QUOTES ON MONEY
"We are in the End Game finally." ~ the Voice
"Signs and symbols rule the world, not words nor laws." ~ Confucius (see the obverse of US$1 bill)
"The world is sinking into debt. Nothing learned from the financial crisis. [It features] higher and higher the rise in debt for the global economy. The next big crash is only a matter of time. [The nations are] making the same mistakes again and again, which is not helping. The financial crisis of 2007-2008 can perhaps be understood as a gaffe, such as over-optimistic globalization euphoria. That it continues since then as well, is the real drama. A few figures: The world's accumulated debt of the states and the private sector amounted to the end of 2007 proud US$107 trillion, over twice the global economic output. Since then much talk of debt reduction of more stringent financial regulation and from saving. We must not be fooled by it. Reality is actually the opposite: The debt continued to rise, even explodes in some countries, according to the Bank for International Settlements. Incredibly, [debt is now] more than US$150 trillion at the end of 2013, approximately two and a half times the global GDP. [Witness] the ever-increasing debt. It all makes the world economy vulnerable to the next big crisis, while hindering the growth dynamics. It is the stuff of which serious conflicts within societies and between states." ~ Der Spiegel
"Now that [Team] President Obama has an urgent political need to absolve themselves of responsibility for what is happening in Syria, he needs to find a scapegoat, someone who does not enjoy the sympathy of the American people. Saudi Arabia is perfect for this role." ~ Eric Draitser (political scientist)
"On matters concerning island disputes and Hong Kong disruptions, neither China nor Russia will give in one inch or a centimeter. The United States will be taught a fatal lesson for its subversive deeds and endless destruction. At the same time, they will extend the harsh retribution to the British. The final chapter and cleanup will not be pretty. It will be a very sudden death, a bit like Lehman Brothers. Others believe it might be a long dragged out episode, like a big piece of tough meat going through a dull meat grinder. One thing however is crystal clear, that all this corruption in market control is unsustainable for much longer. We are quite close to a gigantic meltdown, like in months rather then a year or two. One foot is already on the finishing line in this race to economic death. It will be a brutal event once it happens. If the Chinese re-price gold, they will do it after the Chinese New Year in 2015 (February 19th), unless the United States needs to be neutralized before that. The Chinese are not known for making stupid moves." ~ The Voice (one might surmise the Gold price reset will be the act of vengeance, but it will be much more, rather a return to some normalcy with equilibrium)
"France is sclerotic, hopeless, and downbeat. I have never been to a country more ill at ease. Nothing works and nobody cares about it. It is finished. If you have investments in French businesses, get them out quickly." ~ Andy Street (managing director of John Lewis Investments, who later admitted to having gone too far in the statement)
"Russia and China will give no signal of anything. One day we will get up in the morning, and major events will have just happened. We are nearing the end of the financial war, which has been going on for years. The endgame is now upon us, the consequences for West, particularly the United States and United Kingdom will be savage and uncompromising. In my opinion we will look back in generations to come at this being the most profound times humanity has witnessed or potentially will ever have witnessed. The West continues to over-inflate their own self-importance which is a tragic comedy, coupled with totally under-estimating and having no idea what Russia and China are in the process of doing. They are ushering in a return to the Gold Trade Standard, which will force profound changes on the global banking reserves system. The USDollar will be discarded, and cause a great shock to the United States." ~ London Paul
"The financial war continues. Even if they can not push the stock market, and I think increasingly they cannot, they are not going to let Gold escape, not yet. Rallies now are benefiting from short squeezes, but only last a day, and soon only a few hours. We are seeing a huge split between the banksters and the war/power monger in the Washington gang. Here is the crux of the conflict. They are using the USDollar as a cudgel on Russia and China. However, it is coming home to bite equities square in the nuts, since foreign investors will not buy with the elevated USD. You see, the Wall Street banks have huge exposure to stocks. They practically own the stock market, along with their masters at the Fed." ~ George (the COMEX logistics pro)
## URGENT PRELIMINARY
◄$$$ MANY INDICATIONS POINT TO THE EBOLA VIRUS BEING FABRICATED AND WIDELY DISSEMINATED IN OFFICIAL MANNER... SOME PRESS REPORTS APPEAR FAKED AND CONTRIVED... THE WESTERN ELITE ARE BEHIND FUNDING FOR EBOLA SUPER-VIRUS... A PATENT IS OWNED ON IT, MORE EVIDENCE OF ITS FABRICATION... RED CROSS WORKERS ARE BEING KILLED, AS AFRICAN RESISTANCE HAS SPRUNG UP AFTER THE ONLY SICK PEOPLE ARE THOSE GIVEN THE (LACED) VACCINE... PONDER THE ROCKEFELLER AND GATES GENOCIDE INITIATIVE, AND BIG PHARMA LEGAL IMMUNITY. $$$
As preface, Microsoft founder and Mason Bill Gates, a key member of the global power elite controlling the USGovt, has stated that in order to reduce the atmospheric carbon dioxide levels, we must reduce populations. He refers to genocide of the planet in order to achieve that population reduction goals. Think killing people en masse to make a better world free of worthless eaters (a Kissinger term). Gates openly admitted that the plan was to use vaccines in the genocide plan. His prominent foundation has been a leading edge in the virus development. Their 2009 trial run with the Swine Flu met with failure. The internet and other sources spread ample information about the infectious nature of the vaccine itself. Entire organizations rebelled. The victims were predominantly those who were given the vaccine. So the Elite will try again with more firepower, more coercion, more publicity, and more fear. Wide concerns exist that the vaccine might become legally required, even with traffic checkpoints and school usage. The Atlanta Center for Disease Control is in possession of a patent on this fabricated Ebola super-virus. Knowledge of this fact should arouse deep suspicion. War in the United States is good business. So is virus development.
The United States is linked to the Bio-Warfare Labs in the Ebola Zone of West Africa. It was in these laboratories that the Ebola virus emerged. Worse, the USGovt ordered some victims to come to the United States for study, which goes against all known international protocol, since quarantine is always ordered instead. See the RIA Novosti article (CLICK HERE). Other reports emanate from a special-ops source within the USMilitary. A warning came that the Ebola vaccine is most likely the trigger for the coming Ebola plague. The USMilitary has been ordered into certain West African nations. The purpose appears two-fold. They will protect the Red Cross workers who are accused of spreading the virus through vaccines. They will return home with some trace of the virus themselves, maybe also given through military vaccines of a different kind. The theory often heard is that the entire genocide project has many stages, whereby recombinant virus pathogenesis is involved in those stages, perhaps even including gas agents from chemtrails.
Reports are widespread that Vitamin C treatment is highly effective in treating the Ebola virus, since when contracted, the human body is quickly drained of the immune combatant vitamin. Notice no mention of Vit-C in the mainstream news. The need to create a mild panic is critical, so as to assure wide participation of the vaccine usage. The New York Times and CNN were caught in reports of a phony nature, as fake victims in Ebola were featured. See the Activist Post (CLICK HERE). It should be noted that in 2009, Baxter Labs had legally immunity from the Obama Admin for using contaminated vaccines. The pharmaceutical industry is positioned to profit, with absent legal liability. It is really high time for the West to open its doors and eyes to Eastern developments, especially when they push aside banker cabal activity that is intended to harm, control, and exploit humanity. A Chinese firm seeks quick approval of a drug toward cure of the Ebola virus. Expect fierce US and West resistance. See the Peoples Daily Online article (CLICK HERE). A Russian vaccine against AIDS is to be tested on humans. Expect fierce US and West resistance. See the English Pravda article (CLICK HERE).
Some disturbing accounts were given from Ghana. A person named Nana Kwami and her Facebook found itself the focus on much international attention. She wrote that the Ebola outbreak is not real and the only people who have gotten sick are those who have received treatments and injections from the Red Cross. She wrote about natives taking action in self-defense, even killing some workers. The original Facebook post went viral, so to speak. The messages suddenly became inaccessible from the US and probably other places, but it still serves from Mexico. The officials are censoring this news on a geographical basis, because it is too important. Nana Kwame wrote, "People in the Western World need to know what is happening here in West Africa. THEY ARE LYING!!! Ebola as a virus does NOT Exist and is NOT Spread. The Red Cross has brought a disease to four specific countries for four specific reasons. It is only contracted by those who receive treatments and injections from the Red Cross. That is why Liberians and Nigerians have begun kicking the Red Cross out of their countries and reporting in the news the truth." More explanatory factors are suspected for the USMilitary troop protective placements. They are not for protection. They are intended to give a strong (violent) push toward resumed diamond production in Sierra Leone, where workers are on strike for low pay and miserable working conditions. Always more than meets the eye, or we are told. The communications continue.
Lastly, a futurist research paper by the Rockefeller Foundation detailed the Ebola Plot years ago. This attack is not new. The people have been forewarned. The plot seems inconceivable to good people with integrity. The Swine Flu virus attack and subsequent usage of vaccinations to spread the disease was not successful in causing the desired genocide. The Ebola Plot is improved and will involve far more force and participation. See the 21st Century Wire article (CLICK HERE).
The Jackass has some rejoinder commentary. The Ebola Plot is heinous in its plan and motivation. It stands alongside the Operation Paperclip following the end of World War II, where nazi scientists and other key figures were integrated into the USGovt. Both are egregious acts of treason against humanity. The planned Ebola plague goes side by side with the chemtrail toxic dissemination and genetically modified food supply as despicable betrayals. Many other heinous activities have been done, using advanced technology. These are some of the worst crimes committed by human beings in centuries, with emphasis given to the official coordination of such plans. The banker cabal is cornered. They might face extinction. They have brought out their most feared weapon in their vast arsenal.
◄$$$ THE TRUTH ABOUT THE ISIS TERROR THREAT... ANOTHER LANGLEY CREATION WHICH HAS EXPLODED ONTO THE SCENE, THE LEVEL OF LOST CONTROL NOT CLEAR... PROPAGANDA SURROUNDING ISIS IS AT A HIGH LEVEL. $$$
The purpose is to spread fear as much as to control regions and events. What beheadings are to ISIS, the contagion is to the Ebola super-virus. These are End Game elements. Infowars reporter Joe Biggs is in the main hot zone in El Paso Texas where the American public is being told that the terrorist group ISIS plans to infiltrate the US through the open border from Juarez Mexico. There are no Islamic terror groups in Mexico, just USGovt spooks and their hired hands. See the YouTube video (CLICK HERE). Any infiltration in the Jackass opinion would be directed by the USGovt security agencies with paid guides but without brochures. Biggs breaks down the Obama Admin response to the beheading of US journalists by ISIS and the wool that is being pulled over the American public's eyes. Remember that if a human head is cut off, a tremendous amount of blood spurts from the high pressure. If blood does not spurt several feet, it is a faked event. The televised beheadings appear all to be faked, part of a morbid production.
The Jackass has some general impressions, far from expert, but at least informed. Numerous pieces of information have been reviewed, heard, and digested. We have perma-war in Northern Iraq. The USMilitary abandoned the country over a year ago, but the USGovt security agencies maintain a presence. ISIS is the Langley creation, which it created, supplied, funded, armed, trained, and directed. It is unclear how much control Langley has still over the group, since it has reached out through thefts and capture both cash and oil facilities. In fact, ISIS might be a last ditch Langley tool, to create chaos after the USGovt lost control.
The USEmbassy in Ankara Turkey is being used to direct ISIS activity, another illegal use of embassy buildings. The goal appears to be constant war, and hidden control of the northern regions of Iraq, where gas pipelines had been planned for construction from Iran. They are on hold, thus the exposed motive. The nation Turkey is playing a very bizarre role in it all. The entire region is enormously complex. The Kurds in Turkey are becoming very vocal against their own government. The Kurds in Iraq want their own independence. The expansive guerrilla group has a majority from the Saudi population. In the Jackass view, public pronouncements about goals toward a Sunni Islamic state might be distraction from its mayhem purpose. The fact that USMilitary air strikes are not effective against the guerrillas might indicate a lack of intention to destroy their compounds. Prolonged chaos is the high priority. The European NATO nations do not wish to participate in the new war, nor does Turkey. ISIS has merely added a whole new level of complexity into the equation. The Voice offered a comment, "Ironically, ISIS has brought the complexity into plain sight, and it does not look pretty. If Russia intervenes, and they might just do that, ISIS will be toast in 72 hours. They will all be dead, done, finished. But what to do with their handlers in Langley?"
◄$$$ THE COLD FUSION REACTOR HAS BEEN VERIFIED BY THIRD-PARTY RESEARCHERS... NEW ENERGY SOURCES WILL COMPLEMENT GREEN ENERGY WHICH IS SOON TO RAMP UP IN A HUGE WAY... THE GLOBAL PARADIGM SHIFT WILL FEATURE NEW TECHNOLOGY THAT THE WEST HAS SUPPRESSED. $$$
The New Dawn will not only feature rubble, charred ruins, destruction, poverty, and much more, it might feature new introductions of energy sources. Most have been suppressed by the Rockefellers and other energy moguls, better described as ghouls. The electric cars finally hit the scene years ago. The advanced carburetors might not have arrived yet though. Much debate has come over the legitimacy of cold fusion, which requires only heavy water isotopes, the right ingredients, and a favorable setting. Much controversy surrounds the topic. If proved valid for industrial usage, the entire energy sector would be threatened and turned upside down. The Rocks have been vigorous in their efforts to squelch, snuff, and otherwise kill the science. See the Extreme Tech article (CLICK HERE), which provides some information of the device. The E-Cat accomplishes modern alchemy. It converts nickel and hydrogen into copper, thus emitting tremendous amounts of energy. It boasts one million times the energy density of gasoline, itself very dense in the conventional arena. Andrea Rossi's E-Cat is the device that purports to use cold fusion to generate massive amounts of cheap clean energy. It has been verified by third-party researchers, according to a new extensive report. The isotopes in the spent fuel could only have been obtained by nuclear reactions. Many scientists are mind-boggled by what they have observed, the nuclear reactions taking place at low energies. The lab version is shown on the left, while the commercial version prototype is shown on the right.
The Voice has enormous exposure to Eastern culture, technology, business, banking, and more. He quipped, "This is really big news to everyone but the Russians." London Paul has a handful of Russian clients. He commented, "The West has little comprehension about the technology that already exists." The Jackass likes to add cultural themes. The cold fusion concept was previewed in the "Saint" movie starring Val Kilmer and Elisabeth Shue in 1997. The concept is often passed off as a pipedream. Even Wikipedia describes it as a hypothetical type of nuclear reaction that would occur at or near room temperature. Aaron Krowne of the Implode-Explode website has studied well the USGovt propaganda science. He wrote, "I firmly believe THEY allow little bits of the truth to get out in movies. It serves two functions: 1) they can say they warned people and disclosed the truth, 2) it simultaneously desensitizes people to the true elements by associating them with fiction and allowing the assumption for instance, that cold fusion is just pretend. Maybe a third function, the classical limited HANG OUT notion, where they tell a bit of the truth to mix it in with falsity and thus control the narrative."
## INTRO MONETARY FRAGMENTS
◄$$$ GLOBAL ECONOMIC CONDITIONS ARE CHANGING RAPIDLY, AS CHINA HAS SURPASSED THE UNITED STATE IN MANY CATEGORIES... FORFEITING INDUSTRY WAS THE DEATH KNELL TO THE UNITED STATES AS A NATION, SINCE THE ASSET BUBBLE DEPENDENCE WHICH FOLLOWED HAS CAUSED NEAR TOTAL WRECKAGE... NEVER DOES A STRONG NATION GIVE AWAY ITS INDUSTRY AND LEGITIMATE INCOME, UNLESS IT IS BEING SABOTAGED... ALL THE REST FOLLOW. $$$
Conditions are changing at a breakneck pace. With lost industry goes lost income and lost ethics to conduct work and to add value. Instead, the US as a nation turned to asset bubbles in a lazy manner, and to fraud on a grand scale. Since urged and applauded, even justified, by Wall Street banks, assume they controlled the major national scuttle operation, in a multi-decade destruction. During 2013, the United States sold about $121 billion worth of goods to the Chinese, but in return China sold about $440 billion worth of goods to the US. The $319bn was the largest trade deficit that one nation has had with another nation for a single year in the history of the world. The data has not attracted much attention, although historic and an emblem of failure. See the End of American Dream article (CLICK HERE). A new era is dawning, a Grand Global Paradigm Shift, the evidence for which is crystal clear. The following are some of the more notable ways in which China has surpassed America.
- The United States had been the leading consumer of energy in the world for about 100 years. In mid-2010, China took over the top ranked position.
- China is now the leading manufacturer of goods in the entire world.
- China has more foreign currency reserves than anyone other nation.
- China has more total corporate debt than the United States.
- Back in 1998, the United States had 25% of the global high-tech export market and China had just 10%. Today, Chinese high-tech exports are more than twice the size of US high-tech exports.
- China is the leading gold producer in the world, and the leading gold importer in the world.
- China is on the verge of surpassing the United States in published scientific research articles, to lead the world.
- China is also expected to soon become the global leader in patent filings.
- China awards more doctoral degrees in engineering each year than the United States.
- China has the world's fastest train and the world's most extensive high-speed railway network.
- China now has the largest new car market in the entire world.
- China uses more cement than the rest of the world combined.
- China now produces 11 times as much steel as the United States.
- China controls over 90% of the total global supply of rare earth elements.
- China's leading export to the US is computer equipment. According to an article in US News & World Report, the leading US export to China is scrap (as in metal, paper, plastic). They left out GMO foods and diabetes.
◄$$$ RUSSIA HAS BEGUN TO LIFT THE LAMP BY THE GOLDEN DOOR (WORDS INSCRIBED ON THE STATUE OF LIBERTY ON ELLIS ISLAND IN NEW YORK CITY)... RATHER THAN FOCUS ON DAMAGE TO RUSSIA, FOCUS INSTEAD OF HOW RUSSIA CAN BREAK THE BANKER CABAL STRANGEHOLD ON THE WEST... THE PROCESS OF RUSSIAN COUNTER MANEUVERS HAS BEGUN. $$$
The US & West has crossed the Rubicon with Russia and entered into uncharted territory. In response, Russia will use this momentum to try to fulfill its grand strategic objective of a world no longer dominated by the West or its powerful banker elite. The Russian political scientist Andrew Korybko makes many astute suggestions. He is the American political correspondent of Voice of Russia who currently lives and studies in Moscow. See the Oriental Review article (CLICK HERE). The Voice commented briefly but forcefully. "The Russians are Grand Masters in playing chess. Putin has a double black belt and knows how divert an opponent's energy back onto the attacking opponent. The US Government's unmitigated arrogance and naivete is mind bending. They actually suffer from the belief that they are invincible. Russia already has lifted the lamp."
- Take the Initiative in building strategic partnerships (energy, economic, military, diplomatic) in states formerly thought of as being securely in the Western domain. Begin in Egypt, Bulgaria, Hungary, and Latin America, thereby applying the West's policy of strategic encroachment into their own backyard.
- Deepen Existing Bilateral Partnerships with China in a global sense, and continue with Iran in the West's most vulnerable region. Work toward Iranian influence in Syria, Iraq, and Yemen.
- Expand Multi-lateral Activity like with BRICS Alliance to include the MINT countries, namely Mexico, Indonesia, Nigeria, and Turkey. The expanded admission of India and Pakistan into the SCO congress will present many more unforeseen advantages for Russian foreign and economic policies.
- Solidify New Trade Networks like in the agricultural sector, thus exploiting the interest that many states have in penetrating the Russian market, filling the void. The next counter-sanction can help build an alternative trade network no longer centered in the West.
- Be the Bridge between the grand Europe and Asia continents, serving as air, land, and sea bridge. The return of the Chinese Silk Road and New Eurasian Land Bridge projects can reap the resultant dividends of East-West trade and thereby increase the Russian middleman importance.
- Play the Devil's Advocate in support of the growing Euroscepticism movement that endangers the current Atlanticist establishment. The Kremlin can use its information channels to provide implicit support for these forums and their supporters. Turn the tables.
◄$$$ WALDORF ASTORIA HOTEL WAS SOLD TO CHINESE INSURANCE FIRM... THE APPARENTLY EXORBITANT PRICE MIGHT REFLECT AN OVER-VALUED USDOLLAR, EAGER TO BE CONVERTED TO HARD ASSETS... EXPECT FAR MORE ICON PROPERTY SALES TO COME. $$$
New York City's iconic Waldorf Astoria Hotel has been sold by Hilton Worldwide to the Chinese insurance firm Anbang Insurance Group. The cost of sale is $1.95 billion. As part of the contract stipulations, Hilton will continue to operate the property for the next 100 years, including renovating the property in the coming months. Hilton said it will use the proceeds from the sale to invest in other hotels and assets in the United States. See the BBC article (CLICK HERE) and the Bloomberg article (CLICK HERE). One might conclude the price to be slightly ridiculous, but Hilton appears obliged to conduct some renovations within the contract. Consider also the higher price to reflect a seeming reverse discount on the USDollar, surely over-valued. The Chinese wish to dump USDollars, and convert to hard assets. It smells like the Japanese buying at the top in the 1990 go-go decade. The Japanese defined the commercial property top. No doubt should enter, as the Chinese will pay in USTreasury Bonds in this direct exchange maneuver, hardly indirect since the funds are coming home. The new model is taking form, as the Chinese are converting their USGovt debt into US-based properties. They have purchased over 30% of Manhattan commercial property in recent years. Dollars are coming home. Expect the Waldorf Astoria sale to spur more purchases by Chinese in coming months. See the China Daily article (CLICK HERE).
My Jackass parents celebrated an important event in the Waldorf Astoria Hotel. They were married in 1945 in London immediately at the war's end. But wives could not enter the United States for six months, following a formal screening process. When reunited, they celebrated with a sumptuous dinner in luxury, courtesy of my father's generous uncle in the area. The nazi bankers and security agency infiltration had no such screening, as the vile parties were integrated fully. It was called Operation Paperclip. The good guy Werner von Braun (rocketry) entered, along with Albert Einstein (nuclear physics), but through the back door opened by paperclips entered Joseph Mengele (human genetics & torture).
◄$$$ USGOVT DEBT ROSE BY $1.1 TRILLION IN THE RECENTLY COMPLETED FISCAL YEAR... THE DECEPTION IS EXTREMELY TRANSPARENT, AS NO DEFICIT REDUCTION IS REMOTELY EVIDENT... CHRONIC $1 TRILLION DEFICITS ARE FIRMLY IN PLACE, A FIXTURE TO THE FAILED STATE, EXACTLY AS FORECASTED FIVE YEARS AGO. $$$
The Congressional Budget Office in its annual update made this spring, figured that the budget deficit for fiscal 2014 would be $492 billion. Seasonal adjustments do not apply for full year data. Other adjustments are basic blatant deceptions. This time the accounting gimmicks and outright deceit are visible to the unaided eye. Push them aside to capture reality. In the real world apart from deception and outright bold lies, the USGovt deficit was once again in the $1 trillion range, exactly in keeping with the Jackass forecast made in 2009. The forecast was for the United States to suffer chronic endless $trillion deficits as far as the eye can see. It has been six consecutive years of horrendous $1 trillion deficits. This recently completed fiscal year registered a robust $1.1 trillion USGovt deficit. One trillion dollars equals a million times a million dollars, with twelve zeros. The USFed has been the enabler. After years of QE, it currently owns $2.45 trillion or 14% of the gross national debt, in addition to a couple of trillion in other securities. There is no urgency to reduce the deficit, nor spending. Even the debt limit was suspended by the USCongress in 2013.
Conclude that the USFed's asset purchase buying spree with newly printed money, aka QE bond monetization, enabled the USGovt to go on a borrowing spree, to continue reckless spending, and to engage in continued wars. The big beneficiaries are Wall Street for stocks, the corporate elite for compensation packages, the military and intelligence complex, and others. See the Congressional Budget Office data report (CLICK HERE) for the lies and grand inventions with motive. For more propaganda, replete with lies, deception, and false accounting, see the DW article (CLICK HERE). The claim was made that US deficit dropped to the lowest level during the Obama presidency. Rubbish! Nothing changed on the $trillion deficit trajectory.
◄$$$ BILLIONAIRES ARE DUMPING US-STOCKS AT AN ALARMING RATE... WHEN THE DAM BREAKS, THE DECLINE WILL BE RAPID AND PROFOUND... IT WILL FORCE THE USFED INTO THE OPEN FOR ITS ASSET SUPPORT WHICH IS NOT ADMITTED, NOT ACKNOWLEDGED, NOT PROPER. $$$
In fact, billionaires are already dumping US stocks en masse. Warren Buffett is dumping shares at an alarming rate, disappointed by the earnings of American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods. Berkshire Hathaway has reduced its overall stake in consumer product stocks by 21%. He is not alone in fast fading confidence in future prospects. Fellow billionaire John Paulson, known for exploiting the subprime mortgage meltdown, is vacating out of US stocks too. The hedge fund Paulson & Co dumped 14 million shares of JPMorgan Chase, according to a recent filing. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee. Lastly, billionaire George Soros sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Among the three banks, Soros sold more than a million shares. These savvy investors are exiting at the top.
A massive stock market correction is coming, according to Robert Wiedemer, an esteemed economist and author of the New York Times best-selling "Aftershock" book. He actually believes the true stock market value is 90% lower on the major stock indexes. In 2006, Wiedemer and a team of economists accurately predicted the collapse of the US housing market, stock markets, and consumer spending. They published their recent research in the new "America's Bubble Economy" book. Even Standard & Poors reported that Wiedemer's track record demands our attention. Wiedemer expounds on his theory for rising price inflation and higher interest rates, but not from a rejected USDollar. See the Money News article (CLICK HERE). When the downturn in US stocks occurs, the USFed will be exposed as supporting yet another asset market, which is vigorously denies. In fact, the deeply corrupted overseer of wreckage, the central bank supports all USD-based asset markets, except apparently municipal bonds.
◄$$$ REVELATIONS OF THE GREAT 911 CONSPIRACY WITH NAMES, CONNECTIONS, MOTIVES, DETAILS... THE TRUTH IS COMING OUT, IN SPITE OF CALLS THAT TRUTH IS OUT OF FAVOR IN THE FASCIST NATION... DO YOUR OWN RESEARCH. $$$
The Jackass has been told the documentary is one of the best put together. It contains a tremendous amount of information. The trusted client had to pause the show several times in order to absorb it all. It is probably worth watching, even if drained by other similar videos and a little tired of the subject. See the YouTube video (CLICK HERE) for a description of the greatest bank heist and fascist coup d'etat of the United States.
◄$$$ UKRAINE UPDATE IN REVIEW $$$
Check out a good article on Ukraine, which featured an interview of the Saker by Mike Whitney. The man behind the name Saker was born in Europe of Russian refugees, and now lives in Florida USA covering the NATO war agenda. He is loaded with good insights. The topics are many, each covered briefly, on how Ukraine has been wrecked, the Old Ukraine gone forever. They are the US direct role in the Ukraine coup d'etat, Russia securing Crimea and their Black Sea Fleet in Sevastopol, President Poroshenko as US puppet to go at Washington's whim, no NATO bases to arrive in Ukraine, the South Stream pipeline on schedule to make Ukraine irrelevant, required regime change with de-nazification, and the huge upcoming cost to rebuild Ukraine after the US-EU destroyed it. See the Global Research article (CLICK HERE).
A frozen conflict is looming in East Ukraine, the European Union diplomats claim. The dull war is stuck, and the unelected EU commissioners want their permanent war with scorched earth. Russian sanctions will continue as policy, the intensity having waned though, especially after Russian compliance of the Minsk protocol. The Big Bear has withdrawn troops and offered aid to the eastern region. The EU clowns grudgingly admit the Russian compliance. The EU hawks in the crowd are led by Lithuania and Estonia, each US installed puppets, whose economies stand squarely in line as the biggest victims of the counter-sanctions. The EU Commission admits no military solution exists, thus the road toward a diplomatic approach. See the EU Observer article (CLICK HERE).
Ukraine electricity exports have been halted to Belarus as of October 1st. The economic disaster is escalating, as the industrial input has been interrupted. Interestingly, the Belarusian president had just signed into law the ratification of the Eurasian Economic Union treaty. So consider the electricity cutoff as a US gesture of contempt, done by their obedient Kiev puppets. The cutoff itself is not so surprising since the plants might be damaged, along with great disruptions to its eastern coal field output. The evidence is coming to the fore on a Ukraine Economy totally wrecked. Next comes the regime change after the leaders bugg out and head out of the country, loaded with stolen cash and whatever else they can carry. Then finally formal requests for aid in reconstruction, but it is unclear which party will make the request. See the Kyiv Post article (CLICK HERE). The Jackass maintains the revised forecast of the fascist regime falling before January, the proximal cause being a failed harvest. Many will be the factors to bring down the regime, as the economy is wrecked, tax collection is nil, funds have been stolen by the current ministers, the industry is severely hindered, supply chains are broken, and people are not working. It is possible the US-EU uber-lords will orchestrate a regime change, but retain puppet control of the next criminals of a different stripe and tune. Their objective is to oversee the ruins as obstacle for Russian control and usage. Integration of Ukraine into the EU seems moot.
The natgas war has escalated as Russia cut in half the supply to Slovakia. At issue is the reverse flow that violates existing supply contracts. The EU efforts to broker a truce with gusto in Ukraine seem limp and listless. In response, Russia has cut gas deliveries to Slovakia by half in a bad sign regarding progress, done without any warning. The Slovak Govt disclosed that its national distributor SPP can still fulfill its commitments on reverse flow to Ukraine, while also supplying customers in Slovakia and the Czech Republic. They will purchase extra volumes on the spot market. The real issue is contract violation. Slovakia, Hungary, and Poland began selling Russian gas back to Ukraine immediately after Russia cut the country off in a price and payment dispute in June. Unlike its neighbor, Hungary also cut off Ukraine after the CEO of Russian gas firm Gazprom visited Budapest recently. The action against Slovakia comes ahead of meetings between EU officials, Russia, and Ukraine. The Kiev puppets are caught in the vise, making harsh complaints to all parties. German chancellor Angela Merkel and EU Commission chief Jose Manuel Barroso have urged Russia not to escalate the gas war, while they ramp up sanctions step by step. The hypocrisy is thick. Some statesmanship can be seen. Former German chancellor Gerhard Schroder, who currently works for Gazprom, in a speech in Rostock on the Baltic Sea coast declared the EU should take back economic sanctions to improve the situation. He said the Russia sanctions are wrong, loud and clear wrong. See the EU Observer article (CLICK HERE).
Fitch downgraded Ukraine two steps away from default. The country failed to repay on the domestic $87 million debt. The rating agency cut Kiev's long-term foreign and local currency rating to CC from CCC, and cut its national long-term rating to BB from BBB. Initially the review date for Fitch's rating of Kiev was scheduled on October 10th. The Kiev Regime made a change to restructure domestic bonds. However, its failure to repay the scheduled tranche of 1.125 billion Hryvnia (=US$87 million) on October 6th prompted the rating agency to restate their debt status before the date, in order to reflect adverse deterioration in its credit profile, in their words. See the Russia Today article (CLICK HERE).
## SANCTIONS AS OTHER WAR
◄$$$ SWIFT ANNOUNCED ITS REGRET FOR THE PRESSURE TO DISCONNECT RUSSIA... THE SWIFT OFFICE ADMITTED TO HAVING NO AUTHORITY TO SUSPEND RUSSIA OR ISRAEL FROM INTERNATIONAL PAYMENTS LINKED TO THE RASH OF SANCTIONS... SOME DAMAGE WAS DONE BY THE IRAN SANCTIONS, WHICH HAVE RESULTED IN MORE LIBERAL IF NOT INDEPENDENT POLICY, LESS OBEDIENT TO THE FASCIST GOVERNMENTS. $$$
The SWIFT organization will not submit to pressure to disconnect Russia or other nations from international transactions. The Belgium-based group made a courageous statement, as they announced having no authority to make unilateral sanctions decisions. "SWIFT regrets the pressure, as well as the surrounding media speculation, both of which risk undermining the systemic character of the services that SWIFT provides its customers around the world. As a utility with a systemic global character, it has no authority to make sanctions decisions. SWIFT services are designed to facilitate its customers compliance with sanctions and other regulations. However, SWIFT will not make unilateral decisions to disconnect institutions from its network as a result of political pressure. Any decision to impose sanctions on countries or individual entities rests solely with the competent government bodies and applicable legislators. Being EU-based, SWIFT complies fully with all applicable European law." Much is left to dispute. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is currently one of Russia's main connections to the international banking system. Blockade of funds movement would clearly render harm to the Russian Economy.
Despite the discussed disconnection by EU leaders in August, the usage of SWIFT as a form of sanctions is not so easily executed. The fascists running the USGovt, EU Commission, and UKGovt have obstacles, so it appears, like laws. SWIFT must comply with EU decisions because it is incorporated under Belgium law. Many are calling on SWIFT to block funds movement to Israel, in response to outcry and criticism for war waged on Gaza and alleged atrocities. The SWIFT staff has some bitter feelings over sanctions and suspension of funds movement with Iran, having occurred over the last two years. The SWIFT system transmitted more than 21 million financial messages a day last month among over 10,500 financial institutions and corporations in 215 countries.
Domestic solutions are in progress. Currently Russia is working to create its own domestic money transfer system designed to eventually replace SWIFT. The channels are not easily implemented, especially if extended to foreign nations that span the globe. The work covers multi-layered platforms. In August, Russia introduced its China UnionPay credit card system, an alternative to VISA and MasterCard. A national priority has come to switch Russia from USDollar payments completely for a wide array of products, an immense challenge. Russia is also working with China to set up an international debt ratings agency separate from the big three of Fitch, Standard & Poors, and Moodys. The Western rating agencies have demonstrated no apparent competence since before the subprime bond crisis of 2006 and 2007. They are Wall Street tools and devices. See the RT Business article (CLICK HERE and HERE) and the Zero Hedge article (CLICK HERE). The Voice pitched in with a quick comment. "SWIFT might soon be obsolete and a new, more efficient system will be launched, based from a location outside Europe." The Jackass bet is for an Asian location.
◄$$$ THE EU SANCTIONS IMPOSED ON RUSSIA HAVE ALREADY COST ITALY ALONE 2 BILLION EUROS, DUE TO MOSCOW'S RETALIATORY FOOD EMBARGO... ABOUT 10% OF THE COUNTRY'S AGRI EXPORT TRADE HAS BEEN HALTED. $$$
Italian Govt opposition leader Matteo Salvini called the Western sanctions on Russia a great foolishness. He stated boldly that Italy loses billions of Euros in economic standoff with Russia. In total, the folly has resulted in the EU agricultural sector hasving already lost EUR five billion. They question the purpose. The unelected Brussels commisioners who sponsored the Ukraine War have pledged only EUR 200 million in compensation, a mere one tenth of the loss. Farmers from many EU member states have complained they are bearing the brunt of Russia's food embargo. They are shut out from Russia's $16 billion food market. The nation is unique. Italy has been the most outspoken on the consequences of Russia's ban on listed European food imports. The country's Veneto region promised they would take all the necessary steps to protest EU sanctions against Russia. Veneto ranks the second among Italy's regions in agricultural production, accounting for 160,000 agricultural firms with a total turnover of EUR 6 billion per year. They might be declared terrorists. If China is to pick up these Italian farms on the cheap, they must do so after vehement protests play out. See the RT Business article (CLICK HERE).
◄$$$ ITALY IS UP FOR SALE TO CHINESE INVESTORS AS RECESSION BITES AND NATIONAL DISTRESS REACHES EXTREME LEVELS... THE SAME IS TRUE FOR ALL SOUTHERN EUROPEAN NATIONS, AS FAILED ELEMENTS OF THE COMMON EURO EXPERIMENT... FOLLOWING CHINESE ACQUISITIONS BY CHINA TO COME IN THE GIANT AGRI BUSINESSES WILL BE DIVERSION OF FARM OUTPUT TO CHINESE DESTINATIONS... A FOOD SHORTAGE IN EUROPE IS ASSURED IN 2015 OR 2016. $$$
Typical of the Italian popular business plight is the Caffe Orefici next to the iconic Duomo Cathedral in picturesque Milan. The city is the center of business and fashion in the heart of Italy's financial capital. Forced to sell their business because of high taxes, the last resort for the cafe owners is to sell to Chinese hands. The proprietor complained, defeated, "They [Chinese] are the only ones who are buying. We want to sell, since taxes are too high. We work eight hours a day for the state and one hour for us." This is what debt saturation, oversized welfare state creation, official fraud, heavy taxation, and monetary policy (like QE) have wrought upon the small business sector of Southern Europe. Moreover, this is what the common Euro currency region has resulted in for the Italian business community, and other nations in Southern Europe. Incredibly the Italians have created a website specifically devoted to sale of small businesses to the Chinese entrepreneurs. The entry featuring Caffe Orefici is among the 18,000 advertisements from businesses and individuals that have been published since February last year on the website (www.Vendereaicinesi.it), which translates (Sell to the Chinese). The website helps Italians stricken by the third recession in six years to attract bids for properties, products, and services from Chinese suitors. The system there is broken. The natives have lost heart. It is unclear whether newly run Chinese businesses will win a tax exemption.
The pattern is repeated at the national level. Local stores appeal to the Chinese for acquisition bailouts. So do the larger Italian companies also. The country's largest companies seek investments directly from the Asian giant. Italy has been China's biggest target in Europe after the UK this year, with cross-border acquisitions for $3.43 billion. The appeal is at high level. Prime Minister Matteo Renzi urged Chinese investors in June during a Beijing visit to buy stakes in Italian companies. The Italian Govt struggles to reduce its over EUR 2 trillion official debt, equal to $2.53 trillion. It is the second largest in Europe. The Chinese have been very busy in making acquisitions in both Greece and Portugal, where significant revenues were tapped. See the Bloomberg article (CLICK HERE).
The Jackass extrapolates with a bold forecast, one that seems obvious in the path of rubble, as the destruction from government and monetary policy is far reaching. Next comes acquisitions by China of the great agricultural farm businesses in Italy, Spain, France, Portugal, and elsewhere. These nations have agri business sectors in deep distress suddenly. China is going to enter and gobble them all up as sure as the sun will rise tomorrow. With Russian Sanctions, hundreds of agri businesses across the Club Med region must be on the edge of bankruptcy. This is the new story perhaps for the winter after months, when the pain is fully felt. The private sector screams to end sanctions will come, a process already begun. After the Chinese bring their money for investment stakes, they will divert some harvest output to Chinese shores. Irony is thick. After the Russian sanctions, the European farm output lost a major customer. So the Russian sanctions will lead to food shortages in Europe. It will take a year or two to play out, the features already evident in US farm output diversions to the Mainland China destinations. The Jackass has reported the hayfeed story.
◄$$$ CERTAIN US-BASED BUSINESS COUNCILS STAND STRONGLY AGAINST ANTI-RUSSIAN SANCTIONS... BUT VOICE OF THE NATION'S PEOPLE AND BUSINESSES CARRY ZERO WEIGHT IN THE UNITED STATES. $$$
The US-Russia Business Council (USRBC) and the National Foreign Trade Council (NFTC) met with the Obama Admin hack officers to prevent the passage of legislation expected to affirm and fix into place the sanctions against Russia. The groups have vested interest in continued trade with Russia. The fools in the US Senate unanimously backed the document in September of this year, probably amidst pressures, threats, and bribery. According to the US Congress, the bill stipulates measures against Russia for destabilizing the situation in Ukraine, Moldova, Georgia, and Syria. They left out the blame to Russia for polar bear distress in the north pole, and to penguins in the south pole, along with migratory birds from all continents. The bill also recommends sanctions against any foreign companies for doing large scale investments in the development of the Russian fuel and energy industry, including Gazprom. The bill would thus further impose sanctions against foreign financial institutions that work with the US banking system, if these organizations make a significant number of transactions with Russian defense and energy industries. In turn, the National Foreign Trade Council, which was founded in 1914, vehemently criticizes the projects of the Senate, calling their methods draconian methods. They should include baseless, errant, deceptive, and dishonorable. See the English Pravda article (CLICK HERE).
## CENTRAL BANKS FACE FAILURE
◄$$$ THE USFED IS STUCK IN REVERSE, THE HIGHER USDOLLAR ACTING LIKE A SLIGHT RATE HIKE... THE OUT OF CONTROL USGOVT DEBT DICTATES NO RATE HIKE, JUST LIKE THE INTEREST RATE COMPLEX FORBIDS SUCH A RATE HIKE... THE USFED IS FULLY COMMITTED TO OPEN MOUTH TIGHTENING (VERBAL LIES) BUT THEIR CONTINUED EASING FOREVER... THE RAPID DECLINE FROM ECONOMIC RECESSION COMBINES WITH FAST FALLING CORPORATE PROFITS, TO MAKE FOR A HIGHLY DANGEROUS MIX... RATES ARE STUCK AT ZERO PERMANENTLY, AND UNSTERILIZED BOND PURCHASES ARE STUCK IN PRACTICE FOREVER. $$$
These folks at the USFed are true fools, great destroyers, corrupt beyond description. So we are told the central bank officials at the September 16-17th FOMC meeting saw global slowdown among risks to their outlook. Their outlook is never very astute, as their record shows, never foreseeing an economic recession nor asset bubble soon to suffer a bust. In their last meeting, the Federal Reserve policy makers said a global slowdown and a stronger USDollar posed potential risks to the USEconomy. They decided once again to maintain a pledge to keep interest rates low for a considerable time, which sounds better than forever, or at least until a systemic breakdown. See the Bloomberg article (CLICK HERE). The analysis is far more interesting than their plain pablum of deception and steady myopia. No rate hike can come for many reasons: financing USGovt debt, maintaining the big US bank carry trade in USTreasurys, keeping the interest rate derivative machinery cranking, avoiding a fast obvious frightening economic decline, and avoiding an asset bubble pop in both stocks and bonds.
The USDollar is being cranked up on multiple fronts, like from the Interest Rate Swap machinery that converts free money into fresh artificial USTreasury Bond demand. Like financial derivatives are settled in USD terms, thus the added demand. Like the many foreign investors worried about their home currency, who hunker into the USDollar out of reflex reaction. The mainstream media enjoys the story line of a flight into equities, the stock market, a fanciful self-aggrandizing byline. The only significant demand for US stocks is from the Wall Street banks and their master the USFed itself. As a colleague stated, one really cannot make this shit up, the imagination run ripe.
Colleague George of COMEX fame offered some opinions, always with insight. The following are his words and thoughts, my edits for flow. What it tells him (confirms what George already know) is a few things. His assessment of the USEconomy is correct, not good and rolling over badly. A serious hit to corporate earnings is next. The world slowdown because of Europe with Russian sanctions is real and coming, for more impact. The earnings will reflect these factors, as well as the slowing USEconomy. The USGovt cannot afford to pay higher interest on the $18 trillion in serviced debt. Much more interest due in debt service would force the total debt to go hyperbolic. Most information put out by the media is nonsense, deception, best described as pig shit (his words). It is written by the buy side disseminators and government lab goons for the benefit of the sheep, who comprise 98% of the population. The important observation is that the stronger USDollar is an indirect tightening by the USFed, by at least 25 basis points. Worse, in this environment, any tightening is like 50 plus basis points. As an aside, if this economy turns down much harder, the USFed really has nothing left in its toolkit. So if the USD continues to strengthen, the only solution being a currency devaluation. They are pumping equity up before punk earnings contrasted with falling forward expectations. This is not only insane, but highly dangerous. They tend to push stock rallies further because of an unlikely Fed rate hike, which ignores the entire economy and deteriorating profit outlook. No small amount of sanity has crept in.
As the USEconomy slows even more, and as corporate earnings turn hard down (even broad losses), and as relative values between countries becomes apparent, and when the US equity market can no longer fuel itself on massively insane leverage and hope with deception, the reversal will be quite radical and shocking, even entertaining in a sadistic way. The Jackass remarks that a higher USD exchange rate acts like a tightening device, since foreigners will step back from buying US stocks, bonds, property, and businesses. Also foreign customers now see a higher price for all US-based exports. George believes the United States, despite its horrible weakness, is pricing itself out of the global markets. The USGovt and its Wall Street masters are stroking their egos with the rising USD, but they hasten its actual rejection on a global basis. Their arrogance will lead the nation to ruin, further ruin, complete ruin. Foreigners will cash out of USD-based assets in a growing flood. The most clever method of cashing out is usage of stored USTBonds in capital layouts like large construction projects or large asset purchases, big commercial property purchases, even high profile projects such as building energy pipelines or buying a stake in an energy deposit such as offshore. It is called Indirect Exchange, quite the trendy practice.
◄$$$ USFED'S LACKER SLAMMED THE USFED FOR INAPPROPRIATE BOND PURCHASES THAT DISTORT MARKETS AND UNDERMINE INDEPENDENCE. $$$
Richmond Fed Governor Jeffrey Lacker is the maverick. He is angry and vocal about the QE deviations, pointing out its errant direction, but he misses the capital destruction factor. Modern central banks operating free from political interference, given independence. They will deliver the price inflation scourge, and worse, through abuse of their tools, so he warns. Central bank legitimacy will fade without boundaries on tools used for credit market intervention. Their actions are extraordinary and dangerous. True enough, but such is a shallow indictment. Since 2009 the USFed has acquired $1.7 trillion in mortgage backed securities underwritten by Fannie Mae & Freddie Mac, each under government conservatorship in order to conceal their $trillions in fraud. The MBS bond purchases have resumed, with more than $800 billion accumulated since September 2012. Lacker argued for only USTreasury Bond monetization within limits. The USFed has indicated gradual hikes to normal rate levels, but in contrast the recent FOMC meeting did not detail any such plan. The usual mumbo jumbo is often cited about its two main policy mandates: price stability and maximum employment. A third mandate has been identified in financial market stability. The USFed always harbors one or two mavericks in dissent of monetary policy. Although Lacker offers dissent, his focus is on distortion and independence, as he totally misses the broad capital destruction and gross misallocation of resources. These guys are all hacks who know various degrees of nothing about economics. See the Zero Hedge article (CLICK HERE).
◄$$$ INFLATION IS NOT THE ONLY WAY EASY MONEY DESTROYS WEALTH... BOOSTING DEMAND ARTIFICIALLY WITHOUT PRODUCTION AS PRELIMINARY PRE-REQUISITE IS FOLLY... BUT EVEN THE VON MISES SCHOOL SEEMS NOT TO STRESS THE DESTRUCTION OF CAPITAL FROM THE HYPER INFLATION... CAPITAL IS THE BASIS OF WEALTH CREATION... QE DESTROYS WEALTH FROM DEMAND THAT BURNS CAPITAL, WHILE IT ALSO DESTROYS WEALTH ENGINES FROM THE CAPITAL DESTRUCTION THAT RESULTS FROM HIGHER COSTS AND VANISHED PROFIT MARGINS. $$$
Frank Shostak is a favorite analyst of the Jackass, who writes from the Von Mises Daily. He makes some great points. He covers the demand side very effectively, where capital is wasted. However, he misses the supply side effect from loose monetary policy, namely the rising cost structure from natural hedging. The result is business shutdown and retired capital at the business site, as in removed equipment and machinery. Eliminated profitability shuts down businesses, the capital engines that produce wealth by enabling added value. Therefore, conclude that QE wrecks capital from the top via demand props and wasted capital. But also QE wrecks capital from the bottom via supply and retired equipment, removed engines of wealth. Consider some passages from Shostak. See the Von Mises Daily essay (CLICK HERE). Tragically, the United States has lost its way, and has no concept of capitalism or business creation anymore. The current QE monetary policy is destroying the nation's capital base from above and from below at an astonishing rate. The result is massive economic deterioration, which cannot be reversed without liquidation of the big banks and a return to sound money, as in the Gold Standard. Shostak wrote the following.
"We suggest that there is no such thing as an independent category called demand. Before an individual can exercise demand for goods and services, he/she must produce some other useful goods and services. Once these goods and services are produced, individuals can exercise their demand for the goods they desire. This is achieved by exchanging things that were produced for money, which in turn can be exchanged for goods that are desired. Note that money serves here as the medium of exchange, since it produces absolutely nothing. It permits the exchange of something for something. Any policy that results in monetary pumping leads to an exchange of nothing for something. This amounts to a weakening of the pool of real wealth, and hence to reduced prospects for the expansion of this pool. [Phony money from a paper mill should never be honored in exchange for real goods, products, and services.]
What is required to boost the economic growth (the production of real wealth) is to remove all the factors that undermine the wealth generation process. One of the major negative factors that undermine the real wealth generation is loose monetary policy of the central bank, which boosts demand without the prior production of wealth. Once the loopholes for the money creation out of thin air are closed off the diversion of wealth from wealth generators towards non-productive bubble activities is arrested. This leaves more real funding in the hands of wealth generators, permitting them to strengthen the process of wealth generation, such as permitting them to grow the economy. [Exactly, as the obstacles to capital formation and capital retirement are removed.]
Now, the artificial boosting of the demand by means of monetary pumping leads to the depletion of the pool of real wealth. It amounts to adding more individuals that take from the pool of real wealth without adding anything in return, thus an economic impoverishment. Shostak describes capital destruction from the top. The supply side addresses capital destruction from the bottom. They are two sides to the same phenomenon of ruined systems. The longer the reckless loose policy of the Fed stays in force the harder it gets for wealth generators to generate real wealth and prevent the pool of real wealth from shrinking."
◄$$$ BANK OF JAPAN TO SIGNIFICANTLY INCREASE THE MONETARY BASE, IN RESPONSE TO A VANISHED TRADE SURPLUS... THE RISK LEVEL WILL RISE EXPONENTIALLY TO JAPAN, A TRANSFORMED NATION (FOR THE WORSE)... THE CHINESE COMPETITION HAS HURT BADLY, AS HAS THE HIGHER COST FOR ELECTRICITY... JAPAN IS PLAYING WITH FIRE, COURTING DISASTER, OUT OF GOOD OPTIONS. $$$
The Jackass warned months ago that Japan has lost its trade surplus, and will experience much greater risk in managing their bond market. Witness exactly that. The Bank of Japan is set to increase the annual pace of growth of its monetary base by 60 trillion Yen (=US$550 bn) to 70 trillion Yen (=US$645 bn), in a bold desperate move. Given their monetary base of around 240 trillion Yen (SEE LINK), the increase is about 27% to the base, against a background of near nil economic growth. One can see the effect of a vanished trade surplus. For three decades the nation used the surplus to play their currency games, preserving the trade export industry with a currency kept low. Now they must use monetary inflation means to accomplish the same distortions. It will cause other horrific problems, to be determined, a nightmare for a later date. The Bank of Japan promised to conduct money market operations to effect the growth, and to extend the scale of its asset purchases. It will purchase Japanese Govt Bonds (JGB) in the core, but also exchange traded funds (ETFs) and even Japan real estate investment trusts (J-REITs). So their financial market is uniformly to be contaminated.
The insane goal is to reach amounts of about one trillion Yen and 30 billion Yen respectively at an annual pace for the two additional destinations of the phony (cancerous) money. Like the Western liars, they noted that although suffering some weakness, the Japanese Economy is recovering. Not likely. The new national consumption tax is ugly nasty caustic, on top of the higher electricity costs resulting from Fukushima. The nation is playing with fire, called unsterilized hyper monetary inflation, just like the United States and Europe. They find themselves without good viable options, after the trade surplus turned into a deficit. The competition from China is fierce, their revenge after a millenium. See the RIA Novosti article (CLICK HERE).
◄$$$ CHINA IS MANEUVERING TO GET ITS CURRENCY INCLUDED IN THE IMF SUPER-SOVEREIGN CURRENCY BASKET ON THE OFFICIAL LEVEL WITHIN FULL VIEW, AT THE WESTERN TABLES... IT IS MOST LIKELY A GRAND FEINT, A FALSE ADOPTION, A CLEVER MANEUVER, WHICH KEEPS THE WEST OFF-BALANCE TO THE WHAT COMES IN THE RETURN OF THE GOLD STANDARD... CHINA MIGHT BE USING THE NEW SDR BASKET CONCEPT AS A CARETAKER TEMPORARY DEVICE, OR ELSE AS A PROVING GROUND FOR THE STILL FAILED FIAT PAPER MONEY SYSTEM (WITH NEW WRINKLE)... THE WEST WISHES TO CORRAL AND CONTROL BOTH THE EASTERN CURRENCIES AND PRECIOUS METALS... NEITHER PLOY WILL SUCCEED. $$$
The sequence is as critical as it is devious. China is bidding to have its Yuan currency included as part of an ubiquitous monetary unit used in official transactions around the world. The reality trend goes counter to such a move. In time half the world, primarily the Eastern nations, will settle trade in the Yuan (aka RMB). The issue being argued and negotiated is whether the Chinese Yuan should be part of the Intl Monetary Fund's Special Drawing Rights basket, the composite reserve currency used in official financing. The structure is highly technocratic, while the political questions at stake go to the core of world money and power. The current system helps to keep the major currencies tied together with tight bands of value. The discussions have been taking place, the results kept secret. The Jackass has been informed that the Chinese are playing along, entertaining the West with feigned interest in full pretension. If done, if enacted, the Yuan would be part of an expanded basket to include also the Ruble, Gold, and Silver. If done, if enacted, would influence how China and its currency could play a bigger part in driving world trade, investment, and capital flows. The Renminbi (RMB) will surely challenge the USDollar for its primal position in world money, which explains why the USGovt and Federal Reserve are examining the decision with great interest and caution, if not trepidation.
China is unlikely to mount an open campaign to enter the SDR, but rather might plan to run a pre-emptive move with the corrupt IMF to recalculate the composition weights of the SDR components. China might set a trap, intending to show the world how the Western bankers wish to control the Eastern currency weights, and even Gold & Silver weights. It comes up for review in 2015. The notable increase in demand for RMB financing from private banks, central banks, traders, corporations, and asset managers has changed the entire mix. Many hurdles remain. These include the Renminbi's lack of formal convertibility for transactions that shift capital inside and outside the country. China has been slow to release more data on official reserves.
Some progress has been made. Chinese measures over the past three years to liberalize and internationalize its currency, and wider usage of RMB in trade settlement, even RMB-bond issuance, all point toward an invitation to the SDR from January 2016. An additional high level factor is China's vigorous activity to galvanize emerging market economies toward reforming world monetary arrangements. This includes the BRICS decision to set up the New Development Bank in Shanghai, offering a direct challenge to the IMF and the World Bank. The development bank should be properly named in the near future to the BRICS Central Bank, with massive gold reserves in vaults, maybe decentralized vaults. Consider the name another deception swallowed by the West, with focus awry on Tanzanian railroads rather than converted debt paper to Gold bullion. The remaining issues are wide usage in trade settlement, easy convertibility, and cross border investments. See the USA Today article (CLICK HERE).
HTLetter client put it well. Ernesto of Texas said, "The reappearance of the SDR may also be a time buying last ditch. Clearly an effort is there to manage the transition from this old currency paradigm to the new gold backed system without allowing a hard crash. A deal between the West and the East must be struck. In my opinion, the perception and confidence are key in how the masses will react. The Powers that Be do not want a hard crash. The cost of collateral damage will be too high." The Jackass agrees, wherein the reformed expanded SDR basket might be a caretaker device to buy time, but also might be a pure fake to keep the West off guard while the caretaker device is dismissed amidst grotesque failure. As the USDollar is rejected, the West must compromise with a stronger fiat basket of the same toilet paper, a more sturdy toilet paper which can withstand the harsh effect of ugly stains, heavy liquidity, and nasty flushes.
London Paul is much more dubious. He stated, "From my perspective, China will never entertain anything to do with the IMF. They will not prop up a globalist empire which has tried to destroy it on so many occasions. The article has a look of attempting to put square pegs in round holes, so as to fit the cabal narrative." Agreed here, since China seems absent in any endorsement of the expanded IMF basket. George of the COMEX is extremely dubious and suspicious. He said, "There is zero chance the Chinese will go along and permit the West to set the important weightings within the basket. The process is still alive as the US attempts to beat China and Russia into submission. If the Eastern superpowers join, they give up valuable control. Not gonna happen." Agreed here, since Russia & China would have to permit the same Western bankers to control the value of the Ruble & Yuan, even while the reserves build, even while massive Gold & Silver reserves are demonstrated.
The Jackass in summary believes the constant, the fixed true direction, is for the demise of the USDollar. If and when the SDR makes its appearance in a reformed expanded basket, it will spell the end of the USDollar a reserve currency. The SDR would issue bonds for banking reserves. However, the key is the weights for the Ruble and Yuan, in relation to the USD and Euro and BPound and Yen. They would be fixed, and as the US with Europe weaken, the Eastern currencies would be bounded and gagged in a rigid basket like a straitjacket. It is not flexible, nor practical, and surely not acceptable to either Russia or China. Methinks China is playing along, faking the initiative as diversionary tactic, a fake move, to keep the West badly off balance. They are working feverishly and diligently on the BRICS Gold & Silver currency. Perhaps the Super IMF basket is a temporary device by China, used in a manner to demonstrate that the fiat currency system cannot be effectively reformed. Maybe China wishes to use the new expanded IMF basket to break the Western currencies in a single blow. If and when Russia & China demonstrate 25,000 to 30,000 tons of Gold in official reserves, they can formally demand a double weight in the Ruble & Yuan within the IMF basket, and force the crippled Western currencies to suffer embarrassing weight reductions in full global view. A forced audit of the USGovt gold reserves would be resisted, and the Super IMF basket would be abandoned, with enormous fanfare and unspeakable horror to the West.
China might wish for it to be installed as a reformed basket, so that it would obviously fail. The West would not believe its failure is fait accompli, since so arrogant. The East would expect failure in short order, as would all Von Mises students of sound money. The second Axiom of Sound Money declares that fiat paper money cannot replace failed fiat paper money ever. Maybe the Super IMF Basket buys Beijing some time. Maybe it serves a political purpose, to slam home the central bank franchise system that promotes the phony money. In summary, it is difficult to keep this piece of manure alive, the toilet fiat paper monetary system. It could be to sidetrack the BRICS gold currency. It could be to promise BRICS a transition to the Gold Standard return. It could be a distraction by China to curry favor and tighten the screws over the West. The reformed SDR basket is a double edged sword. Expect it to blow up in the West's faces.
◄$$$ AMERICAN BANKS ARE STOCKPILING TREASURIES AS DEPOSITS NOW EXCEED LOANS... THE LEVERAGED CARRY TRADE HAS SOME BIG PROFITS... THE BIG US-BANK PARTICIPATION HAS ASSURED CONTINUED LOW BOND YIELDS, SINCE ANY RATE HIKE WOULD SEND THE ENTIRE CARRY TRADE INTO REVERSE... ALSO THE INTEREST RATE SWAP MACHINERY PRODUCES MORE ARTIFICIAL USTBOND DEMAND, WHICH IS STORED AWAY AND CANNOT BE SOLD... BOND PURCHASES ARE THE NORM, BUT SALES ARE NOT PERMITTED. $$$
American banks are loading up on USGovt debt, a sign they remain cautious on the economy. Commercial lenders increased their holdings of USTreasurys and debt from federal agencies in September by $54 billion to nearly $2.0 trillion in unprecedented manne, data from the Federal Reserve shows. Banks have now been net buyers for 12 straight months. Bank of America and Citigroup are among the lenders adding government bonds this year as loan growth fails to keep up with record deposits. The important new factor is the upcoming Basel requirement that takes effect in January, requiring them to hold more high quality assets. The uber-lord BIS making the rules considers USTBonds to be high quality even though up to $1 trillion are being monetized annually, an utter travesty, using money created by rolling it off a mill. Lending institutions are reluctant to extend credit in the current chronic stagnant recession. The S&P500 companies are carrying the lowest debt burdens in over 20 years. Banks have stepped up their bond purchases as deposits have ballooned to $10.37 trillion, the most since the Fed data began in 1973. Lenders accumulated so much cash that deposits exceeded loans by the most on record last month. That gap has widened by more than $300 billion in the past year.
The industry chooses to justify their caution, when they see few borrowers of quality. The story line is that big bank demand has pushed down the bond yields, resulting in a 4.2% gain on USTreasury holdings. The bank analysts continue their clownish myopia with commentary regularly about the inevitable USFed rate hikes. Monetary policy in reality is stuck at Zero Percent Forever and QE to Infinity, with no viable alternative to exit, none, zero. Notice the big banks are the bagholders of the powerful Interest Rate Swap machinery that fabricates demand.
Bank of America has more than quadrupled its available holdings of USTreasurys and federal agency debt this year to $38.7 billion as of June 30th. It holds more of the securities than at any time since 2012. Citigroup, which one should recall benefited from a $45bn cash infusion from asset sales at the height of the credit crisis, had $103.8 billion of the bonds at the end of June. The mark logs a 19% increase from December and the highest (toxic liquidity) level since March 2011. What these bankers do not report is their massive bond futures carry trade, a guaranteed win with virtually free money on the short end and a decent return on the long maturity end. The USFed gives the big banks a wink, to assure them of no rate hike. Any rate hike would devastate the big banks, reverse the entire bond carry trade locked in, and force interest rates up 2% to 3% in a matter of several months in a frightening scenario. Thus no rate hikes forever, a trapped system.
The banks put on leverage with the futures contracts, pocket 25 times the rate differential, and park the winnings in USTreasury Bonds. Also, the Interest Rate Swap machinery requires that the New York banks sop up the artificial demand produced by the IRS devices. Again the input is free money, and the output is fresh fake bond demand. The banks store the bonds in collusion with the USFed. Evidence of the outsized usage and heavy reliance of the IRSwap device is the embarrassing failures to deliver. The market does not have as many bonds as the derivative machinery produces artificial demand for. Thus lies are told to explain the failures, or else the financial sector quickly forgets the gross anomaly. See the Bloomberg article (CLICK HERE) and try not to puke on the rubbish. The article cites a jobless rate at a six-year low and corporations at their healthiest in a generation. Nothing more than Reich Finance propaganda. The spew will continue until the bankers are exterminated.
For more reality on the same topic, see the Zero Hedge article (CLICK HERE) which rarely spews rubbish, instead great insight and wisdom with guiding light. ZH echoes the same points with an editorial point of the US banks being broken and very wrong in their function as casinos, not capital formation tools, certainly not lending engines. The JPMorguen deposit volume reached $1.34 trillion last month and is still climbing. Their loan volume peaked at the Lehman event with $761 billion, never having recovered. The big banks are dependent upon free money by the USFed, running easy carry trades for nice hefty profits. Broken system, corrupt links to the paper mill of free money, fascist component as parasite, systemic failure in progress.
◄$$$ THE BANK FOR INTL SETTLEMENTS WANTS A ROLE WITH THE NEW BRICS ALLIANCE AND MANAGEMENT OF THEIR NEW FINANCIAL STRUCTURE. $$$
The story is obscure, but comes from a couple corners. The Basel bank from Switzerland has offered its expertise to the BRICS nations, with respect to management of their funds, oversight for their capital ratios, even ostensibly control of their gold reserves. The gesture seems absurd on its face, since the BIS is the tower of banking corruption, and site of much gold price suppression, even gold rescues via overnight deliveries. To the Jackass, it smells like the gang of foxes is formally requesting a contract for security at the henhouse farm. Verification is very difficult, and more information is sought. The BRICS might give them a subordinate role, in order to keep the enemies closely, within view and for no other reason. However, with violent threats, blackmail, and bribery, the BIS could gain in internal foothold for their truly evil influence. They are the consummate financial criminals, far more dangerous than Al Capone ever was. Capone stole from alcohol bootleggers. He drained neighborhoods and businesses. He tempted people into gambling. The BIS drains entire nations of savings, and imposes a tax on all money created under their guise.
## EURO CENTRAL BANK OPPOSITION
◄$$$ BUNDESBANK BLASTS THE DRAGHI'S QE POLICY, AND FEARS THAT MONETARY POLICY IS HOSTAGE TO POLITICS... A RIFT IS GROWING, THE INTENSITY OF THE CONFLICT REACHING A HIGH LEVEL IN THE OPEN... THE CASE IS FORMING FOR GERMANY TO LEAVE THE EURO MONETARY UNION, WITH A RIFT OVER HYPER INFLATION... THEY HAVE RESENTMENT FOR MULTI-$BILLIONS IN LOST SAVINGS TO SUPPORT SOUTHERN EUROPE... NEXT THEY WILL NOT TOLERATE HYPER INFLATION OF THE WORST VARIETY. $$$
The Bundesbank is a highly respected, high integrity, sound institution with decades of track record in resisting stupidity and recklessness by Western counterparts. It has been a pillar of strength, and lately shows itself as still sturdy with principles. They must contend with both the USFed and the Euro Central Bank, each a reckless institution. The Germans stand their ground. Buba head Jens Weidmann has been outspoken in challenging the Goldman Sachs preppy elite prince monetary lord of Europe, Mario Draghi. The prince feels compelled to extend and expand the continent's own version of QE bond purchases. He sees risk, and he wants to pour gasoline on the fire, just like the nitwit pyromaniac American monetary merchants. Weidmann criticized the Euro Central Bank decision to buy private sector bonds and signaled fierce opposition to purchasing government bonds. He emphasized reluctance to back additional stimulus measures to combat weakness in the EuroZone economy. Deep down, he and his German colleagues must be very well aware of the risks to destroying capital in the medium term, while providing liquidity in the short term. He implicitly referred to rules preventing the ECB from financing government debt.
Weidmann stated, "The concept of an independent central bank clearly focused on price stability is neither old-fashioned nor outdated. There is a risk of monetary policy, especially in the Euro area, being held hostage by politics. The ECB's mandate is more narrowly limited than that of central banks in other currency areas. Against the background of the announced target for the balance sheet, I see a risk that we will overpay for these assets." He pointed out how linking fiscal policies together through ECB bond purchases is a dangerous path, in his words. Pressure in Germany from many fronts, the voices come from failed systems urging the Buba to wreck their own nation in order to bring equality to Europe. The Draghi EuroCB unwittingly is trying to create uniform destruction across the entire European continent, which the Germans will not tolerate. The pressure to separate from the common Euro union is mounting. It will soon be fierce.
Weidmann rejected calls from the Intl Monetary Fund and within the ECB for Germany to cut taxes or to ramp up public spending. He actually suggested instead that the EU Commision should reject France's 2015 budget, which exceeds deficit targets. The Buba chief acted boldly to defend his fortress gate from entry by another Keynes Knight on a horse. He bravely reiterated the conservative principles that have characterized the Bundesbank throughout its nearly 60-year history: keeping inflation low, protecting the central bank balance sheet from risks, and strict separation from the financial needs of governments. The USFed and Bank of England and EuroCB all are in gross violation of all these hardfast principles. Weidmann's firm stance is in direct opposition (hardly just contrast) to the EuroCB, which is on a campaign smacking of politics to convince investors that its role is to boost the flow of money to the economy. Prince Draghi might have too many doubts from his fiefdom, since he must gain the consensus for his desired expansive steps. Deep rifts are exposed. The EuroZone is deeply divided, and soon to become more divided. Countries such as France and Italy are calling for more flexibility (namely corrosive inflation) while Germany insists on fiscal rigor. All such initiatives are opposed by Germany.
The Germans are not alone. In the same week, the Dutch central bank delivered its own critique of EuroCB policies, warning that that easy money policies could cause financial instability and fuel asset bubbles. "The medicine should not become worse than the disease," it said in a terse but very insightful comment. See the Zero Hedge article (CLICK HERE). Bear in mind the Jackass theme for months. The Germans, Dutch, Austrians, and possibly Finns are banding together. They have financed the Southern European sovereign debt (PIGS). They have been drained of well over $3 trillion in savings over the past decade or more, possibly $5 trillion. They are making the case for departing the European Monetary Union, also called the common Euro currency union. The Germans have some big objections with the USGovt, but they have a giant conflict with the Draghi EuroCB. The conflict is enough for the foursome led by Germany to leave the Euro entirely.
◄$$$ GERMANY FIGHTS ON TWO FRONTS TO PRESERVE THE EUROZONE, THE PATCHWORK, OR TO JUSTIFY ITS ROLE IN FRACTURING THE SAME EUROZONE... LEGAL CHALLENGE TO THE DRAGHI MONETARY APPROACH ARE COMING TO A HEAD... WITH EITHER DECISION, GERMANY WILL FIND IT INTOLERABLE TO REMAIN IN THE EUROPEAN MONETARY UNION (COMMON EURO). $$$
The European Court of Justice announced that hearings in the case against the European Central Bank's (ECB) bond buying scheme known as Outright Monetary Transactions (OMT) will begin on October 14th. These are historical challenges. The OMT program of the Euro Central Bank features the bank making open purchases in secondary sovereign bond markets issued by EuroZone member states, under certain conditions, but decided by Prince Draghi alone. The prince values his hoarded power. The process will surely be lengthy, a judgment not due until mid-2015. The ruling will have serious implications for Germany's relationship with the rest of the Europe, mostly debt satured and wrecked economically. In the background are powerful dark clouds of popular resentment, angst, if not venom. The anti-Euro party has recently been making strides on the German political stage, which limits the government ability to maneuver. Unlike America, the popular German opinion matters. They are not a fascist state like the United States.
Both the PIGS nation debt dependence and the easy money dependent financial markets demand endless Quantitative Easing, that euphemism for a flood of fake corrosive money. The broad program of sovereign bond purchases would inject a large quantity of money into the market. Up to this point, three major impediments have obstructed such a policy. 1) The German Govt's strident aversion to devoting more savings on peripheral economies. 2) The political conception that QE would ease the pressure on peripheral economies to put their fiscal houses in order. 3) The court case hanging over OMT as defense against the EuroCB's final ploy in applying toxic fertilizer.
Some details. The original OMT form and Quantitative Easing bond purchases are not exactly the same animals. In the original conception of OMT, the ECB would offset any purchases in full by taking an equivalent amount of money out of circulation. By not increasing the money supply, the practice would be sterilized. On the other hand, QE as per the US format is unsterilized, with no funds removed from the system. Regardless, any declaration that OMT is illegal would severely inhibit Draghi's room for maneuver. He wants to undertake full bore QE and to expand it to various types of assets. The Jackass doubts that Draghi would sterilize his liquidity operations. It will be full of intrigue to watch, as Prince Draghi might embark on QE on the sly, in secret, in defiance, all in the name of rescuing the grand continent as hero.
Merkel is in an awkward position, awaiting the decision of the European Court of Justice. Some call it a no-win situation. If the Luxembourg court declares OMT illegal, Draghi's tool would be removed, but which would also kick out the props that has kept many sovereign bond yields at artificially low levels. The regional bond yields would all rise, and banks would soon fail, while the crippled nations would call for more direct German aid. All PIGS sovereign debt yields are ridiculously low, as shown in the last month's Hat Trick Letter. By contrast, if the European Court of Justice rules that OMT is indeed legal, a sizable inhibitor to QE will have been removed. Then would follow a full scale bond buying campaign of the second most corrosive destructive variety to win liquidity gains at the deep expense of capital destruction. Apart from grand distortions, the massive loss will be of the German loyalty to the EMU itself. The German voters have yet to be fully heard. The German nation is perilously close to leaving the Euro behind and forging a new path with Eastern lights. See the Stratfor article (CLICK HERE).
◄$$$ PROPAGANDA ON EUROPEAN ECONOMY AND PROSPECTS, EVEN A SAVINGS GLUT POINT OF NONSENSE... THE CASH PILING UP IN EUROPE IS FROM CONCERNS OVER THE SYSTEM IN TURMOIL, AND VERY LOW DEMAND... CHINA HAS A HIGH SURPLUS FROM RAMPED UP EXPORTS DURING A TIME OR ROBUST OUTPUT AND LOW LABOR COSTS. $$$
It is often useful to examine the false stories pumped out to the masses, intended to deceive. Check this Bloomberg rag story. The Deutsche Bank analyst George Saravelos has coined a phrase for a collection of toilet paper passing as financial securities. The heap has reached $400 billion, which he dutifully calls the EuroGlut. "It is Europe's huge savings glut, what we call EuroGlut that will drive global trends for the foreseeable future. Via large demand for foreign assets, it will play a dominant role in driving global asset price trends for the remainder of this decade." The strategist is delusional. The glut might be devalued severely, and sooner than later. He expects these assets, often sustained by the Prince Draghi wand, to buoy the world's stock and bond markets. The cash is piling up because the world is buying European goods and services, especially from Germany. In contrast, the EuroZone's depressed consumers are not buying much of anything from home or abroad. They also see a suddenly over-valued USDollar with associated more costly US-made products. The region's Current Account surplus runs at 2.2% of Gross Domestic Product, whereas back in 2008 it was registered at almost 2% of GDP. Saravelos cites the German Current Account surplus at 7% of GDP. The nation is in need of ramping up demand for foreign stuff. Maybe they want to buy Russian things, an unconventional concept. The errant strategist compared Europe to China, an utterly absurd construct in comparison. See the Bloomberg nonsensical drivel article (CLICK HERE).
It could be that European customers are refusing to buy USTreasury Bonds anymore, refusing to buy US stuff tied to the over-valued USDollar, refusing to take risks overseas when they observe the US economic ship listing and sinking. It could be that the US produces less to be purchased. Most surely, European citizens are worried, and likely hunkering down with caution. Worried citizens to hoard, even cash and disposable income. Also, the Draghi well spring of easy money has a side ramp of significant bank speculation and other generated false wealth.
The Voice has some roots in Central Europe, although a migrant sage. He knows the continent well. He wrote the following. "This article is rubbish! Europe has many problems like the currency, the retaliatory Russian sanctions, slow growth, weak banks, weak exports, aging population, declining population, and more. Europe is nothing like China. Current Account surplus is just a paper thing. The real data pertains to unemployment, bank lending, bank capital structures, derivatives, demand for cars or housing or clothes. We have seen several major bankruptcies both in Germany as well as in Spain, which have been stalwart firms. Meanwhile Italy and Greece and Portugal and Ireland are all in tatters. I disagree emphatically with the author that Europe is like China except for the growth.
China is a rising super power with lots of cash, growing demand, strong banks, perfect age of population, good growth, and strong volumes across all sectors. China is nothing like Europe. It has a sturdy GDP and currency growth. The Euro exchange rate will fall to 1:1 in the next few years or even 95 cents as the article says. Europe is very weak while China is very strong. They are on opposite sides of the spectrum. They are also total opposites with respect to the factors behind the current CA surplus. The EuroZone is having surplus because it is importing less due to low demand, while China's surplus is high because it is exporting more during a time of robust domestic demand. What a worthless piece passing as financial journalism."
## RUSSIA & CHINA BEYOND COURTSHIP
◄$$$ RUSSIAN TRADE SURPLUS IS SIGNIFICANTLY LARGE, BUT CURRENT ACCOUNT DEFICIT IS $100BN LESS... SOME OUTSIZED FOREIGN PAYMENTS OR ACQUISITIONS HAVE BEEN COMPLETED. $$$
Trade surplus of the Russian Federation for the first nine months of 2014 amounted to $151.2 billion, compared to $135.1 billion for the same period a year earlier, according to their central bank. The Current Account Surplus for the same nine month period amounted to $52.3 billion versus $26.1 billion a year earlier. The data raises questions. Therefore roughly $100 billion in foreign payments and transfers by Russia took place in the first nine months of 2014. It seems like a very high figure in payments and transfers out of the country. To be sure, Russia is not buying USTreasury Bonds, since doing so would push down their Ruble exchange rate even more. The answer lies in investments of many types. Maybe they are paying off British Petroleum in the TBK-BP oil deal in such large tranches. Maybe the Russians are buying gold externally in a grand accumulation on the sly, like with African supply under the radar. Maybe they made some payments of debt to external lenders, like to settle foreign currency liabilities early, before the sanctions hit. Maybe they are making capital layouts for construction projects externally, like with China in the big oil & gas pipelines. Maybe they are making several sizeable financial asset purchases or equity stakes in Asian firms, without publicity. See the ITAR-TASS article (CLICK HERE), which settles none of the conjecture.
Jaroslav pointed to the gold purchase in the external market, capital construction toward acceleration of projects, and even construction of the spaceport Vostochnyi. He made a great point, that perhaps the Russian Central Bank could have given significant amounts of money to subsidiary banks in foreign nations so as to avoid the ban of credits associated with sanctions. Those banks avoided liquidity pinches.
◄$$$ RUSSIA PAID DOWN A NEAR RECORD $53 BILLION IN DEBT IN THIRD QUARTER... THE NATION POSTED A HEFTY CURRENT ACCOUNT SURPLUS... A COMBINATION OF SEVERAL FACTORS MIGHT HAVE CONTIBUTED TO THE GAIN, LED BY IRAN OIL BARTER, CAPITAL LAYOUTS, REDUCED IMPORTS (LIKE FOOD), AND A LOWER RUBLE... THE BIGGEST FACTOR IS THE GENEVA-BASED LNG SALES OF RUSSIAN NATGAS. $$$
Capital outflows slowed dramatically in 3Q2014, from $23.7 billion in Q2 to $13 billion in Q3. The month of September saw capital inflows for the first time since Sept 2013. The net Russian Current Account surplus for 3Q2014 was significantly stronger than expected, at $11.4 billion compared to $0.7 billion deficit in 3Q2013, driven by increased trade. Their CA surplus stands at at 3.8% of GDP, suffering horribly from the Western sanctions, NOT!! Remarkably, Russia paid down a massive $52.8 billion in foreign debt as Putin began his de-Dollarize initiatives at near record pace, reducing external debt to the lowest since 2012.
Goldman Sachs attributed the Current Account improvement to reduced imports, due to slowing domestic demand and the weaker Ruble currency. They offered shallow analysis, likely hoping to move onto the next research report with less embarrassment. EuroRaj pitched in with a highly credible proximal cause for the bulge in inflows. In progress is a major barter swap between Russia and Iran. Russia provides nuclear technology, and Iran pays for it in crude oil. This oil can be sold to China, India, and South Africa in USD terms, cleverly bypassing the US sanctions and giving Russia access to USD. It uses the funds to satisfy the small requirements that it has in USD. The barter has been in the works for a few months, and might have begun in flow of funds, a very clever deal for Russia to give itself external crude oil sales. When the funds come home to Mother Russia, they appear at capital inflows therefore.
The Jackass can offer some other potential explanations, since not inhibited by the stench of politics. Russia probably ordered some drawdown in USTreasury Bonds held in reserve. Maybe some small payment in Gold to mollify the Western fascist bankers and to buy some time, but doubtful. Refer to some Czarist gold held (ransomed) by France. China might have given Russia some USTBonds as capital layouts for the major new pipelines from Siberia in early deals. Even ExxonMobil might have rushed some payments before a sanctions deadline for Arctic region projects. Furthermore, Russia might have some payments for energy & metals from Western countries, which did not make it back to Russia due to sanctions. So they used funds to pay down debt, rather than to move funds in the current climate. Russia might have purchased less foodstuffs in Q3, which should be sourced in South America, to appear in the next Q4 data. Lastly, the Ruble currency is significantly down, making inflows lower on cheaper Russian products. See the Zero Hedge article (CLICK HERE).
Well, the Voice cleared it up. All the above points might be valid, but they are also probably small factors. For Russia, 95% of all the LNG sales are handled through a Geneva holding company. These structures are complex. If Russia would relocate those business activities from Geneva to Malta or Cyprus or Dubai, the bustling city of Geneva would shrivel up from lost lucrative fees, and render tremendous damage to the big Swiss banks. Bear in mind that Switzerland has remained neutral with regard to sanctions. If their position were to change, Russia might relocate that business office to handle the huge sales. In fact, the Kremlin might decide to move the payment offices anyway since the EU Commission needs to feel the heat of revolt.
◄$$$ CHINA & RUSSIA FINALIZED PLANS FOR THE GAS PIPELINE FROM SIBERIA TO THE EAST... CEO MILLER OF GAZPROM CITED THE POSSIBLE DOUBLED NATGAS OUTPUT TO CHINA OVER THE CONTRACTED 30 YEARS... THE WORLD IS BUILDING THE SUPERPOWER IN CHINA... UTTERLY HUGE CAPITAL LAYOUT FOR CHINA THOUGH THE LONG ARDUOUS PIPELINE CONSTRUCTION... THIS SUPERPOWER UNION WILL NOT BE FORMED EASILY, DESPITE THE WILL. $$$
Joining of the first section for the gas pipeline (named Power of Siberia) in Yakutia Russia has taken place on September 1st of 2014. The China National Petroleum Corp (CNPC) on October 9th approved the designs and construction plans for the east route China-Russia natural gas pipeline. In Moscow, Russian Prime Minister Dmitry Medvedev pledged comprehensive support to Russian state-run energy giant Gazprom and China's CNPC in the design and construction of gas transport infrastructure for the pipeline. Lots of shmoozing again by the two national leader corps in front of the many cameras. The Chinese section of the pipeline originates in Northeast China's Heilongjiang Province and terminates in Shanghai. Work is expected to begin in 2015. Each section has received separate approval by China's National Development & Reform Commission.
From 2018, the target is for 38 billion cubic meters of natural gas to flow into China via the pipeline on a yearly basis. The western route has been the topic of the famed Holy Grail dea. The route to supply gas to China via western Siberia could be implemented faster than the eastern route. Gazprom CEO Miller tossed in a zinger. He reported to Putin that Gazprom might consider more than doubling the volume of supply. "We plan to sign a contract for a volume of 30 billion cubic meters for 30 years, although the talks have also looked at other figures for new contracts concluded for the western route. We are looking at the possibilities for supplying 60 billion cubic meters or up to 100 billion cubic meters of gas to China." One is left to wonder if the statement was intended for European ears, to put fear in their hearts for broader Russian natgas cutbacks. Progress on construction is expected this year. The two sides have also jointly built and put into operation a China-Russia oil pipeline in the Far East. In 2013, China imported 24.35 million tons of crude oil, 27.28 million tons of coal, and 3.5 billion kilowatt hours of electricity from Russia. The nation is China's main energy supplier outside the Gulf region. Many are the details of the various pipelines between Russia and China, details in the following. See the BRICS Post article (CLICK HERE).
◄$$$ RUSSIA CLAIMED THE ARCTIC WELL DRILLED WITH EXXON HAS STRUCK A MAJOR OIL DISCOVERY (COMPARABLE TO GULF OF MEXICO)... THE PROJECT WILL BE STALLED, AS NEW USGOVT SANCTIONS ARE AT WORK THAT TARGET OFF-SHORE AND ARCTIC DEVELOPMENT. $$$
Russia has discovered what might prove to be a vast pool of crude oil on the remote North Pole, with the cooperation of the largest US energy company. Russian Rosneft with Exxon Mobil has a well drilled in the Kara Sea region of the Arctic Ocean. It struck oil, showing promise of a new vast oil producing region. The initial estimates are of one billion barrels of oil with similar geology nearby. The implication is that the entire region could hold more oil than the US portion of the Gulf or Mexico. CEO Sechin was openly thrilled, mentioning how all expectations have been exceeded. The find is of exceptional significance since no new major oilfields have been discovered in many years on the entire globe.
Complexity shrouds the Kara Sea project. The well was drilled before the October 10th deadline granted to Exxon by the USGovt under sanctions that bar US companies from working in Russia's Arctic offshore. Rosneft and Exxon will be obstructed from continued drilling, which puts the exploration and development of the area on hold. For its part, Exxon will focus on completing the well and safely winding down operations consistent with their USGovt license. The development of Arctic oil reserves will require hundreds of $billions and take decades to complete. It is one of Putin's grandest ambitions. Some degree of depletion has occurred on Russia's existing fields in Siberia. New reserves must be developed. Unclear is the degree to which specialized technology owned by Exxon is being shared with the Russians, a point of contention. The drilling reached a depth of more than 2000 meters (6500 feet). The importance of Arctic drilling was one reason that offshore oil exploration was included in the most recent round of USGovt sanctions. Exxon and Rosneft have a venture to explore millions of acres of the Arctic Ocean, which is stalled. See the Bloomberg article (CLICK HERE). The oil production platform at the Sakhalin-I field in Russia is shown, partly owned by ONGC Videsh Ltd.
◄$$$ THE EXXON ROLE IN THE ARCTIC IS FINISHED, HAVING COMPLETED THE MOST DIFFICULT PART WITH ITS RUSSIAN PARTNERS... NEXT THE ARCTIC OIL PROJECT BY ROSNEFT WILL CONTINUE WITH CHINESE FUNDING AND PARTICIPATION... THE CHINESE STATE OIL FIRMS WILL CONTINUE THE HUGE PROJECT AND SHARE THE PROFITS... A MAJOR BLOW TO THE ROCKEFELLER INTERESTS, WHERE VENGEANCE IS LIKELY TO COME... ROSNEFT LOOKS TO CHINA, WHICH WILL ELEVATE THE COMMERCIAL PARTNERSHIPS TO AN EVEN GREATER LEVEL. $$$
ExxonMobil and the dubbed Morgan Stanley as the financing agency will be brushed aside in any role to organize the $billions required to expand the drilling next spring, since banned by USGovt sanctions. Rosneft CEO Sechin is turning to China for partnership. It must be noted that the giant ExxonMobil is forced out immediately after finishing the most complex and difficult part of the project, the exploration. The ample profits will be secured for Russia in its Rosneft giant, as backlash to the wrong-footed ill-conceived counter-productive sanctions. The biggest loss for the US is in prestige. On September 1st, President Putin personally delivered the message to Beijing that he approved Chinese state oil companies taking a financial stake in Vankor, a major onshore subsidiary of Rosneft. They can all express gratitude to Exxon for finished the most arduous portion of the project, which guarantee tremendous profits. The stake will be the largest Chinese equity deal in a Russian oil company to date, and mark some easy pickings. Since the Ukraine War and sanctions, Russia has altered course, no longer jealously limiting foreign roles in its mammoth energy firms. The partnerships make Russia much stronger. The Vankor deal forges the growing energy ties between China and Russia.
The result is the exact opposite result of what USGovt geopolitical Eurasia strategy is intended to achieve. Refer to the chief fascist ideologue. Strategist Zbigniew Brzezinski declared in 1997 with his "The Grand Chessboard" publicaton, that the US geopolitical policy must be to prevent at all costs a unified Eurasian economic challenge to American global hegemony. The Obama Admin has done the opposite, an exercise in stupidity, a major strategic blunder. In fact, the errant policy is hastening the formation of Eurasia economically. They are not competent at geopolitical chess, in no way adequately anticipating consequence and interconnected actions. One is left to wonder if the Brzezinski crew will toss Obama under the bus, or whether they realize the US leaders have a very poor set of remaining pieces on the chessboard. In addition, other vegeance should be expected despite the polite public talk. Exxon is barred from profit taking after spending $600 million on drilling. The Chinese companies replace Rockefeller interests, with no great accomplishments to precede their huge profit sharing. The Rocks have people in very high places. See the NEO Journal with Bill Engdahl (CLICK HERE). Work will continue with Chinese, Japanese, and even Norway's Statoil involvement. The Voice has mentioned in the past that the world's top offshore expertise comes from Norway.
◄$$$ IMPORTANT GAMBIT BY PUTIN TO SELL 19.5% OF ROSNEFT OIL FIRM... THE KREMLIN IS BUILDING PARTNERSHIPS, AND THUS UNDERCUTTING THE ENTIRE SANCTIONS MOVEMENT WHILE IT PROVIDE A FLUSH OF CAPITAL... THE WEST HAS FORGOTTEN CAPITALISM, AND WILL SUFFER IN THE NEXT CHAPTER FROM DRAINAGE. $$$
Russian Economic Development Minister Alexei Ulyukayev announced that the privatization of the country's Rosneft oil company could happen by the end of 2014. He cited challenges but in principle being possible by the end of the current year. Back in July, he claimed the government was ready to privatize 19.5% of Rosneft's shares. In August, Ulyukayev confirmed the plans to likely occur in two stages. Rosneft is a global giant from the Russian petroleum industry. Their activities include hydrocarbon exploration and production, upstream offshore projects, refineries, and crude oil & gas plus product sales in Russia and across the world. Currently, the company's main shareholder is state-owned Rosneftegaz at 69.5 percent. BP owns another 19.75 percent, while the remaining 10.75 percent is publicly traded. President Vladimir Putin confirmed that Russia is considering opening several large state energy companies on the market. Russia is not planning to forfeit controlling interests in these companies. See the RIA Novosti article (CLICK HERE).
It could be a brilliant stroke by Putin and Kremlin. With sanctions have come stress and strain on funds and external investments. The sale of 19.5% stake would leave the Russian Govt with 50%, since Rosneftegaz has 69.5% currently. The privatization sale of 19.5% would bring in some big capital infusion, much needed, but of equal importance to promote partnerships and to stave off the negative sentiment of sanctions. It would also make shareholders as partners, and thereby create some significant voices to undercut the Western sanctions. So the Kremlin has shown a way around sanctions while making hundreds of partners, in the promotion of capitalism. The Voice made some important brief comments. "Putin has very smart advisors who are quite capable to think short, medium, and long term, as well as knowing how the system works. It is absolutely stunning how little the US leaders are aware, or better described as ignorant of the procedures being played. The US and the West are being systematically drained of all its resources, energy, and whatever power and influence they have left." He described a grand backfire with a hidden underpin of the upcoming Eurasian Trade Zone, as the sanctions might eventually be brushed aside as mutually destructive. Capitalism will prevail, a concept forgotten by the Americans and British, who play power games with fascist sticks, showing ignorance of modern commerce. By the way, the Jackass believes the Kremlin has hired the team which includes The Voice. No confirmation, but silence is loud sometimes.
◄$$$ CHINA & RUSSIA PLAN TO SIGN 30 AGREEMENTS DURING THEIR ANNUAL MEETING IN MOSCOW, WHICH COVER A MULTITUDE OF AREAS... RUSSIAN TRADE WITH CHINA IS TRIPLE ITS TRADE WITH THE UNITED STATES. $$$
Russia and China will finalize more than 30 agreements pertaining to energy, finance, and high-speed railway during the annual Russia-China Prime Ministers summit to be held on October 13th in Moscow. A parallel conference will also be held at the international forum Open Innovations on October 14th. The gatherings are important, since Russia has a high priority to remove some of its Western dependence. A continuation is expected of the previous successful meetings between President Xi Jinping and his Russian counterpart Vladimir Putin. The two leaders have overseen enormous Sino-Russian joint ventures, including a landmark $400 billion gas deal in Shanghai called the Holy Grail. It was the culmination after a decade of nettlesome gas supply talks between the two countries, the chief obstacle being price commitments.
Further continuation comes from the meeting in September between Putin and Xi during a Shanghai Cooperation Organization (SCO) Council of Heads of State meeting in Dushanbe Tajikistan. At that gathering, Putin urged for aligning China's Silk Route revival project with Russian plans for a trans-Siberian railway. The leaders of the two superpowers acknowledge that mutual ties are at an unprecedented level, including the influence toward solving international problems, meaning global diplomacy. Bilateral trade between the two nations is three times the trade volume between Russia and the United States. Compare US$27.5 billion in US trade with US$87bn in Chinese trade. Furthermore, the Yuan-Ruble currency trade on the Moscow Exchange has jumped 10-fold this year to $749 million in August. It is tiny but growing exponentially. See the BRICS Post article (CLICK HERE).
◄$$$ RUSSIA & CHINA FINALIZED A DEAL TO BUILD HIGH-TECH CENTERS, WHICH COULD BE AN ATTEMPT TO CONSTRUCT THEIR OWN SILICON VALLEY... CAPITAL INVESTMENT IS THE THEME TO THE PARKS, WHICH IN TIME WILL HAVE SEVERAL SATELLITE OFFICES. $$$
They call them high-tech parks, when they are massive centers that bring businesses together with financial venture firms. In mid-October, China and Russia signed a memorandum of understanding (MOU) to jointly build two high-tech parks, one in each country. The park in China will be located in the new town of Xixian Fendong in Shaanxi province of Central China, and will initially occupy four square kilometers. The park in Russia will be housed in 200,000 square meters of buildings, to be built in the Skolkovo Innovation Center in Moscow. These massive centers are being developed by the Russian Direct Investment Fund (RDIF), Russia-China Investment Fund (RCIF), and the Skolkovo Fund, with support of local governments. More locations for such park centers will be added. Authorities expect to open satellite offices in the Chinese cities of Beijing, Shanghai, Guangdong and Heilongjiang, while the Russian park will open offices in Kaliningrad, Vladivostok, and the Tatarstan republic. The goal is to attract high-tech companies from both countries and to promote development of international companies within the parks.
Russian Premier Dmitry Medvedev stated, "We are interested in attracting Chinese investment into agrarian projects in Siberia and the Far East. In turn, as the world's largest country with the biggest reserves of arable land, we can supply China with food products, especially agricultural products." The Chinese Premier Li Keqiang also said Beijing will advance the establishment of a Eurasian high-speed transportation corridor linking Beijing and Moscow, adding that the current priority should be the high-speed railway between Moscow and Kazan. The two superpower nations are attempting to duplicate Silicon Valley in the United States, but perhaps with a wider scope then electronics. See the BRICS Post article (CLICK HERE).
◄$$$ ROMANIAN AUTHORITIES HAVE ORDERED A HALT TO WORK OF THE REFINERY ON BEHALF OF LUKOIL. $$$
Romanian authorities have ordered to stop the work of the refinery Petrotel, an asset to the Russian company Lukoil since 1998. The news was stated by the Ambassador of Russia in Romania. The plant was searched in connection with allegations of tax evasion and income legalization. See the Russia Today article (CLICK HERE) in Russian.
◄$$$ TURKEY TO RECEIVE UP TO 20% MORE RUSSIAN NATURAL GAS... THE TURKS HOPE TO SERVE AS PROVIDER OF ASIAN ENERGY TO MIDDLE EAST CUSTOMERS... THE ANATOLIAN PIPELINE WILL BE TAPPED. $$$
The Turkish Govt has reached a deal with Russian energy giant Gazprom to receive nearly 20% more gas per year from the Blue Stream pipeline. Turkish Energy Minister Taner Yildiz closed the deal with Gazprom officials in Moscow. Turkey consumes about 1.5 trillion cubic feet of natural gas per year, at least half of which comes from Russia. During meetings with Russian Energy Minister Alexander Novak and Gazprom Chief Executive Alexei Miller, an agreement was made to raise the amount of gas sent from Russia though the Blue Stream pipeline to 670 billion cubic feet per year. Turkey aims to exploit its geographical position to serve as an energy bridge between Middle Eastern and Asian suppliers to the Middle East. The Trans Anatolian pipeline (called TANAP) would transport natural gas from the giant Shah Deniz gas field off the coast of Azerbaijan through Turkey to the Greek border, then onto European consumers. Europe is eager to break Russia's grip on the region's energy sector through projects like Shah Deniz and TANAP. Yet another bypass of Ukraine, the troublesome node. Watch Turkey switch to embrace the Russian alliance much more in coming months. Continued alliance with the West involves risks to its own disintegration. See the UPI Business article (CLICK HERE) and the English Pravda article (CLICK HERE).
◄$$$ OBAMA THREATENED MORE SANCTIONS AGAINST ZIMBABWE OVER A LARGE RUSSIAN PLATINUM DEAL... AGAIN ECONOMIC DEVELOPMENT IS A NEGATIVE AMONG THE USGOVT PRIORITIES... THE MUGABE REGIME WAS CRITICAL OF TEAM OBAMA, LONG PAST HAVING GONE OUT OF CONTROL. $$$
The Obama Admin is out of control, stretching its perceived empire worldwide that exists only in the Manchurian Candidate's mind. The USGovt will accelerate sanctions imposed against Zimbabwe in 2003, due to their closer ties with Russia. At issue is the $3 billion Darwendale platinum project. Their local Pen East Investments has teamed up with Afronet, a consortium of three Russian partners, to form Great Dyke Investments for the project. At full development in 2024, the mine will annually produce 800,000 ounces of platinum, pushing Zimbabwe's output over one million ounces, and in the process create 8000 jobs. Economic development is not a priority to the United States anymore, only war and sanctions and control and pressures. The Mugabe Regime in Harare apparently marches to a different drummer. They feel contradictions for the US to lift sanctions against Zimbabwe, but then demand support for its measures against Moscow. Russian foreign minister Sergey Lavrov visited Zimbabwe last month to conclude the deal with Mugabe. To be sure, Mugabe is a global deviant, but Obama matches him stride for stride.
The USGovt has outright warned Harare that the Darwendale project should not proceed, or else renewed sanctions will be slapped. The leaders point to hypocrisy, "America then invites sanctioned Zimbabwe to support sanctions against Russia, itself a bird of the same feather. Oh America! This is where I am tempted to tell the American government to go and hang, hang on a banana tree, bums up." It is not every day that a joke African nation insults the United States with justification in an unusual dress down. Martin Armstrong made a good summary comment. "Obama is attempting to impose his own rule of law over the entire world. He has no such constitutional authority. This a a guy who misses most of his daily briefings as Fox News reported, and countless others. This is precisely how Athens fell. It dictated to all its allies and one by one they turned against Athens and joined Sparta. Sparta was a virtual communist state and Athens was a state in a battle swinging back and forth between oligarchs and democracy." See the Zero Hedge article (CLICK HERE).
Witness the Western world gone mad. Let Obama go crazy with sanctions, since he is defining the Eurasian Trade Zone with numerous scattered satellite zones. The US President does not show strength or integrity, but rather megalomania and delusions of grandeur. The teleprompter demagogue Obama is likely eventually to impose lunatic sanctions against all Western Europe. As footnote, the Jackass usually ignores Armstrong since he exited prison. A deal apparently was cut to distribute nonsensical analysis at times in support of the regime. The US nazi thugs almost beat him to death in prison.
## ASIAN TRADE, PAYMENTS & RESERVES
◄$$$ CHINA & RUSSIA SIGNED A MASSIVE LOCAL CURRENCY SWAP, TO AID LIQUIDITY FLOW, AND TO RELIEVE PRESSURES FROM THE RUBLE CURRENCY DECLINE... THE FALLING CRUDE OIL PRICE RENDERS DAMAGE, SINCE HALF THE RUSSIAN ECONOMY REVENUES ARE DERIVED FROM ENERGY SOURCES... SOME RETALIATION BY PUTIN IS SURE TO COME SOON, WITH SAUDIS THE LIKELY TARGET. $$$
The currency swap facility will be for CNY 150 billion. Russian sanctions have hurt Europe tremendously, but lately the damage has hit Russia itself. The proximal causes are both the European trade embargo but mostly oil prices in fast decline, like to the $85 level, the lowest since December 2010. Plunging German exports to Russia have a great impact on the export driven German Economy. The fast falling crude oil prices have arrived as a result of financial market maneuvers by Wall Street, combined by direct actions taken by Saudi Arabia in raised output. They have made a bargain with the US fascists in power. The unintended consequence for the Washington crew is likely to tear OPEC apart. Watch its members move to reduce output and to accept non-USD payments soon, thereby fracturing the cartel.
The Ruble currency is hitting new record lows against the USD on a daily basis. Bloomberg reports that Russia has been forced to spend an impressive $6 billion in just the past ten days to brake the dive of the Ruble. The tumbling oil prices push it lower. The decline has seens seven-day slide of 2.2 percent, the longest stretch of losses since the nine days in August 2013. The vulnerability is noted by the fact that crude oil and natural gas contribute almost half of Russian revenue. The Russian central bank intervened in the past ten days to stabilize their currency, admitted central bank Governor Elvira Nabiullina. To be sure, if and when the Ruble recovers, the gains will be commensurate. The Ruble-Yuan currency swap alleviates an immediate problem, as the cost of swapping Rubles into USDollars widened to a record. On the radar suddenly is a new Russia foe. The Royals of Saudi Arabia have teamed up with the USGovt fascist leaders. They will find soon that crossing Putin and threatening Russia comes with consequences. Expect China to exact some of the punishment with some crippling blow from Beijing. In due time, observers will find out which channels the former KGB chief will use to retaliate against the Saudi princes. Tyler Durden of ZH believes retaliate he will. See the Zero Hedge article (CLICK HERE) and the Bloomberg article (CLICK HERE) and the Wall Street Journal article (CLICK HERE).
◄$$$ SERBIA PROPOSED FREE TRADE ZONE WITH RUSSIA, WHICH HAS PROMISED CONSIDERABLE DEVELOPMENT AID... THE SERBS MUST OVECOME THE EU LAWS WHICH ARE DESIGNED TO SEPARATE THE PIPELINE OPERATION FROM ENERGY PRODUCTION... THE RUSSIANS OFFER MUTUAL PROGRESS, WHILE THE USGOVT OFFERS CONTINUED ENTANGLEMENTS. $$$
The nation of Serbia is yet another pressured by the USGovt not to complete the Gazprom pipeline. The pressure comes in the form of bribes to leaders, empty promises of export trade to the EU, and other vague lucrative contracts from the West. The Serbs have more loyalty to Russia. The Serbian foreign minister Ivica Dacic has proposed a limited free trade zone with Russia and has assured Moscow the South Stream gas pipeline project is on track toward completion. Russian companies support the process, by expressing readiness to invest up to $1bn in the Serbian infrastructure. Under the plans put forward, the two countries could soon drop all tariffs on a long list of goods, such as sugar, meat, poultry, cigarettes, alcohol, and cars. The deal is subject to approval by members of the Eurasian Customs Union. Their bilateral food product trade could quickly double. The two countries traded only $270 million of agricultural produce last year, though overall trade between Russia and Serbia saw over 10% growth last year.
On the development side, Kremlin officials said that 26 Russian companies wish to gain access to the privatization of various state assets in Serbia, as well as to invest $1 billion into the repair and upgrading of the country's railways network. In return, Dacic assured Moscow that the proposed South Stream pipeline through Serbia would proceed. It is expected to bring up to $2.6bn worth of investment into the Balkan country. Dacic stated reassurance, "Everything is fine with the South Stream. We are ready to build it. All preparatory works are running as planned. All other matters will be settled between Russia and Brussels." The entire pipeline has been put on hold, due to the Ukraine War led by the US & EU. Construction on the project, approved by Serbia in 2008, was scheduled to begin this year. A leaked EU report showed that Belgrade participation in the continued South Stream project would likely hold back Serbia from becoming a fully EU member in the short term. The nettlesome EU claimed the South Stream pipeline contract is not compatible with the EU laws, with concerns cited over price agreement transparency, third party access to networks, and unbundling of energy production and transportation assets. The Russian development offer will seal the deal, since the US gambit is all talk. Besides, the EU benefits might be miniscule for the nation. The Serbs remain defiant. See the Russia Today article (CLICK HERE).
The scummy US State Dept has an ugly role, in a complicated situation. While the South Stream project is effectively on hold, Serbia wishes to proceed, but the USGovt continues to obstruct. Victoria Nuland is the Assistant Secretary of State. She has consistently growled at EU states who are preparing to build South Stream natgas pipeline sections, placed to pass through the Western Balkans to Austria and Italy, involving Bulgaria, Croatia, Greece, Hungary, Romania, and Slovenia in transit. She made an odd statement, "I ask the same of those who cut dirty deals that increase their countries dependence on one source of energy despite their stated policy of diversification." By increased dependence, she refers to economic development and mutual prosperity, when the USGovt specializes in war, thefts, subterfuge, atrocity, and economic ruin. Serbia has defied EU calls to change the terms of its gas pipeline deal with Russia, but the European Energy Community will block its entry into the EU on these grounds. The EU Commission (unelected) in its annual enlargement report on October 8th repeated warnings to Belgrade not to commence work on the South Stream pipeline until it renegotiates its agreement with Russia. See the Standart News article (CLICK HERE) and the EU Observer articles (CLICK HERE and HERE). Furthermore, Serbia is ready to begin significant exports of dairy products to Russia in the next month. Doing so would go counter to the EU sanctions, more defiance. See the Russia Today article (CLICK HERE).
◄$$$ RUSSIA EXPANDED THE ECONOMIC UNION IN EAST ASIA, AND HAS SET SIGHTS FOR ISRAEL, INDIA, EGYPT... THE UNITED STATES IS WIDELY LOSING ITS FRINGE SUPPORT. $$$
An integration accord was signed at end May 2014 by the presidents of Russia, Kazakhstan, and Belarus as per the Treaty on the Eurasian Economic Union. It will be operational from January 1st of 2015. With their intention to join the East Asia Economic Caucus (EAEC), the nations of Kyrgyzstan and Armenia have submitted road maps that have been approved. In addition, the summit will sign an agreement on the appointment of Armenia to the EAEC as of January. It would become a full member of the Union. Kremlin spokesman Ushakov said, "The leaders will consider the interaction of the Union with foreign partners. This will be given special attention because of a number of countries appears not formal. There is practical interest in expanding cooperation with the Union. This piece of work is gaining momentum." He said negotiations are at an advanced stage toward the establishment of a free trade zone with Vietnam. The consortium has also formed an expert group for the preparation of similar agreements with Israel, India, and Egypt. See the ITAR-TASS article (CLICK HERE). This union is the core to the upcoming expansive Eurasian Trade Zone that the US prefers to ignore.
Russian source Jaroslav provided the story, the Jackass grateful for his many contributions. He asked about the curious Israeli connection. Two very important points must be cited regarding the nation. First, around 35% of its citizens are from Russia, a little known fact. They have a natural base level allegiance therefore. Second, the Tamar Floating Platform that produces massive natgas offshore output in the Mediterranean Sea has a contract with Gazprom to take all its surplus output. So the commercial bond is to grow as well. Israel will supply natgas to Europe, and strengthen its own current account via the sizeable trade surplus income. In the meantime, the Russia-Izzy bond will grow while the US-Izzy bond will fade.
◄$$$ IRAN & RUSSIA ARE PLANNING TO ESTABLISH JOINT BANK... THE SANCTIONED NATIONS ARE UNITING FINANCIAL FORCES TO COMBAT TYRANNY LED BY ANGLO-AMERICANS. $$$
Iran and Russia plan to establish a joint bank as an effort to multiply bilateral trade and to bypass sanctions, which each nation contends with from the USGovt. The two nations hope to break the domination of Western currencies over bilateral exchanges, and begin a new chapter. It will eventually find a BRICS linkage. Asadollah Asgaroladi is head of the newly formed Iran-Russia Joint Chamber of Commerce. He stated, "Since Russian banks fear the implications of working with Iran due to sanctions, we want to establish the joint Iran-Russia bank with the help of our central banks and private sectors. Such a bank would be able to exchange money between the two sides using [Iran] Rials and [Russian] Rubles and put aside Dollars, Euros and Pounds. We are responsible for our nation's prosperity. Before the sanctions, we had 150 billion Euros of deposits in the banks of West and Europe. When they sanctioned us, we transferred the money to other countries exactly where they do not want to be."
Unilateral sanctions imposed on Iran's banking sector by the US and the European Union over falsified justification has caused deep distress for the two nations, which work to overcome the obstacles imposed. Tehran has no nuclear energy program that threatens Israel or any other nations. Russia did not invade Ukraine and had no role in the Kiev coup d'etat. Economic cooperation between Iran and Russia has become a high priority, especially with the oil barter deal. The new Iran President Hassan Rouhani and Russian President Vladimir Putin have held four meetings on different occasions after the Iranian president took office in 2013. The joint bank has the full support of the Iran Govt ministries, as they encourage the exchange of national currencies. See the Press TV article (CLICK HERE).
◄$$$ NEW RMB HUBS ARE SPRINGING UP ALL OVER THE WORLD, WHICH WILL ENHANCE TRADE WITH CHINA... AS A RESULT, TRADE AND BOND BUSINESS WILL GROW LEAPS & BOUNDS... A STRONG UNDERMINE PERSISTS TO THE USDOLLAR AS TRADE SETTLEMENT STANDARD. $$$
The RMB Hubs appearing in London and Frankfurt, as elsewhere, assure the trend to continue. Even plans for a Luxembourg RMB Hub are in the works. Chinese Premier Li Keqiang announced that China supports the establishment of an offshore RMB market in Luxembourg, and the use of national currencies in the bilateral trade and investment. Li made the remark in talks with Prime Minister of Luxembourg Xavier Bettel before he attended the sixth Hamburg summit dubbed China Meets Europe. China values the status and role of Luxembourg as an international financial center, hoping to see more financial institutions and manufacturing companies of Luxembourg invest in China. On the other side, Luxembourg would provide more convenience for Chinese firms that invest and operate in its territory. See the Xinhua Net article (CLICK HERE).
Canada will feature bookends of RMB Hubs in Toronto and Vancouver. Total trade between Canada and China could double, or even triple in the 12 months following the establishment of a hub. Reliance upon international trade continues to grow, which increases ties and produces jobs, thus strengthening the economy. The great focus in trade with the United States has in recent years expanded to include China. The protracted economic recession experienced by their southern neighbor underscores the urgency to diversify trade to other markets across the world. Erecting the trade corridor between Canada and China is an obvious solution. However, those Canadian companies that have tried to do business in China, whether selling their own goods or importing manufactured products there, have been hindered by the lack of convertibility of the Canadian Dollar with the Chinese currency, the Renminbi (RMB) or Yuan. The RMB does not trade freely on international currency markets. Hence the Canadian firms do business there with needless restrictions that do not exist elsewhere. The RMB Hub alleviates the problem. See the Financial Post article (CLICK HERE), which spouted nonsense about the great strength of the Canadian banking system, and the USEconomic recovery fantasy. Nothing could be further from the truth. The Canadian banking system is insolvent, heavily leveraged, and without gold reserves. The US is caught in a multi-year powerful recession of 3% to 5% per year. Also, there will be no US-based RMB Hubs, none.
◄$$$ RUSSIA & UAE ARE CONSIDERING TRADE PAYMENTS IN NATIONAL CURRENCIES... COMPLEXITY ABOUNDS SINCE THE GULF NATION CURRENCIES ARE CLOSELY ALIGNED WITH THE USDOLLAR... THEIR SOVEREIGN WEALTH FUNDS ARE LOADED WITH USTREASURYS. $$$
Russia and the United Arab Emirates (UAE) are considering making payments in their national currencies, according to the Russian Industry & Trade Minister Denis Manturov and UAE's Minister of Foreign Affairs Sheik Nahyan. Manturov stated, "This question was raised today for practically the first time ever, so it requires further review by specialists of both countries. But it has been added to the agenda and is being analyzed." Complexities abound but the will is ample. Nahyan said the entire payments issue in national currencies was complex since the UAE's Dirham currency is very closely connected with the USDollar. The entire set of Gulf Nations is loaded to the gills with USTreasury Bonds from the Petro-Dollar surplus recycle that has endured for 40 years. Nahyan stated, "This creates added difficulties, but there are ways these difficulties can be overcome. From a political standpoint, the UAE is set on full cooperation with Russia. If there is the political will, then the technical difficulties can be overcome." Rumors swirl among my colleagues that The Voice had a hand in the UAE decision, a notion initiated by the man himself. See the Russia Beyond the Headlines article (CLICK HERE). The entire Gulf region is undergoing a shift, according to the Global Paradigm shift eastward. The King of Bahrain will visit Moscow for a facilitating trade development, yet another example of the changing face of the Middle East. See the RIA Novosti article (CLICK HERE).
◄$$$ VIETNAM TO JOIN THE RUSSIAN CUSTOMS UNION BLOC... THE TWO COUNTRIES WILL BOOST BILATERAL TRADE REVENUE TO $7 BILLION IN 2015 AND $10 BILLION IN 2020... RUSSIA HAS ON THE TABLE SEVERAL LARGE SCALE ENERGY PROJECTS FOR THE NATION... EFFORTS AT RUSSIAN ISOLATION HAVE NO SUBSTANCE, AND ARE ABSURD ON THEIR FACE. $$$
Russian officials have put Vietnam on the fast track to join the Moscow-led Customs Union bloc. The inclusion of Vietnam in the group would grow the bloc despite sanctions intended to isolate the superpower. The two parties are increasing efforts to conclude a free trade agreement. The core nations of the bloc are Belarus, Kazakhstan, and Russia, just the beginning. The three nations boast a market of 170 million people, a combined annual GDP of $2.7 trillion, and vast energy riches, a foundation. The Customs Union guarantees the free transit of goods, services, capital, and workforces and coordinates policy for major economic sectors. Russian Foreign Minister Sergei Lavrov said back in April, "Russia attaches great importance to the traditional friendly relations with Vietnam and highlights the increasing role of Vietnam in the Asia-Pacific region. Russia and Vietnam have the same viewpoints over many regional and international issues. Russia supports Vietnam's active role in the Assn of Southeast Asian Nations as well as ASEAN's role in establishing a new regional architecture." In a recent conference at a Eurasian Council meet in Astana Kazakhstan, Russian President Putin made a comment. "In the past three years, trade turnover within the Customs Union has gone up by 50 percent, that is by $23 billion (in 2013 it amounted to $66.2 billion). We also discussed the prospects for other partners joining the Union. We agreed to step up our negotiations with Vietnam on creating a free trade zone." It is coming together piece by piece.
Vietnam is an Asia-Pacific nation that Russia sets priorities in political and economic fields. Russia is working with Vietnam on 12 big investment projects including the construction of the Ninh Thuan-1 nuclear power plant, certain oil & gas exploitation by Russia-Vietnam joint venture companies on their continental shelf and Russian territories, in addition to the expansion and modernization of Vietnam's Dung Quat oil refinery factory. In 2013, two-way trade turnover hit $4 billion, up 7% year over year, while in the first seven months of 2014 the figure already stood at around $2 billion. The inept wrong-footed oppressor, the USGovt continues to entice Vietnam as part of its much-hyped but grossly unsuccessful Pivot to Asia that excludes China. For its awkward part, the US Fascists offer Vietnam a lift on a long-standing weapons ban, to enable weapons purchases. Again the East pursues trade, while the US pursues war devices. See the BRICS Post article (CLICK HERE).
◄$$$ THE SOUTH KOREA CENTRAL BANK HAS UNDERGONE AN EXPLOSIVE RISE IN THEIR YUAN HOLDINGS FOR RESERVES, UP 55-FOLD IN THE LAST YEAR... THE VOLUME REMAINS SMALL... ONE MUST WONDER IF THEY ARE CONVERTING USTREASURYS, OR WHETHER TRADE SURPLUSES ARE BUILDING... THE USDOLLAR AS CONDUIT IS GOING AWAY, DUE TO CANCER, FRAUD, AND WAR. $$$
The Bank of Korea (South Korean central bank) has realized a huge rise in RMB funds held in reserve. The domestic deposits in South Korea reached CHY 16.19 billion in July, a stunning 55-fold increase from the same period last year when CHY deposits accounted for only RMB 290 million. At the end of 2012, the proportion of foreign currency RMB deposits was 0.4% merely. The figure reached 13.7% at the end of 2013. However, by the end of July this year the RMB accounted for 25.9% of all foreign currency deposits in South Korea. That is a rapid exponential increase. With poor investment opportunities in a zero-interest rate environment, combined with bubbly if not frothy equity markets, SKoreans are diversifying their currency exposure. The yield paid to RMB deposits is around 3.25% per year. Also, corporate accounts surely are preparing for increased regional trade in RMB terms. The phenomenon is hardly just a chase for yield. It has critical trade implications.
Europeans from countries with weaker currencies and economic prospects had customarily been protecting their savings by holding them in Deutsch Marks and Swiss Francs. The same practice might be in progress today. Individuals, companies, and even governments (sovereign wealth funds) are diversifying their currency exposure. The USDollar has turned cancerous with QE bond monetization, even as it is shunned for the paltry yield offered on USTBills. Furthermore, RMB denominated bonds are being issued by businesses all over the world. Even McDonalds has issued a RMB-based corporate bond.
A significant development occurred with the UKGovt becoming the first nation in the world to issue an RMB denominated government debt security. The brokers on these bonds are designated to be Bank of China, HSBC, and Standard Chartered, which are to arrange the sale. The actual bond issuance could occur by mid-October. The British bond launch coincides with the news from the Peoples Bank of China, to the effect that Yuan and Euro are now directly tradable. They can be exchanged without the need to use the USDollar as conduit. The signs are everywhere written on banker walls. The present system is being replaced, or at least slowly supplanted. Participants are taking appropriate measures. The Germans, the French, the British, the Canadians, the Koreans, and more are sure to come for wearing the RMB vests in trade. Thanks to Simon Black for the story. See the Sovereign Man article (CLICK HERE).
◄$$$ SOUTH KOREA IS THE SITE OF NEW RMB-BASED BOND SALES, SOLD BY THE GIANT ICBC BANK IN CHINA... THE CHINESE YUAN HAS BEEN IN USAGE ON A GROWING BASIS FOR YEARS BY SEVERAL NATIONS. $$$
The largest Chinese bank is set to sell Yuan bonds first in South Korea in a non-resident capacity. The Industrial & Commercial Bank of China (ICBC) planned to sell the Chinese RMB-denominated bonds on October 14th in Soeul for the first time. The ICBC bank's Hong Kong branch will issue the two-year Chinese currency bonds worth CHY 180 million (=31.3 billion SKWon or US$29.2 million) at a coupon rate of 3.7 percent. The SKorean finance ministry will be paying much attention to the issuance. Officials in Seoul are considering various tools to induce foreign players to sell RMB bonds, adding that their debt sales are anticipated to keep increasing over time. See the Xinhua Net article (CLICK HERE). The encroachment upon the USTreasury Bond global reserve is clear in Asia. They are all terrorists.
For further reinforcement, the Peoples Bank of China head Zhou Xiaochuan claims the Chinese Yuan has been in usage as a reserve currency for several years. Some countries might not be willing to say so. With more Beijing promotion, the Chinese Govt Bonds are appearing in banking systems for several nations as reserves. The European Central Bank will discuss whether to begin laying the groundwork to add the Chinese Yuan to its FOREX reserves. See the Bloomberg article (CLICK HERE).
## GERMANY & ITS ASSURED DEPARTURE
◄$$$ GREAT CHANGES ARE COMING TO GERMANY, IN THE PROCESS OF FLIPPING EASTWARD... THE NEXT STEPS WILL LIKELY BE TRANSITIONAL, AS THE MOVE TO EMBRACE THE BRICS ALLIANCE BECOMES MORE CLEAR... POPULAR OBJECTION TO FINANCING THE BROKEN SOUTH (PIGS) JOINS WITH HIGHER LEVEL DISGUST WITH PRINCE DRAGHI ON MONETARY POLICY... THE RIFT IS PUBLIC WITH THE DEBT-RIDDEN FRENCH, WHO OPERATE A SINKING SHIP... GERMANY HAS ALREADY TURNED EAST, THE FORMALITY TO FOLLOW. $$$
Many are the rifts opening up between Germany and the rest of the crippled EuroZone members. The big bone of contention is austerity, namely the reduction of government spending, which aims to reduce the official deficits. The Jackass has called these poison pills, since the deficits grow as a result. The nations are stuck in their debt and dole dependence. Public debt service is obscene costly, while the public dole weighs down all. Many are the serious issues on the table which could lead the Germans to depart the Euro altogether, to abandon the European Monetary Union, the common Euro region. Chancellor Merkel is feeling the austerity pressure on her back side, and industry leader resistance on her front side. The Bundesbank will slam the table very soon, with High Court support. The twin issues of further debt descent by EU members and objection to the Draghi-led Euro Central Bank bond purchase initiative are sufficient to fracture the EMU, and have Germany put itself outside the Euro umbrella. Germany objects to further debt accumulation and to the sponsored hyper inflation by the wayward EuroCB that has become the USFed outpost in Europe. Germany is much more sensitive as a nation than any other to the grotesque violations, as part of their national makeup.
The conflict is in the open, principally between the industrious rich Germany and the socialist debt-ridden France. Prime Minister Manuel Valls of France has intensified a showdown with Germany and Brussels in recent days, unveiling a so-called No-Austerity Budget designed to cut the deficit more slowly than foreign austerity advocates would prefer. During a trip to London to visit with Prime Minister David Cameron, Valls reiterated France's defiance, promising the government would mend its finances but at their speed while not losing sight of our priorities, in his words. Their major priority is privilege with dysfunction. Not only has France stepped up the apparent open revolt by some of the EuroZone's bigger economies against the German austerity priority, but Italy too has raised objections. Italy has warned against too rigidly following Germany's preferred approach. Even Draghi, the arrogant despicable head of the European Central Bank is pushing for Germany to loosen its demands.
The Jackass suspects three things coming, each to cause significant shock. 1) Germany halts all NATO support for Ukraine War and suspends Russian sanctions, piece by piece. 2) The Bundesbank recommends formally the departure of Germany from the EMU common Euro union, on the justified grounds of heretical monetary inflation. 3) The Anti-Euro popular movement will grow like weeds and wildfire. The Western press does not describe the rift between Germany and its wrecked Southern neighbors as a prelude to departure from the EMU. They focus on friction without analyzing the outcome. The fail to describe the gorilla at the dinner table. See the New York Times article (CLICK HERE).
◄$$$ BUDGET AUSTERITY, THE FRACTURE IN EUROPE COMING INTO CLEAR VIEW... GERMANY STANDS ITS GROUND, WHILE THE DEFIANT DEBTOR WAGS A FINGER IN THE GERMAN FACE... GERMANY APPEARS TO BE MAKING THE CASE FOR A JUSTIFIED DEPARTURE FROM THE EURO. $$$
France has denounced the EuroZone austerity regime as deeply misguided. The French are emerging as the spokesmen and leaders of the PIGS pen, the debt slop ranchers. Call them the PIGS+F. Recall in 2011 that Ambrose Evans-Pritchard forecasted the French would lead the PIGS in time, perhaps with a separate Latin Euro Central Bank located in Marseilles France. He also pointed out that the industrious vibrant northern nations are Protestant, and the broken indebted southern nations are Catholic. The feisty debtor France has issued a blunt warning to Germany and the EU institutions that make demands for further budget tightening. They warn of a political backlash to endanger European stability. French premier Manuel Valls stated, "Be careful how you talk to the countries in the South, and be careful how you to talk to France. The adjustment has been brutal and it has turned millions people against Europe. It is putting the European project itself at risk. You cannot enforce the Treaty rigidly in these circumstances. The austerity policies are becoming absurd, and we have to examine the situation. If they make us reach a 3 percent deficit, the country will be totally on its knees. It is not possible." Exactly! Since when does the debtor dictate terms! Germany wishes to leave the EMU. The union must be dismantled, to ensure Germany's future.
To be sure, austerity does not succeed in reducing deficits that must be financed. These leaders from PIGS+F nations fail to realize that they forfeited industry to China, while following the US housing & mortgage bubbles. Therein lies their errors, along with the obvious welfare state ongoing blunderous path that France loves so dearly. France had pushed through EUR 30 billion of fiscal cuts from 2010 to 2012, and another EUR 30bn in the last year or more. They attempt to comply with EU deficit rules. Despite all their reform efforts, which do not include reducing their pension system or addressing the retirement age, the gains are overwhelmed by the economic downturn. The deficit will remain stuck at 4.3% of GDP in 2015. A further EUR 50bn of cuts are coming over the next three years. See the UK Telegraph article (CLICK HERE). As footnote, over two million French citizens now live outside the French borders, and most are crossing the channel and heading to London. They are voting against the wreckage of socialism and its long shadow. They see little future for France. See the UK Independent article (CLICK HERE). To be sure, the United States sees the same rapid exodus, many flocking to Latin America.
◄$$$ THE POPULAR INFECTION HAS SPREAD TO ITALY... THE GRASSROOTS MOVEMENT PLANS TO DEFEND ITALY'S SOVEREIGNTY BY DITCHING THE EURO CURRENCY... THE EUROSCEPTIC LEADER CALLS FOR REFERENDUM... IT WILL BE AN UPHILL STRUGGLE, BUT GRILLO PURSUES SIGNATURES TO APPEAL TO THE PARLIAMENT. $$$
It is not just the Anti-Euro movement in Germany, but Italy too. New Prime Minister and former comedian Beppe Grillo has an agenda at work. Grillo plans to collect a million signatures in order to hold a referendum on Italy's departure from the EuroZone. The founder of the Five Star Movement in Italy Beppe Grillo boldly stated, "We either return to our national currency, or there is no future for us. We must leave the EuroZone as soon as possible. We will collect one million signatures. This time, we have 150 deputies and senators, and we have time to give [signatures] to the Parliament and adopt a law to hold a referendum." The collection of signatures would begin in November, thus laying the groundwork for a vote by December 2015. Italy might not have that much time. The party is a leader but not in majority within coalitions. The Five Star Movement came in second place in the 2014 European Parliament elections with 21 percent of seats. One of the party's key promises was having a referendum on denouncing the Euro currency. The struggle comes. The Italian constitution does not allow canceling international agreements via referendums. The movement will conclude with a return to the original native Italian Lira. See the RT News article (CLICK HERE) and the RIA Novosti article (CLICK HERE).
A return to native currencies in Europe will offer only a tradeoff of solutions. To be sure, the currency devaluations are urgently needed in the southern nations, to stimulate export businesses with price discounts. But the flip side is higher import prices, which will encourage more domestic supply chain solutions. The effect will be higher prices across the Italian Economy with some kickstart. Consider its shock to be like a 15-year delayed effect, from the time of the common Euro imposition, and inquisition. See the UK Telegraph article (CLICK HERE).
◄$$$ GAZPROM WILL ACQUIRE A MASSIVE NATGAS STORAGE FACILITY FROM BASF IN GERMANY... FURTHER GERMANY-RUSSIA COOPERATION ARRIVES IN FULL PUBLIC GLARE, IN DEFIANCE TO SANCTIONS... THE BUSINESS SECTOR OF GERMANY HAS NO DESIRE OR INTEREST IN ANY DESTRUCTIVE SANCTIONS POLICY... THEY WILL CONTINUE BUSINESS AS USUAL AMIDST MUTUAL INTERDEPENDENCE AND PROGRESS. $$$
Russia will acquire Europe's largest underground gas storage facility this autumn from Germany's BASF, continuing the development of its Nord Stream operations. In return, the Germans will get access to large gas reserves in Western Siberia. Both sides benefit. The massive storage facility is located near the northwestern German town of Rehden. Gazprom and the Wintersall subsidiary of German chemical company BASF are soon to complete the asset swap. Gazprom will take control of the tanks. The framework for the deal was signed in December 2013 and was approved by the European Commission. Both the EU and Russia say the deal will not be sidetracked by sanctions, oddly. The storage facility in Rehden covers eight square kilometers, storing some gas at depths of 2000 meters. It can hold 4.2 billion cubic meters of natural gas, or about 7% of Germany's 60 billion cubic meters of annual consumption. The deal helps assure energy security both for Germany and the nearby Netherlands. In 2012, the site represented about one fifth of the Germany's entire storage capacity. Conversely, the deal will help Gazprom gain a footing in the gas market in Northern and Western Europe after opening its Nord Stream double pipeline, which runs under the Baltic Sea to Germany. The twin pipes for Nord Stream were launched separately, the first in 2011 and the second in 2012. The German position will be fortified in the entire production chain. Below is the giant storage facility, where a worker (circled) is dwarfed within the maze.
The partnership runs deeper. BASF also owns a 15% stake in South Stream pipeline, which when completed will deliver Russian gas to central Europe via the Black Sea and the Balkans. Thus the Germans will push aside any pithy naive bully obstacles placed by the United States for the South Stream construction in progress. In 2013, Russian natural gas exports to Germany increased to 40.2 billion cubic meters (bcm) up from 33.3 bcm the previous year. Of German natgas usage, around 40% comes from Russia. It is common practice for Gazprom to use European gas storage facilities. It currently stores gas in Austria, the United Kingdom, Germany, Serbia, Latvia, Belarus, and Armenia. In no way will Europe permit a cutoff of Russia from their economies. See the Russia Today article (CLICK HERE).
◄$$$ THE BAVARIAN CHAMBER OF COMMERCE AND INDUSTRY HAS URGED TO LIFT RUSSIA SANCTIONS... THE BUSINESS SECTOR WITH ITS 9000 MEMBERS HAS NO INTEREST IN SANCTIONS, BUT RATHER WILL ADVANCE FURTHER COOPERATION... DEFIANCE IS CLEAR, AS BAVARIA IS THEIR LARGEST STATE. $$$
Bavaria's business executives want an end to Western sanctions against Russia. The voice heard is from Eberhard Sasse, President of the Chamber of Commerce & Industry for Munich and Upper Bavaria. Sasse told visitors to Russia's exhibition at an international trade fair, "We have about 9000 members in the chamber of commerce, and we all want the sanctions against Russia to be lifted, enabling business relations between our countries to develop further. Sanctions create uncertainty in business prospects. This is a political tool and not a business tool." He implied a destructive element that serves no purpose. He expressed concern that sanctions as a foreign policy tool tend not to produce the desired effect. Russia has habitually been active in the property market of Germany, and Bavaria is considered one of Moscow's major trading partners. The initial exchanges of delegations took place at the end of the 1980 decade, followed by further cooperative protocols with the nation's largest federal state. Priority areas of cooperation between the Kremlin and Bavaria include high technology, innovations, transportation, medicine, medical equipment, nano-tech, biotechnology, culture, sports, and youth exchanges. The Eurasian Trade Zone formation cannot be interrupted. See the ITAR-TASS article (CLICK HERE).
◄$$$ GERMAN ELITE BELIEVE THE EUROZONE TO BE DOOMED TO DECADE OF CRISES MARRED BY STAGNATION AND ANIMOSITY... THE PRINCIPAL CAUSE IS THE COMMON EURO CURRENCY AND FRENCH INTRANSIGENCE... THE UKRAINE WAR AND RUSSIAN SANCTIONS ARE A MAJOR DAMPENING FACTOR, AS IS THE FRENCH QUAGMIRE. $$$
The EuroZone is doomed to a decade or more of economic stagnation and civil unrest that could destroy the single currency if countries such as France do not implement vital reforms, according to one of Europe's most influential economists. Hans-Werner Sinn is the president of Germany's Ifo Institute for Economic Research. His voice carries weight. He is challenging the French social welfare state to reform. He made an unusual charge, that the common Euro has enabled the misuse of capital to finance the higher living standards. Between the lines is resentment for the German lift for less industrious, more ineffective (due to embrace of housing bubble), even more corrupt Southern European nations. Sinn warned that if French Govt officials failed to implement the vital supply side reforms needed to stimulate growth, it could be the final nail in the coffin for the Euro. The case to leave the EMU is in view. He said it was vital that France shrank its bloated public sector, which currently represents 55% of its national economy, by at least 10 percentage points. Many workers who had left France's uncompetitive manufacturing sector now work for the state, with unclear productivity. He acknowledges the huge challenge for the French nation. Consider his criticism and warnings to be further planks in the German national justification for leaving the EMU common Euro region. He expects Russian sanctions to harm Germany's neighboring nations much more than the powerhouse. See the UK Telegraph article (CLICK HERE).
Sinn stated, "My prediction is not that the Euro will fall apart, but that it leads to a stagnation and animosity even more than we see today among the people of Europe. You see this very strongly in Southern Europe, where people face this mass unemployment, in France, where Marine le Pen in the polls has the strongest party, and with Syriza in Greece which is presenting radical decisions and has the most support in the polls. Germany is obviously affected by the Russian crisis. More than 40% of German companies have Eastern European connections. This will have repercussions on the rest of the EuroZone also, because they have their own problems and when Germany, which is one of their main customers, has difficulties, they will also be affected. There is now a risk of a triple-dip recession in some Southern European countries, if not a triple-dip depression.
If France continues this way and does not want to scale down and go through austerity, but rather seek Keynesian solutions, then they will threaten the stability of the Eurosystem. Of course borrowing at the moment gives us some Keynesian demand stimulus, which for a year or two may help, but it just postpones the necessary reforms and it exacerbates the situation in the long run. It is as if you are sick, you need surgery and take drugs to numb the pain. French industry has been dying for decades now. The share of manufacturing in GDP is only 9%, less than half of what the German share is. The people who were set free from manufacturing, or their children, have by and large been absorbed by the government sector, which has now a quarter of the workforce, twice that of Germany. Hiding the unemployed in government offices is not a healthy solution. It is very difficult and I wonder if the current socialist government will be able do it. Sometimes it takes Nixon to go to China. In Germany we saw that only the Social Democrats under Chancellor Schroder at the time were able to carry out market orientated reforms."
◄$$$ CHINA & GERMANY ARE FORGING THEIR ALLIANCE, THE HAMBURG SUMMIT SERVING AS THE FORUM... WHEN FOCUSING ON EUROPEAN PACTS AND TECHNOLOGY TRANSFER, THINK GERMANY... GREATER ACCESS TO THE CHINESE MARKET IS WANTED, WHILE MORE CHINESE CAPITAL INVESTMENT IS WANTED IN RETURN FOR EUROPE. $$$
Chinese Premier Li Keqiang will share the chair with German Chancellor Angela Merkel for the China-Germany Governmental Consultation in Berlin during his
visit to Germany. The meeting is aimed at drawing a new blueprint for Sino-German cooperation in economy, technology, and environment protection. At the same time, the Hamburg Summit maps out future China-Europe relations. Its main purpose is to promote Foreign Direct Investment (FDI) in both directions. An important EU-China investment agreement is being forged. The Europeans demand better access from the rigorously protected China market. The EU wants assurances on the dismantling of non-tariff barriers, namely what behind the border. The Europeans bring technology expertise which will improve the productivity of China's companies. Investment by Chinese companies helps the European firms to become more efficient and effective. Much room to grow is seen, as European investments in China comprise a mere 2% of its total investments in foreign lands. Battles over dumping were discussed, such as of solar panels and mobile phones. China desires added environmental technology, since burdened severely by polluted air and water. Europe takes a global lead in advanced manufacturing, new energy and energy saving and environmental protection, in addition to solar energy, wind power, and nuclear power. See the BRICS Post article (CLICK HERE) and the Xinhua Net article (CLICK HERE).
◄$$$ GERMANY FACTORY ORDERS WERE DOWN HARD, VERY HARD IN AUGUST, WITH MORE DECLINES TO COME IN SEPTEMBER... THE SLAM OF RUSSIAN SANCTIONS HAS BEEN FELT... EXPECT FIERCE GERMAN RESISTANCE TO THE SANCTIONS, WITH SOME ROLLBACK ACTION IN RESPONSE. $$$
German manufacturing tumbled very hard in August, the slump being the worst since 2009. The USGovt must be pleased at the success of the destructive sanctions, another mission accomplished by the fascists who wish to export their economic rubble. What the monetary policy by the USFed does with damage, the Russian sanctions do with damage in parallel. Europe loses from both sides, and must emerge from the vise. German factory orders plunged the most since 2009, evidence of a slowdown in Europe's largest economy. The adjusted orders fell 5.7% in August on a monthly sequential basis, according to the Economy Ministry in Berlin. Economists predicted one third that level, obviously since they are inept, compromised, and follow political direction along with big bank marketing plans. This data is volatile indeed. The decline followed a 4.9% increase in July, the biggest in over a year. Orders fell 1.3% from a year earlier. The impact of Russian sanctions has hit. Caution over investment has spread with the rising fear. The typical cheerleader comments followed from the usual suspects. More details. Export orders dropped 8.4% in August, while domestic demand fell by 2 percent. Investment goods orders plunged 8.5%, the critical capital expenditure item (CAPEX). The CAPEX item is the best forward indicator known. The lousy data will have a political effect to bring an end to the destructive sanctions that the US and EU Commissioners (unelected) love so much. See the Bloomberg article (CLICK HERE) and the Yahoo News article (CLICK HERE).
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.