The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Friday, April 20, 2018

The Daily Economist update for April 20 2018 - Financial Markets and Economic Wrapup

Shanghai Gold Exchange expands reach over gold markets with new partnership with Moscow Exchange

In just a few short years the Shanghai Gold Exchange has become the world's largest physical gold market, with connections to Hong Kong, Dubai, and perhaps even soon with Malaysia.

But before the latter one happens, possibly as soon as later this year, China just announced a new and even bigger partnership on April 19 when the SGE signed an MOU agreement with the Moscow Exchange to facilitate direct trading in their respective gold markets.

On 19 April 2018, Moscow Exchange signed a Memorandum of Understanding (MOU) with Shanghai Gold Exchange (SGE). The agreement aims to promote cooperation between China and Russia in the sphere of gold exchange trading. 
The signing ceremony with Igor Marich, Managing Director of Money and Derivatives Markets, member of MOEX Executive Board, and Song Yuqin, Vice President of Shanghai Gold Exchange, took place as part of the third annual "Global Gold Market Summit 2018" in Xiamen (China) organized by SGE. 
MOU provides for Russian and Chinese precious metals markets and exchange products information sharing, organization of joint conferences concerning topics of gold market, training and staff exchange as well as seeking opportunities for business cooperation. 
Pursuing the provisions of the agreement on Cooperation in the sphere of gold exchange trading between the Central Bank of the Russian and the People’s Bank of China signed in September 2017 this MOU sets forth the next chapter in enhancing of cross-border gold exchange trading on Chinese and Russian financial markets and development of organized precious metals market. – Mondo Visione

European Union puts down the hammer on cryptocurrency traders by introducing identity requirements on exchanges

On April 19. the European Parliament voted overwhelmingly to introduce new rules for cryptocurrency trading on exchanges that will remove all facets of anonymity for investors.

Passing with the vote count of 574-13, the EU is now ready to begin implementation of tighter regulations over cryptocurrency exchanges which will include due diligence procedures, identity verification, and exchange registration.

Graphic courtesy of Coin Telegraph
Members of the European Parliament supported on Thursday an agreement reached with the European Council in December to bring cryptocurrencies under “closer regulation”. The decision was passed with 574 votes, 13 nays and 60 abstentions, the parliament’s press service announced. The agreement represents the fifth and latest update of the EU Anti-Money Laundering Directive. 
The amendments are intended to address “risks linked to virtual currencies”. To end the anonymity associated with them, cryptocurrency trading platforms and custodian wallet providers will be obliged to introduce customer due diligence controls, including identity verification procedures. In the future, these businesses will apply for registration in order to offer regulated exchange and payment services. - Bitcoin

Turkey becomes the next country to demand their gold back from the Fed as they continue to work towards ditching the dollar

Ever since 2008, a number of countries have called for repatriating their gold from central banks in France, Britain, and the U.S..  And now on April 20 we can Turkey to this list as officials in Ankara reported that they are calling for the remaining gold reserves they hold with the Fed to be returned.

Ankara has decided to bring back all its gold stored in the US Federal Reserve, according to Turkish media. In recent years, Turkey repatriated 220 tons of gold from abroad, and 28.7 tons was brought back from the US last year. 
Turkey’s gold reserves are estimated at 564 tons and are worth about $20 billion, Turkish newspaper Yeni Safak reported. This makes Ankara the 11th largest gold holder, behind the Netherlands and ahead of India. The reports come at a time when Turkish President Recep Tayyip Erdogan has taken a tough stance against the US currency. – Russia Today
Turkey has also joined in with Iran and a handful of other countries looking to divest themselves from dollar hegemony, and may soon join with Russia in the Eurasian Economic Union (EEU) where direct bi-lateral trade is the standard for this trade group.

Thursday, April 19, 2018

Cryptocurrency exchange Kraken gives middle finger to NY Attorney General on their demands for operational and IP data

The newest battle between cryptocurrencies and the hacks who function at the whims of Wall Street appears to be taking shape as the CEO of the cryptocurrency exchange Kraken has denied the state of New York's Attorney General access to their operations and IP data in the wake of the AG's office demanding access to this information.

The head of a major cryptocurrency exchange will not comply with the New York attorney general's request for information. 
"The resource diversion for this production is massive. This is going to completely blow up our roadmap!" Kraken co-founder and CEO Jesse Powell said Wednesday on Twitter. 
"Then I realized we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet," Powell said. "Ordinarily, we're happy to help government understand our business, however, this is not the way to go about it." 
Schneiderman's office asked 13 cryptocurrency exchanges on Tuesday to complete a questionnaire by May 1 to share details on areas such as ownership, fees, trading suspensions and money laundering. 
Powell said the last time exchanges complied with New York's request for information, they were encumbered with the BitLicense. "Kraken left New York because New York is hostile to crypto and this 'questionnaire' we received today proves that New York is not only hostile to crypto, it is hostile to business," he said. - CNBC

Next generation of cryptocurrencies want to use algorithms to mimic central banks

How quickly the cryptocurrency sphere is evolving.

Nine years ago, a mysterious individual or group using the name Satoshi Nakamoto created the first cryptocurrency on the blockchain which was meant to offer people a chance for decentralized money that was outside the control and purview of governments and central banks.  And over the next near decade over a thousand of these types of digital tokens have sprang up.

Then a new type of cryptocurrency came onto the scene which offered individuals tokens that were backed by physical resources such as gold, diamonds, coffee, and even donuts.  These cryptos would incur their own label known as Stablecoins because they promised less volatility than their unbacked cousins.

And now we can add a third category or evolution to this sector as a new form of crypto is being engineered which will offer a flexibility in supply, and would use an algorithm to mimic the functions of a central bank.

Stablecoins are their own category of cryptocurrency. They're designed to maintain a set peg, and avoid the volatility inherent to cryptocurrencies. Unsurprisingly, the most common peg is US$1. 
There have been three distinct generations of stablecoin so far, with new developments in distributed ledger technology and economic theory spurring new coins. 
The third generation is getting increasingly crowded and complex. This genre of coins is focused strongly on economic theory, to create stablecoin systems without any outside collateral. Basis is one of these coins, along with others like Havven and USDX. These cryptocurrencies are essentially designed to be self-sustaining economic systems, which can expand and contract as needed just like a central bank issued currency. Except in the case of these coins, the expansion and contraction is controlled by an algorithm, rather than by a central authority. - Finder

Gold mining output continues to decline as number one producer China reports 3% drop in first quarter 2018

We have written a few times that the potential for Peak Gold production may have occurred sometime back in 2016, and subsequently over the next two years the overall global output has been in a steady decline.  And here in the first quarter of 2018 this trend appears to be continuing as China, the world's largest gold producer, reported a 3% QoQ drop in gold output during this period.

GOLD MINING output in China fell almost 3% in the first 3 months of 2018 compared with the same period last year, according to new data. 
That extends the 6% annual drop recorded in 2017 according to the latest statistics from government-backed body the China Gold Association. 
The world's No.1 gold-mining nation produced 98.2 tonnes in the first quarter, the CGA said down from over 101 tonnes a year earlier.- Bullion Vault

Yield curve now virtually flat as difference between 10 year and 30 year below 20 bps

While the financial pundits continue to jawbone about the ongoing trade war, how great earnings are, and even that stocks have remained 'undervalued', very little is being said about the dwindling difference between the 10 and 30 year bond yields.  And perhaps it is because what this flattening forecasts is something the talking heads don't want to discuss in their narratives, and especially what they don't want their viewers to know.

As of April 19 the Yield Curve (difference between the 10 and 30 year bond yields) has fallen to less than 20 bps difference.  And in every instance in the economic cycle that the curve flattens completely or subsequently becomes inverted (10 year yields go higher than the 30 year yields), it has automatically meant a recession.

10 year U.S. Treasury:

30 year U.S. Treasury:

Difference:  19.4 bps
Peter Cecchini, chief market strategist at Cantor Fitzgerald, calls it “the most important thing to have a clear idea about now.” Billionaire fund manager Bill Gross says we’re rapidly approaching a point at which the trend will induce an economic slowdown. Others claim it’s only natural, with the Federal Reserve raising short-term interest rates in the face of stubbornly low inflation. 
No matter which theory of flattening you subscribe to, the world’s biggest bond market is sending a signal that traders can’t ignore. The longer the trend continues, the more likely its effects could spread to bank earnings and the real economy, while at the same time it would limit the Fed’s ability to respond when these risks emerge. - Bloomberg

Wednesday, April 18, 2018

The Daily Economist update for April 18 2018 - Financial markets and economics wrapup