Editor Note: In keeping with the Jackass tradition, the third video is provided. The US-based triple crown horse races have been completed. The bid by California Chrome to take the three wins and achieve immortality fell short by two lengths. It is always impressive fun, never fails to provide tingles. See the YouTube video for the Belmont Stakes from Saratoga New York (CLICK HERE).
QUOTES ON MONEY
"Extremely high level games are in progress, in ways we might someday learn about only partially. The Rockefellers are making allies with Russia & China, stepping away from the USD, seeking higher bidders. They have probably hedged their currency bets well, most likely with Gold. The Rothschilds are losing ground. They are being tossed out in many countries, with deep resentment almost everywhere. The positioning is seen in numerous places, like in rising crude oil prices. Apart from the Ukraine war zone, it is going to be a very hot summer." ~ EuroRaj
"The Death of the USDollar was easy to foresee for those who do not derive a paycheck from the system, those who are not required to defend bank policy, and those who do not wrap their cerebral cortex in the flag. Lehman was the first signal its inevitable death, from broad big bank insolvency. The desperation seen in QE by the USFed in monetary policy was the confirmation, to cover the debts during absent bond demand. The Gazprom Wars are the battle cry in distraction, as the Petro-Dollar gradually is discarded by the Saudis and goes defunct, the new gas cartel evident and visible. The reaction played out in Europe is pathetic and suicidal, as all sanctions have backfired in the American faces. Isolation attempts will form the critical mass and backfire in the form of grotesque isolation on the United States instead. The USGovt will succeed in isolating 90% of the world from its insane destructive politics, defining the alternative alliance, as unintended consequence. The consequence will be the formation of the Eurasian Trade Zone (USD Alternative nations), led by BRICS nations, their growing list of Associates, and the Russia-China duo. The joke is on the US fascists, who from the helm will lead their derelict vessels into the Third World during the Pox Americana global campaign. The United States will suffer unspeakable hardship during the transition with rising prices, vanished supply, and growing disorder. Poverty will become a national stain and smear." ~ Jackass
"Russia's acquiescence and commitment to the New World Order, however problematic, was one of the great accomplishments of the post-Cold War era. Americans do need to understand the challenge they are facing from a Russia that no longer seems interested in what the West has been offering for the last 25 years, [namely] special status with NATO, a privileged relationship with the European Union, and partnership in international diplomatic endeavor." ~ Christopher Hill (former Asst Secy State, Ambassador to Iraq, South Korea, Poland, in acknowledgment that Russia has spurned the NWO and purged the Anglo-Zionist Empire elite from Moscow)
"It seems that on the side of the Russian Federation on the field of battle will soon appear Colonel Hunger and the Special Forces Giperok (Hyper-inflation), which will dramatically change the balance of power. The Ukrainian economy is finished. Given the disastrous spring sowings, the crops of vegetables destroyed (frozen), lack of credit, problems with gas, the jump in fuel prices, we can safely say that the economy will come as a northern beast, which will be full and fluffy. No one will give money to the junta, not even from the IMF, which promised something around $17 billion, exactly 50% of what Ukraine needs for this year. [The IMF] built into the contract an escape clause: if Kiev does not control all the regions, then Kiev is not to receive a cent." ~ Vineyard Saker (portrays sudden economic failure)
"The world has irreversibly changed, and the West will take a back seat from here on forward. The West's incredibly limited and antiquated view of others and how they fit into the West's intricate game has come to an end. Its short-sighted leaders do not even get it. All came out of the East and all swings now back to the East." ~ The Voice
"It is well enough that the people of the nation do not understand our banking and monetary system. For if they did, I believe there would be a revolution before tomorrow morning. Show me who makes a profit from war, and I will show you how to stop the war." - Henry Ford (founder of the Ford Motor Company)
"Nazis are consistent creatures. They always isolate themselves, since they wage fierce war on their enemies but alienate their allies from treachery. The American Nazis are no different, the isolation soon to be extreme. Observe Russia as the new created enemy, and France as recent betrayed ally. Worse, the Saudi cutouts have begun to turn against the Americans. This will get ugly fast, since their assumed USMilitary superiority is illusory, if not a fiction." ~ KarlM in Switzerland
## INTRO MONETARY FRAGMENTS
◄$$$ IRAQ HAS TURNED INTO A TOTAL DISASTER AND PUBLIC RELATIONS EMBARRASSMENT FOR THE MIGHTY AMERICAN WAR MACHINE... THE WESTERN PRESS WILL NEXT SUPPRESS THE NEWS, EXCEPT TO MENTION THE URGENTLY NEEDED MILITARY AID... NO EVIDENCE OF NATION BUILDING, ONLY EXPLOIT, WAR PROFITEERING, AND SENDING THE NATION INTO THE STONE AGE... THE CONTAMINATION OF A NATION AND DISCARD OF SOLDIER LIVES IS THE BYLINE... WORSE, THE USGOVT STRIVES TO CREATE CONSTANT CONFLICT, ARMING BOTH SIDES, THE MOTIVE POSSIBLY TO DISRUPT THE TRANSIT OF THE IRAN GAS PIPELINE INTO SYRIA... THE AFGHAN FAILURE UPCOMING WILL BE MORE BIZARRE, SINCE THE HEROIN BUSINESS IS THE MOST SIGNIFICANT PRIORITY. $$$
As Iraq is over-run by Sunni militias, and vast money sums are stolen and looted, one must conclude the war was is a grand failure. No matter, since they move on to the next war! The huge number of Iraqi civilian deaths, estimated between 800,000 and two million, are testament to the low value put on human life that is non-white. If this is nation building by the hands of the USGovt, it is a failure. If this is democratization of the nation, it is a failure. The United States has routinely called it nation building, but the war is better described as subservient to the grand crime syndicate. They can be assured of many accomplishments for their many business partners. Consider the huge service contracts to Halliburton and Blackwater for meals, fuel supply, village raids, road explosive dismantles, even helicopter side shows in civilian murder contests. Consider the huge arms contracts to the usual gang of military hardware producers led by McDonnell Douglas and Boeing.
Bear in mind the chemical weapons and biological weapons were cleaned up back in 2003. Do not believe the various expert accounts of nothing found, since the Jackass met an ex-Halliburton contractor in Costa Rica who was part of cleanup of Bush items. They found ten warehouses full of chem/bio weapons, all with 'Made in USA' markings, sold by the Bush I Admin. One must realize that Bush and Rumsfeld were Saddam's suppliers and cohorts for the chemical weapons used against Iran in their long border war in the 1980 decade. Saddam also used US-made chemicals on the Kurds on the Turkish border on multiple incidents. See the News Doctor article with photo (CLICK HERE). One million lives were flushed during the entire project versus Iran, with another million lives flushed in Iraq during the awkward US annexation that followed, later abandoned. Also, the Big Pharm team conducted scattered vaccination experiments on soldier logs, a term used for unwilling victim considered of no value. The USArmy vaccine experiments (well documented by a nurse whistle blower) during the 1990 Kuwait War resulted in the Gulf War Syndrome, since the vaccines were laced with toxins. Many symptoms were blamed on the destroyed oil fields, as Saddam tossed many chemical weapons into the holes before detonations were done. Lastly, the USMilitary is given responsibility for contaminating Iraq with depleted uranium. The diabolical plan called for using uranium in artillery shells, ostensibly since heavier and more penetrating, but which contaminated the landscape and affected our soldiers. Witness the destruction of a nation, in order to confiscate its oil wealth, to maintain higher oil prices, and to create a firewall. See the Global Research article (CLICK HERE).
The entire war abrogated Russian and Chinese oil contracts, to keep both nations at bay. The war has put Iraq back in the Stone Age. The biggest ongoing win was the setup of USMilitary bases in Iraq, which are likely to be terminated soon (we are told) or never (more assuredly). Witness American nation building, better described as military outpost and base building in the Fascist Empire. The more all-encompassing Fascist Business Model is lastly served, since the permanence of war has been established.
Refer to the "1984" novel, with an American public salute at sporting events for the sacrifices (to the syndicate). The "Brave New World" novel is juxtaposed, complete with the 'Soma' drug for control of the masses, found in today's heroin and cocaine with the USGovt the prime purveyor. As July Fourth approaches, the Jackass regards the red, white, and blue on the flag to warrant red stripes for rivers of blood in endless war, white stripes for lines of cocaine and heroin from Langley Inc, and swastikas instead of stars to signify the nazi takeover in the last few decades. Many leaders pass treason as their business cards. Their Patriot Act is a Gestapo Manifesto of the most blatant order. Most people observe the captured flag, which has lost its meaning. The definition of domestic terrorist has been transformed into what was once a US patriot in the 1950 decade. The Vietnam War started the profound changes. The nation building there failed also. For a horrendous review by a CIA insider, who has gone public with open forum speeches, review the John Stockwell essay on "The Secret Wars of the CIA" exposure. The agency is a true plague upon humankind and the earth. John Stockwell was former CIA Station Chief in Angola in 1976, working for then Director George Bush of the CIA. He spent 13 years in the agency. He gives a short history of CIA covert operations. He is a very compelling speaker and the highest level CIA officer to testify to the Congress about his actions. He estimates that over six million people have died in CIA covert actions, and this was in the late 1980's. Therefore estimate that eight million people have died from their actions. See the Information Clearing House article (CLICK HERE).
The Iraq Govt troops are in fierce battles with Islamics, some recent battles in Saddam's old hometown Tikrit, located 80 miles from capital Baghdad. The Jihadis have looted over $400 million from the Mosul central bank. Formally called the Islamic State of Iraq & Greater Syria (ISIS), they routed the pathetic Iraqi Army after being outnumbered by 10:1 or 15:1 on the field. The regular army retreated, stripping off their uniforms, and fled. Two entire divisions of Iraqi soldiers, nearly 30,000 men, simply turned and ran in the face of the assault by an insurgent force of just 800 fighters. The extent of the Iraqi Army's defeat at the hands of ISIS militants became clear when officials in Baghdad conceded that insurgents had cleaned out the main army base in the northern city of Mosul of weapons, released hundreds of prisoners from the city jails, and seized up to $480 million in banknotes from the the Mosul banks. Witness American nation building, with priorities badly awry. Halliburton and Blackwater surely have profited, along with McDonnell-Douglas and Boeing. Witness American nation building on the global stage.
Chaos has come to Iraq, the bitter fruit of US alliance. The US-trained security and mercenary forces are in a bid to overthrow Iraq. The hidden motive might be to disrupt and derail the Iranian interests. Endless war is the US end result with renewed military aid. Recall that Iraq is two-thirds Shiite, with eyes directed toward Iran. The constant theme by the Langley folks is to disrupt and steal amidst the chaos. An Iraq mired in disorder and economic mayhem cannot be of value to Tehran. The US has left the nation in total disorder, but that might have been the plan. On another plane, witness a possible setup for higher oil prices driven by the Rockefeller group. The other cabal clan in the Rothschilds had a main concern in interest payments, no longer in the room. The rising oil price could be evidence of the Rocks prevailing. Some tend to believe Ukraine might be a distraction of the Iraq agenda in creation of a firewall to fend off Iran. See the Zero Hedge article (CLICK HERE) and the Bloomberg article (CLICK HERE) and the Irish Times article (CLICK HERE). Witness American nation building on the global stage.
Another motive makes perfect sense, when factoring in the three decades old policy of destabilization of nations. The USGovt is arming both sides of the Iraqi conflict, which assures constant instability. The delivery of 36 fighter F-16 aircraft arrived on the one side, to replace those destroyed in the early months of the war that began in 2003. The more standard fare of munitions included 100 Hellfire missiles and 11 million rounds of ammunition. It is unknown how much has fallen into Al Qaeda/ISIS hands. Last week as many as six Iraqi Black Hawk helicopter gunships were captured during the rush for Mosul. Furthermore, US-supplied Al Qaeda (Al CIA-da) mercenaries in Syria has crossed the border. So Iraq is being indirectly attacked by US-led mercenaries from the neighboring Syria war zone. Zero Hedge concluded, "To summarize: the US was arming and training the same Al Qaeda/ISIS groups of Jihadists, that it concurrently gave Iraq weapons to fight. And since the Iraq Army has so far proven utterly incapable of any resistance, it is now up to US drones to fight the same [supposed] rebels that the US itself was collaborating with until a month or so ago. The clear winner here? The US military industrial complex, of course, as well as the banks who lend money to the governments to fight wars provoked by various developed nation spy agencies. Collateral damage? Millions of innocent people on the ground in Syria and Iraq, and everywhere else too." See the Zero Hedge article (CLICK HERE). Witness American nation building on the global stage.
The angle few analysts seem to notice or comment upon is that an Iraq in constant conflict mayhem and violence cannot support an Iran Gas Pipeline, under construction from Iran to Syria ports. An Iraq in chaos cannot support the growing Russian energy firm investments and infiltration. The pipeline is to be linked up with Gazprom. The Jackass finds a Gazprom angle to cut through Cyprus to Syria to Ukraine in a common theme. In Cyprus, the large GazpromBank was prominent, in a land where the Russians were converting USTBonds to Gold bullion. The Syrian conflict is to make a firewall in preventing Iran gas supplies to reach the European market through the Gazprom system. In Ukraine, the scorched earth policy is to destroy an entire nation in order to interrupt Russian control of Europe in energy supply. In general, constant conflict in the Middle East region supports higher crude oil prices, a Rockefeller goal and priority. In addition, an environment of chaos enables the Bush Mercenaries to steal gold bullion held in banks, even the gold flushed out in movement to safer locations. The American populace is told that gold has no value, while the Shrub Teams steal gold at every opportunity.
A source who prefers anonymity has access to several different security agency information. He has a unique perspective as part of the global consulting functions, with European roots. He commented. "Another miserable US-American failure story. They vividly demonstrated how to prosecute a war under obscure priorities, which resulted in the deaths of millions of civilians, even the nation's own soldiers in far greater numbers than are reported, and in the end lose it all. Washington DC is like Berlin in April 1945 but almost nobody seems to get it. Few seem to ask the question who is arming and equipping these terrorists that are now taking over Iraq. The current Iraq situation is CIA funded and managed, using the dark pool of mercenary soldiers. Beware, Afghanistan is next to fall back under Taliban rule, in a far more complex situation given its massive heroin output managed again by the Langley gangsters. So much for the claimed spread of democracy to foreign countries. Nation building is a utter total failure. The working priorities have been contractor gains and development of the global heroin business with both vertical and horizontal integration." Ouch! The corruption is so deep and so broad and so bold. Recall the plan to build a Chevron oil pipeline for the Afghan nation, a nation without oil resources. Condoleezza Rice was the Chevron paid consultant and Neo-Con queen. The Pentagon spent $millions on boats that were never delivered to landlocked Afghanistan. The military establishment capitalizes on all the buying sprees. Their only requirement is endless war on multiple fronts. Witness the Nazi Nation at work. See the Russia Today article (CLICK HERE).
The total disintegration of Iraq amply demonstrates the failure of American & British adventure, in nation building, in placing a military footprint, and in rampant exploit. The events in Iraq have spiraled out of control. Russian Foreign Minister Sergey Lavrov told journalists, "It has been reported that the UK foreign minister declared that the events in Iraq are, according to him, an illustration that terrorism is rampant in the region due to the absence of reconciliation in Syria. We have known that our English colleagues have a unique ability to twist everything. But I did not expect such cynicism, because the events that are taking place in Iraq are an illustration of a complete failure of the venture started by the US and the UK that allowed it to spiral out of control completely. We express our solidarity with the Iraqi authorities, the Iraqi people who should restore peace and security in their country, but the actions of our Western partners raise a lot of questions." See the Russia Today article (CLICK HERE). It gets worse. In the always disputed NorthEast Iraq, the Kurds have seized a disputed oil hub amid chaos. They have exploited the power vacuum. The losses are universal and uniform. This ample oil will surely find its way to Russia for distribution via the Rosneft system, which is gaining a foothold easily in this region. See the CBN article (CLICK HERE).
◄$$$ BANK OF FRANCE CHIEF NOYER CLAIMS PUNITIVE ACTION AGAINST BNP PARIBAS COULD PROMPT A SHIFT AWAY FROM DOLLAR IN GLOBAL TRADE SETTLEMENT... THE BACKLASH OF USGOVT POLICING THAT RESEMBLES CONFISCATION WILL HAVE A STRONG BACKLASH... HIDDEN MOTIVES ARE LIKELY AT WORK, TOWARD BANK REALIGNMENT. $$$
Bank of France Governor Christian Noyer said the US punitive actions against their flagship bank BNP Paribas might encourage companies to stop using USDollars in international transactions. The USGovt has gone overboard in sanctions declarations and sanctions enforcement, in what appears to be a hidden tax on the foreign private sector. Noyer stated, "We could say that companies would have maximum interest to do the most possible transactions in other currencies. Trade between China and Europe. Do it in Euros, do it in Renminbi, stop doing it in Dollars. This is an affair that will leave marks. [Removed USD settlement capability is] something that can put in danger the good functioning of the international financial system because BNP Paribas is a big player in this area. I hope if there are sanctions in this area, they are limited in a way that is not dangerous." Recall that Noyer is also a member of the Governing Council for the European Central Bank. The remarks by the influential Noyer are the strongest yet from French authorities protesting the size of the possible fine BNP Paribas faces in the matter.
US investigators are said to seek between $7 and $10 billion in fines, an admission of guilt, and the suspension of USD clearing operations. The violation stems from the biggest French bank's dealing in countries including Iran and Sudan. The sharp observer detects a hidden motive for the USGovt to force a merger of BNP Paribas with the Societe General Bank, which is a firm fixture in the New York & London bank syndicate. SocGen maintains outsized derivative positions, like all syndicate banks. Anything close to a $10 billion fine could more than wipe out this year's earnings for BNP Paribas, estimated at EUR 5.64 billion (=US$7.6 billion) by analysts.
The bigger goal might be the admission of guilt, which opens the door to forced liquidation or merger. The odor of malevolent US bank dictatorship is in the air, noted by the Europeans. The BNP fine appears exaggerated, equal to more than three times the combined fines paid by HSBC Holdings, Standard Chartered, and ING Groep in 2012 for sanctions violations. French President Francois Hollande and his finance and foreign ministers angrily replied that such a heavy fine for BNP Paribas would increase opposition to a free trade agreement being negotiated between the United States and the European Union. The US faces resentment, hostile reaction, and isolation. See the Bloomberg article (CLICK HERE).
◄$$$ THE JAPANESE GOVT AND BANK OF JAPAN ARE CAUGHT IN A LIQUIDITY TRAP... THEY WILL CONTINUE TO DISPENSE FAKE MONEY, AND RELEASE GIGANTIC QUASI SOVEREIGN WEALTH FUNDS ONTO THEIR STOCK MARKET... AT RISK IS THE JAP GOVT BOND, SURE TO GIVE OFF AIR... LOST TRADE SURPLUS AND BALLOONING GOVT DEBT SIGNAL TROUBLE AHEAD FOR SUPPORT OF THE USDOLLAR REGIME... THE QUANTITATIVE EASING PROGRAMS HAVE FAILED, FOLLOWED BY THE RISE OF CHINA... JAPAN WILL LOOK TO CHINA & RUSSIA FOR SOLUTIONS... JAPAN LACKS THE NECESSARY SURPLUS WITH WHICH TO SUPPORT THE USD WITH REGULAR USTREASURY BOND PURCHASES... PERSONAL SAVINGS IS ALSO DOWN STEADILY TO THE 2% LEVEL (FROM 15% IN 1990). $$$
The Japanese financial scene is a total wreck, lost control, distorted markets, ballooned debt, bubbly pension funds, extreme risk, utter desperation. Japan will keep printing money for many years, or until the great breakdown and bust occurs. The Bank of Japan will be required to mop up the entire issuance of public debt forever and a day. They must cover cover the budget deficit with printed money, since no buyers exist at near 0%. The nation is on the verge of fresh new abuses. The authorities are about to funnel large sums into Japanese stocks from stored funds, augmented by the direct purchase of the Nikkei stock index with printed money. Prime minister Shinzo Abe is in the process of removing the restrictions of the world's biggest quasi sovereign wealth fund, the $1.3 trillion Govt Pension Investment Fund (GPIF). Word has leaked that the official ceiling on equity holdings will rise from 12% to roughly 20% by August. The path is open for a $100bn buying blitz of stocks.
Two other major gigantic funds are eager to join the bubble mania party. The Japan Post Bank wishes to rotate more of its $2 trillion holdings into equities before damage is done to the bond market. The Japan Post Insurance wishes also to join the party, with $850bn at its disposal. The Abe Admin has gone out of control, doubling down at every turn, never finding success. The Japanese financial markets are as distorted as the US markets. Like the USFed, they print money with abandon, to clean up the mess that QE has not solved in 23 years of application. It is not stimulus, but rather life support, if not suspended animation. The Bank of Japan continues to pour fake money into the economy, buying $75bn of bonds every month. On a per capital basis, that is like $215bn per month in the US realm. The BOJ balance sheet will reach 70% of GDP by March 2015, three times the USFederal Reserve balance sheet. The big risk to Japan is with their government bonds, the JapGovtBonds (JGB). Their sovereign bonds will give off significant gas, since the asset bubble cannot be sustained any longer. Their trade surplus has vanished. Witness the signaled systemic failure. See the UK Telegraph article (CLICK HERE).
◄$$$ KINDERGARTEN POLITICS AND THE JUVENILIA OF THE G-7 MEETING HAVE COME ON STAGE... THE HOLLOW ARROGANT DEBILITATED OLD GUARD IN G-7 DOES NOT REALIZE ITS OWN IRRELEVANCE... THE G-20 HAS SUPPLANTED IT IN IMPORTANCE FOR MAKING POLICY TOWARD GLOBAL SOLUTIONS. $$$
The only way the United States can win a unanimous alliance on its misguided crusades is to remove all other nations from the G-7. Eventually they will all step back, including France, Germany, and England. The latest juvenile move was to snub Russia from the G-8, rendering it a G-7 Meeting again. The memories of kindergarten, bullies, and isolated nasty players come to mind from unsupervised playgrounds, from childhood. Recall that Nazis attack their enemies, betray their allies, and pilfer from their subjects, earning utter isolation. The remaining Western rump plus Japan resorted to meeting in the safe confines of Belgium, under the shadow of the Belgium Bulge Billboard of hidden USTreasury Bonds. The clownish fascists running the USGovt stated publicly the need for dialogue and calm, then they supported Russian exclusion from the G-8. It would be confusing, if not for the obvious mental depravity and vile roots of the US political and banking leadership. They are fascists, nazis, and narcotics merchants, with a diabolical agenda.
The hapless incompetent Gay Prince Obama speaks of pivoting east, but that is what Russia is doing with adroit steps. The NATO expansion to Eastern Europe is a grand misstep, doomed from the start. It is motivated by a plan to isolate Russia. But the Kremlin will deploy the links in the north to join with Germany, and will utilize Gazprom to divide Europe, while Beijing is busy setting up RMB Hubs in England, France, Switzerland, and most importantly Germany. The US-EU-NATO axis will fail in a sinking sea of quicksand. Its main glue is narcotics trafficking and related skimmed profits from money laundering among its major banks.
The shun of Russia is not a sign of strength. The USGovt sanctions directed at Russia will not touch the legion of US corporations. But the Russians will use the sanctions to divide and conquer Europe, while the world watches the rape and pillage of Ukraine, along with its Eastern European neighbor states. Not surprisingly, the Europeans who have the large share of trade with Russia, are reluctant to comply. Key military contracts by France and Germany underscore the newly established strong linkage with Russia & China. Apathy can be expected from Italy and Spain. A notable signal came when French President Hollande invited Russian President Putin for a luxury hosted dinner in the Elysee Palace, but dinner was served to US President Obama in an ordinary Paris restaurant. Therefore shun Russia in the G-7 in front of the global camera, but embrace Putin for dinner in front of the regional cameras. King Vladimir is still in the game, amidst some pomp, well aware of where the power center lies. See the Voice of Russia article (CLICK HERE).
Thus the G-7 Meeting in Brussels in many ways demonstrates the weakness of the West, not its unity. Behind closed doors, the gauche amateur Obama is left fruitlessly pursuing his unilateral agenda alone. The US is truly stuck in foreign policy limbo, which will win extreme isolation. The only major pivot to be seen or heard is Russia turning to affirm bonds with China, and Saudi Arabia turning to affirm bonds with China. The US isolation results painfully. The rise and prominence of the G-20 Meeting is the outcome. See the Russia Today article (CLICK HERE). The Kremlin will pull levers in the background, and make tactical phone calls. See also where Russia tells the G-7 to kiss off, in a BRICS Post article (CLICK HERE). It is amateur hour in WashingtonDC, and the loser will be the American people. They are not prepared for the shock of slamming into the Third World, a Jackass forecast for five years.
## DOLLAR GLOBAL REJECTION
◄$$$ SAUDI TO ESTABLISH ITS FIRST SOVEREIGN WEALTH FUND... THE INDICATION IS CLEAR MOVEMENT AWAY FROM THE USDOLLAR AND USTREASURY BOND COMPLEX... THE SAUDIS ARE BUILDING A MODEL FOR USTBOND PROCESSING INTO GOLD BULLION ACROSS THE ENTIRE WORLD... ABANDONMENT OF THE PETRO-DOLLAR INVOLVES THE REVERSAL OF A GENERATION IN COMMITMENT... BUT MORE, WE COULD HAVE THE FIRST SIGHTING OF A BRICS CENTRAL BANK OUTPOST FOR PROCESSING USTBONDS INTO GOLD BULLION IN A REGIONAL SENSE... NEW POLICY IS COMING TO SUPPORT THE PETRO-YUAN, WHICH REQUIRES FULLER COOPERATION BY NEW PARTNERS AND OLD ENEMIES. $$$
Amidst numerous global distractions, from scorched earth in Ukraine to Negative Interest Rate Policy among central banks, to abdication of royals in Spain, the big story in the Global Financial War to topple the King Dollar Regime is without question the establishment of the new Saudi sovereign wealth fund. It is to be independent of their central bank, devoted to prudent investment, and likely cooperative. Think Gold investment. The indication is clear movement away from the USDollar and USTreasury Bond complex. The US-Saudi divorce is speeding away from the lawyer's offices, and asset redistribution is the key task underway. Abandonment of the Petro-Dollar involves the reversal of more than a full generation in commitment. It involves the discharge of decades of accumulated rubbish US$-based debt paper. We could have the first sighting of a BRICS Central bank outpost for processing USGovt debt securities, straight into Gold bullion. The Saudis might win giant favor with Russia & China, the new dynamic duo, by jump starting the process of dumping USTBonds, followed by converting them into Gold bullion. The Great Indirect Exchange might become far more direct. So conclude that the Saudi SAMA official fund has almost 3/4 of a $trillion, ready and waiting to exit toxic paper status, and achieve true valid gold reserve status. A good portion will find gold.
The Saudis might formally join the BRICS Associates as part of their nascent alliance with Beijing. The embryonic relationship had a debutante ball in the form of huge multi-lateral conference in the Great Hall just a couple months ago, followed by a grand gesture of disrespect to the USGovt during a military parade featuring Chinese missiles. The Jackass suspects a processing plant is being formed, to rid the Saudis of USTreasury Bonds, and to rebuild their Gold reserves. Other Gulf nations might use the outpost to discard their toxic USTBonds supported by QE, bubble dynamics, and hidden derivatives. In fact, the Saudis must replace what London and Switzerland have stolen in Gold bullion. Furthermore, Saudi and Iran might soon coordinate energy policy and payment systems outside the USDollar, even in gold settlement. Expect more such BRICS Central Bank outposts to arise and take form useful for processing USTBonds into Gold in other countries. Furthermore, expect the Saudis perhaps to open a new gold vault on their own soil, with possible Chinese security. It is doubtful that Riyadh Royals would entrust all their gold any longer outside their borders, after the London and Swiss pilferage. The Riyadh Royals might wish to use Dubai until more mature facilities are in place on home turf (sand).
A vast satellite system of BRICS central banks might spring up, in mimicking fashion to the Western central bank franchise system that includes the USFederal Reserve, the Bank of England, the Euro Central Bank, the Bank of Japan, and others such as the Swiss National Bank. This is a Jackass forecast. Expect the Saudis will create the mold, to be copied elsewhere. The Saudis will soon announce a payment policy that accepts any major currency for oil shipments, even petro-chemical shipments. The Jackass believes the entire Gulf region will soon coordinate policy toward the Petro-Yuan standard as a temporary caretaker vehicle, with the ultimate destination to be the Gold Trade Settlement system. The Saudis and Iran will become working partners, not friends, replete with constructive engagement, a process already begun with numerous visits by Tehran ministers to the emirate nations. Constructive engagement goes against the USGovt goals.
The official news item was short on details, long on implications. The crafty alert observer can read between the lines. The kingdom of Saudi Arabia will establish its first sovereign wealth fund to manage budget surpluses worth hundreds of $billions, according to the kingdom's state news agency. The Shoura Council is expected to discuss a draft law for the National Reserve Fund imminently. The fund would take control of management for the entire kingdom's investments from the central bank. That is the zinger, independence. Saudi Arabia remains the world's largest crude oil exporter, but not for long since depletion is acute. It has not been revealed whether the fund would change the kingdom's investment strategy.
In the past four decades, the strategy has been to recycle petro surpluses dutifully into USGovt bonds, with a smatter of Wall Street bank stocks, in the strategically important Anglo cutout role. The eyes of Kissinger and Rockefeller types are on them, the designers of the Petro-Dollar defacto standard, which replaced effectively the Gold Standard in 1973. Just two years earlier, the Bretton Woods Accord was abrogated. The fund would start with capital representing 30 percent of budgetary surpluses accumulated over a number of years. In the past three years alone, the kingdom has announced budget surpluses totaling about $232 billion. See the Arabian Business article (CLICK HERE). Bear in mind that Arabs distrust paper wealth, despise mortgage bonds, and made a deal with the Anglo devils. They will reverse their paper investments and accumulate gold, while moving into the Eastern sphere.
As footnote, the Saudis must have finally grown tired of the threats and the MERS scare put in their house. They appear to have finally decided to pull the plug on the Anglo-American masters. For the Langley Nazis to create the deadly MERS viral scare on Saudi soil was probably crossing a red line, or rather the straw that broke the camel's back. The Fort Dietrich USArmy Bioweapons Lab in Maryland USA is the source of the majority of global viruses in design and production, in a nazi chapter. The timing of the viral outbreak was immediately after the Saudi conference in China for embracing the Petro-Yuan. The Saudis regard their land as holy land. It would be difficult to imagine a powerful Arab force lacing the Rome Metropolis, creating a plague around the Vatican as part of a financial blackmail scheme, forcing them to give up their Gold. The Christian world would be outraged. Yet the Western world considers it business as usual for such extreme dastardly tactics.
◄$$$ IMPLICATIONS TO THE GOLD-OIL TRADE ARE VAST... THE CONNECTIONS BETWEEN THE GOLD MARKET, THE OIL MARKET, AND THE USTBOND MARKET ARE BEING ARRANGED IN COMPLEX TERMS... MORE DEVELOPMENTS ARE SURE TO COME, LIKE WITH GOLD TRADE NOTES AND GOLD BACKED CURRENCIES, EVEN THE GULF DINAR... THE FULL INTEGRATION MUST INCLUDE THE FOREX CURRENCY MARKET, TIED TO GOLD, ALL IN TIME. $$$
The Saudi SWFund news is a grand tempest. The Saudi SWFund move is a direct assault to the US financial regime with their power lodged in the USFederal Reserve and USDept Treasury. Their USD-based vehicle operates as the USTreasury Bond, the reserves asset tucked in global banks. They will be removed. One must wonder if the Belgium Bulge Billboard of stacked stashed stuffed USTBonds is actually at least 30% Saudi, and not exclusively Russian. The Saudis are withdrawing from the Fed-led central bank franchise network. The Saudis are making a clear indication of turning East, finally making distance from the Anglo-American bond fraud kings and paper merchants. Expect more transparency in the future. Expect a huge diversification away from USTBonds. Expect the foundation early in stages for the net settlement in the Gold for Oil & Gas swap, which China also implemented with Russia. The Gold-Oil trade will become more formalized in the important Gulf region, and integrated with the Russia-China energy trade. The arrangement could be an intermediary step toward full Gold Trade Settlement, used as a future model.
What remains is an array of gold-backed currencies and Gold Trade Notes to act as letters of credit. To be sure, the need is acute for a vast satellite system of BRICS central banks to spring up. Next could be the Shanghai Free Trade Zone in USTBond conversion, done more in the open. In the near future, Frankfurt might announce a BRICS central bank for managing sovereign wealth, the innovative zipword for coded press releases, meaning diversification away from USTreasury Bonds. Gold would be a likely vehicle, if the Nordic Euro currency is to come into view. Recall the Jackass forecast, from Voice confirmation, that Frankfurt is destined to become the global Yuan (RMB) Hub for Asia and Europe. The Belgium Bulge is increasingly looking like collateral posted by the Saudis and the Chinese for Gold. If done equally by the two nations, then the BRICS central bank sourcing project has two key players, with more to follow. The hidden billboard message is that Saudi has been enlisted as a BRICS Associate nation. The integration of the Petro-Yuan will have many sides, and the Saudi central bank appears to have more development to come. The Petro-Yuan has numerous integral project elements to put in place.
◄$$$ THE GULF EMIRATE NATIONS POSSESS $2.377 TRILLION IN SOVEREIGN WEALTH FUNDS... THE DIVERSIFICATION WILL COME NEXT... THE PAPER SECURITIES WILL FIND THEIR WAY OUT OF BONDS AND INTO GOLD BULLION, LONG AN HISTORICAL ARAB FAVORITE MEDIUM... LOOK FOR COOPERATION WITH TURKEY IN THE INTERMEDIARY GOLD PROVISION, FOR EURASIAN TRADE ZONE USAGE. $$$
Other regional Gulf Sovereign Wealth Funds have invested in property on an international basis, primarily in Europe and England. They own plenty of UKGilts and EuroBonds and probably more than a handful of Japanese Govt Bonds. The Saudis are clearly signaling a major move out of USTreasurys. Soon come announcements that Saudis will accept any major currency for oil. Iran already is finding little resistance, like in energy sales to India and Turkey. The USGovt will soon quit the battle of imposing sanctions on the entire world. The BRICS foundation is showing signs of coming together. This is the exit of Petro-Dollar and its death dirge, a break from the Anglo-American banker hive. Look to the future, and the entire Gulf region wealth could actually work closely with Turkey in gold intermediary supply, required for the Eurasian Trade Zone in settlement systems. Dubai UAE has a long-standing relationship with Turkey in export, India too. Expect in the future for three destinations of Gulf region Arab gold in Turkey, Dubai, and Shanghai. The Dubai route will be for Arabs and home accounts for royals. Given the new marriage between the Saudis and China, with numerous developments, business deals, arms deals, charity deals, it is natural to expect their gold route to widen.
Other Sovereign Wealth Funds in the Gulf region are extremely significant. The leader is the United Arab Emirates with their massive Abu Dhabi Investment Authority fund, which contains $773bn. But UAE also has four other such funds totaling another $286bn, which tips the total past $1 trillion to $1059bn. The Saudi fund SAMA Foreign Holdings has $737bn. The Kuwait Investment Authority has $410bn. The Qatar Investment Authority has $170bn. The total Gulf region SWFunds have a combined $2.377 trillion. If a mere quarter of the funds are directed toward Gold bullion conversion, the Gulf region could supply the equivalent of a Fort Knox. Such ample vault supply could provide the Arabs a sufficient gold store to back the Gold Dinar currency. The fortress in Kentucky once steeped in prestige used to house 8500 tons of gold for the USGovt until it was stolen by the Clinton-Rubin gang. Only morons and dupes believe the official story of relocating it to the New York Fed and West Point for safe keeping, coupled with preposterous concepts like Deep Storage Gold. Ask Germany, Netherlands, Austria, and Venezuela how the safe keeping of their official gold account is doing. See the SWF Institute listing of funds and their data in detail (CLICK HERE).
◄$$$ MORE BRICS SATELLITE BOND PROCESSING PLANT OUTPOSTS ARE TO COME, SCATTERED ACROSS THE ENTIRE WORLD, SURROUNDING AND OVERWHELMING THE MANY MAJOR WESTERN CENTRAL BANKS... EXPECT THEM IN ALL BRICS NATIONS, PLUS MANY ASSOCIATE NATIONS... THE SAUDIS HAVE OFFICIALLY JOINED THE ALLIED GROUP... MANY ARE THE INTERMEDIATE STEPS IN THE RETURN TO THE GOLD STANDARD, FOR BOTH TRADE AND CURRENCIES. $$$
Expect each BRICS nation to have a central bank processing plant to convert the toxic USTBonds into Gold bullion. They will process the other sovereign bonds as well. Expect Shanghai and Hong Kong to have one, and Moscow, along with Delhi India and Rio de Janeiro Brazil, Johannesburg South Africa too. Other nations will host BRICS central bank satellites like Riyadh in Saudi Arabia and Dubai in the United Arab Emirates. Eventually expect BRICS central banks to spring up in Frankfurt Germany, in Ankara Turkey, in Tokyo Japan, and in Tehran Iran. It will be impossible to stop the trend in diversification out of USTBonds and into Gold. Opening an outpost for processing Western sovereign bonds will be like a rite of passage, a requirement for entry into the BRICS Associates.
The entire process is an integral part of a bonafide solution toward the Gold Trade Standard. To be sure, a large amount of Western sovereign bonds will be converted into Chinese Yuan and Russian Ruble, since much Eastern trade will be settled in those two rising currencies. They will both give birth to gold-backed currencies (Yuan & Ruble). Ironically, both China & Russia are in possession of far more Gold reserves than the global economy sees in currency flow for their Yuan and Ruble currencies. The energy trade will soon be settled in Yuan and Rubles, in response to the stupid USGovt sanctions that have all the appearance of self-inflicted shotgun wounds to the face and chest, a truly suicidal maneuver in grandiose arrogant bellicose manner. The usual tactics will be used against the BRICS & Associate nations which strive to rid themselves of the toxic USDollar.
◄$$$ THE USDOLLAR IS TOXIC, DUE TO QE & ZIRP BUT ALSO REINFORCED BY PERMITTED BANK CRIMINALITY AND GLOBAL USMILITARY AGGRESSION. $$$
Many are the factors making the USD toxic. The global reserve currency is on life support in a highly embarrassing and totally indefensible manner. The USD has annual $trillion USGovt debt behind it, which is financed 80% by USFed unsterilized bond monetization, the sheer creation of phony money to cover debt. It has Zero Interest Rate Policy behind it, which distorts all asset prices. It has permitted protected Wall Street criminality behind it, which features massive bond fraud, property title fraud, bond counterfeit, insider trading, and narco money laundering. It has endless fascist wars behind it sponsored by the USMilitary and its vast supporting cast of contractors. They sustain the hegemony and make crystal clear that the USDollar has more a military backing than an industrial economic backing. The effects of the planks to sustain and to prop the USDollar have resulted in a rising cost structure across the world, most felt in food prices. The effect of coordinated Western hyper monetary inflation is global capital destruction and economic ruin. The usual tactics to prevent the BRICS & Associate nations will include bribery, threats of violence, more fraud, shared narcotics traffic profits, basic murder (assisted suicide), ostracism from the system, continued sanctions, and cash settlement in the metals market.
The world cannot begin a resolution and escape from the cancerous economic plight without discarding the USDollar and salvaging their USTBonds held as savings. The global economy suffers from contaminated USD blood in trade and banking functions. Already many nations are selling USD cash at a 30% to 35% discount for redemption in their native currencies, the ugly little secret along with countless other ugly secrets. The Gold Standard is the solution for the chronic financial plague that must respond to toxic USD blood coursing their its global economic system, the trade arteries and the banking reserve veins. The supporting systems for the USD Regime will fall away, like the COMEX, the OPEC, the Intl Monetary Fund, the World Bank, and others.
◄$$$ CHINESE COMPANIES ARE READY FOR TRADE IN RUBLE AND YUAN AS COOPERATION GROWS TOWARD GLOBAL DE-DOLLARIZATION... THE VARIOUS VAST SUPPORTING SYSTEMS ARE COMING INTO PLACE. $$$
Chinese companies have declared themselves ready for transactions with Russia in Rubles and Yuans, according to Anton Siluanov (head the Finance Ministry). TASS reported, "The start of transactions in the national currencies must give an impulse to a further development of economic cooperation between Russia and China. First. [The joint rating agency] will evaluate projects and investments pursued under the Russian-Chinese cooperation and with participation of some Asian countries." Siluanov also said that Chinese companies are ready to invest in Russia's Far East infrastructural projects. To kick off the broad set of deals, the two nations have made initial progress to create a joint rating agency, which will apply conventional instruments and criteria to the evaluation of national and regional investment projects. Moscow and Beijing openly stated a goal for the agency to go beyond politics and give purely economic estimates. As the agency gains weight and respect in his words, it will be able to reach the international level. It is not known whether the agency would be a new organization or derived as extension from the Universal Credit Rating Group. Announced by the Chinese Dadong rating agency, it is a joint venture with the US Egan-Jones Ratings and the Russian RusRating.
Further finance expertise will be shared across a wide range of common activities, such as liquidity management, Treasury single accounting, budgeting, public finance management information, and human resources, claimed the Russian ministry press service. The medium for such exchanges would be visits, seminars, and conferences, using shared departmental print publications, guidance papers, and texts of regulatory acts. Some great challenges will come, since China has been gearing up with English language. Now they must jump tracks to Russian, using a different Cyrillic alphabet.
Another goal is to streamline the national Russian payment system, to make it similar to those in Japan and China. The Russians have agreements with foreign counterparts. Recently, the VTB bank executive Andrei Kostin reported progress on a national payment card system. He stated "In May, we made a first step on the way, as VTB Group merged its system with the United Russian System. Thus Russia's 300 banks, about 30 percent of the banking sector, are united into one system. Russian clients will be able to settle payments so that the system remains within the country." The banks have united their services, including ATM machines. See the Voice of Russia article (CLICK HERE).
◄$$$ AT LEAST 90% OF GAZPROM CLIENTS HAVE EXITED THE USDOLLAR AND WILL TRANSACT IN EURO & RENMINBI... LATER THE CLIENT STATES WILL MAKE PAYMENTS IN RUBLES... THE EXITING TIDE IS BECOMING A CLEAR FLOOD IN EXODUS. $$$
The global press new zipword is De-Dollarization, the imposing task of removing the USDollar from financial settlement in trade and banking functions in reserves. ITAR-TASS reported that Gazprom Neft had signed additional agreements for clients to switch from USD to Euros and RMB. They cited 90% of customers had agreed to switch, a very significant first cut. It is the giant conglomerate's oil subsidiary company. Gazprom Neft head Alexander Dyukov told a press conference of energy customers making a possible switch for payments under contract. He said "Additional agreements of Gazprom Neft on the possibility to switch contracts from Dollars to Euros are signed. With Belarus, [direct] payments in Rubles are agreed on. The so-called Plan B is already partially worked out. The switch of Dollar contracts to Euros and Yuans is agreed on with some of our contracting parties. Under consideration is the possibility to switch contracts to Rubles." Dyukov made the statement at the St Petersburg International Economic Forum, which did not invite the United States. Their isolation will become unspeakable and complete. See the Tass article (CLICK HERE).
Zero Hedge concluded back in mid-May, "As we have explained repeatedly in the past, the further the West antagonizes Russia, and the more economic sanctions it lobs at it, the more Russia will be forced away from a USD-denominated trading system and into one which faces China and India." See the Zero Hedge article (CLICK HERE).
◄$$$ THE RUSSIA-CHINA ENERGY TRADE WILL SETTLE IN YUAN & RUBLES... HOWEVER, IT WILL MAINLY FEATURES FOR THE DUMPING OF USTREASURY BONDS... IT WILL SETTLE IN GOLD MUCH LATER DOWN THE ROAD. $$$
Consider some concluding thoughts by my astute colleague EuroRaj. It is doubtful that the Holy Grail energy deal completed by Russia & China will stipulate settlement to be made in Gold. Such a tremendous platform comes later. Intermediary steps come initially, in a carefully crafted transition away from the USDollar. The contract has stipulations that begin in 2016 and 2018, well into future. The settlement price is secret for many reasons in my view, due to complexity and expected shifts in the currency markets, due to obstacles presented in sanctions, due to displacement from USD/USTB system (lost integrity), due to introduction of new gold-backed currencies, leading to the culmination in the gradual return of the Gold Standard. Some conclusions follow.
- Price is difficult in view of so many incomplete and uncertain aspects, like pipeline construction progress, integration of LNG facilities, timing of steps, adoption of third parties (like India), certain contingencies in other markets.
- Trade will be settled in Yuan, which will become fully convertible soon, with later Gold Trade Notes used as letters of credit.
- Yuan and Ruble will be interchangeable, following the convertible status of Yuan currency, led by Shanghai Free Trade Zone launch.
- Expect a trap set for rising Ruble from requisite usage in energy payments, as Putin wants to penalize and even rebuke the London and Wall Street offices which are intervening heavily in their Ruble to cause price inflation.
- The ultimate settlement of R&C energy trade as part of the Holy Grail deal will be in USTBonds, in a grandest dumping exercise in human history, which neither nation wishes to discuss openly (part of Putin strategy of secret counter attacks), since the money flow will largely be from China to Russia on net basis.
- China will wish to reduce its vast FOREX reserves which are dominated by UTreasury Bonds, of which China owns up to $1.5 trillion.
- R&C both want a slow but certain transition, since the United States must be propped like a dead man until its assets are drained out its pockets (much like a man held upside down to let gravity work). Unfortunately, the dead man holds a gun, and has twitchy fingers.
◄$$$ AZERBAIJAN SOVEREIGN WEALTH FUND WILL INVEST IN CHINESE CURRENCY... THE GREASE IN THE EURASIAN TRADE ZONE SYSTEM IS COMING INTO PLACE, ALONG WITH EVIDENCE OF INTERNATIONALIZED YUAN CURRENCY... EXPECT ALL FORMER SOVIET REPUBLICS TO FOLLOW SUIT. $$$
The Financial Times newspaper has reported that the Azerbaijani sovereign wealth fund will invest up to $1.8 billion in Renminbi this year. It would be one of the largest investments in the Chinese currency made public. Consider the event to serve as further indication of the rapid move towards reserve currency status for the RMB. The move is more than symbolic, not holding in standard USTreasurys. Shahmar Movsumov, chief executive of the State Oil Fund of Azerbaijan (SOFAZ), told the Financial Times that the fund was applying for permission from Chinese regulators to access RMB assets. They hope to start investing in the currency by the end of the year. The same SWFund data source cited for Gulf region volumes also includes the Azerbaijani SWF, which has $36.6bn invested. See the AZ News article (CLICK HERE).
◄$$$ GHANA'S CENTRAL BANK IS ENCOURAGING THE USAGE OF CHINESE YUAN AS SETTLEMENT CURRENCY IN TRADE... GHANA WISHES TO REDUCE RELIANCE UPON THE USDOLLAR... THE THIRD PARTY CURRENCY USAGE IS SEEN AS CAUSING MORE PROBLEMS THAN ENHANCING THE SYSTEM. $$$
The Ghana central bank is collaborating with banks to expand the usage of trading partner currencies. The central bank is reviewing new measures to govern the operations of foreign exchange and currency accounts in the country. Benjamin Amoah, head of Stability at the Bank of Ghana (BOG), said "We are going to encourage the use of currencies of Ghana's major trading partners, such as the Chinese yuan, which is already available in Ghana, instead of the use of the USDollar, as the sole settlement currency." The unstable exchange rate of the domestic Cedi currency exchange rate has constrained exporters and importers in commerce. Foreign currency deposits and citizen remittances are also adversely affected. The BOG introduced new rules on February 4th to streamline the operations of FOREX and foreign currency accounts, so as to assure transparency in their operations.
The bank's latest decision comes shortly after a top African regional banking official recommended the introduction of the Chinese currency into the Ghanaian banking system. Albert Essien is CEO of regional bank, Ecobank Transnational Inc. He said the introduction of the RMB in Ghana would "ease business transactions for Ghanaian traders who do business with China and vice versa. Introduction of the Yuan will smoothen that kind of business interaction between Ghana and China, and there would be no third currency." He also suggested that the Bank of Ghana should look at other currencies to reduce its reliance on the USDollar. Increasingly, nations are seeing no value in the third party currency, namely the toxic USD. See the China Daily article (CLICK HERE).
## SILK ROAD REVIVAL
◄$$$ PRESIDENT XI HAS CALLED FOR CHINA-ARAB COOPERATION IN MUTUAL BENEFIT, AS THE PETRO-YUAN COMES INTO VIEW... THE AFTERGLOW IN THE NEW MARRIAGE SEEMS TO INCLUDE AN ENDLESS LIST OF LOVEFEST CONFERENCES FOR DEVELOPMENT PURPOSES... CHINA IS ATTEMPTING TO DRAW IN THE FULL SET OF ARAB GULF STATES... THE NEW SILK ROAD WILL BE TO BUILD GLOBAL ACCESS TO CHINESE CULTURE. $$$
The US-Saudi relationship is dead. The Obama Admin killed it, probably its most significant accomplishment in foreign policy bungling. Consider it a side effect of the Al-Qaeda abuses, since Obama is after all a Langley product and a parody puppet. Langley controls Al-Q and has always controlled Al-Q since before the 911 attack. Al-Qaeda means The Base in Arabic, which can be regarded as the Rolodex of terrorists that the USGovt security apparatus uses to destabilize, to terrorize, and to exploit its enemy and allied states. With Libya, Egypt, and Syria, even Iraq, a vast backfire has occurred from inept USGovt foreign policy and aggression, which has claimed Saudi Arabia as victim. The USDollar is the impact victim. The US has lost the Saudis, who had probably run the course of their Cut-Out usefulness, since their oil is largely depleted. The Petro-Dollar wreckage is an Obama resume item.
The marriage between the Saudis and China is proceeding down a newly arranged path that includes what seems to be a key conference almost every month. Chinese President Xi Jinping delivered a keynote speech on the relations and cooperation between China and Arab states generally at the opening ceremony of the Sixth Ministerial Conference of the China-Arab States Cooperation Forum (CASCF) in Beijing. It took place in the Chinese capital on June 5th. The bilateral lovefest seems to feature a new conference every month to affirm relations and to forge a continuing string of contracts, deals, and facilities, the consummation. What Gulf states China does not draw into the fold, anticipate that Russia will partner with, like Qatar. The Gazprom team is busy with Qatar on matters of liquefied natural gas technology, commonly called LNG.
Chinese President Xi Jinping stressed mutually beneficial working arrangements, urging win-win cooperation between China and Arab states. He actively is promoting the spirit of the Silk Road, the vast trade route linking East and West. At the ministerial conference of the China-Arab States, he called for deeper cooperation. He cited common development being pursued, which will let other nations grow as well. This year marks the 10th anniversary of the CASCF. The forum will mainly focus on the building of the Silk Road economic belt and the 21st century maritime Silk by means of expansive mutual development. Peace, friendship, openness, and inclusiveness form the core of the Silk Road spirit. This leader seems more friendly than any uncle in the home family tree. Putin might seem menacing in demeanor, but Xi seems engaging and affable. Never forget he is a communist first, but a capitalist second, unlike the US and UK leaders, who are devoted closet fascists.
Xi offered details for the coming five years. China expects to import over US$10 trillion in goods and outlay over US$500 billion in direct investment abroad. In 2013, China's imports from Arab countries amounted to $140bn, only about 7% of the roughly $2 trillion of goods China will import annually. China's direct investment in Arab countries last year stood at $2.2bn, a mere 2.2% of the $100bn that China will invest abroad each year. Xi identifies gaps as potential opportunities. The President wishes to dovetail China's own development with that of Arab states, and furthermore, to support the Gulf states in increasing jobs, advancing industry, and promoting economic growth. The concepts of the Silk Road economic belt and the 21st century maritime Silk Road were introduced by Xi during two separate visits to Central Asia and Southeast Asia in 2013. It is his baby, and fits as a centerpiece in the Eurasian Trade Zone, which will feature Russian energy pipelines as its skeletal circulatory system.
The two Silk Road initiatives aim to seize the opportunity of China's continued development, especially its poorer western regions that border the Gobi Desert. They will focus on economic cooperation, cultural exchanges, with priorities given to system connectivity, bilateral trade, and broad investment. Around 200 guests from China and Arab states, including various foreign ministers or representatives attended the forum. See the Xinhua Net articles (CLICK HERE and HERE). Once more, notice the foreign policy approach by China, in promoted trade, economic growth, and mutual investment. The United States prefers banker infiltration, weapons deals, military bases, violent insurrection, and subterfuge, in keeping with their fascist roots. China does not tell other nations how to develop. Each nation is left to his own path.
◄$$$ PUTIN INKED THE EURASIAN UNION, AS THE SILK ROAD TAKES ON A NEW LOOK... THE SEED NUCLEUS MIGHT HAVE BEEN PLANTED IN KAZAKHSTAN FOR A BROADER TRADE ZONE IN BROADER PRACTICE... THE RULES, REGULATIONS, CUSTOMS, AND EVEN CURRENCY MIGHT BE DEVELOPED AS A MODEL IN PROTOTYPE. $$$
At the end of May, Russian President Vladimir Putin arrived in Astana, the capital of Kazakhstan, to attend a session of the Supreme Eurasian Economic Council. Together with the Belarusian and Kazakh leaders, Alexander Lukashenko and Nursultan Nazarbayev, Putin signed the pact on the establishment of the Eurasian Economic Union, due to begin its function in the Customs Union space in January 2015. The Kremlin sees the agreement between Russia, Belarus, and Kazakhstan as a landmark integration event. Integration of the Eurasian space is the over-arching goal, beyond the three nations. The fruits are expected to be new opportunities which can be used to increase their competitive advantage in the global economy, to expand opportunities for business, to pursue joint investment, to engage in cooperative projects, and to coordinate on external markets. Over the last 20 years, Russia and its two neighbor states have managed to achieve impressive results on their way towards integration, towards creating a full-fledged Customs Union, and starting the formation of the common economic space. The creation of the Eurasian Economic Union would be a further step in the same direction towards integration and cooperation. Russian Deputy Foreign Minister Vasily Nebenzya drove the process. See the Voice of Russia article (CLICK HERE).
◄$$$ GLOBAL ALLIANCE OF EURASIAN UNION WILL COMPETE WITH THE US & NATO ALLIANCE... THE SILK ROAD IS THE PHILOSOPHICAL BACKBONE OF THE ENTIRE MOVEMENT, JOINING EAST WITH WEST... THE BRICS ALLIANCE AND SCO FORUM WILL CONTINUE TO GROW IN PROMINENCE AND PRESTIGE... THE RESENTMENT AGAINST USGOVT ACTIVITY FOR ALMOST A GENERATION HAS SPURRED THE ACCELERATED PROGRESS, COHESION, AND FORMATION OF THE EASTERN UNION. $$$
The West should not underestimate the role of the Eurasian Union in international affairs, warned Nikolas Gvosdev, professor of national security studies at the USNaval War College. Two other institutions, the Shanghai Coop Org (SCO) and the BRICS Forum, will rise in prominence as adjunct spearhead groups. They were likewise dismissed as irrelevant and meaningless initiative at their times of creation. They are now seen as vital toward advancement of the new union, more important than the G-7 Meeting. Gvosdev wrote, "From the US perspective, both the SCO and BRICS are much weaker institutions compared especially with the established entities of the Euro-Atlantic world, particularly NATO and the European Union, but Washington should not take particular comfort in that fact. It is also laying the foundations for an alternate Russo-Chinese vision of a new Silk Road that would compete with the preferred Western Silk Road approach, one which would tie Western Eurasia to the Far East, rather than acting as a way to pull Central Asia into a closer connection with the Euro-Atlantic world." He cautioned of recent failures, pointing out that US efforts to create viable sustainable post-Cold War institutions have not fared particularly well. The US-led movement toward a global NATO initiative has fallen on its face. It has not resonated well with the majority of the West European, East Asian, or global South allies of the United States. Neither has the ill-planned veiled corporate hegemony built into the Trans Pacific Partnership met with any approval.
The BRICS alliance and SCO forum did not set overly ambitious goals for themselves. Out of expedience and need to oppose the US financial and military aggression, both groups (BRICS & SCO) have eventually grown into a substantive counter-balance to the Euro-Atlantic dominance. Distrust, anger, and resentment of the West drive the process of the Silk Road formation. Desire to join with Europe is reinforced by deep negative sentiment toward the United States. The American Fascist state cannot project its power deep into the Eurasian heartland. The response has been the revival of Russo-Chinese rapprochement process, claims Nikolas Gvosdev. He foresees the current hostility and confrontation as catalyst in the development of a Eurasian Union.
Gvosdev believes the Eurasian Union will follow the path set by NATO and the EU. He concluded, "[Although SCO and BRICS do not come close] to emulating the European Union and NATO, they are inculcating and reinforcing habits of cooperation among their members that could become the foundations for more serious economic and security cooperation. The SCO, BRICS, and now the Eurasian Union are a reflection of a new, flexible, and dynamic approach on the part of Russian foreign policy, seeking to maximize Russia's influence on the world stage. The effort is underway to hitch Russia's chariot to the energy and dynamism of the rising powers as a way of retaining Russia's relevance as a global player." Nikolas Gvosdev gave particular emphasis to how the USGovt should take this process much more seriously. Arrogance usually results in massive setbacks and isolation. See the Voice of Russia article (CLICK HERE). The Jackass believes the US leaders on the banking, economic, and military flanks are scared witless, knowing their NATO device has morphed into a narcotic distribution ring, marred by mercenary killers and pillage experts, while the Trans Pacific Partnership has only a military base component to claim after some strong withering eastern winds have eroded its original assortment.
## WESTERN EROSION OF DOLLAR
◄$$$ THE US-BASED CORPORATIONS AND RUSSIAN CORPORATIONS ARE JUMPING SHIP, ABANDONING THE USDOLLAR IN TRADE USAGE... THE RULES TEND TO BE DICTATED BY THE SUPPLIER... THE KING DOLLAR IS BEING PUSHED OFF THE THRONE... THE GAME OF THRONES IS SEEN WITH THE DECIDED EDGE TO RUSSIA (WITH ENERGY & METAL SUPPLY) AND CHINA (WITH INDUSTRIAL PLANT & CAPITAL SUPPLY), DESPITE THE DISTRACTING DIN OF WAR... RUSSIA IS USING USGOVT SANCTIONS AS THE SLEDGE HAMMER TO FORCE PAYMENT STRUCTURES INTO YUAN... THE ISOLATION TO THE UNITED STATES IS UNAVOIDABLE, THE FOCUS ON THE TOXIC USD/USTBOND TO BECOME STARK CLEAR. $$$
US corporations are following the global trend. The largest economies in the world are breaking ranks rapidly. They are making distance from the USDollar. Foreign firms see it as jumping from the USS Dollar Titanic, avoiding sanctions problems. They see it as enabling easier currency translations, even slightly lower costs. They see it as joining the next chapter. Last April, the world's 12th-ranked economy in Australia, joined a growing list of nations that are to bypass the toxic USDollar in bilateral trade with China. The vast array of nations conduct trade with China, using the Yuan Swap Facility, essential a sleek barter device, which has created a road to a USD alternative. The nation of China, ranked 2nd behind the US, also has similar agreements with Japan (3rd), Brazil (6th), India (9th), and Russia (10th). Furthermore, more shock waves are to come from the BRICS nations, who are on the verge of deploying their own development bank. It will facilitate trade by usage of letters of credit, possibly a newly introduced Gold Trade Note soon afterwards. The USD discard will lead to the Gold Standard, but with intermediary steps.
Increasingly more Russian companies are set to drop the USDollar, and switch to Chinese Yuan. The RMB will move onto center stage as trade standard for settlement. Without any dispute, except from the blind, the compromised, the ignorant, trade is changing as the Eurasian anti-US Dollar Axis is rapidly taking shape. A catalyst is the USGovt aggressive policy in Ukraine, endless sanctions imposed, even bank penalties slapped on allies (see France). The effect has been to push Russia closer and faster to China. The Financial Times has reported that Russian companies are preparing to switch contracts suddenly to RMB and other Asian currencies in large numbers. They fear that Western sanctions may freeze them out of the USDollar market, and force obstacles. Pavel Teplukhin is head of Deutsche Bank in Russia. He told the Financial Times, "Over the last few weeks there has been a significant interest in the market from large Russian corporations to start using various products in Renminbi [RMB] and other Asian currencies and to set up accounts in Asian locations. It looks like this is not just a blip. This is a trend, changing the letter of their contracts to allow them to change currency if it is necessary."
Echoes came from Andrei Kostin, the CEO of state bank VTB in Russia. He called the wider usage of non-USD currencies a main task for the bank. He said, "Given the extent of our bilateral trade with China, developing the use of settlements in Rubles and Yuan [RMB] is a priority on the agenda. So we are working on it now." He assured President Putin during a briefing of their progress. The unnamed Russian head of another large European bank stated the consensus belief. "There is nothing wrong with Russia trying to reduce its dependency on the Dollar. Actually it is an entirely reasonable thing to do. There is no reason why you have to settle trade you do with Japan in Dollars." The large exposure Russia faces with respect to the USDollar subjects it to risks, even market volatility.
The trend away from the USD sphere is evident outside the banking sector. The CEO of a Russian manufacturer that derives 70% of its revenues from export in USD terms claimed his company had done the groundwork to move its contract settlements to different currencies in the event of further sanctions. He said, "If something happens, we are ready to switch to other currencies, for example to the Chinese Yuan or the Hong Kong Dollar." Expect more usage of HKDollars with Asian firms, a regional giant given the vast financial hub in the former colony. Another favorite emerging is the Singapore Dollar, which is a regional giant in the Pacific Rim. The entire Russian Economy is undergoing a rapid pivot to Asia, as its relations with Europe become strained. The CNY (RMB) exchange rate has seen a little lift in recent days. Some cross currents are at work, since Russia is moving in with Yuan demand, but the Beijing authorities wish to weaken the national currency. The metal vanishing act in Shanghai is another weird factor.
The trend away from the USDollar has other factors as well. The G-20 nations are flexing muscles, while the G-7 shows its irrelevance. The IMF members are angry at the USGovt for not making final its pledge, but keeping the voting right dominance. The Jackass believes the IMF is dead defunct. The USGovt sanctions are working to push the USDollar off its throne, along with related privileges. When Uncle Sam hits the floor after the long fall from the elevated throne, the Third World awaits the US nation as the thud, a longstanding Jackass forecast. The Renminbi will becomes progressively more important on the global FOREX stage, supplanting the USD in trade settlement. Russia owns the trump card. If it wants to show the world that the Russia-China Axis does not need the toxic USD at all, it need only show more aggressive action toward Ukraine and thus set off new sanctions. The result will be more global USD rejection and US isolation. Sanctions result in isolation.
As the isolation increases from reduced usage, the full focus will come to the USTreasury Bond, and its toxic nature supported by the Third World device known as hyper monetary inflation. The USGovt might soon be forced to ramp up the derivative machinery in order to absorb the discarded dumped USDollars. The foreign banks holding USD accounts will want protection for value of the account funds. The USGovt will be forced to launch a new Scheiss Dollar. De-dollarize, isolate, dump, rinse, repeat. See the Zero Hedge article (CLICK HERE) and the Alt Market article (CLICK HERE).
◄$$$ USAGE OF RMB IS FAST RISING WITHIN THE UNITED STATES TO MANAGE CHINESE IMPORT TRADE... RENMINBI USAGE IS SURGING IN THE HOME OF THE USDOLLAR... INCREDIBLY, THE USD IS BEING PUSHED ASIDE ON HOME TURF... ADVANTAGES COME TO BOTH PARTIES TIED TO RMB USAGE... THE RUSSIA-CHINESE LINKAGE WILL SPLIT US-ALLIES AND KICK THE USDOLLAR TO THE CURB. $$$
As more US firms use Chinese Yuan in payments for the endless flow of imports, one must ask the question when the first US city will register a RMB conversion hub. The Jackass guess is Los Angeles, or possibly San Francisco. The city of LA has the ports activity, but the city of SF has the financial power. The Chinese Renminbi is rapidly displacing the USDollar as a trading currency not only in Asia and Europe, but recently also in the US home market. The value of RMB payments between the US and the rest of the world rose by 327% in April this year from the same month a year ago. To be sure, it has risen sharply from a very low level. More US corporations have switched to using the Chinese currency to pay for imports from China, according to data from SWIFT. The same device to impose sanctions is used to verify the invasion on US soil, kind of ironic. The factors driving the upsurge are structural and long-term. The US importers can slash the cost of imports from China by agreeing to trade in Renminbi rather than USDollars. Second, a recent surge in the popularity of RMB-based bonds and financial instruments has made easier the task for US corporates to hedge currency risk. Moreover, they can actually earn some interest yield, while the USTreasury Bill earns zip, nothing, bupkus, nada. The ZIRP by the USFed has a backfire in popularizing the RMB bond trade, which rewards savers.
SWIFT data shows the volume of RMB settlement between the US and China is far less impressive than the growth rate. Just 2.4% of payments between the US and China/Hong Kong were settled in RMB in April this year, up from 0.7% in April 2013. However, the key is the direction and force. By the end of 2015, many astute analysts close to the tables expect that 30% of Chinese global trade will be settled in Renminbi, up from 13 to 15% today. The surge is to come from small and medium enterprises in China using Renminbi for trade with the US firms, such as the armada of retailers. After switching to RMB-based trade contracts, US importers no longer have to pay an exchange rate premium to Chinese exporters. They can hedge their currency exposure in an increasingly liquid offshore market for RMB financial instruments. For Chinese exporters, a shift to the RMB eliminates exchange rate risk. The cited instruments include RMB forward contracts, foreign exchange swaps, offshore RMB options, and so-called Dim Sum bonds (corporate bond issuance). The yield on the 10-year Chinese Govt Dim Sum bond at 4.00% offers a premium to the equivalent USTreasury Bond of all maturities. Check out the Dim Sum bond issued by US-based giant Caterpillar. It trades at a 2.95% yield with a 2016 maturity. See the Financial Times article by James Kynge (CLICK HERE).
The shift from greenback (USD) to redback (RMB) is animated by commercial considerations, with a strategic resonance carried for certain. China strives for financial independence and global respect. The Jackass detects linkage. As the pressure on Russia grows with sanctions, notice the effect seen in more Chinese demands for US firms to settle in RMB. Conversely, angering China might result in Russian natgas cutoffs. Furthermore, the Jackass foresees huge pressures to gain RMB Hub activity for trade resulting in less willingness to approve Russian sanctions. The two-sided consequence of R&C joined at the hip is that neither can be isolated. The joint R&C activity in commodity supply, global product exports, and bond trade will split the US from its allies, strip the USTBond from global bank reserves, take away the USD credit card, and push the King Dollar from its throne. The Third World awaits the United States as consequence for bad economic decisions, corporate abandonment, currency abuse, and relentless aggression.
◄$$$ CHINA IS SETTING UP LONDON AND FRANKFURT RMB HUBS IN COMPETITION... THE RUSSIANS MIGHT BE USING THE ENERGY CARD, BUT CHINA IS EXPLOITING THE FINANCIAL CARD EFFECTIVELY... EXPECT FRANKFURT TO EASILY ECLIPSE LONDON IN THE INVESTMENT BANKING AND RMB HUB ACTIVITY... GERMANY CAN PLAY ITS TECHNOLOGY AND BUSINESS CARD IN ASTUTE LEVERAGE, AND THUS WIN THE RMB HUB SITE COMPETITION. $$$
China has signed an agreement with Germany toward the creation of a clearing bank in Frankfurt. Meanwhile, the UK administration would also allow Chinese banks to open new branches in the country soon. Previously, Chinese banks, as well as many other international banks, were only allowed to set up subsidiaries, thus subject to the strict capital requirements applied to Britain's local banks. The British are on the verge of permitting foreign banks, in particular Chinese banks, to operate in London City under their own rules. This is a very big Open Door policy in development, a total reversal of events in the 1990 decade where NY/London banks entered China. See the BRICS Post article (CLICK HERE).
EuroRaj pitched in, tying together the Russian & Chinese strategies. He called it Greed and Survival at work. The following are his words, my edits. Russia & China are each exploiting the financial and military battle front disorder, in order to drive a wedge between the United States and Great Britain. Russian leader Putin has managed to drive a wedge by enticing the global oil companies to do exploratory business, to do joint research, to invest in pipeline construction, and to participate in other ventures. The German businesses and everybody else who depends on Russian gas have been drawn into their fold. On the other side of the Eurasian beltline, China has begun to drive the wedge into the main Western financial hubs. The Middle Kingdom is enticing Europe into the Eurasian project by dangling simpler discount payment systems and assured growth prospects.
The Jackass concurs with my brilliant colleague with Western Asian roots. The RMB Hub in Frankfurt will expand, and cover the majority of Asian investment business, even a growing portion of similar European business functions. Numerous German banks are to be integrated within the Shanghai Free Trade Zone. London will see a run for their RMB Hub money in Frankfurt. The catalyst is German technology of wide spectrum. My prediction is that in three to four years, Frankfurt will eclipse London in RMB trade of all types. Refer to bond issuance by Chinese Govt and Chinese firms, bond issuance by European firms, bond issuance by US firms, bond issuance by North American and South American firms, as well as vast FOREX currency conversion activity following the full RMB convertibility. Bank accounts under RMB denomination are even coming to Costa Rica, in Banco Cathay. The RMB bank accounts have been in Panama for some time.
The advantage Germany has is the broad set of active companies in trade & export, with the technology kicker. The British possess no such advantage with which to use leverage in the investment banking sector. For every lump London gains, Frankfurt will gain three. Imagine all the corporate to corporate developments that Germany currently has linked to China. To assure success and to develop the channel, China will lead in RMB corporate bond issuance done in Frankfurt, like with Chinese Govt Bonds. The process has already begun with significant Goethe Bonds. Witness a huge advantage, to lead with corporate ties, existing trade relationships, desired technology transfer, and expanded foreign direct investment on the opposite end. The British can offer their usual menu of business entrees, such as Lloyds, Barclays, and British Petroleum. All will be rejected in favor of German cuisine, since China suffers from British style indigestion. The natural mutually beneficial evolution can overwhelm corrupt financial regimes. German trade will overwhelm British financial dominance.
◄$$$ LONDON HAS CONSTRUCTED ITS OWN RMB HUB IN THE FORM OF A CLEARING BANK... THE IMPACT ON THE KING DOLLAR FOR TRADE SETTLEMENT WILL BE NOTED... ANOTHER KEY REFORM PERMITS CHINESE BANKS TO OPEN BRANCHES IN LONDON, NO LONGER RESTRICTED TO OPERATE WITHIN SUBSIDIARIES... WITNESS THE CHINESE INVASION OF LONDON CITY. $$$
A Renminbi (RMB) Yuan clearing bank will soon open in London. The obvious can be seen, in spread of the RMB in trade settlement, in investment banking, in bond issuance, for general financial sector currency procedure. The hidden effect is not as well known. If one talks about Yuan clearing house functions, then as soon as London launches the RMB facility, the Petro-Dollar will take a hit as crude oil in Europe will be transacted more in Yuan currency under the shadow of tall London trees. This is a big deal, and with Yuan convertibility in the Shanghai Free Trade Zone in July, the momentum will accelerate.
A RMB Yuan clearing bank will be officially appointed in the United Kingdom in June, said Mark Boleat, policy chairman for the City of London Corp. It is the custom for such a RMB house to be a Chinese bank. The approval is a hugely important endorsement for London's efforts to become an offshore RMB center. Other European financial centers in the race to become an RMB Hub include Frankfurt, Paris, Switzerland, and Luxembourg. An official clearing bank facilitates efficient clearing of offshore Renminbi transactions, achieved through the appointed bank's direct cooperation with the Peoples Bank of China, their offsetting central bank. The clearing bank in London will merge in function with activities already cleared through many commercial bank channels. For example, Standard Chartered teamed up with Agricultural Bank of China in December to provide their own RMB clearing platform, relying upon their own expertise and client base in the UK and China. One week before the accord was reached, China signed a memorandum with Germany to work on appointing a clearing bank in Frankfurt. The competition will be fierce between European financial centers, mainly between Germany and London.
Boleat confirmed another key announcement for Chinese banks to open new branches, after a long lobbying process. It was won by Beijing. No more will only subsidiary banks be the only permitted type. Foreign bank branches will be permitted, as in banks based in China, a huge change in reform. They will be able to give Chinese companies significantly greater lending and financing services. By contrast, branches have a lending and financing capacity proportional to their parent company balance sheets. In a letter sent by the Assn of Foreign Banks written to Britain's Treasury back in 2012, a group of Chinese banks expressed frustration at their inability to open branches in London. The pressure came from the Chinese banks, seen as perfectly proper. The British relented and acquiesced, with a bow, soon a kissing of the ring. Last year, the Bank of England announced foreign banks would be allowed to apply for a branch license, although only for wholesale businesses. Some rules will prevail. Retail businesses still need to be conducted under bank subsidiary license, under the guise to protect individual depositors. See the Live Trading News article (CLICK HERE). The Jackass detects subtle Kremlin pressure on London to open its banking sector to China, or else face Gazprom obstacles.
◄$$$ CHINA & NEW ZEALAND RENEWED THEIR CURRENCY SWAP PACT... THE VAST ARCHIPELAGO OF RMB STEPPING STONES WILL BE SUSTAINED. $$$
Chinese economic ties with New Zealand have been strengthened after the central banks of the two nations announced the renewal of a reciprocal currency arrangement. The Yuan Swap Facility will continue to support the settlement of bilateral business deals. The swap line was first agreed by the Peoples Bank of China and the Reserve Bank of New Zealand in 2011. The size of the swap facility was CHY 25 billion, equal to NZD $5.0bn, translated to US$4.29bn. Its original three years of maturity required extension, conditional upon agreement. It has been agreed upon. Expect all such swap facilities to be easily renewed with other countries. At this time, the Chinese currency trades directly with the Japanese Yen, the Australian Dollar, the Brazilian Real, the Euro from Europe, the New Zealand Dollar, and many other currencies. Beijing strives to replace the USDollar with the Yuan (RMB) in all their trade with other countries. Reserve Bank Deputy Governor Grant Spencer claimed the bilateral currency swap line will contributes to strengthen the China-New Zealand relationship. He made no comment on the pervasive Chinese colonize of Auckland in property purchases.
◄$$$ STEVE FORBES BELIEVES THE USDDOLLAR MUST BE LINKED TO GOLD IN ORDER TO AVERT A BIGGER REPEAT OF THE GREAT DEPRESSION... HE COMPREHENDS THE URGENT NEED FOR A GOLD STANDARD RETURN... HIS VIEWPOINT GATHERS ZERO TRACTION OR MOMENTUM IN THE AMERICAN REGIME. $$$
The Gold Standard requirement and USDollar toxicity are comprehended by some American titans, just the wrong ones. They might run for president, but they are not entrenched within the banking syndicate. It is a 3-year old video clip, but never more relevant. See the Washington Examiner video (CLICK HERE).
## CENTRAL BANK HIVE ON DEFENSIVE
◄$$$ PAUL VOLCKER SLAMMED THE FED FOR ITS HERESY AND BUNGLED REGULATORY FUNCTION... DESPERATE MEASURES ARE ADOPTED, AND THEREFORE BLESSED AS PRUDENT AND GOOD... BUNDESBANK CHIEF SLAMMED THE DRAGHI EURO-CB FOR ITS HERESY... HERESY LOVES COMPANY... GERMANY MIGHT BE MAKING THE CASE FOR LATER DEPARTURE FROM THE EURO CURRENCY. $$$
Former USFed Chairman Paul Volcker: "The responsibility of the government is to have a stable currency. This kind of stuff that you are being taught at Princeton disturbs me. The responsibility of any central bank is price stability. They ought to make sure that they are making policies that are convincing to the public and to the markets that they are not going to tolerate inflation. The Volcker Rule is that institutions protected by the government, implicitly or explicitly, should not be engaged in speculative activities that bear no real relationship to the purposes for which banks are protected. Banks are protected to make loans, they are protected to keep the payments system stable. They are protected so you have a stable place to put your money. That is why banks are protected. They are not protected to engage in speculative activities which led to risk and jeopardized the banking system. That is the basic philosophy. [The trade-off between inflation and unemployment] is a scenario and a delusion, which economists have gotten Nobel Prizes twenty years ago to disprove. [In the area of financial regulation] a lot has been done. What needs to be done is to enforce it. This business of the resolution process [of resolving the affairs of insolvent banks in an orderly fashion], whether you are talking about the FDIC or the Federal Reserve, there is a lot of work being done. But it is not complete. We have to reorganize the supervisory system. There are too many holes, too many overlaps, too many opportunities for regulatory capture from the affected industries. That should be reformed." See the Zero Hedge interview (CLICK HERE), where the best parts of his interview were summarized into a single quote. Of the USFed Chairmen, Volcker stands out as the best and most competent, while Bernanke earns the lowest marks for steady heresy, justified hyper inflation, blatant stupidity, for being syndicate butler, and for his doctoral thesis steeped in revisionist history and systemic apologism.
On the eve of the Euro Central Bank entering the acidic hyper monetary inflation waters, the esteemed Weidmann warned against central bank excess in purchases of government bonds. In Croatia, Bundesbank President Jens Weidmann warned Draghi against using central bank money to purchase government bonds. He suggested the European Central Bank would face stiff opposition from its most powerful member bank in Germany, if it decided to engage in reckless monetary policy. He referred directly to the aggressive policy used by central banks in the United States, Japan, and England. The increasingly heretical Draghi EuroCB signed on to a dramatic array of stimulus measures, including interest rate cuts to record lows, endorsed unanimously. So far, the Draghi steps have not included large scale purchases of public and private bonds, known as Quantitative Easing. For his part, Weidmann delivered stern warning. "While sovereign bond purchases are a widely used monetary policy tool, they are not without risks. Asset purchases may act like a sweet poison for the governments. The rude awakening may come when the purchases are reduced or stopped altogether. [Purchases of government bonds] bring monetary policy very close to monetary financing of governments, which could undermine the central bank's ability to maintain its mandate of price stability." He argues clearly against monetized national deficits and debt growth. See the Wall Street Journal article (CLICK HERE). The Jackass senses a great change in the monetary winds. The Bundesbank (aka Buba) might be making the case for later departure from the Euro Monetary Union, on the grounds of reckless debt monetization which violates their own charter.
◄$$$ THE EURO CENTAL BANK CUT ITS OFFICIAL INTEREST RATES ON DEPOITS BELOW ZERO... DRAGHI JUSTIFIED THE DECISION (SUPPORTED BY FRANCE AND THE IMF) TO COUNTER DEFLATION AND TO SPUR LENDING VOLUME... ASSURING A PROLONGED PERIOD OF LOW RATES, DRAGHI DID NOT PROMISE BOND MONETIZATION PURCHASES, BUT PRESSURE WILL BUILD FOR AN USFED-TYPE QE PROGRAM... THE GERMANS DISLIKE THE MANEUVER, CLAIMING IT WILL RESULT IN NOTHING POSITIVE... THEY WILL TURN EAST WITH THEIR DEDICATED CAPITAL. $$$
The piqued battle between the adrift debt slaves (who want 0% money) and the diligent worker bee savers (who want a reward for their money) has elevated into a high pitch. The European Central Bank cut interest rates to record lows on June 6th, imposing negative rates on its overnight depositors. Their motive is to urge banks to lend in greater volume. Irony abounds. The banks do not regard borrowers as good risk, especially since the central bank policy has weakened the business sector, even as policy gradually destroys working capital. Further stupidity is evident, as the EuroCB wishes to fight the risk of Japan-like deflation, but by using the same techniques that have failed Japan for 23 years, the Zero Interest Rate Policy. The ECB lowered the deposit rate to minus 0.1 percent, meaning it will effectively charge banks for holding their money overnight. It cut its main refinancing rate to plus 0.15 percent, and cut the marginal (emergency) lending rate to 0.40 percent. The negative depositor rate for parked funds at the heretical central banks has occurred for the first time. Regard the move as an admission of defeat and utter failure in monetary policy. The measures are aimed at easing pressure on the strong Euro currency, which interferes with the export trade. Again more irony, since the Draghi ECB is responsible for keeping the Euro high from hidden devices, in service to the bank sector which privately and secretly is dumping European assets. They want a favorable exchange rate.
The ECB stopped short of full bore Quantitative Easing, using newly printing phony money to buy assets. Speculation abounds for additional action, and a launched USFed-like bond purchase program, which itself is another staggering failure. Analysts believe expectations of a broad-based asset purchase program will rapidly start to build. Like the heretical pompous fool he is, Draghi cited a different world of low inflation, weak economic recovery, and poor credit dynamics to justify his decision. His revised policy will worsen all the above. Prince Mario outlined a four-year EUR 400 billion (=US$544.86bn) scheme which gives banks that have been holding back credit due to stress tests an incentive to increase lending to businesses in the EuroZone. Other steps were included to enhance liquidity injections and to support small businesses. The ECB policy setting Governing Council was unanimous in its commitment to use unconventional instruments, if needed to further address risks. The published ECB calculations of price inflation and jobless rate will not be cited here, so as to avoid laughter with guffaws due to their errant ways. The Jackass is firm and loud. Success in extreme monetary policy focused upon ZIRP & QE tools is evident by their temporary nature, not their extensions. They are huge failures.
The quintessential battle between tribal camps continues, as observed by reactions. The French are happy, but the Germans are either silent or muttering displeasure with deep doubts. French President Hollande had been urging for months the ECB action to weaken the Euro's exchange rate. He welcomed the central bank's decision, expecting a lower Euro would prompt exports. The International Monetary Fund had also pressed the ECB to take robust action. The fund applauded the decision as a very proactive stance. Low rates are staunchly unremittingly unpopular in Germany, the location of Europe's biggest economy and site of usable legitimate capital piles from export surpluses and savings. Notice the absence of such ample available capital in the last several years across the continent, the reliance instead on phony money spun off the Weimar printing press. The conflict will escalate, perhaps enough to force Germany out of the Euro Monetary Union, as expressed by the Bundesbank warning as well. A split could later see the southern nations given free money off the press, which would force powerful devaluations of their separate currency. The Germans will follow the Sound Money trail to gold-backed currency that the Russians & Chinese espouse.
The Germans see the easing as an extreme penalty to savers, and a subsidy to debtors at their expense. The reaction will be more funds devoted to Chinese Dim Sum (aka Goethe) Bonds in the future, which fetch a higher yield. The liquidity competition will soon favor the East in an enormous push. Conservative German economist Hans-Werner Sinn of the IFO Institute called the ECB move an exercise in desperation which would not work. He said, "This is a desperate attempt, with ever cheaper money and penalty rates on deposits, to shift capital flows to Southern Europe in order to stimulate growth there." The Germans regard the PIIGS nations as a lost cause, harbor of poor work ethics, site of reckless property bubble promotions, economies that lack technology, and a deep black hole for their well earned savings. See the Reuters article (CLICK HERE).
◄$$$ FINRA RELEASED A BOMBSHELL IN ITS FIRST DARK POOL DATA DISCLOSURE... THE BIGGEST WALL STREET BANKS ARE TRADING THEIR OWN STOCK IN DARK POOLS... THEY CAN DETERMINE NOT TO BE BAGHOLDERS, WHILE MAKING THEIR OWN MARKET AND RIGGING THEIR OWN BOOKS, EVEN SETTING THEIR OWN SHARE PRICE... CORRUPTION IS BEYOND DEEP, DIRTY, DESPICABLE. $$$
The main financial media has finally begun to awaken to market rigging. A major Wall Street bank traded the most shares in their dark pool during a recent week. The Financial Industry Regulatory Authority (FINRA) released detailed dark pool data for the first time. The Wall Street must be very uneasy, even angry. The FINRA is a self policing body in the financial sector. The largest banks on Wall Street have been making a market in their own stock inside the dark pools they own, right under the nose of FINRA and the SEC. These are the very same insolvent corrupted banks that the USGovt bailed out in 2008. It is hard to say the US taxpayers bailed out any firm, since the federal debt is covered by the USFed and their bond monetization schemes. The volume of the big bank share trading activity could be in the hundreds of millions of shares per year. Conclude quickly we are witnessing the equivalent of Bank of America or Citigroup being a specialist in their own stock on the floor of the New York Stock Exchange. The rigging is obvious, blatant, and egregious.
For example, during the week ending May 16th, Merrill Lynch's dark pool is shown executing 16,246 individual trade orders in the stock of its parent, Bank of America. Its self dealing came to a total of 8,207,150 shares. This figure represents a hefty 12% of the 67.8 million shares of Bank of America that were traded in dark pools that week. See the Wall Street Parade article (CLICK HERE). Another astute Hat Trick Letter client (who provided the story), DonaldZ said "This means the banks can completely control the price of their stocks, the profits on their books, and the means to distribute liquidating shares without supply pressure." Corruption runs deeper than even the most suspicious and cynical analyst can imagine. One is left to wonder why Wall Street permitted the report to be published. They are losing their power and their grip.
◄$$$ JPMORGAN MIGHT REDOUBLE THE JOB REDUCTION AT THEIR MARKET CONTROL ROOM... TRADING PROFITS ARE WAY DOWN IN THE CONTROLLED MARKET CLIMATE, WHICH CAUSE A DULL SIDE TO THE VOLATILITY... THE CFO FOR THE BIG BANK CLAIMED A CYCLICAL DOWNTURN, NOT SECULAR (AS IN SYSTEMIC BREAKDOWN), AN OBVIOUS WRONG STATEMENT. $$$
The internal squabbles might have reached fever pitch. At JPMorgan Chase, more big cuts could be coming. The world's biggest investment bank is at heightened risk to cut jobs and reduce compensation, unless trading revenue rebounds. Chronically weak global economic growth and chronically low interest rates have become a rooted plague in the banking sector. The CFO Marianne Lake is suddenly in the spotlight. Compensation pay scales will be reduced, if revenue results hold at the current levels. She admitted that, "Then in the longer term, the question is whether we will have too much capacity. Over time, we should expect to see these cyclical headwinds abate and get replaced with tailwinds. It is possible that reductions may be required in response to market evolution, but it will take time to play out."
JPMorgan warned investors in May that Q2 trading in fixed income and equities would probably decline by 20% from a year earlier. The blame was placed on low volatility across all asset classes. CFO Lake deceived in the usual manner, claiming openly that the problems appeared to be cyclical, rather than a secular shift of permanent type. No big US bank ever admits to a secular decline, as in systemic breakdown. Accurate assessment would bring attention to their own corrupt hands in profound multi-$trillion bond fraud and contract fraud. Instead, the party line was trotted out. Lake claimed the bank's huge size allows it to withstand market lulls without overreacting. She acknowledged the possibility that job cuts could be needed eventually as part of a grander reaction. Then more, the level of deposits are on course to decline on the order of $100 billion at JPMorgan. The big bank had to respond to tighter USFed requirements, the Basel Rules.
The CFO Lake claimed that the bank has drawn $350 billion in additional deposits since the end of 2009, much of it because of Fed actions. A very deceptive remark indeed, since deposits have predominantly come from a USTBond carry trade, to borrow at the Fed window for free, and invest in long-term USTreasurys. Deposits might even arrive at the Narco Money Laundering window. The carry trade collective activity has helped to pull down the long-term USTreasury yields, using both leveraged bond futures contracts along with the powerful but better hidden interest rate derivatives. See the Bloomberg article (CLICK HERE). The USFed QE initiatives mean no volatility and no volume, just vacuum tubes and control levers. Nice quip, courtesy of EuroRaj.
◄$$$ GOLDMAN SACHS WON DISMISSAL OF A $450 MILLION MORTGAGE BOND SUIT IN NEW YORK STATE... THE DISCLOSURE BASIS FOR DISMISSAL WAS DISTURBING, AND SHOWED NO CONSIDERATION TO INVESTORS... WHEN THE ISSUER BANK DOES NOT VOLUNTEER ROTTEN DATA, IT IS NOT HELD ACCOUNTABLE... DISCLOSURE IS THE INVESTOR'S BURDEN. $$$
State Supreme Court Justice Charles Ramos dismissed the claims against Goldman Sachs in a mortgage bond lawsuit. The ruling stated that investors reviewed data presented in the prospectus and related documents, but never formally requested to review files for the underlying loans. Ramos wrote, "The true nature of the risk being assumed could admittedly have been ascertained from reviewing these loan files and plaintiffs never asked for them. It does not matter if the failure to seek this information was because of blind faith in the process of origination and/or securitization, or if it was attributable to the desire to quickly get on board of what the investors thought was a profitable bandwagon. The obligation of a sophisticated investor to inquire cannot be merely excused." The issue is over data sharing, on active versus passive, and the burden to share versus to request. So conclude that the bond issuer has no burden on disclosure, a dangerous precedent.
The investor plaintiffs claimed Goldman Sachs did not share the files for the loans underlying the securities. Ramos said there were no allegations that that they asked for them, where Goldman Sachs denied access. Regardless, an honest bond issuer would provide data, unless of course the data was rotten. If the true nature of the risk was so easily ascertainable from reviewing the files, then it should have been disclosed in the offering memorandum. A passive investor loses in the US court system against Wall Street banks. See the Bloomberg article (CLICK HERE). The US courts will help to undermine an already horrible global image for the nation, and further contribute to its isolation.
◄$$$ BANK OF IRELAND IS CONDUCTING BUSINESS IN BILATERAL PAYMENTS IN YUAN CURRENCY, FROM PEER TO PEER... FULL RMB BANK ACCOUNTS ARE NOT YET AVAILABLE, EITHER COMMERCIAL OR PRIVATE... IN OTHER LOCATIONS, RMB-BASED BANK ACCOUNTS ARE POSSIBLE. $$$
Greetings from Ireland by a Hat Trick Letter client. Further inquiry revealed he had a story to tell, his bank being the Bank of Ireland. He wrote, "Just thought I would let you know that my company buys a lot of steel and machinery from China. We always used to pay in USDollars. However in the last two months we are now paying in RMB. We can just go to our bank and do a transfer in Yuan. This was never possible before and it is very convenient. In follow-up, just had a conversation with the guy in Global Markets of the same bank. He says it is only a matter of time before you can open an RMB account, but not yet. Apparently there is a domestic exchange rate and an offshore exchange rate for RMB. There is still a little fear of the offshore exchange rate fluctuating." As rejoinder, not the same continent, but an HTLetter client in Dubai mentioned that one can have Yuan/RMB accounts with Emirates NBD Bank in the UAE. The Jackass adds that Banco Cathay in San Jose Costa Rica offers RMB bank accounts, both commercial and personal types. The bank has roots in Taiwan, and services a multitude of Chinese clients in the city. The Chinese are pushing to have a Bank of China license in SJCR, soon to come, with plenty of foot dragging. The desire is to have a chain of branches from the Chinese flagship bank, which would provide more lending volume for various projects in the metropolitan area.
◄$$$ BILL HOLTER (OF MILES FRANKLIN STAFF) ANTICIPATES THE USFED TO RAMP UP QE VOLUME AGAIN, IN FULL SINCH WITH THE JACKASS... NO NATION HAS EVER PRINTED ITS PATH TO PROSPERITY, OR TO A RECOVERY WITHOUT HEAVY COST... THE CREEPY SUSPICION IS THAT THE USFED HAS NOT MONETIZED ENOUGH, IN ORDER TO ACHIEVE THE TRUE KNOCK ON JUMP START... IF IT FAILS, REDOUBLE THE EFFORT, AT THE RISK OF LOSING THE USDOLLAR CURRENCY ITSELF (IT IS COMING)... HERESY HAS NO LIMITS, AND MONETARY ERROR HAS NEVER SEEN SUCH DEPTHS. $$$
"We are very close to Reality showing its ugly head because of a confluence of events. Inflation is now at the point that even the most ardent Ostrich can no longer keep their head in the sand and believe the numbers. The number of unemployed and those receiving benefits can no longer be ignored. The Fed is going to have to soon reverse course and admit that more adrenaline (QE) is needed just to keep the patient alive. This leads me to another topic that is also related, Belgium. Belgium is now an owner of some $450 billion worth of Treasurys. They emerged as a big buyer since late last year, and coincidentally they have accumulated almost exactly the amount of Treasurys that the Fed supposedly tapered. Is this a coincidence? What we do know is that the Fed has been buying 70% of Treasury issuance. No one else wanted them, but the Treasury still had funding needs so the Fed acted in their true role of lender of last resort.
This lender of last resort role was however supposed to be for a bank or the banks, not the USDept Treasury itself. Good thing though, because if it were not for the Fed, we collectively would have already witnessed Reality. Remember that QE was (+Belgium now) over $1 trillion of extra juice per year. What is next? $2 trillion? This will come to head in a very ugly manner. No country has ever monetized (printed) its way to prosperity. In fact, every country throughout all of history that tried this ended up losing their currency. In this particular instance we are talking about the country that issues the reserve currency of the world, and in amounts and size that have NEVER, EVER been seen before. This has already been proven not to work many times before but the thought process is that they have not monetized enough. Imagine, this is the thought process coming out of Ivy league business schools! You must prepare yourself for what is coming because the brain trust has apparently short circuited!" Desperation has merged with heresy to breed disaster and perdition.
◄$$$ GLOBAL FINANCIAL TAX FOR INCOME AND WEALTH REDISTRIBUTION TOWARD EQUALITY, THESE COULD BE DEBATED SOON... WITH THE CARBON TAX GONE BY THE WAYSIDE, ANOTHER BANKER RUSE AND CONFISCATION SCHEME IS GRADUALLY APPEARING. $$$
From the Intl Montary Fund to the USFederal Reserve, even the vaunted US press networks, watch your back as sinister duplicitous do-gooders are busy at work again. The powers are trying to fight income inequality in their own way, the old fashioned way, by confiscations. They are talking about wealth taxes as a means of achieving an egalitarian level field. The income tax, built upon dubious legal footing, is not enough. They wish to go after the mother load, accumulated private wealth, in their hidden quest to create a world of powerless paupers. The prelude might be seen in the tenacity of the powers to conduct worldwide tracking of all assets located across the planet. This increasing trend has been coined GATCA, as the next generation to FATCA. The most obvious motivation for tracking after-tax money is to execute on plans to seize it. Like with other seizure initiatives, the burden on proving that money in accounts is not narcotics or terrorist related lies on the victim individual, and the government can summarily reject the defense without ever reviewing it. There is no end to the vile agenda of the global fascists, who are at the same time busy with contamination of air, water, and food. See the New York Times article (CLICK HERE) and the SJBerwin article (CLICK HERE).
## BRITISH BANK HIVE UNDER SCRUTINY
◄$$$ BRITISH CHANCELLOR OF EXCHEQUER HAS PLEDGED CRIMINAL ACTION AGAINST BANKS AND TRADERS (MERE VERBAGE FOR NOW)... FOCUS IS DIRECTED AT FRAUD IN FOREX AND LIBOR, THE CURRENCY AND INTEREST RATE MARKETS... IT IS DIFFICULT TO RESPECT THEIR ACTIONS AS GENUINE... TO DATE THE FINES HAVE BEEN MINISCULE, COMPARED TO THE VICTIM LOSSES LODGED WITHIN SYSTEMIC COSTS. $$$
Either the British are putting on a good show, or they are actually working hard to tackle the financial malfeasance, fraud, and market rigging in the banking sector. Given that LIBOR consequences are a trifle, given that the Gold Fix game continues, given that mortgage fraud (including title falsifications) have had near nil consequences, the Jackass concludes the London regulators are putting on a show, beating their chests, under pretense of taking firm action. The LIBOR revelations involved the fixing of the interest rates at which banks lend to each other. Banks around the world have to date been forced to pay fines totalling more than $6 billion. The figures sounds large, until the ultimate cost is calculated into at least several $trillions, and certainly several hundred $billions. It is possible that a maverick regulator George Osborne is simply using a pee-shooter against a goliath, the powerful banks permitting the man his diversionary actions in pure futility. It is hard to know. Osborne is Chancellor of the Exchequer. He is gradually unveiling his actions to tackle wrongdoing in the financial sector. Certain measures will include making the manipulation of the foreign currency markets by banks a criminal offense. To demonstrate how corrupt the current system is, it is not a felony to rig markets. A storm of protest and controversy has come on the increasing concern about whether the multi-$trillion foreign exchange (FOREX) market has been rigged for ages. The crafted legislation could be extended to the commodity trading, even to the fixed income market, where the most common items traded are the bonds.
The chancellor is expected to establish a joint review by the Treasury, Bank of England, and the Financial Conduct Authority (FCA) to examine how these markets operate. Mr Osborne will say, "The integrity of the City matters to the economy of Britain. Markets here set the interest rates for people's mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy. I am going to deal with abuses." If Osborne threatens the system too much, he will be reined in or retired. It would seem a crackdown on malpractice in the financial industry has been gathering pace. The FCA has stepped up investigations into the sector, and the recent Parliamentary Commission on Banking Standards prompted a new legal regime for executives. The focused attention has recently been directed at the FOREX market, where traders police themselves. They have focused on LIBOR, done next to nothing in remedy, and moved on to the next arena, where they will also do nothing in remedy. The Jackass opines that the pace has been that of a snail, with wholly inadequate prosections, penalties, fines, victim restitutions, financial firm shutdowns, and admissions of guilt.
BBC business editor Kamal Ahmed made a detailed comment. "A new set of storm clouds is gathering over UK banks. The foreign exchange market is under investigation. The allegation is fraud. Companies that operate around the world use the foreign exchange market to buy and sell currencies so that they can trade in different countries. Our pension funds also use the market so they can invest globally. If wrongdoing is proved, banks could be facing fines. The chancellor will say that any manipulation could affect the amount people pay for foreign currencies when they go abroad, as well as the amount companies pay." It all sounds good, very frothy, but so far nothing but talk and wrists slapped.
Behind the scenes, the big banks are being forced to exit business lines, which might be the only justice meted out. The current focus by the London regulators is FOREX and LIBOR, both a den of thieves operating out of London with near impunity until the present. At least 15 banks are being investigated by regulators around the world for alleged FOREX manipulation. The voice of dissent was heard from the Labour Party shadow Treasury minister Cathy Jamieson. The Treasury argues that the UK's own regulations retain the flexibility needed to protect London's role as a global financial sector. In reply, Jamieson said the chancellor's review was "too little, too late. We pressed ministers to regulate commodities markets and the full array of financial benchmarks back in 2012, but the chancellor failed to act." See the BBC article (CLICK HERE).
◄$$$ BANK OF ENGLAND FINDS ITSELF IN HOT WATER OVER ASSET BACKED SECURITIES... THE BOE IS ATTEMPTING TO REVIVE THE MORTGAGE BOND MARKET IN PLAIN VANILLA TYPE, WHILE MINIMIZING THE FINANCIAL FRACTURES CAUSED BY THE ENTIRE ASSET BACKED MARKET WITH LINKED SCUMMY DERIVATIVES... THEY HAVE GIVEN INADEQUATE COVERAGE TO THE TITLE PASSAGE ISSUE UPON THIRD-PARTY PURCHASE FOR BOND PACKAGING... SCRUTINY IS RISING, AS DESPERATION SETS IN.... ECONOMIC NEEDS OVERRIDE PRUDENCE... REFORM IS NOWHERE, OR MINIMAL AND INADEQUATE... THE GREED CYCLE IS AT WORK, NOT THE BUSINESS CYCLE. $$$
Asset-backed securities are poised for comeback, says a desperate buffoon employed as the Bank of England deputy. The corrupt bank hive seeks to revive the market for asset-backed securities, denounced widely as toxic sludge for their role in causing the global financial crisis. Sir Jon Cunliffe, one of the Bank's deputy governors, claims that with the right safeguards in place, asset-backed securities could once more be a useful mechanism for lending. Dream on about self-imposed safeguards. Asset-backed securities involve mortgages, home equity lines of credit, other home loans, or other debts (even car loans and student loans), which are bundled and sold to investors. They were hawked and shucked upon dullard investors by almost every large bank before the financial crisis, a key element to the crisis that still has not been resolved since the banks which perpetrated the $trillion fraud are still in operation. They have been bailed out by governments, instead of liquidated and sold as parcels in a ploughing under of rot. The mortgage bond concept was tainted by spectacular failures, such as with Northern Rock, which sold asset-backed securities which were ripe with toxic tranches (de)composed from US sub-prime mortgage loans. Contagion spread through the financial system when they rotted in place, and infected all they touched. Securitized bonds are suddenly back in vogue, seen as a cheap source of funding when many investors are still struggling to get credit. The ultra low bond yields still reflect incorrectly the huge risk to investors.
Speaking on BBC Radio, the clownish Cunliffe made the case for securitized bonds, calling them a tool. He urged safeguards to prevent further exploitation and abuse. He placed blame on the US as the origin, if not the sole site of toxicity. He called the bonds a useful mechanism. He stated, "What happened in the financial crisis, particularly with assets originating in the US, is that it was exploited and abused and it spread risk, the so-called toxic assets through the system. But in the end securitization is a just a mechanism for banks to make loans, to bundle up those loans, and to be able to sell on those loans to other investors who want to be lending to real economy, to households, to businesses. We want to see if the market can develop standards and ways of doing this that actually deals with the risks, [which] can enable securitization to happen in an beneficial way." Sounds like a sales brochure leading to a corrupt prospectus tossed at still more hapless investors. Standards exist, but are not enforced. The corruption was all through RBS and several other big banks like Barclays, and all through England, Scotland, and Ireland, not just the United States. The acidic vacant securitization originated also in Great Britain and Ireland. Back in 2005 and 2006, the Jackass pinpointed the reckless underwriting all across the English-speaking economies which copied the US example.
The missing parts are: 1) the reform of the system (no evidence yet), 2) the liquidation of insolvent structures (no evidence yet), 3) the jailing of guilty parties (no evidence yet), 4) the restitution of victimized investors (very little to date), 5) the elimination of leverage squared from the trading arena (done but due to wrecked investors), 6) the tightening of regulatory oversight (no evidence yet), and 7) the block of industry insiders to manage the entire oversight process ( no evidence yet).
In the last week of May, the Bank of England and the European Central Bank set out proposals to revive the market for asset-backed securities. They did so without any of the stated seven Jackass steps toward valid reform, a desperate premature action in response to economic sclerosis and stagnation. The BOE & ECB tag team is trying to revive a rotten fetid corpse. They admit the reputation of securitized mortgages was severely tarnished by the financial crisis, in their words. They acknowledged the role of complex structures, referring indirectly to the Collateralized Debt Obligation monstrosity instrument, and the obscene leverage squared concept in vehicles. They could not have referred to the criminal device such as MERS, the title database warehouse, highly useful in bond fraud for multiple uses of the same property title, protected by the internal software. They referred to poorly underwritten loans, where there was over-reliance on high leverage. The elite dirty team believes the revival of Plain Vanilla securities can play a useful role, provided that risk does not build up in the system, as well as a source of funding. They strive to return to the basics, without doing the reform or cleanup process. They want a revival of corrupted zombies, since they are caught in deep delusion. Another motive might be at work. The UK and EU might be scared witless that the Chinese might undertake the mortgage function, and conduct it fairly and responsibly.
The ugliest light on the conference room comes from delusional approach to persuade policymakers that only a small corner of the market, securities linked to US sub-prime mortgages, were responsible for much of the damage. In full admission that the market had been abused in the past, Cunliffe suggests that banks keep part of any investment as their inherent stake, so as to share in the losses if failure resulted. He cites in the past how poor quality loans were originated, then bundled and sold to naive and unaware investors who did not understand them. He urged that needed to be developed to ensure asset-backed securities were transparent and easy to understand. It all sounded like a morgue revival meeting or a voodoo seance, without the proper preparations or notable reforms. See the Guardian article (CLICK HERE).
Dotted throughout the above apologist treatise was Jackass interjections. More must be cited. The pertain to rugged legal technicalities, but important ones. In addition, if the mortgage or loan is sold onto a third party, surely that is breach of contract in many cases, and therefore voids the original agreement, thus tainting the mortgage bond that secures the income stream. Unless some contract stipulation appears in small print which allows them to do so, the bond is tainted and rendered imperfect. One of the key issues in repackaging loans and transferring them to third party, has been retaining the connection between home loan note and property title. The linkage has usually been lost in the paper shuffle, and cetaintly lost in the MERS title database acidic corrosive swirling vat. The repackaging of US-based mortgage loans has been rampant in the mortgage backed securities (MBS) markets for years. The central legal issue appears to revolve around the notion that when an MBS is sold to a third party, clear title and deed transfer must be legally guaranteed with the sale. Numerous examples in the US courts have occurred, where banks have tried to foreclose on properties, but the judges have thrown out the case when the banks could not provide clear line in deed ownership. The home owners (mortgagees) have won in a majority of cases brought before the courts. The problem for the home owners is that they are timid to challenge the banks, lack resources to carry out the battle, and are not aware of the procedure in doing so.
The US mortgage market is trying to achieve status on standing on both feet again, after succumbing to horrific blows. The Home Equity Line of Credit (HELOC) loans are making a comeback in the US, with interest only due, in ten year contracts. It is shocking and amazing, but proof of the greed cycle that relies on short memories. The ultra-low fixed mortgages at 4.2% cannot revive the mortgage market, since the USEconomy is depressed and the borrowers are without means. The subprime loans (and leasing) for cars is back, the credit risk pushed aside, and length of loans extended to five, six, seven, eight years. They go instantly underwater in the first year. Subprime student loans are so popular, that they are justified as part of the culture of opportunity. Home mortgages are set up as 40 or 50 years in loan duration. The central bank high priests endorse it all as good, with blessing. They preach over charred ruins among the congregrations.
◄$$$ BRITISH TAXPAYERS RISK LOSING THEIR ENTIRE GBP 45 BILLION STAKE IN ROYAL BANK OF SCOTLAND (RBS)... THE CORRUPT CONGLOMERATE HIVE REMAINS IN GRAVE DANGER OF FAILING WITHIN THE NEXT FEW YEARS... THE CRIMINAL ACTIVITY IS DELINEATED IN CLEAR TERMS, THE RISK LAID OUT FOR MASSIVE LOSSES. $$$
A new book has been published, an explosive new study about the disgraced Royal Bank of Scotland Bank, which brought the UK to the brink of financial ruin. The book is entitled "Shredded: Inside RBS, The Bank That Broke Britain" by financial journalist Ian Fraser. In it he reveals RBS still has a black hole of 100bn British Pounds in its finances due to five broad areas of alleged criminality and wrongdoing, as it claims. The criminal activity continues, and therein lies the greater controversy. The RBS behemoth continues with a) the mis-selling of financial products such as payment protection insurance, b) the alleged duping of investors who were persuaded to invest more than GBP 12bn into RBS shares immediately before the banking crash in 2008, d) further fallout from the LIBOR scandal, d) current criminal investigations into the manipulation of the GBP 3 trillion per day FOREX markets, and e) mortgage contract fraud on a broad basis. Although the book is a powerful exposure, it does not go far enough.
Fraser accuses leaders Gordon Brown and David Cameron as having let the people of Britain down, in his words. The author overlooks much deeper depravity and corruption, indication of some level of ignorance. They failed to reform RBS after it received a mammoth bailout under the stewardship of former CEO Fred 'The Shred' Goodwin. At risk is the UKGovt investment of GBP 45bn into the sinking rotten corrosive hull known of RBS. The intrepid author seems unaware of the deep criminality that the leaders are part and parcel of. Brown arranged for a transfer of British national gold reserves at multi-decade low prices, in order to assist in covering up the German secret lease. Cameron is but an errand boy of diminutive stature to continue the syndicate crimes and cover-up, given no leeway in reform. See the UK Independent article (CLICK HERE).
## GAZPROM CONFLICT BOILS
◄$$$ THE EU SANCTIONS IMPOSED ON RUSSIA COULD PUSH NATGAS PRICES UP 50% FOR EUROPEAN CUSTOMERS, SO ESTIMATES THE WORLD BANK ECONOMISTS... THE BACKFIRE DAMAGE WOULD BE UNIVERSAL, HARMING RUSSIAN INCOME IN RETURN... THE EXCEPTION WOULD BE FOR CERTAIN DISCOUNTS HANDED TO THE NEW CHINESE CLIENTS... THE SHIFT TO LNG GAS DEMAND COULD RESULT IN FURTHER DISRUPTION TO PRICE... ONE MUST WONDER IF THE USGOVT POLICY IS MOTIVATED TO WRECK BOTH ECONOMIES IN EUROPE AND RUSSIA, IN ORDER TO OFFSET THEIR OWN WRECKAGE IN AMERICA. $$$
Russia and the many European nations would both suffer if sanctions escalate, according to a recently released World Bank economic report. The energy market would continue to see higher prices, but the Rockefellers and Big Energy firms would enjoy the windfall, just like when they arranged for the Arab Oil Embargo in 1973. The Chinese client for Russian gas shipments might also enjoy a discount. The reductions shipments and sales to the European market would cut Russian Govt revenue by 10% of GDP, while European natgas prices would jump 50% on average. Some deeply dependent EU countries could see even higher gas prices. As the Jackass pointed out in the May report, certain countries like Austria (45%), Germany (40%), France (20%), England (18%), and Italy (15%) are dependent upon Russia gas imports. But other nations like Hungary (80%), Greece (80%), Czech (88%), Poland (100%), and Finland (100%) are almost totally dependent on Russian gas imports. The corrupt compromised World Bank brain trust does some useful work. It calls the increased tension between Russia and the EU a key downside risk to regional forecasts. They warn that intrusive sanctions could interrupt trade and banking flows, and thus impose huge economic costs.
In Russia, oil revenues represent 25% of total government revenues. The giant oil & gas firms are state owned. The World Bank crack analytic staff estimates that a loss of EU export markets could reduce government revenues by at least 10% of GDP. The continent is heavily at the mercy of Russia, and the United States does not like that fact one iota. A strong developing relationship between Russia and the EU would leave the United States very isolated and without a power lever, a factor compounded when the trade no longer revolves around the USDollar. Thus, the strong motive for US disruption. Europe depends on Russia for nearly 30% of its natural gas supplies. In the event of supply disruption associated with sanctions, the economic costs could be high. Marginal additions to LNG imports to Europe from elsewhere in the world would lift global prices. However, even assuming no rise in LNG prices, EU import costs would rise by 50%, equal to 0.15 percent of GDP, by the World Bank estimation. The losses would be much higher for major importers, like the Eastern European nations. Watch Poland, which has served as staging ground for the Soros mercenaries involved in the Maidan coup in Kiev. The Poles might be singled out by Putin in vengeance. See the Russia Today article (CLICK HERE). Never overlook the fascist destructive motives at work. The USGovt might wish to damage both Europe and Russia, in order to weaken the Euro currency and lift the USDollar. The vile despicable depraved WashingtonDC leaders might rationalize that a uniformly damaged Western Economy serves their global fascism plans. Consult with Brzezinski and Kissinger for confirmation. They are the lead fascist brain trust.
◄$$$ IN THE GAS WARS, UKRAINE HAS REFUSED TO PAY FOR RUSSIAN GAS IN ORDER TO FORCE THE ISSUE... THEY WILL WRECK THE UKRAINE ECONOMY IN ORDER TO ATTEMPT TO CAUSE SEVERE DAMAGE TO THE RUSSIAN ECONOMY... THE GOAL IS TO PAINT PUTIN AS THE VILLAIN IN FINALLY CUTTING OFF THE NATGAS SUPPLY... THE SIDE VICTIM COULD BE ALL OF EUROPE. $$$
The dangerous chess game continues. The Ukraine Prime Minister Yatsenyuk has given the order to prepare for the gas shutoff imminently, defiant to the last deadline given by Russia for past due payment. Keep in mind that four previous deadlines have already come and gone. Yatsenyuk and newly elected President Poroshenko prefer to have the entire country be without gas, and force the issue with Russia. They received a direct order from the USGovt war room to destabilize Russia and with it Europe, thereby driving a wedge between them. Regard the actions to be a vain futile attempt to halt the Eurasian Trade Zone, the paramount motive. It seems they desperately need to paint the Kremlin and Putin as a villain who turned off the natural gas line to poor Ukraine, so later they can lay blame on Russia for the economic collapse of Ukraine and fallout damage to Western Europe from gas interruptions.
Ukraine has been the site of groteque criminal activity for over two decades, apart from Nigerian online fraud schemes and white women trafficking. The majority of assets have been regularly siphoned by ruling oligarchs. That includes the current cast and many other in the past. Per reports, Poroshenko's wealth only one year ago was estimated at $600 million. After the 2014 Kiev coup d'etat led by Maidan (the Langley asset), where a different oligarch thug Yanukovich was ousted, the Poroshenko wealth suddenly leaped to $1.3 billion. He and his cronies, such as Kolomoysky, Avakov, and others seized the assets of the Yanukovich family. The coup was as much a grand larceny event. In addition, part of the $5bn that Victoria Nuland brought to light that the USGovt invested in subverting Ukraine has ended up in the oligarch pockets, diverted and stolen. Following the Maidan takeover, yet more multi-$million payments by the West were made to the Ukraine mafia dons. Witness nation building by the United States yet again, a shameful shocking display.
The main US goal in Ukraine is to convert it into an area of permanent instability on the Russian border, a veritable scorched earth firewall that will obstruct the Eurasian Trade Zone from forming. Ruining Ukraine is part of the plan, to block Russia and its sprawling Gazprom kingdom from extending and capturing Europe. It is possible that the masterminds for the chaos in WashingtonDC and Langley realize that they will not be able to hold Ukraine for long. The nation of constant conflict and criminal fraud will revert to Russia in an exercise of achieved equilibrium. The Ukraine pendulum has swung too far in the direction of the West, led by lies, massive thefts, rampant violence, deception. It will swing back into the Russia fold in the next year or two. However, when it does, the USGovt wants the frontier nation to be in the worst condition as possible. Hence expect Gazprom pipeline damage, natgas contract sabotage, wrecked economy, teetering infrastructure, and leveling of Eastern Ukraine, even widespread ground water contamination from fracking, and probably direct nuclear waste disposal (a US security agency specialty, see California coast).
The USGovt and CIA control room is eager to render great damage not only to Putin's reputation, but to the Russian Economy. They are desperate to derail it, so that the trade zone cannot join to a healthy viable northern appendage. This is not a new concept. The plan is diabolical and evidence of a vile mindset within the United States leadership. With the EU/Ukraine/Russian economies sabotaged, Russia vilified, Putin hated, Ukraine and Eastern European countries fracked into oblivion, the US & Canada can earn $billions on the energy trade, with the inevitable US Empire collapse postponed for a period of time. Witness the time tested divide & conquer strategy of the US empire which has earned the nation pariah status. If only the world knew that the US was the deep enclave of Nazis, working off their playbook. See the Futurist Trendcast article (CLICK HERE).
◄$$$ USGOVT IS BLOCKING SETTLEMENT FOR GAZPROM PAYMENTS IN UKRAINE TO PROLONG THE CONFLICT... KIEV IS A DEAD-BEAT CLIENT WHICH CONTINUES TO REJECT OFFERS, WHILE LOSING FUTURE ABILITY TO PAY. $$$
Washington is making Ukraine stall on a gas settlement agreement with Russia in order to try and draw out the conflict, journalist and broadcaster Neil Clark opines. The Gazprom heads have offered Ukraine a 25% discount on gas, but Kiev insists that is not enough. Despite the deadlock, the first payment deadline yet again has been extended. Putin must be growing weary of the drawn out struggle, but the chess masters usually possess great patience. Below are some thoughts by Clark taken as subsets, his thoughts, my edits. See the Russia Today article for the original interview (CLICK HERE).
Russian President Putin is absolutely right to send this ultimatim warning out, but it is being portrayed in the West as Russia making hostile threats. The Ukraine leaders have been offered a very generous discount by Gazprom. Yet they still want more in a display of incredible audacity and chutzpah. Whatever is offered, Kiev wants more on the discount. It is never sufficient, and no amount of discount will satisfy Ukraine. They want a fight, wishing to prolong the payment in arrears. Clark said, "I think that we have the United States behind this. The United States is using the Ukrainian government to try and provoke a conflict with Russia and to prevent a settlement of this issue. Russia has got to bring this to closure now. But of course there is a trap here."
The business of natural gas supply has been interwoven with high jinks political jostling and maneuvering. Any supplier like British Gas would have cut off the client in Scotland or Northern Ireland after non-payment of the bill for several months. The West prefers to paint the picture as Russia using a political weapon in aggressive manner, while Kiev is a dead-beat client. It seems obvious that the USGovt has urged the Ukraine Govt to reject any compromise from Moscow. In fact, Gazprom has offered Ukraine a generous discount, for what is a very anti-Russian government which is killing civilians in the eastern provinces. One must conclude that the Kiev leadership do not want settlement. They wish to expand the crisis and promote much greater damage, as in a scorched earth firewall.
◄$$$ BULGARIA HAS HALTED WORK ON GAS PIPELINE AFTER US TALKS WITH THE USGOVT... THEY CITED A CONTRACT TECNICALITY THAT BYPASSED THE PAN-EUROPE BID PROCESS... BUT THE SOUTH STREAM GAS PROJECT IS IRREVERSIBLE, CLAIMS BULGARIA'S ENERGY MINISTER... CONFLICTING COMMENTS HAVE COME FROM BOTH BULGARIA AND SERBIA. $$$
Bulgaria might halt work on its Russian-backed South Stream gas pipeline following criticism from the European Union and United States. Prime Minister Plamen Oresharski announced an order that all work be stopped. He awaits further orders from his new masters in Brussels, after meeting with US senators such as dimwitted lackey McCain (one of the dumbest incapable morons ever to sit in the US Senate). The Gazprom pipeline would ship natgas to Western Europe via the Balkans, thus avoiding Ukraine as transit country, and ensuring reliable gas supply to Europe. It is a strategic response by the Kremlin to work around the Ukraine obstacle, in planning stages for at least two years. The European Commission had sent Bulgarian authorities a letter at the start of the month, asking them to suspend work on the project. The battle has entered the contractual arena. The EU directive actually claimed Bulgaria broke EU public procurement laws by choosing local and Russian bidders, cited flimsy grounds indeed. The Bulgarian leaders have actually complained in the past, of being targeted by Brussels as a means of retaliating against Russia over the situation in Ukraine. If built, the vital South Stream pipeline would deliver 63 billion cubic meters of natural gas per year, with transit routes passing through Bulgaria, Serbia, Hungary, and Slovenia before entering Italy. Bulgaria borders Turkey and Greece to the north and lies east of the Black Sea. Construction work on the South Stream began in Bulgaria in October 2013. Gazprom's $45 billion pipeline project is slated to open in 2018. See the BBC article (CLICK HERE).
A savvy European corporate consultant with extensive ties to the region for over 20 years pitched in a comment. He said, "Bulgaria will regret the day they made this stupid decision under pressure from the US and EU. This is a dwarf country of seven million dirt poor natives that have been rescued over and over again by Russia during history. This will be an interesting story to watch. Not before long, they will fall over. One Eastern European country after another will turn to Russia, all in time." The Eastern European nations have made bad friends, and will revert to their historical allies soon enough, but not until a very bitter taste enters their mouths.
The South Stream pipeline project cannot easily be interrupted. Its importance is too great, and besides, the Bulgarian dependence is near total. The South Stream gas pipeline is irreversible, claims the Bulgarian Govt Energy Minister Dragomir Stoynev. He openly emphasized that Bulgarian authorities have not given up plans to proceed with the project. The minister's comment came immediately after the announcement by Oresharski, concerning an ordered halt to the Russian Gazprom-led project under EU pressure. Stoynev said, "If we look at this situation strategically, not emotionally, it will be clear that the South Stream project cannot be canceled. It is equally important for Europe and Bulgaria. I am convinced that all the issues currently on the table will be solved." Legal technicalities are being trotted out. In order for South Stream to operate, it needs approval from the EU, which is stalling the project until it complies fully with Europe's Third Energy Package (a legally devised obstruction). In Europe, new laws stipulate that pipelines cannot be owned and operated by the same company. The law was designed specifically to obstruct Gazprom, the owner & operator in monopoly. According to the law, Gazprom can only control 50 percent of the project.
Bulgaria is the poorest member of the EU. The country imports nearly 90% of its natural gas from Russia. The leaders have expressed hope to cut dependence on Russia by half in the next five years. They might plan to accomplish this feat by introducing US fracking techniques, which will destroy their ground water systems. Without South Stream, their future will involve no energy. Once more, US politics and interference is failing, except to cause conflict and ruin. In reality, Gazprom has Bulgaria captured, just like the obstreperous Poland.
A strange sequence of events is unfolding. The PM Oresharski might be giving the US-EU lipservice, while complying with the Russian directives with a wink and nod. The following week has been full of mixed messages between government officials and heads in Bulgaria. The contradictions have also come from Serbia. Their Deputy Prime Minister and Minister of Transport Zorana Mihailovich announced that Serbia was stopping work on the gas pipeline, in response to Bulgaria's decision to halt work. However, only hours later, Serbian Prime Minister spoke out and said that Serbia has no plans to delay work on South Stream. Patrick Young is a global finance expert. He said, "The Prime Minister came out quite rapidly and said the project goes on. We are going to continue building, we want that several billions dollars of investment in Serbia, we need the jobs, we want to be effectively connected as a gas pipeline to the rest of Europe." Young emphasized that the subsequent news from Serbia pertained to infrastructure problems, and not any decision to pull out of the project completely. The pipeline project has many levels of complexity in the physical work. For its part, Gazprom has stated the project can be completed without any outside international funding. See the Russia Today article (CLICK HERE).
◄$$$ IN A LUDICROUS FLOW OF EVENTS, THE EUROPEAN UNION CITES THE SOUTH STREAM TALKS AS CLOSELY LINKED TO RUSSIA OBEYING INTERNATIONAL LAW... THE COMMISSIONERS HAVE DEVISED A LEGAL OBSTACLE, BUT THEY WILL FALL VICTIM ON ECONOMIC IMPACT AT HOME... RUSSIA HAS RESPONDED BY DEMANDING PREPAYMENT FROM UKRAINE FOR CONTINUED SUPPLY. $$$
The West is playing a high stakes chess game with missing pieces, and a poker game with stained cards. So the US & EU & Soros mercenaries stage a coup in Kiev, invite a Russian response to secure their critical Black Sea naval port in the Crimea, then accuse Russia of violating international law in blatant aggression, even though they offered a referendum to the Crimean people. The West has shifted focus from Crimea to Gazprom operation. It seems comical, except for the deep damage to the Ukraine Economy and the loss of lives in the developing civil war. Europe's Energy Commissioner said talks on the Russian South Stream gas pipeline planned by Gazprom are faltering, partly due to the Ukraine crisis. The talks will continue when Russia abides by international law, reports the German newspaper Frankfurter Allgemeine Sonntagszeitung. Progress is stalled because Russia has not accepted European regulations in the energy sector on ownership and operation, the clever tactical ploy. The EU is using the ongoing conflict in Ukraine to suspend the negotiations. Guenther Oettinger said, "The crisis in Ukraine overlies everything. We will continue discussions if the Russian partners comply with international law again, and they are prepared to cooperate constructively on the basis of our energy law. In the current situation with civil war-like circumstances and in the absence of Moscow recognizing the government in Kiev, we certainly will not reach a political conclusion of our negotiations." See the UK Reuters article (CLICK HERE).
Further obstacles have hit the table. The gas talks between Russia, Ukraine, and the EU have failed to reach a deal. They on on again, off again, in a juvenile display. In addition to the operation clause that has jammed the accord, a critical clause of pre-payment is being required by Russia. Call it a blowback introduction, since Russia has been supplying Ukraine for years without proper payment. Call it a massive cluster fark, as Putin is not impressed by games. Russia's Energy Minister Aleksandr Novak has made the request for payment in advance for the June-August quarter, surely in reaction to constant arrears for payments due. Ukraine is clearly a basket case with $1.454 billion of its undisputed debt to Gazprom still unpaid. This is the debt for Russian gas delivered to Ukraine in November and December of 2013. Novak reminded the parties of the need to manage this outsized payments by mid-June, in addition to the partial repayment of $500 million debt accumulated for April and May.
The sitting fascist tool in Kiev, energy & coal industry minister Yury Prodan assured that Kiev will pay the debt for Russian gas after the new gas price is confirmed. The big picture appears unfixable. Gazprom says Ukraine owes it $4.46bn in unpaid bills, running up further debt at a rate exceeding $1bn per month. Meanwhile, Kiev says its debt for 2013 and 2014 (as of April 1st) stood at only $2.2 billion. It paid $786 million in early June, which covered the gas supplied in the first quarter of this year. See the Russia Today article (CLICK HERE). It would seem that Russian Gazprom is not aggressive at all, but rather generous to a deadbeat client. Better to reduce gas supply slightly, and prompt a reaction.
Some quick comments. If the Gazprom-Ukraine negotiations blow up and Gazprom suspends gas shipments to Ukraine and Europe, both Oettinger and Merkel would wish South Stream was in place, since the EU economy will tank and grind to a halt. The notion that winter was avoided is shallow, as per home heating. The European industrial sector depends upon Russian gas. The West is doing its best to blame the East for its collapse, tragically. The West is near toppled due to its own financial insolvency, debt saturation, toxic currency system, outsourced industry, absent industrial base, paltry legitimate income, and outsized military spending. The Gazprom blow knocks over a dead man walking. The Jackass smells a test run in partial cutoff of Gazprom natgas to a Southern Europe nation. My guess is Italy, just to make an example and to divide Europe. It will be easily split.
◄$$$ A NEW MULTI-$BILLION RUSSIA-JAPAN NATURAL GAS PIPELINE IS POSSIBLY SOON TO BE AGREED UPON IN A PACT... IT WOULD STRETCH ONE THOUSAND MILES, AND RELIEVE THE JAPANESE ENERGY SHORTAGE... THE ORIGIN WOULD BE THE RUSSIAN SAKHALIN ISLAND, DELIVERED TO JAPAN THROUGH VLADIVOSTOK... JAPAN IS A MAJOR NATGAS IMPORTER, MAKING THE MARRIAGE NATURAL... REALIZATION OF THE SAKHALIN-VLADIVOSTOK GAS PIPELINE PROJECT MAKES OPPORTUNITIES FOR EXTRA GAS DELIVERIES IN A PERFECT HAND IN GLOVE FIT... THE JAPANESE ARE SLOWLY BECOMING INTEGRATED IN THE EURASIAN TRADE ZONE, ALONG WITH SOUTH KOREA EVENTUALLY. $$$
Following Russia's historic $400 billion natural gas supply deal with China, called the Holy Grail, the potential for an important Japan echo deal is likely to come to pass. A consensus is building in Tokyo among their Parliament. They wish to tap into Russian natural gas supplies themselves. Stress to their economy has come in the wake of the Fukushima attack, hardly a natural event. A group of 33 lawmakers in Japan is backing a gas pipeline that would traverse over 1350 kilometers between the Sakhalin Island on the Pacific coast of Russia to Japan's Ibaraki prefecture, just northeast of Tokyo. The project is estimated to cost $5.9 billion and could yield as much as 20 billion cubic meters of natural gas per year. The volume is equivalent to 15 million metric tons of liquefied natural gas (LNG). The pipeline flow would comprise 17% of Japanese imports.
The nation struggles with energy shortages, following the shutdown of all of Japan's 48 nuclear reactors after the March 2011 events, the series of tactical nuclear detonations, followed quickly by the HAARP induced earthquakes and ensuing tsunami. The triple meltdown at the Fukushima Daiichi plant has been called a natural disaster in the West, but consistently called an attack in Japan, China, and Russia in open forums, even political leader speeches. The scientific data corroborates the sequence of events. Nukes have a distinct signature, of a major disturbance on the oscilloscope, followed by dampening aftershocks over a period of time. Earthquakes have the opposite signature, of a series of growing disturbances on the oscilloscope, followed by a climax shock that defines the earthquake itself. The global scientific community knows what happened, while the ignorant dullard molded masses in the West continue to spout the propaganda like parrots. Motives are numerous, such as interference with the economic energy lines, and interference with the regional coordination with China in USDollar alternatives. In time, Japan will become a key swing state nation to the Eurasian Trade Zone.
Based on current plans, natural gas originating from Sakhalin Island would be transported via the Sakhalin-Khabarovsk-Vladivostok pipeline, where it would be processed into LNG for export to Japan. On the table are Russian plans for additional undersea and land-based pipelines to deliver gas to China, North Korea, and South Korea in the region. The odd duck segment includes one pipeline that would deliver gas to South Korea through North Korea. Land pipelines are an order of magnitude cheaper than undesea pipelines. Expect that Putin and Gazprom have offered the inbred violent freaks in Pyongyang some incentives, maybe in offset to Beijing hemlock cocktails.
For Russia, a pipeline deal with Japan would be a major accomplishment. The economics are compelling. Japan is the world's largest LNG importer, the purchaser of 87.49 million metric tons of LNG in 2013. Despite being the largest importer worldwide and located as Russian closeby neighbor, Japan only imported 9.8% of its LNG from Russia. The figure will grow markedly, a natural fit. The main reason for limited imports to date is that Siberia and Pacific Coastal Russia have achieved far less development. It is a barren hostile remote environment, but that is changing. The proposed pipeline would enable Japan to import natgas directly, instad of the costlier LNG. See the Diplomat article (CLICK HERE) and the Vladivostok Times article (CLICK HERE) and the Anadolu Agency article (CLICK HERE) for more data and details.
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