Category Archives: Financial Collapse by Design

12 Signs That An Imminent Global Financial Crash Has Become Even More Likely

Financials

Did you see what just happened?

by Michael Snyder | Economic Collapse | August 12, 2015

The devaluation of the yuan by China triggered the largest one day drop for that currency in the modern era.  This caused other global currencies to crash relative to the U.S. dollar, the price of oil hit a six year low, and stock markets all over the world were rattled.  The Dow fell 212 points on Tuesday, and Apple stock plummeted another 5 percent.  As we hurtle toward the absolutely critical months of September and October, the unraveling of the global financial system is beginning to accelerate.  At this point, it is not going to take very much to push us into a full-blown worldwide financial crisis.  The following are 12 signs that indicate that a global financial crash has become even more likely after the events of the past few days…

#1 The devaluation of the yuan on Tuesday took virtually the entire planet by surprise (and not in a good way).  The following comes from Reuters
China’s 2 percent devaluation of the yuan on Tuesday pushed the U.S. dollar higher and hit Wall Street and other global equity markets as it raised fears of a new round of currency wars and fed worries about slowing Chinese economic growth.

#2 One of the big reasons why China devalued the yuan was to try to boost exports.  China’s exports declined 8.3 percent in July, and global trade overall is falling at a pace that we haven’t seen since the last recession.

#3 Now that the Chinese have devalued their currency, other nations that rely on exports are indicating that they might do the same thing.  If you scan the big financial news sites, it seems like the term “currency war” is now being bandied about quite a bit.

 

#4 This is the very first time that the 50 day moving average for the Dow has moved below the 200 day moving average in the last four years. This is known as a “death cross”, and it is a very troubling sign.  We are just about at the point where all of the most common technical signals that investors typically use to make investment decisions will be screaming “sell”.

#5 The price of oil just closed at a brand new six year low.  When the price of oil started to decline back in late 2014, a whole lot of people were proclaiming that this would be a good thing for the U.S. economy.  Now we can see just how wrong they were.

At this point, the price of oil has already fallen to a level that is going to be absolutely nightmarish for the global economy if it stays here.  Just consider what Jeff Gundlach had to say about this in December…

And back in December 2014, “Bond King” Jeff Gundlach had a serious warning for the world if oil prices got to $40 a barrel.

“I hope it does not go to $40,” Gundlach said in apresentation, “because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be — to put it bluntly — terrifying.”

#6 This week we learned that OPEC has been pumping more oil than we thought, and it is being projected that this could cause the price of oil to plunge into the 30s

Increased pumping by OPEC as Chinese demand appears to be slackening could drive oil to the lowest prices since the peak of the financial crisis.

West Texas Intermediate crude futures skidded through the year’s lows and looked set to break into the $30s-per-barrel range after the Organization of the Petroleum Exporting Countries admitted to more pumping and China devalued its currency, sending ripples through global markets.

#7 In a recent article, I explained that the collapse in commodity prices that we are witnessing right now is eerily similar to what we witnessed just before the stock market crash of 2008.  On Tuesday, things got even worse for commodities as the price of copper closed at a brand new six year low.

#8 The South American debt crisis of 2015 continues to intensify.  Brazil’s government bonds have been downgraded to just one level above junk status, and the approval rating of Brazil’s president has fallen into the single digits.

#9 Just before the financial crisis of 2008, a surging U.S. dollar put an extraordinary amount of stress on emerging markets.  Now that is happening again.  Emerging market stocks just hit a brand new four year low on Tuesday thanks to the stunt that China just pulled.

#10 Things are not so great in the United States either.  The ratio of wholesale inventories to sales in the United States just hit the highest level since the last recession.  What that means is that there is a whole lot of stuff sitting in warehouses out there that is waiting to be sold in an economy that is rapidly slowing down.

#11 Speaking of slowing down, the growth of consumer spending in the United States has just plummeted to multi-year lows.

#12 Deep inside, most of us can feel what is coming.  According to Gallup, the number of Americans that believe that the economy is getting worse is almost 50 percent higher than the number of Americans that believe that the economy is getting better.

Things are lining up perfectly for a global financial crisis and a major recession beginning in the fall and winter of 2015.

But just because things look like they will happen a certain way does not necessarily mean that they will.  All it takes is a single “event” of some sort to change everything.

So what do you believe will happen in the months ahead?

Please feel free to join the discussion by posting a comment below…

 

12 Ways The Economy Is Already In Worse Shape Than It Was During The Depths Of The Last Recession

Did you know that the percentage of children in the United States that are living in poverty is actually significantly higher than it was back in 2008?

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by Michael Snyder | July 23, 2015

Did you know that the percentage of children in the United States that are living in poverty is actually significantly higher than it was back in 2008? When I write about an “economic collapse”, most people think of a collapse of the financial markets.

And without a doubt, one is coming very shortly, but let us not neglect the long-term economic collapse that is already happening all around us. In this article, I am going to share with you a bunch of charts and statistics that show that economic conditions are already substantially worse than they were during the last financial crisis in a whole bunch of different ways. Unfortunately, in our 48 hour news cycle world, a slow and steady decline does not produce many “sexy headlines”. Those of us that are news junkies (myself included) are always looking for things that will shock us. But if you stand back and take a broader view of things, what has been happening to the U.S. economy truly is quite shocking. The following are 12 ways that the U.S. economy is already in worse shape than it was during the depths of the last recession…

#1 Back in 2008, 18 percent of all Americans kids were living in poverty. This week, we learned that number has now risen to 22 percent

There are nearly three million more children living in poverty today than during the recession, shocking new figures have revealed.

Nearly a quarter of youngsters in the US (22 percent) or around 16.1 million individuals, were classed as living below the poverty line in 2013.

This has soared from just 18 percent in 2008 – during the height of the economic crisis, the Casey Foundation’s 2015 Kids Count Data Book reported.

#2In early 2008, the homeownership rate in the U.S. was hovering around 68 percent. Today, it has plunged below 64 percent. Incredibly, it has not been this low in more than 20 years. Just look at this chart – the homeownership rate has continued to plummet throughout Obama’s “economic recovery”…

Homeownership Rate 2015

#3 While Barack Obama has been in the White House, government dependence has skyrocketed to levels that we have never seen before. In 2008, the federal government was spending about 37 billion dollars a year on the federal food stamp program. Today, that number is above 74 billion dollars. If the economy truly is “recovering”, why is government dependence so much higher than it was during the last recession?

#4On the chart below, you can see that the U.S. national debt was sitting at about 9 trillion dollars when we entered the last recession. Since that time, the debt of the federal government has doubled. We are on the exact same path that Greece has gone down, and what you are looking at below is a recipe for national economic suicide…

Presentation National Debt

#5During Obama’s “recovery”, real median household income has actually gone down quite a bit. Just prior to the last recession, it was above $54,000 per year, but now it has dropped to about $52,000 per year…

Median Household Income

#6 Even though our incomes are stagnating, the cost of living just continues to rise steadily. This is especially true of basic things that we all purchase such as food. As I wrote about earlier this year, the price of ground beef in the United Stateshas doubledsince the last recession.

#7 In a healthy economy, lots of new businesses are opening and not that many are being forced to shut down. But for each of the past six years, more businesses have closed in the United States than have opened. Prior to 2008, this had neverhappened before in all of U.S. history.

#8Barack Obama is constantly telling us about how unemployment is “going down”, but the truth is that the percentage of working age Americans that are either working or considered to be looking for work has steadily declined since the end of the last recession…

Presentation Labor Force Participation Rate

#9Some have suggested that the decline in the labor force participation rate is due to large numbers of older people retiring. But the reality of the matter is that we have seen a spike in the inactivity rate for Americans in their prime working years. As you can see below, the percentage of males between the ages of 25 and 54 that aren’t working and that aren’t looking for work has surged to record highs since the end of the last recession…

Presentation Inactivity Rate

#10 A big reason why we don’t have enough jobs for everyone is the fact that millions upon millions of good paying jobs have been shipped overseas. At the end of Barack Obama’s first year in office, our yearly trade deficit with China was 226 billion dollars. Last year, it was more than 343 billion dollars.

#11 Thanks to all of these factors, the middle class in America is dying. In 2008, 53 percent of all Americans considered themselves to be “middle class”. But by 2014, only 44 percentof all Americans still considered themselves to be “middle class”.

When you take a look at our young people, the numbers become even more pronounced. In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”. But in 2014, an astounding 49 percentof all Americans in that age range considered themselves to be “lower class”.

#12This is something that I have covered before, but it bears repeating. The velocity of money is a very important indicator of the health of an economy. When an economy is functioning smoothly, people generally feel quite good about things and money flows freely through the system. I buy something from you, then you take that money and buy something from someone else, etc. But when an economy is in trouble, the velocity of money tends to go down. As you can see on the chart below, a drop in the velocity of money has been associated with every single recession since 1960. So why has the velocity of money continued to plummet since the end of the last recession?…

Velocity Of Money M2

If you are waiting for an “economic collapse” to happen, you can stop waiting.

One is unfolding right now before our very eyes.

But what most people really mean when they ask about these things is that they are wondering when the next great financial crisis will happen. And as I discussed yesterday, things are lining up in textbook fashion for one to happen in our very near future.

Once the next great financial crisis does strike, all of the numbers that I just discussed above are going to get a whole lot worse.

So as bad as things are now, the truth is that this is just the beginning of the pain.

 

 

Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months

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by Michael Snyder | Economic Collapse | July 23, 2015

If we were going to see a stock market crash in the United States in the fall of 2015 (to use a hypothetical example), we would expect to see commodity prices begin to crash a few months ahead of time.  This is precisely what happened just before the great financial crisis of 2008, and we are watching the exact same thing happen again right now.  On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months.  When global economic activity slows down, demand for raw materials sinks and prices drop.  So important global commodities such as copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key “leading indicators” that can tell us a lot about where things are heading next.  And what they are telling us right now is that we are rapidly approaching a global economic meltdown.

If the global economy was actually healthy and expanding, the demand for commodities would be increasing and that would tend to drive prices up.  But instead, prices continue to go down.

The Bloomberg Commodity Index just hit a brand new 13-year low.  That means that global commodity prices are already lower than they were during the worst moments of the last financial crisis

The commodities rout that’s pushed prices to a 13-year lowpulled some of the biggest mining and energy companies below levels seen during the financial crisis.

The FTSE 350 Mining Index plunged as much as 4.9 percent to the lowest since 2009 on Wednesday, with BHP Billiton Ltd. and Anglo American Plc leading declines. Gold and copper are near the lowest in at least five years, while crude oil retreated to $50 a barrel.

This commodity bear market is like a train wreck in slow motion,” said Andy Pfaff, the chief investment officer for commodities at MitonOptimal in Cape Town. “It has a lot of momentum and doesn’t come to a sudden stop.”

 

Commodity prices have not been this low since April 2002.  According to Bloomberg, some of the commodities being hit the hardest include soybean oil, copper, zinc and gasoline.  And this commodity crash is already having a dramatic impact on some of the biggest commodity-producing nations on the globe.  Just consider what Gerald Celente recently told Eric King

We now see that the Australian dollar is at a six-year low against the U.S. dollar. What are Australia’s biggest exports? How about iron-ore and other metals.

If we look at Canada, their currency is also now at a six-year low vs the U.S. dollar. Well, Canada is a big oil exporter, particularly some tar sands oil, which is expensive to produce.

We also now have the Brazilian real at a 10-year low vs the U.S. dollar. Why? Because it’s a natural resource rich country and they don’t have a strong market to sell their natural resources to.

Meanwhile, the Indian rupee is at a 17-year low vs the U.S. dollar. This is because manufacturing is slowing down and there is less development. If the Americans aren’t buying, the Indians, the Chinese, the Vietnamese — they’re not making things.

All of this is so, so similar to what we experienced in the run up to the financial crisis of 2008.  Just a couple of days ago, I talked about how the U.S. dollar got really strong just prior to the last stock market crash.  The same patterns keep playing out over and over, and yet most in the mainstream media refuse to see what is happening.

Something else that happened just a few months before the last stock market crash was a collapse of the junk bond market.

Guess what?

That is starting to happen again too.  Just check out this chart.

I know that I must sound like a broken record.  But I think that it is extremely important to document these things.  When the next financial collapse takes place, virtually everyone in the mainstream media will be talking about what a “surprise” it is.

But for those that have been paying attention, it won’t be much of a “surprise” at all.

When the stock market does crash, how far might it fall?

During a recent appearance on CNBC, Marc Faber suggested that it could decline by up to 40 percent

The U.S. stock market could “easily” drop 20 percent to 40 percent, closely followed contrarian Marc Faber said Wednesday—citing a host of factors including the growing list of companies trading below their 200-day moving average.

In recent days, “there were [also] more declining than advancing stocks, and the list of 12-month new lows was very high on Friday,” the publisher of The Gloom, Boom & Doom Report told CNBC’s “Squawk Box.”

“It shows you a lot of stocks are already declining.”

Others, including myself, believe that what we are going to experience is going to be even worse than that.

We live in such a fast-paced world, and most of us don’t have the patience to wait for long-term trends to play out.

If the stock market is not crashing today, to most people that means that everything must be fine.

But once it has crashed, everyone is going to be complaining that they weren’t warned in advance about what was coming and everyone will be complaining that nobody ever fixed the things that caused the exact same problems the last time around.

Personally, I am trying very hard to make sure that nobody can accuse me of not sounding the alarm about the storm that is on the horizon.

The world has never been in more debt, our “too big to fail” banks have never been more reckless, and global financial markets have never been more primed for a collapse.

Amazingly, there are still a lot of “experts” out there that insist that everything is going to be okay somehow.

Of course many of those exact same “experts” were telling us the same thing just before the stock market crashed in 2008 too.

A great financial shaking has already begun around the world, and it will hit U.S. financial markets very soon.

I hope that you are getting ready while you still can.

 

 

China’s GDP Growth Is a Total Lie

World’s second largest economy is definitely faking their suspiciously consistent growth numbers

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by Joshua Krause | SHTFPlan | July 17, 2015

I think it’s safe to say that anyone who thinks the United States economy is on the road to recovery, is drinking some serious Kool-aid. As organizations like shadowstats have shown time and time again, our government likes to fudge the numbers on a regular basis. They think they can keep the party going indefinitely, so long as they convince the world that everything is just fine.

Of course, the United States isn’t the only country that’s doing this. Heck, it wouldn’t be surprising if we found out that most governments falsify their economic data. However, it’s a little scary to think that maybe the world’s largest economy isn’t the only one lying to the world. In fact, the world’s second largest economy is definitely faking their suspiciously consistent growth numbers.

“You can’t trust the numbers,” Bill Miller, CEO of LMM Investments, told a room full of investors at CNBC’s Delivering Alpha Conference this week.

Miller spoke on Wednesday, just hours after China announced that it once again hit its gross-domestic-product growth target of 7%.

This despite the fact that its economy seems to be experiencing a major slowdown.

But after 25 years of watching China hit the mythical 7% mark without fail, analysts understand the charade.

There are dead giveaways everywhere. The most obvious way to tell that China’s books are cooked, though, is by looking at how its neighbours are faring.

Miller noted that Singapore’s GDP has dropped 4.6% in just the last quarter, and that their manufacturing sector is down 14%. So why is that so telling? Because, Singapore does a lot of trading with China, and the contraction of their manufacturing industry is being caused by a lack of demand from the Chinese.

You can also look to Australia, another one of China’s major trading partners. They’re also experiencing a significant decline in exports.

But that’s just what’s going on outside of their country. When you look at what goes on in China itself, it’s hard to believe that they would still have consistently high growth numbers. It wasn’t that long ago that their stock market tanked by more than 30%. I can’t recall a single instance where a stock market fell like that, without it causing a contraction of that nation’s GDP.

 

And finally, China’s debt to GDP ratio is off the charts. While a large debt won’t kill the economy if it’s in the process of being paid for, China is experiencing quite the opposite. Their debt is actually increasing faster than their economy is supposedly growing. In 2008, their total debt, which includes business loans and household debt, amounted to 125% of their GDP. Today, that number stands at 207%.

That means that even if they’re not faking their growth numbers, their GDP is still a lie. Their growth is still being fueled by debt, which means that in the big scheme of things, it’s not really growth at all.

China is just like the United States and the EU. They’re just another massive world power that is using their economic clout to throw their weight around the world stage. And that economic clout is a big lie. When the world figures out how insolvent and unsustainable these nations really are, their house of cards is going to crumble.

 

New IMF Report on Greece Says Projections Are Unrealistically Optimistic

They went ahead with it, anyway

greece-flag

by Eric Zuesse | Infowars.com | Originally published July 15, 2015

new IMF report on Greece, issued on Tuesday, July 14th, is titled “AN UPDATE OF IMF STAFF’S PRELIMINARY PUBLIC DEBT SUSTAINABILITY ANALYSIS,” and it says — these are quotations, not paraphrases — in summary

Greece’s public debt has become highly unsustainable. … The financing need through end-2018 is now estimated at Euro 85 billion. … Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far. … Public debt cannot be assumed to migrate back onto the balance sheet of the private sector at interest rates consistent with debt sustainability until debt is much lower. Greece cannot return to markets anytime soon at interest rates that it can afford. … Medium-term primary surplus target: Greece is expected to maintain primary surpluses for the next several decades of 3.5 percent of GDP. Few countries have managed to do so. …

Shortfalls in program implementation during the last year led to a significant increase in the financing need [which was] estimated only a few weeks ago. … The preliminary (mutually agreed) assessment of the three institutions is that total financing need through end-2018 will increase to Euro 85 billion, or some Euro 25 billion above what was projected in the IMF’s published DSA [Debt Sustainability Analysis] only two weeks ago. … 

Debt would peak at close to 200 percent of GDP in the next two years. This contrasts with earlier projections that the peak in debt—at 177 percent of GDP in 2014—is already behind us.

By 2022, debt is now projected to be at 170 percent of GDP, compared to an estimate of 142 percent of GDP projected in our published DSA.

Gross financing needs would rise to levels well above what they were at the last review (and above the 15 percent of GDP threshold deemed safe) and continue rising in the long term.

Moreover, these projections remain subject to considerable downside risk, suggesting that there could be a need for additional further exceptional financing from Member States.

ADDITIONAL:

Though this report revises the previous IMF estimates, which had been issued just two weeks ago, the new report was (according to the Wall Street Journal) “circulated to eurozone officials over the weekend and published more broadly Tuesday.” This would mean that when the Greek government and its creditors reached agreement on Sunday night, July 12th, they already knew that the estimates on which their deal was reached were unrealistically optimistic. They went ahead with it, anyway.

The Greek public had overwhelmingly voted a week earlier to reject a deal that was less draconian than the one which was reached on July 12th, and yet the Greek government, which had urged them to vote against it, promptly ignored that vote against it, which the Greek government had been calling for. And, now, it appears that both sides to the deal even knew that its terms are impossible, yet ignored that, and agreed to it.

The persistent and ongoing deceit here is hard to square with widespread allegations that the EU is at all democratic. The origin of this loan and earlier loans to Greece (euphemistically called ‘bailouts,’ as if it weren’t the banks which were being bailed out by the taxpayers, instead of the Greek public, who had never received the benefits of those loans anyway) had been private investors in Greek government bonds, receiving high interest rates on these junk bonds, which turn out to have been guaranteed by Western publics bailing out Western banks. Between 2010 and 2015, the IMF and other Western taxpayer-supported debt-transfer agents, bought those bum loans and thus transferred those risks from private investors onto taxpayers. And now, this continues, though with one major added poison pill for the Greek public: “privatization.” Greek government assets, including everything from highways to health care, will be sold off to investors at steeply depreciated prices, so that the Greek public will have not only skyrocketing taxes but also disappearing government services. Obviously, the youth-unemployment rate of near 50% will become much worse, and virtually all young Greeks will move elsewhere in Europe, while their parents will die, or even increasingly commit suicide, in the soaring poverty of the Greek ghost-town state. Greece’s essential tourist industry will collapse. But the banks, and the investors in the bank stocks, will be protected. This is socialism for the rich, capitalism for the poor. Call it fascism.

 

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

Greece Today, America Tomorrow?

The drama over Greece’s financial crisis continues to dominate the headlines

greece-greek-bankby Ron Paul | InfoWars | Originally published July 13, 2015

The drama over Greece’s financial crisis continues to dominate the headlines. As this column is being written, a deal may have been reached providing Greece with yet another bailout if the Greek government adopts new “austerity” measures. The deal will allow all sides to brag about how they came together to save the Greek economy and the European Monetary Union. However, this deal is merely a Band-Aid, not a permanent fix to Greece’s problems. So another crisis is inevitable.

The Greek crisis provides a look into what awaits us unless we stop overspending on warfare and welfare and restore a sound monetary system. While most commentators have focused on Greece’s welfare state, much of Greece’s deficit was caused by excessive military spending. Even as its economy collapses and the government makes (minor) cuts in welfare spending, Greece’s military budget remains among the largest in the European Union.

Despite all the handwringing over how the phony sequestration cuts have weakened America’s defences, the United States military budget remains larger than the combined budgets of the world’s next 15 highest spending militaries. Little, if any, of the military budget is spent defending the American people from foreign threats. Instead, the American government wastes billions of dollars on an imperial foreign policy that makes Americans less safe. America will never get its fiscal house in order until we change our foreign policy and stop wasting trillions on unnecessary and unconstitutional wars.

Excessive military spending is not the sole cause of America’s problems. Like Greece, America suffers from excessive welfare and entitlement spending. Reducing military spending and corporate welfare will allow the government to transition away from the welfare state without hurting those dependent on government programs. Supporting an orderly transition away from the welfare state should not be confused with denying the need to reduce welfare and entitlement spending.

On reason Greece has been forced to seek bailouts from its EU partners is that Greece ceded control over its currency when it joined the European Union. In contrast, the dollar’s status as the world’s reserve currency is the main reason the US has been able to run up huge deficits without suffering a major economic crisis. The need for the Federal Reserve to monetize ever-increasing levels of government spending will eventually create hyperinflation, which will lead to increasing threats to the dollar’s status. China and Russia are already moving away from using the dollar in international transactions. It is only a matter of time before more countries challenge the dollar’s reserve currency status, and, when this happens, a Greece-style catastrophe may be unavoidable.

Despite the clear dangers of staying on our recent course, Congress continues to increase spending. The only real debate between the two parties is over whether we should spend more on welfare or warfare. It is easy to blame the politicians for our current dilemma. But the politicians are responding to demands from the people for greater spending. Too many Americans believe they have a moral right to government support. This entitlement mentally is just as common, if not more so, among the corporate welfare queens of the militarily-industrial complex, the big banks, and the crony capitalists as it is among lower-income Americans.

Congress will only reverse course when a critical mass of people reject the entitlement mentality and understand that the government is incapable of running the world, running our lives, and running the economy. Therefore, those of us who know the truth must spread the ideas of, and grow the movement for, limited government, free markets, sound money, and peace.

 

The Last Days Of ‘Normal Life’ In America

These are the last days of “normal life” in America

American-flag-barbed-wireby Michael Snyder | End Of The American Dream | Originally published July 13, 2015

If you have got family and friends that you would like to visit before things start getting really crazy, you should do so within the next couple of months, because these are the last days of “normal life” in America.

The website where I have posted this article is called “End of the American Dream“, but perhaps I should have entitled it “The End of America” because that is essentially what we are heading for.  The debt-fueled prosperity that so many of us take for granted is about to come to a screeching halt, and we are about to enter the hardest times that any of us have ever known.  And I am not just talking about economics either.  Based on all of the intel and information that I have gathered, we are about to enter a “perfect storm” that is going to shake this country in just about every possible way that it can be shaken.  So I hope that you will truly savor this summer – days like this will not come around again any time soon.

Have you ever known someone that lived a seemingly charmed life even though that individual made foolish decision after foolish decision?

In the end, reality almost always catches up with people like that.

And in so many ways, we have been living a charmed life as a nation even though we have been making incredibly foolish decisions for decades.  We have cursed ourselves over and over again, and just about every form of evil that you can possibly imagine is exploding all around us.  As a nation, we now stand for just about everything that is foul, disgusting and wicked, and the rest of the world is absolutely horrified by what has happened to us.

Once upon a time, we were one of the most loved nations on the entire planet.

Now we are one of the most hated.

The things that we have been doing to ourselves and to other countries are about to catch up with us in a major way.  We thought that we were getting away with everything that we were doing, but that was never the case.  When you do evil, there is always a price to pay.

Over the past few weeks, some very strange things have begun to happen.  And in the months ahead, we are going to see some more unusual events.  But to be honest, this is just the tip of the iceberg.  For now, you are just going to have to trust me on this one.

If my tone sounds ominous, that is good, because that is precisely the mood that I am trying to convey.  Right now, there are major things going on behind the scenes, and all of our comfortable little lives are about to get shaken up big time.

I have often written about the global elite and about how they like to go about doing things.  Throughout history, they have always liked to create order out of chaos.  In other words, they will often purposely create a crisis in order to push through things that they would not be able to accomplish during “normal” times.

I believe that we are about to enter one of those periods of time.  The problems that we are about to experience are going to be used to justify radical “solutions” that will further the overall agenda of the elite.  But because we will be in the middle of an “emergency”, a lot of people will choose to go along with those solutions.

Sadly, most people don’t understand how the world works because they are so consumed with other things.  We live in a society that is absolutely addicted to entertainment.  Just recently, I wrote about how the average American spends more than 10 hours a day plugged in to some form of media.  If we are not watching television, we are listening to the radio, going to movies, playing video games, messing with our smartphones or spending endless hours on the Internet.  And more than 90 percent of the “programming” that we are fed through these devices is produced by just 6 absolutely gigantic media corporations.

And who controls those gigantic media corporations?

The elite do.

And have you noticed how “the mainstream media” loves to divide us?

Today, Americans are more divided than ever it seems.  Our news broadcasts endlessly fixate on “black vs. white”, “male vs. female”, “liberal vs. conservative”, “rich vs. poor”, etc, etc.

Americans are extremely angry and frustrated at this point, but most of our anger and frustration is directed at one another.

How can we ever hope to come up with any solutions for our nation if we spend so much time hating our fellow citizens?

But this is just how the elite like it.

They love to play divide and conquer.  If we were united, we would be far more difficult to manipulate.

And even if we did find a way to come together, what values and principles would we use to rebuild this nation?

The truth is that most Americans deeply reject the values and principles that the founders of this country once held so dear.

Personally, I am very optimistic about the future.  My wife and I believe that the greatest chapters of our lives are still ahead of us.

But am I optimistic about the future of the United States?

No, I am not.

Perhaps you are reading this and you have come to the conclusion that I am being irrationally negative.  If so, you are probably spending way too much time plugged in to the “propaganda matrix” that I described above.  The establishment wants you to believe that everything is going to be just fine and that the best days for this world are ahead.

If you think that I am wrong, I challenge you to bookmark this page.  Then, after some time has passed, come back and revisit what I had to say today.

I believe that you will be quite shocked by how your perspective has changed.

The last half of this year (2015) is going to represent a major turning point, and we are moving into hard times unlike anything that America has ever seen before.

Unfortunately, most of the “sheeple” are going to be completely blindsided by what is coming.  They just continue to follow their utterly clueless leaders down a path toward oblivion.

But the good news is that once the “shaking” starts, many of these “sheeple” will begin to wake up.

When that happens, who will those “sheeple” turn to for answers?

 

 

3 Big Reasons Why The ‘Greek Debt Deal’ Is Really A German Trap

Greece is saved?

greece-flag

by Michael Snyder | Economic Collapse | Originally published July 14, 2015

Greece is saved? All over the planet, news headlines are boldly proclaiming that a “deal” has been reached which will give Greece the money that it needs and keep it in the eurozone.

But as you will see below, this is not true at all.  Yesterday, when I wrote that “there never was going to be any deal“, I was not exaggerating.  This “deal” was not drafted with the intention of “saving Greece”.  As I explained in my previous article, these negotiations were all about setting up Greece for eviction from the euro.  You see, the truth is that Greece desperately wants to stay in the euro, but Germany (and allies such as Finland) want Greece out.  Since Germany can’t simply order Greece to leave the euro, they need some sort of legal framework which will make it possible, and that is what this new “deal” provides.  As I am about to explain, there are all kinds of conditions that must be satisfied and hurdles that must be crossed before Greece ever sees a single penny.  If there is a single hiccup along the way, and this is what the Germans are counting on, Greece will be ejected from the eurozone.  This “deal” has been designed to fail so that the Germans can get what they have wanted all along.  I think that three very famous words from Admiral Ackbar sum up the situation very well: “It’s a trap!

So why is this “Greek debt deal” really a German trap?

The following are three big reasons…

#1 The “Deal” Is Designed To Be Rejected By The Greek Parliament

If Germany really wanted to save Greece, they would have already done so.  Instead, now they have forced Greek Prime Minister Alexis Tsipras to agree to much, much harsher austerity terms than Greek voters overwhelmingly rejected during the recent referendum by a vote of 61 percent to 39 percent.  Tsipras has only been given until Wednesday to pass a whole bunch of new laws, and another week to make another series of major economic changes.  The following comes from CNN

Greece has to swiftly pass a series of new laws. Prime Minister Alexis Tsipras has until Wednesday to convince Parliament to pass the first few, including pension cuts and higher taxes.

Assuming that happens, Greek lawmakers have another week, until July 22, to enact another batch of economic changes. These include adopting European Union rules on how to manage banks in crisis, and do a major overhaul to make Greece’s civil courts faster and more efficient.

Can Tsipras actually get all this done in such a short amount of time?

The Germans are hoping that he can’t.  And already, two of Syriza’s coalition partners have publicly declared that they have no intention of voting in favor of this “deal”.  The following is from a Bloomberg report

Discontent brewed as Tsipras arrived back in the Greek capital. Left Platform, a faction within Syriza, and his coalition partners, the Independent Greeks party, both signaled they won’t be able to support the deal. That opposition alone would wipe out Tsipras’s 12-seat majority in parliament, forcing him to rely on opposition votes to carry the day.

The terms of the “deal” are not extremely draconian because the Germans want to destroy Greek sovereignty as many are suggesting.  Rather, they are designed to provoke an overwhelmingly negative reaction in Greece so that the Greeks will willingly choose to reject the deal and thus be booted out of the euro.

And this is what we are seeing.  So far, the response of the Greek public toward this deal has been overwhelmingly negative

Haralambos Rouliskos, a 60-year-old economist who was out walking in Athens, described the deal as “misery, humiliation and slavery”.

Katerina Katsaba, a 52-year-old working for a pharmaceutical company, said: “I am not in favour of this deal. I know they (the eurozone creditors) are trying to blackmail us.”

On Wednesday, the union for Greek public workers has even called a 24 hour strike to protest this “agreement”

Greece’s public workers are being called to stage a 24-hour strike on Wednesday, the day their country’s parliament is to vote on reforms needed to unlock the bankster eurozone plan agreed to by Greek Prime Minster Alex Tsipras.

Their union, Adedy, called for the stoppage in a statement issued today, saying it was against the agreement reached with the eurozone.

The Greek government is not guaranteed any money right now.

According to Bloomberg, the Greek government must pass all of the laws being imposed upon them by the EU “before Greece can even begin negotiations with creditors to access a third international bailout in five years.”

The Germans and their allies are actually hoping that there is a huge backlash in Greece and that Tsipras fails to get this package pushed through the Greek parliament.  If that happens, Greece gets ejected from the euro, and Germany doesn’t look like the bad guy.

#2 Even If The “Deal” Miraculously Gets Through The Greek Parliament, It May Not Survive Other European Parliaments

The Greek parliament is not the only legislative body that must approve this new deal.  The German and Finnish parliaments (among others) must also approve it.  According to USA Today, it is being projected that the German and Finnish parliaments will probably vote on this new deal on Thursday or Friday…

Thursday/Friday, July 16/17: Eurozone parliaments must also agree to the plan for Greece’s $95 billion bailout. The biggest tests may come from Finland and Germany, two nations especially critical of Greece’s handling of the crisis. Berlin has contributed the most to Greece’s loans.

Either Germany or Finland could kill the entire “deal” with a single “no” vote.

Finnish Finance Minister Alexander Stubb has already stated that Finland “cannot agree” with a new bailout for Greece, and it is highly questionable whether or not the German parliament will give it approval.

I think that the Germans and their allies would much prefer for the Greeks to reject the deal and walk away, but it may come down to one of these parliaments drawing a line in the sand.

#3 The Deal Makes Implementation Extraordinarily Difficult

If Greece fails to live up to each and every one of the extremely draconian measures demanded in the “deal”, they will be booted from the eurozone.

And if you take a look at what is being demanded of them, it is extremely unrealistic.  Here is just one example…

For instance, the Greek government agreed to transfer up to 50 billion euros worth of Greek assets to an independent fund that will raise money from privatization.

According to the document, 25 billion euros from this fund will be poured into the banks, 12.5 billion will be used to pay off debt, and the remaining 12.5 billion to boost the economy through investment.

The fund will be based in Greece and run by the Greeks, but with supervision from European authorities.

Where in the world is the Greek government going to find 50 billion euros worth of assets at this point?  The Greek government is flat broke and the banks are insolvent.

But if they don’t find 50 billion euros worth of assets, they have violated the agreement and they get booted.

This whole thing is about setting up Greece for failure so that there is a legal excuse to boot them out of the euro.

And it actually almost happened very early on Monday morning.  The following comes from Business Insider

As the FT tells it, German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras rose from their chairs at 6 a.m. on Monday and headed for the door, resigned to a Greek exit from the euro.

“Sorry, but there is no way you are leaving this room,” European Council president Donald Tusk reportedly said.

And so a Grexit was avoided.

For the moment, Greece has supposedly been “saved”.

But anyone that believes that this crisis is “over” is just being delusional.

The Germans and their allies have successfully lured the Greek government into a trap. Thanks to Tsipras, they have been handed a legal framework for getting rid of Greece.

All they have to do now is wait for just the right moment to spring the trap, and it might just happen a lot sooner than a lot of people may think.

 

Anti-austerity Protesters and Police Clash Outside Greek Parliament

Demonstrators oppose surrender of Greek sovereignty to European bankers

July 15, 2015

Demonstrators opposed to the surrender of Greek sovereignty to European bankers are confronting police and throwing Molotov cocktails in Athens, according to reports.

clash

The protests against the $96 billion bailout plan have shut down much of the city.

USA Today reports:

As the deadline neared and Greece teetered on the verge of financial collapse, a general strike and at least 10 separate protests took place in Athens as demonstrators called for the government to reject the new rescue package or try to renegotiate for better terms from international creditors that include the European Central Bank, eurozone governments and the International Monetary Fund. So far, the lenders have been unyielding in their terms.

 

 

Maintaining the Illusion of Stability Now Requires Ever-Greater Extremes

Brittleness is being passed off as stability

economy

by Charles Hugh Smith | Of Two Minds | July 10, 2015

 

This much-needed re-set to an economy that serves the many rather than the few is what the Powers That Be are so fearful of.

On the surface, everything still looks remarkably stable in the core industrial economies. The stock markets in Japan, Germany and the U.S. are only a few percentage points off their highs, and we’re constantly assured that inflation no longer exists and official unemployment is low.

In other words, other than the spot of bother in Greece, life is good. Anyone who signs on the dotted line for easy credit can go to college, buy a car or house or get another credit card.

With more credit, everything becomes possible. With unlimited credit, the sky’s the limit, and it shows.

Europe is awash with tourists from the U.S., China and elsewhere, and restaurants are jammed in San Francisco and New York City, where small flats now routinely fetch well over $1 million.

In politics, the American public is being offered a choice of two calcified, dysfunctional aristocracies in 2016: brittleness is being passed off as stability, not just in politics but in the economy and the cultural zeitgeist.

But surface stability is all the status quo can manage at this point, because the machine is shaking itself to pieces just maintaining the brittle illusion of prosperity and order.

 

Consider what happened in Greece beneath the surface theatrics.

1. Goldman Sachs conspired with Greece’s corrupt kleptocracy to conjure up an illusion of solvency and fiscal prudence so Greece could join the Eurozone.

2. Vested interests and insiders gorged on the credit being offered by German and French banks, enriching themselves to the tune of tens of billions of euros, which were transferred to private accounts in Switzerland at the first whiff of trouble. When informed of this, Greek authorities took no action; after all, why track down your cronies and force them to pay taxes when tax evasion is the status quo for financial elites?

3. If Greece had defaulted in 2010 when its debt was around 110 billion euros, the losses would have fallen on the banks that had foolishly lent the money without proper due diligence or risk management. This is what should have happened in a market economy: those who foolishly lent extraordinary sums to poor credit risks take the resulting (and entirely predictable) losses.

4. But since the big European banks that were on the hook for the 110 billion in bad debt were highly leveraged (estimates are 30 to 1), then a mere 5% loss in their capital would render them insolvent–a Lehman Moment of cascading defaults that the European leadership could not allow, as not only would their cronies lose fortunes but they would lose power when the fragile house of cards they’d constructed collapsed.

Here is the debt in 2009–mostly owed to private banks and bondholders:

5. The status quo’s solution: transfer all the private bank debt to the taxpayers of the Eurozone members and loan Greece another 200+ billion euros in exchange for the illusion of reform and a squeezing of average Greek households to pay the interest due on the ballooning debt.

Here is the debt in 2015–almost all was shifted onto the backs of Eurozone taxpayers:

6. Five years later, the debt has exploded to 340 billion euros, triple the debt that should have been written off in 2010 when it became clear Greece could not pay the debt down or even service the interest payments.

7. Five years of austerity and suffering by the Greek people have all been for naught, as the entire euro system is untenable, the debt cannot be paid and the simulacra reforms did nothing to change the power structure or the corrupt, dysfunctional status quo in the country.

8. To maintain the surface illusion of stability for five years, the Powers That Be tripled the debt, vastly increased the risk of default and the damage a default would unleash, and caused undue suffering above and beyond the costs of default and a return to a national currency–a re-set that, if undertaken when it became clear there was no way the debt could be paid in 2010, would already be over and done.

This re-set, while painful in the short-term, is the only mechanism available to force reforms on a self-serving kleptocracy and rid the economy of a dependence on unsustainable credit expansion.

This much-needed re-set to an economy that serves the many rather than the few is what the Powers That Be are so fearful of, for it is the few who garner most of the gains of a corrupt, fully financialized neofeudal system and it is these few who fund the election campaigns of the politicos who are so desperate to maintain the perquisites of the Financial Nobility.

Austerity is meted out to debt-serfs while those at the top transfer tens of billions to their private accounts.

There are variations of this basic flow of income from serfs to the nobility, of course; stock market bubbles are inflated by authorities, insiders sell, sell, sell as credulous banana merchants and wage-earners buy, and then when the bubble bursts, these same authorities ban selling by the small-fry bagholders.

But this is not real stability; it is a brittle simulacrum of stability, an illusion that has required the status quo to pursue extremes of policy and debt that are intrinsically incapable of yielding stability.

In effect, the status quo has greatly increased the system’s vulnerability, fragility and brittleness–the necessary conditions for catastrophic collapse–all in the name of maintaining a completely bogus facade of stability for a few more years.

 

 

 

 

 

A Serial Short Seller Asks “Do Governments & Central Banks Ever Lose?”

071714stockfloor

 

by Jared Dillian | Zero Hedge | July 10, 2015

We are about a week into the Greek non-crisis, and nothing especially scary has happened. Stocks opened up lower a couple of times, and there was one wild trading day in EURUSD, but everything is essentially unchanged. Which surprised everyone. Including me, a little.

I used to be a plunger. Loved shorting stuff. I had one muscle, and I flexed it constantly. By my rough calculations, I was up about 18% by the time Lehman went bankrupt in 2008. The more turmoil, the better.

I was born in a bear market. Literally, in 1974, and figuratively—I learned to trade in the dot-com bust. Seven years into my trading career, I had experienced two crashes. I know lots of people who got rich buying GE at six bucks. I almost shorted it there.

So the past six years have been tough on me. I’ve made money, but not a lot. Worse, I’ve been conditioned to expect that whenever I spend a bunch of money on S&P puts, I’m going to get sconed and watch them melt to zero while the market rips higher.

The real kick in the nuts was when the market was melting down on Ebola fears in October and St. Louis Fed President Bullard walks out with a “buy” ticket stapled to his forehead.

Here’s another way to look at this: We had two crashes in seven years, and if you go back in history, the market doesn’t crash all that often.

Like the ‘50s. Stocks went up, quietly, for a decade. Nothing happened.

But this isn’t the ‘50s. There’s an IPO boom, a VC boom, valuations are stretched, and crap like Fitbit is going public. Shake Shack has a bigger valuation (I am told) than the entire coal industry.

We have unicorns and decacorns, and it’s only a matter of time until we have a centicorn. All the kids are going to startups. Talk about risk-taking.

I have seen worse bubbles, but the markets are definitely running hot.

So a developed country is about to default on a couple of hundred billion dollars worth of debt, and the market just shrugs. Worse, it sets a nasty precedent for other, larger economies defaulting on debt. Seems much more contagious than Russia in 1998. And stocks are bulletproof. The only selling going on is in China.

Serious question: Do you give up shorting? Like, throw in the towel?

The thing that gets a lot of people is that they believe the market is engineered by the authorities to go higher. Like Bullard with his rate comments. But it’s gotten so bad, there are wide swaths of people who think the Fed is actually buying stocks. ZeroHedge talks about this all the time.

There is a pretty funny Twitter account called 3:30 Ramp Capital, LLC. Plunge Protection Team rumors have been around since the beginning of time, but six years of stocks going straight up have given rise to all kinds of other theories. (For the record, the Fed fully acknowledges its interventions in the bond market, but it has never admitted to trading stocks.)

And it’s true that “the authorities” want the price of financial assets (stocks, bonds) to go up, and the price of hard assets (commodities) to go down… which is exactly what has happened.

So do governments and central banks ever lose?

In the old days, they lost all the time. In one extreme example, an individual hedge fund took out the entire Bank of England. But central banks are currently on a massive winning streak.

So to answer the question, “Will we ever have a crisis,” you need to answer the question, “Will we ever be allowed to have one?”

I’m not just some crazy guy asking these questions. Market professionals I talk to, hedge fund managers, mutual fund managers, will freely discuss the widespread distortions in the market. They feel like they can’t ply their trade. What I mean is, you can’t buy stuff cheap and sell it dear. Everything is dear, and it keeps going up, and you have to participate or get left behind.

That’s not the way it was in the ‘50s. There was all kinds of value to be found. That was how Warren Buffett made his money.

Today, I realized that, outside of some biotech stuff, I haven’t written about an individual stock in months. There’s just nothing interesting to buy, and you certainly can’t short anything. You’ll get your head blown off.

At one point in my career, I was really good at market timing. Calling tops and bottoms. You just can’t do it anymore. Tops never happen, and bottoms don’t get deep enough to find value. We haven’t had a 10% correction in how long?

Honestly, it’s so hard to invest in this environment, I’ve made nearly all my money in the last two years trading FX. It’s the only thing that makes sense.

This is a lot of me whining. And I’m secretly hoping that this letter means there will be a return to rationality soon.

But probably not. Stupid usually gets stupider.

 

Chinese Stocks Collapsed Right Before NYSE Shutdown

Before NYSE shutdown, Hang Seng Index plunged its most since 2008 financial crisis

by Kit Daniels | Infowars.com | July 8, 2015

european-stocks

 

Chinese stocks were suffering huge declines prior to the New York Stock Exchange shutdown due to an alleged “technical issue,” fueling concerns whether the NYSE was actually halted due to the free fall in China.

Companies in China fell 20% from a May high and, right before the NYSE shutdown, the Hang Seng Index plunged its most since the 2008 financial crisis.

“The Hang Seng Index fell 5.8% to 23,516.56 at the close today, the biggest drop since November 2008, after slumping as much as 8.6%,” Bloomberg’s Kana Nishizawa wrote.

Overall, China’s stock market plunge has wiped out around $3.2 trillion since June 12.

“Investors are disappointed and afraid that the Chinese policy makers lost control of the market,” Mari Oshidari, a Hong Kong-based financial strategist, said. “With no end in sight to the plunge, sentiment has turned cold.”

“With liquidity drying up in the mainland, the Hong Kong market is being sold instead –- the only thing it can do is just quietly take the storm.”

The global economy is so dependent on China that if the country were to completely implode, a world-wide recession would likely result.

Not long after China suffered huge losses on Wednesday, the New York Stock Exchange temporarily halted trading due to an alleged “technical issue.”

“NYSE/NYSE MKT has temporarily suspended trading in all symbols,” the NYSE said in a statement. “Additional information will follow as soon as possible.”

Art Cashin, director of floor operations at the NYSE, told CNBC it had been a “bumpy day” before the stock market was shut down.

“We had some technical problems even before the opening,” he said.

 

Capturestocks

 

 

Greece ‘48 Hours Away From Unrest’

Greek Unrest

Hedge fund managers turned cautious on global equities in the run-up to Sunday’s vote

by Will Wainewright | Bloomberg | July 6, 2015

Greek Prime Minister Alexis Tsipras probably has 48 hours to resolve a standoff with creditors before civil unrest breaks out and ATMs run out of cash, hedge fund Balyasny Asset Management said.

Fund managers are questioning how the International Monetary Fund and Europe’s leaders can seal a deal with Athens following the “no” vote in a Greek referendum on Sunday. Sixty-one percent of voters rejected austerity, increasing the likelihood of an exit from the euro area.

“I don’t see a good resolution any time soon,” Colin Lancaster, senior managing director with Balyasny, a $9 billion fund based in Chicago, said in an e-mailed statement. “The big question is whether the EU adopts a strategy of waiting them out. The hope would be that the unrest leads to a unity government or change in government.”

Hedge fund managers turned cautious on global equities in the run-up to Sunday’s vote, with sales of stocks sending a gauge of manager bullishness sliding. The Evercore ISI index of hedge fund long versus short bets was at 50.5 in the week ending July 1, down from 51.8 at the start of June, data from the New York-based research firm show.

The survey, based on 31 hedge funds with about $86 billion under management, tracks investments on a zero through 100 scale. Readings of zero show “maximum” short selling, or the sale of borrowed equities with the hope of profiting by buying them at lower prices later; 100 means “maximum” bullish bets. The index has dipped below 50 only twice in the past year.

 

Plan B

There’s little chance of Greece accepting a deal unless the country’s debt is restructured, Philippe Ferreira, global strategist at Lyxor Asset Management, a Paris-based unit of Societe Generale SA with investments in about 100 hedge funds, said in an e-mail. Investors should be cautious as European Union leaders may not have an adequate plan B if negotiations fail, he said.

Greece has been targeted by some hedge funds seeking returns in a market viewed as too risky for many traditional investors. John Paulson of Paulson & Co. bought bank stocks, while Perry Capital, Knighthead Capital Management and Monarch Alternative Capital purchased Greek debt. Randy Smith, who runs Alden Global Capital, started a Greek-focused fund in December.

Bruce Richards, co-founder of U.S. hedge fund Marathon Asset Management, said last week Tsipras will be gone within 30 days regardless of the outcome of the nation’s referendum.

A “no” vote would cause “rioting in the streets come weeks from now when the banks are closing and you have drachma,” he said in an interview on the television program “Wall Street Week.”

Europe’s leaders run the danger of setting a precedent for other governments if they agree to a writedown for Greece, said Savvas Savouri, chief economist at Toscafund Asset Management, a $3 billion London-based hedge fund.

“Other debt-burdened countries will campaign for the same treatment,” he said. “That is especially relevant with a Spanish election in December.”

 

 

 

The Troika Swindle: Greeks Owe Nothing

broken-euro-greece

 

by Kurt Nimmo | Infowars.com | July 6, 2015

In June the Greek “Truth Committee on Public Debt” established by Zoi Konstantopoulou the speaker of the Greek parliament “came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.”

The establishment media has hidden from view the facts behind the debt and has sided with the banks in declaring the population of Greece deserves austerity and its attendant poverty and misery because of the Greek government’s intransigence and refusal to accept the harsh conditions of the Troika, consisting of the IMF, European Commission and European Central Bank.

Left unsaid is the fact a large portion of the debt totalling about €245 billion was fraudulently dumped on the country in the course of huge bank bailouts in 2010 and 2012.

“And since the huge bank bailouts, ‘Greek debt’ exists only on the basis of the Wall Street practice for unpayable debt, known as ‘extend and pretend.’ Its interest and repayment terms have been so dramatically changed by the creditors — in a backhanded admission that it cannot be paid — that in debt-market terms, it is nearly worthless,” Paul Gallagher wrote in February.

Gallagher explains that the Greek debt swindle is similar to the TARP scam foisted on the American people following the subprime fiasco and a move by the Federal Reserve to print $4 trillion of new money to cover the gambling debt of the financial class. “Its political perpetrators are the same huge banks, and the European Central Bank working with the Federal Reserve,” he writes.

In the course of buying up toxic mortgage securities and derivatives from the United States, the European banks engaged in their own subprime scam and made unrepayable loans to governments in Greece, Ireland, Portugal, and Hungary.

Gallagher explains that the Greek debt swindle is similar to the TARP scam foisted on the American people following the subprime fiasco and a move by the Federal Reserve to print $4 trillion of new money to cover the gambling debt of the financial class. “Its political perpetrators are the same huge banks, and the European Central Bank working with the Federal Reserve,” he writes.

In the course of buying up toxic mortgage securities and derivatives from the United States, the European banks engaged in their own subprime scam and made unrepayable loans to governments in Greece, Ireland, Portugal, and Hungary.

 

 

Our worst fears about the market are coming true

NYSE-floor

 

 

 

 

 

 

Sean Goldsmith in The Stansberry Digest: 

Today’s Digest carries a grave warning: Our worst fears about the global monetary system are coming true. The wheels are starting to fall off. A crash could be just around the corner.

Below, we’ll show you the specific steps we’re taking to prepare… and how you can do the same. But first, we need to explain how and why the global monetary system is coming unglued. We do this by explaining what’s going on in the giant global market that you probably know nothing about.

Most investors don’t pay any attention to the currency market. But they should.

The currency market is the world’s largest, most important market. It’s where governments, corporations, and investors execute trillions of dollars’ worth of transactions every day. It’s where a Japanese carmaker goes to exchange money earned in American dollars to pay expenses in Japanese yen. It’s where a U.S.-based hotel chain must exchange euros earned in Germany into dollars that can sit in its U.S. bank account. It’s where nations buy and sell currencies by the billions in the normal course of doing business.

The currency market is far, far larger than the stock market. After all, it’s the market for money. When there are real problems in the economy, you see them clearly in the currency market.

We realize the currency market isn’t as exciting as the next Apple or the next Facebook. It doesn’t have the allure of making a killing in a big oil strike. You won’t hear your brother-in-law opining on the likely direction of the Australian dollar.

But ignoring this market – and the messages it is sending right now – is a huge mistake that could bankrupt you and your family.

As you’re about to see, many of the world’s major currencies are plummeting in value right now. They’re plummeting in response to insane government policies that constitute the largest monetary experiment in human history. Monetary experts like Jim Rickards say these policies constitute “currency wars.” This is where the politicians of major economies actively devalue their currencies in order to make their exports cheaper to the rest of the world… and make it so they can pay off debts with devalued currencies. It’s truly a “race to zero.”

The result of this experiment will be financial disaster. And you must take steps to protect yourself.

For example… you may have heard the value of the Japanese yen is declining. But do you know why?

A nation’s currency is like a rough “stock price” of that nation. Generally speaking, if a country manages its finances well and engages in productive behavior, its currency appreciates over the long term. If a country racks up huge debts and runs its finances like a drug addict, its currency depreciates over the long term.

For example, Zimbabwe and Venezuela are two of the worst-managed economies of the last decade. The leaders of these nations treated the national coffers as a personal piggy bank… While they got rich, their constituents toiled in poverty and suffered hyperinflation. Zimbabwe’s currency has lost nearly 75% of its value since 2009 (when its currency was reissued). Venezuela’s currency has lost 70% of its value over the past 10 years.

This brings us to Japan. Japan is the world’s third-largest economy. It’s a leader in automobile and electronics production. But the country announced it officially entered a recession in November… The country’s GDP shrank an annualized 7.1% in the second quarter of 2014 from the previous quarter.

This recession hit despite Prime Minister Shinzo Abe’s massive quantitative easing (QE) in an effort to stimulate Japan’s economy. Beginning in 2012, Abe printed 60 trillion to 70 trillion yen a year (nearly $600 billion). Following the recent recession announcement, Abe said he would up the QE to 80 trillion yen ($676 billion).

Bank of Japan Governor Haruhiko Kuroda said the increased QE “shows our unwavering determination to end deflation.” In other words, Japan will print and print and print…

Recklessly expanding a country’s monetary base is disastrous for its currency. And Abe’s efforts have caused a huge decline in the trade value of the Japanese yen. It’s in a clear downtrend.

The yen lost 33% of its value since late 2012, hitting a seven-year low against the dollar. This is an enormous move for a major currency.

And how about the euro, currency of the world’s largest economic bloc, the European Union?

Regular Digest readers know the European economy is struggling. The high-tax welfare states of France, Spain, Portugal, Italy, and Greece are drowning in debt. Their economies are slowing and deflation is taking hold. Unemployment is soaring. And like Japan, this dire outcome follows massive easing from the European Central Bank.

These economies simply can’t compete with Asia and North America. Naturally, the central bankers are responding with more stimulus and currency devaluation.

Just last week, European Central Bank President Mario Draghi announced he would flood the European currency union with more than $1 trillion in newly created money. It’s a desperate attempt from a desperate group of politicians. Instead of asking citizens to make needed changes in government policy – so-called “austerity” like less welfare – the politicians chose currency devaluation. This sent the euro to an 11-year low against the dollar. It has plummeted 19% since April…

Please keep in mind the enormity of this move. A 19% decline is a stupendous move for a major currency. This isn’t a high-flying tech stock. It’s not a speculative gold stock. This is the value of bank accounts. This is the value of debts. This is the currency of the world’s largest economic bloc. And it’s falling apart.

But it’s not just happening in Europe and Japan. Almost every major currency (save the U.S. dollar) is getting destroyed.

The plunge in oil prices has killed the Canadian dollar. And Canada’s central bank, the Bank of Canada, worsened the decline this month when it cut its benchmark interest rate by 0.25 percentage points to 0.75%.

The Australian dollar plunged 17% from its 52-week high on July 1. And investors believe the Reserve Bank of Australia will cut rates to a record low from today’s 2.5%.

Falling oil prices, a war with Ukraine, and economic sanctions from the U.S. have destroyed the Russian ruble.

And in one of the wildest currency moves in history, the Swiss franc soared as much as 39% against the euro in one day following the Swiss National Bank’s removal of its peg to the euro.

Unlike the rest of the currencies we discussed today, the Swiss franc – a longtime safe-haven asset – appreciated. We’re simply noting that the currency of a stodgy, economically sound country like Switzerland should never experience such volatility.

Something is wrong in the currency markets today…

Despite the madness, we are seeing one bright spot: Gold.

Expansion of the global money supply is generally bullish for the precious metal. Still, the price has slumped. But, as we discussed in the January 20 Digest and the January 21 Digest, gold is forming a bottom.

As you can see from the chart below, gold is breaking out…

Steve Sjuggerud, Matt Badiali, and Jeff Clark are all urging their subscribers to invest in gold right now.

In short, governments can print more money, but they can’t print more gold. And with interest rates across the world at record lows (and in some cases, negative), gold is even more attractive.

Many readers have asked why gold and the U.S. dollar are moving up in lockstep… They believe gold is the “anti-dollar.” But that’s not the case.

Gold is performing well for two main reasons…

First, gold is a currency. In our opinion, it’s the safest currency by a mile because it has no counterparty risk. And again, you can’t print more of it. People are starting to realize this and they’re diversifying into the precious metal.

Second, gold benefits from the “fear trade.” When people get scared of what’s happening in the markets, they want the security of owning gold.

As you can see from the charts above, the world is losing faith in fiat money… so people are rushing to safe-haven assets like the world’s reserve currency (the dollar) and gold.

We’ve been warning about this event for years. We knew global central banks couldn’t continue to boost their economies via quantitative easing forever. Eventually, those debts come due… Eventually, the world loses faith in manipulated fiat currencies.

But what happens then?

As Porter said last week on an episode of Stansberry Radio, “We are in the early stages of the complete collapse of global capitalism.” He thinks stocks could fall by 50% or more.

Regardless of when the market correction comes, you have an incredible opportunity to buy gold today.

The metal is trading for less than $1,300 an ounce, down from its 2011 high of $1,900. We think it could easily hit $2,000 an ounce this year. Jim Rickards, who wrote the book Currency Wars and is an expert on this topic, believes gold will hit $7,000 an ounce one day.

And that’s based on the actions already taken by central banks.

But we’ll undoubtedly see many more shocks to the system in coming years…

For example, it’s possible the euro will disband.

The anti-austerity party Syriza just won the elections in Greece. The party, led by Alexis Tsipras, rallied support by saying Greece would not repay the hundreds of billions of dollars it owes to the “troika” – the Eurpean Central Bank, International Monetary Fund, and European Union (EU).

Upon election, Tsipras softened his language, saying he plans to write Greece’s debt down while abandoning the budget constraints that were part of Greece’s bailout. He also said Greece will stay in the European currency union.

Given politicians’ long history of false statements, we’re not putting much weight in Tsipras’ claims.

Even if Greece does stay in the euro bloc, we’ll see shocks to the system throughout these negotiations. And we’ll likely see more and more Europeans join the “anti-austerity” mindset – with more fringe parties winning elections in the EU.

And the global race to zero is still on… Central banks will continue doing what they’ve always done – printing money. But the consequences are only getting more severe.

So… what actions should you take?

Porter advises everyone to have at least 10% of your net worth in physical gold before you put a penny in the stock market.

If you still need to purchase physical gold, we recommend using two dealers: Van Simmons at David Hall Rare Coins and Rich Checkan at Asset Strategies International.

As we always remind readers, we receive no compensation for recommending their services. You can reach Van at 1-800-759-7575 or by e-mail at van@davidhall.com , and you can reach Rich at 1-800-831-0007 or by e-mail at contactus@assetstrategies.com .

Following that, you should definitely own gold stocks. And when it comes to gold stocks, one man’s track record has outperformed the rest… His name is John Doody.

John’s proprietary method for investing in gold stocks has returned 636% since 2001 – double the gains of bullion.

And right now, John is imploring his subscribers to purchase gold stocks. (He also put his money where his mouth is and personally invested a fortune in the sector.)

But outside of a small group of investors, not many people know about John’s investment strategies.

That’s why a self-proclaimed “financial survivalist” recently published the details online…

Giant profit opportunities don’t come around often in gold stocks. And when they do, it’s important you take advantage… because these stocks soar when the trend moves up.

You can get all the details right here.

 

 

Birth Pangs Of The Coming Great Depression

050914burningmoney

 

The signs of the times are everywhere – all you have to do is open up your eyes and look at them

Michael Snyder | Economic Collapse | January 30, 2015

The signs of the times are everywhere – all you have to do is open up your eyes and look at them.  When a pregnant woman first goes into labor, the birth pangs are usually fairly moderate and are not that close together.  But as the time for delivery approaches, they become much more frequent and much more intense.

Economically, what we are experiencing right now are birth pangs of the coming Great Depression.  As we get closer to the crisis that is looming on the horizon, they will become even more powerful.  This week, we learned that the Baltic Dry Index has fallen to the lowest level that we have seen in 29 years.  The Baltic Dry Index also crashed during the financial collapse of 2008, but right now it is already lower than it was at any point during the last financial crisis.  In addition, “Dr. Copper” and other industrial commodities continue to plunge.  This almost always happens before we enter an economic downturn.  Meanwhile, as I mentioned the other day, orders for durable goods are declining.  This is also a traditional indicator that a recession is approaching.  The warning signs are there – we just have to be open to what they are telling us.

And of course there are so many more parallels between past economic downturns and what is happening right now.

For example, volatility has returned to the markets in a big way.  On Tuesday the Dow was down about 300 points, on Wednesday it was down another couple hundred points, and then on Thursday it was up a couple hundred points.

This is precisely how markets behave just before they crash.  When markets are calm, they tend to go up.  When markets get really choppy and start behaving erratically, that tells us that a big move down is usually coming.

At the same time, almost every major global currency is imploding.  For much more on this, see the amazing charts in this article.

In particular, I am greatly concerned about the collapse of the euro.  The Swiss would not have decoupled their currency from the euro if it was healthy.  And political events in Greece are certainly not going to help things either.  Economic conditions across Europe just continue to get worse, and the future of the eurozone itself is very much in doubt at this point.  And if the eurozone does break up, a European economic depression is almost virtually assured – at least in the short term.

 

And I haven’t even mentioned the oil crash yet.

There is only one other time in all of history when the price of oil collapsed by more than 60 dollars, and that was just prior to the horrific financial crisis of 2008.

Since the last financial crisis, the oil industry has been a huge source for job growth in this country.  The following is an excerpt from a recent CNN article

The oil sector has added over a half million jobs — many of them high paying — since the recession ended in June 2009. That’s 13% of all US job growth over that period.

Now energy companies and related sectors are laying off thousands. Expect that trend to continue, bears say.

But losing good jobs is just the tip of the iceberg of this oil crisis.

At this point, the price of oil has already dropped to a catastrophically low level.  The longer it stays at this level, the more damage that it is going to do.  If the price of oil stays at this level for all of 2015, we are going to have a complete and total financial nightmare on our hands

For the first time in 18 years, oil exporters are pulling liquidity out of world markets rather than putting money in. The world is now fast approaching a world reserve currency shift. If we see 8 to 12 months at these oil prices; U.S. shale industry will be wiped out. The effect on junk bonds will cascade to the rest of the stock market and U.S. economy.

…and this time there will be nothing left to catch the falling knife before it hits the American economy right in the heart. Not the FED nor the U.S. government can stop what’s coming. Liquidity will freeze up, our credit will be downgraded, the stock market will start to collapse, and then we can expect the FED to come in and hyper-inflate the dollar. This will cause the world to finish abandoning the world reserve currency in the last rungs of trade. This will be the end of the petrodollar.

Something that I have not discussed so far this year is the looming crisis in emerging market debt.

 

This is a really big deal.  As a Business Insider article recently detailed, we could be talking about hundreds of billions of dollars…

Russia this week became the first of the major economies to lose its investment grade status from Standard & Poor’s, falling out off the top ratings category for credits deemed to have a low risk of default for the first time in a decade.

If Moody’s and Fitch follow, conservative investors barred from owning junk securities must sell their holdings. JPMorgan estimates this means they may ditch $6 billion in Russian government rouble and dollar debt.

Russia may have company. Almost $260 billion worth of sovereign and corporate bonds – nearly a tenth of outstanding emerging market (EM) debt – is in danger of being relegated to junk, according to David Spegel, head of emerging debt at BNP Paribas, who calls such credits “falling angels”.

And no article of this nature would be complete without mentioning derivatives.

I could not possibly overemphasize the danger that the 700 trillion dollar derivatives bubble poses to the global financial system.

As we enter the coming Great Depression, derivatives are going to play a starring role.  Wall Street has been pumped full of funny money by global central banks, and our financial markets have been transformed into the greatest casino in the history of the world.  When this house of cards comes crashing down, and it will, it is going to be a financial disaster unlike anything that the planet has ever seen.

And yes, global central banks are very much responsible for setting the stage for what we are about to experience.

 

I really like the way that David Stockman put it the other day…

The global financial system is literally booby-trapped with accidents waiting to happen owing to six consecutive years of massive money printing by nearly every central bank in the world.

Over that span, the collective balance sheet of the major central banks has soared by nearly $11 trillion, meaning that honest price discovery has been virtually destroyed. This massive “bid” for existing financial assets based on credit confected from thin air drove long-term bond yields to rock bottom levels not seen in 600 years since the Black Plague; and pinned money market costs at zero—-for 73 months running.

What is the consequence of this drastic financial repression along the entire yield curve? The answer is bond prices which keep rising regardless of credit risk, inflation or taxes; and rampant carry trade speculation that can’t get out of its own way because  central banks have made the financial gamblers’ cost of goods—the “funding” cost of their trades—-essentially zero.

Of course I am not the only one warning that a new Great Depression is coming.  For instance, just consider what British hedge fund manager Crispin Odey is saying…

British hedge fund manager Crispin Odey thinks we’ve entered an economic downturn that is “likely to be remembered in a hundred years,” and central banks won’t be able to stop it.

In his Odey Asset Management investor letter dated Dec. 31, Odey writes that the shorting opportunity “looks as great as it was in 07/09.”

“My point is that we used all our monetary firepower to avoid the first downturn in 2007-09,” he writes, “so we are really at a dangerous point to try to counter the effects of a slowing China, falling commodities and EM incomes, and the ultimate First World Effects. This is the heart of the message. If economic activity far from picks up, but falters, then there will be a painful round of debt default.”

Even though most average citizens are completely oblivious to what is happening, many among the elite are heeding the warning signs and are feverishly getting prepared.  As Robert Johnson told a stunned audience at the World Economic Forum the other day, they are “buying airstrips and farms in places like New Zealand“.  They can see the horrifying storm forming on the horizon and they are preparing to get out while the getting is good.

It can be very frustrating to write about economics, because things in the financial world can take an extended period of time to play out.  Sadly, most people these days have extremely short attention spans.  We live in a world of iPhones, iPads, YouTube videos, Facebook updates and 48 hour news cycles.  People no longer are accustomed to thinking in long-term time frames, and if something does not happen right away we tend to get bored with it.

But the economic world is not like a game of “Angry Birds”.  Rather, it is very much like a game of chess.

And unfortunately for us, checkmate is right around the corner.

Source

 

Why Printing Money will end badly for the US

fedmoney You are witness to possibly the greatest economic slight of hand ever perpetuated on a people.

Zero Hedge | January 24, 2015

You may have heard the news, the European Central Bank have started up the printing press. They are soon to print upwards of €60 Billion a month. The crowds of economic pundits have collectively cheered. Europe stands to enjoy significant near term benefits, but at what cost?

They speak of lower government borrowing costs for new debt, by lowering funding costs and thus the hurdle that projects must meet to become viable. They believe our exchange rate will fall and our goods will be come cheaper abroad. European products and services will be flying off the shelves, etc. Well, it is an absolute nonsense. Yes there will be short term benefits. Any time you give a liquidity jolt you temporarily relieve pressure. But the longer term risks are far far greater, now that the act of QE has been taken.  Essentially the technocrats have short circuited the capitalist system which continuously prices risk based on perceived repayment risks and cost of funds.  This is a road to ruin as returns become obscured by official and politically motivated credit flows.

They will argue that deflation is a threat and must be tackled early before it takes hold. This is a smoke screen. The deflation we are experiencing is spotty and multi faceted and is primarily being driven by lower oil prices which are a global phenomena, not a purely European one. Secondly oil prices have already begun to stabilise and if anything are likely to drift higher from here. Don’t get me wrong deflation is a vey dangerous condition and can lead to a vicious negative feedback vortex to a state of depression. But we are no where near that level of risk or type of deflation.

The thing is it is being sold as a low risk, one way bet. Worryingly there has been no talk of the actual cost or the ramifications of his new measure.

So who pays? Someone has to, you can not just create money out of thin air. The answer is “we do, you and I”, in the form of a devalued currency, diminished savings and devaluing pensions.

The ECB was always going to to launch Quantitative Easing whether it wanted to our not. Once the Fed, BOJ, BOE launched their programs in 2008 it was only a matter of time. We are in a era of global competitive currency devaluation were desperate governments must devalue currencies in order to spur domestic growth by improving the value of exports.

The problem with QE or money printing is it is a like a Pandora’s box. Once it is opened it can never be put away again. There will, now, always be an easy way out of every economic issue. All interested parties will now be able to eye this short term financing tool as away of solving short term issues. The Euro will likely morph into the Lira over time.

 

QE is not actually the creation of money, not in real terms. What it is is the reallocation of the monetary pool from those that have a share to those that do not. All they have done is to devalue the Euro’s held by duplicating and allocating the new Euros to central banks. The Central Banks will in turn buy junk assets off commercial banks and government bonds all in return for cash.

The hope is that the banks will lend the new cash to businesses who will employ people and in doing so add productivity and value to the economy, increasing bank earnings and taxes and wealth.

But the banks will not do that. They will hold the money first to improve their capital ratio’s then they will invest in the the stock market via funds or other instruments.

The ECB also hope that the governments will have more money in the treasury and be able to tax less, but they wont, rather they will allocate to social partners such as Unions.

In short what we are seeing is the wholesale capture of the monetary system by special interests and the mass confiscation of wealth from pensioners and savers to governments and government proxies. I fear that we have just passed a monetary Rubicon that may eventually undermine the very basic social contract of our capitalist system: work hard and you will prosper.

It will take time for the effects of this to be felt but the gates have been well and truly opened and from now on we are only as strong as our weakest political masters at their weakest moment. Those actors will surely plunder this monetary tool.

This tragically could be the step that opens the gate to extreme political entities who can canvass on the widest remit and promise everything to everyone. Indeed the definition of “urgent need” will change by degrees over time, until it will take very little to invoke a new round of money printing.

You are witness to possibly the greatest economic slight of hand ever perpetuated on a people, when the long gaze of history looks at this decision, deflation fears will not be part of the final analysis, arrogance, stupidity and theft will be.

Read more from GoldCore

Russia and China ‘Furiously’ Buying Up Gold As “a Global Currency Crisis – Albeit Unstated – is Underway”

gold

Are you prepared? Is anyone? Brace yourself…

Mac Slavo | SHTFPlan.com | January 21, 2015

A larger global currency shift is underway…

And it may be happening much more quickly than anyone has realized.

Things are definitely in motion. Call it a game of musical chairs, or an exercise in rearranging chairs on the Titanic, or just that a tilting balance of power. Just don’t make the mistake of thinking this is all routine.

As Michael Snyder just reported:

The absolutely stunning decision by the Swiss National Bank to decouple from the euro has triggered billions of dollars worth of losses all over the globe. 

[…]

And these are just the losses that we know about so far.  It will be many months before the full scope of the financial devastation caused by the Swiss National Bank is fully revealed.  But of course the same thing could be said about the crash in the price of oil that we have witnessed in recent weeks.  These two “black swan events” have set financial dominoes in motion all over the globe.  At this point we can only guess how bad the financial devastation will ultimately be.

 

The key to understanding how the hammer will fall may lie in: gold.

In the material world that governs politics and economics, there has always been one golden rule: he who has the gold makes the rules.

Put China at the top of the next generation of rule makers, then.

China has been quietly stockpiling gold for years now. In fact, it is stockpiling so much gold that many have speculated that it may be building a gold-backed yuan currency that would make the Dollar pale in comparison on the global market.

Bottom line: no one knows just exactly how much gold China has amassed:

Buying surreptitiously allows Beijing to buy bullion at bargain prices; if the world knew how much gold China was really amassing, a run on gold the likes of which the globe has never seen would likely ensue. “We believe China is controlling the gold price because it is buying in such a way so as not to push prices up.” That’s the opinion of respected precious-metals analyst Julian Phillips of The Gold Forecaster, along with a host of other informed sources. (source)

It is widely believed that China has accumulated larger – possibly much larger – reserves since. (source)

Lots of other countries are rapidly buying up gold, too, including – Serbia, Greece, Ecuador, Mexico, Kazakhstan, Kyrgyzstan, and Tajikistan.

But reportedly no one is buying gold at a faster pace than Russia.

Back in August it was reported that:

Russia’s increase is the most dramatic, according to the recent report from the IMF. The Russian central bank has almost doubled its gold holdings within the last 5 years to 1,094.8 tonnes in June of this year. China’s Central Bank followed with an increase of 75% from its holdings in 2009.

Bloomberg reported in November:

The country has tripled its gold reserves since 2005 and is holding the most since at least 1993, IMF data show.

There is little doubt that gold plays a major factor in Russia’s posturing during a global showdown that involves proxy war and military tensions in the Ukraine, Syria, Iraq and other parts of the globe.

Moscow’s purchase of bullion and the assault on the bank can be seen as tactics of a single strategy designed to break the monopoly of the dollar. Gold is Russia’s hedge against that hegemony; it can’t be hacked.

More than that, Putin has been positioning his motherland to team up with China to solidify the emerging BRICS system which aims to thwart decades of Anglo financial dominance with a un-dollar currency system that will also include a development bank.

Russia’s response has been to buy gold and turn east, cementing deals with China and, it would seem, firing the opening salvos in a cyber currency war with the U.S. (source)

Warnings have sounded about a tipping of the global balance:

Russia is also increasing its gold reserves. China and Russia have been exchanging their U.S. dollar reserves and buying physical gold. Last year we speculated that this dynamic would create a shortage in gold leading to much higher prices. Russia and China now rank in the top ten countries by gold reserves.

With Russia now in what appears to be a currency war with the U.S., they may find a willing partner in China to create an alternative international financial system that does not rely upon or use the dollar. Irrespective of either country’s intentions, their physical gold buying sprees continue unabated. (source)

To that end, Russia has been amassing as much gold as possible, in a bid to outmaneuver its enemies in a silent economic war to hold onto its independence and further project its status.

Nearly every bit of gas and oil that Russia sells to neighbors in Europe and Asia is converted from dollars into gold reserves – and even with the collapsing oil price, that amount could still be staggering.

Many have pointed to the gold and oil trade off as Putin’s grand chess strategy:

Thus, the Western world, built on the hegemony of the petrodollar, is in a catastrophic situation. In which it cannot survive without oil and gas supplies from Russia. And Russia is now ready to sell its oil and gas to the West only in exchange for physical gold! The twist of Putin’s game is that the mechanism for the sale of Russian energy to the West only for gold now works regardless of whether the West agrees to pay for Russian oil and gas with its artificially cheap gold, or not.

If it ever comes to throwing down the gold and putting everyone’s cards on the table – ounce for ounce, and ton for ton, China and Russia will be major contenders in the global system, worthy of the kind of respect that equates both sovereignty and diplomatic power.

Keep in mind that China is also the world’s leading gold miner, producing more than 420 metric tons in 2013 numbers, with Russia ranked behind the U.S. as the fourth largest with 220 tons produced each year.

BRIC by BRIC a new system is being erected.

China has quietly declared war on the U.S. worthless dollar but can you blame them? They already have in place Chinese Yuan Swap facilities, which started the non U.S. dollar trade practice years ago. In 2012 China completed trade agreements with most nations they trade with called BRICS. They also have a BRIC Development Fund with a reported $200 billion already funding infrastructure needs and to deal with their toxic U.S. T Bonds. They will be busy replacing these bonds with gold and the chartered bank (Bank of China, Peoples Bank of China) will compete with the IMF and World Bank. (source)

The strings that come with IMF and World Bank loans give the U.S. and Europe leverage over developing countries, and thus, control. With a competing development bank, China and Russia will literally be building the infrastructure for growing global control.

Germany Has Already ‘Called’ – The World Second Largest Holder of Gold Has Demanded Repatriation of Its American Holdings

The elephant in the room of this entire affair is, of course, the United States. Ostensibly, they are far and away the world’s largest holder of gold, officially holding more than 8,000 tons of gold, and further housing thousands of tons of gold for various allies – especially in Europe.

However, very serious speculation has arisen about the veracity of U.S. claims to gold possession. No audit has taken place of Fort Knox, where the gold is held, since the Eisenhower administration, and many believe that significant portions have been lent or sold on the market to meet other obligations. Conventional wisdom, touted by such official mouthpieces as CBS, asserts that despite lacking confirmation of this gold through an audit, the question of who holds the gold just doesn’t matter anymore:

Fort Knox began losing its luster when the United States went off the gold standard in 1971. Before that, gold bars packed into a secure vault gave people faith in the country’s currency. Today, however, Fort Knox’s gold is now an asset on the Federal Reserve’s balance sheet, not a key part of our monetary system.

With decades of the U.S. dominating world finance through the petrodollar, no one was in a position to demand answers to this plaguing question, including the European nations with substantial deposits there.

However, things have changed since the 2008 financial crisis. The petrodollar is fading, and with it, American hegemony. Numerous European countries are now demanding, politely or not, to repatriate their gold.

For Germany, it has become an important question economically as well as politically. Nominally, it is the world’s second wealthiest in gold reserves, with more than 3,300 tons. However, the vast majority of its holdings have been kept in New York and London, due to post-World War II spheres of influence in Europe. With worries about the future of global economics, and a keen eye on the demise of the dollar, Germany has become decisive about keeping its gold closer to home.

Despite a 2012 decision in Germany to repatriate more than 600 tons of gold being held by the New York Federal Reserve, only 5 tons had actually been transferred across the Atlantic at the start of 2014, with the Bundesbank reassuring the German people that all is well, despite delays in the process.

Was their gold actually there, or have the delays been due to the need to buy back physical gold to meet demands on their ‘call’?

While this remains officially unclear, a fresh report yesterday claimed that Germany’s gold repatriation was still underway, and supposedly ‘on schedule’:

“The Bundesbank successfully continued and further stepped up its transfers of gold,” the central bank said in a statement.

“In 2014, 120 tonnes of gold were transferred to Frankfurt from storage locations abroad: 35 tonnes from Paris and 85 tonnes from New York.”

According to the German central bank’s own data, 1,447 tonnes are stored at the Federal Reserve Bank in New York, 438 tonnes at the Bank of England in London and 307 tonnes at the Banque de France in Paris.

Under the Bundesbank’s new gold storage plan in 2013, it decided to bring back 674 tonnes from abroad by 2020 and store half of its gold in its own vaults.

The Dutch were apparently more successful in quickly repatriating some 122 tons of gold from the New York Fed back in November:

As the debate regarding whether or not Switzerland should keep the bulk of its gold reserves at home on Swiss soil reaches it’s climax – the referendum takes place on Sunday – it is telling that the Dutch announced on Friday that they have just secretly repatriated 122 tonnes of their sovereign gold reserves from New York back to Amsterdam.

The Dutch Central Bank went so far as to state that the action was designed to install public confidence in the ability of the central bank to manage crises. The prospect of further shipments from the U.S. remains open as they are keeping the logistical details secret.

Meanwhile, during this silent drama, the Ukraine has been rapidly emptied out of its gold reserves.

Following the coup in Ukraine, the nation’s gold reserves mysteriously plummeted to “near zero”, with reserves depleting from from about $1.8 billion in gold reserves to “near zero,” raising speculation that it was transferred to the U.S. Meanwhile, some $874 million in gold was officially sold in October 2014 to service its debts. Did the Federal Reserve steal Ukraine’s gold to meet calls on its lacking gold reserves?

And Now the Swiss…

The recent shock announcement that the Swiss are decoupling from the Euro is the latest domino to fall, and could set off the long-feared chain reaction.

Many are asking if it signals the end of the Euro as a currency… and if so, what else after that?

The Swiss had vowed to not allow the franc to rise beyond 1.20 francs per euro. With the removal of that cap, the franc soared as much as 30% against the euro on Thursday, an unheard-of move in the currency markets.

It tells the world loudly that a global currency crisis – albeit unstated – is underway … that Western economies and Western sovereign debt is so out of whack that the only ammo left in the arsenal is currency.

Currencies are now being sacrificed in an effort to save economies. And the only winner in that environment is gold. (source)

If possession is said to be 9/10ths of the law, and he who has the gold makes the rules, what does that tell you about fiat currencies, digital currencies and the balance of global power?

Are you prepared?

Is anyone?

Brace yourself…

Source

 

If the Fed Has Nothing to Hide, It Has Nothing to Fear (Audit the FED….)

The-US-Federal-Reserve-II-A1

The American people have suffered long enough under a monetary policy controlled by an unaccountable, secretive central bank…

Ron Paul | January 19, 2015

Since the creation of the Federal Reserve in 1913, the dollar has lost over 97 percent of its purchasing power, the US economy has been subjected to a series of painful Federal Reserve-created recessions and depressions, and government has grown to dangerous levels thanks to the Fed’s policy of monetizing the debt. Yet the Federal Reserve still operates under a congressionally-created shroud of secrecy.

No wonder almost 75 percent of the American public supports legislation to audit the Federal Reserve.

The new Senate leadership has pledged to finally hold a vote on the audit bill this year, but, despite overwhelming public support, passage of this legislation is by no means assured.

The reason it may be difficult to pass this bill is that the 25 percent of Americans who oppose it represent some of the most powerful interests in American politics. These interests are working behind the scenes to kill the bill or replace it with a meaningless “compromise.” This “compromise” may provide limited transparency, but it would still keep the American people from learning the full truth about the Fed’s conduct of monetary policy.

Some opponents of the bill say an audit would somehow compromise the Fed’s independence. Those who make this claim cannot point to anything in the text of the bill giving Congress any new authority over the Fed’s conduct of monetary policy. More importantly, the idea that the Federal Reserve is somehow independent of political considerations is laughable. Economists often refer to the political business cycle, where the Fed adjusts its policies to help or hurt incumbent politicians. Former Federal Reserve Chairman Arthur Burns exposed the truth behind the propaganda regarding Federal Reserve independence when he said, if the chairman didn’t do what the president wanted, the Federal Reserve “would lose its independence.”

Perhaps the real reason the Fed opposes an audit can be found by looking at what has been revealed about the Fed’s operations in recent years. In 2010, as part of the Dodd-Frank bill, Congress authorized a one-time audit of the Federal Reserve’s activities during the financial crisis of 2008. The audit revealed that between 2007 and 2008 the Federal Reserve loaned over $16 trillion — more than four times the annual budget of the United States — to foreign central banks and politically-influential private companies.

In 2013 former Federal Reserve official Andrew Huszar publicly apologized to the American people for his role in “the greatest backdoor Wall Street bailout of all time” — the Federal Reserve’s quantitative easing program. Can anyone doubt an audit would further confirm how the Fed acts to benefit economic elites?

Despite the improvements shown in the (government-manipulated) economic statistics, the average American has not benefited from the Fed’s quantitative easing program. The abysmal failure of quantitative easing in the US may be one reason Switzerland stopped pegging the value of the Swiss Franc to the Euro following reports that the European Central Bank is about to launch its own quantitative easing program.

Quantitative easing is just the latest chapter in the Federal Reserve’s hundred-year history of failure. Despite this poor track record, Fed apologists still claim the American people benefit from the Federal Reserve System. But, if that were the case, why wouldn’t they welcome the opportunity to let the American people know more about monetary policy? Why is the Fed acting like it has something to hide if it has nothing to fear from an audit?

The American people have suffered long enough under a monetary policy controlled by an unaccountable, secretive central bank. It is time to finally audit — and then end — the Fed.

This article first appeared at RonPaulInstitute.org.

There Is No Inflation (Unless You Eat Food, Use Water, Live In A House, Get Sick, Go To School, Or Do Taxes)

011315cashmoneycongress

Your government keepers will continue to drown you in propaganda and misinformation

Jim Quinn | Zero Hedge | January 17, 2015

 

Government data reports are so funny. The blaring headlines today tells us that prices dropped in December. We are all saving billions from the drop in oil and gas. Hallelujah!!!

The corporate MSM never digs into the numbers to get the real truth. These reports and their distribution to the sheep are designed to keep you sedated and calm. Facts are not necessary. How this data pertains to your everyday life is not important to the .1% who control the flow of information.

Here is a link to the detailed inflation numbers by category. We already know they massage these numbers to achieve a happy ending, but even the massaged numbers tell an entirely different story than the one peddled to the masses by the government and corporate media.

 

I don’t know about you, but the costs listed above account for a significant amount of my budget. Do those price increases jive with the message being spewed by the government controlled media?

The credibility of their numbers is highly questionable in that they say health insurance accounts for .75% of a person’s annual budget. They actually have the balls to say health insurance fell by 0.5% over the last year. I’d love to hear from anyone out there whose health insurance premiums fell in the last year. Mine went up by 20%.

Your government keepers will continue to drown you in propaganda and misinformation. But the average person should know they are being lied to. They see how much money they have left over at the end of every month. If any.

 

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