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

* Intro Monetary Fragments
* Ukraine Aid & Gazprom Effects
* Eurasian Trade Zone Development
* Central Banks Lost Control
* Banks Wobble as Crime Scene
 


HAT TRICK LETTER
Issue #122

Jim Willie CB, 
“the Golden Jackass”

18 May 2014

Kentucky Derby and Preakness: It was heart warming to see California Chrome win, a plebeian colt who cost only $10k. Apparently during the foaling process, the mare who gave birth to the winning horse received a huge amount of medication due to complications. The tiny colt was the legal beneficiary of the treatment's pronounced effect, making a tough horse with endurance. Yesterday California Chrome won the second leg of the triple crown, being within reach of the lead again during the entire race. See the YouTube video for the Kentucky Derby race (CLICK HERE) and Preakness race (CLICK HERE), which strangely still give the Jackass goosebumps. The triple crown races are a true spectacle.


EDITOR NOTE: The Hat Trick Letter reports are direct responses to events in progress and developments underway. They are a Bottom-Up work that permits chapters to built via coalescence, forming chapters with headings that evolve. The editor role does not dictate what is happening, rather to provide interpretation and assessment with forecasts. The public articles are the opposite, each a Top-Down effort with a certain topic in mind to expound upon, using supporting evidence and arguments underneath the directed theme. Clearly the HTLetter reports are increasingly devoted to Ukraine conflict, NATO pressures, and Eurasian Trade Zone developments during the demise of the Petro-Dollar with the painful end to the USDollar global reserve currency status.

SPECIAL REPORT PREVIEW: The reports are not wartime military document updates. For this reason, a Special Report has been assembled on war concepts and the rise of the Eastern Military front with vital European support. It is entitled "NATO Split & Russian Arms Deals" for May publication. The focus will continue on financial and economic fronts where the global monetary war is fought. The military buildup directly indicates a commercial, and therefore financial alliance between China and Europe which will assure the removal of the USDollar as global reserve currency, and isolate the United States beyond description. Many are the important weapons deals and diesel engine supply lines to Russia and China. The USGovt introduced the military element in currency defense. The European alliance is just the unforeseen backlash to tear the USDollar asunder. The evil cabal seeks to preserve power within the cratering toxic paper currency regimes, while the Global Paradigm Shift works toward a return of the Gold Standard, as solution to the enduring global financial crisis. The solution comes from the East, as the abuse, fraud, heresy, and belligerence comes from the West.

QUOTES ON MONEY

"Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to, and you have found out the exact measure of injustice and wrong which will be imposed upon them. These will continue till they are resisted with either words or blows, or both. The limits of tyrants are prescribed by the endurance of those whom they oppress." ~ Frederick Douglass (abolitionist orator, anti-slavery, 19th Century)

"The Chinese are reading about how the Fed is printing money. They go and buy Gold. There are knock-on effects all over the world, and portfolios are shifting based on perceptions. It is not so easy for a central bank to create inflation, or you would think one of these guys would have succeeded. People act like you have to be careful because one false move on inflation expectations and Bang, you have hyper-inflation. If you know what that false move is, tell Janet Yellen [the current Fed chief], because she is trying hard to find it." ~ Warren Mosler (economist and former hedge fund manager)

"Ukraine's rapidly worsening social, economic, and political problems resulting from the lack of effective government could lead to massive strikes that would paralyze the economy. The junta's flagrant acts of violence could turn Ukrainians against it and finally break the West's information blockade on reporting their crimes. EU support for Washington's pro-Kiev policy allows Ukraine's interim government to continue its policy of violence against pro-Russian protesters. But there is a growing public opinion backlash in a number of EU countries against Washington's extremist politics. Hope remains that more European politicians will listen to their constituencies and require the EU to adopt a more balanced policy. Putin is trying to buy time, but his basic peace plan for Ukraine remains unchanged. He wants Kiev to end its military campaign against its own citizens, withdraw the Army to its bases, disarm the neo-fascist gangs that have been legalized under the guise of the National Guard, and to amend the Constitution to put the Russian language on equal footing with Ukrainian as a means for ending discrimination against Ukraine's Russian-speaking citizens, who constitute 65 percent of the population, not counting Crimea." ~ Sergei Markov (Moscow Times)

"My instinct tells me Cyprus is to create a financial firewall against Russia (where they convert USTBonds to Gold bullion), Ukraine is to create a commercial and land-based firewall against Russia (where Gazprom pipelines supply the vast Western European market), and Syria is to create a sea-based firewall against Russia (where Iran Gas pipelines can join the Gazprom grid)." ~ Jackass

"This view that interest rates trigger an effective transmission mechanism is one of the Great Faults in monetary management committed during the Great Recession. The reality is that the level of interest rates affects the economy mildly and in an ambiguous way. To state that monetary policy is powerful is an unsubstantiated claim." ~ Andrea Terzi (Professor at Franklin Univ, who also questions the entire premise that the Wealth Effect of higher stock and property prices actually promotes a rise in business investment)

"I got to ask him all these questions that had been on my mind for a long time. It was sort of frightening because the answers were not better than I thought they would be. Not that I think there will be hyper-inflation, but how do you get to 100 percent certainty about anything? Why can't you be 99 percent certain?" ~ David Einhorn (manager of the $10 billion Greenlight Capital fund, during an interview with Bloomberg Financial News, making reference to a March 26th dinner with Bernanke, where Einhorn expressed the viewpoint that low rates become more harmful over time, but Bernanke countered that he was 100% certain there would be no hyper-inflation, overlooking the extreme effect of capital destruction)

"Extreme acceleration of events is underway. Behind the scenes, important hidden developments on new trade payment systems are coming together, which are led by Russia & China. The Saudis are ending the Petro-Dollar, the US divorce final, with full support being turned to China. The USDollar is fast losing its entire foundation as global reserve currency, and in the fast lane for losing its trade settlement status. It is game over for the USDollar. In the next couple years, the United States will begin importing price inflation after four decades of its export. For a glimpse of what comes to the US with respect to chaos, look at Venezuela. Events are occurring in hyper-speed on global rejection of the USD and installation of the Gold Standard. The US will kick and scream to the end in resistance. The nation and its leaders do not want a solution." ~ Jackass

## INTRO MONETARY FRAGMENTS

◄$$$ RUSSIA HAS BEGUN MOVING GAZPROM BANK ASSETS HOME... FUNDS ARE NOT SAFE IN BELGIUM OR LUXEMBOURG... THE SANCTIONS WILL BE AVERTED AND FORCE A GRAND BACKLASH AGAINST THE UNITED STATES (TRUE AGGRESSOR). $$$

The attack on Russian banks will not be permitted by the Kremlin. Russia's third largest bank has moved some big money from Europe back home to Moscow. It will find safe refuge from the grubby EU paws, or US predator mitts. Gazprombank transferred client funds out of Belgium and Luxembourg locations, back to safer Russian turf, in order to protect against any future sanctions. The securities were moved from Euroclear Bank (in Brussels) and from Clearstream Banking (in Luxembourg) to the Russian Central Depository at the end of April. The bank moved nearly $7 billion to the Russian Central Bank for safe keeping. Any subsequent sanctions and seizures have been circumvented. No client funds will be permitted frozen. Unlike the USFed, which holds printed money swapped into toxic USTreasury Bonds, the Russian Central Bank as of April 1st holds $486 billion in FOREX reserves this year. The reserves are from export trade and actual production output, not the printing press and Weimar output. The Russian reserves are actually $40bn less than one year earlier, when holdings stood at about $528bn.

The last round of US sanctions included 17 companies on the lists, but omitted the giant Gazprombank and Vnesheconombank (VEB) as targets. Both banks are state-owned lending institutions. In March, the US imposed sanctions on Bank Rossiya and its owner, Yury Kovalchuk. The Bank Rossiya has total assets are $110.5 billion (=3.9 trillion rubles), with a sizeable stake in Gazprom subsidiaries. The bank is 49.6% owned by a Gazfond (Gazprom affiliated pension fund), 35.5% owned by Gazprom OAO (the giant natgas firm), and 10.2% owned by VEB (Russian state development bank). Bank customers will still be able to make transactions with other securities that were previously stored in the European banks. See the Russia Today article (CLICK HERE).

◄$$$ GAZPROM HAS BEEN THE TARGET OF THREE STRAIGHT ATTACKS, THE FIRST TWO INDIRECT (AS PRESENTED)... THE THIRD ATTACK WAS DIRECT, BUT WITH A TWIST TO LAY BLAME ON RUSSIA USING BLATANT PROPAGANDA. $$$

The USGovt game of sanctions has produced uniformly negative results for the Western nations in the last three years, yet they continue unabated in a highly destructive manner. Bear in mind the three steps in escalated commercial attacks on Russia. First, the Cyprus actions were a massive hidden attack on Russian banks, in particular on Gazprombank. The process was halted, but really only diverted. The Russians were using the Cyprus banks to convert USTreasury Bonds to Gold bullion. The Russian central bank has long used Cyprus banks as conduit to the entire Western banking system. The USGovt clown show did not want any press story of interrupting Russian gold conversion. So a diversionary double pronged story was told on bank confiscations. Nowhere in the world have any bail-ins taken place, although the threat looms. Second, the Syria war front was created in order to obstruct progress with the Iran Gas Pipelines. They will eventually connect to the Gazprom network, in service to the European market. Consider it a monopoly in formation to the European market, which curiously Israel has joined. Their Floating Tamar Platform also joins the Gazprom network for European service.

Fast forward to the present. Third, the Ukraine attack by the West with mercenaries staging a coup d'etat (blamed comically on Russia) was a direct assault on Gazprom, in order to control its pipelines that direct natgas flow to Europe. But Russia has busily been building alternate routes north and south, as well as LNG facilities. Next, the entire European continent will conform to the Russian will, and later enlist in the Eurasian Trade Zone, so as to avoid isolation, after thoroughly witnessing the rape and pillage of Ukraine by the Western entities. The United States will be isolated like a grand pariah, avowed fascist aggressors, vile bank thieves, that features land plunder. The quarantine will push the US into the Third World, after forcing the nation into launching a new Scheiss Dollar. The new domestic currency will lead to staggering imported price inflation, painful supply shortages, and outright violence at certain centers (supermarkets, gas stations, ATM machines). Almost all USGovt foreign policy and war activity in recent years has resulted in colossal backlash and failure. Yet it continues.

◄$$$ LITTLE HEADWAY ON THE HOKEY OBAMA TRADE ZONE DEAL IN ASIA, AS THE TRANS-PACIFIC PARTNERSHIP IS DYING A SLOW DEATH... THE ONLY NOTABLE SUCCESS ON THE ASIAN TRIP BY OBAMA WAS SECURING THE PHILIPPINES AS A MILITARY BASE... ANY PIVOT IS FROM BEING DISMISSED AND SENT HOME BY ASIA, WHICH IS BANDING WITH CHINA IN THE FORMATION OF THE EURASIAN TRADE ZONE... THE TPP PACT HAS DEEP FLAWS ON THE LABOR STANDARDS, ON THE ENVIRONMENTAL PROTECTION, ON WEBSITE CONTENT REMOVAL, ON ABSENT TRANSPARENCY, AND ON AGGRESSIVE FAST TRACK METHODS... THE TPP IS A FASCIST TREE TO DIE WITHOUT SUPPORT FROM SUNSHINE OR WATER. $$$

Little headway was made on the awkward aggressive Trans-Pacific Partnership (TPP) free trade pact with Pacific Rim nations and South American nations, but not with China. Excluding China from any trade zone deal is lunatic and beyond short-sighted. During his trip to Asia, President Obama was unable to resolve differences with Japan over the TPP, due to numerous snags. Even in WashingtonDC, the president faces growing opposition to the ambitious trade deal within the USCongress. It is flawed beyond description. The TPP would deepen integration among 12 economies in the Americas and Asia, covering 40% of the world's economic output and 26% of its total trade. The free trade negotiations currently include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. Notice the inclusion of very minor nations, and the absence of larger nations like China and South Korea. The powerhouses Japan and SKorea are already working vigorously behind the scenes with Russia on energy pipeline projects. The Trans-Pacific Partnership aims to agree on labor standards, environment protection, and intellectual property. However, the strongarm approach with almost zero transparency in the negotiation process, and the heavy corporate lobby interest, have probably doomed the TPP. The Obama Admin is attempting to fast track the TPP approval, limiting debate, while obstructing any attempt at transparency. Doing so is as stupid as omitting China in the array of nations.

Devil in the details, as always. The World Wildlife Fund has criticized the draft for not containing a binding mechanism, which would impose sanctions against a violator for failing to carry out the tribunal's action plan. Civil liberties groups have criticized the TPP's intellectual property chapter. The draft chapter would expand and entrench the US notice-and-takedown system, under which copyright holders can inform intermediary sites such as Facebook, Google, YouTube that their content is being used without their permission. Accounts could be terminated and content blocked without a court order, as in fascist systems. In some cases, political and educational content could be removed, but which is generally protected by fair-use doctrine. The TPP provisions would create and bolster corporate information monopolies, as in fascist systems. It is impossible to know what will ultimately be in the final TPP deal, due to the near total lack of transparency in the negotiations. In the United States, only members of Congress and some trade union representatives have access to the TPP texts, which effectively leave the broader public in the dark. To demand Fast Track approval without debate seems fascist on its face, and severely undemocratic.

The Pivot to Asia is more of a dismissal by the more powerful Asian nations, who tend not to support the TPP pact. The Tokyo officials prefer to keep their Eurasian TZ work quiet. Expect the TPP to mirror the same degree of success as the Affordable Health Care on the domestic front. The intention is to realign the USMilitary with changing Pacific Rim realities, and to re-orient the USEconomy with the fast growing Emerging Markets. Yet the list of nations omits all the BRICS nations, which are leading their own parade in the opposite direction to the USDollar. In the Jackass view, the TPP is going down for the count from lack of critical mass and absent support by Japan and SKorea, the end around approach to evade BRICS critical mass truly empty of strategy. It will die from neglect and backwater irrelevance, rather than being actively placed in the rubbish bin. See the German DW article (CLICK HERE).

After being rebuffed in both Japan and South Korea, but with meaningless positive strokes received in the many small player nations, Team Obama met with some success in the Philippines. The US President could not reach an oral agreement from Japanese Prime Minister Shinzo Abe on a way for Japan to lower tariffs against certain US imports, a key setback in making the trade pact a reality. But the success was on the military front only. Obama will return home with almost nothing to show for the trade zone pact, only a broader military base in the Pacific Ocean. The military angle is the highest priority for fascist states anyway.

In the Philippines, the two countries signed a defense cooperation agreement that will give the United States military access to a former American colony that two decades ago ordered the United States out. The fabricated pair of devastating hurricanes in recent months by HAARP devices achieved the purpose, easily documented from tell-tale microwave evidence (which never appear in natural storm centers). The Philipino leaders gave the USGovt whatever it wanted. US and Philippines officials signed the defense pact, which was negotiated over eight months. It gives USMilitary greater access to the archipelago than they have had since the US Naval base at Subic Bay was closed in 1992, a useful feature in defending against the fast encroaching Chinese Navy. Neither progress nor breakthrough was won on a trade liberalization agreement called the Trans-Pacific Partnership. It is a deeply flawed TPP being sold and pitched, which would give incredible power to corporations. See the McClatchy article (CLICK HERE). Consider the doomed trade pact a Fascism Business Model planted tree. Expect no Asian sunshine on the TPP tree, only HAARP induced rainfall.

◄$$$ NSA HAS CLASSIFIED INFORMATION ABOUT FLIGHT MH370 INVESTIGATION... BEST INDICATION IT WAS A BUSH FAMILY OPERATION WITH HIGH LEVEL MOTIVES, WHERE THE PLANE WAS TAKEN TO THE USMILITARY BASE ON DIEGO GARCIA IN THE INDIAN OCEAN, USING A REMOTE CONTROL DEVICE SIMILAR TO THE RAYTHEON TOOL USED ON 911 FOR THE WORLD TRADE CENTER (GUIDING EMPTY PLANES)... THE RESULT WAS TO GAIN COPYRIGHT ADVANTAGES AND TO PREVENT TECHNOLOGY FROM ENDING UP IN CHINESE HANDS. $$$

The National Security Agency has classified information about Malaysian Airlines Flight MH370, thus out of reach. Some important facts and details are being concealed. No need should arise to keep the actual investigation secret. It is unclear why it is an NSA matter anyway, a missing commercial airliner suddenly a national security issue. The public is not even told why the flight data is classified. Usually it means deep criminal motive and syndicate activity. In true fascist contradiction, the story was endlessly reported and displayed on CNN and every news network, down to painful details and family misery in a constant drone blather. Yet when the NSA shut the door and classified the event as high priority, the news networks including CNN did not report the story of the infamous NSA classifying all data in secrecy. Doing so would be a story in itself, not to be discussed. One should leave with an impression that the Malaysian commercial aircraft was involved in some specific way with the United States and its security agency objectives, probably in key technology transfer. Having the event classified contradicts the premise of a simple missing commercial flight of unfortunate consequence and no US upper level involvement. The Jackass perception is stated up front. See the Common Sense Conspiracy article (CLICK HERE).

◄$$$ MONSANTO BOUGHT BLACKWATER, NOW CALLED XE SERVICES, BASIC MERCENARIES AND MURDER FOR HIRE... THEY ARE ACTIVE IN UKRAINE, JUST LIKE IN IRAQ, SYRIA, AND AFRICA, SPREADING FREEDOM AND LIBERTY THROUGH DEATH AND DESTRUCTION... THE FASCIST INDUSTRIAL COMPLEX IS EXPANDING AT A TREMENDOUS RATE, UNDER THE BLIND AMERICAN PUBLIC EYE IN THE DEEP SHADOWS.  $$$

A report by Jeremy Scahill in "The Nation" revealed that the largest mercenary army in the world, Blackwater (later called Xe Services and more recently Academi) was sold to the multi-national firm Monsanto. It should be called Odessa Redux, after the Nazi German war machine that became a private weapons dealer firm after World War II. Permit me to continue calling it Blackwater, so as to link it to past smears on its name. The elite firm engages in clandestine intelligence services related to murder and mayhem. The name changed in 2009 after wretched attention was given it for civilian massacres abuses in Iraq, including helicopter contests in shooting civilians. It remains the largest private contractor of the USDept State for security services in the form fascist state terrorism. Many military and former CIA officers work for Blackwater and the renamed related companies. They sell their nefarious services, ranging from intelligence to infiltration, political lobbying, and para-military training. Clients tend to be other governments, investment banks, and multi-national corporations. They can be seen as a militarized side of Halliburton, which operates commercial sabotage and nefarious projects like the Gulf of Mexico ruin.

According to Scahill, the Blackwater business connections are with Monsanto, Chevron, Barclays, and in Europe with Deutsche Bank (being dismantled, sure to reveal more scum). Blackstone operates from the Total Intelligence Solutions & Terrorism Research Center. Erik Prince and Cofer Black are the kings of these death merchants, like mafia dons. When contacted, Monsanto admitted to hiring Total Intelligence in 2008 and 2009, in order to track public disclosure of its opponents. The relationship goes much deeper. They are more like Monsanto's intelligence arm, which has a history in the science of death, toward production of toxic poisons from Agent Orange to PCBs (polychlorinated biphenyls), pesticides, active hormones, and genetically modified seeds. Lately it has worked on genetic positioning for virus acceptance and control mechanisms, like chromosome receptors. They are like agriculture's answer to Mengele.

The Gates Foundation has been effectively exposed, owner of 500,000 shares of Monsanto. The mask of philanthropy has been revealed as a cover for death merchants. It is a marriage between two truly brutal monopolies in the history of industrialism. Bill Gates controls more than 90% of the market share of proprietary computing (PC operating systems via Microsoft) and Monsanto owns about 90% of the global transgenic seed market as well as most global commercial seed. No market competition exists in the supposed capitalist USEconomy. Altruism is nowhere with the Gates Foundation, while market dominance and death is everpresent. My contact Cato informed me in 2011 that Gates funded a virus program to kill multitudes in Africa. It was a special virus that entered the human system through the sweat glands, and was responsible for killing several hundred thousand people already. The sweat gland virus project was the Gates project used for admission to the elite cabal.

Fundings from the Gates Foundation finance projects as destructive as geo-engineering on a global scale or replacement of natural community medicines for high-tech patented medicines in the poorest areas of the world. The Gates Foundation for death has board members from the USGovt cabinet. Like Monsanto, Gates is also engaged in trying to destroy rural farming worldwide, mainly through the Alliance for a Green Revolution in Africa known as AGRA. It works as a Trojan horse to deprive poor African farmers of their traditional seeds, replacing them with the seeds of their companies first, finally by the genetically modified type. Monsanto fosters a seed dependence. As footnote, William Gates Sr is a ranking member of the Masons. His son outshined him in the global genocide campaign, making dad proud.

Blackwater, Monsanto, and Gates are three sides of the same death merchant machinery. The mainstream media defended the Monsanto acquisition of Blackwater as a hoax, in keeping with the media network propaganda in service to the cabal. The acquisition was done by private investors via private equity companies, but easily detected. The groups are not compelled to divulge details of their dealings. Bank of America provided much of the $200 million in financing for the deal. USTC Holdings is an investor consortium led by private equity firms Forte Capital Advisors and Manhattan Partners. To be sure, Forte Capital Advisors is the baby of long-time Blackwater ally Jason De Yonker, whose unique experience with the company dates back to its founding in the late 1990s. He had a key hand in original development, expansion of training facilities, and its initial training contracts with USGovt security agencies (made under no-bid basis). See the Counter Current News article (CLICK HERE). Witness the expansion of a sprawling mercenary American Gestapo with corporate reach and objective. My guess is 98% of the population do not know who Brzezinski and Kissinger are, the principals to the global spread of fascism under the Rockefeller aegis. The article was taken 75% verbatim, with my interjected comments.

◄$$$ THE BACKLASH COMES FROM RUSSIA ON MONSANTO SEEDED SUBTERFUGE AND NEFARIOUS PROJECTS... THE RUSSIAN PARLIAMENT IS TRYING TO TREAT THE GMO SEEDS AS TERRORIST ACTIVITY. $$$

In Russia, the Duma Parliament is pushing legislation to make GMO producers punished as terrorists, within legal statutes. The Genetically Modified Organism food products are highly controversial. The Duma contends that harm to human life forms and to the environment are not to be tolerated, requiring legal prosecution and disciplinary action against the corporations and individuals responsible. Kirill Cherkasov is co-author of the bill, a member of the State Duma Agriculture Committee. The administrative code would provide for up to RUB 20,000 (=US$560) per incident in fines for failure to report examples of environmental pollution, which would also cover harmful GMO contamination. But the bill sponsors must prevail. Treatment of GMO sponsors and distributors would be put it in the same category as terrorists.

Russia gave approval to import GMOs and planting of bio-engineered seeds as part of its World Trade Org entry, but the Russian Govt remains skeptical of GMOs. The global plot is evident in the WTO sponsorship. In April, Prime Minister Dmitry Medvedev announced that his cabinet will postpone the beginning of certification of GMO plants for growth in Russia due to lack of proper infrastructure needed to test their safety. The Kremlin also opposes imports of GMO food, claiming the country has enough farmlands to provide enough regular food to feed itself. But the new draft legislation, even if adopted, would be difficult to enforce in practice. Wait until Russia must contend with legal rights from blown seeds in the wind to neighbor farms, which Monsanto claims rights to, an incredible grab. Some believe proving a direct link between certain GMOs and health or environmental problems could be difficult. The harmful effects, if they manifest, could take years to become apparent. However, the proof is widely available from Western research, proof of harm and dangerous chromosome alteration. The proof is not given proper publicity or media attention. The Monsanto genocide and human chromosome alteration is a global intiative. The opponents challenge the giant agri-firm for creating a pre-disposition for viruses and control agents in the human body. See the Russia Today article (CLICK HERE). As footnote, the Colombia Military last summer was burning farmlands when owners refused the Monsanto seeds, a vile Papa Bush initiative. The Bush Legacy is plague.

◄$$$ FRANCE INVOKED NATIONAL SECURITY TO STOP GENERAL ELECTRIC FROM BUYING ALSTOM... FRANCE PROTECTED ITS OWN, BUT THE RISK OF BACKWATER NEGLECT AND ROT IS PRESENT... FRANCE WILL WIN ISOLATION AND POVERTY. $$$

French president Francois Hollande has formally nixed the General Electric acquisition bid to acquire the industrial group Alstom. He cited national interest grounds, openly protecting the French core industry. In doing so, he stood in defiance of global markets forces. Hollande denounced as unacceptable the GE offer of EUR 12.4 billion offer for the French manufacturer of power turbines and TGV high-speed trains. Bear in mind that the company's own Board of Directors approved the deal. The socialist clown Hollande stated, "The role of the state is to make sure the national interest is upheld. We have sufficient means of pressure to ensure that the outcome is good for Alstom, good for French industry, and good for the diversity of energy." The company is recognized as a strategic priority, which France must preserve for its technological sovereignty. Next might come some misfortune in the Alstom business, like job cuts, production shutdowns, and shrinking in keeping with the socialist theme. GE sought a partner to learn of technology advances, even funded research. The giant GE will seek partners elsewhere, like in Japan or China where high speed train technology is superior. See the UK Telegraph article (CLICK HERE).

The Jackass holds no respect for socialists or their demagogue leaders who preside over ruin on a constant uninterrupted basis. France will retreat inward, just like the United States, and win isolation. Socialists have a near perfect track record of wrecked businesses and economies. The global economy during the modern era has not demonstrated a single success story for socialism, only wreckage and oppression that follows profound poverty. Socialism should be clinically classified as a mental disease. It is usually adopted when failure abounds.

◄$$$ CAPITAL DESTRUCTION COMMENTS, A PET JACKASS TOPIC... LIQUIDATIONS ACCELERATE THE CAPITAL DESTRUCTION FROM A PRICE ANGLE... WEAPONS PRODUCTION HAS A NASTY NEGATIVE TRICKLE DOWN EFFECT AFTER DIVERSION OF CAPITAL... GOLD INVESTMENT REMOVES CAPITAL FROM THE SYSTEM... QE IS HIGHLY DESTRUCTIVE. $$$

The bank analysts seem incapable of detecting or commenting on the harmful effects from Quantitative Easing and the unsterilized bond monetization purchases. The Jackass has harped on this theme for two years. The market response to QE bond purchases is to lift the entire commodity price structure, whether actively through hedging or indirectly through leakage of excess funds. The result is rising costs and shrinking profits for businesses, which results in retired capital, liquidated capital, idle capital, and destroyed capital. The capital is machinery, computer systems, telecom gear, vehicles, servicing support equipment, plants and buildings. So along with reduced income for savers from lower bond yields, comes destroyed capital and economic deterioration. Some additional thoughts have come to mind. 1) The vast store liquidations accelerate the effect of vanished profit margins, from supply overload and intense price competition. It might be temporary, except that so many businesses are in liquidation in a never ending stream. One third of all malls in the United States have empty stores, the trend continuing. 2) The devotion to war adds to capital wrecking ball activity, as capital is converted to destructive assets. When put to usage, the actual destruction takes place, but usually on foreign lands which also has a horrendous image impact. The trickle down effect in war material production has two or three steps to reward the perpetrators in all the wrong encouragment, but to please the fascist architects.

The third point pertains to gold. 3) All the hedging into gold and hard assets removes capital from business investment. The central bank hyper monetary inflation urgently invokes the protective response to protect capital from the cancerous monetary policy. The capital is removed from a toxic system from the wondrous Gresham Law. In the 16th Century, Thomas Gresham stated so simply, "Bad money drives out good money." Sound money finds refuge in a corrupt system that infects all investments in paper securities and all financial markets under controlling arms. The road to perdition is build with Quantitative Easing as monetary policy. It is not stimulus, but rather acidic corrosive destructive in its enduring effects. Its only positive perceived effect is buying another day before assured ruin, in the true sense of the Rubin Doctrine.

## UKRAINE AID & GAZPROM EFFECTS

◄$$$ BEWARE OF FINANCIAL FRONT BLOWBACK FROM UKRAINE, EMBRY WARNED... RUSSIA & CHINA COULD (WILL) BRING ON WORST NIGHTMARE FOR US AUTHORITIES, WHOSE STOCK & TRADE IS MAYHEM, CHAOS, AND TERROR... ADD THE EXTREME VULNERABILITY OF THE USDOLLAR AND USTREASURY BOND DEBT... THE MERE ANNOUNCEMENT OF RUSSIAN REQUIREMENTS FOR RUBLE ENERGY PAYMENT BY ITS EUROPEAN CLIENTS WOULD SEND THE RUBLE SKYWARD, AND CRUSH THE ANGLO MARKET MAVENS STEEPED IN CORRUPTION... WHAT COMES NEXT IS CONTROVERSY, EXPOSURE, AND PROSECUTION. $$$

John Embry of Sprott Asset Mgmt gave urgent warning of blowback risk to the United States for actions in Ukraine. Aside from all the propaganda on the nature of the original attacks, hidden black op mercenaries, stolen gold, snipers on rooftops, killing demonstrators in public, all done by the US side, the financial front remains the extreme vulnerability to the USGovt. Embry was quick to point out the race to the edge of the cliff in global financial structures. He believes the real problem for the West is the USDollar, which is in jeopardy. He sees the Russians and Chinese as well aware, and just biding their time as the West sinks on the financial stage. He took a quick tour down History Lane, remarking how the US adopted hokey economic theory, became more aggressive in fiscal policy (big federal deficits) and in monetary policy (ultra-low rates and USTBond purchases) only to suffer an explosion of debt. The USGovt had a low debt burden in the 1960s of only several $100 billion in debt, accumulated over the previous 180 years. At the time, it had no unfunded liabilities, and the USFed balance sheet was so tiny you could call it a rounding error. Here we are, 50 years later the USGovt has $17.5 trillion of funded debt, with further multiples in unfunded liabilities from an expanding socialist state. The USFed balance sheet in the past six years has blown out from $800 billion to close to $4.5 trillion, loaded with toxic paper in irreparable fashion.

Amidst the madness, the consensus and compromised analyst community (aint no brain trust there) swallow the monetary strategy nonsense whole, as the New Normal. Those wretched statistics are undermining the USDollar week by week, month by month, year by year. Embry believes it is just a question of time before this all ends in catastrophe. The Russians might be presented as the villain that pushes the US off the global stage, for debt abuse. On the other Eastern front, the Chinese appear ready to undertake a vast reflation initiative. It will be wildly bullish for gold in Embry's expectation. In the Jackass view, the two key announcements upcoming will be Russian demand for Ruble energy payments by EU clients, and China obtaining permission from all of OPEC, led by the Saudis, to pay for oil in Yuan terms. The Chinese reflation is important, but nowhere nearly as critical as the Birth of the Petro-Yuan. Just imagine Nigeria, Angola, Indonesia, and the entire Gulf including Iran all accepting Yuan currency for Chinese exports. The USDollar rejection gains momentum.

Embry concluded with a global sweeping view. "I think Putin is playing his cards very well over there. The West is basically impotent in this situation. I do not see anything happening over in Ukraine as a positive development for the West. The last thing the world needs is more geopolitical turmoil because of all the problems we already have in the economic and financial spheres. It is not just the Ukraine. It is the Middle East, and it is the South China Sea. I was also reading over the weekend that Thailand is now on the verge of blowing up. Kenya is becoming increasingly more lawless, and the Central African Republic is a mess. The world is just lurching toward a crisis and the destabilization on the geopolitical front will just add fuel to the fires that are already about to erupt in the financial system. The United States better be careful [in attacking the Ruble] because the Chinese and the Russians could attack the US currency and bring on the worst nightmare the US authorities could ever imagine. The West is impotent in Ukraine. So the US is trying to attack Russia in the markets. But as I said, they better be careful because those tactics may end up blowing up in the faces of the central planners in the United States." See the King World News article (CLICK HERE).

Embry omitted the huge risk run by the London and Wall Street banks who are shorting the Russian Ruble in a politically motivated high risk project. They are pushing down the Ruble exchange rate in order to cause price inflation inside the Russian Economy. The extreme risk is for Russia to demand that European customers pay for oil & gas in Rubles. The mere news of such a demand would send the Ruble upward by 10% to 20% in a single month, and cause a short squeeze on the criminal financial terrorists operating in London City and Wall Street, protected by their vast government networks. The Ruble could as a result become a suddenly strong currency, from the mere NY/London short covering event. A much stronger Ruble is a very strong likelihood in the next chapter, a prelude to a gold-backed Ruble currency itself, matching the gold-backed Yuan currency that comes. The blowback of a Ruble for Energy Plan could set the stage for the introduction of a gold-backed Ruble, begun from a newly strengthened Ruble position!

◄$$$ FAST MOVING EVENTS SHOW DETERIORATION OF UKRAINE... KILLING OF PRO-RUSSIAN DEMONSTRATORS IN ODESSA (WESTERN PROVINCE) IS YET ANOTHER SPARK... SCORCHED EARTH AND ECONOMIC QUAGMIRE BEST DESCRIBE THE WESTERN MOTIVATION, THE CREATION OF A FIREWALL TO HALT THE EURASIAN TRADE ZONE AND CREEPING INFLUENCE OF THE GAZPROM SKELETON... SEE THE CHESS PIECES MOVE WITH TROOP MOVEMENTS... THE BATTLES WILL BE EVERYWHERE SOON, NOT JUST THE DEFENSE OF THE CRIMEAN RUSSIAN NAVAL PORT... NO FURTHER EXPLANATION OF THE MAP IS GIVEN (OFFERED IN ALTERED LINEAR SCALE). $$$

◄$$$ THE IMF LOAN CONTAINS PREDATORY TERMS AND CONDITIONS, NOT THE LEAST FOR STIMULUS OR AID... THE IMF HAS GONE TO WAR IN UKRAINE, AS NO ECONOMIC SUPPORT APPEARS VISIBLE, AND ALL AID IS DIRECTED TO THE UPPER ECHELONS (AS USUAL)... WITNESS ANOTHER POISON PILL PACKAGE WITH EUROPEAN LABEL, JUST LIKE WITH GREECE... THE IMF DEAL IS HARDLY A SAVIOR PACKAGE... THE INTL MONETARY FUND SHOULD BE OUTLAWED AS A TERRORIST ORGANIZATION, USING DICTATORIAL BLACKMAIL AS FORMAL CONDITIONS AMIDST HIDDEN CONTRACTUAL ASSET RAIDS. $$$

An overview. The IMF has approved a $17 billion loan to Ukraine. The first $3.2 billion tranche has arrived. It is a predatory loan with the usual EU poison pill stench from austerity directed at their tattered financial sector. No measures are evident for sustaining the Ukrainian Economy. The awkward IMF structural adjustment policy will accomplish little, just like in past applications that bore zero success in Greece. The motive is not aid, but extraction of wealth under contract and forming an indentured servant state. The Kiev Regime seems stupified in its compliant response. They launched the harmful austerity package, using tax hikes, freezing pensions, while the natgas heating bills rise 50% in homes. The nation is bankrupt, and the mid-sized patch loan is not intended to benefit of the Ukrainian people. The loan is a bank transfer to pay off some creditors, to alleviate internal distress, and to facilitate some shuffling after the gold theft by the US Blackstone mercenaries. Expect the funds to be snatched by the new current bunch of oligarchs aligned with the Maidan gangsters in Kiev. Ukraine has always been a lawless land, but recently more of a fishbowl for global observation, not in keeping with US objectives, but rather serving Eastern goals.

Martin Armstrong seems reinvigorated, as perhaps time has brought some healing and renewed boldness. He puts it plainly that the IMF is a financial terrorist group and Christine Lagarde is nobody's savior, a clueless actor. The IMF terms can be construed as official funding of military reaction and confrontation. Paraphrase falls short. Armstrong wrote, "Christine Lagarde should be stripped of her position and the IMF should be shut down. Lagarde's IMF is now demanding that Ukraine must hold on to the Eastern provinces of Ukraine, or this insane woman has dictated that she will change the terms of the already approved credits worth $17 billion dollars. She also demands that Kiev should really implement her reforms as promised. This woman is totally insane and an absolute outrage to economics. Impose those same economic restraints on France. Stop the budget deficits that France is following in the footsteps of Greece and is just one heartbeat behind. She will never speak against France. All she cares about is extracting money from Ukraine to cover the ass of her bankers. When it is France's turn in a few years, let's see what she does then." See the Russia Today article (CLICK HERE) and the Armstrong Economics essay (CLICK HERE).

The Intl Monetary Fund warned Ukraine to fight against the East or no money, even worse altered terms of current money. The $17bn tranched loan to Ukraine from the IMF comes at a cost of more controlling influence into the divided nation, and a call to arms never seen before by a global banking agency. The loan covenant is predatory and dictatorial, couched as a caveat call to war. IF THE UKRAINE GOVERNMENT LOSES EFFECTIVE CONTROL OVER EAST OF COUNTRY, THE ENTIRE BAILOUT LOAN MUST BE RESTRUCTURED. They already had their central bank gold (33 tons) and banking system core assets ($70 billion) stolen, leaving nothing but perhaps ownership of rich farmland in future gunsights. That could be the ultimate target. The Kiev Regime is ordered to go to war against pro-Russian forces or no money. Some other items of note include some guidance. The IMF urges Ukraine to reach a price accord with Gazprom by September. The IMF staff expects Russia's gas price increase may weaken Hryvnia (obvious to any high school student). Expect a 50% devaluation. And the IMF forecasts Ukraine inflation may jump to 16.2% this year. The Jackass was thinking more like 60% to 100% price inflation. See the Zero Hedge article (CLICK HERE).

◄$$$ THE INTL MONETARY FUND HAS APPROVED AID TO UKRAINE, BUT WITH STRICT CONDITIONS ATTACHED... THEY ARE BIG STRINGS INDEED... THE PRIORITIES ALL SOUND VERY NICE, VERY PRUDENT, VERY CONSTRUCTIVE... THE IMF HAS EMERGED AS A FINANCIAL WARLORD. $$$

The IMF Executive Board approved a two-year US$17.01 billion stand-by arrangement (SBA) for Ukraine, as it is called. The first tranche of $3.19bn will be for immediate disbursement. It is loaded with conditions on policy, thus more like a imperial dictum to a vassal state to define ball & chain. The aid was approved under the Fund's exceptional access policy. The keen observer should note that the IMF is broke, and has no funds in their accounts. So a high level shuffle is perceived and suspected in the echelon shadows. The official rationale is to support the Kiev Regime in its initiatives to restore macro-economic stability, to strengthen economic governance and transparency, and to launch sound and sustainable economic growth, while protecting the most vulnerable. What a crock! It is to alleviate upper echelon financial sector distress and to provide high level slush funding. Of the immediate $3.19bn funding, about $2.0bn is allocated to budget support. Here is the catch. The second and third disbursements will be based on bi-monthly reviews and performance criteria, and the remainder of the program period will be subject to standard quarterly reviews and performance criteria. The conditions are strict. Lagarde offered an official statement, pure boilerplate stuff, with a nod to the Gazprom unpaid bills. She cited priorities of the Ukraine Govt program: a) maintaining a flexible exchange rate to restore competitiveness, b) stabilizing the financial system, c) gradually reducing the unaffordable fiscal deficit, d) eliminating losses in the energy sector while enhancing social safety nets, and e) decisively breaking with problematic past governance practices. An impressive set of criteria to maintain a vassal state in turmoil which the cabal strives to make a firewall and sinkhole. Obstruction of the Eurasian Trade Zone is a principal unspoken objective.

The most humorous laughable part of the IMF official statement on the SBA was the following, which should elicit a usage of a small vomit bag. No credibility remains in any IMF action. "A strong and comprehensive structural reform package is critical to reduce corruption, improve the business climate, and achieve high and sustainable growth. The authorities have already enacted a new public procurement law, reducing room for misuse of public resources. They have begun addressing governance issues in state-owned companies and are seeking recovery of stolen assets. They are also planning to build capacity to more effectively conduct enforcement of anti-money laundering and anti-corruption legislation, as well as enhance the effectiveness of the judiciary and tax administration. Risks to the program are high. In particular, further escalation of tensions with Russia and unrest in the east of the country pose a substantial risk to the economic outlook. Steady and rigorous implementation of policy measures, while maintaining broad public support, will be critical for the program's success and would unlock sizable international official assistance and private capital inflows. The authority program is an appropriate response to present challenges and constraints and deserves strong support."

Reality check! But the US/NATO are adding to tension, which the IMF should urge in a cease & desist plea. See the IMF Organization website statement (CLICK HERE). Money laundering is the stock & trade of Kiev. A thorough audit of their banking activity over the last ten years would cause a global uproar. Let them start by bringing a halt to cooperation on Nigerian fraud schemes and a halt to hosting of white women slavery operations.

◄$$$ GAZPROM HIKED THE OVERDUE UKRAINE BILL TO $3.5 BILLION AFTER KIEV NEGLECTED TO PAY AN APRIL INVOICE... UKRAINE HAS RECEIVED THE FIRST IMFUND TRANCHE OF $3.2 BILLION... A COMPETITION WILL COME FOR PAYMENT TO GAZPROM VERSUS PAYMENT TO THE RUSSIAN GOVT FOR PAST STATE LOANS... DISORDER RULES, AS NATIONAL UKRAINE REFERENDUM COMES, ALONG WITH A DONETSK REPUBLIC VOTE TO SECEDE FROM UKRAINE... THINK CHAOS SQUARED. $$$

The story told was that the Ukraine Govt would purchase some gold with its IMF infusion of $3.2 billion, the first tranche loaded with conditions, rules, and chains. True to form, Gazprom reported that Ukraine forgot to pay its latest monthly gas bill in April, a regular habit. As consequence, the total amount now due for the gas bill has risen from $2.2bn to $3.5bn, after invoiced through the end of April. The threat has been heard, that in June Ukraine might receive Russian gas shipments only if advanced payment is made, a stern condition indeed. The Ukraine state-owned oil & gas company Naftogaz has a long record of late payments and unpaid bills to Gazprom, nothing new, only recent given more attention. The debt as of May 7th stands at $3.508 billion, according to the Gazprom recent statement. Timing is important. Ukraine has pocketed the first IMF bailout tranche of some $3.2 billion. The outstanding Gazprom bill is greater than this amount. The standoff escalates. Watch IMF funds be stolen by the Maidan Regime, announced later as missing.

The indication is for all the money funded by USGovt and other IMF members will go straight to the Kremlin. It is highly doubtful that Ukraine will prepay for future gas deliveries. A dog does not change its spots, nor a tiger its stripes. The IMF attempted to dictate usage of funds, like a financial warlord in a far-off land. The IMF clarified that out of the $3.2 billion amount, Naftogaz is eligible to use only $2.16 billion to pay off its debts to Gazprom. Not enough to cover the overdue notice. All is in chaos, nothing settled, much in suspended animation. Ukraine hopes to receive another $13.7 billion from the Intl Monetary Fund soon in the next tranches. The flow of funds is in serious doubt, especially if the national referendum delivers a disruptive vote, and if the republic of Donetsk votes to split from Ukraine. See the Zero Hedge article (CLICK HERE).

Additionally, the terms of the indirect US payment to Gazprom are to be:

- Ukraine to only pay interest on IMF loan for 3 years

- Ukraine to repay IMF principal quarterly over 2 years

- Ukraine says govt to pay 3% interest per year on IMF bailout.

## EURASIAN TRADE ZONE DEVELOPMENT

◄$$$ THE EAGERLY AWAITED CRUCIAL PUTIN-CHINA SUMMIT IS NEAR... A SUBSTANTIAL STATEMENT IS ANTICIPATED DURING THE VISIT, IN ADDITION TO NUMEROUS TRADE PACTS AND INVESTMENT ACCORDS TO BE AFFIRMED... A SIGNIFICANT QUANTUM JUMP IN COOPERATION FOR ECONOMIC AND INDUSTRIAL DEVELOPMENT IS EXPECTED... FURTHER PROGRESS IS ALSO PRESUMED ON THE GOLD CURRENCY FRONT, PERHAPS IN SUBTLE TERMS. $$$

Chinese President Xi Jinping and Russian counterpart Vladimir Putin are set to conduct a formal summit meeting during an extended period for the next week. Meetings are planned in Beijing and Shanghai. The meetings will be stacked with political leaders and corporate heads. It will be Putin's first China tour since President Xi took office, and the second meeting between the two presidents this year. The two Eurasian presidents will oversee the signing of a series of important bilateral cooperation agreements, designed to strengthen strategic coordination on major international affairs. The Holy Grail oil & gas pipeline and energy supply deal will be announced. A record 30 agreements are expected to be affirmed during Russian President Vladimir Putin visit to China, the main meetings to take place on May 20 and 21. See the Xinhua article (CLICK HERE) and the BRICS Post article (CLICK HERE). As footnote, Russia & China have affirmed deeper cooperation in military and outer space, forming a working group for space cooperation projects. The arrangement was finalized at a recent meeting between Russian Economic Development Minister Aleksei Ulyukayev and Chinese Commerce Minister Gao Hucheng. The gathering covered domestic earthbound investment intiatives as well. The projects discussed should increase China's direct investments in the Russian economy seven-fold by 2020. See the Strategic Culture article (CLICK HERE).

The Jackass expectation is to see the Russia-China team establish stronger formal bonds. The R&C Team might use the Holy Grail forum in Beijing to announce steps toward gold trade settlement and gold-backed currency, or at least important hints in that direction. Most likely will come announcements or implied statements on the groundwork for interim procedures toward Yuan trade settlement on wider basis, and gold-backed letters of credit to facilitate trade. The USDollar reserve status lies in the rear view mirror. Putin will not pass on a chance to severely alter the West financially in their foundation core, in a constructive response to Ukraine maneuvers. Putin will do it in a way to win confidence of leadership and constructive solution to the Toxic USDollar, as he takes the high road. The West refuses to discuss the Toxic USDollar. The main roads from the Eurasian Trade Zone are paved with R&C trade outside the USDollar. Some irony abounds. Russia will be receiving USTreasury Bonds from China in large energy payments and even large energy pipeline investment contributions. The will talk about Yuan payments, but make USD payments. Russia will take the Chinese Dollars in USTBond form and sell them immediately. What the Kremlin does not use for economic and budget purposes, they will convert to Gold.

◄$$$ THE EURASIAN TRADE ZONE WILL INCORPORATE NATIONS FROM EVERY CONTINENT IN THE WORLD... THE UNITED STATES HAS A GRAND CHALLENGE NOT TO BE LEFT OUT, AS A RESULT OF PAST HEGEMONY, BOND FRAUD, BANK ABUSES, AND MILITARY AGGRESSION.... CHINA WILL DRAW IN AFRICA, SOUTH AMERICA, AND THE MIDDLE EAST, WHILE RUSSIA DRAWS IN EUROPE... GERMANY AND TURKEY ARE KEY SWING STATES, WHILE SAUDI ARABIA HAS ALREADY TURNED EASTWARD. $$$

Many are the critical links in the chain for the Eurasian Trade Zone to come together. Russia and China (R&C) join to form its axis. The entire BRICS nations have already hitched to the R&C wagon, which include both India and South Africa. China will join with the Asian powers, principally Japan and South Korea, with Indonesia and Malaysia easy wins. China will turn its Persian Gulf connections and African projects, winning the MidEast and the dark continent, full of the largest mineral and energy supply remaining on the planet. The Chinese connection to Australia and New Zealand will draw them in also, an easy win given the extensive mining and port facilities ownership in both countries. The key events are flipping the swing states of Germany, Turkey, and Saudi Arabia. The sturdy Iran is already in the R&C camp with huge energy projects and weapons supply, in addition to Russian nuclear technology. The Saudis are making their choice known in the past few weeks, hitching to the R&C wagon. The entire Gulf region will follow Iran and the Saudis. The South American continent will follow the Brazil lead and the Chinese stations already in place. Russia has made key inroads in both Venezuela and Mexico. Britain will be stage struck soon, realizing they must join with Europe and Russia, or be left in the cold with the most corrupt financial nation in world history spanning several thousand years, the United States.

The Eurasian Trade Zone will trade in Rubles and Yuan, then later in Gold, thus restoring the Gold Trade Standard, with full opposition, resistance, and obstruction by the United States, which strives to maintain its free money source in the USDollar. The trade zone will establish barter systems, as extensions to the prevalent Yuan Swap Facilities. Later will arrive the series of gold-backed currencies, all in time. The US will not wish to rely on federal debt support from profits derived from its global narcotics monopoly. Therefore the US will enter systemic failure, default on its debt, and chaos will reign when its Scheiss Dollar is launched. It will be discarded, just like the USD, when recognized as built on a false gold floor. The world will just say NO to the USDollar, as it turns to GOLD as the solution to the chronic global financial crisis. New strong currencies will arrive, built atop Gold reserves. The elusive solution centers on Gold. The USDollar will be useful to line bird cages and cat litters, or for the basic function of toilet paper. It is finally being recognized as toxic.

◄$$$ RUSSIA AND CHINA ARE BUSY DISCUSSING BILATERAL INVESTMENT SUPPORT FOR EAST RUSSIA AND CURRENCY SWAP FACILITIES, PRIOR TO A SKEIN OF IMPORTANT TRADE PACTS WHICH WILL DEFINE THE EURASIAN TRADE ZONE... SANCTIONS ARE DEFINING THE GLOBAL LOSERS IN THE PARADIGM SHIFT TO COME, AS AN EXCLUSION PRINCIPLE. $$$

Russian President Vladimir Putin is set to make a strategic trip to Shanghai. In the background are mindless EU sanctions directed against Russia. In preparation for the Energy Holy Grail summit meeting, Chinese Vice Premier Zhang Gaoli held talks with his Russian counterpart Igor Shuvalov in the Great Hall of the People in Beijing. The two men confirmed that China would emphasize a steady increase in the already vibrant bilateral investment between the two nations. China is Russia's fourth largest source of foreign direct investment. Their trade in local currency settlement has grown, while currency swap details are being worked out. The USDollar usage will be eliminated entirely. Beijing is motivated to substitute the USD with Yuan usage in all of the nation's trade with other countries. Gradually to achieve convertibility, the Chinese currency currently trade directly in the Japanese Yen, the Australian Dollar, the Brazilian Real, the Euro, the New Zealand Dollar, and many other minor currencies.

China will work to boost investment via the China-Russia Investment Fund, singling out greenfield investment, equity investment, bond issuance, and mergers & acquisitions. The partnership will serve as model for other nations in mutual development within the Eurasian Trade Zone. VP Zhang formally requested that Russia aid Chinese enterprises remain active in special economic zones in the Far East region of Russia. Several large and medium sized Chinese firms have invested in such sectors as energy, chemicals, mining, and agriculture in the Russian Far East. The Russian Premier Dmitry Medvedev vowed last year to protect foreign investors in the region. In the next couple months, a skein of conferences will take place of great significance for the two countries, which will offset the toothless bombastic sanctions by the US/NATO desperado buffoons. They are the uninvited guests, the bullies. The result of Western sanctions will be isolation from the vibrant Eurasian Trade Zone which will reshape global trade. The BRICS allies have begun to align against the West, sanctions serving as defining meter after Iran sanctions sorted some nations out in preliminary manner. Both Beijing and New Delhi have given indication (clear or tacit) that they are opposed to the Western sanctions against Russia. In time, the United States will be alone in opposition to Russia, as European nations splinter off. See the BRICS Post article (CLICK HERE).

◄$$$ THE ABANDONMENT OF THE USDOLLAR IS NEAR, AS THE CORE OF THE BRICS NATIONS PLUS IRAN ARE WORKING TO REMOVE THE USD FROM TRADE SETTLEMENT... ALL OF THE BRICS & ASSOCIATE NATIONS ARE THUS TERRORISTS... A VERITABLE PARADE OF NATIONS WILL FOLLOW, KNOWING IT IS SAFE BEHIND THE RUSSIAN & CHINESE LEAD... A CARAVAN WILL PASS THROUGH THE GULF TO DRAW IN THE ARABS TOO... THE RUSSIAN GAZPROM NAT GAS COOP IS COMING INTO FORM, SURE TO ECLIPSE OPEC AND USHER IN THE PETRO-YUAN... DEATH IS IN THE AIR, FOR THE PETRO-DOLLAR AND ITS ENTIRE ARAB CONSORTIUM. $$$

The name Petro-Yuan is inadequate, since Russian natural gas will be the central commodity traded in Yuan terms, even in Rubles. Also, the Russian Gazprom gas pipelines will be the skeleton system for the Nat Gas Coop, whose function will serve as the Petro-Yuan distribution network much like the OPEC oil shipping network of tankers had served as the Petro-Dollar skeleton. The BRICS nations are showing exacting and effective unity in their policy development and systems integration. They are recruiting additional nations, which are given a name of BRICS Associates. Refer to Indonesia, Vietnam, Thailand, Pakistan, Argentina, Mexico, Venezuela, and most importantly Iran. The appeal to Argentina has gone into the open.

The BRICS+ are in the movement together, committed in unison, working to form a critical mass of non-USD trade settlement. They need close to 50% to begin and over 60% to change the global balance. Their goal is to achieve a non-USD trade system founded in barter, aided by the Yuan Swap Facilities (like bicycle training wheels), with the ultimate goal of gold trade settlement on a net basis, using Gold Trade Notes as letters of credit. Tremendous change is in the wind like a powerful desert scirocco. The result of at least two years of preparations are about to be unleashed on the global stage. See the Zero Hedge article (CLICK HERE).

On May 6th, the Russian Foreign Ministry reported that Deputy Foreign Minister Mikhail Bogdanov visited Doha, the capital of Qatar. The Persian Gulf nation is the natgas giant and leader in LNG systems. The results of the unannounced visit are very telling. The official Doha statement from the royals said, "The Emir of Qatar praised the compelling and consistent policy of the Russian Federation in international and regional affairs." Much can be read between the lines. Keep in mind the harsh rule in the emirate matches with the iron fist of the Kremlin in matters of state. Clearly, the opinion means that Qatar will not play according to USGovt rules of engagement with respect to Russia. As US ally, they will not condemn Russia and refuse commerce. Qataris are a stubborn bunch. Some strategist interpret the meeting's outcome with the perception that the ruthlessly efficient rulers of the Emirate appreciate the uncompromising style of Moscow's foreign policy, and will never comply with any sanctions. Instead the Doha leaders will forge ahead with greater cooperation on matters of natgas business. See the Voice of Russia article (CLICK HERE).

◄$$$ PUTIN SAID TO SEEK CHINESE INVESTMENT MONEY FOR A WIDE RANGE OF PROJECTS, WITH SOME PLACED LIMITATIONS... IT WILL BE A CHALLENGE FOR RUSSIA TO MAINTAIN AN EVEN KEEL ON SUCH FLOWS... PUTIN WILL FIND IT IN CHINA, JAPAN, SOUTH KOREA, TAIWAN, EVEN INDIA. $$$

Russian President Vladimir Putin plans to open the door to increased Chinese investment capital. The move would roll back informal limits on Chinese investment as Russia seeks to stimulate growth. The targeted sectors for such funds would be industries from housing and infrastructure construction to natural resources. Limits will be imposed. Certain Red Lines would be set around significant projects focused on gold, platinum-group metals, diamond mining, and high technology. The Kremlin intends to turn to Asia as foreign direct investment (FDI) from the United States and European Union tightens and capital outflows surge away from Russia. He will find it with success in ample volume across the entirety of Asia and the Emerging Markets. Think fewer USTreasury Bonds and more FDI from the BRICS & Associate nations. See the Bloomberg article (CLICK HERE).

◄$$$ GERMAN TELEVISION FEATURED A STORY OF LEAVING THE EURO MONETARY UNION, IN A REALISTIC RENDITION... TIMING IS 2015... THE EURASIAN TRADE ZONE WILL BE BORN WHEN GERMANY JOINS, BRINGING ITS FULL FORMIDABLE MIGHT OF AN INDUSTRIAL POWERHOUSE. $$$

German public television has broken ground, put the topic on the table, raised the point on air. The show was entitled "Deutschland verlasst den Euro" in the form of a ZDF documentary. In English, it pertained to Germany leaving the Euro, but perhaps much more, as in leaving the broken European Union altogether. It is a broken union and a crippled currency, with sovereign bonds upheld by central bank monetary inflation and little else. Bear in mind it was not the mainstream German TV. They presented the show as a gaming point in time 2015, in a very realistic hypothesis. See the ZDF show (CLICK HERE). The German nation is split, with the commercial and business linkage to Russia and East being quite extensive. The banking and political, even military linkage is completely committed to the West. But times are changing and pressures are building.

The Germans are exhausted and depleted in the support of the broken Southern States of Europe, although not yet obvious in the Western dominated press. The Germans gradually see the futility of US/NATO support against Russia. The Jackass has long maintained that German is the critical European state to flip eastward. When, not if, Germany joins the Eurasian Trade Zone with more full support on trade with Russia & China, the entire European power structure will change. It will in effect be the birth pang of the Eurasian Trade Zone, since it must include the biggest industrial power of Europe. The British and Americans will be isolated, outside looking in. The British would be less detached, since a Gazprom client and a Dim Sum Bond broker. Watching Germany will be full on intrigue, but watching Britain will be plain interesting, if not contradictory.

◄$$$ RUSSIA HAS SHOWN INTEREST IN NATURAL GAS INVESTMENT IN TURKEY, TO ADD TO STORAGE CAPACITY (FOR WESTERN EUROPE DELIVERY)... ADD TURKEY TO THE LIST OF WESTERN TRADE PARTNERS PULLING AWAY FROM EUROPE... TURKEY WILL PLAY A KEY ROLE IN THE RISE OF THE EURASIAN TRADE ZONE, BUT AS THE NEUTRAL PLAYER THAT CONSTRUCTIVELY EXPLOITS THE SITUATION. $$$

The dispute over Crimea has had repercussions in the European energy sector, forcing nations dependent on Russian energy imports to contemplate their position on energy demand, alternative sources, and potential consequences. Expect them to increasingly align with Russia, including Germany. In Moscow, state-owned Gazprom is doing the same, seeking out alternative routes to supply Western Europe, and firming up additional markets like China and the Pacific Rim of Asia. Turkey is caught in the middle of this geopolitical clash and conflict, a familiar position for the nation over the last thousand years. The Turks are being courted by Russia.

The Russian energy imports play a key role in the Turkish economy. In 2013, Turkey imported 26.61 billion cubic meters of Russian gas via the Western and Blue Stream pipelines. Last year, Turkey imported 98% of its natural gas and 93% of its oil, a very dependent nation, but from neighbor Iran sources also. Natgas is used to generate 46% of the nation's electricity, the imports running up an energy bill of $60 billion per year, a major drain on its foreign currency reserves. After Germany, Turkey is the second largest European importer of Russian gas. The electricity market over the past 30 years in Turkey has tripled, the current generating capacity of 64.612 megawatts of electricity. Seizing an open door to a crisis situation, Turkish Energy Minister Taner Yildiz disclosed that Ankara has appealed to Gazprom to reduce the price of Russian natural gas imports, a discount offered to Turkey. Yildiz expects no interruption or curtailment of gas flow to Turkey through the Western pipeline, which delivers 16 billion cubic meters (bcm) annually of Russia gas to Turkey. The nation's foreign ministry has stressed that energy cooperation between Moscow and Ankara is not limited to the supply of natural gas, rather extending to developing nuclear energy. Turkey wants no adverse impact on their cooperation with Russia.

Turkish Energy Minister announced that Russia seeks to acquire or build gas-fired power plants in Turkey, and intends to pursue construction of a natural gas storage facility in its neighbor nation. Certain Russian energy officials are reviewing possible sites for the facility, which could also serve Western European markets with its huge capacity. Turkey currently has natural gas storage capacities of about 2 bcm and is building an additional 5 bcm of capacity. Gazprom Deputy Chairman Alexander Medvedev has a visit planned to Turkey. To be sure, Turkey will not join any future sanctions talk, while Gazprom will retain its dominant role in Turkey's domestic natural gas market. Turkey is keen to play option cards on the energy table. Rivals Azerbaijan and Iran already supply natural gas to the Turkish market, with expressed hopes to expand their exports, thus the competitive card played toward a discount. Therefore, the winner in the Ukraine struggle is Turkey, which might win a Gazprom discount, and win expansion in its natgas storage capacity, while neighbors bring offers to the window. The Turks are an important swing state in the rise of the Eurasian Trade Zone. They will not so much flip eastward, as rise in the middle as key ferrymen between East and West, their traditional role. Watch as the Russians respond to war cries with a swarm of commercial initiatives. See the Oil Price article (CLICK HERE).

◄$$$ CHINA & NIGERIA SIGNED A $13.1 BILLION DOLLAR RAILWAY DEAL... THE WESTERN AFRICAN NATION WILL BENEFIT FROM DEVELOPMENT... EXPECT WEST AFRICA TO BE AN EXTENSION OF THE EURASIAN TRADE ZONE, AS IN OIL SUPPLY TO EUROPE NOT SETTLED IN USDOLLARS. $$$

Chinese Premier Li Keqiang paid a visit to Africa. The result was more trade and development, their usual calling card, as opposed to the USGovt typical gestures, to build more military ties with troops placed on bases and massive weapon sales. The China Railway Construction Corp announced it has signed a framework contract for a $13.1 billion railway project in Nigeria. The company signed the deal with Nigeria's Federal Ministry of Transportation for a coastal railway line. The plan calls for a single track of length 1385 km (=858 miles). The design speed for the railway is 120 km/hr (=74mph). Expect the railway to carry passengers and freight. The two sides remain in talks toward details based on the framework. See the CNTV article (CLICK HERE).

◄$$$ CHINA SEALS A LANDMARK RAILWAY PROJECT WITH AFRICA DURING A FOUR-NATION TOUR... THE CHINESE REGIONAL LOANS WILL BE INCREASED TO $30 BILLION... EXPECT EAST AFRICA TO BE AN EXTENSION OF THE EURASIAN TRADE ZONE... THE CHINA DEAL LOOMS LARGE WITH KENYA, WHOSE WEALTH IS CONCENTRATED WITH THE ELITE KENYATTA FAMILY... THE LEADER HOLDS RESENTMENT FOR THE ANGLO-AMERICANS, WHO ACCUSE HIM OF A ROLE IN ETHNIC ATROCITIES... NAIROBI HAS BEEN THE SITE OF DIRECTED VIOLENCE WITH VILE MOTIVE BY COLONIAL INTERESTS. $$$

Kenya is the last stop of a four-nation Africa tour by Chinese Premier Li Keqiang. The sweeping tour took him to Ethiopia, Nigeria, and Angola also. China has successfully negotiated with four nations to participate in East Africa's biggest infrastructure project in modern history. No military element was involved, just commerce, the manner in which Africa will be won as a truly massive Chinese supply zone. Expect it all to be financed using USTreasury Bonds. China and Kenya signed a co-financing deal on Sunday for construction of a railway linking Nairobi to Mombasa. The modern high-speed, high capacity standard gauge railway for passengers and freight will fortify regional trade. Chinese Premier Li Keqiang, together with presidents of Kenya, Uganda, Rwanda, and South Sudan as well as representatives from Tanzania, Burundi, and the African Development Bank, witnessed the signing of the agreement. The common goal is to develop the railway network in East Africa for mutual benefit. Once more, infrastructure development is key to Chinese expansion, which leads to economic growth in the African nations in a mutually beneficial deal. Weapons sales do not.

The Mombasa-Nairobi railway is an important part of building the continent's infrastructure networks composed of high-speed railways, highways, and regional airports. The track is planned from Nairobi in Central Kenya to Mombasa on the southern coast on the Indian Ocean. It will stretch in length 609km (=378m), and later be expanded through Uganda to Rwanda and South Sudan. Work on the project will begin in October this year and will take three and a half years to complete. After the signing in Nairobi, Kenyan President Uhuru Kenyatta took a slap at the West and the former colonial powers. He said, "The relationship between ourselves and China is based on mutual trust, because we are pursuing inclusive development and promoting inventive practical cooperation. [Colonial nations were committed to] inequality of treatment, division, and distrust." He stressed the basis of mutual trust between Africa and China. Li promised that the Chinese firms taking part in the railway project will employ the local populace after training them. The total cost of the project is estimated at $3.8 billion, with China financing 90% of the cost, the remainer from Kenya. The Chinese Premier also stressed the intention to narrow the trade imbalance with Kenya. See the BRICS Post article (CLICK HERE).

The Chinese Premier unveiled extra aid for Africa totaling at least $12 billion during his trip. China and Kenya have signed 15 agreements at the Nairobi conference, covering sectors of the economy such as technology, wildlife protection, public health, agriculture, fishery, and finance. Li said trade and investment are the cornerstone of China-Kenya ties even as Beijing becomes the leading foreign direct investor in the African nation. President Kenyatta is making his bet with China, stating how the Asian giant has secured a role in the history of Kenya's economic development. Premier Li promised to encourage more Chinese investment in Kenya's manufacturing sector, including building industrial parks. Li also promised assistance for Kenya to improve product processing capability and competitiveness in global markets. The two leaders also vowed to protect wildlife, saying they will spare no effort in combating poaching and ivory smuggling. China has also announced $100 million in aid for wildlife protection for Africa generally. Beijing has pledged support for African peace & security initiatives, as the region is troubled by a recent spate in terror related violence.

Western conflicts and resentment run thick. The United States and United Kingdom have reduced diplomatic contacts with the country following the election of Kenyatta. The UKGovt warned that upon his election, Britain would maintain only essential contact. The US Secretary for African Affairs Johnnie Carson (no relation to comedian talk show host) reiterated the same warning, that choices have consequences in his words. At issue is local ethic atrocities in the nation of Kenya, for which international courts have accused Kenyatta. The leader has been indicted by the Intl Criminal Court for ethnic violence. See the BRICS Post articles (CLICK HERE and HERE and HERE) and the Xinhau article (CLICK HERE).

A certain Hat Trick Letter contact with longstanding African consultant experience added a perspective, an unexpected addendum. "A new Chinese colony is born, in a regrettable way of sorts. Since the Kenyatta family owns 60% of all land in Kenya, as well as many key industries, securing the nation's assets (above ground and below ground) will be an easy task for the Chinese. The African supply chain is coming together. They just have to deal with one person." He was present last year during the terrorist incident and enduring violent standoff, and has excellent information sources. Recall the Nairobi shopping mall violence and extended shoot-out. His best sources reported that the entire incident was done by mercenaries from Langley, but resolved ironically by hired Israeli SWAT teams from Mossad when it spun out of control. The irony extends from the Langley-Israeli partnership in a grand upheaval. The nefarious motive in his opinion was to promote deep disruptions, to stir up violence, to encourage regime change, thus to make the many valuable resource and mineral assets of Kenya open to contract renegotiation by major Western firms. Think colonials at work, just like in the Congo. But China is stepping into the fore.

When further local color information was requested, the jolly Brit was quick to respond. He is a little embittered. What follows are his words, with my simple edits. President Uhuru Kenyatta is an alcoholic, widely known, and recently very unstable. The nation is the target of factions. The Somalis have defacto taken over the country via purchases, bribery, and violence. Somalia is the northern coastal neighbor to Kenya. They have been investing their ill-gotten pirate booty plus ransoms in lucrative real estate and trading business. The radical Muslims have essentially taken over a predominantly Christian country, piece by piece. The corrupt Kenyatta has launched and runs a bandit warlord type of regime, where everyone in the regime can claim as much as possible at the expense of the Kenyan people. Given that 88% of Kenyans are without electricity, the country is indeed in the dark. Let's watch if the Chinese Navy can successfully patrol the Indian Ocean on the African side, to rid the waters of Somali bandits. The only nation so far with any isolated success has been Russia, which has stamped out Somali pirates in brutal moves.

The land of Kenya is rich, from deep minerals to fertile land, available for exploitation. My contact has British roots, and reports that many Brits are packing and leaving Kenya, in time him also it seems. They are not so disgusted by the violence, a valid concern but it is isolated. They object to harsher bank practices, restrictions in Nairobi banks on funds movements, and heavy fees for those movements. Treatment of Anglo businesses has shifted to outright unfriendly, and is expected soon to turn more hostile. The Kenya story is taken, and the Jackass runs with it more than other African nations. The reason has to do with its longstanding British roots and somewhat more beneficial European connections. The Kenya nation will turn to the Chinese camp, with nettlesome pirate obstacles. Note the Shilling is their currency, much like Egypt has the Pound as currency name, reflecting British influence.

◄$$$ THE KENYA & CHINA TRADE IMBALANCE SEEKS REMEDY. $$$

Bilateral Kenya-China trade is grossly tilted in favor of the Asian giant. The value of Kenya's imports from China was the second highest in 2013 at KES 182.36 billion, behind India at KES 258.23 billion, according to Economic Survey 2014. Imports from Kenyan to China include machinery, transport equipment, motor vehicles, metals, plastics, electrical equipments, electronics, textiles, and a range of household goods. Note the finished product nature. Exports from Kenya to China amounted to a mere KES 4.2 billion in 2013. Therefore the bilateral trade deficit for Kenya amounted to a massive KES 178.16 billion last year, equal to US$2.04 billion when converting the Kenya Shilling (KES). Exports to China include iron, manganese, chromium, copper ores, leather, sisal fibre, tea, coffee, and fish. Note the raw commodity nature. See the Kenya Star article (CLICK HERE).

◄$$$ INDIA, BRAZIL AND SOUTH AFRICA WANT ARGENTINA TO JOIN THE BRICS CLUB... THE SOUTH AMERICAN STALWART HAS DEBT PROBLEMS... GIVEN ITS IMMINENT EXIT BOOTED FROM THE G-20, SOME INTEREST LIES WITHIN THE BRICS TO ADOPT THE NATION AS A PROJECT... THE LIST OF BRICS & ASSOCIATES IS GROWING ON ALL CONTINENTS... THEY FORM THE EXPANDING NUCLEUS OF THE EURASIAN TRADE ZONE. $$$

In a recent interview the Indian ambassador to Argentina, Amarenda Khatua mentioned that India, Brazil, and South Africa are interested in having Argentina join the BRICS group of emerging economies. The mobilized renegade consensus is led by Russia and China. The New Delhi ambassador stated his plan to arrange a visit to Argentina for the next Indian Prime Minister, following the BRICS summit in Fortaleza Brazil. It is scheduled for July 15th. The Chinese foreign ministry has confirmed that president Xi Jinping will visit Buenos Aires on July 19th. India is currently in the process of electing a new parliament and prime minister. The process started on April 7th and will continue until May 12th, and must accommodate the vastness of the country and its 815 million registered voters. The leading party is Bharatiya Janata (BJP) which supports Narendra Modi, as the outcome will be known on May 16th. The election has been concluded, and Modi/BJP have emerged victorious. See the Asia Times article (CLICK HERE).

Ambassador Khatua sees a tremendous potential in their relations, but both countries have much to work to do. According to Clarin sources, Argentina is under pressure from other industrial powers, which want it out of the G-20 group of nations. However, the drawback is that Argentina has deep sovereign debt problems not shared by the BRICS members, and an imploding financial system, with nightmarish Peso currency crisis. Despite those problems, he perceives a growing consensus to have Argentina join the emerging markets group. Rather than weighed down by bricks, the land of the pampas and vibrant Buenos Aires could be lifted by the BRICS. See the Bernama article (CLICK HERE), the official news agency of Malaysia.

The list of BRICS Associates nations is growing. In recent months, the BRICS core palette has added Indonesia, Iran, Vietnam, Thailand, Pakistan, Argentina, Mexico, and Venezuela. Eventually the prize nations of Japan, SKorea, Germany, and Turkey will join, forming a massive nucleus of the Eurasian Trade Zone. It will be extremely interesting to watch the few key nations as they sit on the fence like Switzerland, England, and France. The Jackass sees game over for the NATO and Western Alliance, fractured by a toxic USDollar, cancerous bond monetization by the USFed, rampant bond fraud by Wall Street, unending market interference by New York and London, and the LIBOR rigged market. The final phase is marked and marred by US aggressive military action, replete with deep duplicity, increasingly seen as destructive to economies and dangerous for nuclear risks.

◄$$$ INDIA IS ON THE VERGE OF A GREATER AWAKENING, FREED SOMEWHAT FROM WESTERN CLUTCHES... EXPECT MORE DOMESTIC ECONOMIC AND STRUCTURAL DEVELOPMENT... EXPECT TRADE WITH IRAN TO EXPAND IN A BIG WAY, AND CREDIT FLOW FROM CHINA... EXPECT THE USGOVT TO ATTEMPT TO DISRUPT THE MODI REGIME IN INDIA, USING VIOLENCE BY PROXY... THE FUTURE ROAD FOR INDIA LIES ON THE BRICS ALLIANCE PATHWAYS. $$$

EuroRaj added some commentary on the important shift to Indian Govt politics. The following are his thoughts, my minor edits for flow. The big Modi/BJP win in the India national election will bring change to the geopolitical stage. The Indian Congress has been working closely with Western cabal and IMF offices to enhance a corrupt regime for a long time, since they disposed of Nehru. The nation's elite have been socking away wealth in Switzerland and Dubai for decades. The BJParty on the other hand stands for mercantilism and trade, but more so toward making India a strong, bold, and better nation with aspirations of being a super power. It stands for people empowerment and self reliance. The US, UK, and France will find dealing with the BJP difficult, using the old bribery methods. The party tends to lean toward China, in particular with support from the titans of industry, such as the Ambanis, Tatas, Birlas, Mahindras, the Big Pharma, and Info Tech giants. Trade with Iran and East Africa is likely to emerge in a significant way. Next to come is likely big Indian corporations borrowing from Chinese banks. Focus will definitely be on infrastructure spending, and bringing efficiency to the agricultural sector.

The Western narrative will try and paint Modi as a racist right-wing warmonger of elite caste. Modi does not toe the cabal line for Western interests. It was the BJP in 1998 that conducted the nuclear test against US wishes and despite US sanctions for five years. The US made no headway in halting tests. The US then compromised, made an exception for India and started nuclear exports. Expect the Pakistanis at the USGovt command to attempt to disrupt the Modi Regime in India, since the ISI is a well-known US tool. Expect much more broad deep financial economic and strategic cooperation between India and the Russia & China Eurasian belt. For a good hint on future direction, watch which national leader visits Modi first in India, or where Modi goes on his first foreign trip. The formation of the cabinet will be equally interesting. As final Jackass footnote, India will be powerful if it defies the West on gold controls, builds more industry, leads the region in the BRICS Associate parade, and starts mining metals including gold. The nation already does excellent offshore oil & gas work. It needs gold mining in the Himalayas, from domestic engineering, investment capital, and labor.

◄$$$ CHINA HAS DEMANDED GOLD AS COLLATERAL FOR ZIMBABWE LOANS, ALONG WITH DIAMONDS (MAYBE CHROME TOO)... CHINA WANTS ZIMBABWE TO USE ITS MINERAL PROCEEDS TO GUARANTEE ANY FUTURE LOANS, WHICH HAVE ALREADY BEEN EXTENDED BY NEARLY $1.5 BILLION IN THE LAST THREE YEARS. $$$

China wants Zimbabwe to use its mineral proceeds to guarantee any future loans. The Chinese have extended nearly $1.5 billion in the last three years to the nation's ailing economy. The debt burden to China alone amounts to 37% of the 2014 national budget, in what has been deemed onerous and difficult to repay. In February, the finance ministry announced the negotiation for a comprehensive financial rescue package. The official statement read, "We are discussing whether we can take proceeds of sales for some minerals as collateral for the loans. The bank and the team from the ministry of finance are now working at a technical level on how they can set up such a mechanism, how much the collateral would be and how much loans they [Zimbabwe Govt] can get." In principle, the funding request and use of minerals as collateral has already been accepted, reports the Beijing side. It should be noted that the Zimb Govt had a plan to create a gold & mineral backed currency, but they botched it as quickly as it was on the verge of being hatched. They are an extraordinarily unimpressive group of dimwit stubborn criminal types at the helm, far beyond incompetent. Watch China exploit the nation totally in established mineral supply lines, but in a constructive fashion.

Outgoing Chinese embassy economic and commercial counselor Han Bing called it all business as usual. More like gold and mineral securitization (grabs) on the legitimate legal table. Han stated, "We are asking for collateral because it is in accordance with rules and regulations when granting any loan. But it does not mean that we will use the collateral. This is the concept that we are now discussing with the Zimbabwe government." The Zimbabwe mines ministry added that they are also considering gold and diamonds and even chrome, as part of the securitization. The Harare leaders believe gold is more stable for the debt linkage. The pathways are seen as a great way for China to convert its excess USDollars to Gold. The Zimb Govt has announced it is ready to embark on a multiple currency system for the nation, but sure as the rising sun its leaders will lean on the ready printing press. Just smart management by China to create a channel for hard assets and minerals. See the Zero Hedge article (CLICK HERE) and The Source article (CLICK HERE).

◄$$$ CHINESE PLANS FOR NORTH KOREAN REGIME COLLAPSE HAVE BEEN LEAKED... AS NORTH KOREA'S SOLE REMAINING SIGNIFICANT SUPPORTER, CHINA IS FORCING THE ISSUE MUCH LIKE A CUSTODIAN STATE... IT APPEARS THAT THE CHINESE ARE ENCOURAGING THE NORTH KOREAN ARMY TO STAGE A COUP. $$$

The story might have substance. Beijing has set up contingency plans to detain key North Korean leaders, and to set up border refugee camps, showing no faith in the decrepit regime. The collapse of the North Korean Govt could be near. Documents drawn up by the Chinese Peoples Liberation Army (aka Chinese Military) were leaked to Japanese media on such elaborate plans. The entire 880-mile common border must be monitored for the contingency for a flow of refugees. Beijing would offer sanctuary to any senior North Korean military or political leaders who could be targets in reaction. But the sanctuary might consist of special camps where they could not conduct any military operations. Think removing them from any nuclear button. The Chinese expect some Western destabilization actions. The key event is China's refusal in the first three months of the year to export crude oil over its border to supply North Korea. One is left to conclude that Beijing is forcing a crisis, and possibly a regime change.

Jun Okumura is visiting scholar at the Meiji Institute for Global Affairs in Japan. He said, "This only underlines that all the countries with a stake in the stability of NorthEast Asia need to be talking to each other. What we have learned from the collapse of other dictatorships, the Soviet Union, Muammar Gaddafi's Libya, is that the more totalitarian the regime, the harder and faster they fall. This is why we need contingency plans. To be sure, the United States and South Korea have extensive plans in place, but the release of Chinese measures is new." The study came days after Beijing issued a thinly veiled warning to Pyongyang, ahead of a fourth anticipated nuclear test, that China would "by no means allow war or chaos to occur on our doorstep." See the UK Telegraph article (CLICK HERE). The inbred psycho freaks in the NK capital who have kept their nation captive for five decades really gotta go.

## CENTRAL BANKS LOST CONTROL

◄$$$ IN EFFECT, THE USFED QUANTITATIVE EASING POLICY IS A GRAND TAX, AND OBVIOUSLY AN INDIRECT WALL STREET BAILOUT... THE NET EFFECT OF USFED ACTIVITY IS A GRAND SHUFFLE BETWEEN OFFICIAL CHECKING ACCOUNTS AND SAVINGS ACCOUNTS... THE LOWER PREVAILING INTEREST RESULTS IN INADEQUATE INTEREST PAID ON BONDS AND SAVINGS GENERALLY, A TAX ON THE SYSTEM THAT FAILS TO MATERIALLY ADD MONEY TO THE REAL ECONOMY... LAUGHABLY, THE CENTRAL BANKS ARE TRYING TO PRODUCE PRICE INFLATION, BUT WARN OF FALSE POTENTIAL MOVES TO PRODUCE STRONG INFLATION... THEY ARE HACKS, AND CABAL ENGINEERS, VENDORS OF WET BLANKETS AND PURVEYORS OF HERETICAL DOGMA. $$$

The USDollar is a floating currency, backed by nothing tangible (like Gold) at the USFed window, but implicitly backed by USGovt debt and future obligations. The debt is managed in the current environment with almost zero bond buyers, by means of the Quantitative Easing. To be called the New Normal is obscene, and testament to the stupidity of the American population, even the entire Western population. A small minority state objection. They should demand a Gold Standard and liquidation of the insolvent criminal banks. Instead, they struggle with earning a living, managing businesses, and raising families. Warren Mosler calls the QE a tax, in full consistency with the Jackass notion that QE causes capital destruction. QE is in no way a stimulus program, the popular poppycock for the pauper masses. Our views run parallel perfectly, as the tax adds to cost and shrinks profits, which in turn kills capital. Mosler is a former hedge fund manager and now trailblazing economist, formerly a successful banker. The US currency system is one of floating exchange rates and a non-convertible currency, except to other floating paper currencies.

Mosler discusses interest rates and the market that sets them. His point is that QE undoes what the USDept Treasury has done. The interference comes in two ways. The USFed pays interest on bank reserves, which sucks capital out of the system. Doing so interferes significantly with capital formation in the USEconomy. The USFed also pays higher interest on Treasury securities, higher than the reserve accounts. Consequently, the market does not set rates based upon credit risk, borrower viability, collateral, income, track record, and so on. The interest rates are set by fiat declaration as a result of monetary policy and extreme market interference. It is not a legitimate market, but rather loaded with distortions. When the USFed purchases securities, it is as if the USDept Treasury never issued them in the first place. So the central bank nullifies the entire deficit dynamics on the fiscal side, removing all motivation to resolve the deficit and grotesque imbalance. The deficit is in part owing to the endless wars, roughly half the debt for weapons and conducting war. War is as natural to Nazis as planting a vegetable garden, in their genetic code.

Mosler argues that the process of selling USTreasurys does not constitute drainage, and does not take money out of the system in what is commonly called a deflationary way. The Modus Operandi for the the creation of USD-based deposits in member bank reserve accounts, as in money creation. By issuing securities and offering alternative interest bearing accounts, the USGovt pays a heap of interest to the USEconomy. The mainstream view is that USTreasury security sales takes money out of the system, a deflationary event which offsets the inflationary effect of deficit spending. He said, "So in that sense, issuing securities means paying higher rates than the overnight rate. It is a spending increase and has an inflationary bias by adding net financial assets to the system. Not true at all. Selling Treasurys does not take money out." He called the entire process akin to a grand shuffle between checking accounts and savings accounts, hardly a removal of funds.

The QE tax comes in two forms, a macro side and micro side. On the macro general side, when the USFed does its bond purchases, the USEconomy loses the potential interest income from those securities. That is negative. QE takes money (from interest income) out of the economy, which is what a tax does, he explained. Hence, QE is a tax. On the micro side at the ground level, where people live and businesses operate, less is received on interest paid from USTreasurys and bank certificates tied to USTreasury yields. The entire point of QE is to bring rates down, he explained so succinctly. Lower rates mean less interest paid to savers and bond holders, but also lowered USGovt cost of borrowing. The debt burden costs less to manage, maintain, and finance. The USEconomy is not aided with proper reward to savers and investors, which actually contributes to less cash flow, much like a wet blanket. Hence, QE is a tax. Mosler said, "If it does bring rates down, that means the rest of the securities the Treasury sells pay less interest too. So it lowers government interest expense even more. Because the government is a net payer of interest, lower rates mean it pays less interest." Simply stated.

The end result is not aid to the USEconomy, not stimulus at all, since a wet blanket ignites nothing and smothers all. QE results in less flow of funds and slower money velocity. If fiscal policy is expected to work, then the USFed is going to be raising rates, since the economy will become stronger. The only time QE is imposed and put in place is when the system architects do not believe the fiscal policy will work. So Quantitative Easing is a failure policy, a grand patch, and a cover for toxic pus secretions which obscures how badly the entire system has failed and how terribly the capital structures have deteriorated.

The foreign reaction is another destructive outcome. The Chinese and gaggle of other nations read about how the USFed is printing money. So in protection, they buy Gold in a big way. These knock-on effects happen all over the world, whereby portfolios are shifting based on perceptions, in his words. Because QE costs the private sector interest income and does not add money to the economy, is not inflationary, nor is it stimulus. The evidence is that it is not inflationary, and worse, all the hedging into gold and hard assets removes capital from business investment. Thus the wet blanket effect, the drainage to business investment, combined with capital destruction on shrinking profit margins. Mosler made a laughing stock of central bankers in his conclusion, as they try to create inflation within a declared desired boundary. The Bank of Japan and the USFed have been trying to create inflation as hard as they can, the Tokyo folks for over 20 years. The European Central Bank too. He said, "It is not so easy for a central bank to create inflation, or you would think one of these guys would have succeeded. People act like you have to be careful, because one false move on inflation expectations and, Bang, you have hyper-inflation. If you know what that false move is, tell [Fed Chair] Janet Yellen, because she is trying to find it." His chuckles came through in the mockery of a lunatic gang of failed central bankers. QE is a tax, not stimulus. It is a wet blanket too. See the Mosler Economics essay (CLICK HERE).

◄$$$ QE IS DOING MORE HARM THAN GOOD, AS CREDIT VOLUME IS NOT DICTATED BY DEPOSITS (OTHER WAY AROUND)... THE USFED MONEY MULTIPLIER APPROACH IS FOUNDED IN ASSUMPTIONS THAT DO NOT APPLY IN THE REAL WORLD... BUSINESS EXPANSION SPAWNS GROWTH IN CREDIT DEMAND AND INCOME... THE QE POLICY HAS ACTUALLY HAD A NEGATIVE EFFECT ON EMPLOYMENT, RECOVERY, AND ECONOMIC ACTIVITY, SINCE IT INVOLVES PUSHING ON A BIGGER BROADER LIMP STRING... THE WEALTH EFFECT HAS NOT CAUSED A RISE IN BUSINESS INVESTMENT... THE LOW INTEREST RATE IS NOT A TRIGGER OF GROWTH, BUT RATHER OF SPECULATION... HERESY ABOUNDS AS THE SYSTEM HURTLES TOWARD FAILURE. $$$

Independent economic and financial analyst Paul Gambles has some excellent insights. He foresees a truly epic economic and market meltdown unless drastic changes are enacted in most official policy, from monetary to fiscal to economic policy. He attempts to proclaim a pivotal moment in economic understanding at a key time, in reaction to an important admission of heresy from the Bank of England and their Quarterly Bulletin. At issue is the entire Money Multiplier approach and original power source for credit itself. Many misconceptions exist, despite debate and respect given to charlatans who set monetary policy. The Quantity Theory of Money is in dispute, the famous theme by Milton Friedman. Never lose track of the heresy of almost all major economists outside the Austrian School of Economics. The Keynesian crowd is full of quacks, hacks, fools, egotists, charlatans, shamans, apologists, and marketing agents, all destroyers of wealth. They dominate since they advise politicians to spend money they do not have, and when the system suffers crisis, to spend even more. The United States is in the midst of systemic breakdown, noted by the Lehman event. The response has been to cover nearly infinite debt by nearly infinite new money, and to bless the process as sane, giving it a label of the New Normal. Witness lunacy that does not stop.


The advocates of Quantitative Easing began in the Bank of Japan, but in recent crisis editions have extended to the the US Federal Reserve. The Euro Central Bank followed, although kicking and screaming for almost a year, a correct Jackass forecast in 2009. The Europeans know hyper inflation better than any other continent. The heresy has been repeated by the Bank of England, the Swiss National Bank, and the Peoples Bank of China. Notice how the global economy has not recovered, after $trillions of phony money has been pissed into the system, after $trillions of government debt has been covered, after $trillions in bad debt held by big banks has been redeemed. It is because QE is destructive to capital, nor does it enforce fiscal prudence. Expect no recovery. Expect economic deterioration from retired capital. Expect large deficits to persist. Expect systemic failure in acceleration.

QE is seen by its advocates, such as former USFed Chairman Ben Bernanke, as both the panacea to heal the post-global financial crisis world and also the factor whose absence was the main cause of the extended Great Depression. Bernanke is wrong on the former and wrong on the latter, but revered since he catered to the big banks in the grandest backdoor bailout in Wall Street history. In the 1930 decade, the nation emerged from the grips of depression due to the Gold Standard, not any revisionist history of credit extension volume flow. The nation had traction from industry put in motion and the backing of money by Gold. The current quagmire is partly a result of absent traction, the capital formation predominantly occurring in the many Emerging Market nations. Money means nothing anymore in the West.

The party line of the wrongful dogma preached by the banker high priests is as simple as it is incorrect. They preach an errant thesis that central banks create currency for commercial banks to then lend on to borrowers, which in turn stimulates both asset values and thus consumption, which then underpin and fuel the various stages of the expected recovery. The effect is said to have a virtuous cycle, which encourages banks to create even more money by lending to both businesses and individuals as the cycle of expansion unfolds. The theory sounds great, but it has one tiny flaw. It is nonsense, which Gambles confirms as well. The Jackass adds that as the system breaks down and capital is taken offline, the system requires even more phony money to compensate while federal deficits grow evermore larger and grotesque. By lying on price inflation, the maestros call inflation as growth to justify their heretic and calamitous policy. Bernanke claims the Great Depression would have been averted with greater liquidity bestowed. Thus the QE1 yielded QE2, which yielded Operation Twist, which yielded QE3, and which will soon yield QE4 perhaps. If it fails, do it again. Same wrong thinking and absent justification on the Road to Perdition (lost capital).

Gambles has been openly critical of the Bernanke Fed and its monetary policy for three years. Big Ben is the acknowledged academic expert on The Great Depression, but only acknowledged by the same crowd from Keynesian stains and blemishes on their uniform emblems. Gambles on CNBC interviews has explained how he could not justify the leap of blind faith demanded by Bernanke's neo-classical monetarist theories. The immortal economist Hyman Minsky was one of the first to recognize the flaw in those theories. He realized that in practice, in a credit driven economy, the process is the other way round. Here is the economic reality poorly comprehended, from correct Minsky theory. The credit which underpins economic activity is not created by a supply of large deposits which then enables banks to lend. Instead it is the demand for credit by borrowers that creates loans from banks which are then paid to recipients, who then deposit them into banks. Loans create deposits after work is rendered and finished products shipped, not the other way round. Minsky is not referring to credit for speculation by borrowers, but rather business formation.

In the latest BOE Quarterly Bulletin, they conceded this point, recognizing that QE is indeed tantamount to pushing on a giant piece of string. It is in reality a growing gigantic piece of string which transforms to become a toilet plunger for the entire economy. The bulletin itself attempted to salvage some central banker dignity by claiming somewhat painfully that the artificially lower interest rates caused by QE might have stimulated some loan demand. However the elasticity or price sensitivity of demand for credit has long been understood to vary at different points in the economic cycle. Besides, the loan demand even by Western corporations is for expansion in Asia and the Emerging Markets. The expert timeless Minsky recognized that people and businesses are not inclined to borrow money during a downturn purely because it is made cheaper to do so. Firms borrow when they foresee promising future prospects and improving conditions. Neither is perceived here and now. Consumers need to sense job security and confidence in the economic system before taking on additional borrowing commitments. Gambles believes the QE monetary policy has actually had a negative effect on employment, recovery, and economic activity. But unlike the Jackass, he does not delineate the dynamics of destroyed capital from higher cost structures in response. His points are valid and stand side by side effectively.

As footnote, the venerable Austrian School economist Kurt Richebacher (a German native) preached sternly that economic development begins first and foremost in capital formation and business spending. Work is done, products shipped, supply chain is built, people earn income, the multiplier trickles down the chain, money is spent and saved. This is the forgotten progress, the basis of capitalism. The morons who run policy nowadays have never run a business, prancing as purveyors of heretical dogma like high priests. The nation has forgotten what capitalism is, instead committed to promote hidden socialism and collectivism, laced with the banker fraud. The Emerging Markets are practicing capitalism, while the Western nations rot in place.

Gambles next challenged the Wealth Effect, another heretic plank to the Keynesian extensions of gobblygook. To be sure, a notable effect QE is seen to raise asset prices. However, with a basis of free money, what constitutes value is murky indeed. If the so-called wealth effect (of higher stock indices and property markets combined with lower interest rates) has failed to generate a sustained rebound in demand for private borrowing, then the higher asset values can start to depress economic activity. Just think of a property market where unclear job or income prospects make consumers nervous about borrowing even as house prices keep going up from private equity demand. The deterrent serves as obstacle. Another great point by Gambles. The Jackass joins by pointing out that the so-called Wealth Effect does not lead to economic development, but rather to asset speculation. The masses, including investors, chase the assets, chase whatever rises. These past several months it is seen as investing in the rising S&P500 stock index instead of starting a new business and dealing with the nutty ObamaCare costs.

Andrea Terzi is Professor of Economics at Franklin University. She added some worthwhile comments. Terzi calls into question the entire theory that lower interest rates kickstart economic rebound. She points to the loose connection between rates and activity. She doubts such monetary policy is effective at all. The Jackass reminds that since 1999, when China was granted the Most Favored Nation status, the primary location for global industrial expansion has been China. If not in the expanding awakening Middle Kingdom, then it has been in the Emerging Markets where labor is cheaper, regulatory fences are lower, and fringe benefits tend not to be mandated. The ultra-low USFed interest rate has not kickstarted the USEconomy. The business prospects lie outside the United States. Besides, the USGovt corporate tax structure is the highest in the industrial world. Federal regulatory burdens are, well, burdensome.

The system is doomed to failure, which should be obvious when one considers that the prevailing approach is to go deeper into debt when the system strains mightily from excessive debt. The study of alcoholism is far more advanced than the economics of monetary management. It is mangey. Keeping the official interest rate near zero reflects on a dying pulse of the USEconomy itself. A rising rate is a rising pulse, signaling an increase in activity and flow. The recent Hat Trick Letter has shown the dreadfully low Money Velocity in contrast to the frightening high Money Supply Growth. The system is heading for failure, no question about it to the enlightened among us. Gambles concluded, "For a central bank to recognize that its economic understanding is flawed is a major admission [by the BOE]. However, unless it takes the opportunity to correct its policy in line with this new understanding, then it will repeat the same old mistakes [since no change in monetary policy has come]. The world's central banks are steering a course unwittingly directly towards a repeat of the 1930s but on a far greater scale. It is not yet clear that there is any commitment to change this course or indeed whether there is still time to do so. [Way too late.] Either way, it will be very interesting to see what future economic historians make of Ben Bernanke's contribution to economic policy." See the CNBC article (CLICK HERE).

◄$$$ JANET YELLEN HOLDS FIRM ON SIX DUBIOUS PREMISES, ALL OF WHICH WILL PROBABLY PROVE TO BE UNTRUE... NO FORMULA APPLIES FOR HIKING INTEREST RATES, AND NO TIMETABLE IS IN PLACE... THE USFED IS STUCK IN MALFUNCTION MODE, PARALYZED AND CRIPPLED BY FAILED MONETARY POLICY. $$$

In a recent event, with full adulation for heresy and passed baton in promised failed monetary policy, the newly appointed USFed Chair Janet Yellen did a masterful job navigating the political shoals at the Joint Economic Committee. But she still stands on acidic sinking ground, committed to failed policy. The event is the usual site for kowtowing with one or two critical gadflies on the panel of the House committee. She shares the concern about income and wealth inequality, even conceding that Congress needed to act soon to reduce long-term budget deficits. But her testimony and its related discussion raised a host of serious questions about the role of the USFed itself in this economy mired by recession with all gears spinning and oil burning out of the central bank windows. Yellen spouted about six issues which made no sense. The Fed Mandate is to work toward full employment with low price inflation amidst stable financial markets, the new triple mandate. The failure is on all three fronts. See the Market Watch article (CLICK HERE). Yellen cannot defend against the following symptoms of failed monetary policy.

  1. keeping even the doctored CPI at the 2% goal
  2. massive stock market bubble despite ongoing recession
  3. persistent increase in income inequality
  4. role of forward guidance as baseless klaptrapp
  5. limp economic growth, even after the 5% lie on inflation
  6. historically low labor force participation rate.

USFed Chair Yellen says a high degree of accommodation is still needed. The Liar in Chief is at work on tapering QE volume, the challenge being to hide the proxy agents hired to outsource the bond monetization in greater volumes. The giant red herring is to avoid counting the derivative redemption which multiplies the QE volume by a factor of 5x to 7x more. The actual USFed QE volume is well over $100 billion per month, counting the derivatives. The official count never includes the hidden backroom derivatives redeemed by the broken Wall Street banks facing desperation, insolvency, and vanished capital.

USFed Chair Janet Yellen continues to make clear she believes the USEconomy still requires a strong dose of accommodation. It is laughable she still calls it stimulus five years after the recession supposedly ended, yet no recovery has occurred. The easy money and ample money have stimulated nothing except systemic capital failure. The biggest obstacle to the recovery is the USFed policy and the absent liquidation of the big insolvent banks. The lunacy is heard as she proclaims how price inflation is below their goal, and unemployment is widespread. She spoke the required party line, on the improved economic outlook and sluggish growth. Neither is based in reality. In no way can the central bank remove accommodation, but they will talk about tapering the QE volume. She is a liar, just like Bernanke was a liar, all surrounded by liars. Some reality came when Yellen admitted that no mechanical formula exists and no timetable is in place for when the benchmark interest rate might rise. They are stuck in time, lost in space, holding no working monetary compass, confused on their own failure. She repeated the Federal Open Market Committee statement that the rate will stay near zero for a considerable time, like forever. See the Bloomberg article (CLICK HERE). Since 2012, the Jackass is on record with a forecast that QE to Infinity is the rule, the policy, the position, until systemic failure and USGovt debt default.

◄$$$ STEIN AT THE USFED IS DELUSIONAL... HE EXPECTS QE TAPERING SET FOR SMOOTH LANDING WITH NO MARKET DISRUPTIONS... THESE GUYS ARE GENIUSES IN THEIR OWN MINDS, WHO COULD NOT RUN A SUCCESSFUL VEGETABLE STAND, BAKERY SHOP, OR HOTDOG PUSHCART. $$$

Theses guys are full of delusion, deep narcissists, suffering from Messiah complexes an order of magnitude worse than the medical profession. These are witch doctors and great destroyers of wealth. Jeremy Stein gave an exit speech as a Federal Reserve governor. He crowed and boasted that the central bank crew has engineered what will turn out to be a smooth end to their bond purchase program, and better still, the Soft Landing will not whipsaw investors as interest rate expectations change. All hail the witch doctors and their phantom miracle cures. They should be heckled with tossed tomatoes, not revered and paid at all. The investment community is equally blockheaded and blind to reality. Investors almost uniformly expect that the Federal Open Market Committee will continue tapering bond purchases in further measured steps through the rest of the year. What glad tidings! The investors do not wish to see evidence of QE volume lies, even grand lies.

The liars at the USFed claim to have reduced buying in $10 billion increments over the past four meetings to $45 billion a month. Stein stated, "We are currently in a very good position with respect to the market's expectations for our asset purchases. With these expectations in place, the execution of the taper itself becomes much easier, as we no longer have to worry about a step down at each meeting, sending a potentially misleading message about our intentions with respect to the future path of the federal funds rate." This egomaniac surely spent more time in front of the mirror than fortifying such drivel on paper with valid arguments to read. No misleading here! They are liars! The QE volume in bond and other derivative purchases is well over $100bn per month and closer to $150bn per month. They are using proxies like the Euro Central Bank and Bank of England to gobble up unwanted USTBonds, stuffing dumped USTreasury Bonds in EuroClear hidey holes. See the Money News article (CLICK HERE).

◄$$$ DAVID STOCKMAN PULLED THE PLUG ON JANET YELLEN'S BATHTUB ECONOMICS... HE DELIVERED A POINTED TIRADE THAT COULD SERVE AS A COURT ROOM INDICTMENT FOR A FAILED MONETARY POLICY OVER THE LAST FEW DECADES... WITNESS THE RANCID FRUIT FROM THE TRANSPLANTED KEYNESIAN TREE. $$$

Former Reagan Admin Budget Director has been an indefatigable critic of the US Federal Reserve. It is a shock to see him not stifled and shut up, either run over in a hit & run or at least arrested for child planted pornography on his home computer. He wrote a directed tirade with solid logic on a napkin. "Some people are either born or nurtured into a time warp and never seem to escape. That is Janet Yellen's apparent problem with the Bathtub Economics of the 1960s neo-Keynesians. As has now been apparent for decades, the Great Inflation of the 1970s was a live fire drill that proved Keynesian activism does not work. That particular historic trauma showed that full employment and potential GDP were imaginary figments from scribblers in Ivy League economics departments, not something that is targetable by the fiscal and monetary authorities or even measureable in a free market economy. Even more crucially, the double digit inflation, faltering growth, and repetitive Boom & Bust macro-cycles of the 1970s and early 1980s proved in spades that interventionist manipulations designed to achieve so-called full-employment actually did the opposite. That is, they only amplified economic instability and under-performance as the decade wore on.

The irony is that the paternity of this real world proof came from the Yale Economics Dept, which was inspired in the 1960s and 1970s by one of the most arrogant, wrong-headed Keynesians of modern times, Dr James Tobin. It was Tobin's neo-Keynesian theories and activist role in the Kennedy-Johnson White House which gave rise to the Great Inflation and its destructive aftermath." See the Stockman Contra Corner essay (CLICK HERE). The USGovt leaders have latched for decades onto any elite rubbish that justifies endless debt in front rooms, while embracing fascist war pledges in backrooms. The system has obscene debt levels, absent industrial critical mass, grotesque economic imbalances, shocking unemployment, and total central bank monetary dependence to show as its ugly bitter rancid fruit from the transplanted Keynesian tree. One should not unduly blame John Maynard Keynes. He advocated paying down the federal debt during good times, and never anticipated a warmongering military with bloated sacred budgets. Keynes would be a critic, standing alongside Stockman.

## BANKS WOBBLE AS CRIME SCENE

◄$$$ BANKER DEATHS HAVE A JPMORGAN AND SWISS CONNECTION... COVER-UP IS THE THEME, SILENCE THE MEANS, MID-LEVEL THE AIM. $$$

The recent death of Pierre Wauthier, CFO of Zurich Insurance Group, points a finger at JPMorgan once again. The JPM link is the common thread with numerous banker deaths (more like murders). The motive appears to keep closed all data on scummy activity, such as related to the interconnectedness of global banking, offshore banking, off-balance sheet vehicles, regulatory arbitrage, mule bond runs, and derivative fraud. New links have come to the surface between JPMorgan Chase and two Swiss insurers. The Wauthier supposed suicide had the tell-tale murder hint, a typed note. The victim worked for JPMorgan Chase for 11 years, his last JPM post in London. Also, JPMorgan is a market maker in the stock of Zurich Insurance Group, which raises more red flags on conflict of interest. In addition, JPMorgan is an asset manager for a large roster of mutual funds contained in the Investment Linked Policy offered by Zurich Insurance Group. One JPMorgan managed fund, the Global Natural Resources Fund, has lost 42.5% since last June. The custodian of the assets in these funds is JPMorgan Bank Luxembourg SA. Those waters are as dark and murky as those where the London Whale operated. The fund brochure indicates that many types of derivatives are used in the portfolios, the same that beached the whale.

In January, Tim Dickenson died a suspicious death. He was the UK-based Director of Communications at Swiss RE. No further information was offered by the tight lipped and contentious Swiss RE folks. A deeper relationship exists with significant financial ties to JPMorgan. Swiss RE obtained a $1 billion Letter of Credit facility from JPMorgan. The Stable Value Fund run by JPMorgan is one of the three largest funds in the 401k plans Swiss RE offers to its US workers. Swiss RE and Zurich Insurance Group also provide excess insurance lines to JPMorgan in its tower insurance structures to provide liability protection from securities fraud claims, another murky pond. Both Swiss insurance firms have been bogged down by ongoing fraud charges and investigations by the Securities & Exchange Commission (SEC) which have resulted in fines paid but new charges. Another death that touched JPMorgan include Gabriel Magee (VP Technology in their European HQ in London), who was in charge of architecture oversight concerning fixed income securities and interest rate derivatives. Another death was Ryan Crane, who was an Executive Director involved in trading at JPMorgan's New York office. Another death was Dennis Li (or Dennis Li Junjie or Dennis Lee), an investment banker at the Hong Kong office of JPMorgan. These men were not high ranking executives, and they were rather young. They knew too much about criminal operations and extensive losses that JPMorgan wants to keep quiet. See the Wall Street Parade (CLICK HERE).

Many more stories are on the table about the hidden dealings of the Anglo-American banking crime syndicate. USFed Chairman Bernanke held 84 secret meetings leading up to the Lehman planned kill. The Bank of England shredded all its crisis era records, it admitted to Parliament. Many are the ways the banking crime syndicate covers its tracks. Murders prevent revelations which would alter the entire public perception of their crimes and forever disrupt the fragile faulty foundation on the monetary system. See the Wall Street Parade articles (CLICK HERE and HERE).

◄$$$ A NEW DERIVATIVE CONTRACT HAS EMERGED... THE CABAL IS RUNNING SIDE BETS OF MURDERS OF THE MID-LEVEL BANKERS WORTH HUNDREDS OF $MILLIONS ON THE HEADS OF KEY EMPLOYEES... THE TOTAL VALUE OF BOLI ASSETS IS POTENTIALLY OVER $680 BILLION, NOT A TRIFLING SUM... THE FEDERAL REGULATORS PROTECT THE NEW BUSINESS BY CALLING IT TRADE SECRETS... JPMORGAN EMPLOYEES ARE THE OUTLIER. $$

A cross between Orwellian, Mafia, macabre, and vile sinister is the banker murders. These are mid-level bankers who know too much about slush funds, off-shore accounts, hidden derivatives, foul links to protected sources (like Vatican or Russian Mafiya), mule bond run deliveries, thefts of private accounts (including gold), market skimming, and more. The suspicious deaths are enough to arouse curiosity, but the unusual life insurance policies tip it over the edge. It turns out that four big Wall Street banks hold over $680 billion face amount of life insurance on their workers, payable to the banks, not the families. Upon inquiry, the federal regulator related that the information constitutes trade secrets. The life expectancy of a 25 year old man with at least a college degree was 81 years of age, as of 2006. Not so if a bank employee at a major New York bank or connected to Wall Street mortgage and derivative businesses. Further adding to suspicions, hardly random in occurrence, is the tendency for the deaths to happen to JPMorgan bankers. If one were to do a simple paired statistical test of JPM versus Citigroup, the hypothesis of random is tossed out quickly and unequivocally. The deaths are almost uniformly at JPM desks.

Both big banks have nearly equal business segments and size. In focus suddenly is the bank owned life insurance (BOLI), a controversial practice that pays the corporation when a current or former employee dies. They justify the policies by claiming the business is hurt if a key person is no longer in the important post. Yet the insured tend not to be high level people, which implies they know too much on illegal activity. Both JPMorgan and Citigroup own massive amounts of  BOLI policies ready to pay out. The death sweeps are a regular tally of employee status, to check on potential death benefit from the insurance company.

The insurance award goes to the bank, the basis of controversy. In many cases, the employees do not even know that multi-$million policies that pay upon their death have been taken out by their employer, even former employer. To insure the death of a former employee is the true indisputable item on the table, pointing to murder, since function is not the implied issue, but rather information. For publicly traded companies, their shareholders have a right under securities laws to understand the quality of its earnings, like whether from the ghoulish practice of profiting from the death of workers. Witness a new shadowy contributing source to Wall Street profits. The data can be found in certain reports, even if regulators put it behind trade secrecy walls. JPMorgan Chase held $10.4 billion in BOLI assets at its insured depository bank as of end December 2013. Michael Myers is from a Texas law firm McClanahan Myers Espey LLP, and an expert on BOLI assets. He estimates the cash value of $10.4 billion could easily translate into more than $100 billion in actual insurance coverage, but possibly two or three times that amount. So the payout potential tends to be 10x to 30x the cash value. The law stipulates that the families might be entitled to the proceeds of these policies if employee consent was required under State law and not given, and/or if the corporation cannot show it had an insurable interest in the person. The latter is a tough test to satisfy, unless the worker is not on the bank payroll any longer.

A source of BOLI data is the Federal Financial Institutions Examination Council (FFIEC), a federal inter-agency. Its website provided consolidated financial statements for all the large Wall Street banks. Four of Wall Street's largest banks hold a total of $68.1 billion in BOLI assets. Using the modest 10:1 ratio by Myers, it means these four banks could potentially collect at least $681 billion in tax free income from life insurance proceeds on their current and former workers. Not an expert, the Jackass believes death benefits are in the same category as award for lost limbs or other personal injury, thus not a taxable event. The breakdown in BOLI assets follows as of December 2013.

BANK

BOLI

EARNINGS

Bank of America

$22.7 billion

$625 million

Wells Fargo

$18.7 billion

$566 million

JPMorgan Chase

$17.9 billion

$686 million

Citigroup

  $8.8 billion

    $0

More insidious, the BOLI assets show earnings from the cash surrender value, kind of a rising odds of subject death. More practices raise suspicion. Separate accounts are being used for large amounts of their BOLI assets. Some funds never leave the bank, since re-invested in friendly hedge funds, creating an added layer of scummy waters. Some banks have reported losses from BOLI assets, like Wachovia (now owned by Wells Fargo) and Fifth Third Bancorp. It is not clear if the BOLI payout applies to deaths on Wall Street Satanic basement altars, for exclusive member invitation only. Not likely, since suicide usually does not include self-disembowelment, the regular ritual event. See the Wall Street Parade article (CLICK HERE).

◄$$$ BARCLAYS WILL AXE 19,000 JOBS INCLUDING 7000 INVESTMENT BANKERS... A GRAND SHOCK WAVE CAME ON THE NEWS... TO BE SURE, BARCLAYS IS SLOWLY BEING SHUT DOWN, SINCE IT CANNOT BE PROSECUTED... NO REMEDY, JUST EXTINGUISHED. $$

Barclays plans to sack thousands of highly paid bankers. A total of 7000 jobs will be shed from in its investment division, including more than 2000 in the London City sphere. The rigged casino will be in part shut down. The big bank called the reduction a bold simplification plan that almost caused guffaws of laughter. They will cut a total of 19,000 staff around the world by 2016. The closures involve its European chain of high street banks in Portugal, Spain, Italy, and France. The dramatic reform comes after its profits fell hard earlier this year, in contrast to bonus hikes by 10% doled out at the same time amidst uproars. The Voice has assured that since the big London banks cannot be properly prosecuted for their grand crimes, like LIBOR price rigging, they will be shut down piece by piece. Watch closely for cables and passageways to the LMBA and COMEX to be cut and closed, like official fixes. See the UK Daily Mail article (CLICK HERE).

◄$$$ UNOFFICIAL PROBLEM BANK LIST REMAINS UNCHANGED AT 509 INSTITUTIONS... UPDATED INFORMATION IS COMING. $$$

These are just the banks that regulators say are in trouble. The unofficial list of Problem Banks is compiled only from public sources.  Here is the unofficial problem bank list for May 9, 2014 shown on the CR4RE website (CLICK HERE). It is best to note the changes. The total remains at 509 institutions with assets of $163.3 billion. The last week for alterations was November 23, 2012. Next should be updates by the Office for Comptroller to the Currency. Then comes the FDIC report on industry results for Q1, with updated Official Problem Bank figures. It has been ten weeks since the last release of the official figures. The difference between the unofficial (then 566, now 509) and official lists (467) has been reduced from 99 to 42 institutions. See the Calculated Risk article (CLICK HERE).

◄$$$ SOCIETE GENERALE BANK SAYS THE RUSSIAN SQUALL HAS HIT PROFITS FOR THE LARGE FRENCH BANK... IT HAS DIRECT SYNDICATE TIES TO WALL STREET AND LONDON SYNDICATE BANKS. $$$

French bank Societe Generale reported a huge profit decline setback for 1Q2014, with blame placed on declining asset values in Russia. The country strangely is the site of the second biggest market for high street banking. The bank wrote down the value of assets acquired in Russia by EUR 525 million (=US$731 mn). They cited a Ruble decline, slower Russian Economic growth, rising cost in risk, all reflecting the crisis in Ukraine. These writedowns cut the bank's quarterly net profit figure to EUR 315 million, down by 13.3% versus the level Q1 last year. The provisions for troubled loans in Russia almost doubled.

Societe General had increased its stake in the Russian subsidiary Rosbank in April. They even issued forward guidance for the business with outlook promising, with aim of investment return at over 10% in 2016. The big French bank claims that activities in Russia represented only 3.0% of its worldwide activities. Contradictions or inconsistencies arise. Net banking income rose by 14.0% to EUR 5.68 billion. Provisions for problem loans fell by 28.0%, with a big reduction in reserves place for risky loans to French businesses. Assume they raided their Loan Loss Reserves for profit purposes, or used them to cover writedowns. The bank saw a rise in the ratio of core shareholder funds to loans made, the ratio going from 10.0% at the end of last year to 10.1% at the end of March. That is well above rthe 8.0% minimum level required by the global masters from Basel III. See the France24 article (CLICK HERE).

◄$$$ RUMORS OF A POTENTIAL BANK ACCOUNT FREEZE IN BRAZIL... THE GLOBAL RESET IS NEAR... SOME REASSURING CONFIRMATIONS OF PARADIGM SHIFT DETAILS CAME FROM THE BANK OF CHINA IN SAO PAOLO... BIG CHANGES ARE COMING, SHOCK WAVES WITH CURRENCY, INTRODUCTION OF GOLD-BACKED RUSSIAN & CHINESE CURRENCIES, THE END OF THE USDOLLAR AS GLOBAL CURRENCY RESERVE... INVESTORS ARE MOVING MONEY OUT OF THE US-MARKETS. $$$

Thanks to MarceloF in Rio de Janiero, a Hat Trick Letter subscriber. He reports on persistent rumors. He wrote, "I want to mention that there are rumors here in Brazil, that there will be a freeze in the money in the bank accounts. I live in Rio. So I wonder how would this be related to the Global Currency Reset." Expect a freeze to make large movements impossible in order to prevent exploit the sudden shifts and changes. Conclude easily that there are enough signs to suggest that all is not well in the Western banking world, serious ailments unaddressed. Something big could happen soon. Important changes are coming, very unclear exactly what.

Thanks also to WesleyS in Sao Paolo, another Hat Trick Letter subscriber. He reports on confirmed word about significant changes coming, highly disruptive to the USDollar currency regime. The following are his words, his points, my edits for flow. The Bank of China (BOC) opened bank offices a few years ago in 2009 here in Sao Paulo. In late April, a conversation of length took place with a investment manager. A room was closed, and a talk took place for an hour. During the conversation the urge came to discuss several important topics, because the BOC officer knew so much. Topics she mentioned without hesitation were the decline of the Dollar and its removal as a global reserve, the new gold-backed currencies from Russia and China, the Yuan Swap Facility usage. To my amazement, she confirmed everything to me. She is expecting actions as soon as this July, when the BRICS Development Bank officially begins its operations. Furthermore, she mentioned that many Brazilian investors with liquid investments in the United States are coming to her office in the last few months asking for assistance. They wish to move completely their assets from US to Asian markets as soon as possible. They anticipate negative factors to hit the USDollar soon with a big impact. The Bank of China and its investment office help them to transfer and invest in Hong Kong markets, the most desired location to place funds. Challenges exist regarding investment in China for Westerners. She opened up in several ways, just from my initially stated worries about the US markets.

◄$$$ LOS ANGELES CURRENTLY SPENDS MORE ON WALL STREET FEES THAN ON MAINTAINING ROADS... THE INFAMOUS INTEREST RATE SWAPS ARE AGAIN THE CULPRIT, WHOSE RISK WAS SURELY NOT DISCLOSED ADEQUATELY... REMINISCENT OF THE ALABAMA COUNTY BLOOD SUCKING... ANOTHER CLASSIC EXAMPLE OF WALL STREET BLEEDING MAIN STREET DRY. $$$

Controversy has hit Los Angeles, whose councilman Paul Koretz has called for banks NY Mellon and Dexia to return $65 million in unfair profits and termination payments sent between 2008 and 2014. The hubbub has come over a new report which revealed that the city spent more than $200 million in fees to Wall Street in 2013 alone. The amount is 25% more than spending on city road maintenance, officially from the Bureau of Street Services. Koretz threatens to take punitive action against the financial institutions involved if they do not renegotiate the deal. A union initiative by the Fix LA Coalition issued the report. It concluded, "The City of Los Angeles last year spent more on Wall Street fees than it did on our streets. LA paid Wall Street $204 million in fees, spending only $163 million on the Bureau of Street Services." Once again, the fees are connected to the controversial Interest Rate Swap deal set by Los Angeles in 2006. At issue are details on the fees, which are not directly stated. The total to date was calculated using numerous registry records and sources. The deal was similar to those engineered by Wall Street in cities across the country, with pitifully little awareness of risk, or inadequate disclosure of details on inner workings. Detroit, Denver, and Birmingham are other cities beset by the same Wall Street plague. Several such headlines in recent years have been made in some of the country's most high profile municipal budget crises. See the Pando Daily article (CLICK HERE).

## THANKS

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.