly be related to extensions of the FOREX and Gold market investigation underway at D-Bank. The suspicion from the German source is to identify the extent of potential damage caused to investors by gold price manipulation. BaFin told Gold Reporter in a written statement that the inquiry was routine and that the probe does not relate to investigations on alleged gold price manipulation by Deutsche Bank. Conclude therefore that a bigger purpose is at work, to take account of national damages to German citizens. See the Gold Reporter article (CLICK HERE). Bear in mind that the investigation and accounting does not address Allocated Gold Account pilferage and hypothecation. Many German citizens have these accounts in the major Swiss bullion banks, where corruption is rife, the secured gold illicitly sold. Ongoing class action lawsuits are in progress.

◄$$$ THE GERMANY GOVT HAS INSTRUCTED ITS COMPANIES TO LIMIT COOPERATION AND PROCUREMENT ORDERS WITH THE US-CORPORATIONS... NEW STRICT GUIDELINES ON SECURITY ARE TO BE ENFORCED... THE FALLOUT GROWS. $$$

In recent months, China cut off major US corporations from big procurement contracts, with impact on falling Cisco Systems and IBM Asian revenues. They kicked out Google long ago. France is extremely angry. Next comes Germany, where their Interior Ministry has begun reviewing rules for awarding contracts for computer, communications equipment, and services. The political rift with the USGovt widens. Certain No-Spy clauses will become prevalent. Contracts will include provisions which require suppliers of components to guarantee they do not relinquish confidential data. The effect will be felt by IBM, Cisco, and Microsoft. Severing ties with Russia, crushing relations with China, alienating France, and angering Germany has managed to sour relations with old friends to a point where one wonders just who is a remaining US ally in Europe these days. An historically unprecedented isolation comes to the United States, far more painful than imagined by most aware analysts. See the Zero Hedge article (CLICK HERE). The Europeans must not be aware of the Intel Pentium chip containing a nifty back door for Langley views on all internet transactions. Let's not touch the the fraud perpetrated on Hong Kong banks from gold bar export in the 1990 decade during the Clinton-Rubin Admin.

◄$$$ STEPHEN LEEB HAS NOTICED GERMANY AND CHINA MAKING A STRONGER ALLIANCE, ALONG WITH RUSSIA... WHILE THE USGOVT SPIES ON GERMANY (CORPORATE TRADE SECRETS TOO), BERLIN TURNS EASTWARD.... THE JACKASS HAS BEEN ADAMANT, HOW GERMANY IS THE LINCH PIN IN THE EURASIAN TRADE ZONE COMING TO FORM. $$$

Stephen Leeb has been a successful fund manager for over 25 years. He is typical of the forward thinking analysts who notice Germany and its importance. The key link nation is turning eastward, the gestures made in the open. The contrast is that Russia & China are moving toward capitalism, with certain struggles, while the United States & United Kingdom are embracing fascism, with a clear collapse in progress. See the King World News interview (CLICK HERE). Leeb stated, "I was floored by the comments made on Merkel’s visit that she just concluded to China. The German leader went to China for several days and many trade agreements were signed in what turned out to be an extremely friendly visit. The president of China left Merkel saying he wished Germany luck against Brazil in the World Cup and called Germany an important strategic partner.

The significance to me is in comparing Merkel’s relationship with China, where she goes there for several days and gets to speak with students, and in the end concludes that ‘ANY INTERNATIONAL SITUATION SHOULD INVOLVE CHINA.’ When you contrast that with what she said on her last trip to the United States, she said, ‘STOP THE SPYING.’ A couple of days ago they just found an individual in the German intelligence that was spying on her. Perhaps the United States is spying on her because of her closeness to not only Russia, but also to China, and her distancing herself from the United States.

It appears that the German-Russian-Chinese connection is getting stronger and stronger, and the [connection with the] US is becoming more distant. It feels like the world is changing in front of us. Do not be surprised to see Gold & Silver being the ultimate safe havens, but also Gold being sure to play a part in the new reserve currency in the East. This means the price of Gold will soar as that [scenario] begins to unfold. We are very close to that point of inflection, and every news story of any importance that I see proves that is the case." Leading analysts are noticing the German linch pin.

◄$$$ BERLIN OUTRAGED BY ALLEGED USGOVT SPYING, THE ACTIVITY AS MUCH RELATED TO CORPORATE TRADE SECRETS AS POLITICAL AGENDA... THE BREAK IS REACHING A CRITICAL LEVEL, AS USGOVT RESPECT IS NOWHERE, AND TREATMENT OF GERMANY IS LIKE AN ENEMY CAMP... FALLOUT HAS HIT A VERIZON CONTRACT, KILLING IT (THE LATEST OF SEVERAL AS BACKLASH FROM NSA ABUSES)... SLOWLY EMERGING IS THE REALIZATION OF A VIRUS THREAT TO BE USED AS BLACKMAIL. $$$

The arrest of a German intelligence employee involved in alleged spying for the USGovt security agencies has caused an uproar among German politicians. The foreign minister has demanded an immediate clarification of the situation from the USGovt State Dept. He will receive a muffled modicum of nonsense blather. Germany arrested a man suspected of acting as a double agent for the USGovt, in what can be better described as the US acting on enemy soil in espionage. Large cash pouches were handed in return. Germany is developing as rival nation toward anti-American interests, while the Eurasian Trade Zone takes shape. "If the reports are true, then we are not talking about trifles," said Frank-Walter Steinmeier, the former Minister for Foreign Affairs. The motive for the espionage is construed as in pursuit of US interests. The Jackass identifies a new NSA objective to undermine efforts by Germany to forge stronger strategic commecial ties with Russia.

US Ambassador to Germany John Emerson was summoned to the German Foreign Office to answer questions concerning the recent arrest of a 31-year-old German foreign intelligence agency (BND) employee. The man had confessed to having spied on behalf of the USGovt. The German tabloid Bild reported that the man had been active as a double agent for two years, during which time he exchanged bundles of secret documents for EUR 25,000 (=US$34k). The harshest reaction so far has come from German President Joachim Gauck. The quotable quote making the headlines comes from Gauck. He told the ZDF news, "One really has to say, enough is enough." See the Russia Today articles (HERE and HERE). The US Allies have begun to question the value of a USGovt relationship in the open, having turned corrosive and distrustful. The US Alliances are falling apart in a visible manner. See the Russia Today interview with New York-based political analyst Caleb Maupin (CLICK HERE).

Fallout implications have begun, and are likely to accelerate. The implications hit the commercial arena suddenly, over NSA concerns and objections. The German Govt has decided to cancel a Verizon contract with over issues linked to USGovt intelligence agencies eavesdropping on official communications. The Interior Ministry will let its current contract for Internet services with the New York-based company expire in 2015. Expect other limiting actions before the contract's end, done on security grounds. Revelations have come that Verizon and British company Colt provide Internet services to the German Parliament and other official entities. Both the US National Security Agency and British GCHQ were revealed last year by former NSA contractor Edward Snowden as having been conducting illegal wiretapping. Germany wants to ensure it has full control over highly sensitive government communication networks. Furthermore, concern has grown over highly developed viruses or Trojans being injected into the German computer network and communication systems. They could be used as blackmail, when strategic decisions are made concerning Germany tilting toward Russia. The US has turned Allied relations into a warzone. See the Zero Hedge article (CLICK HERE).

Although not directly related, the event does chime with sinister motives and violent outcomes. In past Hat Trick Letter reports, the story was told of massive demonstrations in German cities to end the Federal Reserve. Consider Lars Maehrholz, a skydiver who became the main organizer of the massive Monday peace vigils in Berlin against the US-based cabal central bank. The Monday peace vigil is an autonomous fully independent movement that gained massive popularity in Berlin, its target being the US Federal Reserve. Like with the Occupy Wall Street movement, their advocates are under attack, in this case violent. Maehrholz is the object of severe criticism by the German mainstream media and political system. Worse, a car he was riding in was the object of a fire bomb incident by an anonymous perp. Lars had received online threats of exactly such actions. The coverup went into action quickly. The local police decided that the car caught on fire by itself, and are not investigating the case. Luckily neither the organizer Maehrholz nor his companion were in the car when it was set on fire. See the Financial Survival Network article (CLICK HERE), which includes a video of the blaze. The stink and trail of Langley is active, where it is suspected they are plying their trade once more with hired hands. At least 100 previous precedents exist, like the news reporter in San Francisco a couple years ago whose car was set ablaze. Suspicion has come to the fiery fatal car crash involving actor Paul Walker of "Fast & Furious" movie fame, the possible motive being his private support of certain movements.

◄$$$ GERMANY HAS SUSPENDED SHALE-GAS DRILLING FOR NEXT SEVEN YEARS DURING A POLITICAL STANDOFF WITH RUSSIA, THE NATION'S MAIN GAS SUPPLIER... NOT ONLY ARE SHALE PROJECTS A SOURCE OF CONTAMINATION, BUT THEY RUB RUSSIA THE WRONG WAY... THEY WILL BE HALTED. $$$

Germany plans to halt shale gas drilling for the next seven years over concerns that exploration techniques could pollute groundwater. The more relevant and powerful angle is competition with Russian Gazprom. "There will not be [shale-gas] fracking in Germany for the foreseeable future," Environment Minister Barbara Hendricks stated tersely. It is a wise decision, which will spare Germany of broad deep nasty effect to ground water systems. The Halliburton chemicals are reputed to include toxic additives far beyond those necessary to release the natural gas, like heavy metals and even radioactive waste. The planned regulation reform come amidst a political standoff with Russia, the primary German natural gas supplier. Some intensive lobbying also came from environmentalists and brewers (beer) concerned about possible drinking water contamination. The US firms never are concerned about wrecking the ground water, in the name of profit and scorched earth pursuits. See the Wall Street Journal article (CLICK HERE). Notice in Germany, how common sense prevails over corporate greed, corruption, and corrosive global agenda.

◄$$$ GERMANY AND CHINA ARE DEVELOPING A SPECIAL RELATIONSHIP, FORGING SOME NEW DEALS IN THE AUTOMOBILE AND AVIATION SECTORS... THE NATIONS ARE EMBARKING ON DEALS TO BUILD HELICOPTER AND CAR PLANTS... THE DEAL PRECEDES HIGH LEVEL MEETING BETWEEN THE GERMAN CHANCELLOR AND CHINESE PREMIER. $$$

China is the magnet and Germany is being drawn into its vast sphere. Hundreds of German firms do active business in China, led by construction firms and equipment suppliers, as well as car makers and machine tool firms. On her seventh visit to China as German Chancellor, Angela Merkel presided over Chinese and German companies affirming several agreements in Beijing in early July. The main contracts featured the purchase of helicopters from Germany, worth over $400 million. Also a new automobile manufacturing base in China was a featured contract. Chinese Premier Li Keqiang held an official welcome ceremony for Merkel before their official talks at the Great Hall of the People. President Xi also met with the German leader. China and Germany pledged to grow cooperation, and to cement partnership in their already strong healthy bilateral relationship. Germany's enthusiasm has come with gusto toward the construction of the Silk Road Economic Belt. It will serve all Europe.

Chancellor Merkel led a high-level economic delegation during a three-day trip to China intended boost trade ties with the burgeoning giant, site of the world’s second largest economy. The business entourage included top executives of Volkswagen, Siemens, Airbus, Deutsche Bank, and Lufthansa, all very popular brands among the rising middle class in China. Some details can be sketched. Air China signed an agreement with its Star Alliance partner German airline Lufthansa. A new manufacturing base for FAW-Volkswagen Automotive will be established. The two sides also witnessed the signing of deals for automakers Daimler and BMW, useful to deepen ties with their Chinese partners. BMW sold half a million cars in China last year. As an added spice, an Eco-Park will be built in Qingdao which will showcase energy efficient buildings, using German engineering. See the BRICS Post articles (CLICK HERE) and the Deutsche Welle article (CLICK HERE). As footnote, a strategic item is worthy of mention. Most deals with China must involve Russia for energy and transport, when significant increases of energy are required for new plants. The link is clear. Germany is going East for trade reinforced by secure energy, which is certain to cause a rift and split for US relations. At risk is the entire system of NATO bases across Europe, which have been abused with narcotics distribution.

◄$$$ THE EMERGING GERMAN-RUSSIAN AXIS REVEALS THE CONTINENTAL EMPIRE EMERGING THAT WILL SOON PUSH ASIDE THE LONGSTANDING MARITIME EMPIRE... THE VICTIM WILL BE THE UNITED STATES, SINCE IT IS LOSING ITS HEREDITARY PARTNER EUROPE... THE JACKASS CONTENDS THAT GERMANY & RUSSIA ARE NATURAL ENEMIES TO THE ANGLO-AMERICAN FASCISTS WHO RULED THE SEAS. $$$

Historical analyst Charles Gave from Gavekal Dragonomics submitted an utterly outstanding essay on the emerging Eurasian Trade Zone. It focuses on the rise of the new German-Russia Axis. The framed conflict is extremely relevant, and historically significant. The essay will make the reader think hard and scratch the head on motive for war, and orchestrated events in history. Some main points are presented in summary, but the full article is worth a read. As preface, the maneuvering to install arch-federalist Jean-Claude Juncker as European Commission president was interesting, not for its selection, but for its process pressure for selection. Many nations opposed Juncker, who used to serve as Luxembourg Prime Minister. The nations in opposition stretched from Sweden to Italy, but ultimately Germany won its choice. Shortly afterwards, Russian President Putin said at an official function, "We value the accumulated potential of Russian-German relations and the high level of trade and economic cooperation. Germany, one of the European Union leaders, is our most important partner in enhancing peace, global and regional security." The following main points are made by Charles Gave, with Jackass commentary spliced within.

The world is witnessing a decisive shift in the political character of Eurasia. History tells us that long wars have tended to be fought between maritime empires and continental empires. The maritime empire has been in rule for a century, with Britain and the United States at the helm as global police force and manager of commerce. Regard them as designers of the global infrastructure. A generation of abusive legal violence has been exercised, which must come to an end.

Numerous continental empires are starting to challenge the monopoly held by the United States and United Kingdom, the biggest being China and Russia. The emerging continental alliance between Russia and Germany could be worrisome. Preventing such a partnership has for centuries been a firm strategy by France, and obviously London bankers, as well perhaps as Swiss bankers. A combination of German industrial might and Russian raw materials and military strength would instantly create a colossus. The landscape has shifted from a European Germany to a German Europe. Shedding the PIIGS has changed Germany. So has contending with a corrupt aggressive United States.

The developments in the UK appear to create a door for them to leave the EU within four years. Winston Churchill said, "England does not belong to Europe; it belongs to the seas." The comment pointed out the hidden thrust of maritime empire, from which it planted colonies in America, Australia, Hong Kong, and India. History shows it will remain allied with the US-led maritime empire, perhaps in the next chapter to its own detriment.

As the Russian-German Alliance grows more firm, a major loss is in store for the maritime empire. The United States is on the verge of losing its Euroean partner, a kind of protector to its US-UK maritime empire. The new continental empire is slated to include China, India, and an array of smaller nations as fief, in a vast connection of the Old Silk Road. Major political repercussions in the United States are in store, due to the new global alignment, and newly carved geopolitical stage. The key question will not only be how did the US come to lose Asia and the Middle East, but also how did the US manage to lose its most reliable and pliable ally, namely Europe. Watch the Saudi and Iraq boundaries possibly be redrawn, revising the British architecture. See the Zero Hedge article (CLICK HERE).

Some additional thoughts. A combination of German industrial might and Russian raw materials and military strength would instantly create a colossus. Next comes the introduction of commodity backed money and a global barter system being installed. These are the directions the Eurasian region is heading by default, from the US vacuum and USDollar breakdown failure. Furthermore, a trusted source informs that some powerful decision makers and advisors on the core team will ensure that the so-called Third world, especially Africa, will have all its foreign debt (IMF/IFC/WB) wiped out and forgiven. The motive is simple. The fresh accounting will give full consideration to all the wealth that has been stolen from that continent in the past, as well as colonial interference with its sovereignty. Think maritime imperial abuse, as with Belgium in Congo and with Britain in Kenya, and with France in North Africa.

When the German-Russian partnership flourishes in more obvious fashion, the US isolation plan for Russia will be dead. Expect the European nations to split away from US support, one by one, for an assortment of reason stemming from premeditated fraud to aggressive war. A nation to watch closely will be the United Kingdom. They will in effect abandon the United States, in favor of survival. The US risks a Third World outcome. The British will court the Chinese bond trade and RMB Hub activity, while striving not to have cut off its Russian supply chain. The London bankers will be left holding their shriveled cocks unless they look to serve the East. In fact, the ultimate insult is likely to occur. As the Voice anticipates, London will be eclipsed by Frankfurt on the RMB Hub that serves the Eurasian Trade Zone for two important reasons that England cannot overcome. It is the site a strong commercial enterprise and advanced technology. It is trusted more by the Eastern powers.

Friend and colleague Aaron Krowne pitched in, manager of the Implode-Explode website (CLICK HERE). He commented on a chief architect of the Trilateral Commision, and advocate of the New World Order. He summarized, "Finally eyes are opened, obvious to me now. The corollary to Brzezinski's hysteria about a Eurasian power emerging is that the German-Russian Axis is what is exactly has been sought to be prevented, throughout history. Their goal was to prevent Russia and Germany from aligning. I would not be surprised if the WWI/II manipulations, and before that, the engineered rise of communism and naziism were in large part intended to keep these two nations pitted against each other as mortal enemies. But politics can only trump economic and commercial interests for so long." Exactly. The London bankers financed the Bolshevik Revolution that spawned the Soviet Union. The Anglo-American bankers financed the German Nazis, who received important Vatican training. Next the Londoners will become fawning financial squires to the Eurasian Trade Zone. What irony!

The Jackass takes the argument one step further. The London maritime interests are based in Fascism, rooted in their predatory (often Satanic) bankers. That Britain fought against the Nazis in World War II in no way contradicts the premise. The British Military and the USMilitary never fought against the London and Wall Street bankers, who were secretly allied with the Nazis. The Wall Street bankers are on record as having financed in part the Nazi Regime in Germany. The 911 events and Patriot Act are the coming out party for the Anglo-American Fascists. The CIA and MI-6 held major roles in the false flag attacks, and the critical coverups. They have natural opponents in the continental Germans and Russians. The deceased Austrian School advocate Kurt Richebacher (a native German) once told the Jackass in 2003, "The British have always been predator fascists, stuck on an island with limited resources. They own the seas. The last Fascists are the Americans, as time will tell."

## EASTERN ALLIANCE AGAINST USDOLLAR

◄$$$ CEO OF A LARGE EUROPEAN ENERGY MAJOR SEES NO REASON FOR PETRO-DOLLAR DEDICATION OR BROAD USAGE... FRENCH TOTAL ENERGY SEES NO REASON FOR THE USDOLLAR RESERVE CONVENTION... THE DEFACTO STANDARD IS FADING AWAY GRADUALLY BUT INEVITABLY... THE USDOLLAR IS NOT ONLY OBSOLETE, BUT CORROSIVE... THE USECONOMY WILL FALTER TRAGICALLY WHEN IT IS REMOVED AND DISCARDED... THE BLACKMAIL IS TO BE PULLED OFF. $$$

The United States Govt is fast running out of friends to support its exorbitant privilege and exercise of its exceptional status. The abuse from blackmail will be removed. The many frictions are growing intense and pervasive. The sequence is astounding. The New York and Washington gangsters have alientated the Germans over NSA spying of leaders and of corporate executives, to seize state level trusts and to grab trade secrets. They have forced the Russians into abandoning the USDollar more rapidly. They have imposed tariffs on trade with China, and undermined their $1.4bn stash of USTBonds held in reserve, forcing them into vast diversification and asset conversion. They have punished France to the point of open discussion of USDollar retirement, if not rejection and abandonment. The latest volley came from the head of Total SA, the French energy giant. They even have gasoline stations in San Jose Costa Rica.

The energy firm is the world's 13th biggest oil producer and Europe's second largest. Total CEO Christophe de Margerie stated simply, "There is no reason to pay for oil in dollars." He went on to explain flawless logic. The fact that oil prices are quoted in USD terms per barrel did not mean that payments actually had to be made in the same currency. The Europeans hesitate to stipulate that abuses extend far beyond the NSA wiretaps. The entire USEconomy existence is dependent upon a caustic controlled corrupt USDollar with no pretense of repaying debts accumulated in a seeming confiscation, and no hope of halting the debauchery from QE monetary policy. The rest is a tail wagging from the fallen wolf which has perched on an undeserved throne far too long. The wolf still bites hard, friend and enemy alike. The USGovt defense room has turned into a global monster in need of being euthanized. Clearly the world has passed peak Petro-Dollar. The Total executive believes the Euro currency should have a bigger role in international trade although the USDollar will have a continued but dimished role. Leading French policymakers are openly looking for ways at the EU highest levels to bolster the usage of the Euro in international business. The BNP Paribas fine pushed them over the edge, into reaction, like into a war room posture. The status quo is the victim of the ongoing aggressive action taken by the US Fascists on the military front, on the energy front, and on the banking front. See the Zero Hedge article (CLICK HERE).

The Petro-Dollar is dying a horrible death on the global stage. The French Total oil giant CEO wants to pay in a non-USD currency, and implicitly no longer for European nations to hold USTreasurys in reserve role (for energy payments). That is what Saddam Hussein and Iran did, earning US ire. Animosity grows against the United States, certain to cause much greater alienation. It is becoming obvious now to all except US financial news bodies that the King Dollar is deposed, to be shown the door. Watch the USGovt for additional retribution, beyond BNP fines, as test cases. Next up is Deutsche Bank and Commerzbank on the German front. The big French energy firm said the obvious. Inside the halls of US power, they are scared witless. Thus the sudden movement for North American Union has re-emerged. But China will not permit any such union. Mexico is gradually coming into the Russian sphere, like with PEMEX deals as a toe hold. Western Canada is a already a Chinese colony, contrasting Eastern Canada with much more progress lately in commercial acquisitions. The Vancouver site will have a RMB Hub soon, as Toronto already has one. British Colombia has over a million Chinese in residence.

The only course to avoid default is money printing at an accelerating rate, which has been wrecking the national structures, beams, and cables, in a vast broad deep capital destruction exercise. The ZIRP & QE is a temporary solution, which averts debt default tomorrow, but whose extraordinary negative consequences. Dumping of all paper currencies lies in our future. The Weimar exercise has feedback loops, like free fall of the economic degradation and fast decay. The rapid accelerated economic ruin from capital destruction is a main Jackass theme. It feeds upon itself with job cuts, reduced income, less spending, less investment, and more business contraction. QE bond purchases lift costs all during the cycle, much like a witch stirring the cauldron. It is utterly amazing that even after the concept has been cited, explained, repeated, and documented, the media does not comprehend that QE is not stimulus. It is a gigantic backdoor Wall Street bailout of an ongoing nature and false pillar to hold up USGovt debt from collapse. It also props up the bond and stock markets, which should properly reflect 8% to 10% bond yields and equity valuations at 60% to 70% lower levels. Sadly, not even many folks in the gold community seem to comprehend the capital retirement and economic deterioration as consequence from the QE bond monetization of unsterilized manner. They only focus on supporting the USGovt debt.

◄$$$ BY PURSUING AND PUNISHING FRANCE, THE USGOVT JUST ACCELERATED THE DEMISE OF THE DOLLAR... FRANCE WILL MOVE TOWARD GREATER DIVERSIFICATION, DONE IN TRADE AND BANK RESERVES MANAGEMENT... THE MOMENTUM IS BUILDING FOR EUROPE TO ABANDON THE USDOLLAR, SINCE USED AS A WEAPON WHILE HIDDEN IS ITS CORROSIVE EFFECT ON THE GLOBAL ECONOMY... GERMANY AND FRANCE ARE EACH MOTIVATED TO EMBRACE THE EURASIAN TRADE ZONE, WITH ITS NEW HONEST CURRENCY. $$$

It is difficult to call the effect an unintended consequence, when the USGovt acts with such hidden motive, arrogant approach, hostile manner, vicious methods, and self-serving panache towards its own allies. The US has turned super predator. The allied nations do not yet regard the USGovt penalties to act like a tax on the private banking sector, wielded without opposition. They see the penalties as simply unilateral, discretionary, and abusive, on the back end of unilateral rule making. The French National Bank head Christian Noyer submitted to an interview with the French magazine Investir. The whiplash shock from the $9bn BNP fine continues to reverberate. One should recall that Nazis alienate all their allies since they are regarded as targets for theft also, with no distinction except method deployed.

The French have taken very much to heart the attack by the USGovt against their biggest bank. The nature of violations by BNP do not matter at this point. The French will pursue diversification away from the USDollar in all official venues. They will develop their own RMB Hub in Paris. The words by Noyer should serve to guarantee the King Dollar will be deposed and discarded. The arrogant Americans believe they lord over the world with that haughty exceptionalism and full spectrum dominance. The former is permission to steal, defraud, and extort. The latter faded away years ago, the key adversary weapons cutting through the haze. Noyer responded to a general query as to whether the USDollar's role as international currency created a systemic risk. It does, and it does so in a grandiose way. Notice in the following statement, the central bank does not even criticize the Americans and their dedicated Federal Reserve for several serious violations in errant policy. Noyer did not cite the separate violations, such as:

  • hyper monetary inflation
  • undermining banking reserves
  • lifting the global economy cost structure
  • favoring Wall Street banks in hidden bailouts
  • handing out free loans to Fed owners.

Noyer addressed ethical and trust issues, perhaps equally important. He did say the following, a long statement with much significance. "[The BNP] case increased legal risks from the application of US rules to all dollar transactions around the world. [The effect] will encourage a diversification from the dollar. BNP Paribas was the occasion for many observers to remember that there has been a number of sanctions and that there would certainly be others in the future. A movement to diversify the currencies used in international trade is inevitable. Trade between Europe and China does not need to use the dollar and may be read and fully paid in Euros or Renminbi. Walking towards a multi-polar world is the natural monetary policy, since there are several major economic and monetary powerful ensembles. China has decided to develop the Renminbi as a settlement currency. The Bank of France was behind the popular ECB-PBOC swap and we have just concluded a memorandum on the creation of a system of offshore Renminbi clearing in Paris. We have very strong cooperation with the PBOC in this field. But these changes take time. We must not forget that it took decades after the United States became the world's largest economy for the dollar to replace the British pound as the first international currency. But the phenomenon of US rules expanding to all USD-denominated transactions around the world can have an accelerating effect." He argues motive to change the status quo from a prominent European post not sitting in the PIIGS pen.

Noyer mentioned acceleration in the movement away from the USDollar. As head of the French central bank, and a Euro Central Bank member, Christian Noyer has issued a direct threat to the world's reserve currency, the USDollar. It is on notice. Worse, the USGovt tried to use the BNP fine as a carrot for the French to abandon arms deals with Russia. It did not work, but instead it is backfiring. Noyer is highly regarded from the Paris dispatch. He made it clear that the USDollar's reserve currency status is not sacrosanct, and also that the world will hasten its efforts to avoid USD transactions in order to escape the tentacle of global Pax Americana. The Jackass prefers the term Pox Americana, a true scourge, a veritable cancer which spreads the contaminated USDollar as corrosive lubricant, and abuses the world community with its military in the USD defense. The USD destroys capital as much as the USGovt leaders destroy allied relationships. The core of the Eurasian alliance will accelerate the gravitation toward Eurasia, namely the heart of Europe.

The emerging trade zone might have its arms extending from Russia and China. But it requires an embrace of Europe to actually be deemed the Eurasian Trade Zone. The key nations will be Germany and France, as well as Turkey (all NATO members). The future will feature a multi-polar world with no piece of garbage designed as the SDR-based currency by the Intl Monetary Fund. They are yesterday's office, the tired exhausted tool, the recognized corrupt element, already marginalized. See the Zero Hedge article (CLICK HERE). The Greenback is dying quickly, and the Redback (RMB=Yuan) will rise as temporary caretaker until a legitimate valid gold-backed currency arrives on the scene.

◄$$$ THE USDOLLAR REMAINS FIRMLY ENTRENCHED IN TRADE AND BANKING, BUT WILL SUFFER A GRADUAL GROWING FLOOD IN THE OPPOSITE DIRECTION... THE PHILOSOPHY OF THE USDOLLAR AS GLOBAL RESERVE IS ALMOST TOTALLY BROKEN... THE PRINCIPAL EFFECT WILL BE FELT IN DIRECTION OF MOVEMENT, NOT VOLUME STILL CONDUCTED IN TRADE... THE FRENCH WILL WORK TOWARD DIVERSIFICATION, BUT WITH A DEMENTED SOCIALIST MINDSET... THE GERMANS WILL WORK TOWARD THE SAME GOAL WITH A FIRM CAPITALIST MINDSET. $$$

           

Europeans are realizing that trade among the nations in Europe need not be done in USDollars. They are seeking a rebalancing, which will surely include trade settlement with Russia and China. Big changes are coming, since the psychology of the USD is fast eroding. It is seen as an obstacle and source of tax, much like with King George from England when the Colonies began a revolution almost 250 years ago. The tables are turned, and the United States is seen as the fascist oppressor. The common link is that the US has for 101 years been a British colony (see Federal Reserve Act). The nations of Europe have grown tired of using the USD in trade, and submitting to the whims of USGovt rules, which often have an agenda not shared. The French body of finance sector believes that the US is guilty of massive judicial overreach. The French Finance Minister Michel Sapin promised to raise the need for a weightier alternative to the USDollar with fellow EuroZone finance ministers. They will work to promote other methods of trade and reserves management, the ultimate death sentence to the USEconomy, given the divorce already well along with the Saudis on the Petro-Dollar front. The Sapin gesture will result in steps toward the Eurasian Trade Zone.

Details on the USD entrenchment are imposing and formidable. Over half of cross-border loans and deposits are transacted in USD. In the last global survey of the $5 trillion per day foreign exchange market, the USDollar was on one side of 87% of all trades. The central banks hold more than 60% of their reserves in USD form. Despite efforts to diversify, many central banks still see no viable alternative to the USTreasury market liquidity and its perceived safety. Great challenges lie ahead to move toward more Euro currency settlement in the continental trade. The key change is the USD is no longer seen as a safe place for broad usage or store of value. The custodian and gate keeper of the USD is now seen as hostile to adversary and ally alike. They are dealing with Fascists in the United States, and have begun to react. The European lead duo will work to stimulate the further usage of the Euro in cross border trade, as well as international trade. However, in the end the market makes many decisions. Look for Russia and China to make grand transitions for more Euro transactions, and more Ruble or Yuan transactions.

Bear in mind that Finance Minister Sapin embraces the socialist model, a highly destructive system. The US embraces fascism and hyper monetary inflation, also a highly destructive system. Curiously, both clash. Sapin reiterated comments that the French Govt was prepared to exit some of the EUR 100 billion of corporate share holdings, while taking a more active management over its stakes. First, the market cannot absorb a huge amount of equity without the Bank of France printing the money. Second, active management by political figures usually results in a mass of stupidity entering the corporate decision making process. Sapin wishes to reduce the national debt, to better finance the French Economy, to make prudent decisions on energy transition and housing. He has no idea how, since he comes from the blockheaded Hollande socialist mindset. The Jackass has suggestions. Sapin must advise Hollande to reduce the bloat in their government, to raise the national retirement age, to eliminate onerous federal regulations, to dismiss 20% of federal workers, to cut back on taxes, to grow industries without tethers, and to adopt more capitalist terms. These are totally foreign concepts to the French, thus their staggering debts and deficits. The socialist mindset is a disease. It wrecks all in its path, despite good intentions. The US mindset wrecks all in its path, with ample malicious intentions. It is intriguing that two nations with different destructive policies are at extreme odds, with growing conflict. See the Financial Times article (CLICK HERE).

◄$$$ EUROPE IS AWAKENING TO THEIR DEEP DEPENDENCE UPON RUSSIAN ENERGY SUPPLY... STATOIL ANNOUNCED THEY CANNOT REPLACE RUSSIAN GAS FOR THE EUROPEAN MARKET IN THE LONG TERM... NORWAY CAN ASSIST IN ADDRESSING BRIEF SHORTAGES, BUT EUROPE IS TOO LARGE. $$$

Statoil ASA is a Norwegian multi-national oil & gas company with HQ in Stavanger Norway. It is a fully integrated petroleum company with operations in 36 countries. The firm is loaded with some of the best off-shore engineers in the world. Statoil develops the technology and engineering methods for deep water platforms, the home of world class expertise. Stories abound of their expertise and hard ball methods in dealing with foreign nations, like with their capricious ways. The company once suffered a tragedy with over 20 engineers killed in a mid-air plane explosion. The fingers pointed to Langley, since Statoil does not operate within the Seven Sisters of Western energy giant firms led by Rockefeller. Another key element to the triangle is that Oslo was attacked in a false flag bombing event in 2011, blamed on a loner psycho. The official story is silly. The finger was pointed at the British MI-6 (partner to Langley), in retaliation for the Norway Govt not having invested its $700 billion pension fund in London banks. London needed the capital desperately. So a Norway-US/UK-Europe triangle is at work, with strain.

Norway has let it be known that it is incapable of replacing the huge Russian gas supplies for Europe in the long run. The European market is grappling with the prospect of seeking alternative sources besides Russia, in view of USGovt pressures to isolate the vast nation replete with gargantuan resources. The Statoil CEO Helge Lund spoke with Suddeutsche Zeitung during an interview. He assured that Norway can increase its supply in flow for the short term to cover any possible disruptions of gas pumping to the EU from Russia, but it will not be in a position to cope in the longer term. The demand by the EU countries for gas imports is growing because their own gas output is gradually falling. Ukraine poses a risk, as the main transit hub for Russian gas to Europe. The volume through Ukraine to European markets runs about 6 billion cubic meters of gas during the winter season. See the ITAR TASS article (CLICK HERE). Be sure to know that whatever Norway can supply in compensation for lost Russian supply, the United States can supply a mere fraction of the volume with its far fetched kooky shale and fracking. The US strategy has already been shown to be a failure, founded in lies and deception.

Consider that the United States is holding Europe hostage with the Ukraine supply route. The US demands support for the war, support for sanctions, support for energy strong arm contracts, despite the US and Soros mercenaries in charge of the coup d'etat in Kiev and all the gold and banking thefts. The US wants control of the Ukraine gas flow switches. This is what nazis do. Nazis tend to concentrate efforts on pilferage devices, war machines, genetic concoctions, and fences to corral humans. In effect, Russia has EU in checkmate while the United States has EU in a headlock. The Europeans are gradually realizing where their economy is fed and their homes heated, namely in Russia. The situation is incredibly complex. The Europeans are somewhat at the mercy of Kiev and its willingness to cut a fair contract with Gazprom. Meanwhile the Russian gas giant Gazprom fears that the Ukraine thugs in office will continue to siphon and redirect the gas flow, in outright gas stealing which has been going on for many years. Thus the motive for the completed Nord Stream from Russia, and the in progress South Stream from Russia. In essence, Ukraine will be rendered an isolated dead zone when fully circumvented.

◄$$$ THE SWISS HAVE SIGNED A TRADE DEAL WITH CHINA... BARRIERS ARE BROUGHT DOWN, TRADE FACILITATED, AND MUTUAL INVESTMENT TO COME... THE SWISS HAVE WON AN ADVANTAGE OVER EUROPEAN RIVALS. $$$

Switzerland has obtained an advantage over its European Union neighbors with a free trade deal with China. The land of yodels, watches, and chocolate intends to vastly boost ties with China. Already active in force, the free trade agreement (FTA) is China's first with a mainland European country. It was actually sealed in 2013 after two years of talks, and recently implemented. Economy Minister Johann Schneider-Ammann exclaimed, "We look to the huge Chinese market. But on the other side, China will find partners in Switzerland on a top technology level and a top innovation level." The FTA with China has commenced. The deal will cut red tape, reduce tariffs on Swiss farm and industrial exports to China, thus providing access to the country's 1.4 billion consumers. China already imports mainly Swiss machinery, pharmaceuticals, chemicals, and watches. The direction with nuclear technology, a strong French suit, is not clear.

Benefits are anticipated from FTA for the small-sized and medium-sized technology and engineering businesses that form the foundation of the Swiss Economy. In turn, Chinese manufacturers will win duty-free access to Switzerland, where their primary products will be cheaper for factories to use. The accord also makes firm intellectual property protection for Swiss goods, a constant nagging concern for Western firms doing business in China. The emerging giant is showing a clear commitment to open its markets, but making concessions on the nagging intellectual property issue. The deal is China's second European FTA since it signed a similar agreement with Iceland in April 2013. The FTA movement is not uniformly pursued, as divisions in Europe are common. Member nations such as France and Italy are distrustful of a flood of Chinese imports.

The Beijing leaders strive for a wider Free Trade Agreement with the entire European Union. Haggling has come over favored state-run companies and intellectual property. EU exports to China were worth almost $192 billion in 2013, compared to $382 billion of imports. Data shows Switzerland sent $9.9 billion in exports to China last year, and $12.8 billion of goods it bought in return. The European nations want greater export volume, but the wage differential is significant. In Switzerland, the disadvantages are the strong Franc currency and high labor costs. Swiss products are seen as coming with high quality. Demand comes for watches and the machine industry. The Swiss hope to win more Chinese direct investment in their country, with acquisitions and investment stakes in existing businesses, as well as joint projects. See the IBN Live article (CLICK HERE).

◄$$$ BEIJING & SEOUL HAVE AGREED TO DIRECT TRADE IN NATIONAL CURRENCIES, EXCLUDING THE USDOLLAR... MORE DIRECT TRADE IN YUAN AND WON CURRENCIES WILL OCCUR. $$$

China designated a clearing bank in Seoul for direct Yuan transactions in South Korea in the first week of July, coinciding with a visit by President Xi Jinping. The global project by Beijing to promote broadbased usage of its currency overseas has been quite successful. The Peoples Bank of China has authorized the Bank of Communications (fifth largest lender) to undertake the Yuan clearing function in the South Korean capital. As time passes, the Asian trade partners, in particular Japan and SKorea, will conduct more trade in RMB terms, thus avoiding USDollar usage. It makes perfect sense for two large Asian nations to settle trade in a regional currency. Chinese President Xi and SKorean President Park Geun-Hye pledged to strengthen efforts to launch direct trading between the Yuan and the Won. The movement toward full convertibility in Yuan is slowly happening. See the Voice of Russia article (CLICK HERE).

◄$$$ CHINA AND NIGERIA ARE TO EMBARK ON CONSTRUCTION OF A HUGE INDUSTRIAL PARK... DETAILS ARE SKETCHY, FOUND FROM PRIVATE SOURCES... EXPECT THE EURASIAN TRADE ZONE TO INTEGRATE PARTS OF AFRICA, DEFINED BY PORTS AND RAILWAYS. $$$

A global consultant with contacts in the Middle East and Africa has provided some interesting information. The following is from him, his words and my edits since not his native language. It is interesting to note that China & Nigeria are in progress building a 10,000 hectare, $50 billion fully funded industrial park in Nigeria. In the grand plans will be huge port facilities, petro-chemical plants, refineries, steel mills, pharmaceutical plants, food processing plants, a gigantic cargo airport, schools & training facilities, and more. This project has gone largely unnoticed and receives almost no press reporting, although it is a mega game changer. Within view is much more USTreasury Bonds to be devoted for usage, more Indirect Exchange to find its way back to London, all to be converted into tangible assets. Also, in Ras al-Khaimah in the United Arab Emirates, the Chinese built five deep sea ports. One of the ports is designed and built to host large naval warships. The site could eventually host the Chinese Navy, and offset the US Navy in Qatar. No one talks or writes about this. It is only a matter of time before China will take control of the Mombasa port in Kenya or the Dar es Salaam port in Tanzania. With ports come connection to the greater trade zone that is coming into form.

The Jackass believes Nigeria will work into a role within the Eurasian Trade Zone, probably Kenya and Tanzania also. Expect the railway network across portions of Africa, built by China, to define the participation of African nations in the ever expanding trade zone. In fact, the Eurasian Trade Zone will include Africa and South America. A better name is Global Trade Zone ex-USA, since the Western Canada region might be fully integrated into the zone.

◄$$$ A CARIBBEAN FOOTHOLD FOR CHINESE IS SOON COMING OFF THE JAMAICAN ISLAND... THE JAMAICAN GOVT IS PREPARING TO SELL THE GOAT ISLANDS TO THE CHINA HARBOUR ENGINEERING CO... IT PLANS TO BUILD A MEGA-FREIGHTER SEAPORT AND INDUSTRIAL PARK... THE MANGROVE FOREST AND JAMAICAN IGUANA ARE ALREADY ENDANGERED. $$$

The Jamaican Govt is preparing to sell the Goat Islands to the China Harbour Engineering Co. The plan is to construct a mega-freighter seaport and industrial park. Oddly, China Harbour is part of a conglomerate blacklisted by the World Bank for violations of its Fraud & Corruption Sanctioning Policy. (JPMorgan, Bank of America, Monsanto, Novartis, and Microsoft oddly do not appear on the list.) The local agencies report the project involves dredging and land reclamation, and a coal-fired power plant built to service the facilities. The defenders of the environment anticipate the mangrove forest on the two Goat Islands to be clear cut and the surrounding coral reef to be dredged to make room. The island is unique.

The Goat Islands quadrant puts at risk the entire Portland Bight Protected Area, an area of ocean and land set apart in 1999 for protection. Its rich biodiversity includes birds, reptiles, plants, trees, and marine life. The area boasts exceedingly rare reptiles, such as the critically endangered Jamaican iguana. In the face of commercial progress and regional expansion, some expect to soon see the destruction of mangrove forest ecosystems, and the disappearance of rare creatures. Perhaps they can be preserved in similar habitats. The Goat Islands are right off the Hellshire coast, where the precious life flourishes under current protection. See the map below, where Goat Island is marked west of Kingston.

History has shown that in past projects with Chinese contractors, most of the employees have been Chinese shipped in. The local regulatory agencies cannot cope, especially with players like China who have huge financial resources and care little about the environment. During recent years, international funding and ecotourism has drawn significant funding to Jamaica and the West Indies. The ecotourism could be developed, but will instead be put at risk. In 2012, tourism contributed close to $4 billion to the economy of Jamaica and 25% of jobs in the country are tourism-based. If the Jamaican Govt affirms big contracts to Chinese developers, reversing its environmental protection laws, even in violation of its own constitution, it will send the message that goes counter to investing in tourism in Jamaica. Time will tell whether the Chinese strike a balance and expand a vast port, while preserving the mangrove forest and the rare iguanas. History is not on their side. See the CNN Edition article (CLICK HERE).

## BRICS WALL TAKING FORM

◄$$$ BRICS BANK TO START LENDING SOON, IN WHAT WILL CHANGE THE BALANCE OF FINANCIAL POWER, AND SURELY OUTRAGE THE WORLD BANK... THE SIGNIFICANCE OF BRICS NATIONS IN ECONOMIC AND TRADE DATA IS IMPRESSIVE... LOOK FOR ARGENTINA TO BEGIN NEGOTIATIONS FOR AID, AS A TEST CASE IN ASSOCIATE ROLE. $$$

As upcoming BRICS Summit host nation, Brazil claims the much heralded BRICS Development bank will start lending within one or two years from now. The summit meeting will take place from July 14th to 16th. Russian leader Putin will be in attendance. A Brazilian official stated that the only remaining step is the legislative approval process. The members have long objected to the IMF and World Bank for their neglect of development and excessive emphasis of control, if not asset seizure rights. The five countries are negotiating to fund the $100 billion development effort equally, but China will likely invest the majority of funds eventually. The BRICS Bank will serve as an effective mechanism for development, and give notice to the Old Guard of insolvent nations that the emerging economies will play a much bigger role in the new global financial architecture, as well as global politics.

The five BRICS countries (Brazil, Russia, India, China, South Africa) represent almost three billion people, with a combined nominal GDP of $16 trillion and an estimated $4 trillion in combined foreign reserves. The BRICS account for 17% of all global export trade. These figures are staggering, especially in view of the outsized debts carried by the Industrialized Old Guard nations, which really do not have critical mass of industry anymore. Their aging sovereign bonds are all in deep trouble, if not awaiting default. As a group, the BRICS are making policy statements, like from the Hague Summit where their foreign ministers harshly criticized Western attempts to isolate Russia or to place any restrictions on Kremlin participation at the G-20 summit in Australia later this year. As for agenda, Chinese Foreign Minister Wang Yi urges the BRICS Summit in Brazil to focus on promoting two major projects, the Development Bank and an Emergency Reserve. Doing so would send broad signals of confidence, unity, and cooperation. The BRICS Associates are a growing movement to embrace other nations in extensions. Notice the BRICS combine to form an economy equal in size to the United States GDP, which is around $15.67 trillion supposedly. However, the BRICS economies are more geared to industrial output, while the USEconomy is skewed toward consumption and financial paper shuffling. The BRICS internal makeup is far more healthy and sturdy than the US, where the debt in movement is often double counted and can hardly be considered output.

As part of a BRICS outreach strategy to emerging economies, a working session will be held on July 16th between the heads of states of BRICS nations and their counterparts from the South American nations. The outreach is to attract more Associate nations. Argentina had expressed interest in joining the powerful bloc, although BRICS have ruled out expansion of the group for now. The troubled nation could become an Associate nation, with a formalized aid project from the new funds. It would be a tremendously powerful example if the BRICS could lift Argentina from its gripping quagmire, plagued by currency wreckage. But to accomplish the task, a new currency would be required with a commitment of resources. They could coordinate the same commitment between Russia & China. See the BRICS Post article (CLICK HERE and HERE) and the Russia India Report (CLICK HERE).

◄$$$ SHANGHAI HAS BEEN SELECTED TO HOST THE BRICS BANK, IN CLOSE PROXIMITY TO THE EXCHANGES FOR FILLING VAULTS WITH GOLD BULLION... FUNDING WILL FINALLY OCCUR FOR AT LEAST THE INITIAL $50 BILLION... THE RESERVES EMERGENCY FUND WILL ALSO BE LAUNCHED... PROVISIONS ARE TO BE MADE FIRM FOR INVITING ADDITIONAL NATIONS TO JOIN... EXPECT THE FUND TO HAVE A MAIN HIDDEN PURPOSE OF CONVERTING BONDS TO GOLD, IN REVERSE ALCHEMY. $$$

Kremlin aide Yury Ushakov leaked in Moscow that the much awaited BRICS Bank will be headquartered in Shanghai. The South African Trade & Industry Minister said that the final stamp on the location of the Bank will be delivered by the Heads of State at the Summit in Brazil this week. All the BRICS nations except for Brazil had bid to host the $100 billion Development Bank. Both the Bank and a separate $100 billion contingency Reserve Fund for the BRICS nations will be launched during the Brazil Summit on 15-16 July. Ushakov said, "Thus, the basis for the macroeconomic coordination of the five states will be laid. The new institutions will allow enforcing the global finance system, which is particularly important amid the IMF reform that reached a deadlock." One must wonder if the Chinese forced the IMF into a stall with motive, or even tacit assent, like by dictating the US non-payment. He claimed the location of the Bank has already been recorded in the official documents. The Chinese choice for location is natural, since close to the Shanghai exchanges. How convenient to fill the vaults with gold. The Development Fund will have perhaps a primary hidden purpose to convert USTreasurys to Gold bullion at the new central bank. Its sourcing is a complex multi-faceted project with several participants and certainly some expert consulting for execution.

The BRICS nations will initially underwrite $50 billion in capital to the BRICS Development Bank, in equal parts of $10 billion each, according to Brazilian officials. The $50 billion will be eventually built up to $100 billion. This is a lot of money, to be removed from their reserves, ostensibly USTreasury Bonds. Thus the appearance of the Belgium Bulge if converted to another asset, LIKE GOLD, or simply placed on the ramp for sale, like in futures contracts. The Bank will have a rotating chair similar to the BRICS Business Council, the first chairman of the Bank to be disclosed during the Summit. In addition, the five founding members of the Development Bank will retain controlling interest in the event that any new members be admitted. The rule is firm, the BRICS share from the founding five nations will never dip below 55 percent. Imagine a parallel to the United Nations Security Council. Expect some bumps in the road, some minor snags to begin operations, and some growing pains. Nevertheless, as Russia expert Mark Adomanis noted, "The simple fact of its creation demonstrates the shockingly rapid pace of change of the past decade. Ten years ago the creation of such a bank would have been greeted with open derision and laughter in Washington, London, Paris, and other Western capitals. They ae certainly not laughing anymore."

The New Development Bank would specialize in infrastructure projects in the member countries, and in Third World regions. The Jackass suspects the projects will be minor in scope, compared to the larger task of converting USTreasurys into Gold bullion to back the trade notes used as Letters of Credit. In fact, the BRICS are taking aim at the USDollar and the entire fallacious corrupted fiat currency system. These industrious nations will no longer tolerate a corrupt payment system for global trade which is vulnerable to the USFed monetary policy, which harms their reserves and adds to the cost structure. The major central banks have killed their fiat currency system centered upon the USDollar by QE and its unsterilized bond monetization (aka hyper inflation). The Voice has assured the Jackass that the BRICS plan to launch a new currency, with asset backing of gold and other key element, the event to occur in the next several months. The launch is the return to the Gold Trade Standard, the insurrection coming from the East. See the BRICS Post article (CLICK HERE) and the ITAR-TASS article (CLICK HERE).

◄$$$ ATTEMPTS TO FORMALIZE BRICS FINANCIAL STABILITY HAS MANY REPERCUSSIONS, MANY PROMISES AND PERHAPS PITFALLS... IT WILL BE ATTACKED BY WALL STREET, THE LONDON CENTRE, AND THE EURO CENTRAL BANK APPARATUS... THE PLANKS OF AN ALTERNATIVE FINANCIAL ARCHITECTURE ARE READY TO BE PUT IN PLACE, WITH ATTENDANT RISKS... A $4.4 TRILLION POTENTIAL FOREX RESERVES CAN FILL THE FUNDS, BUT EXPERT ANALYSIS AND GUIDANCE IS REQUIRED. $$$

The BRICS $100 billion Contingency Reserve Arrangement (CRA) is the often cited emergency fund. The CRA is to be a contingent reserve pool for bilateral swap arrangements designed to ease short-term liquidity pressures and to strengthen financial stability. These nations have periodically suffered from hot money swings, recession impact, and deficit funding. They wish to be prepared for many contingencies, including a balance of payments or currency crisis. It was at the 2013 Durban Summit in South Africa, where the BRICS Leaders decided to create a US$ 100 billion CRA to defend against potential financial crisis. Past shocks had set these nations back by years. The fund might actually be in operation before the large BRICS Devmt Bank. The CRA could be born once BRICS Leaders reach on a final agreement in Fortaleza Brazil. It is important to note that the CRA will take action only when a member nation faces an imminent financial crisis. In normal times, each member nation of BRICS will keep the funds in its FOREX reserves. Whether set aside from regular FOREX reserves, or placed in a special facility, is unknown. Currently BRICS nations hold $4.4 trillion in foreign exchange reserves, a truly staggering sum which is similar in magnitude to Western nation debts. The five nations no longer wish to finance Western debt gone haywire. They wish to finance capital investment and economic development, in a revolt. They wish to fund their own rescues without risk of asset captures by the overlords. History is being made.

The establishment of Contingent Reserve Arrangement (CRA) of $100 billion looks very promising, especially given the endless string of crisis events as the Western nations refuse to liquidate big banks, declare defaults, and install a Gold Standard. The West wants no legitimate solutions, only patches to continue the present system, and asset grabs. Thus the opposition to come. The BRICS nations face a rare opportunity to reshape the global financial architecture by providing a concrete financial mechanism of a large sum of money to assist their own nations and possibly other poor nations in trouble. Many are the events of developing countries which suddenly face a balance of payments or liquidity crisis. A bigger objective could be realized. The proposed Development Bank and CRA funds could potentially sow the seeds of an alternative financial architecture, provided they could expand the mandate and reserve pool, and solicit the expertise to convert massive amounts of sovereign bonds (mostly USTBonds) into Gold bullion. The smaller nations of the world have been coerced, given no option but to accept the misdiagnoses and harsh conditions of the IMF. In the aftermath, huge public outcry and bitter resentment were provoked in the 1980s and 1990s for exploitation and asset seizures accompanied by economic setbacks. The new BRICS funds must enlist excellent consulting staff for financial and economic analysis and forecasting.

The relevance of CRA becomes even more important when perceived as an opposition structure to the current financial landscape dominated by Western institutions and banks. Thus, the potential of the BRICS Bank and adjoining CRA present a threat to the West, from the risk of seriously altering the present unequal balance of financial power in the financial world. Time will tell, as structures come into form, policy meted out, and projects initiated, whether these instruments can really fulfill potential roles. It is important to observe their official mandate, policy framework, governance, and the operational aspects before judgment on Paradigm Shift potential. The Jackass believes the BRICS twin pillar funds will pull down the Western pillars like Samson, and push the USDollar into the dustbin of history, as the Gold Trade Standard is installed once more. The world begs for a legitimate solution to the chronic financial crisis. The valid workable solution with systemic integrity is found in the gold backed currencies and gold trade settlement, combined with barter systems. The return of the Gold Trade Standard is near, a point of celebration for all but the cabal, the expansive crime syndicate which blankets Western Governments. Brace for continued retaliations and desperate maneuvers. Many are their resources, like war machines, virus devices, bank account access, and press news networks.

History provides a concrete example of a failed attempt to create a regional pool and safety net. A recent case did not challenge the IMF or its hegemony, possibly due to coercion. Following the Asian financial crisis of 1997-98, Asian countries (ASEAN plus China, Japan, and South Korea) launched the Chiang Mai Initiative (CMI) to develop a self-managed reserve pooling arrangement and a regional financial safety net, which could have provided immediate liquidity support to member nations in the event of financial crisis. The CMI was the first regional currency swap arrangement launched with much fanfare in 2000. Disappointingly, not a single member nation facing an impending financial crisis of whatever type has yet opted for its regional financial safety net. This has happened despite the fact that the CMI reserve pool has been greatly expanded over the years, and currently stands at $240 billion. New facilities on crisis prevention and resolution have even been added. It is not exactly clear what the terms were for aid, like collateral provision and risk. Nations such as Indonesia and the Philippines are more vulnerable to liquidity shocks at present than in the past. Therefore, the recent unappealing experience of CMI raises several pertinent questions which BRICS leaders cannot choose to ignore. It requires leadership, which Russia & China appear ready to give. See the Global Research article by Kavaljit Singh in New Delhi (CLICK HERE).

◄$$$ THE BRICS ARE MORPHING INTO AN ANTI-DOLLAR ALLIANCE... THE SWAP BETWEEN THE RUSSIAN RUBLE AND CHINESE YUAN IS BEING EXPANDED INTO A MORE AMBITIOUS MULTI-LATERAL SWAP, AND COULD FORM THE BASIS OF GLOBAL BARTER OUTSIDE THE USD/USTBOND REALM... RUSSIA IS TRUMPETING A CALL TO ARMS IN A USDOLLAR BOYCOTT... THE USTREASURY BOND WILL BE ISOLATED AND EXPOSED AS AN ASSET BUBBLE AND PONZI SCHEME... RETALIATION FOR THE WESTERN MILITARY ACTION WILL COME BY EASTERN COUNTER ATTACKS ON THE FINANCIAL FRONT... ACTIONS BY THE USGOVT AND SHADOW MERCENARY MILITARY ARE ENCOURAGING A GLOBAL BANDWAGON THAT IS DRAWING IN GERMANY AND FRANCE. $$$

While attention is being diverted around the world to events in Ukraine, Syria, Iraq, the Philippines, and the Mexican border, even to the stock markets, a more significant trend is well underway to remove the USDollar from world financial affairs. The major nations of the Eastern world are busily devising platforms, channels, protocols, and methods to diversify banking systems away from the USTreasury Bond, and to bypass the USDollar in trade settlement. The latest example in the Global Currency War is the transforming of the BRICS into an anti-Dollar Alliance. The central task is to eliminate USDollar usage, since contaminated by debt saturation and hyper inflation. The alliance operates with an objective to seek solutions and to install a fair system. As such, they work to create a formal non-USD alternative. It will be firmly planted on the Gold Standard, but done by the back door of trade settlement. The consequence will be unseating the USTreasury Bond from its throne in banks.

Events are lined up in succession, serving to highlight the climax of a renewed Gold Standard. The governor of the Russian Central Bank met Vladimir Putin to report on the progress of the upcoming Ruble-Yuan Swap deal with the Peoples Bank of China. The Kremlin used the meeting to publicize the technical details of its international anti-Dollar Alliance. Bold statement indeed, actually a declaration of financial war. Last month the Kremlin economy advisor Sergey Glazyev published an article outlining a Call to Arms. He expounded on the need to establish an international alliance of countries willing to remove the USDollar in international trade and to refrain from using USTBonds in their currency reserves. The ultimate stated goal by Glazyev (even bolder) would be to break the USGovt money printing machine that feeds its military industrial complex responsible for causing havoc around the globe. The Russians are responding to the Ukraine assault in an extremely courageous noble gallant manner. If they prevail, they will wrest the global leadership mantle from the US Fascists, who are teamed with UK Fascists and EU Fascists.

The Russian Central Bank is avidly working on a key solution plank. They have begun to unveil an elegant technical solution for fuller implementation of non-USD trade, a vexing challenge well recognized as difficult. Russian CB governor Elvira Nabiullina has left a clear message to members of the anti-Dollar Alliance on possible channels and mechanisms. The BRICS might benefit from the bilateral mechanism created for Moscow and Beijing in settlements. Nabiullina said, "We have done a lot of work on the Ruble-Yuan Swap deal in order to facilitate trade financing. I have a meeting next week in Beijing. We are discussing with China and our BRICS partners the establishment of a system of multi-lateral swaps that will allow to transfer resources to one or another country, if needed. A part of the currency reserves can be directed to [the new system]." Some regard the statement as a dropped financial nuclear bomb. Think barter system, a concept the Western maven morons cannot contemplate. Elvira Nabiullina is shown below.

The Kremlin has chosen the all-in-one approach for establishing its anti-Dollar Alliance. Currency swaps between the BRICS central banks will facilitate trade financing while completely bypassing the USDollar. The concept has been proven with several nations over the past eight years, starting with China & Brazil. The new system will act as an effective replacement of the IMF, because it will allow the members of the alliance to direct resources to finance the weaker countries. The Jackass does not pretend to understand the entire multi-lateral swap system. Redirected funding to weaker countries sounds like credit extension, not barter. As an important bonus effect, derived from this quasi-IMF system, the BRICS will use their USTBond portion of FOREX reserves to support the new system. They will as a result drastically reducing the amount of USD-based instruments invested. The biggest foreign creditors of the USGovt are leaving the building. They are going on strike, or better described starting a boycott. The USGovt will be isolated to finance its own debt by the USFed and Weimar printing press, killing its own big banks with the Interest Rate Swap device (weapon) in a grand backfire. The USTreasury Bond will be exposed and identified for what it is, an asset bubble and Ponzi Scheme. The entire USEconomy is at risk of dissolution and liquidation.

Skeptics will argue that an anti-Dollar Alliance forged from the BRICS workshop will not deprive the USDollar of its global reserve currency status. They are wrong, since the alliance will pull out the USTBond support and isolate its funding to exclusive hyper monetary inflation means. The United States cannot monetize its debt without forcing eventually a certain failure event, the Jackass premise for debt default stated in 2008, repeated in 2009, and every year thereafter. To be sure, the USGovt and its corrupted leaders seem to encourage expansion of USDollar enemy ranks. The president of the major Russian VTB Bank responded to the Nabiullina statements. Sergey Kostin is one of the staunchest supporters of anti-Dollar alternative policies. In comments on the European situation, he stated, "I think the work on Ruble-Yuan Swap line will be finalized in the near future and the way [path] for Ruble-Yuan settlement will be open. Moreover, we are not the only ones with such initiatives. We know about the statements made by Noyer, chairman of the Bank of France. As a retaliation for what Americans have done to BNP Paribas, he opined that the trade with China must be done in Yuan or Euro." The Russian banker comments are a bombshell.

The gang is forming, ready not to burn down the USDollar buildings. Instead, they will neglect them, avoid them, isolate them, and thus let them sink from their own corrupt devices. When fully isolated, the USDollar cannot stand. Its bond market is deeply corrupted by derivative applications to produce phony demand. Its bond purchases are done with monetized USFed output. The USFed itself is killing itself with a rapid expansion with 4 $trillions of USTreasury Bonds on its broken balance sheet. If the current trend continues, soon the USD/USTBond will be abandoned by most of the significant global economies and kicked out of the global trade finance. Then the USGovt must launch a new Domestic Dollar, in order to enable supply for the USEconomy itself. The Domestic Dollar will be devaluated in order to attract foreign interest and usage, properly reflecting the US fundamentals on debt generation, industrial output, and net current account deficits. Isolation breeds birth of a new vehicle, a Third World Dollar, affectionately called by the Jackass as the Scheiss Dollar. Its heavy devaluation will be the source of imported inflation, reversing four decades of its export. Call it the global QE backlash. Price inflation, supply shortage, and social disorder will result.

The bullying by USGovt offices will make even former American allies choose the anti-Dollar Alliance as ready alternative. Allies will choose to walk away instead from the existing USDollar-based monetary system, all too often used as weapon in hegemony. The departure of US Allies from the US camp was precisely a Jackass forecast made in March. The USDollar represents contaminated blood in trade. The USTBond represents cancer in the global banking system. Tyler Durden concluded, "The point of no return for the dollar may be much closer than it is generally thought. In fact, the greenback may have already passed its point of no return on its way to irrelevance." See the Zero Hedge article (CLICK HERE).

Client DonZ from Florida made a great relevant conclusion of his own. He wrote, "Indeed, emphatically, without doubt, the USDollar has passed the point of no return. The world is rising up against the USMilitary machine, using the financial front for counter attack. The original goal of the BRICS was to curb the excesses of the USDollar, which exported inflation and instability to the rest of the world. They also wished to provide their own development toward projects and support for emergency market relief without the IMF or World Bank involvement. The morph is clear, seen on a new front. The opposition to the USD/USTBond weapon of mass destruction is coming from nations abandoning it. The new goals are to force a direct end to the suffocating interest payments that foster a pyramid of internal slavery (to the exclusion of national development), and to curb military behavior through financial boycott and economic squeeze."

◄$$$ CHINA PLANS TO FORM AN INVESTMENT BANK TO BREAK WORLD BANK DOMINANCE... THE SILK ROAD CONSTRUCTION IS THE PET PILOT PROJECT... RUSSIA IS ADVOCATING FOR A BRICS NATION ENERGY RESERVE POOL AND THINK TANK ON ENERGY ISSUES (TO RIVAL IEA & EIA)... THE SUPPORTING PIECES ARE COMING INTO PLACE. $$$

China is moving forward with a plan to create its own version of the World Bank, designed to supplant Western institutions. The bank will start with $100 billion in capital, double the original plan. The Asian Infrastructure Investment Bank (AIIB) will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan. The complaints about the IMF are longstanding and blatant. At the Intl Monetary Fund, China pays a 4% quota, whereas the US pays nearly 18%, but the US is over a year late in its payment. The US has 50% voting rights, and therefore decides unilaterally on where lent funds are directed. The IMF is considered dead defunct. At the World Bank, China has small voting power in its Category II bloc. It has a small voice. At the Asian Development Bank, China only holds a 5.5% share, compared to the US 15.7% share and the Japanese 15.6% share. No longer will China tolerate second class citizenship when it possesses huge wealth in reserves and sovereign wealth funds.

China concluded in the last year, it cannot make decisions from the back seat or from the hallway waiting room. It wants to set up its own World Bank, and decide on fund allocation. To date, 22 countries have expressed interest in the project, including oil-rich Middle Eastern nations, several European nations, plus India, and even Japan. China will fund the AIIB and decide on pilot projects. The fund's first project will be a reincarnation of the ancient Silk Road, the vast network of trade routes between China, India, and Europe, along with its regional neighbors. Other proposed projects include railway systems to connect to China's largest cities. The idea for the bank was first floated in October 2013. Then it was to be initially funded with $50 billion in capital. See the Russia Today article (CLICK HERE).

Russia intends to urge its BRICS counterparts to set up an energy association that will include a vast fuel reserve and an institute for energy policy. So reports Russian presidential aide Yuri Ushakov, "Russia will propose a number of specific issues for consideration, including establishing a BRICS energy association aimed at ensuring the energy security of its member states, and to conduct integrated research and analysis of global hydrocarbon markets. It is suggested that a fuel reserve and an energy policy institute for the BRICS will be created within this association." Such an institute would challenge the politically motivated Intl Energy Agency (IEA) out of Paris and the politically motivated Energy Information Admin (EIA) out of the USDept Energy. Expect research and forecasts to clash with the Western tool offices. The fuel reserve would parallel the US Strategic Petroleum Reserve.

In addition, Russia will suggest a network to link the leading universities of Russia, China, Brazil, India, and South Africa that will specialize in economics and technology. Recall the plan for linking the BRICS nations with an independent global fiber optic network. Also, harken back to DARPA origins for the internet, the US defense research network also connecting universities. Maybe later the network could include the entire parade of BRICS Associate nations, and an alternative internet system will arrive with more secure email (no NSA eyes). See the Russia Today article (CLICK HERE). Such energy institutes complement the move to create Eastern debt rating agencies. The West is being challenged for its corrupt devices.

◄$$$ THE RESERVE BANK OF INDIA PLANS TO SWAP OLD GOLD FOR NEW PURER GOLD... THEY TALK OF ENABLING MORE GOLD SUPPLY WITHOUT GROWING THE CURRENT ACCOUNT DEFICIT... THEY MIGHT BE TRYING TO HIDE INDIAN DEMAND, OR TO CONCEAL FUNDING THE BRICS BANK IN A CLEVER DECEPTION... THE SOURCING OF BRICS CENTRAL BANK MUST OCCUR WITH SUBTERFUGE, IF IT IS TO AVOID DIRECT USGOVT ATTACK... NOTICE THE COMMON $20BN AMOUNTS. $$$

Examine first the official story on its face. The Reserve Bank of India (RBI) plans to swap some of the old gold lying in its Nagpur vault since the 1940 decade (pre-Independence) with more pure gold bars. Apparently, the old bar quality is not exactly top grade. The central bank has enlisted a call for large lenders and international bullion banks to strike location swap deals. The visible result would improve the quality of FOREX reserves but also ease the supply shortages in the local market. The RBI has called for bids from banks, to carry out swaps for the first time ever. In the global bullion market, the Loco Swaps are a mechanism whereby gold in one location is swapped or exchanged for gold in another location without physically shipping the yellow metal. The RBI would give delivery of gold from its Nagpur vault to banks in India, while taking delivery of gold from banks in London. A fee is charged, for accounting work and to compensate for lower quality (fewer 9's). The banks will deposit the gold in London in RBI's account with the Bank of England. It all sounds nice.

Gold accounts for $20.8 billion of India's $315 billion FOREX reserves. Most of the gold is located in Nagpur. Some is vaulted with the Bank of England, where gold was shipped in 1991 to avert an economic crisis. The story told is that the Indian Gold lying abroad has long been freed of pledge, a debatable point. The other main point told is that gold would be supplied to India without a USD outflow to strain the currency market. The local Indian banks could be given the right to lease London gold and to postpone payment for around nine months, thus keeping their accounting books tidy. The RBI wishes to keep the Current Account Deficit low, and to gain some earnings on its gold held in reserves. In 2009, almost 20 years since it had pledged gold, the RBI bought 200 tons of gold from the IMF. The scheisters talk of innovative plans in reserves management, when it is more likely innovative deception. But the motive might be positive in this case, whereas in 2009 it was negative. Back then, the Indians did not purchase gold at all. Instead, they engaged in slippery IMF pledge swaps where book entries took place, rather than any gold being sold. The US and IMF were busy with a string of stories about official government gold sales, none of which were based in reality. See the Economic Time of India article (CLICK HERE).

EuroRaj pitched in, always the intrepid observer, this time with an angle that makes sense once again in light of the BRICS activities. So the RBI will buy bullion in London, and sell gold to local banks, not to alter its own national reserves. The need for the maneuver might be to hide the local demand that needs to be satisfied. Another likely reason could be BRICS Bank provision, possibly even in the form of Gold bullion. Notice the amount at $20.8bn. The BRICS Bank will have a capitalization of $100bn split equally, which means $20bn per nation. The Indians are cashing in $20bn and taking gold in London for the BRICS Bank, the suspicious observer might conclude. Makes sense, too much sense. The main question is whether London is aware of the hidden BRICS gold provision. It is hard to imagine the London bankers being hoodwinked in their own building. They might wish to promote a phony story with Indian collusion, being fully aware but helpless to stop it. London does not wish to appear cooperative in BRICS gold central bank provision.

◄$$$ SOUTH AFRICAN MINES MIGHT BE A SIGNIFICANT TARGET FOR THE BRICS NATIONS... OFFICIAL REVENUE STREAMS APPEAR TOO SMALL... AS SOUTH AFRICAN MINES ARE SHUT DOWN DUE TO VANISHED PROFITABILITY, WATCH CHINA ENTER WITH PRISON LABOR FORCES TO SUSTAIN THE VAST MINES... GOLD SUPPLY TO BRICS CENTRAL BANK SEEMS A LIKELY PATHWAY. $$$

The Jackass has long been curious why South Africa was brought into the BRIC group to make the BRICS group of nations. No pledges or investments were made. The suspicion has been future commitment for gold from its still considerable gold deposits as a nation. A South African client with the Hat Trick Letter wondered whether the BRICS nations are motivated to capture the SAfrican tax revenue stream in a re-directed flow. It would be a sinister plan, but the client insists many old nazis reside in the country. Every time a smart informed fellow is asked why BRICS were extended to include South Africa, the reply is heard to gain their gold supply. The provision of future gold output to the BRICS central bank would be a significant factor with subterranean channels. But here is a long shot hypothesis. As declining profit margins creep into the equations, and SAfrican mines would be shut down, later to be taken over by Chinese firms in liquidation sales, or huge investment stakes on shut mines.

The Chinese could put in prison gangs for labor, offer them freedom for three years service, and extract gold with platinum on marginal mines with almost zero cost of labor except housing and food. The Chinese would keep the plentiful but difficult SAfrican mines churning out precious metals output. There is still gold in them tharr ridges (Rand = Ridge in Afrikaner language), but it is most costly to produce and difficult since deep. Therefore the cheaper prison gang business model makes sense, much lower cost. Bear in mind that the far bigger continental African gold supply comes from smuggling like in Congo, and in several surrounding countries. The BRICS nations might have sights set on the nearly totally depleted very deep and low yielding gold mines in the once powerful mining country. No more paychecks, no more strikes, no more problems with worker accidents, no more production shutdowns. The outcome would be a still significant gold supply to the BRICS central bank, with a key Chinese helping hand.

The SAfrican HTL client assured that the Chinese and Russians both own a lot of mines in the country. The client believes the Langley folks are behind the mine worker strikes, possibly using existing local Barrick offices. The motive is to bankrupt the mining firms, then take them over in cheap buyouts. Maybe the BRICS nations want to interrupt the sequence with Chinese buyouts instead. The story told by the client is that the gold supply is an order of magnitude greater than reported, a huge amount of gold left in the mines to be pulled out. The evil camp wishes to put a lid on the mines, slam the gold price, and work toward a string of predatory buyouts. A warning was given that violence at a higher level could break out, since the natives wish to take their country back. The black unions are strong and organized. The Chinese would have to fashion a compromise. They might not have the easy path ahead to circumvent local labor unions, wages, and laws on conditions as well as safety. They could bring in Chinese prisoners as laborers, 100% Chinese workers, with incentives for freedom and assimilation into the local population after service guidelines are met. Such has been the model used by the Chinese Govt, according to their plan used in many African nations, and in Costa Rica (where 200 prisoners built the national stadium in 2011, enduring three deaths, the rest enjoying a reprieve in the country as free men).

## SOUTH STREAM GAZPROM BATTLE

◄$$$ BULGARIA WILL PROCEED WITH THE SOUTH STREAM GAS PIPELINE PROJECT, VITAL TO ITS ECONOMIC FUTURE... THEY WILL DEFY THE USGOVT, AND CONTINUE TO GIVE IT LIP SERVICE... THEY ARE BRACED FOR USGOVT BACKLASH FROM THE USUAL CHANNELS. $$$

Last month, the Hat Trick Letter reported that Bulgaria would continue with the South Stream construction of the Gazprom pipeline. Nothing has changed. The public assertions by the Western press are vacant distortions of reality. It looks clear that the Bulgarian Govt is defying McCain and the US Senate clowns, and will go forward with the South Stream Pipeline (SSP) across their countryside. Ultimately, the SSP will make all other Ukraine pipelines irrelevant. Gas fields in Eastern Ukraine are the target of the West and US energy firms. Control of the vast array of transit networks is the bigger goal. They will be rendered much less critical in Ukraine after the SSP is operational. The Ukraine network will be marginalized in importance. By the time they come online, the concept of Eurasian market integration will be so compelling to Europe that all of Ukraine will be avoided by the mass of EU member nations. The embattled nation will become a wasteland. The firewall designed to block the Russian natgas flow will instead form a firewall around the Ukraine nation, as it is destroyed, a spectacle of Western nefarious plots. The Bulgarians seem to be the lead front to block or proceed with the SSP. They are giving lip service to the USGovt, telling them what they want to hear. The next day, they engage in cooperation with the Kremlin. It is not even certain that the Ukraine gas fields are important for fracking projects, and all that miniscule short-lived supply. The nation is part of the scorched earth segment.

◄$$$ BULGARIA WAS DISTURBED BY A PANIC BANK RAID, THE PHONY CAMPAIGN TRIGGERED USING SMART PHONE TEXT MESSAGES... THE MINI-PANIC MOVED 440 MILLION EUROS SUDDENLY OUT OF BANKS... THE TIMETABLE FOR NATIONAL ELECTIONS WAS SHIFTED FORWARD AS A RESULT, WITH POSSIBLE PRESSURES TO CONTROL THE NEXT ELECTION. $$$

Hints have been heard that the US-EU are raiding Bulgarian banks in order to undermine their efforts in the South Stream Gazprom pipeline. The motive is to wreck their banks, to force new elections, and to install Western puppets in power. The following is from a Hungarian subscriber with great familiarity with neighboring Bulgaria. Many hidden events are underway to interfere with the construction of the South Stream Pipeline (SSP). Notice the typical financial dastardly deeds by the Western bankers. He wrote the following in excellent English.

"I concur with your analysis. Regarding the SS pipeline, Austria decided, Hungary decided, Serbia is a tough nail and forever in the Russian camp. The weak link is Bulgaria. The EU could make inroads, if they can stir up trouble there and put traitors into power. Here are the facts as presented. The bank panic was artificially created by way of a [telephone] text message campaign, which is standard procedure. The population has vivid memory of the 1990 decade when 14 banks went under. So it is easy to trigger a panic. During the past few days, a rather large amount of 403 million Euros was withdrawn by depositors. On June 30th, the EU voted aid in the amount of EUR 1.7 billion to help s(l)ave the Bulgarian bank sector. The Government’s mandate was supposed to expire on October 8th, but now it is stepping down as of July 25th. A caretaker interim government will replace the elected one in the meantime. Again, this is all standard procedure except for an accelerated timetable. Such machinations are easy to do. These devious events will go on up until the Eastern Alliance takes away the printing press from the abusers. The sooner the better." Together, we concluded that the plan to expect was for the US-EU hidden levers to control the election, which is the whole point of forcing early elections. The election might be rigged. The West capitalized on the bank run, which in all likelihood they caused.

◄$$$ SOUTH STREAM RELIES UPON HUNGARY TO PLAY A ROLE IN SUPPLYING AUSTRIA WITH NATURAL GAS... THE PIPELINE CONSTRUCTION HAS FIRM FOOTING... BUT COMPLEXITIES ARE INVOLVED AMONG NEIGHBOR NATIONS. $$$

The commencement of supply for Hungary is projected by 2015, and for Austria by 2017. Both countries consider the energy network as having strategic importance, a high priority for sustaining their economies. The company formed for the design and development of this section is owned 50% by Gazprom and 50% by MFB (Hungarian Devmt Bank). Furthermore, MFB recently transferred its full stake to MVM (Hungarian State Electric Company), both fully government owned. On June 24th in Vienna, officials of Gazprom and OMW (Osterreichische Mineralolverwaltung) signed an agreement regarding the Austrian segment of the South Stream. At the same time in Vienna, the Hungarian energy minister requested that Gazprom allow increased delivery of natural gas to fill up the nation's very considerable underground storage facilities. Gazprom is considering the request, but a complex situation has arisen. Gazprom faces a dilemma. Cooperation by Hungary is evident and ample in the SSP construction. However, Hungary has declared a willingness to relieve neighboring shortages. It is prepared to supply Ukraine from its reserves in case they are cut off, in a reverse flow. Gazprom is still negotiating, a tangle encountered on contracts which might forbid reverse flow.

Hungarian Prime Minister Viktor Orban held a news conference during a recent visit to Belgrade Serbia. His words were emphatic, when he stated, "We will build South Stream, since this project enhances energy security of our country, and we will not let Hungary be dependent on Ukraine." On the practical side, he urged that those who pursued a halt to the SSP project should first offer an alternative solution on how to obtain fuels in replacement supply. See the ITAR-TASS article (CLICK HERE). Naturally, the US and the EU gangsters in office are trying to block the project in Bulgaria, or at least attempting to gain leverage. Notice the fork, sending flow to both Serbia and Greece. The situation in Bulgaria is precarious. They import 85% of their natgas from Russia, with no alternative supplies in existence for their usage. The situation in Poland is much the same, with extreme dependence.

◄$$$ SOUTH STREAM DEVELOPMENT FROM HUNGARIAN PERSPECTIVE ON ITS CONTINUED COMMITTMENT TO THE GAZPROM PIPELINE... THEY STRESS THEIR RIGHT TO ENERGY SECURITY, AND REFUSAL TO BE A HOSTAGE TO THE UKRAINE EVENTS. $$$

The HTLetter client from Hungary provided an excellent account in summary. Recall that of the South Stream participants, Austria already voiced open support. Now Hungary and Serbia have done the same. Prime Minister Orban has the ability to convey his decisions in such a reasonable manner that it is hard to oppose him logically. During his press conference, Orban said the following verbatim.

"We must maintain our commitment to the completion of the South Stream gas pipeline. Every country has the basic right to energy security. Nobody can take away our right to insure our energy security. Those who oppose the project are supposed to offer an alternative. Today the opponents of the SS offer NOTHING. We do not want to find ourselves in a situation that we end up being hostage to the unfolding events in the Ukraine. Our solidarity with the Ukraine should not mean that we deprive ourselves of our energy security. We support Ukraine; we feel solidarity with Ukraine. But at the same time we have our responsibility to ensure our energy security. This is why we cannot accept those international opinions that oppose the construction of the South Stream and challenge Hungary's right to it."

◄$$$ AUSTRIA AND RUSSIA HAVE SIGNED A SOUTH STREAM GAS PIPELINE TREATY... A JOINT FIRM HAS BEEN FORMED, AND A FASTER TIMETABLE IS TO BE PURSUED... THE SUPPORT IS UNIVERSAL IN EUROPE. $$$

A joint company will be formed to construct the Austrian segment of the $45bn South Stream gas pipeline project. The new company satisfies the EU legal statutes, according to CEO Gerhard Roiss. The SSP is expected to deliver 32 billion cubic meters of Russian gas to their economy, in an effective bypass of Ukraine. In a Vienna ceremony, the creation of South Stream Austria was announced, to be 50% owned by Gazprom, and 50% by Austria’s OMV Group, its largest oil & gas company. Construction on the Austrian section is expected to begin in 2015, with initial deliveries to arrive in 2017, reaching full capacity in January 2018. The OMV officials are more optimistic, claiming the initial SSP deliveries could come as early as 2016. While weaker Eastern European nations have faced US-EU pressure to halt construction, Austria operates under the German shadow (or outstretched wing). It cannot be intimidated, acting as German bidding agent. The Austrian ministers have clearly stated the nation's firm commitment to Russia’s SSP project, with plans to accelerate its construction. See the Russia Today article (CLICK HERE).

◄$$$ ITALY SUPPORTS THE SOUTH STREAM PIPELINE PROJECT... ENERGY SUPPLY IS CRITICAL FOR THE INDUSTRIAL SECTOR, AND FOR HOUSEHOLD NEEDS... THE EUROPEAN NATIONS ONE BY ONE WILL TURN TO THE EAST FOR COMMERCIAL PARTNERS, AND TURN AWAY FROM THE WEST AS SOURCE FOR CONFLICT... THEY VALUE THEIR ECONOMIES MORE THAN THE ENDLESS US-WARS. $$$

Italy has well coordinated priorities with Russia Gazprom. The publicly stated position is that the nation has always regarded the South Stream plan as a strategic project for Europe. It is designed to supply Russian gas across the floor of the Black Sea to Bulgaria, and then onward for land transit to supply Greece, Italy, and Austria. The boot of Europe is firmly fixed with the SSP project. Sandro Gozi is the Italian state secretary for European affairs. He stated, "The South Stream project has always been and remains most important for Italy. We have a strong interest in implementing it. First of all, as it is one of those projects aimed to diversify transit routes. We assume that in order to strengthen a single European energy market, it is absolutely necessary to diversify infrastructure connecting it with various suppliers. And we believe that the same approach should be applied to everyone." See the Voice of Russia article (CLICK HERE). Notice the flags for Russia, Germany, and Italy. There is almost no doubt expressed by European nations, both from the east and west, in support of the South Stream Pipeline.

◄$$$ UKRAINE HAS MADE THE FIRST STEP AT THE HINT TO PERMIT EUROPE AND THE UNITED STATES TO CO-MANAGE NATIONAL GAS PIPES... REASON MIGHT WIN OUT, SINCE UKRAINE IS FRIGHTENED OF BEING MADE AN ISOLATED WASTELAND WITH RUSTED UNUSED PIPELINES. $$$

Ukraine has made first step to let the EU & US co-manage national gas pipes. It is early, but constructive progress might be in view. The Ukraine Parliament passed the draft bill allowing Western companies to own up to 49% of the national gas transportation system (GTS), which is currently totally owned by Naftogaz Ukraine. The recent vote was 229 - 221 in favor of a foreign operator to manage, be licensed to operate, or to lease Ukraine’s gas pipelines and underground storage, according to RIA News. Although not a big majority vote or mandate, it shows progress. In addition, the Ukraine Govt can set up a separate operator for the underground gas storage, where US and European companies could also obtain a 49% stake. Prime Minister Arseniy Yatsenyuk, who proposed the bill, stressed the bill was a part of a bigger initiative to modernize the Ukraine GTS and to strengthen the Ukraine position as a transit country. His public comments expressed concerns of the national gas delivery network system could become marginalized, if not abandoned for scrap. To become a law, this bill and other ancillary bills must pass for approval in two more hearings before the Parliament (Rada), as well as be given signature by President Petro Poroshenko. See the Russia Today article (CLICK HERE).

Obviously, if the situation goes out of control, either by extensive gas supply thefts or from capricious controls by the Western junta, Russia is in position to turn off the gas to Ukraine pipelines. In no way will Gazprom submit to giving US full control of energy, even under blackmail or threat of wider war. The scorched earth scenario seems to be all too destructive. First of all, once South Stream comes online, Russia and the EU might have little or no use for the troublesome Ukraine pipelines. Gazprom can cut off the nation, and do away with its negative cash flow from chronic unpaid bills. Meanwhile, the West with NATO military forces are fast destroying the industrial base of Eastern Ukraine, rendering them incapable of providing any cash income to Kiev in the future. The Crimean tax flow and port fees are gone also. If thefts or strongarm control is used, Gazprom will simply cut off the gas and the flow will come to a sudden halt. The Jackass has a different tactic to suggest. Gazprom should conduct a few exercises, putting Ukraine gas pipes on 50% flow. Keep the flow cut in half for a few days, until European customers complain bitterly about US-EU nefarious games and schemes. Let the Western junta know who is in charge. Tell them "FU to your Fascist War Lords" then proceed with dictated fair rules from the Kremlin which just happen to require payment for deliveries. Then let the full natgas flow be given. As of now, the flow has been stopped by Gazprom, since the deadbeat nation Ukraine does not pay its bills, even at discount prices. With a wrecked economy and abandoned farm planting system, the prospects to pay have faded away. Time is on Putin's side, to soften the Kiev stance.

◄$$$ ​ THE NAFTOGAZ DIRECTOR CLAIMS THE US AND GERMANY WANT A MAJOR GAS HUB IN UKRAINE... AT ISSUE IS STOLEN NATGAS STORED IN LARGE FACILITIES... GAZPROM ACCUSES UKRAINE OF THEFT OF 11.5 BCM OF NATGAS... LEGAL HAGGLES HAVE COME OVER REVERSE GAS FLOW, OR EVEN THE POTENTIAL FOR A REVERSAL. $$$

The Ukraine officials strut like arrogant peacocks, lording over their captured gas network. Aleksandr Todiychuk is deputy chairman of the country’s state owned Naftogaz. He has proclaimed that German and US companies want to start using Ukraine as a gas hub. He said, "For them [Germany and US] it is an opportunity to gain a foothold in the region. Our underground gas storage is interesting for both sellers and buyers of gas. This is why potentially everybody who is interested in creating a hub, are talking about our high potential in this field." Gazprom is extremely agitated and angry that the indebted country has been secretly siphoning gas flow, and will continue to siphon off deliveries destined for European customers. Because of its $4.5 billion debt, Gazprom switched Ukraine to a prepayment system in June, and cut off gas flow. Europe depends on Russian gas via Ukraine for 15% of its energy needs, but in Germany it is 40%, and for some Eastern nations the dependence is 90% or more. The company head explained that Ukraine has 14 billion cubic meters of gas in underground storage, less than the June reported amount. The situation is extremely complicated. Gazprom maintains that the majority of the supplies in Ukraine storage facilities is unpaid Russian gas (aka stolen gas). Gazprom CEO Miller cited an 11.5 billion cubic meter figure as potentially belonging to Gazprom.

The situation is also murky. The Naftogaz team plans to install this autumn new rapid injection feature and gas lift devices for managing its (stolen) underground gas storage system. Naftogaz has also announced a scheme to start reverse gas flow to make up for any shortfall in Russian supplies. Ukraine plans to import 30 billion cubic meters of gas per year from Slovakia. Deliveries from Slovakia could satisfy up to 20% of Ukraine’s natural gas demand, which in 2013 was 55 billion cubic meters. It is very unclear which party Ukraine would pay for such reverse deliveries. Demand for natgas is down in the Eastern provinces, where the war is more fierce. Many businesses have been destroyed, fully or partially. Where not leveled, workers are rarely showing up at foundries and mills.

Todiychuk said, "Practically we have five pipes in the corridor. And very often, unfortunately at the official level, statements are made that Slovakia and Ukraine cannot pump gas in two different directions in one pipe. That is not true. Ukraine was never going to undermine transit or not fully comply with our gas obligations. We have enough space in the pipe for everything." Apparently the Ukraine thieves are expert at multi-directional flow, or good liars. Putin claims the Ukraine reverse gas flow from Europe is artificial, part of a Kiev bluff. Gazprom doubts that the current contract allows Ukraine to legally start reverse gas flows. It lasts another five years. According to the Naftogaz chaiman, the pipeline between Ukraine and Slovakia is only used at 60% capacity during peak winter periods and less so in the non-winter months. With the space capacity, the gas flow can be arranged to go in the opposite direction, so he claims. See the Russia Today article (CLICK HERE).

◄$$$ SOUTH STREAM IS A DONE DEAL IN A CLEVER CHESS MOVE... PUTIN SPOKE DIRECTLY ABOUT THE PIPELINE PROJECT, PUTTING THE ENTIRE CONFLICT IN BUSINESS TERMS... HE PAINTED THE USGOVT AS UNHAPPY SINCE THEY CANNOT WIN THE CONTRACTS THEMSELVES FOR SUPPLY. $$$

When in Vienna, Russian President Vladimir Putin held talks with Austrian President Heinz Fischer, who hailed the South Stream pipeline project, calling it expedient and useful. He defended his country's decision to proceed with strong SSP support, reminding others that the two nations have good intense relations, fully capable of conducting negotiations. Many rich quotes came from Putin, so-called The Man From Vlad. He believes the US opposes the Russian South Stream gas pipeline project because it wants to supply gas to Europe itself. Surely, he is aware the US has no great excess capacity nor delivery mechanisms. Its shale and fracking strategy is a blatant ruse. It has laid no trans-Atlantic pipeline, nor does it possess adequate LNG facilities. Putin called the situation an ordinary competitive struggle, trying to downplay the fierce battles underway in Ukraine. Coy always, Putin has attempted to frame the entire set of decisions as made for business reasons, with negotiations obstructed for political reasons. He reminded that the Nord Stream, South Stream, and Blue Stream projects started a while ago. Commerce wins. The collection of attached Putin quotes follows.

"They [United States] do everything to disrupt this contract. There is nothing unusual here. This is an ordinary competitive struggle. In the course of this competition, political tools are also being used. We are in talks with our contract partners, not with third parties. That our US friends are unhappy about South Stream, well, they were unhappy in 1962 too, when the gas-for-pipes project with Germany was beginning. Now they are unhappy too, as nothing has changed, except the fact that they want to supply to the European market themselves. [In such event, US gas] will not be cheaper than Russian gas. Pipelined gas is always cheaper than liquefied gas. These are natural steps to expand the transport infrastructure. [Moscow is not] striving to bypass Ukraine. It is wrong to always say that we are doing anything against anyone. [Russia and its] partners can and will create the most favorable conditions, and have contacts and contracts with many partners. [Russia will continue] to promote our product in emerging markets." See the Russia Today article (CLICK HERE).

## THANKS

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