QUOTES ON GOLD
"All the perplexities, confusion, and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit, and circulation." ~ John Adams (second US president, statesman)
"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 inscribe treason on their business cards and demand a salute to their captured flag. The nation is being converted into a land of fascists, with only 10% realizing the transformation. Liberty is gone. Rights are gone. Free press is gone. Industry is gone. Job security is gone. Home equity is gone. Free market is gone. Gold is gone. Law enforcement at the highest level is gone. Banks are dead insolvent pillars of power. The nation is horribly isolated on the global stage. Witness the bitter fruit of the Fascist Business Model." ~ Jackass (an alert angry patriot)
"The BRICS concept is to do away with the dilution and hegemony of the USDollar, and move to Net Trade Settlement in Gold. The consequence is to also remove the populist socialism as well as fascist exploitation. In a sense, the playing ground (the trading ground) is equal for all nations and the rules are made more fair. No toll takers will be in position to extort fees, and no SWIFT weapons will be available to exploit and exclude nations." ~ EuroRaj
"The Chinese are playing the British and the Germans like a fiddle, or better yet a hammer. It is like a wedge being slammed from London, then Frankfurt, then London, then Frankfurt. The wedge acts like a cutting agent to a tree stump, a sledge hammer making noisy impact with the logger wedge. The stump is the USDollar global reserve status and trade settlement medium. The London slam on the wedge is with the financial hammer. The Frankfurt slam on the wedge is with the commercial hammer. When fully split, the result is a broken USDollar, lost global reserve status and abused privilege." ~ Jackass
"Russia & China use the African gold connection to its fullest, to fark the USA hard. They have accumulated enough gold to start a pair of gold-backed currencies, to fark the USA hard. They are to start a new Gold Trade system with foundation residing in a new Gold Central Bank, to fark the USA hard. The USDollar is dead, and the USTreasury Bond is toxic. The Russians & Chinese are using vast supplies of USTBonds to make payment for the ample underground gold supply chains. The world is at the edge of game over for the current financial system. The USDollar regime can accurately be called the most corrupt in the history of mankind, very deserving of retirement." ~ Anonymous source
"The United Kingdom is expecting significant disorder this summer, making preparations. The BRICS alliance cannot risk waiting for the West to capitulate, and neither can Germany. The challenge to install new payment and trade systems would grow much more difficult. Furthermore, the West's ability to loot gold is diminishing with each passing month and falling victim. Dates might indeed be futile, but we are talking months at best in my opinion for the big disruptive events. It has become a point of intrigue that manner of price movement has become more important than the actual gold price." ~ London Paul
"Some people are wondering aloud in a new system run by the Russia & China with BRICS support, whether it will be any less corrupt, whether it will contain an official Bad Bank, whether its integrity will be contaminated. My personal understanding is that the new system will have four main features. 1) Gold Trade Notes used as Letters of Credit for honest trade without abused credit, 2) Gold backed currencies with subtle differences among them for sound money, 3) numerous Free Trade Zones for brisk healthy investment and trade with certain banks excluded, and 4) widespread barter systems that exclude deadbeat nations. It will be harder to pollute and abuse the system. However, given that humans will be leading the various offices, give it time and they will corrupt it. We should hope for a decade of sustained honest trade and fair financial structure." ~ Jackass
"Ultimately, we are going to get to a place where we will have no more choices. It will blow up. We are seeing cracks in the foundation of this fraud. Gold & Silver is your life insurance policy, and it is not going to come into its own until this current system breaks. I think we are close to the current system breaking. The way America is printing dollars, the dollar will absolutely go to zero, along with the other fiat paper currencies." ~ Rob Kirby (former bond trader)
"The tree of liberty must be refreshed from time to time with the blood of patriots" is often cited by wicked figures in criminal exploit to justify their mass murders and defense of criminal regimes, to which the Jackass adds better clarity in the rebuttal, "The forest of fascism must be refreshed every month with the blood of the innocent in their vile great games of endless slaughter colored by creative propaganda."
## INTRO GOLDEN NUGGETS
◄$$$ ON COSTA RICAN ECONOMY, EXODUS OF EXPORT COMPANIES, A PROXIMAL CAUSE BEING HIGH ELECTRICITY COSTS... PRESSURE ON THE DOMESTIC COLONCURRENCY WILL CONTINUE RELENTLESSLY... WHAT HAPPENS IN COSTA RICA IS NOT MUCH DIFFERENT IN ANY SMALLER NATION THAT STRUGGLES WITH A GROWING DEFICIT, WHICH MUST ATTRACT FOREIGN DIRECT INVESTMENT URGENTLY NEEDED.... LOCAL RISKS REMAIN, AS THEY RISK FALLING FURTHER. $$$
Two months ago, the Costa Rican Economy suffered the loss of the Intel plant with 1600 workers. It was the largest employer in the country. It contributed a huge amount into the national CAJA (aka Social Security). A quick update indicates Intel is reconsidering its decision to leave, amidst some renegociations (on tax and electricity). The CRgovt charges four times the normal rate for electricity to corporate clients during mid-day. The nation has a cockeyed subsidization policy for electricity. It is a 5-tier pricing, dependent upon affluence of neighborhood (think percentage gringo and elite). My electric bill monthly is $60 to $80 for two men. Some single women in acquaintance pay $8 to 15 per month. In effect, the entire corporate sector plus gringo barrios pay for over 50% of the domestic household electricity cost. News swirls that several hundred businesses have shut down in the CR Economy and gone home, most of which had US connections toward export.
The CR Economy is likely to struggle, with some worsening price inflation. It is currency related, not monetary. Since January, the local CR Colon currency is down 10% versus the USDollar. The newspapers complain about the fastest domestic price inflation in many years. My dentist has a banker friend from university days in the CR central bank. Word has it that for five years, the central bank here has been printing money to levitate the CRC local currency. The reversal process began in January, as the outgoing president lost influence. Actually, seven wealthy men control the banks, more so than the central bank, which has administrative duties, like complying with endless USGovt rules. The Colon will lose another 10% by the end of year 2014, according to the managed plan. The loss would be 20% in the current year. Some of us expect the Colon devaluation will continue into next year, beyond the 20% amount, and cause some civil disturbances.
The ongoing reduction of exportable products will have a worsening powerful effect on exchange rate. With Intel and other companies closing, due to the global economy or other cost reasons, the effect will be direct on the Colon exchange rate, now at around 550 per USD. It was 500/USD from 2009 to 2013 in stable fashion. The new president had a plan to raise taxes, raise wages of (often idle) government workers, raise fees everywhere possible for Gringos (like residence or Caja fees), in a tragic display of socialist idiocy. However, a renewed plan has rejected most elements as inviting disaster, believed to be due to the Chinese influence. They convinced the new administration of a better path. The new plan is to work more closely with the Chinese developers and project managers, who have kept the construction market strong, and the housing market strong. The Chinese urgently request more electricity generating plants, which could support more assembly plants, for domestic worker hiring programs. The CR leaders note the acute need for promoting jobs, but cannot get out of their own way on electricity plant obstacles (environmental justification) and demands for payoffs in the permit process. Newly appeared are the billboards to promote higher quality of work in a nationalist priority. The natives are bracing for more price inflation to come, based upon a falling CR Colon currency.
The Jackass expects that if equilibrium is sought, the Colon should fall a total of 40% from 500 per USD to 700 per USD by early 2016. The cheaper Colon will attract more North American tourists, for the eco tours and for medical and dental work, which tend to be half the cost or less. The Jackass had dental crowns done for $400 to $500 per unit this year. The downside reaction comes in two ways. Risk of domestic rebellion is possible, but not too likely since the natives are very peaceful and jovial. The risk of accelerated truck hi-jacking to steal the cargo is possible. It already takes place. The stolen products are placed in discount stores. The Jackass frequents one of them downtown, for a nice 30% to 35% discount on a variety of items (like diapers and frijoles). It is rumored that 10% of all supermarket and retail truck cargo is hi-jacked. There are no laws against fencing stolen items. The discount store circuits for stores do a brisk business, including stolen cell phones and laptop computers (mine in October 2009). Regular backup devices and cloud storage are the norm in this office. This story is told of life and times here, since dozens of requests have come to explain the circumstances in Costa Rica. A great many more stories could be told, the most shady reserved for face to face meetings like clients, of which at least 40 have taken place since my arrival in January 2007. Panama has many advantages that are being reviewed, in case the Chinese cannot bring some stability to the domestic economy here through greater development.
◄$$$ DEUTSCHE BANK IS THE KEY FOR UNRAVELING THE WESTERN FINANCIAL STRUCTURE... INTERPOL INVESTIGATIONS HAVE A HIDDEN EFFECT, TO OBTAIN EVIDENCE FROM FLIPPED PROSECUTION TARGETS, AND OFTEN TO FORCE SHUTDOWN OF CORRUPT BANK BUSINESS SEGMENTS... MORE FOREX AND GOLD QUERIES ARE TO COME. $$$
The Swiss RE suicide murder of Wauthier signaled involvement of JPMorgan, but also brought the violence and focus closer to some German roots. The center of many fraud projects for 20 years has been Deutsche Bank. The criminal activity intensified after the big German bank acquired Bankers Trust from the New York hive, as much an extension of the syndicate reach as development of a European subsidiary to the syndicate. BT was the USFed derivative shop. The obvious victims have been players like the CEO of Zurich Financial Group and former Deutsche Bank CEO Ackermann. It is the Jackass job to discern the various pieces that Ackerman held together. The D-Bank monster held together Bankers Trust with the derivative subsidiary, the Gold Fix with the gold suppression via London, along with a connection between the Bundesbank, the Bank of England, the USFed Reserve, and the Euro Central Bank. The officials at Deutsche Bank have begun to conduct an internal probe into trading on Gold Fix, their next target, which by its very name indicates collusion and corruption. It will be done independently, using BAFIN, the anti-trust regulator and criminal investigation office. See the Reuters article (CLICK HERE).
Without doubt, D-Bank was used to secure the foundation to the entire Euro Monetary Union using FOREX derivatives, with widespread fraudulent London usage of Chinese gold (more broadly Asian gold). One might conclude that Deutsche Bank is the string that when pulled by the forced Ackerman hand, released the entire US-UK-EU sweater lattice that held like glue the financial criminality. The sweater is unraveling completely. The Voice mentioned in late 2011 and early 2012 that D-Bank would be the pillbox office to bring down London. They would have all their many well integrated devices exposed to light, using a hidden Interpol hand, using special violent leverage with underworld figures. He hinted many times (and Jackass concluded) that direction of the entire New York-London unraveling would be done by a sheriff type, with high pressure action (called the New Sheriff in Town often by the Jackass). It is the White Dragon Family from Asia. Best to call it unraveling, rather than prosecution. They have drained London of over 20,000 tons Gold bullion, exposed the London bank sector crimes, and work to shut down various elements. Theirs is a work in progress. The Voice is a broker in the process that has removed 1000 tons of gold from London each and every month since March 2012, incredibly.
◄$$$ THE NAT GAS COOP IS SOON TO FORM... NOTICE THE ELEMENTS COMING TOGETHER FOR THE NAT GAS COOP, WHICH WILL ECLIPSE OPEC AS THE GULF MEMBERS COME TOGETHER TO ALIGN WITH RUSSIA... THE THREE LEADING CHAMBERS WILL BE RUSSIA, QATAR, IRAN WITH GAZPROM THE LEAD DOG... THE PETRO-YUAN WILL HAVE ITS FORUM AND CONSORTIUM. $$$
The Vineyard of the Saker has provided details on the emerging Nat Gas Coop. The Forum of Gas Exporting Countries (GECF) is an organization which includes Russia, Iran, Qatar,Venezuela, Bolivia, and other exporters. Given the geopolitical situation as near perfect, the Kremlin will pursue the formation of the gas analog of OPEC. Until recently, the forum has met with no success. It is possible that now is the right hour for a potential gas cartel. The three major gas exporters: Russia, Qatar and Iran have very similar interests and should be able to work cooperatively in order to share and take control of the LNG market and command of the pipeline gas market. Such a gas cartel would have an open path for significant influence in the energy markets of Europe and Asia. The nucleus would form, as the Russian Federation, Qatar, and Iran currently control at least 55% of the world's gas reserves. Challenges and obstacles remain ahead, but Moscow is actively seeking to establish strategic advantages against the United States. The nations are motivated to cooperate.
The natgas market has new strange bedfellows. The Qatari emir stated that he appreciates the convincing and coherent regional policy of the Russian Federation, in his words. Such a statement is very unexpected, given the geopolitical framework. Qatar is a US ally. It serves as the political branch of Exxon Mobil in the Middle East, and stands as an opponent to Russian action inSyria. The fact is that American dreams of filling the whole world with cheap gas are a death sentence for Qatar and its elite, even if just a temporary fracking solution, short-lived to be sure. The Gulf emirate requires firm natgas prices. The emir statement means that fresh emphasis was placed on accelerating the coordination of the Forum of Gas Exporting Countries, with Qatarbacking the forum. Its next summit will be held in Qatar. The Jackass notes the importance to bring in Algeria, Israel, and possibly Turkmenistan, although the nation has a clever swap deal working with Iran in gas for oil. The conclusion is simple. The OPEC is dead, a victim of the defunct Petro-Dollar. The Nat Gas Coop is rising, with Iran a key player, which will usher in the Petro-Yuan defacto standard in its place.
◄$$$ JOHN MACK WILL LEAVE THE ROSNEFT BOARD AFTER IT TOOK OVER THE PLATTS ENERGY DESK... GRADUALLY RUSSIA & CHINA TAKE CONTROL OF THE ENERGY AND GOLD MARKETS... THE CURRENCY MARKET IS NEXT. $$$
Russia will take out the garbage. Mack has left the Rosneft Board, citing personal reasons. More likely the Russians told him to get lost and keep the door open behind him so as to let some fresh air in to remove the Wall Street stench. John Mack, former CEO and venerable chairman of Morgan Stanley, will leave the board of Russia's biggest oil producer Rosneft. The transition for Russian to control the Platts energy desk proceeds afoot. Irony is thick. His departure comes after the United States imposed sanctions on Rosneft over Russia's actions in Ukraine. The personal reasons might pertain to having his throat cut by his own hand while shaving, if uncooperative. The energy explorer Artur Chilingarov has been proposed to replace Mack on the Board. He is current member of the Russian Parliament upper house, best known as an explorer in the Arctic, a region seen as increasingly important for Rosneft's future as an oil & gas producer. Mack will continue as senior adviser at KKR (private equity giant) and as independent director at Glencore (mining firm). Six months after the Rosneft massive acquisition of the Anglo-Russian oil firm TNK-BP for $55 billion, the world's largest energy firm announced it would buy the majority of the global physical oil trading operations of Morgan Stanley. The TNK-BP buyout was from British Petroleum and the AAR consortium. The Russian company has said that the deal with Morgan Stanley is intact and will be completed in the second half of this year. See the Reuters article (CLICK HERE).
◄$$$ STANDARD AND POOR PAID TO GIVE AAA RATING AND WERE FOUND GUILTY... AN AUSTRALIAN COURT UPHELD A LANDMARK S&P DERIVATIVES CASE DECISION... THE RISK OF DERIVATIVES WAS NOT EXPLAINED TO INVESTORS, NOR THE ROSY RATING JUSTIFIED... MORE CASES WILL FOLLOW, USING PRECEDENT. $$$
Standard & Poors was found liable last week for investment losses incurred by Australian councils (local boards) for investments during the time leading up to the Lehman failure, after a court dismissed its appeal against a landmark 2012 ruling. Major case, major loss, major news! The full bench of the Federal Court of Australia threw out the appeal by the ratings agency, ABN AMRO Bank, and Australian firm Local Govt Financial Services (LGFS) and upheld the original judgment. The Sydney court ruled that Standard & Poors, ABN AMRO (newly merged division of Royal Bank of Scotland),and LGFS were 100% liable for losses sustained by the councils of 13 towns, rather than 33% in the earlier judgment. The S&P rosy rating on the Rembrandt Notes was unreasonable, unjustified, and misleading. The councils lost A$16 million (=US$15 million) on the investments purchased from LGFS in 2006, more than 90% of the original capital invested. The councils could recover about A$25 million, after tacking on interest accrued from losses.
In a flauting manner, S&P issued a statement, "It is clear that the law in Australia relating to duty of care is at odds with well-established laws elsewhere, including in the US and Europe. We continue to believe that it is bad policy to enforce a legal duty against a party like Standard & Poors, which has no relationship with investors who use rating opinions, yet impose no responsibility on those investors to conduct their own due diligence." Exactly, legal statutes at odds, since deception and fraud are permitted in the US and Europe with almost complete impunity, where furthermore the collusion is blatant and the rating is essentially purchased. The landmark case could hold significant global ramifications, but in nations where the rule of law applies. Expect other cases to line up for liability rulings. It was indeed a great win for investors. It was the first time a ratings agency faced trial over synthetic derivatives, a form of collateralized debt obligation, a high risk product that can offer extremely high yields to investors but with matching exteme risk that usually is not explained. They always seems to carry a rosy unjustified low-risk rating, but in recent years resulted in total wipeout losses in the investments.
Last year Standard & Poors, fellow ratings agency Moodys, and investment bank Morgan Stanley reached agreements to settle two lawsuits in Washington state of the United States and from Abu Dhabi Commercial Bank of the UAE. They were accused of hiding the risk of subprime mortgage investments to customers. In a too little too late case, S&P also faces a US$5 billion lawsuit filed by the USGovt for exaggerating mortgage bond ratings in 2007. They will be scapegoated, while Wall Street banks will continue to face an onslaught of legal restitution in the courts.
◄$$$ A DIFFERENT BOND ISSUED IN LONDON, THE FIRST, SURELY MANY TO FOLLOW... THE WORLD BANK'S IFC ISSUED ITS FIRST RMB-DENOMINATED GREEN BONDS TO SUPPORT GLOBAL PROJECTS. $$$
The IFC, a member of the World Bank Group, has issued an RMB 500 million (=US$80.3m) green bond that will be used to support environmental investments in emerging markets. The bond is listed on the London Stock Exchange and sets a precedent as the first green bond issued by a multi-lateral institution in the offshore Chinese markets. They spoke openly of deeper liquidity and extended yield curve, code word for avoiding the ultra-low bond yield. The bond, which yields 2%, saw demand from investors in Asia and Europe. HSBC was the sole lead for the bond. In March, IFC became the first diverse institution to list RMB-denominated bonds in London, raising RMB 2bn from international investors. IFC previously pioneered the international issuance of RMB-denominated bonds in China (Panda bonds) and in Hong Kong (Dim Sum bonds). IFC green bonds support projects to reduce greenhouse gas emissions. Popular types are to rehabilitate power plants and transmission facilities, to install solar and wind power devices, and to provide financing for technology that helps generate and use energy more efficiently. Criteria for the use of IFC green bond proceeds are certified by Cicero, an independent research center associated with the University of Oslo. In FY2013, IFC invested a record $2.5bn in eco-projects, nearly 14% of the institution's overall commitments for the year. About two thirds of IFC's investments in the power sector involved energy efficiency and renewable energy. By FY2015, IFC expects to launch $3bn in eco-projects per year, likely to comprise 20% of its long-term financing. See the FTSE Global Markets article (CLICK HERE).
◄$$$ THE HYPE PLANK IS FAST ERODING IN SUPPORT OF THE USDOLLAR, AS SHALE OIL IS BUT A RUSE (AS JACKASS STATED CONSISTENTLY)... MANY ARE THE MISSING PLANKS THAT UNDERPIN THE USDOLLAR... THE COFFIN NAILS ARE ON THE FUNERAL PARLOR TABLE, WITH HAMMER IN HAND, KING DOLLAR FALLEN OFF HIS THRONE, DEPLETED AND BLOOD ON HIS HANDS, READY FOR THE BIG BOX... ONLY THE USD REMOVAL AND REPLACEMENT BY THE GOLD STANDARD CAN REPAIR THE GLOBAL BANKING SYSTEM AND GLOBAL ECONOMY. $$$
Different analysts have their own metaphors, whose mixture must be pardoned. The latest energy report from Energy Information Admin (IEA) forecasts a decline in North American oil supply, resulting in the United States forced into greater reliance upon Middle East oil in the coming years. The US sources are drying up, and worse, the hype on the entire shale story is coming to light. Bear in mind that the Obama Team has been promoting a stupid baseless strategy of energy independence. Since 2012, the IEA forecast that the United States would overtakeSaudi Arabia in oil production by 2020, and would be a net oil exporter by 2030. The Jackass scoffed and ridiculed such mindless paid research as lunacy and motivated drivel. The NPR Business News put it succinctly, predicting the North American sources start to dry up on a steady controlled basis. They write about US energy production having boomed in recent years, much of it coming from oil & gas extracted from shale. But the IEA says US production will start to lose steam around 2020, which would put more bargaining power back in the hands of OPEC countries, such as Saudi Arabia. They omit mention of Iran and Russia. It is not possible to have a bigger reversal of strategic position, with the attendant total loss of credibility. The USleaders are bad clowns without the proper circus attire.
The sudden reversal was noted with a loud bang last month, when the USGovt agency suddenly downgraded by 96% its assessment of the Monterey Shale tight oil fields. Such downgrades are at best embarrassing, and at worst an exposure of grotesque corruption to support an unsupportable national agenda. The IEA is a watchdog organization considered the world's leading energy analyzing institution, when in reality it is a propaganda rubbish research outfit, and always has been. See their nonsensical promotion on the IEA official website (CLICK HERE). The fantasy and the dreams with its misplaced hope spun by Wall Street are all coming apart. For the summary story on the hype plank eroding, which affects a smaller platform for the USDollar itself, see the SRS Rocco article (CLICK HERE). Third World, dead ahead.
Mike Maloney (of The Hidden Secrets of Money) has demonstrated that that every 30-40 years the world has an entirely new global monetary system. The current monetary system based upon the USDollar global reserve standard is antiquated, corrupted, and held together by heretical USFed monetary policy that is gradually wrecking the global economy, the source of great instability and cause of great disruption. Simply stated, the USDollar has turned toxic and is contaminating the entire global banking systems, and is undermining the entire global economy. Defense of the King Dollar requires killed nations, slaughtered foreign civilians, painted enemies, and a river of blood. The reaction for the last couple years, actually since the QE bond monetization initiative was recognized as permanent by the international creditors, has been to create a USDollar alternative system. Russia & China lead that effort, thus the new enemies.The following wide-ranging clip entitled "Nails in the Coffin of the Dollar Standard" explains how nails are being hammered faster and more furiously than ever before.
Maloney believes that there will be a global currency crisis before the end of this decade and that the days of the USDollar standard are numbered. He is way off on timing, as it will be in the next several months, or early next year, for the King Dollar to be kicked off its arrogant abusive bellicose throne. The tragedy is that the king has turned into a despot and tyrant, a great destroyer. He expects its overnight devaluation, when the Jackass expects its replacement with a launch of the domestic Scheiss Dollar. A great opportunity is presented for those prepared with Gold & Silver, as a new asset backed currency system is to be introduced. See the Zero Hedge video clip (CLICK HERE).
◄$$$ RUSSIA IS DEVELOPING ITS OWN CHIP TECHNOLOGY FOR NATIONAL PAYMENT CARD, IN RESPONSE TO SANCTIONS BY VISA & MC... THE SYSTEM WILL BE TIED IN WITH THE TAIWANESE UNIONPAY AND JAPANESE JCB SYSTEMS... IT IS NOT READY FOR FULL ROLLOUT. $$$
Russia has developed its own microchip for the national payment card, expected to aid commerce with security. Working quickly, Russia is ready to replace the technology used in foreign payment systems in Visa & MasterCard. The chip is created for Sberbank's Universal Electronic Card (UEC). The chip was developed by Payment Technologies, a company developing the first Russian payment systems like the STB Card since 1994. The UEC is not yet ready for mass production of the cards with the chip, experts told Kommersant. They will need 1-1/2 years to reach a full scale production with full infrastructure. As the moment the chip has only passed laboratory testing. The Central Bank of Russia has created a wholly owned subsidiary to operate the national payment system. What has been put in place is an infrastructure road map, a bank commission, and a panel for technology decisions.
The need to accelerate the development of Russia's own national payment system became evident, after international firms VISA & MasterCard blocked operations with Russia's Rossiya and SMP banks. The Russian lenders were sanctioned by the USGovt. The new chip card is expected to come into wide usage by mid-2015 and will also be valid outside Russia. The chip card has allies for reinforcement. The national payment system card will be co-branded with the Taiwanese UnionPay, Japanese JCB, and thus indirectly with the international VISA & MC payment systems. See the Russia Today article (CLICK HERE).
◄$$$ PUBLIC RALLIES TO END THE FEDERAL RESERVE SYSTEM ARE EXPLODING THROUGHOUT GERMANY... THE MOVEMENT IS SPREADING, AT A HIGHER LEVEL THAN US-BASED MOVEMENTS... THE POPULAR COUNTER-ATTACK HAS BEGUN IN EARNEST... IT IS WITHOUT PRECEDENT. $$$
In the last two to three years, the Occupy Wall Street movement came and went in the United States. The opposition to the bank cabal fizzled as it was smothered. It tendered hope but was attacked by the FBI, its offices infiltrated, treated like a terrorist organization. We are seeing the Bundesbank tell the Draghi EuroCB why it dislikes their monetary policy with a stern warning not to do QE program of bond purchases. Then come the public massive demonstrations. One might conclude that Germany is preparing to exit the Common Euro and make the Gold Standard return, or at least to turn East with openly stated support for Russia & China in currency and trade matters. See the Zero Hedge video clip (CLICK HERE) and the YouTube video clip (CLICK HERE).
## EXTREME DERIVATIVE STRAINS
◄$$$ BONDS LIQUIDITY THREAT IS REVEALED IN DERIVATIVES EXPLOSION... BOND YIELDS ARE CLOSE TO ZERO ON SHORT-TERM INSTRUMENTS AND AT EXTREME LOWS ON LONG-TERM INSTRUMENTS... TRADING VOLUME IS DRYING UP, WITH WHAT REMAINS BEING SHALLOW AND EVEN ARTIFICIAL... PRIMARY BOND DEALER INVENTORY IS DOWN 75% FROM NORMAL... IT IS A GLOBAL PHENOMENON, MARRED BY DRIED UP LIQUIDITY... THE ENTIRE USTBOND MARKET IS A FAKE FRAUD FANTASY... JAPAN IS THE FISHBOWL BOND MARKET FREAK CASE. $$$
The life support for most major sovereign bonds is the derivative, a pure prop, well hidden. The sovereign bond market is a dry river, rendered to ruin by fixed-income derivatives trading gone amok, buoyed by outsized central bank purchases. In Japan, their govt bond did not trade for two full days, causing alarm and raising attention to derivatives in control. Futures contracts rule the market, while bond volume in trading is finally vanishing in many venues. Liquidity has become a serious issue, and threatens many sectors like the insurance business and pension business. The only way to support the artificially high bond prices is through artificial props like leveraged futures contracts, reinforced further by even more leveraged Interest Rate Swap contracts. As bond trading has slumped, the notional value of over-the-counter contracts soared five-fold in the past decade to a record $710 trillion, based on the latest BIS data. In reality, it is more like $1500 trillion ($1.5 quadrillion). Witness the floating platform that supports the bond market and currency market, but evaporating and dispersing. At the same time, regulations designed to curb financial risk-taking such as the Volcker Rule and Basel III are limiting the flexibility that investment banks have to facilitate trades for clients. Bond Dealers globally have slashed their bond inventories 75% since 2007. They serve as the buffer, and they are exiting. What trading that does exist is seen to be shallow, and below the surface very artificial, as in from the derivative props.
The problem is a global phenomenon, most acute in Japan, but also a problem in New York, London, and Frankfurt. The risk is for a sharp selloff, in order to take bond prices to lower levels, more appropriate for their rising default risks. A plunge would result in even greater reliance upon the most leveraged of derivatives which can fabricate demand, namely the Interest Rate Swap contracts. The FOREX currency market is at grave risk, its support platform a central bank prop. The ocean tide is going out fast with accelerating global economic recession. Almost no sovereign bonds are wearing any swim suits. They are all exposed and naked. Their papyrus currency vessels are all waterlogged. See the Bloomberg article (CLICK HERE). Martin Hutchinson believes the systemic risk from derivative bloat is greater than it was in 2008. The bank cabal is using derivatives to hold a broken system together, with risk already beyond absurd. No extra risk is seen doubling down, the need only to conceal their activities. See the Prudent Bear article (CLICK HERE).
◄$$$ THE JAPANESE GOVT BOND MARKET IS FROZEN SOLID... THEIR QUAGMIRE IS TYPICAL OF ALL MAJOR CENTRAL BANKS... THEY HAVE NO EXIT STRATEGY AVAILABLE... THE FIRST NATION TO BE STUCK IN QE MADNESS IS THE FIRST TO SUFFER A DRIED UP BOND MARKET. $$$
William Pesek is an excellent financial analyst, an old Barrons favorite in the 1990 decade. He offered some good reasons why the Japanese Govt Bond market is frozen. His message is as simple as dire ominous frightening perilous. Clearly the world's biggest central banks are headed toward the widespread monetarization of debt, in essence nationalizing bond markets, exposing huge risks to the currency regime, raising questions about the integrity of the entire global financial system. He identifies three problems concerning a central bank's balance sheet, and how its phony elements blend with the actual debt market. One is the loss of volatility that traders and companies require to buy and sell things. A second problem is losing the vital information that a liquid debt market affords, like data on spreads and volume. The third is finding an exit strategy for the many emergency programs like QE and ZIRP, which are the opposite of stimulus. They are deadly final stage traps with no exit for escape. The major central banks in Frankfurt, Tokyo, and New York find themselves on a treadmill from which there is no escape. Their programs must continue forever, or else the entire system collapses. They must amplify the speed of the mill, or risk collapse. The perceived harmony can reach tipping points, which then rapidly degenerate into chaos. We have entered the chaos. See the the Bloomberg article (CLICK HERE).
◄$$$ STOCK MARKET HIGHS ACCOMPANIED BY RECORD LOW VOLUME, INDICATING A RIG JOB... THE USFED AND USDEPT TREASURY MAKE THIS MARKET, ALONG WITH CORPORATE BUYBACKS. $$$
Lookie! Lookie! No legs! The S&P500 stock index is probing highs, contrasted against chronic economic recession bordering on outright depression. Lending is tight, job security is nowhere, public participation is nil, and fear is non-existent (low VIX index). Corporate buybacks litter the trading floor, and a clever 7:1 stock split by Apple added fuel to the fire that throws of no heat.This is the least loved bull market in history, running on two cylinders. The trading volume is plumbing record lows. They say never to sell a dull market, but this painted pig deserves a redemption of investment capital to the investor, who would be paid by the official prop team. The USFed's portfolio has reached $4.3 trillion, but nobody knows the full extent of combined central bank and USGovt purchases. The story swirling out there is that the USFed owns half the stock market. See the Financial Sense article by Gary Dorsch (CLICK HERE), who always does excellent work. Thanks to SirChartsAlot for the chart, whose newsletter can be considered (FOUND HERE).
## GAZPROM & USDOLLAR COUNTER-ATTACK
◄$$$ RUSSIA HALTED GAS SUPPLIES TO UKRAINE FROM GAZPROM... ONE DAY LATER, A GAZPROM PIPELINE BLAST OCCURRED IN EASTERN POLTAVA REGION OFUKRAINE... KIEV MINISTERS BLAMED IT ON TERRORISM, BUT THE RIGHT SECTOR IN POWER HAD VOWED TO BLOW UP THE SOURCE OF RUSSIAN ENEMY INCOME LONG AGO... THE CONFLICT HAS RISEN ONE LEVEL ON THE WAR GAUGE... EUROPE'S GAS SUPPLY IS AT RISK. $$$
After weeks of worthless preliminary negotiations, the defection outcome finally occurred. Meetings between Gazprom and Ukraine/EU fell apart with the Russian energy giant halting supplies to Ukraine. The standing demand is for supply to be cut off unless Kiev prepays for gas deliveries from that date onward. No payment to Gazprom had been received for a debt it set at $4.458 billion, by the Monday June 16th deadline given. The policy is simple, as Ukraine will receive gas only in the amounts it has paid for, according to Gazprom. The Kiev side wants to pay $268.5 per 1000 cubic meters of gas, the price from the pre-coup time frame. But recently Kiev agreed to pay $326 for an interim period until a lasting deal was reached. Moscow had sought to keep the price at the 2009 contract level of $485 per 1000 cubic meters, but had offered to waive an export duty, bringing down prices to $385. This price is broadly in line with the priceRussia charges other European countries. Hence, the gap was under $60, as a deal was within reach. Fascists do not make agreements, instead preferring conflict.
It was not sufficient for Kiev, which rejected the deal. They are keen for a battle and larger conflict. Furthermore, Gazprom CEO Miller added that Ukraine has not paid for its gas obligations in arrears. The Gazprom officials are aware that Kiev had been pumping Russian gas in its underground storage facilities at a frenetic pace. The end result was that at 10am Moscow time, Gazprom, moved Naftogaz to prepayment status for gas supplies, according to the existing contract. The warning was also given by Gazprom to the European Union officials on possible gas transit risks, in their words. Refer to the gas shipments to Europe that transits Ukraine. The risk points to how Kiev would continue to siphon off Russian gas without paying for it. Downstream, the clients on such at-risk natgas impact are Germany, Central Europe, and the UK. The greed, corruption, violent and psychopathic ways will work to split Ukraine from its NATO sponsors.
In a few months, the alleged 14 billion cubic meters (bcm) in Ukraine gas storage should run out, at which time the Kremlin once again has all the leverage. According to simple estimates, empty silos will be seen in a few months at most, and certainly just in time for Ukraine's winter. As footnote, at $400 per 1000 cm, the value of 14 bcm is $5.6 billion worth. Europe will be affected in natgas supply, not totally shut off. Mostly, Italy will get harmed. Theft of gas has been an uncontrollable issue offset by higher prices. The Gazprom CEO maintains the position in the talks with the Kiev regime, that they are engaging in blackmail. The Kiev thugs in office wish to control the gas flow, to extort the situation where European nations downstream need the supply, to steal with siphoning, to deny Russia its important income. The Ukraine gangsters wish to guarantee safe passage of energy flow, much like Al Capone of the Chicago Gangland Mafia would in a protection racket. Thus the presence of the USGovt mercenaries from Langley, the modern day gangsters. See the Russia Today article (CLICK HERE). See the Zero Hedge article (CLICK HERE).
Interfax has reported a massive explosion on Ukraine gas transit pipeline. The Ukraine interior ministry confirmed the story on a gas pipeline blast. Witnesses say flames reached 200 meters high. The conflict has entered a new phase. The so-called Brotherhood natural gas pipeline (Urengoy-Pomary-Uzhgorod) is about 1km away from the nearest village. No deaths or injuries have been reported from the blast. Operating since 1967, the Brotherhood is the largest consumer gas pipeline in Europe, measuring in at 4451 km in length. It cuts through Ukraine and runs into Slovakia, where it diverges in two directions, one part supplying gas to the Czech Republic, Germany, France, and Switzerland, the other supplying Austria, Italy, Hungary, and several Balkan countries. Apparently, the blaze was put out by 5pm the same day by fire fighters, faucets turned off temporarily. See the Russia Today article (CLICK HERE). Conflict and risk of greater wider conflict is possible. The Hat Trick Letter does not report on war specifics and battlegrounds. See the Zero Hedge article (CLICK HERE) for a war outlook.
Mere minutes after claiming the explosion at The Brotherhood pipeline in Eastern Ukraine was not an explosion but rather a fire, the fascist Interior Minister Arsen Avakov stated that the gas pipeline explosion was probably a terror attack. Probably so, and by the Kiev Govt itself using a Langley grenade. Many terrorists apply for the blame, the Right Sector (avowed fascists in power) or the Russian separatists (independence guerrillas). The Right Sector leaders have long threatened to destroy the Gazprom pipelines, and remove the income stream from their enemyRussia. Tensions have reached a new stage. A lame explanation also was heard initially about the fire occurring from sudden reduction of pressure, an implicit blame on the Russian side. Pipelines do not explode from the friction of closing valves. The Kiev fascists claim the explosion was another attempt by Russia to discredit Ukraine as partner in gas industry. However, contrary to many assumptions, the natgas transit was not effectively disrupted. Ukraine will boost security along gas transport systems, the Naftogaz CEO Andriy Kobolyev said. See the Zero Hedge article (CLICK HERE).
Motives are important to follow. On one side, Kiev wishes to remove the anvil over their heads, to remove the influence of Russia in Europe, to cut into Gazprom income, even to paint the Kremlin as destructive to the European Economy. On other side, the Kremlin wishes to halt the theft by Kiev of siphoned gas, to end Ukraine supply since they do not pay bills, to pressure European nations into eliminating political support by the US & EU & NATO in a great squeeze. As overlord, the United States wishes to create a scorched earth buffer and to halt the capture of Europe by Russian Gazprom. The capture would effectively isolate the US and just as importantly, result in the rejection of the USDollar as trade settlement currency, then later result in the diversification away from the USTreasury Bond from global banking systems. The biggest motive in the mix is the destructive US motive, to prevent global USD rejection.
◄$$$ PUTIN'S STAFF WILL PROPOSE ANTI-DOLLAR ALLIANCE TO FORCE THE UNITED STATES TO END THE CIVIL WAR IN UKRAINE... DEEP DAMAGE IS BEING DONE WITH EUROPEAN CORPORATIONS, WHICH ARE PUSHING RESISTANCE AGAINST US-LED SANCTIONS... COMMERCE FACTORS WILL OVERWHELM POLITICAL FACTORS IN THE NEXT FEW MONTHS... THE CIVIL WAR LIT IN UKRAINE MIGHT SOON BECOME THE WAR FOR EUROPE'S INDEPENDENCE FROM THE USGOVT AND A WAR AGAINST THE USDOLLAR... THE ENTIRE RESISTANCE INITIATIVE FORMS THE CORE OF THE MOVEMENT TOWARD RETURN OF THE GOLD STANDARD. $$$
Sergey Glazyev, the economic counselor of Russian President Putin, published an article outlining a plan designed to undermine the economic strength of the United States in order to force the USGovt to stop the civil war in Ukraine. Glazyev believes that the only way of making the US give up its plans on starting a new cold war is to remove the USDollar as a privileged tool, and to force a crash of the currency regime system upon which the USTreasury Bond complex rests. Glazyev is the mastermind behind the Eurasian Economic Union. The provoked conflict might have a common thread with the Iraq War waged 11 years ago, which is to rescind the Russian portfolio of USTreasurys. More importantly, a new wave of sanctions will create a situation in which Russian companies will not be able to service their debts to European banks. So the European firms risk losing the Russian client, while their own banks risk defaults on major credit lines. The motive for Europe to cut the US cord is strong, as a climax approaches for the cut cord. Europe has bank risk from Russian clients, along with huge risk from natgas cutoff and economic impact.
According to Glazyev, the so-called Third Phase of sanctions against Russia would be at tremendous cost for the European Union. The total estimated losses would be higher than EUR 1 trillion. Such losses would severely hurt the European Economy, making the US the sole safe haven in the world. Displacement and disconnects for Gazprom with respect to the European energy market would (in the insane US strategy) leave open the door for the US to capture the European market, even though with more expensive LNG from US sites. Glazyev believes co-opting European countries in a new arms race and military operations against Russia will increase American political influence in Europe, and furthermore, directing a war march will help the US force the European Union to accept the American version of the Transatlantic Trade & Investment Partnership. The trade agreement is designed to transform the EU into an economic colony of the US. The Ukraine war project in effect is forcing Europe to choose: Russia for cheap gas and broad commerce, versus United States for higher economy and oppressive TTIP trade pact. Problems for the European Union will reach a fever pitch. The usage of regional wars for the benefit of the USEconomy is from a tired old playbook. The civil war in Ukraine is being used in a similar way as a pretext to repeat the old trick.
The Voice of Russia article concludes with the an advocated strategy 1) to undermine the Ukraine war, 2) to detach the EU enlistment in war, and 3) to implicitly replace the USDollar with a viable currency. In other words, defuse the war, split Europe from the US, and introduce a new BRICS gold-backed currency. They do not mention it, but the solution centers upon the Gold Trade Standard making a return. The following is taken almost verbatim. Glazyev's set of counter-measures specifically targets the core strength of the US war machine, i.e. the Fed's printing press. Putin's advisor proposes the creation of a Broad Anti-Dollar Alliance of countries willing and able to drop the USDollar from their international trade. Members of the alliance would also refrain from keeping the currency reserves in USD-denominated instruments (as in USTreasury Bond exit, dump, diversification). Glazyev advocates treating positions in USD-denominated instruments like holdings of junk securities, for which regulators should require full collateralization within portfolios. If global support came for downgrade of USTBonds in banking systems, then Russia would gain momentum in stripping the US of its credit card used for war machinery. An Anti-Dollar Coalition would be the first step for the creation of an anti-war coalition that can help stop the US aggression.
Glazyev believes that the main role in the creation of such a political coalition is to be played by the European business community, because America's attempts to ignite a war in Europe and a cold war against Russia are to wall off Russian newfound domination and to threaten the interests of big European business. At risk is Europe far more than the United States. Judging by the recent efforts to stop the sanctions against Russia, made by the German, French, Italian, and Austrian business leaders, Putin's aide seems correct in his assessment. Somewhat surprisingly for the USGovt, the war for Ukraine may soon become the war for Europe's independence from the US and a war against the USDollar. See the Voice of Russia article (CLICK HERE) and the Zero Hedge article (CLICK HERE).
Meanwhile, commerce continues, as Russia & China make steps toward another important gas contract. A seismic shift should hit Europe soon as consequence of the new Eastern courtship between the superpowers. The Altai gas pipeline that is to connect central Siberia with Western China is coming to pass. The vast network of pipelines to serve the Chinese market will require a couple years, but the foundation is almost in place. In a quick update, Russia announced progress on initial welded seams of its major pipeline for gas supplies to China will begin this August, as in two months from now. See the RIA Novosti article (CLICK HERE) and the Xinhua Net article (CLICK HERE) and the BRICS Post (CLICK HERE).
EuroRaj offered an opinion. "Europe (ex-Germany) is soon going to wake up to a reality that they will need to bend over and take whatever gas Russia offers them. The older established wealthy Asian families as the Dragons in the East (China, Japan, S.Korea) are going to be making much higher demands and will be ready to pay a higher price too. Germany surely arrived at the reality long ago, and has probably locked in supplies. More sanctions and blockages on South Stream pipeline will be very counter-productive. Witness yet more aggressive stupidity by the DC puppets sitting in Brussels. The Altai project, or the western route, has been planned for over a decade, and will extend a new pipeline to the natural gas basins that feed Europe. When completed, Altai will allow Russia to redirect some of that gas to China's north-western provinces. However, it will take time, and during that time, Russia will lose some significant energy revenue income. Russia and China are explicitly sending a signal to Europe to ditch the USDollar." To be sure, the USDollar is a dead man walking, under a certain death sentence. Colleague Rob Kirby prefers to say, the USDollar is like the propped dead man in the 1989 movie "Weekend at Bernie's" with Jonathan Silverman and Andrew McCarthy. The USDept Treasury and USMilitary and Langley CIA are holding up a dead dollar.
◄$$$ SOME HASTILY GATHERED RUSSIA-SERBIA TALKS ON SOUTH STREAM WERE FRUITFUL... APPROVAL WAS GIVEN TO THE RESUMED CONTINUED CONSTRUCTION OF THE IMPORTANT PIPELINE, WHICH WAS GIVEN FINAL THUMBS-UP WHILE RUSSIA BACKED SERBIA'S EU PATH IN RETURN... EASTERN EUROPEAN LEADERS ARE GIVING THE USGOVT LIPSERVICE, WHILE PROCEEDING WITH SOUTH STREAM PIPELINE BY GAZPROM. $$$
The landmark two-day negotiations in Serbia ended June 17th with some key achievements. Namely, Russia and Serbia have confirmed their commitments to implement the controversial South Stream natural gas pipeline project. South Stream is designed to pipe 63 billion cubic meters of gas per year from Russia via the Black Sea into central and southern Europe, working around Ukraine's territory. Russian Foreign Minister Sergei Lavrov spoke after meeting his Serbian counterpart Ivica Dacic in Belgrade. "We have confirmed our agreements on the South Stream and the need to implement the project. We confirmed our readiness for South Stream and the need to carry it out, as it is the only realistic project for gas security in Southeastern Europe. All agreements remain in force and no changes have occurred. We consider that everything will proceed as planned." In response, Dacic reiterated the position that the South Stream project lies in their best national interests, commenting that the pipeline is the only systematically feasible solution so as to provide Southeastern Europe with natural gas, in his words. Russia expects Serbia to begin building its leg of the Gazprom-led South Stream gas pipeline as planned in July.
Serbia finds itself in the middle of a geopolitical storm. The nation is determined to join the EU on the one hand, but wishes to maintain strong historical ties with Russia, on the other hand. A meeting between Lavrov and Serbian President Tomoslav Nikolic went favorably, after which Nikolic pledged that his country would do nothing that might hinder brotherly relations withRussia. He stressed continued cooperation with Russia, and ongoing respect for their interests in the region, but with desire to improve living standards and economic opportunities. Serbiasees the South Stream pipeline and EU participation as both working toward their national directives. Serbia sees EU membership as a huge boon to the nation economically. Trade between the Russia and Serbia had risen by 15% in the past year alone. The Russian side expressed by Lavrov addressed Serbia's concerns. He expressed Russia's support of Serbia's intention to join the European Union, but unspoken is the disapproval of any NATO advancement into Eastern Europe. Again: EU da, NATO niet.
Enter the business factor. The Gazprom subsidiary (Gazprom Neft) owns controlling interest at 51% of Serbia's main oil company, NIS. The Naftna Industrija Srbije (English: Petroleum Industry of Serbia) will follow the Russian beat. Once again, the USGovt is given lipservice from Eastern European leaders, while they follow the Kremlin orders. A suggestion by the Jackass forSerbia to pursue EU on commercial grounds, but reject any support of NATO activity or arms deals. The pipeline deal has become an bone of contention and object of discord lately betweenRussia and the European Union. Pressed by US-led puppets in Brussels, the neighbor Bulgaria cited intentions in June to suspend construction for fears the project is not in line with the EU law. The owner & operator law was devised in Brussels to halt Russia legally, a pure ploy. The Kremlin can finesse the EU by working with local contractors as operators. See the Voice of Russia article (CLICK HERE).
◄$$$ GAZPROM HAS LISTED ITS STOCK IN SINGAPORE, A LARGELY SYMBOLIC MOVE... MORE ASIAN INVESTORS WILL MAKE INVESTMENTS. $$$
The Russian gas export monopoly Gazprom has listed on the Singapore stock exchange. The goal is to become more transparent to Asian investors, seen as more important since the $400bn gas deal with the Chinese energy giant CNPC. As of June 17th, the Gazprom global depositary receipts (GDR) are being traded on the Singapore floor. They already trade on London and New Yorkexchanges. Better financial relations with Asian investors could simplify the construction of the Power of Siberia pipeline, the eastern route to deliver Russian gas to China. The pivot East is a investment phenomenon also. As Western investors are less willing to invest in Russia, Asian investors are a new class of investors to pick up the slack. See the Russia Today article (CLICKHERE). Clearly, business will increasingly come from Asia. Liquidity and credit will come from the East for Russian energy firms generally. The sanctions from the West are being pissed upon. Imagine also sidebar investors to earn royalties on the pipeline flow, a potential bolster. Gazprom has the ability to spin off a pipeline construction entity, a subsidiary dedicated to faster completion of the vast network to service all coastal Asia. Japanese and Korean firms could join the parade.
## CHAOS HITS IRAQ VACUUM
◄$$$ IRAQ & ITS OIL PROVOKE NEW CONFLICTS, OPENING THE DOOR TO RUSSIA... ALTHOUGH COMPETING WITH RUSSIA, THE WESTERN ENERGY FIRMS APPEAR TO BE RETREATING... EXPECT RUSSIA TO ENTER THE VACUUM AND GOBBLE UP ADDITIONAL CONTRACTS FROM THE KURDISTAN REGION AND CENTRAL DESERT REGION... THE REQUIRED REPORTING, SHIPMENT, AND REVENUE FUNNEL THROUGH THE BAGHDAD MALIKI REGIME OFFICES JUST DOES NOT WORK, GIVEN THE FIERCE KURDISH AUTONOMY... THE KURDS ARE CUTTING DEALS WITH MAJOR ENERGY FIRMS, WITH TURKEY, AND WITH IRAN. $$$
Iraq is in the midst of a civil war, now that its buffer annexor lord and hegemon state has gone back to the United States. A nettlesome problem in Iraq remains as the distribution of income from oil & gas. It has been a major bone of contention, since the old Saddam era rule is no longer law, and the new rule was so poorly crafted, under US guidance. The new rule has been sabotaged by the Maliki regime. According to reports from Erbil in north central Iraq, the Kurd Region has not received the 17% of energy revenues that are attributed to this region by the Iraqi law. Consider it basic betrayal by the Maliki henchmen. To fill the regional budget gap and to achieve a greater economic independence from Baghdad, the feisty Iraqi Kurdistan has adopted its own law on the usage of natural resources.
The estimated worth of this northeast region's natural deposits amounts to 45 billion barrels of oil and 2.83 trillion cubic meters of gas. The story told is that the Kurdistan Regional Govt has already signed over 50 contracts with international corporations toward exploration and extraction of oil & gas. Among them are the Exxon-Mobil, Total, and Chevron from the West, and Gazprom Neft from Russia. The only Russian firm on the scene, Gazprom Neft (subsidiary of Gazprom natgas giant) has signed contracts with the sitting Kurdish authorities of Iraq that call for the extraction of at least 670 million barrels of oil. The company is planning to invest around $1 billion in the development of Kurdish oil fields. Gazprom Neft is also working with Iraq's central government as an operator of foreign consortium, with plans to extracting oil in the area of Basra in the extreme south of the country. The northern region is loaded with confusion and controversy. Oil delivery from the disputed Kurdish pipeline is set to be directed toward Israel, always a friendly partner to Langley. See the Daily Sabah article (CLICK HERE).
In late 2013 Kurdistan began exporting oil & gas via pipelines to Turkey. Reportedly, 50% of the energy output would be consumed by Turkey, and the remaining 50% bound to be shipped via the Turkish port of Ceyhan to the world market. As of now, most of the oil remains stored in the depots of Ceyhan. The expected rate of the Kurdish oil exports must reach 400,000 barrels per day by the end of 2014. The authorities of the Iraqi Kurdistan have lately been negotiating oil & gas pipeline projects with Iran. The possible outcome is the construction of both types of pipelines between Iran and Northern Iraq. Those pipelines would ship crude oil from the Kurdish region to Iran, where it would be processed and refined at a plant in the city of Kermanshah. The refined oil products would then be shipped back to the Kurdish region. In return, natural gas projects could result in the shipping of Iranian gas to the Kurdish cities of Sulaymaniyah andErbil. At the same time the Kurdish authorities have begun the search for investors and contractors toward the establishment of their own refining and petro-chemical industries. They want development, and a possible partner might be the Russian companies Tatneft. Expect the Kurdish officials to forge many deals with Russian energy firms, as the Western firms retreat.
Tremendous irreconcilable conflict persists. Baghdad leaders are irritated by the Kurdish initiatives in the entire energy sector. Nothing new there. Iraqi authorities demand that Erbil inform them in advance about volumes produced and exported, with prices to correspond with international levels. In addition, according to Baghdad, which never yields to Kurdish regional autonomy, all deliveries must be made through the state company SOMO (State Organization for Marketing of Oil), and revenues from all sales of oil & gas should be deposited in the accounts of the Development Fund for Iraq (DFI) in the United States. In order to reduce tensions with the Maliki regime, the Turkish authorities proposed that their Iraqi partners to create a three-way committee (Ankara, Baghdad, Erbil ) to manage and report on the shipments of Iraqi oil to Turkey. The committee is more likely to adopt an agenda of reporting Baghdad misdeeds and fraud. See the New Eastern Outlook Journal article (CLICK HERE), which includes much political chatter.
◄$$$ AN IRAQ EXODUS IS IN PROGRESS AS OIL MAJORS WITHDRAW STAFF IN DROVES... THE ISIS PLAGUE LAUNCHED BY LANGLEY HAS TAKEN CONTROL OF ALMOST THE ENTIRE NORTHERN IRAQ REGION... THE TERROR THREAT RISES, BETTER CALLED BASIC BLOWBACK OF VIOLENCE THAT THE UNITED STATES INITIATED IN 2003, THE VIOLENCE DELIVERED IN THE VACUUM... NOTICE BUSINESS AS USUAL BY THE RUSSIAN OIL FIRM, WHILE IT REMAINS UNCLEAR WHETHER LANGLEY WILL ENTER THE OIL BUSINESS (MASTERS OF ISIS). $$$
ISIS is a powerful and very real player. ISIS is a rebel army composed of Sunni jihadis that calls itself the the Islamic State of Iraq and greater Syria (ISIS). They are composed of Islamic State inIraq merged with the Levant. They strive to establish a theocratic Sunni caliphate in the region. They oppose the Shiite-dominated Iraqi Govt, which is secular by form and in the ISIS view oppressive to the Sunni minority. The jihadis are a breakaway Al-Qaeda group with Sunni loyalty, in opposition to the Shiite sect, a rebel army of fierce fighters, not the suicidal radicals, organized and trained and supplied by the USGovt CIA. The USMilitary might have abandoned Iraq, but not the Langley (CIA) Military, the second military force from US control rooms, but funded by massive global narcotics funds estimated at over $800 billion in annual profits. They want Iraq, and use their mercenaries to seize its oil-rich lands.
The spread of violence is like a plague, causing the Western oil firms to scatter and abandon their fields and installations, along with hordes of staff. ExxonMobil and BP have both ordered staff to leave Iraq. Even China considers pulling some of its 10,000 workers from projects following the turmoil caused by the rebel group ISIS. Giant Exxon is removing 20% of its staff, mostly foreigners. BP has shipped out all non-essential employees from the Rumaila field in the south and Exxon has been evacuating staff from the West Qurna 1, also in the south. Royal Dutch Shell is in a unique spot. The firm has played a large role in revamping the country's oil industry. Shell has invested $billions in the Majnoon oil field, which is located just east of West Qurna 1 & II. Shell has not evacuated any employees yet, but has a plan if it becomes a necessity. China has a contingency plan to recall thousands of workers stationed in the south of the country, where unrest could spread. They are prepared to make an immediate evcuation, stated CNOOC to the Global Times.
The Iraqi leaders are lying about the threat, assuring that oilfields are safe from attacks, while they are themselves leaving Baghdad. The concern is that the Sunni rebel group ISIS (a breakaway Al-Qaeda group) could target oilfields and refineries in their campaign. It is not certain whether they wish to capture and control, or to destroy and spread the scorched earth. Rebels this past weekend captured the largest Iraq oil refinery located in Baiji, 43km north of Tikrit. The Iraq Oil Ministry has dispatched 100,000 police in posts with the task to protect oil facilities. Like their military, they will flee their posts quickly or be corralled in large numbers. Iraq is home to the world's fourth largest oil reserves, which are estimated at over 150 billion barrels lying around. Daily output reached record highs earlier this year, pumping 3.5 million barrels per day. The majority of Iraqi oilfields are located in the southern regions, which are predominately Shiite, said to be the main target of the group. ISIS seeks the creation of an Islamic Iraq and Syrian state. Their organized bands of well trained ruthless guerrillas are making significant territorial advances, having taken Mosul as the press reported. But they have taken most of Northern Iraq's regions, setting sights on the cities. They are pushing toward Baghdad. See the Al Jazeera article (CLICK HERE).
The US has mentioned it may team up with long-time diplomatic foe Iran in order to combat the insurgents in Iraq. Thus the dilemma. The perennial violence purveyor and historical warmonger USGovt finds itself facing the US Security Military from Langley, with its legion of mercenaries, joined with Al-Qaeda which has from the start been a Langley asset box. The answer to whether ISIS wants capture or wreckage of oil facilities could be seen from its recent attack launched on Iraq's largest oil refinery with mortars and machine gun fire.The refinery process about 300,000 barrels per day and supplies the northern regions with oil. It was once a key strategic goal the USMilitary, captured in its 2003 invasion of Iraq.
The European oil firms are also on the move. The Italian ENI, the French Schlumberger, the Swiss Weatherford, and the Texas-based Baker Hughes are all rumored to be considering similar exits, reports Reuters. Baker Hughes is the third largest oil & gas service company in the world. Then there is Gazprom Neft, an arm of the gas giant Russian Gazprom. The subsidiary owns a 30% stake in the 300 million barrel Basra deposit, situated in the southern end of Iraq near the Iranian border. The company announced on Tuesday it is experiencing no problems in Iraq, with plans to start supplying gas from the field at the end of June. Russia's largest independent oil company, Lukoil also has significant stakes in the region. It includes a stake in the hard to reach crude oil in West Qurna II, located in the south of Iraq. See the Russia Today article (CLICK HERE).
London Paul gave a solid assessment. "It seems like someone wants to kill two birds with one stone, during a supply squeeze. Stretch Langley to breaking point and cause Western corporations to loosen their grip on the stolen assets they acquired in the post-Saddam era. The Sunni Rebels control most of Iraq's largest Beiji oil refinery, near Baghdad. The Maliki Admin will fall soon, who after all is a puppet in charge of a USoutfit anyway. The entire Iraqi Govt high-tailed it out of the country with the lone exception of Maliki. It will be an intrigue to observe the infamous Green Zone as a hint on the power struggle."
◄$$$ ISIS IS FUNDED BY THE SUNNI ARABS, BUT TRAINED BY LANGLEY... THEIR METHODS ARE NAZI, TO RAID BANKS AND CAPTURE THE INCOME SOURCES... CONSIDER THEM THE LANGLEY ARAB GUERRILLAS... THEY ARE THE MIRROR IMAGE OF THE ISLAMIC REPUBLIC OF IRAN IN SPIRIT (RELIGIOUS FERVOR), BUT SUNNI... THEY WILL GROW IN SIZE, CAPABILITY, AND FORCE IN THE NEAR FUTURE... THEY MIGHT WIN THE CREATION OF NEW IRAQI NATIONAL BOUNDARIES. $$$
Religious zealot ISIS despises the secular sovereigns of all types, whether in Syria or Iraq or Saudi Arabia. The following is some sensible chatter, which has found its way into the online media, with a Jackass preface. The hidden beneficiary of ISIS action is the Rockefeller team. Maybe it is too simple. Maybe the confusion takes attention away from the more obvious, the theme for the last five decades. The ISIS Fiasco might just be an attack on Iran in the making, funded by oil money and narco money. Their activity might be to attack the vortex of Iran and obstruct their expectant gas pipeline to Europe through Northern Iraq and Syria. After all, Iran is the central nexus for the Gazprom Empire in the Middle East extension. Maybe ISIS is yet another USGovt security network parade of blood, guts, violence, and death, with mercenaries in the body bags, mercenaries of Caucasian and Arab descent, lovers of violence and psychopaths the majority.
Maybe the Langley leaders decided to play with Iran on their own terms, must like the HezBollah. Maybe just more ploys and projects to keep US interests rolling, for the benefit of the Rockefellers, their Big Oil firms, orchestrated by their masters (see Kissinger) and their puppets (see Obama) in government. The legions of soldiers will will soon die for what they believe is their country, but in fact will be dying for the Rockefellers and Bush gangsters, to support the oil interests and the narcotics interests, which no longer coincide with US national interests. See the Counter Punch article (CLICK HERE). The above argument makes a lot of sense, in a dark sombre way.
ISIS is a rebel army composed of Sunni jihadis that calls itself the Islamic State of Iraq and greater Syria. Its goal is to establish a theocratic Sunni caliphate in the region to counter the Iranian Shiite republic. It bears repeating, since at times confusing. ISIS was formed to oppose the regime of Assad Regime in Syria, the prevailing consensus viewpoint. Three quarters of the Syrian population are Sunni Muslims, but Syria is ruled by an elite with Alawite minority roots. The Alawites are an offshoot of Shiite Islam. ISIS is Sunni, fighting the harsh vile Assad leadership. It is estimated that ISIS currently has around 10,000 fighters. The manner the organization spends its money, however, is not known in detail. In the Jackass view, the ISIS is the Sunni embodiment of the HezBollah, the radical violent Shiite group. ISIS is well funded by the USGovt via Langley offices, but covertly. The methods of ISIS appear to be very similar to those of the Nazis, thus exposing their Langley roots of training. They steal money and commandeer income sources. In the aftermath of the Mosul conquest, the jihadi ISIS outfit has been recognized as the richest terrorist organization in the world.
During its conquest of the northern Iraqi city of Mosul, ISIS fighters looted more than 500 billion Iraqi Dinar, worth about $420 million at current exchange rates. Maybe they are the latest Dinar speculators, knowing something we do not, that the Iraqi Dinar will enjoy a 20-fold lift in its exchange rate!! Iraqi officials estimate that the group has about $2 billion in its war chest. What remains controversial is where the bulk of its money comes from, and in which banks it is stored. With nearly half a $billion in cash, their ranks could easily triple or more. ISIS will surely use much of the money to buy military equipment. In taking Mosul, the ISIS fighters captured a lot of US weapons and vehicles. Using their connections, like from funding sponsor networks, ISIS should be able to buy additional high-quality weapons on the international arms markets.
Iraq and its Govt is dominated two thirds by Shiites. The Maliki Regime has accused Saudi Arabia of supporting the ISIS guerrillas, with financial and moral support. The USGovt denies the Saudi connection, mainly because any funding or training by Langley is always kept hidden by a wall of lies, behind which lies vast narco money, the walls painted by incessant lies and propaganda. The Brookings lackey in Qatar denies any government role in creating or financing ISIS. Then again, the institute is a USGovt-funded toolkit. Charles Lister at the Brookings DohaCenter believes that ISIS is reliant upon funding from established networks in society, and systematic extortion like done in Mosul. Lister said, "The exortion affects small businesses and big companies, construction firms, and if the rumors are true, even local government representatives. In addition, it is suspected that the organization levies taxes in the areas that it completely controls, for example Raqqa in northeastern Syria. It is assumed that ISIS pays the foreign fighters in its ranks, but perhaps it pays all its troops. In the areas under ISIS control, the organization subsidizes bread, water, and fuel, and also finances the maintenance and operation of basic public services. All that costs money." Sounds like primitive nation building.
Conversely, Gunter Meyer is head of the Arabic Research Center at the University of Mainz in the German Rhineland. Meyer claims no doubt in where ISIS gets its funding. Meyer told Deutsche Welle, "The most important source of ISIS financing to date has been support coming out of the Gulf states, primarily Saudi Arabia but also Qatar, Kuwait, and the United Arab Emirates," The motivation for Gulf states in such support has been to oust the Assads in Syria. The backfire might come to Saudi Arabia, since radical Saudis compose the largest contingent of foreign fighters in ISIS. When those fighters come home, Meyer believes the danger lies in starting a revolt against the Saudi regime. More funding comes from rich Saudis than the Saudi Govt, another point of concern for the royals in Riyadh. The Jackass believes a main part of the divorce between the Obama Admin and the Saudi Royals centers on deep disputes over radical Saudis being actively recruited by the USGovt security agencies, namely the Langley CIA. That explains the 20-minute summit meeting between Obama and King Abdullah without a word of news on the event.
ISIS has oil sources for financing means. They control the oil fields of northern Syria, which funds their till but denies Damascus their income. Meyer claims they use trucks to transport oil over the border into Turkey, for an important source of funding. The biggest ISIS financial coup so far was no doubt the looting of the central bank in Mosul, which netted them over $400 million in cash. Additional banks in Mosul and other areas under ISIS control were also plundered, according to Meyer. They must have insiders at work, to be informed that such large cash was available. The researcher doubts any involvement for funds, weapons, or network come from the former dictator of Iraq, Saddam Hussein. He was a non-religious tyrant, maybe raised from a Sunni home, but to no further extent. The goals of ISIS are sharply different from those of the Saddam Regime. ISIS wants to establish an Islamic theocracy after toppling the Iraqi Govt. The surviving Sunni supporters from Saddam's Baath Party want to establish a secular democracy. See the Deutsche Welle article (CLICK HERE).
## USGOVT BANK AT-TAX (ATTACKS)
◄$$$ PAINT THE BACKGROUND WALL BEFORE THE BANK ATTACKS, DISGUISED AS LAW ENFORCEMENT... SOME MINOR PANIC HAS HIT THE USTREASURY COMPLEX... THE PROFESSIONALS ARE FLATTENING THE YIELD CURVE WITH BUYING THE LONG-TERM USTBONDS... DEALERS ARE ADDING LONG MATURITIES, SELLING THE SHORT MATURITIES... THEY DO NOT BELIEVE ANY RECOVERY STORY, BUT RATHER ARE POSITIONED FOR A NEAR COLLAPSE. $$$
Tyler Durden adds some excellent perspective. Here are several of his points, taking many pieces in verbatim, with my interjected additions and edits. Observe a glaring disconnect and is the reason why pundit after pundit on CNBC is screaming to ignore bonds, and better yet, sell or short them (ignoring record short interest and the ongoing squeeze), while focusing only on stocks, also ignoring that in several decades of market history bonds always end up on the winning side compared to stocks. He calls the USFed declaring a heretical centrally planned New Normal Frankenstein monster, in line with the Greenspan, Bernanke, Yellen monetary policy and distorted market. A quick look at the Fed's Primary Dealer database shows that while banks have been actively dumping their holdings in the near-belly end of the curve, namely debt paper in the 3-6 year range, they have been buying up bonds in the 11+ year maturity bucket. While Dealer holdings of bonds in the 3-6 year bucket are down to minus $12.6 billion as of the latest week of May 16th (the lowest position since June 2011), they have just taken their holdings in the 11+ year long end to $11.9 billion. That is the most long they have been in the farthest part of the curve since June of 2013.
Primary Dealers are positioned for the flattest bond market since November 2011, being heavy on the long end and light on the short end. At that time, Europe was on the verge of complete collapse with the PIIGS bond infection. The USFed responded with a $2.2 trillion Dollar Swap Facility that year, in a massive global bailout which prevented the near disintegration of the Eurozone. Durden concluded, "Bottom line: while dealers are telling their clients to dump the long end immediately due to everyone mispricing economic growth and inflation prospects, and to expect the long awaited curve steepening any minute now, what are they doing? They are the flattest they have been in two and a half years! In other words, [Bond Dealers are doing the opposite, as in] buying. And one other observation: if one expands the universe of bond holders from just Primary Dealers to all commercial banks operating in the US (as reported by the Fed's weekly H.8 statement), what does one get? One gets the following total Treasury exposure. It needs no explanation." It shows a sharp rise from June 2013 at $465bn to end 2013 at $540bn, in a chart not shown here. See the Zero Hedge article (CLICK HERE) which includes several Primary Dealer bond position charts.
◄$$$ THE CREDIT SUISSE AND BNP PARIBAS CASES HAVE A PUBLIC STORY OF TAX EVASION ACCOUNTS AND VIOLATED SANCTIONS... THE USDEPT JUSTICE IS COMPENSATING FOR NOTHING DONE AGAINST WALL STREET BANKS, JUST HAND SLAPS, DEFERRED PROSECUTION, AND FUTURE BLAND PROMISES... THEY ARE TRYING TO APPEAR TOUGH, BUT AGAINST EUROPEAN BANKS, INVITING VENGEANCE... SUCH IS THE STORY AT THE SURFACE. $$$
The USDept Justice slammed Credit Suisse and BNP Paribas with multi-$billion penalties. The CS fine was $2.6bn but the BNP fine is expected to be near $10bn. So stress the BNP story for greater significance. The Jackass suspects a hidden agenda, but let's set the table for the story at work. To begin with, the pressure has been fierce to bring about admissions of guilt by the big banks. Usually a bargain is struck like with the big corrupt US banks, which have been through the ringer with dozens of judgments. All contained a deferred prosecution feature to the outcome, a fine, and often restitution to damaged investors. But the CS and BNP cases struck hard at the admission of guilt, which in both cases will be given. The guilt enables the USGovt to take control of the bank's fate. It can be merged or liquidated, kind of like a foreign Lehman killjob. But merger is the likely route to be taken, and the merger entity is key to reading the motives, along with examination of the bank portfolio.
Credit Suisse has agreed to plead guilty and pay more than $2.6 billion to settle charges that it helped Americans to evade taxes and make secretive transactions. The case involved the biggest criminal tax penalty ever. CS is the second largest Swiss bank. USGovt prosecutors charged the bank with aiding clients to deceive US tax authorities by concealing assets in illegal, undeclared bank accounts, within a conspiracy that spanned decades. It is revealed that Credit Suisse had around 22,000 US client accounts worth around $10 billion, which included both declared and undeclared accounts. Like in the movie, Credit Suisse made a large business managing rich client money, helped them withdraw funds from their undeclared accounts by either providing hand-delivered cash to the United States or using Credit Suisse's correspondent bank accounts in the United States.
The bank was forced to plead guilty not only because of its complicity in tax evasion, but also because of its poor cooperation in the investigation, according to prosecutors. The bank did not begin an internal probe until early 2011, and did not preserve some evidence of the wrongdoing, as in document shredding, discarding, and file deletions. The bank admitted that for decades it engaged in practices such as destroying documents and setting up sham accounts to help thousands of US citizens dodge taxes. The USDept Justice has been harshly criticized for failing to prosecute banks in the aftermath of the 2008 financial crisis in the United States, within which Credit Suisse was not a major player. So instead of slamming the Wall Street brethren, they struck at a big Swiss bank and a big French bank. Suspect hidden motives. For the Credit Suisse story sketched, see the Politico article (CLICK HERE) and the Reuters article (CLICK HERE).
The USDept Justice (DOJ) is pressuring BNP Paribas to plead guilty for widespread movement of funds for clients in violation of sanctions against Sudan, Iran, and Cuba. The remaining debate centers on whether BNP will be left with operational capability. The settlement is likely to be the largest criminal penalty in the US history, eclipsing the BP accord worth $4 billion with the DOJ last year. To keep the fine high, the USGovt is using leverage of threats to remove the BNP from the USDollar payment system. Refer to the ability to transfer money into and out of theUnited States. Initially the DOJ sought a $5bn fine, while BNP hoped for a $7bn fine. But in the end, to make a statement and defend against criticism, if not to offset pea-sized integrity, the players on the USGovt prosecution staff went for a cool $10bn fine. The case involved US and District Attorneys in Manhattan, as well as the USFed and the USDept Treasury Office of Foreign Assets Control. A criminal himself (gun running with Mexico, fraud in solar investments, harrassment of Occupy Wall Street, attempts in Nevada land grabs with the Bureau of Land Mgmt, and several more), US Attorney General Eric Holder has taken a tougher stance following criticism from lawmakers for settlements that let banks escape criminal charges while paying fines, admitting wrongdoing, and improving controls. Essentially hand slaps and promises given have been the norm applied to US banks. To the Swiss and French banks, they lowered the hammer.
Prosecutors are continuing to try and extract a guilty plea from the bank, actually using the weak response by financial markets to the Credit Suisse admission of guilt. The Jackass believes the market does not fully comprehend the implications of such admissions. To put the cases in some context, DOJ head Eric Holder, frustrated at allegations he refuses to take legal action against banks, is doing his best to destroy one particular bank. It is a French bank, one of their big three (Societe Generale, BNP Paribas, Credit Agricole). The hatchet job is being done in Europe, where first it was Credit Suisse and now French BNP is about to get crucified. The image of the USGovt enforcement team has never been stronger, a bunch of tough guys with notches on their holsters. For the BNP Paribas story sketched, see the Zero Hedge article (CLICK HERE) and the Bloomberg article (CLICK HERE) and the Russia Today article (CLICK HERE).
◄$$$ THE CREDIT SUISSE AND BNP PARIBAS CASES HAVE A BIG STORY BEHIND THE SCENES... THEIRS IS NOT SIMPLE STORY, BUT RATHER TWO MAIN EFFORTS... THE USGOVT IS TAXING THE PRIVATE SECTOR, BUT WITH HIDDEN MOTIVES.... THE AFTERMATH MIGHT INCLUDE RUNNING AN AGENDA TO STEAL GOLD IN PRIVATE ACCOUNTS AND TO MERGE THE DERIVATIVE SHOPS MORE EFFICIENTLY... STEP BACK TO SEE A BREAKDOWN IN THE BANK SYNDICATE (THE CABAL), AS THEY ARE LOSING CONTROL... MANY FACTORS POINT TO A WIDESPREAD USTREASURY BOND DUMPING ON A GLOBAL BASIS, COMBINED WITH MOUNTING SHORT POSITIONS AGAINST THE USDOLLAR BY THE EUROPEANS... THUS THEIR BANKS ARE ATTACKED, THE USGOVT DEFENDING ITSELF WITH WHAT ARE BEST DESCRIBED AS COUNTER-ATTACKS. $$$
The Voice has been slamming the USGovt unilateral bank prosecutions as dictatorial, one side making all the rules, irrational desperate ineffective obstacles presented, and finally heavy fines imposed that act like gigantic taxes on the European private sector by a predatory USGovt that has lost control of its own back yard financially. The USGovt has failed to impose budget cuts in a meaningful manner, failed to honor debt limits by simply raising the limits, conducted endless wars at huge cost (money & lives), and has the QE spigot running on the highest level at the central bank which is wrecking the global economy. So the USGovt decided to tax Credit Suisse and BNP Paribas, both heavily, both with admissions of guilt, which leaves the door open for dictums by the USGovt on the fate of the two banks, even extensions to reshape them on their home soil. The savvy gold trader, my esteemed colleague, senses utter desperation and lost control at the US Helm.
EuroRaj has closely examined the two banks, since the cases occur in his sector from the London hive. He has provided a slew of message and notes on the story. Permit the Jackass to attribute the following to my gifted bank analyst colleague. His thoughts follow on Credit Suisse First Boston and BNP Paribas, my edits for readable form. People are on the right track if they believe the CSFB and BNP shakeouts are very likely related to extraordinary measures to defend against Gold, and to extreme defensive measures in some form against the global abandonment of the USD system. To threaten exclusion of BNP from the USDollar payment system seems not only extreme, but overboard. BNP might have been installing devices to dump USTreasurys and the USD itself. It looks like something very serious has broken down between the cabal itself. Our one suspicion has proven true. Banks were buying USTreasurys over the last month.
The background has an urgent stench and air of desperation, particularly evident in the USTreasury Bond market. The scarcity of USTreasurys is so artificial that the Boyz are either having to go after their best clients or are being force fed USTBonds. Recall the Primary Dealers gobbling up the long dated USTreasurys. They have created a shortage. The entire bond arena looks broken and held together artificially.
The reason behind the USTreasury complex confusion, disarray, and lack of liquidity might be explained by the BRICS Gold Sourcing project. Foreign creditor nations are dumping USTBonds to buy Gold bullion. The story was introduced and analyzed in the May Gold & Currency Report last month, another feather in the EuroRaj cap. The Belgium Bulge indicates broad sovereign nation dumping of USGovt debt. The theme is continued this month, in the form of the Saudis opening an outpost for further USGovt debt dumping. Vast liquidation of USTBonds is underway, and the event can be linked to both the USGovt bank attacks of CSFB and BNP, as well as the Primary Dealer induced bond shortage. The big events appear all interconnected, which is usually the case since multiple $billions in movement causes great changes to the balance and equilibrium required to sustain markets.
EuroRaj summarizes the bond activities which appear to be major events, well concealed, but indeed are causing cracks in the cabal from widespread foreign dumping of USTreasurys and build-up in anti-USDollar positions. He suspects (i) BRICS nations, Japan, and the Saudis are liquidating maybe, (ii) a mass of BRICS & Assoc nations are posting of collateral towards over $100bn in physical gold delivery maybe, (iii) the Exchange Stabilization Fund maybe is placing huge amounts of derivatives to force banks to buy USTreasurys which will drive rates lower, the Rob Kirby theory, (iv) hedge funds are being squeezed from their USTBond short positions maybe, and (v) CSFB/BNP are being forced to liquidate the FOREX carry trades that are Long Euros and Short USDollars. The USGovt prosecution forces them to be unwound. Whatever is happening, it is big big big!!
In today's day & age, the banks are never ever guilty of anything. The exact reason to force CSFB and BNP to plead guilty is difficult to discern, but certain elements can be pieced together.EuroRaj has a hunch that that CSFB/BNP were looking to cross an important Red Line, and were either warned or are being curtailed from doing so. They were subjected to very extreme pressure. A guilt plea is like a criminal record, which precludes opportunities to find a job in the US for the bankers involved. The $10bn fine for BNP equals almost 20% of its entire equity base of about $50bn. The fine is therefore a veritable death sentence. No bank can survive after wiping out 20% of the equity base. Something very big is stirring below the surface for to see this $10bn charge and guilty plea. The size of the penalty is way out of proper proportion, as something very serious is going on. Other banks are put on notice. Permit conjecture on what Red Line that BNP may have crossed. Perhaps BNP a) assisted Russian and US oil companies in deal making, b) applied to Shanghai Free Trade Zone for license, c) facilitated some Gold trades for sovereign nations, or big financial firms (even hedge funds), or big individual players.
Another theme must be brought to light on the conjecture with suspicion. The USGovt panicked at the sight of some new channels possibly being constructed. Very likely, Wall Street maestros just want BNP to give up Gold or Gold swaps or Bank of the West. We will find this out in hindsight. BNP is considered the JPMorgan of Europe. The bank is run in the shadows by the banking elite and certain special families of Europe out of Paris and Brussels. Bank of the West is the US subsidiary of BNP, fully owned but effectively ring fenced under FDIC rules. Therefore, deposits at BNP cannot be used to fund BNP capital markets in the United States. SocGen might be larger, and with bigger portfolios, but BNP has key control room power. The SocGen bank site contains significant derivative positions useful to the New York and London bank syndicate, from which USTBond and FOREX and Gold markets are controlled. The attack against CSFB & BNP could be an attempt to wrest control of European control rooms, and to merge them with the US/London control rooms. The attack is clouded by the smokescreen of legal prosecution against sanctions violations, a ruse and simple cover.
The EuroRaj thoughts continue. A guilty plea would be a departure from previous OFAC cases, which typically ended with deferred prosecution agreements that spared offending companies from criminal prosecution. The largest settlement was in 2012, when HSBC Holdings agreed to pay $1.9bn in fines and penalties. In addition to the HSBC settlement, fellow British banks Standard Chartered and Barclays reached accords with the USGovt over their transactions with countries covered by OFAC rules. Swiss and Dutch banks have also settled investigations into transactions with states subject to USGovt sanctions. As part of their settlements, they acknowledged responsibility for the conduct without having to plead guilty. Those six settlements together are less than half of the $10bn BNP might face to resolve the case. Therefore, suspect a much bigger agenda at work.
The Jackass has a theory. It is unclear whether the Belgium Bulge of USTreasurys showing up might be related in any way to the BNP case. A wild shot could be that BNP assisted in the dumping of massive USTBonds, placed in EuroClear at the Belgium depot. Notice in the last month, the Belgium depot of USTBonds has come down slightly. Perhaps a channel was shut down that BNP has not been able to keep open. The timing is suspicious, as the USGovt wanted to stop something in progress. The US bank syndicate in defense of the USDollar might be using BNP to halt the BRICS nations from securing the gold required for their BRICS Gold Central Bank. Witness some high stakes brinksmanship, complete with deceptions and misdirections.
◄$$$ FRANCE RESPONDED TO THE USGOVT FINE AGAINST BNP PARIBAS... IT WILL TRAIN HUNDREDS OF RUSSIAN SEAMEN TO OPERATE FRENCH-MADE WARSHIPS... THE SENTIMENT WAS RAISED BY PRESIDENT HOLLANDE TO WORK ON A USDOLLAR ALTERNATIVE. $$$
So France reacted to the BNP attack by emphasizing its plan to train Russian naval forces for operating the Mistral ships loaded with amphibious vessels. President Hollande had strongly approved of US-led sanctions against Russia earlier. But he has turned, after the slam against the big French bank. The Wall Street Journal reported "a group of 400 Russian sailors are scheduled to arrive on June 22nd in the French Atlantic port of Saint-Nazaire, to undergo months of instruction before some of them pilot the first of two Mistral-class carriers back to Russia in the fall." The training is a pivotal step that deepens the French commitment to fulfilling the $1.6bn contract to supply Russia with the carriers, which are built to launch amphibious attacks with landing craft, helicopters, and tanks. See the Zero Hedge articles (CLICK HERE and HERE).
Expect more bank fines, more Russian sanctions, more military contracts with Russia & China by European corporations, more technology transfer from Germany and France to the East. The USTBond and USDollar defense has higher priority than alliance with EU nations. It is unclear the relationship between NATO Military and EU governing administrations. Conclude that a reaction has come, as France has begun to explicitly look East. Hollande made indirect comments about seeking a USDollar alternative, a financial declaration of war hinted. The fascist financial sector ploys will work to wreck the economic structures, that simple. They will continue the pressure and ruin until the allied nations say NO MORE. Eventually these out of control fascists will impose sanctions on almost the entire world, and the majority of the world will be defined as the Eurasian Trade Zone with satellite continents in full tow. The pathogenesis appears to be visible. Extreme isolation comes to the US nation. It is unfolding before our eyes, but in difficult terms to comprehend. It comes from financial attacks to defensd the USTB/USD regime. Sadly, the US population seem oblivious to 95% of what is happening. They do not notice anything on the USTB/USD front, but they cheer on the Russian confrontations, in a sick display of arrogance. The wise fear the confrontation.
## BRICS ALLIANCES ON GLOBAL FIELD
◄$$$ KUWAIT AND ABU DHABI IN TALKS WITH INDIA FOR STORING TWO MILLION TONS OF CRUDE OIL IN INDIAN CAVERNS FOR USAGE ON EMERGENCY BASIS... THEY ARE BUILDING A STRATEGIC RESERVE... INDIA DISTRUSTS THE US-SUPPLY AND UNCERTAIN US-SHALE OIL STORY... WATCH THE GULF NATIONS MAKE TIGHTER BONDS WITHINDIA, WITH CHINA WATCHING. $$$
Kuwait and Abu Dhabi are in talks with India to store two million tons of crude oil in Indian caverns. The country want to make plans for emergencies such as supply constraint due to geo-political turmoil and an uncertain US supply. Kuwait Petroleum Corporation (KPC) and Abu Dhabi National Oil Company (ADNOC) have confirmed that they are willing to fill crude in two compartments of caverns at Visakhapatnam and Mangalore, as confirmed by the Indian Govt. The two stated concerns are supply disruption and sudden oil price spike. KPC and ADNOC will be free to trade their inventories, but during emergencies India will have the first right of refusal. Other nations such as South Korea and Japan have strategic oil storage facilities for secure supplies. Many nations heavily dependent on energy find themselves vulnerable to shocks. Importing 80% of the crude oil it processes, India is the fourth biggest energy consumer in the world after the US, China, and Russia. India has been constructing three facilities with combined capacity of over five million tons and is planning to construct four such facilities of 12.5 million tons in Orissa, Gujarat, Rajasthan, and Karnataka. India has another key distinction. It is the regional refining hub with over 215 million ton annual capacity in production of gasoline, diesel, and other fuels. Unable to afford any crude oil supply disruption, the nation carries capacity for a mere 30 days. The capacity will grow markedly. See the India Economic Times article (CLICKHERE).
Some important takeaway points. The project is not just an interesting development for the nation. They do not trust the US, nor do they believe the shale oil story with nonsensical claims of production potential. India might be indulging in an Indirect Exchange by building up storage facilities, converting some of its USTreasury Bonds, while forging stronger Arab bonds. They might reduce Iran oil demand, but that is doubtful. A bigger conclusion could be relevant. We could be seeing the first glimpse of the Gulf nations turning toward the BRICS for dedicated supply, outside their already set supply for China. In the past few years, India has not been a very large Arab Gulf customer. One might suspect the Indian purchase is part of a Chinese strategy, whereby China is directing the Gulf emirates to pivot East and build up the relationship with India and other BRICS Associate nations.
◄$$$ RUSSIA'S GAZPROM SIGNED A 3.5-MILLION-TON LNG SUPPLY DEAL WITH INDIA'S GAIL, THROUGH THEIR SINGAPORE SUBSIDIARY... THE TRIANGLE IS FORMING WITHRUSSIA, CHINA, INDIA. $$$
In mid-June, Russia inked another deal with India. The gas giant Gazprom can increase its delivery of liquefied natural gas (LNG) to India's GAIL corporation to 3.5 million tons annually with an option to extend the contract to up to 25 years, confirmed by Gazprom Vice Chairman Alexander Medvedev. Gas Authority of India Limited (GAIL) is the largest state-owned natural gas processing and distribution company in India. Back in early 2012, Gazprom's subsidiary, Gazprom Marketing & Trading Singapore, signed a 20-year LNG supply contract with GAIL of India. Under the contract, the price for LNG was to be based on a formula tied to the price of crude oil at Indian terminals. In 2011, the same Gazprom subsidiary in Singapore signed four memorandums on supplying LNG to India, including with Indian Oil Corporation Limited, Gujarat State Petroleum Company and Petronet LNG Limited. The deal is expansive and long-term, with Gazprom expected to supply up to 2.5 million tons of LNG annually to each of the Indian companies within 25 years. The Russian energy link to India grows. See the RIA Novosti article (CLICK HERE).
The triangle of Russia, China, India is making significant progress. Russia is already partnering with India in Siberian and Pacific energy projects. The thinking extends from Russia-China duo, joined at the hip. Cut a deal with China and forge a tie with Russia by association. Cut a deal with Russia and forge a tie with China conversely. The same is true when working towardLondon as an RMB Hub, or toward Frankfurt as an RMB Hub. The UKGovt will be unwilling to anger Russia much longer, since China is their new ally partner. EuroRaj pitched in. He cites 4 key pipelines on the horizon of big importance. 1) Russia to China to India, 2) Russia to Japan, 3) Russia to North Korea to South Korea, and 4) Iran linking Turkey, Syria, Europe. As the rebellion against the USDollar gains force, these headlines should hit in 2014. The energy chain will work to dismantle the King Dollar regime. As foonote, The Voice corrected the Jackass. No RMB Hub will come to the United States, like at San Francisco as cited. The North American sites for RMB Hubs will be Vancouver on the west coast and Toronto to service the entire east region, the latter already in place.
◄$$$ AUSTRALIA WILL PLAY A ROLE IN THE SHANGHAI FREE TRADE ZONE... ANZ BANK SEEKS ROLE IN CHINESE INTERNATIONAL GOLD EXCHANGE. $$$
Australia & New Zealand Banking is seeking a role in the global gold trading platform planned for the pilot Shanghai Free Trade Zone. It is expected to become a serious major potential challenge to gold exchanges in London and New York, where corrupt contract practices are the norm, used to suppress the gold price. The Peoples Bank of China in May gave the ShanghaiGold Exchange approval to launch a board for gold trade in the free trade zone. The zone itself consists of an area 28 square km (=11 sq mile). The analysts who are aware and awake and astute realize the Shanghai Free Trade Zone will serve as a testing ground for reforming (if not reconstructing) the country's financial sector. It is expected to become a model imitated and emulated elsewhere. ANZ was one of the first foreign banks to sign on. See the Wall Street Journal article (CLICK HERE). Since Australia is a veritable Chinese commercial colony (mines, ports, property, etc) with a Yuan Swap Facility already in place, expect Australia eventually to create a similar free trade zone on Australian soil, with others set up in New Zealand.
◄$$$ RUSSIA & QATAR COMPETE IN NATURAL GAS MARKET, BUT WORK TOWARD COOPERATION IN MUTUAL INTERESTS... QATAR HAS COMMITTED $2 BILLION FOR RUSSIAN PROJECTS... THE ENTIRE GULF REGION WILL SOON BE LOST TO THE EAST. $$$
The Qatar Investment Authority has committed $2 billion to the government related Russian Direct Investment Fund for infrastructure projects in Russia. In view of Western governments attempting to isolate Moscow economically, it is a significant gesture that the Kremlin will notice and understand. Qatar is scoffing at the US-led sanctions in a direct manner. Business is to expand, along with integration with cooperation. As US and European relations with Russia continue to erode, the Gulf nations are forging ties with the future power center in the East. Isolation comes to the US and certain Western European nations that do not splinter away from the US faction. See the Al Monitor article (CLICK HERE).
◄$$$ CHINA & ITALY PLEDGE EFFORTS TO CEMENT THEIR PARTNERSHIP... ITALY IS NEXT TO HOLD THE EU-COMMISSION CHAIR POST. $$$
Chinese President Xi Jinping met with visiting Italian Prime Minister Matteo Renzi at the Great Hall of the People in Beijing on June 11th. They pledged efforts to strengthen the partnership between the two countries. In view of the bitter conflict over Ukraine and the clouds over Europe generally, consider the meeting as a gesture by Italy to show deference to the new power center in the East. The leaders reminisced about Marco Polo, the legendary Italian explorer, and the missionary Matteo Ricci. The Chinese leader spoke of work together to enhance mutual understanding and expand cooperation that elevate the bilateral relationship to a new level. Xi talked boilerplate stuff, but in broad terms. Xi proposed China and Italy continue to understand and support each other on issues involving their core interests and major concerns, to deepen political trust, to increase exchanges of ideas on reform, and to boost cooperation on energy conservation, environmental protection, sustainable urbanization, modern agriculture, and tourism, as well as to broaden cultural and people-to-people exchanges.
President Xi reached out for improved communication and coordination on major international issues to promote world peace and development. Sounds like anti-US concerns of constant war, spread of economic destruction, and proxy battles to interrupt commerce. Watch China emerge as the new global diplomat, their initial work to take place in the Persian Gulf and nextEurope. Recalling his visit to Europe in March, Xi reiterated his desire that China and Europe should implement the China-EU 2020 Strategic Agenda for Cooperation in order to advance their comprehensive strategic partnership. It should be noted that Italy will assume the rotating chair of the European Union in the latter half of 2014. The fact is not lost on Chinese President Xi. The Italian prime minister promised to maintain close high-level interactions, to increase exchanges on governance, and to boost cooperation in multiple areas with China. In addition, Renzi wishes to take more measures to facilitate cultural exchanges between the two countries, especially for students. Italy will assure continued Europe-China cooperation and push to coordinate withChina in international affairs. It was a minor lovefest. See the Xinhua Net article (CLICK HERE).
Many are the bilateral projects to firm partnerships with China. The Eurasian Trade Zone is coming together. It is better described as the Global ex-US trade zone. The entirety of Europe will fall in line, but only after some nasty political skirmishes. One by one, every country is lining up with China and the BRICS nations, not to embrace the Russian opposition alignment. Trade and investments are expanding between the European nations and China, along with Russia. The once sturdy alliance of NATO is in a losing position, which will slowly splinter off and isolate the United States.
◄$$$ CHINESE PREMIER EXPECTED TO SEAL $30 BLN IN DEALS WITH BRITAIN... MEETING IS MORE TO WARN BRITISH TO BACK OFF, TO TIE THEM DOWN, RATHER THAN TO EMBARK ON BILATERAL TECHNOLOGY TRANSFER... BRITAIN CAN OFF THE LARGE FINANCE OUTPOST. $$$
Chinese Premier Li Keqiang arrived in London in mid-June, the agenda somewhat unclear. The press reports a string of multi-$billion deals to be struck, with a focus on economic relations. The premier will hold talks with Prime Minister David Cameron, and meet Queen Elizabeth, the latter being an unusual call. He is expected to sign more than $30bn worth of deals covering infrastructure, high-speed rail, nuclear energy, and finance. Britain does not have a fat portfolio of technology to transfer to China in a grand bargain. Germany does. Britain can offer a RMB Hub and finance output, a significant outpost. Li Keqiang has a second perhaps more important agenda to the trip. It is to warn Britain to stay clear of the Ukraine war zone, to cooperate with the Eurasian Trade Zone coming of age, and to avoid interference in the next chapter being installed as part of the Global Paradigm Shift. See the CCTV article (CLICK HERE). The second agenda is nowhere in the news, and comes from excellent sources with an ear to the wall and a hand on the table for the shift. The meeting was a stern warning. Watch the NATO support splinter away from the US.
◄$$$ CHINA SIGNED A $20BN DEAL WITH BRITISH PETROLEUM FOR LOCKED LNG GAS SUPPLY... CHINA IS EXPANDING ITS SUPPLY NETWORK NOT ONLY WITH RUSSIA... THE SOURCE BEGINS WITH NORTH SEA, BUT DELIVERS GLOBALLY. $$$
British Petroleum announced a $20 billion deal to supply energy hungry China with liquefied natural gas (LNG) over a 20-year period. In doing so, China plans to move slowly away from dirty coal with its air pollution byproduct, thus building a good bridge between itself and the UK. The deal was unveiled at the the World Petroleum Congress in Moscow, which ran for five days ending June 19th. BP already supplies the China National Offshore Oil Corporation (CNOOC) with LNG from its Indonesian project, and will now ship 1.5 million tons of LNG per year toChina starting in 2019.
BP is Europe's second largest oil company, based in the UK. It taps the gradually depleting North Sea sources, but mostly fills its portfolio with overseas projects. On the same day, Anglo-Dutch oil major Royal Dutch Shell signed a global strategic alliance with the China National Offshore Oil Corporation (CNOOC). The alliance will include working together in LNG and upstream deepwater projects in Brazil, Gabon in Africa, and other midstream and downstream cooperation, which means refinery. The BP agreement comes right after a landmark $400bn mega deal between Russia's Gazprom and state-owned CNPC, part of the ongoing Holy Grail contract. The Royal Dutch shell deal came just before the refinery explosion on their soil. Suspicion is again directed at the USGovt security agency in Langley. Follow motive to find the culprit, while ignoring the US-based news network laced with propaganda. The stage is slowly for China to gently nudge Britain, to break away from its NATO support of the Ukraine war. See the Russia Today article (CLICK HERE).
◄$$$ ROYAL DUTCH SHELL EXPLOSION MIGHT INDICATE THE GAME ON FOR EUROPE SPLITTING AWAY AND LOOSENING USGOVT TIES... EITHER RUSSIAN ENERGY DEALS OR NORDIC EURO CURRENCY DEVELOPMENT COULD BE MOTIVE BEHIND THE ATTACK ON DUTCH ENERGY INTERESTS.
One must wonder if the explosion has anything to do with the Dutch working behind scenes against USDollar interests. The Dutch might be working to introduce a New Nordic Euro currency with Germany, or to cooperate with Black Sea offshore drilling projects near Ukraine, or to integrate Dutch energy interests with the new BRICS platforms, or to enable the Kremlin in a USTBond dumping window, or to be working deals with the Kremlin in a general sense. Perhaps the USGovt caught wind of various future plans and current projects, then dispatched theLangley black op teams do their usual nasty games, a specialty with full cloaking deflection, usually with false blame attached. Also, the Netherlands signed some energy deal with Turkey. We could be moving close to the event whereby Core Central Europe, marked by Germans & Dutch & Austria & Finland are breaking away from the US & UK core of New Fascists. See the Zero Hedge article (CLICK HERE) for details.
◄$$$ TURKEY AND IRAN WORK TO FIRM MORE HIGH LEVEL DEALS... IRAN IS READY TO MEET GREATER TURKISH NATGAS DEMAND... TALKS ARE IN PROGRESS TOWARD DIRECTING IRAN NATGAS SUPPLIES TO EUROPE THROUGH TURKISH TRANSIT LINES... TURKEY COULD BECOME THE NEXT THORN IN THE USGOVT FASCIST RIBCAGE. $$$
Iran and Turkey will sign six cooperation agreements in various fields, including in the energy sector, when President Hassan Rouhani visits Ankara for a meeting with heads of state. In the meantime, the Iranian Minister of Communications & Information Technology Mahmoud Vaezi had meetings with Prime Minister Erdogan and several other ministers and ranking officials. Vaezi affirmed as positive Iran-Turkey cooperation in various areas, including energy. He said "Turkish officials are willing to increase [natural] gas imports from Iran." Notice the direct plain language and formal statement, knowing the US eyes & ears are attentive. The neighboring nation Iran is Turkey's second biggest natural gas supplier after Russia. A high priority recently has been to expand electricity capacity and natgas storage capacity. Turkey uses a significant portion of its imported Iranian natural gas to generate electricity. Russia has been working closely on storage silos and construction contracts, which include Russian contractors.
Here is a key point. Negociations are in progress toward transfer of Iran's natural gas to Europe via Turkish transit lines. Discussions are ongoing, which would mean Iran supplants Russianatgas. It is unclear whether pipeline capacity and connections are in place. Commerce finds a way, even if the events work against destructive obstructive US imperial interests. If Ukraineneeded to be wrecked in order to block Eastern (Russian) natgas from reaching Europe, then the same logic dictates that Turkey will become a target to block Eastern (Iran) natgas from reachingEurope. Additional pacts were signed on economic, cultural, political, trade, banking, customs, and cinematic cooperation during the visit by Erdogan in January to Iran. The relations continue to warm. During that official two-day stay in Tehran, the Turkish premier emphasized his country's resolve to lift its economic trade with Iran to $30 billion by 2015. The potential areas cover the construction of power plants and refineries as well as industrial projects, with oil & gas cooperation. See the PressTV article (CLICK HERE).
◄$$$ KUWAIT EMIR KICKED OFF THE IRAN VISIT WITH SIX AGREEMENTS... RAPPROACHMENT HIT A HIGHER GEAR WITH ACCORDS ON SECURITY AND CUSTOMS, AS WELL AS CULTURAL EXCHANGE... RELATIONS HAVE TURNED CONSTRUCTIVE AS TENSIONS SUBSIDE. $$$
The Kuwait royal leader went to Tehran Iran, the lion's den, a significant symbol of eased tensions and mutual cooperation. The two countries signed six agreements to strengthen cooperation in various fields. The agreements were finalized in the presence of Iran's President Hassan Rouhani and Kuwaiti Emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah (too many names, whereas Chinese names are too short) in Tehran at the Saadabad cultural and historical complex. The foreign ministers for the two nations signed agreements to enhance cooperation in air transportation and security fields. Their finance ministers signed an accord to strengthen customs cooperation. The two countries also signed agreements in the softer fields of sports, tourism, and the environment. More thorny topics on the landmark two-day visit centered on bilateral and regional issues including the conflicts in Syria and Iraq.
For his first visit to Iran, Sheikh Sabah arrived as head of state leading a high-level delegation, comprised of ministers for foreign affairs, oil, finance, commerce, and industry in addition to other senior officials. The conference was in response to an official invitation by Iran's President Rouhani. Tensions subside, hostility abates, while watchul US eyes seethe in anger since it means the death of the Petro-Dollar. See the PressTV article (CLICK HERE). Gulf Arabs will sell crude oil in Chinese Yuan. Gulf Arabs will cooperate with Gazprom on LNG projects. Iranpipelines will feed Europe. The Nat Gas Coop will eclipse OPEC. The King Dollar is being pushed off its throne. Indeed, relations are warming considerably and very noticeably, probably on orders from China to begin a constructive engagement chapter. Remove the United States, the British, and Israel from the room, and all parties find common ground, mutual interests, and constructive engagement. Funny how that works! The three nations form the Axis of Fascism, a complete reversal from the 1940 era that is slowly dawning on the Western world.
◄$$$ RUSSIA AND IRAN RAILWAY LINK WILL SOON CONNECT THE TWO NATIONS, THROUGH THE AZERBAIJAN REPUBLIC... THE RAIL LINE IS ALMOST COMPLETE... OTHER PROJECTS FOCUS ON CONVERSION FROM DIESEL TO ELECTRICAL POWER FOR TRAIN LOCOMOTIVES... IRAN WANTS TO JOIN THE 3-MEMBER EURASIAN UNION. $$$
Iran, Russia will be connected through railway in a matter of months, with only short sections remaining to be completed. The rail line is seen as urgent for trade. The Iranian Ambassador toRussia traveled to Moscow to firm the project completion and to make additional contracts. At end May, Mahdi Sana'ie reached accords with Alexander Yakunin (president of the Russian State Railways Co) during an economic forum held in Gorno-Altaysk in southeast of Siberia, focusing upon bilateral economic cooperation. "The plan for connecting the two countries through railway is practically complete now and only a few kilometers of it remains to be constructed, which will not take a long period, as existence of railway services between Iran and Russia is an urgent necessity," said Ambassador Sana'ie. He cited four other joint projects between the two countries in railway transportation field. The lead item is conversion from diesel to electric for the train engines for the two countries, and making more fully electric their railway systems, such as track monitors.
In the meeting, the Iranian envoy discussed issues related to the expansion of Iran's economic cooperation with the Eurasian Economic Union (EAEU). The union (EAEU), also known as the EAE Community (EurAsEC) originated from the Commonwealth of Independent States Customs Union of Belarus, Kazakhstan, and Russia in March 1996. Recent progress had been made among the three nations, even a gold-backed currency. See the Iranian IRNA article (CLICK HERE). Iran wants in. Iran will be key part to the Eurasian Trade Zone, as important to the Russia-China alliance as the Saudis were to the US-UK axis. Iran is a linchpin to secure all the Persian Gulf group of Arab nations. Iran will promulgate the usage of Yuan-based energy sales in payment systems.
◄$$$ ENGLAND TO REOPEN ITS TEHRAN EMBASSY IN A SIGN OF WARMING RELATIONS... THE UNITED STATES AGAIN IS OUTSIDE, LOOKING IN. $$$
Britain announced in mid-June that its embassy in Tehran will reopen. The warming of relations between Iran and the United Kingdom has resumed, in a major turn. It has been nearly three years since a mob overran the diplomatic compound. See the NBC News article (CLICK HERE). Nothing in the entire Gulf region is looking favorable for the US fascists.
◄$$$ ANOTHER RUSSIA-SYRIA AGREEMENT INVITES SYRIA TO JOIN THE NEW RUSSIAN CUSTOMS UNION... RUSSIA WILL CONTINUE TO SUPPLY ARMS AND TO ASSIST WITH RECONSTRUCTION OF THE NATION. $$$
The USGovt strategy of scorched earth wherever the Russian Gazprom plans to build port facilities is backfiring on all fronts. In late May, a Russian entourage arrived in Damascus. It included Deputy Prime Minister Dmitry Rogozin, Deputy Finance Minister Sergei Storchak, and Alexander Fomin, the Director for Military Technical Cooperation. The visit marked the return of Kremlin to the region after the Ukraine conflagration erupted. The ministers put a stamp on their new policy towards the West. Three important decisions were reportedly adopted at the economic, military, and financial levels. 1) In 2015, the Eurasian Economic Commission will create a free trade zone with the Customs Union that is centered on Russia, Belarus, andKazakhstan. The FTZ will include Syria. 2) The Russian Federation will continue to deliver weapons authorized by the UN Security Council. Agreements will come toward the extension of the Russian naval base at the Tartus port, as well as Syrian access to Russian satellite images. 3) The Russian Federation will shoulder the majority of costs for the reconstruction of Syria. See the Voltaire article (CLICK HERE).
◄$$$ CHINESE INVESTORS PLAN TO INVEST $3 BILLION IN A BIG CRIMEA PORT PROJECT, TO RENDER IT A DEEPWATER PORT... IT WOULD ENABLE ECONOMIC DEVELOPMENT TO THE DEBATED PROVINCE. $$$
Chinese investors have returned to meetings toward the construction of a deepwater Crimean port. The $3 billion awaits further Ruble developments and assured supply of water to the peninsula. Talks will be held in August, back on track on the business agenda after a recent visit by Russian President Vladimir Putin to China. The construction of a deep water port near Yevpatoria is planned with Chinese funding capital. The group of Chinese investors is ready to invest $10bn in the construction of the port and its infrastructure. The first stage of the project is estimated at $3bn. The project talks had been halted since start of the Ukrainian crisis. Perhaps an opportunity was lost, since some lucrative investment by Western oil services company could have secured the deal.
Crimea, which was previously an autonomous republic within Ukraine, is the center of controversy. The province refused to recognize the new Maidan fascist regime in Kiev since February. On March 16th, citizens of the republic held a referendum which saw over 96% of voters in the region back the motion to secede from Ukraine and join Russia. The distorted propaganda in the Western press called the sequence of events a Russian invasion, followed by a Russian annexation. The Russian Parliament never annexed Crimea, contrary to Western propaganda. They secured the Russian Naval port in Crimea, vital to the Russian Navy, and ordered the referendum. The distorted news is an absolute abomination. The province has attempted to install measures to foment calm, especially in response to blockades of rivers that feed the Crimea its water. They introduced a transition period until January 2016, during which both the Russian and Ukrainian currencies would remain in use on equal grounds. See the Russia Today article (CLICK HERE). The Jackass believes not a single Western press report is accurate on either Ukraine of Crimea. Aggression is coming from the US-NATO side, using both Langley and Soros mercenaries.
◄$$$ EUROPEAN FIRMS RUN THE RISK OF LOSING KEY RUSSIAN BUSINESS... EUROPE IS SUBJECT TO HUGE ISOLATION RISK, THE CONTAGION ELEMENT FROM THE US-NATO ASSOCIATION... CHINESE HIGH TECH FIRMS ARE READY TO REPLACE THE EUROPEAN MAJORS FOR COMMERCE INSIDE RUSSIA, UNLESS GERMANY AWAKENS... IT IS DECISION TIME FOR GERMANY, AS HEAVY COMMERCIAL LOSSES AND ECONOMIC HARDSHIP ARE THE BYPRODUCT FOR US-NATO SUPPORT. $$$
A great many European corporations led by the German giants are at risk of being blocked and walled off from Russian trade and commerce. The Russians are prepared to replace European companies if the EU Commission follows through with the reckless policy of sanctioning Russia, according to Reiner Hartmann, chairman of the Assn of European Businesses in Russia. He said, "I have heard about 20 or 57 Chinese high-tech companies ready just to move in and replace Alstom, Siemens, BASF, and Bayer, just to name the few. It is amazing!" Never lose sight of the fact that 3000 German companies conduct regular business in Russia. It took decades to build the trusted business relations. It can take only a few months and USGovt brainiac maniac psychopathic inspiration to destroy it, in pure Fascist Business Model style. It is decision time for Germany and other nations. The central European powerhouse is dominated commercially by its major businesses and conglomerates. It is dominated politically by its subservient class of bankers and hacks with loyalty to London and New York.
A division is coming, if not forced already. Germany has already made some difficult decisions to turn Eastward, but has decided to be very cautious in announcing them. They might be waiting for the US-led initiative to fail miserably on all non-military fronts. Commerce will change the balance, since Germany corporations will not sacrifice their business ties to Russia. See the Russia Today article (CLICK HERE).
◄$$$ SELF-FUNDING THE PADMA BRIDGE WILL ENABLES BANGLADESH TO REMOVE THE WEST FROM ITS INFLUENCE, INTERFERENCE, AND CONTROL... THE HASINA REGIME IN DHAKA MUST STRIKE A BALANCE TO COURT CHINESE AND JAPANESE AID AND CONSTRUCTION KNOW-HOW, BUT NOT STEP ON INDIAN TOES... SLOWLY AND STEADILY, THE WEST AND ITS PROXIES ARE BEING DRIVEN OUT OF THE EAST. $$$
After three years of uncertainty, the Hasina regime in the Bangladesh Govt has made a definitive decision of its most ambitious infrastructure project. In focus is the multi-$billion contract for construction of the main structure of the 6-km railroad bridge on the mighty Padma River. It is called the Ganges River on the Indian side, a sign that the two nations cannot agree on much of anything. The contract has gone to a Chinese firm, Major Bridge Engineering Co. The engineering challenge would link the region around the capital Dhaka to 21 southern districts. The bridge is expected to boost the Bangladesh GDP by about 1.2% every year. The plan is to complete the project with its own financial resources, and to enable the nation to rid itself of a basket case image.
The World Bank has been involved, making accusations, interrupting progress, and surely demanding control in turn. The bank leveled serious corruption allegations against senior ministers of Hasina regime in awarding contracts for the bridge. The World Bank was supposed to fund $1.2 billion, and other funding agencies such as ADB and JICA were to fund the rest of the project. Hasina never fulfilled her promise to make inquiries into the corruption charges. Finally, a year before the January 2014 Parliament vote, the leader called the World Bank's bluff and withdrew her government's funding request to the global lender. Like many other nations, Bangladesh turned East in a pivot. Offers of funding from China and Malaysia were actually rejected, as the Dhaka team decided to go ahead with Bangladesh's own funding resources. Buoyed by steady GDP growth and augmented remittances from Bangladeshi expatriates running at $15bn annually, a Current Account surplus at $2.57bn in the last fiscal year has formed, linked closely to garment exports. Hasina was determined to make a larger statement aboutBangladesh and its future. The nation has been rocked from violent political agitation by an Islamist Opposition which has targeted road and rail transport. The goal is to create an investment destination in the southern provinces, for further capital investment.
Finance minister Muhith cites an allocation of 121 billion Taka (=US$1.56bn) for the bridge, as per the Chinese construction company estimate. The cost has gone up by 30 billion Taka, due to a three-year delay. Initially, the project cost had an estimated 91.7 billion Taka price tag. Muhith is confident of making payments to the Chinese firm with domestic surplus funds, and completing the bridge by end-2017. Contingencies are being put in place for a possible final cost escalating to 160 billion Taka. The Padma bridge calls for expansion to a four-lane highway (the Dhaka-Chittagong) that connects the capital and the country's main industrial zone with its leading port to the south. Like the new Indian leader Narendra Modi, the main Hasina priority is developing infrastructure, which will enable economic growth, a concept lost on both American and British leaders. Corruption and inefficiency have adversely affected the path in Bangladesh, but progress continues.
Like Modi, the Bangladesh leader is attempting to strike a balance between China and other Asian nations such as Japan and South Korea, who are wary of the Beijing superpower. During her recent trip to Tokyo, Hasina solicited Japanese assistance for several key infrastructure projects, including the Dhaka metro rail project. The Japanese may well oblige. Prime Minister Shinzo Abe has already promised an additional $6 billion in aid. If Hasina can win the Chinese contract to construct the Padma bridge and widen the important Dhaka-Chittagong highway, and convince the Japanese to do crucial projects like the Dhaka metro railway, it is believed that no obstacle lies in the path for the Indian Govt to win support from both China and Japan toward heavy investment in the Indian Economy. With BRICS leadership and Chinese diplomacy, watch even India and Bangladesh begin to work cooperatively. See the Economic Times of India article (CLICK HERE).
## GOLD MARKET NEEDS A FIX
◄$$$ WITH LONDON GOLD FIX UNDER FIRE, CHINA SEEKS BIGGER SWAY IN GOLD TRADE... THE SHANGHAI GOLD EXCHANGE HAS FORMALLY INVITED SEVERAL WESTERN BANKS INTO THE ARENA, MOSTLY FROM AUSTRALIA... GOLD FUTURES CONTRACTS IN RMB ARE TO BE OFFERED BY YEAR END. $$$
China has approached foreign banks and gold producers to participate in a global gold exchange in Shanghai. The burgeoning nation seeks greater influence over global pricing. The Shanghai Gold Exchange (SGE) received approval from the central bank in late May to launch a global trading platform in the newly established free trade zone, a pilot project of global importance.The challenge to New York and London dominance in the gold trade is strong, notable, even palpable. The global platform will initially host spot physical contracts for gold and other precious metals, before aiming to launch derivatives later in time. Their plans coincide with the Gold Fix benchmark controversy in London. The state backed SGE has formally invited bullion banks such as HSBC, Australia & New Zealand Banking Group (ANZ), Standard Bank, Standard Chartered, and Bank of Nova Scotia to take part in the global trading platform. In a quick spurt of time, the SGE has emerged as the world's biggest physical gold exchange, where domestic banks, miners, and retailers buy and sell gold. They strive to extend to the international platform to foreign brokerages and gold producers. They wish to transition from a member to a power.
The Shanghai Gold Exchange seeks to launch three RMB-denominated physical gold contracts, as in 100 grams (1/10-th kg), 1 kg, and the bigger London good delivery bar 12.5 kg size. The exchange is expected to be launched by 4Q2014. Even if China lures foreign participants, the exchange still must offer full convertibility of the Yuan currency with sufficient liquidity on the exchange. Thus expect it to happen by summer. Currently, the London Gold Fix is the benchmark for spot gold price, while the New York COMEX contract sets the gold futures benchmark price. SGE prices are tracked to gauge Chinese demand as reflected in premiums or discounts to spot rates. China's ICBC (giant bank) was once interested in buying the Deutsche Bank seat on the London Gold Fix, but no longer, which is an indication that London will become irrelevant as new Asian systems are embarked upon. The SGE in Shanghai has become the biggest global physical exchange, with a turnover of 10,000 tons for its immediate and deferred delivery contracts, according to Thomson Reuters GFMS. The Shanghai Futures Exchange ranks second in traded gold futures contracts, although limited to the domestic market. Volumes were 41,176 tons last year, well behind COMEX at 147,083 tons. See the Reuters article (CLICK HERE) and the Bloomberg article (CLICK HERE) and the Zero Hedge article (CLICK HERE).
◄$$$ DISPLAYED GOLD BARS CARRY A POSSIBLE IMPORTANT MESSAGE, REVEALED AS THE NEW 'G' GOLD CURRENCY... THE SYMBOLS MATCH FOR THE SGE AND THE GLOBAL SUMMIT, WHICH INDICATE A POSSIBLE GLOBAL GOLD STANDARD COMING. $$$
The Shanghai Gold Exchange put on display gold bars at the China Intl Exhibition on Financial Banking Technology & Equipment in Beijing in September 2010. Notice the 'G' marking on the gold bar. Compare it to the Global Sustainable Currency Summit last September 2013 in China, with similar letter and bound ornate rings. There might be a message in the symbols. Notice the big capital G with a vertical line through it, much like vertical line on US$ and horizontal line in Yen and Euro and Pound. The new G currency with vertical line thru for new currency symbol, could signify a global standard Gold currency. It could be its new G representation in the new Gold currency. It could become the new BRICS gold backed currency. As Guiseppe fromItaly says, "The Details are in the Fine Print, but in this case, it is more like the Details are on the Gold Stamp." The Euroasian Economic Forum website shows their logo, which matches the stamps on the gold bars. Furthermore, the currency keynotes of the last summit claims the main scope of this gathering was toward "Emission and control of New global currency G by an international board of trustees." See the Eurasian Forum article (CLICK HERE).
Giuseppe added more astute comments that describe the Paradigm Shift behind the scenes. "New currency is coming from a new Euro-Asia coalition. This is a very interesting summit. These are the new players as the new world emerges, common interests combine, and the Rothschilds, Rockefellers and Tri-Lateral planners face a whole new twist of evolution. Looks like the Old World does not want to play the New World games anymore. Nonetheless, the UK will shapeshift out of this mess. UK will have to leave the European Union as is the only way to expand the Empire. They must become an important backbone for Russia, China, and BRICS, which will use London as a Yuan clearing house. London's gold is gone but the City remains the key as the central focal disbursement stage for inter-bank trading profits. Britain cannot go away as UK and Germany will reshape the EU. Now If Britain pulls out, since the most hidden markets are in Euros, they will fail. The entire Global Banking Market will then fail and maybe, just maybe the Euro-Asia platforms can be instituted."
◄$$$ NUMEROUS ADDITIONAL SUPPORTING STORIES PERTAIN TO PHYSICAL GOLD, ITS DEMAND, ITS TRUE TRADING, ITS MOVEMENT... CONSIDER THE TABLE OF SEVERAL IMPORTANT EVENTS AND DEVELOPMENTS REGARDING THE GOLD & SILVER MARKET. $$$
A new law makes Gold & Silver coins legal tender in the state of Oklahoma, doing away with a nonsensical tax. The law puts the precious metals on the same legal footing as stocks and property. Gold & Silver will not be used for paying bills, but rather be available for contractual purposes. Tax consequences were removed on sales, but remain on profits. The framers of the bill stressed that cash in your pocket is not taxed. See the KFOR Channel article (CLICK HERE).
China is accumulating Gold bullion as prelude to introduction of a Gold-backed Yuan currency. They plan to relieve their financial crisis with a clean break from the USD-based system. Ronald-Peter Stoferle of Incrementum AG out in Liechtenstein spoke by interview of stripping the United States of its exorbitant privilege for USDollar usage, abuse, and its related currency hegemony. The US public finances are out of control, while even with reduced usage, the USD still accounts for more than 60% of global foreign exchange reserves. Many countries want to cast off the shackles of the USD, such as China, Russia, India, even Japan, so as to increase the share of trade invoiced in their own currencies. They urgently wish to circumvent the USDollar. This clearly marks a paradigm shift because more than two thirds of all USDollars are held abroad in cash form. Global history shows the series of its dominant currencies, the end soon for the USD, following the British Pound end in 1920. Based upon comments by the Peoples Bank of China, what comes is more gold accumulation leading to a gold-backed Yuan launch. See the King World News article (CLICK HERE).
Putin issued an unusual warning about the urgent need to secure gold reserves for both Russia and China. It came like a murky herald of gold-backed Ruble and Yuan currencies to be launched. The message served as an admonishment never to trust the West on matters of money or storage of gold bars. Some suspect that R&C are working toward more fair financial markets with elaborate new currency and payment platforms. The Jackass suspects precisely such efforts. The two nations must put mechanisms in place in order to protect the value of their gold reserves, in addition to sustain viable functional trade with a return to strong banking system foundations. R&C must establish a gold system, which the Western criminal hives in London andNew York cannot slam the price down at will. See the Futures Magazine article by friend and colleague Mark O'Byrne (CLICK HERE).
March Indian Gold imports rose to the highest level in 10 months. Hefty premiums are paid, plus taxes on top. The customs department DGCIS reported that in March, the official gross gold import accounted for 60 metric tons, up 88% from 32 tonnes in February. Indian law dictated 20% of all gross gold import was bound for export, as per the 80/20 rule. Demand for gold in Indiaworks around the rules easily, by circumventing the official channels via smuggling routes into the country. Koos Jansen provides fine graphs on imports and price premiums,. See the In Gold We Trust article (CLICK HERE). The smuggling routes are active, available, and effective. The World Gold Council estimates that India illegally imported about 200 metric tons of gold last year, a total worth of $9 billion. EuroRaj claims that figure is very conservative, as reality might be double, like 400 tons. The Indian people are very innovative in concealing and moving the gold. The put it under toilet seats on airplanes, in fake consumer batteries, in belt buckles, in seeds of fruit, in underwear, even in human rectums. See the Quartz of India article (CLICK HERE).
Much press was given to Goldman Sachs Asset Mgmt running India's largest gold Exchange Traded Fund. On the one hand, its Indian investors will never see that gold again, as it will be swallowed whole by the London criminal bankers. On the other hand, the fund will go nowhere, since only accepted in trifle amounts. The Indian people are not gullible paper addicts like in the US. The story is a nothing burger. They buy gold, keep it at home, have safe storage for it, display it at weddings, and wear it freely. As EuroRaj admonished, "They have no desire for such funds, when they buy Gold easily and often wear it." He pointed out that a big part of Indian Elite has sold out their country for a full generation, but a big part opposes them, like the new leader. See the Business Standard article (CLICK HERE).
The Saudis are to embark on a mining project to secure half a million gold ounces. One might suspect they are replacing stolen Gold bullion in London. The Saudi Arabian Mining Company (Maaden) is planning to excavate 500,000 oz of gold across the Kingdom, including in Madinah region, as was announced at the Mining Investment Opportunities Forum. They will expand processing facilities as well as exploration functions. Groundwork has been laid with substantial national investments for mining operations in the country. The Kingdom's two enormous industrial mineral complexes testify to this claim, including 600 km of railroad built to carry minerals from the country's northern center to an industrial mineral complex in theArabian Gulf, which can provide the gas and water needed to support the mineral industry. See the Al Arabiya article (CLICK HERE).
Ecuador appears to have wrung its hands and sold out to the bank cabal. The nation has invested 466,000 oz gold (half its reserves) as collateral for a 3-year swap contract. The nation is strapped for cash, and expects to use the funds for economic growth, more like propping the economy. The transfer of 1165 gold bars for $580 million comes on top of Govt attempts to sell about $700 million of bonds this year. It was the nation's first foreign debt sale since it defaulted on $3.2 billion of its notes in 2008 and 2009. Much confusion swirls over the deal involving so-called instruments of high security and liquidity, like where the Gold bars reside. The fools in charge in Quito talked of gold earning no income, with new uses in active participation, straight off a Wall Street brochure. Some observers believe Ecuador has out-witted Goldman Sachs, but doubtful the nation will ever see their gold again. The Correa Admin is also in talks withChina to finance a $10bn refinery in the coastal province of Manta. See the Bloomberg articles (CLICK HERE and HERE) in addition to the Fortune article (CLICK HERE) and Financial Survival article (CLICK HERE). The Jackass smells blackmail, the national gold used probably as bargaining chip so Ecuado does not have any freak induced weather like earthquakes, or a visit from the Langley contingent. Also, no hits to their economy or financial structures. Clearly, Ecuador and Venezuela will never see their gold again, lost to the vultures. In three years, the Gold Standard will have been installed and their gold will be lost in a vast derivative pit.
Chinese Gold demand remains stable at 823 tons year to date, while Shanghai Silver has gone scarce in supply. The Shanghai Gold Exchange withdrawals were steady, at 35.7 metric tons for week ending May 30th, versus 36.4 tons in the previous week. The year to date weekly average is 37.4 tons, whose trajectory points to 1908 tons on annual basis trend. Silver remains scarce inShanghai. The premiums for spot Silver over 6% are reflected in some futures contracts on the SHFE still in backwardation. Physical Silver sold in June can be bought back in December for less money. Silver delivered in June trades over a premium to Silver delivered in December. Normally, precious metals trade in contango, whereby future prices are higher than current spot (to account for carry cost). Koos Jansen gave an update on Chinese gold delivery, and it seems that gold buying is brisk but still lower than it was one year ago. See the In Gold We Trust articles (CLICK HERE and HERE).
## MINING & DRILLING FUTILITY
◄$$$ ESTIMATED BREAK-EVEN PRICE FOR THE 2014 TOP TWELVE PRIMARY SILVER MINERS IS $19.78 IN A CALCULATION, A NICE DROP FROM LAST YEAR... THE BULK OF 1Q2014 PROFIT FOR THE SILVER MINERS WAS DUE TO BY-PRODUCT IN HIGHER VOLUME OVERALL OUTPUT... TWO THIRDS OF THE 12 LEADING SILVER PRODUCERS OPERATE AT NEGATIVE FREE CASH FLOW... THE FUTURE SILVER PRICE AFTER ENDED SUPPRESSION WILL COMPENSATE BY RUNNING HIGHER FASTER TO CRAZY HIGHS, DUE TO RAPID DEPLETION OF THE BEST MINE DEPOSITS. $$$
The primary miners are in a big bad bind. They suffer the corrupt low price for their product in mine output. So the miners cut costs, reduced exploration, cut back on capital expenditures, and temporary shut down marginal projects. Their action is reversal in high gear. The top primary silver miners collectively managed to win a small profit, even though the average price of silver was $20.49 during the 1Q2014. The top mining companies were able to lower their costs during the second half of 2013 and into the first quarter of 2014. The estimated break-even price for the top 12 primary silver miners is now $19.78 per oz, a sizeable $4.27 lower than the average for full year 2013. As a result, the top 12 primary silver miners were able to make $0.53 per ounce on adjusted silver profit during 1Q2014 on an average realized price of $20.31/oz for the group. This is a significant improvement compared to the estimated break-even level of $25.23 during the Q2 and $21.38 during the Q3 of 2013. However, the lower break-even could be a result of closing marginal mines and ravaging their best mines. Their action is destructive to the extreme. More evidence of wrecked assets in the form of mine ore reserves, to parallel the wrecked capital from mothballed projects.
Curiously, the addition of Tahoe Resources to the group in Q1 2014, helped lower the overall average. Tahoe Resources owns the Escobal mine in Guatamala, now the lowest cost producer of the list. The Escobal mine started commercial production in 4Q2013, but ramped up operations during 1Q2014. The Escobal mine produced 4.1 million oz of silver during the first quarter (second highest of the group) at an estimated break-even of $16.08 per oz. By next year, their cost should come down to $15 per oz. What a shame they are ramping up to earn a suppressed price, earning profits for shareholders, but squandering an excellent property to serve the interests of the bank cabal.
An astonishing note on the change from Q1 last year versus this year. Even though total revenues for the group increased $27.7 million from $804.9 million in 1Q2013, up to $832.6 million 1Q2014, it took the additional sales of 5.8 million ounces of silver to do so. Furthermore, by-product revenue increased $105.3 million during the same time period. The strong increase in (non-silver) by-product revenue enabled the mining companies to post a small profit for the quarter. The side metals are usually copper, zinc, and lead. A few big silver mining firms consider gold to be a by-product on the accounting ledger, since ancillary. Rocco pointed out that 8 of the 12 Silver Majors suffered negative Free Cash Flow. It is defined by subtracting capital expenditures and dividends from cash generated on operations. During 1Q2014, the group suffered a net negative $61 million in Free Cash Flow. The primary silver miners are still spending more money on Capex than cash provided from their operations. They will weather the price suppression storm, but with less reserves on the balance sheet. Witness depletion. Rocco doubts any more room exists to lower costs in the future. See the SRS Rocco article (CLICK HERE). For last year see the SRS Rocco article (CLICK HERE). Their equipment is huge, observable from the photo.
The Jackass remarks that the debate about silver industry surplus or deficit is irrelevant as a driving factor in price. It is like the background wall, important but not as critical as a tilted stage on which to stand. At the margin is production cost, the resulting profit margin, required to sustain the industry. If they cannot make a profit, no silver mine output will reach the market.Without sustained profits, a mining firm will fail, and shut down all projects, then sell out to the Chinese. The positive factor is that when the price suppression ends, and price equilibrium is pursued within the market, fewer high margin (low cost) deposits will be at reach, since depleted more rapidly. A higher price would then be required to fetch the desired output with which to meet demand. Such description is of a normal market that seeks equilibrium, not evident today. The mining firms do not have much choice, and must remain in business. They must earn profit for share holders, must service their debt, and besides, their executive teams and engineering staff and field workers enjoy what they do and must earn a living, many to support families.
◄$$$ THE 2013 GLOBAL MINE PROFITS LOWEST IN A DECADE, MARRED BY PROFITS PLUNGE, RESERVES REDUCTION, FALLING MARKET CAPS, DECLINE IN EXPLORATION BUDGET, RISING NET DEBT, AND DEFERRED CAPEX... THE NEWFOUND DOMINANCE OF EMERGING MARKETS IS PROFOUND ON THE PROFIT SIDE AND ON ARRIVAL OF NEW GOLD RESERVES. $$$
The year 2013 was dreadful for the global mining industry. They were forced to realign expectations, to take enormous reserve writedowns, to reduce exploration budgets, to mothball certain projects, and to cancel others. Pushed by the gold price suppresison, mining stocks fell 23% during the year. Coupled with record impairments of $57 billion last year, global mining sector net profits plunged 72% to $20 billion in 2013, a decade low. Gold miners endured another particularly bad year, losing $110bn on market capitalization (stock valuation). Gold reserves fell 8% in 2013 to 431 million ounces, pushed along by acceleration in output, which squandered the best mines. Barrick and Goldcorp were responsible for the reduction by 22 million ounces in reserves as a result of lower factored price. However, the Top Five diversified miners remained stable, at a collective market capitalization of half a $trillion dollars over the past three years.
The changing global mining landscape featured a sharp difference in the collective profits between emerging market mining companies and their developed market counterparts, according to Price Waterhouse Cooper. Last year's net profits from emerging market mining companies totaled $24 billion, compared to an aggregate net loss of $4 billion for developed market companies. The former brought new mines on line, while the latter were affected adversely by impairments to their balance sheets. A change in the wind is evident. Wealth engines have moved East. Emerging markets also accounted for 60% to 80% of the new reserves added globally during the past ten years ending 2013. Their arrival is not without risk due to the relative differences in political, legal, and business practices.
Budgets took huge hits too. Exploration spending was down more than 30% in 2013, and capital expenditures are expected to decline by more than 10% this year. Net debt increased 42% during 2013 as miners extended their repayment periods. Cost saving initiatives will become more critical this year, as operating costs were up 4% in 2013. Their Free Cash Flow entered into negative territory for the first time, according to the PwC kept Mine series. Deferred Capex expenditure was commonplace. This year's projected Capex for the 40 major mining companies surveyed by PwC came to a total of $116 billion, down 11% from 2013. See the Mine Web article (CLICK HERE). The entire industry is at risk of being acquired with narcotics funds by the bank cabal, a point found nowhere in any analyst work.
◄$$$ NEVADA MINING PROCEEDS RESULTED IN A 77% DECLINE IN NET TAX REVENUE FOR THE STATE... A DEFICIT OF $70 MILLION WAS GENERATED IN THE STATE GENERAL FUND. $$$
The biggest mining state, the one with the largest total projects, largest output, and largest work force is by far Nevada. Its mine output almost equals the rest of the US nation combined. The state is stacked with mining firm offices and projects. Lower gold prices, higher mining costs, and declines in output hit Nevada's gold mines hard in recent months. Consequently, a $70 million deficit was generating in the Nevada state general fund. The state's mining industry was projected to generate $93.4 million in net proceeds tax revenue this year, but net proceeds have arrived at only $21.3 million in FY2014-15, a whopping 77% shortfall. The state might stumble along, but rural Nevada counties, school & hospital districts, and other local governments will surely have a hard time coping. The Nevada Dept of Taxation projected that the rural counties can expect only $26.5 million in net proceeds revenue in FY2014-15. In 2013, counties earned $88 million from net proceeds. See the Mine Web article (CLICK HERE).
◄$$$ CHINA NATIONAL GOLD IS IN TALKS WITH BARRICK CONCERNING POTENTIAL PARTNERSHIPS... BARRICK IS CASH STARVED, AND CHINA SEEKS PRECIOUS METAL SUPPLY... MEANWHILE BACK HOME, CHINA HAS TWO NEW GOLD MINE VENTURES IN CENTRAL ASIA THAT HOST 3 MOZ GOLD IN POTENTIAL. $$$
China National Gold Group Corp is in the hunt for acquisitions and partnerships. The mining industry is gradually realizing that the big state-owned Chinese mining conglomerates are to become the kingmaker in the beleaguered industry. They will scour the world for firms to acquire, and lock in the output, even while cutting deals to secure output of the North American firms at a better price than the corrupt COMEX and Wall Street crime centers offer. Executive Xin Song of the giant gold firm revealed ongoing talks concerning potential partnerships with Barrick Gold Corp. The implication is capital stakes for the cash starved mining firm, steeped in gold market corruption, whose roots extend to finance centers and government offices, not to engineering expertise houses. The Chinese firm searches for opportunities in gold, silver, and copper supply lines. The Chinese company has current preference for assets in countries nearChina, such as Mongolia, Russia, and in central Asia. It also is looking for acquisitions in developed countries such as Canada, Australia, and the United States. A third option is in developing countries, including in Africa and South America. He stressed that the political situation has to be stable for their investment. That rules out Venezuela and maybe Argentina. See the Wall Street Journal article (CLICK HERE).
Chinese companies are in progress, developing gold mine projects in Central Asian nations of Kyrgyzstan and Tajikistan. On June 12th, Yantai Yuancheng Gold Co Ltd said they signed a strategic agreement with partners to increase investment in a gold mine project in Tajikistan. More details will follow. On April 3rd, the China Gold Assn published an article about cooperation between Zijin Mining Group and Kyrgyzaltyn. The project is the Taldybulak Levoberezhny Gold Mine in Kyrgyzstan. From the website of Zijin Mining Group, information is disclosed that the Chinese giant has bought a 60% stake in the Taldy-Lev mining project. The mine was to be fullly operational early this year. According to the Kirghizia National Reserves Committee, its resources at two levels are 2.078 million ounces of gold metal at average grade of 7.23 gm per ton, while C1-level reserves ore is 4,949,754 tons with 1.117 million ounces of gold metal at average grade of 7.02 gm per ton. These are great yields. See the InGoldWeTrust article (CLICK HERE) and the Zijin website (CLICK HERE).
◄$$$ THE SOUTH AFRICAN GOLD MINING SITUATION INDICATES THE END GAME IS NEAR... OUTPUT IS DOWN EVERY YEAR... SUPPLY IS NOT ELASTIC VERSUS PRICE... THE PLATINUM STRIKE HAS BEEN PAINFUL, AS WORKER DEMANDS ARE FOCUSED ON RISING WAGES TIED TO INFLATION (SEE USFED POLICY). $$$
The future of gold mining in South Africa will feature decline in production. Output is at a 109-year low, at 167 tons in 2012. Peru overtook SAfrica at that point in the global ranking. The national output has been on a linear decline, an exact linear path, with the exception of the 2012 strike and its disruption. The pattern disproves the theory of elasticity, which the Jackass disposed of in 2004 and 2005 on both the demand & supply side. Higher price yields greater demand, but lower output. Inelasticity rules on both sides of the equation. Inelastic supply (forecasted in 2005) has taken the industry and analyst community by surprise. But reduced cash from hedge book accidents, worker strikes, high cost production, sudden demands for higher royalty, and government confiscations have hurt output volume significantly, as forecasted.
Since year 2001, no rise has come to SAfrican mine output in a great surprise. The reasons are many, from increasingly difficult and deeper deposits, from more safety measures after accidents, from pay-related worker strikes, from nationalization, from the Marxist morons damaging the electric grid, from idiotic Marxist policy to hike taxes on the mine sector. Welcome to a non-linear world, where even more surprises are in store for strong discontinuities. Once dominant, the global producer SAfrica expects to shut down the once giant Witwatersrand deposit in 2019. The trend of reducing capital expenditure is the death knell. Saved cash flow on the short end guarantees the end on the long side. The Jackass expects the Chinese to convert the mine into a prison worker colony. See the Mine Web article (CLICK HERE).
To end the platinum strike in the Union of South Africa, a final deal could arrive any day. The situation seems intransigent and unrelenting. In its fifth month, the strike has taken out 40% of global platinum production, at a time when Russian output is out of bounds. The AMCU union of mine workers handed a list of demands to Amplats, Implats, and Lonmin which went beyond what leader Joseph Mathunjwa had delivered earlier. Wage demands involve linkage to price inflation, a feedback loop from the USFed itself (higher food & fuel prices) to interrupt directly the elasticity dynamic. The employers had offered pay increases of up to 10%, quickly rejected. The workers halted work in January, demanding their wages be doubled to R12,500 per month basic wage in four years. The companies balked, citing rising production costs.
Lonmin risks running out of cash, as platinum output in South Africa is at a standstill. It is the smallest and weakest of the big three. It will require a funds injection, drawn on to cover costs, not capitalization. Some analysts believe Lonmin could fail as a firm suddenly, since it has no other mine operations to offset the strike center. CEO Ben Magara said last month the London-listed company was losing cash at a rate of $60 million per month. At the end March, it had net cash of only $71 million, compared with $194 million a year ago. It went from the strongest firm among the three before the strike, to one where its balance sheet is degrading the most rapidly. Its credit facilities are largely exhausted. The extended worker strike is estimated to have cost the three companies ZAR 21.7 billion in lost revenue and cost the employees over ZAR 9.0 billion in wages.
Suddenly in mid-June, platinum miners reached a tentative deal with with Lonmin. Peers Anglo American Platinum Ltd and Impala Platinum Holding Ltd have received the same in principle undertakings. The South African mine worker union next votes on the tentative pact. Lonmin is anxious to have workers return, which they promised would be in safe conditions. The strikes extended over 22 weeks, crippling the sector with a significant harmful effect on the SAfrican Economy. See the Mine Web article (CLICK HERE) and the Fin24 article (CLICK HERE) and the Kitco article (CLICK HERE).
◄$$$ SHALE BOOM BUST REALITY... NO NATIONAL PROGRAM VISIBLE HERE, JUST MORE OBAMA HOT AIR AND GRAND DECEPTIONS LACED WITH FANTASY... A GRAND SHAKEOUT COMES AS REALITY HITS. $$$
The US-based shale patch is facing a shakeout, as drillers struggle to keep pace with the heavy ongoing spending needed to pull oil & gas from deep underground. Shale company debt has almost doubled over the last four years, while revenue has gained just 5.6%, according to a Bloomberg News analysis of 61 shale drillers. They are loaded with debt. A dozen of those wildcatters are spending at least 10% of their sales on interest compared with Exxon Mobil at 0.1 percent. The shale companies are financially stressed to the limit. Many will perish, and soon, since their output is limited and short-lived. The reserves are grossly exaggerated. The reserves have been and will continue to be written down on a regular basis, just like Monterey did last month in a 96% reduction. Reality strikes.
Drillers are caught in a bind. They must keep borrowing to pay for exploration needed to offset the steep production declines typical of shale wells. At the same time, investors have been pushing companies to cut back. Spending tumbled at 26 of the 61 firms examined. For companies that cannot afford to continue drilling, less oil output translates to less money as income, which accelerates the financial tailspin. This is a quick death process, like the life of a moth. Yet the Obama Admin like total morons, without much of any business experience, set a course that supposedly will not only generate energy independence, but also enable grandiose supply of Europe after Russian gas is cut off. These are corrupt evil sadistic incompetent dangerous violent morons. See the Bloomberg article (CLICK HERE) for details of several companies under great distress. Next comes the RESET process, where the US loses its fairy tale energy story.
## USECONOMY IN FREE FALL
◄$$$ THE USECONOMY HAS BEEN RAVAGED... IT IS COLLAPSING FROM UNSOUND MONEY, THE (QE) BOND MONETIZATION, OUTSOURCED INDUSTRY, WALL STREETFRAUD, AND ENDLESS WAR... WITNESS SYSTEMIC FAILURE AND THE DEATH OF AN ENTIRE ECONOMY. $$$
The everpresent blemishes are seen in rising food prices, rising insurance premiums, rising labor costs, falling housing prices, shutdowns in retail centers, and a rise in large company job cuts, even bloated Food Stamp rolls. Such is the bountiful fruit of four years of near 0% interest rates and three years of unsterilized bond monetization. The banking and political puppets in tow have called it all stimulus. The Jackass has called it a wet blanket with colossal capital destruction. They are wrong, the Jackass correct, but Americans are the losers. In fact, they are fast losing their nation. They have been lied to, exploited, and conned with the QE bond purchase programs, which are better described as a Wall Street backdoor bailout. The USEconomy is collapsing under capital ruin and lost viability, due in large part to absent industry. It is dying a horrible death. It desperately needs the Gold Standard, not more QE4 or a new war. The USGovt already considered counting fast food as manufacturing. They should consider what England and Italy have done, to count prostitution and narcotics in their GDP calculation. Anything to make the targets. See the CBS News article (CLICK HERE).
The death spiral is characterized by free fall in consumer demand. Recall the business model of consumption rather than business investment for the last 20 years. The unequivocally dreadful news came from the likes of Wal-Mart, Target, Sears, KMart, JCPenney, Kohls, Costco, Staples, The Gap, Ann Taylor, American Eagle, Aeropostale, Best Buy, Macy's, Dollar General, Urban Outfitters, McDonalds, Darden Restaurants, TJX, Dick's, Home Depot, and Lowes. John Williams at Shadow Govt Statistics predicts that by July 30th, the second quarter will verify that theUnited States has entered another recession, officially defined as two consecutive negative growth quarters. See the Burning Platform article (CLICK HERE) for a staggering frightening list of retail chain woes, marred by deep losses and store shutdowns. America is going out of business, but leaders still call it a very sluggish Recovery. Truth in reporting has been outlawed.
The solution can be found on a different plane. The Gold Standard coincides with economic recovery and national interests. To be sure, tribal warfare has been part of humankind for centuries, and various elite groups have harnessed mankind for centuries, conjuring up conflicts and cold wars. Citizens have become mere subjects and serfs, for war and debt, slavery both. The constant lies pertain mainly to price inflation and job growth, along with the bolstered stimulus from heretical monetary policy. The proof of policy failure is seen easily in the falling Money Velocity, recently having fallen to record lows. If QE were a success, it would show up in faster money movement in cycles. This topic has been covered in past Hat Trick Letter reports. To add insult to injury, the business sector vitals have fallen badly. While labor costs rose by 5.7%, unit productivity fell by 3.2% (for Q1 annualized) to compound the problems. Witness the profit pinch cited by the Jackass ad nauseum about destroyed and retired capital effect from QE. See the update in the Economic Collapse article by Michael Synder (CLICK HERE) and the Money News report (CLICK HERE).
◄$$$ HARDSHIP IS BROAD AND DEEP IN THE HOUSING MARKET AND HOUSEHOLD SITUATION... PRICES ARE FALLING AGAIN, AND FORECLOSURES ARE RISING AGAIN... NOTHING LIQUIDATED, NOTHING SOLVED, ONLY EXPLOIT... HOLDING A HOME IS HARDER WHEN LOSING A JOB. $$$
Half of Americans struggle mightily to afford their own homes, making key sacrifices in order to remain in a house. Hart Research Associates estimated that 52% of Americans had to make at least one major sacrifice in order to cover their rent or mortgage over the last three years. These sacrifices include taking a second job, deferring saving for retirement, cutting back on health care, running up credit card debt, moving to a less safe neighborhood, or moving to one with worse schools. See the Market Watch article (CLICK HERE). The US housing market has once more hit the skids, the downturn evident in the national data. The claimed recovery was spotty and driven by private equity firms. Home prices are on the decline, only buffeted by private equity firms out of Wall Street attempting to make predatory investments, buying 100 homes at a time using hidden agents in sweet deals, taking on huge landlord problems. It backfired, as forecasted. See the Before Its News article (CLICK HERE).
Foreclosures have returned in force in California, with a renewed crisis. Nothing is ever fixed, since no big banks are never liquidated, nor their extensive portfolios of homes ever liquidated. The festering wound continues to fester. See the Russia Today article (CLICK HERE). Challenger, Gray & Christmas disclosed that announced job cuts at large corporations soared by 45.5% year-over-year in May, the biggest annual rise in nine months. More worrisome is the actual 53 thousand furlough layoffs in May, the highest since February 2013. No recovery in sight, just demagoguery and deceptions. Further collapse comes in accelerated manner next.
Thanks to the following for charts StockCharts, Financial Times, UK Independent, Wall Street Journal, Zero Hedge, Business Insider, Calculated Risk, Shadow Govt Statistics, Market Watch, and more.