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?

Tuesday, November 29, 2016

Donald Trump interviewing a potential Treasury Secretary who advocates gold standard and ending the Fed

If there is one thing you can say about President-Elect Donald Trump so far is that he has been very thorough in interviewing candidates for his administration.  From appointing a loyal supporter like Dr. Ben Carson to the position of Director of HUD while at the same time dumping former loyalist Chris Christie, to being willing to listen to and talk with a staunch adversary like Mitt Romney, to date Trump is sticking to his word in trying to finding the best person for the job no matter what side of the aisle they are on.

Yet one cabinet position remaining to be filled in his administration has seen as much contention as that of Secretary of State.  And so far the only real candidates interviewed have been those from the establishment, and tied to the banking cabal that are at the core of Washington's elite swamp.

Until now.

On Nov. 28 Donald Trump met with the former CEO of BB&T to perhaps discuss his potential to become the next Secretary of the Treasury.  And what makes John Allison unique is that as opposed to a banker from Goldman Sachs or J.P. Morgan who would strive to keep the status quo, Allison is a staunch advocate of returning the monetary system to a gold standard, and eliminating the Federal Reserve as the country's money printer.

On Monday, Trump will meet with John Allison, the former CEO of the bank BB&T and of the libertarian think tank the Cato Institute. 
There have been reports that Allison is being considered for Treasury secretary.
Trump's has on the campaign trail questioned the future of the Federal Reserve's political independence, but Allison takes that rhetoric a step further. While running the the Cato Institute, Allison wrote a paper in support of abolishing the Fed. 
"I would get rid of the Federal Reserve because the volatility in the economy is primarily caused by the Fed," Allison wrote in 2014 for the Cato Journal, a publication of the institute. 
Allison said that simply allowing the market to regulate itself would be preferable to the Fed harming the stability of the financial system. 
"When the Fed is radically changing the money supply, distorting interest rates, and over-regulating the financial sector, it makes rational economic calculation difficult," Allison wrote. "Markets do form bubbles, but the Fed makes them worse." 
Allison also suggested that the government's practice of insuring bank deposits up to $250,000 should be abolished and the US should go back to a banking system backed by "a market standard such as gold." – Business Insider
What makes John Allison different than the string of too big to fail bank executives that have proliferated the office of the Treasury over the last several administrations is that BB&T is considered to be a mid-size regional bank, and not among the protected financial oligarchies that have a history of fraud and corruption, and who are reliant upon the expansion of cheap credit from the Fed to be able to continue running their criminal schemes.

With both Russia and China very open to a return to some form of a gold standard in international trade or reserve currency standard, the confirmation of a pro-gold standard Secretary of the Treasury would go a long way in helping Donald Trump to negotiate a currency reset to deal with the untenable debt that both the U.S. and most of the world are being suffocated under.  And this would also mean that the gold price would finally be released to climb to its true value, as the supply of metal would need to be valued much much higher to backstop the amount of currency and debt that are currently floating around the global financial system.

Monday, November 28, 2016

Newest banker scheme: tax on withdrawing money from your bank accounts

Despite the fact that taxpayers bailed out banks in the U.S. and around the world following the 2008 financial crisis, the 'masters of the monetary universe' did little to show appreciation for the people that saved them from bankruptcy due to their own greed and corruption.  And even with the ability now to borrow money from central bank discount windows at or near zero percent interest, a large number of banks chose to impose new fees on their customers under the guise of re-capitalization.

Ironically, when companies impose a charge on individuals for a service it is known as a fee, but when a government does the same it is instead called a tax.  And that is exactly what India, Greece, and perhaps soon even the United States is, or is planning to do, for people who choose to withdrawal cash out of their bank accounts in the future rather than using digital constructs to perform commerce.

war-on-cash
Greek banks have proposed a series of measures to combat tax evasion, strengthen the electronic transactions and limit the use of cash in the economy, and as KeepTalkingGreece.com reports, one of the measures proposed is a special tax on cash withdrawals. 
Bankers reportedly stress that cash money can easily and largely be channeled in the black economy. Therefore, a tax on cash withdrawals will drastically reduce cash transactions and by extension the black economy. 
The bankers suggest that also credit and debit cards as wells as new technologies enabling cash-less transactions even for small amounts  and mobile phones can be used for the purchase of a transport ticket or a newspaper at the kiosk. 
The bankers proposal to the government also includes: 
-Mandatory use of cards or other electronic payment networks for every transaction with professions where there is strong evidence of tax evasion or where cash is mainly used [ like bakeries, kiosks, street vendors and chestnut sellers?]. 
-Mandatory use of cards or electronic networks for transactions above a certain amount [this measure is already in effect]. 
–Reforming the tax system by introducing a revenue-expenditure system. Households or professionals will only be taxed on the amount of income that is has not been spent. In this way, households and professionals will have a strong incentive to seek receipts for any expenditure in order to increase their expenditure and reduce the tax amount they will have to pay. 
-Obligation for all businesses and regardless of their size to pay electronically every salary and wage. (source: Kathimerini via Liberal.gr) - Zerohedge
Over in India, Prime Minister Modi has already implemented a 45% transaction tax on deposits that the government arbitrarily believes come from illegal or 'black market' commerce.  And these two countries (India and Greece) are not the only nations with plans to impose a tax on cash withdrawals as this has been in the works for a few years in the halls of the Fed and Congress.

Greece is the first country to push for a carry tax on physical cash. It won’t be the last. This policy has been floating around in Central Banking circles for years. The fact that it’s now being openly promoted only proves how desperate the elites are getting about the state of the financial system. 
Watch, the moment things turn south in the US in a big way, similar proposals will start cropping up here too.

Sunday, November 27, 2016

Spread between London paper gold price and Shanghai physical price now at $15

Over the past 35 days the spread between the daily AM and PM gold price fixes set in London and in Shanghai have steadily moved apart as the physical markets in China break away from the prices set in the Western paper markets.

Back in late October we began to see the difference in price grow to around $5, with the spread then moving to a difference of $7 just two weeks later.  But with the London and Comex paper markets crushing the paper spot price back under $1200 per ounce since the Presidential elections on Nov. 8, the physical markets in Shanghai have not seen fit to accept these prices based on the actual rising demand in their own exchanges, and are reflecting it in price as the spread on Nov. 25 is now a whopping $15 difference.

The gold premium on the Shanghai Gold Exchange soared as high as $30 Thursday before easing back to a still historically high level of around $15 on Friday, reports MKS (Switzerland) S.A. On Thursday, the “feature of the day was the SGE premium, which rose to an amazing $30 over the loco London gold price, the loftiest levels seen since 2013,” says Sam Laughlin, precious-metals trader with MKS. “The difference between then and now, however, is now the high premium seems to be more a factor of a supply shortage in mainland China as opposed to outright demand. As a result, despite the high premiums this week, the turnover has not been anything enormous.” The premium fell by roughly half on Friday, he continues. “While still elevated, we did some fatigue creeping into the Shanghai premium today, 'easing' to around $15 relative to loco London gold.” - Kitco
London Gold Fix, November 25, 2016

Shanghai Gold Exchange Gold Fix, November 25, 2016

As central and bullion banks in the West continue to beat down the price of gold in their paper derivative markets, the spread between the Asian physical and Western paper gold prices will continue to widen.  And at a certain point, producers of gold will find it much more profitable to simply ship their metals directly to China rather than to continue to supply the Comex or LBMA, who's manipulation of the spot price using 100's of naked short contracts no longer reflects the true price of the precious metal.

Friday, November 25, 2016

Indian government seeks to expand war on cash to also include a war on gold as the death of fiat money becomes a global phenomenon

In India's move to end what they call 'black market' transactions by eliminating their two highest denominated currency notes, Prime Minister Modi is quickly discovering the folly of attempting to mess with the nation's money, and a system that has functioned outside of banking systems for decades.  And even as Modi's new measures of trying to force upwards of 1.3 billion people to turn in their now non-legal tender notes in exchange for a new currency has so far been a huge failure, the leader of India is now seeking to double down on capital controls and expand the war on cash to also a new war on gold.

As Bloomberg reports, the Indian government had observed a declining trend in exchange of old notes over the counter, according to a statement from the state-run Press Information Bureau. 
And so the decision to end OTC exchange of notes was to encourage people to deposit old notes in their bank accounts. 
Government allows certain exemptions for use of old notes until Dec. 15, with only 500 rupee denomination currency notes accepted for such transaction:
  • Old 500-rupee notes can be used for payment of school fees with limit; utility dues; payment of road toll fees
  • Foreigners permitted to exchange foreign currency up to 5,000 rupees/week
Furthermore, as CNBC reports, the Indian government is set to impose a 45% tax (haircut) on any suspicious deposits. 
This is a major problem as only 40% of banknotes have been exchanged according to local reports. 
We suspect the sudden urge to force citizens to deposit/exchange their old banknotes is due to the increasing prevalance of "illegal workarounds" across the nation... (as The Wall Street Journal reports
Unable to spend or deposit their sackfuls of large bank notes amid India’s crackdown on hoarding cash, business owners across the country are paying employees months of salary in advance, ringing up bogus sales and even buying gold they can smuggle overseas to get rid of stashed money or conceal its source. 
Such illegal workarounds are threatening to undercut Prime Minister Narendra Modi’s move this month to cancel India’s highest-denomination rupee bills, which was meant to punish tax evaders and other criminals and bring more of the nation’s $2 trillion economy out of the shadows. - Zerohedge
And because Prime Minister Modi's scheme has failed to accomplish his desired outcome from the people, it now appears he is going after their most sacred holdings.

Their gold.
Recall, that as per our report last night, one of the reasons proposed for the recent tumble in gold has been speculation that India may ban gold imports. As a reminder, gold has traditionally been a widely-accepted cash alternative in an economy where gold has long held a supremacy over cash equivalents, to the point where recently the government started paying a dividend to those who deposit their gold to local banks for "safe keeping." 
Well, it now appears that the government is taking its crusade against gold one step futher, and according to a report by NewsRise, the Indian government may soon impose curbs on domestic holdings of gold as Modi intensifies his war against "black money", news agency NewsRise reported. 
As we reported previously, gold prices have soared in India ever since the November 8 demonetization announcement, and premiums jumped to two-year highs last week as jewellers ramped up purchases on fears the government might restrict imports after withdrawing higher-denomination notes from circulation in its fight against black money. 
India is the world's second biggest gold buyer, and it is estimated that one-third of its annual demand of up to 1,000 tonnes is paid for in black money - untaxed funds held in secret by citizens in cash that don't appear in any official accounts.
India may be the most public and most notable of countries going through the turmoil of forcing their people to change their currency, but they are far from the only nations currently implementing a ban on cash and gold.  In just the past week the countries of Australia, Uruguay, and even Spain have begun the process of eliminating large currency denominations in their economies as the world seems ripe for a new liquidity crisis that is requiring extreme measures.
India, Uruguay, Australia and now Spain. The Minister of Finance and Public Service, Cristóbal Montoro has reportedly just announced “anticipated measures in order to ‘reduce the use of cash.’ 
In other words, Spain is going to make cash transactions even more difficult. As of presstime, from what we can tell, this has yet to be reported anywhere in English media except here now at TDV. 
As you can see, the chaos is increasing. Combine cash bans with attacks on fake news (more on that tomorrow), and you end up disturbing a significant amount of people as we wrote here recently. 
This amounts to a trend of course, of the sort we’ve been analyzing for several years now. We’ve predicted increased social chaos throughout the West and beyond because globalism is not built by votes but by violence and widespread disaffection that allows globalist “solutions” to be rammed home. 
I expect “cash banning” to be speeded up along with selected attacks on the alternative media - as part of a larger effort to create widespread social dissension. People believe attacks on cash and “news” are what they seem to be on the surface. They are not. They are part of a much deeper strategy that involves additional globalism. 
We’ve expected just these sorts of actions and have profited from them for the past several years along with our newsletter subscribers. We await more of the same. 
Currently, violence spawned by this anti-cash trend can be seen in such countries as Uruguay and India where cash banning on large bills has ignited significant social chaos already. India is in the throes of riots while Uruguay has been hit with a nationwide strike aimed in part at derailing a mandate that all employers must pay employees electronically via a bank account, starting as soon as March.  - Dollar Vigilante
Perhaps one of the reasons for this sudden attack on money by governments and central banks is due to the rising dollar and the expanding liquidity crisis that the reserve currency is creating as fewer nations can afford to buy dollars for international commerce.  And with the dollar reaching a 14 year high this week by nearly touching 102 on the dollar index, history shows that anytime the reserve currency has crossed the 100 level over the past 30 years it has triggered a financial crisis somewhere, which it appears to be doing now in multiple locations.

In the latest report from ADM ISI’s strategy team, “Dollar Liquidity Threat is Getting Critical and Fed is M.I.A.”, Paul Mylchreest argues that mainstream economic luminaries (like Carmen Reinhart) are finally acknowledging the evolving crisis due to the dollar shortage outside the US, a topic which even the head researcher at the BIS shone a spotlight on yesterday suggesting that the strength of the dollar, not the VIX is the new "fear indicator". - Zerohedge
As always in history, when people lose confidence in their currencies the natural and obvious next move is to rush out of their 'money' and into tangible assets such as gold and silver.  And besides the rumors of gold soaring as high as $3600 on the black market now in India, over in Asia people are massively increasing their own buying, and are more than willing to pay high premiums to get it.

The price of gold is being attacked right now in a manner that is quite reminiscent of the way it was attacked in the summer of 2008, right before the global financial markets collapsed, led by the fall of Lehman.  Something really ugly is coming toward the global economic and financial system. 
In Viet Nam the premium paid by the public has just soared to $90 over world gold.  The spread has been wider over the last 15 years, but not much and only during times when there’s been high “backwardation” between the physical delivery bullion markets in the east vs. the fraudulent paper gold markets in London and NYC. - From PM Fund Manager Dave Kranzler 
Gold was pushing $1230/oz overnight, as the methodical take-down of gold and silver in the NYC and London paper markets has triggered an avalanche of demand for physical gold in the eastern hemisphere. 
Last night ex-duty import premiums in India were $14 over spot gold.  In Shanghai the premium to world gold was $9.76.  Delivery volume into the Shanghai Gold 
Exchange rocketed to an extraordinary 86.55 tonnes (it was 35.9 tonnes on Wednesday).  The open interest on the SGE was 807 tonnes.  To one observer’s recollection, John Brimelow of John Brimelow’s Gold Jottings, this is the first time the open interest has been over 800 tonnes. 
In Viet Nam the premium paid by the public was $90 over world gold.  only during times when there’s been high “backwardation” between the physical delivery bullion markets in the east vs. the fraudulent paper gold markets in London and NYC.Silver Doctors
Just as most people imagine the strength of the economy as being tied to the value of the stock markets, so too do people erroneously picture the true value of gold as being tied to the manipulated paper spot price determined in London and the Comex.  But the coming financial crisis that has been deferred now for eight years ever since the 2008 Credit Event appears very much to be demanding a reckoning, and those who both see it early enough, as well as prepare for it, will find the ability to do so as the days of the dollar and of money quickly come to an end.


Thursday, November 24, 2016

Dollar strength leads to more purchasing power as Thanksgiving dinner costs for 2017 go down

It's Thanksgiving once again and that time of the year again where many things kick into motion for the American consumer.

Beginning with gasoline prices climbing a bit for areas around the country that switch over to winter blends, the season culminates with the arrival of snowbirds down South from Canada and the Northern U.S. locations and of course, the home stretch for retailers during the Christmas holiday shopping season.

But the main course for this period is as always Thanksgiving, and the coming together of families along with the cooking and baking of the traditional dinner.

Each year economists try to put together a cost analysis for the average dinner and more often than not, the price rises around 3-5% from the year before.  But with the dollar suddenly strengthening to levels not seen in the past 13 years, that additional purchasing power has done something not seen in quite some time...

A decline in cost for this year's Thanksgiving meal.

According to the American Farm Bureau Federation's (AFBF) annual informal price survey, the average meal for 10 people will be $49.87--  a 24-cent drop from last year’s average of $50.11. 
The survey’s shopping list includes enough turkey, bread stuffing, sweet potatoes, rolls (with butter, of course), peas, cranberries, a vegetable tray, pumpkin pie with whipped cream, coffee and milk for 10 eaters. The AFBF has been commissioning this study for 31 years. 
Foods showing the largest reductions this year were pumpkin pie mix, milk and a veggie tray comprised of celery and carrots. A 30-ounce can of pumpkin pie mix was $3.13, a gallon of milk was $3.17 and a one-pound veggie tray of celery and carrots was just 73-cents. 
A group of miscellaneous items including coffee and ingredients need to prepare the meal (butter, evaporated milk, onions, eggs, sugar and flour) came in at $2.81. 
The headliner – a 16-pound turkey – averaged a total of $22.74 (about $1.42 per pound). That’s a decrease of 2 cents per pound, or an overall 30 cents per whole turkey, compared to last year. - Fox News

Wednesday, November 23, 2016

Russia becoming masters of alchemy as they turn coal into both diamonds and gold

While the technology for taking simple carbon materials like coal and using the time tested methods of heat and pressure found in nature to turn them into diamonds and other precious gems has been around since the 1940's, Russia has long since mastered the process and is recognized around the world for their ability to process synthetic stones in flawless grades.

Yet even as the mystical and sometimes scientific process of alchemy has been part of mankind going back thousands of years, the ability to take mundane materials and turn them into valuable elements on a large scale has been a roadblock for the art form to become full scaled to make the process widely profitable.

Until now?

On Nov. 22 a new discovery out of the Russian Academy of Sciences shows that engineers there can now extract gold from coal and provide a valuable by-product from an energy source that provides power to billions of people around the world.

Image result for alchemy gold
Researchers from the Russian Academy of Sciences’ Far East branch say they are building a facility to make gold out of coal. 
Although the science is no fairy tale, to the dismay of business owners, the process is not as productive as they might hope – burning a ton of coal yields one gram of gold, tops. 
At present, the scientists are setting the bar even lower, expecting a yield of 0.5 grams, or 1,500 rubles, per ton. 
“We burn a ton – we gain 1,500 rubles,” Oleg Ageev, CEO of Complex Innovative Technologies of the Amur Scientific Center, said in a press statement. 
At current exchange rates, that is roughly $23 US dollars. 
The discovery of gold lacing in coal is the result of 15 years of study from different fields. 
To create the gold, smoke created in burning coal goes through a hundred-fold purifying system. The residue is then flushed through a filter with water, allowing a gold concentrate to be extracted that is later used to make the precious metal. 
The scientists are planning to test the gold-making equipment in one of the Amur region’s boiler houses next year, and ultimately hope to receive a grant to develop and implement an industrial grade device. 
“We plan to use municipal boiler houses to implement our filtering system because they burn about eight to 10 thousand tons in a season, and that’s potentially 10 kilos of gold.” - Russia Today
It is of course obvious right now that the process will cost far more than it gets in return from their extracting minute amounts of gold from coal, but as with any new discovery or technology, improvements over time may not only allow gold and other materials to be taken out of cheaper raw substances like coal, but better and more inexpensive methods will over time take their place.

Saturday, November 19, 2016

Price of gold in dollars well over $3600 in India as currency crisis threatens to bring their economy to a halt

As news continues to come in from the nation of India following the government's order to eliminate certain currency notes from their monetary system, the rush to both trade in, and move money out of banks has been the singular thought for hundreds of millions of people.

And as part of this monetary transfer has been the massive demand for gold, especially since Modi pushed for a suspension of imports of the yellow metal last week.  And according to many sources, the price of gold in dollars has now reached over $3600 per ounce as the people move to get rid of their rupees and into the one tangible asset that weathers all crises.

Measure planned to prevent people from hoarding cash and generating income that could evade taxes, according to government officials with direct knowledge of the matter. 
Planned measures include limit on large cash withdrawals from bank, the officials said, asking not to be identified citing rules on speaking to media. 
Budget, due in February, may have steps to encourage use of checks, credit and debit cards. 
Purchase of gold jewelry said to be made more stringent to prevent switching of asset from cash. 
Finance Ministry spokesman D. S. Malik couldn’t be reached for comment. - Zerohedge
Perhaps the most interesting and destructive thing to come from Prime Minister Modi's move against the Indian currency is the fact that productivity has virtually stopped as people are spending several hours per day swapping over $60 worth of rupees due to the capital control laws limiting withdrawals.

When Venezuela collapsed into hyper-inflation a few months ago, it was reported on the ground that an ounce of silver would buy you 3-4 months worth of groceries, and a single ounce of gold could buy you a house.  And now in India the price of gold is skyrocketing upwards and outside the control of the paper gold markets which determine the global spot prices, and should be a warning to all on why owning physical metals is vital in a world where confidence in fiat money is crashing.

Friday, November 18, 2016

Strong dollar about to trigger a massive dumping of treasuries and dollar reserves by foreign holders of U.S. debt

Few people actually connected the dots six years ago as to the real reasons behind the Arab Spring uprisings in places like Yemen, Egypt, and elsewhere in the Middle East.  Politicians and a lazy mainstream media wanted us to focus on how it was due to people wanting to rise up against tyrannical dictators, but the truth of the matter was that the civil unrest was intrinsically tied to the dollar, and in nations being unable to afford to purchase commodities such as wheat because of how strong the reserve currency was in relation to their own.

Image result for arab spring bread helmet
(Egytian protester wearing a bread helmet)

When grain prices spiked in 2007-2008, Egypt's bread prices rose 37%. With unemployment rising as well, more people depended on subsidised bread – but the government did not make any more available. Egypt's annual food price inflation continued and had hit 18.9% before the fall of President Mubarak. 
Fifty per cent of the calories consumed by Egyptians originate outside its borders. Egypt is the world's largest wheat importer, and no country in the region (except for Syria) produces more than a small fraction of the wheat it consumes. Should the global markets be unable to provide a country's need, or if there are not enough funds available to finance purchases and to offer price support, then the food of the poor will become inaccessible to them. - Guardian
Despite the fact that the entire world was involved in the Great Recession, and most of their economies did not have access to strong central banks able to implement ZIRP and QE programs, it did not take the dollar exploding over 100 on the dollar index to cause financial havoc to one or more countries, but only a move from 72 to 84 to be just enough for countries deep in recession to be unable to buy dollars so they could purchase over-inflated commodities to feed their peoples.


In the past 30 years there have been three times when the dollar was over 100 on the index, and on every occasion a financial or monetary crisis emerged someone in the world.  In the 1980's it was the Mexican Peso crisis, and in the late 1990's it was both the Argentinian and Asian financial crises.

And now in November of 2016, and immediately following the election of Donald Trump as President, the dollar has skyrockted upwards and has crossed 100 on the index for the first time in 13 years.  And in that short amount of time since Nov. 8 we have seen India experience a monetary meltdown, and China see its currency strengthen to its highest levels in a decade.

However, both India and China are not Argentina, Egypt, Mexico, and Thailand.  And unlike these second world economies who were unable to withstand the reserve currency's pressure on their own money back 20 and 30 years ago, the world's second and seventh largest economies do have a form of ammunition to respond to the dollar's move and counter the dollar with its own medicine...

That of their dollar reserves.  And China appears ready now to bring heavy pain to the U.S. bond market by dumping hundreds of billions, if not trillions of dollars worth to protect their own economy.
Asked about when the Yuan may cross the psychological barrier, a PBOC advisor told Reuters that "I don't think the breaking of 7 is imminent. We may have to wait until next year." Actually, at this rate, "breaking" of 7 may happen as soon as next week, to which he adds :"If the pace of depreciation is too fast, if it hit 7 before the end of this year, the central bank will control it." 
And that's when the liquidation of Chinese USD-denominated reserves begins in earnest, among all those other measures the PBOC implemented a year ago when the market was far less sanguine about the Chinese devaluation: 
The policy insiders said the central bank was likely to intervene in currency markets and enforce capital controls to slow the rate of decline in the yuan. 
As we expected, the intervention has already started:
traders said large Chinese state banks had offered dollars in the domestic currency market on Thursday in an apparent effort to slow down the depreciation of the yuan. 
They said there had been no sign of state dollar selling in previous sessions. 
Another way of saying "offering dollars" is selling US assets. - Zerohedge
Once China begins dumping more of their dollars in earnest, and the bond rates for Treasuries start to spike arithmetically or even exponentially, it will open the floodgates for everyone else to dump their $14 trillion in foreign held dollars where the ramifications of them returning to the U.S. will be catastrophic.  And all that inflation that has been exported for decades to the rest of the world will come back in one sudden wave to prices and consumers, and might very easily spell the end of the American century, as well as dollar hegemony as the global reserve currency.

Wednesday, November 16, 2016

As the world currencies start to crater, India mulling banning of gold imports along with eliminating cash

Earlier this year, some establishment economists, along with academics and central bankers, began throwing out the proposal of banning cash as a way to allow for the backdoor expansion of currencies in monetary policy.  This of course received a huge backlash by the citizenry of several countries, and in some cases led to a run on banks from those fearing theft through negative interest rates, or through the implementation of draconian capital controls.

Surprisingly, one of the countries that was least likely to show signs of a currency collapse until recently was that of India.  And as a strong emerging market nation who had just embarked on a massive Make in India campaign, their elimination last week of their two largest currency denominations stoked fears of their own government seeking a ban on cash, and has led millions to either take out their money from banking institutions, with much of the wealth going into gold.

But in a new article published on Nov. 16 at The Daily Bell, eliminating cash may be the first step towards absolute control over money as the Modi government is now mulling plans to stop gold from being imported into the country entirely.

Prime minister Narendra Modi recently decided to confiscate the cash of hundreds of millions of Indians, and now he may forbid Indians from importing gold. 
This would have an immediate effect on gold supplies as India, despite the affinity of citizens for gold and silver, has very little in the way of domestic mining. 
In part, this is because the government itself is consistently at war with Indian citizens over money and its control. This struggle has most recently manifested itself in India’s decision to remove, wholesale, large denomination bills from public circulation. 
The country [banned] 500 and 1000 rupee notes (worth about US$7 and $14 respectively) and the mooted import restriction [banning gold imports] could be a reaction to dealers swapping the notes for gold.IBJA national secretary Surendra Mehta told the Times of India its members should be ready.   “We hear from certain circles of this possibility, though nothing official is out yet,” he said. 
The larger issue here has to do with banning cash on a global level. It is typical of reporting in this modern era that few if any of the mainstream articles covering India’s most recent move seemingly mention this. 
Governments around the world are beginning to ban cash. Sweden is far advanced but Uruguay and now India are not far behind. Uruguay is soon to demand that employers cease to pay employees via cash and instead deposit paychecks directly in bank accounts. - Zerohedge
India is not the only nation looking hard at eliminating cash, or creating barriers for people to get their money out of banks and into something tangible that is outside the hands of government control.  And as the world rushes towards a currency or financial crisis worse than in 2008, the days are becoming numbered on you and an individual having a choice on what you can do with your own money.

Tuesday, November 15, 2016

Got gold? Italy's Monte dei Paschi bank begins bail-ins for bond holders

Bail-ins can no longer be said to be limited to just Cyprus now as on Nov. 15, a major Eurozone country just facilitated the confiscation and subsequent haircut of bond holders owning the bank's subordinated debt.

Italy's albatross, and the world's oldest operating bank which goes back to the days before the discovery of the New World, was finally forced to capitulate to stave off insolvency by cutting staff and conducting a bail-in of certain bond-holders of the bank's debt.

Ever since the bank failed the ECB's latest stress test this summer, when it was advised that it needs to raise billions in capital, only to see the process fizzle with virtually no willing sources of new cash emerging due to the opaque labyrinth of the bank's bilions on NPLs, Italy's third largest, most insolvent, bank has been hoping to avoid a debt conversion, out of fears it may spook retail bondholders across the capital structure, and in other Italian banks, who may perceive the move even if touted as "voluntary" as a creditor bail-in. Which it technically is. 
Earlier today, the bank's board bet on Monday to set the terms for a bond-to-equity conversion that is part of the lender's capital boosting plans. As part of its sweeping restructuring, Monte Paschi was planning to lay off a tenth of its staff, shut branches and sell assets to win investor backing for a 5 billion euros ($5.4 billion) cash call, its third recapitalisation in as many years. The key part, however, due to the lack of new investor interest was the previously leaked voluntary conversion of its subordinated debt, whose successful execution would limit the amount of new funds needed.
So while we wait to learn if Monte Paschi will be successful in raising the critical outside cash, here is what Monte Paschi's bail-in, pardon debt conversion will look like, according to sources including Ansa, Bloomberg and Reuters
  • Monte Paschi approves voluntary debt-to-equity swap offer
  • Offer to target subordinated bonds for total outstanding amount of 4.289 billion euros; will offer between 20-100 percent of nominal value in bond swap offer
  • Holders of ~€4.5 billion of subordinated bonds will be able to convert them to shares
  • Bank is also considering possibility of launching conversion into equity of 1 billion euros of Fresh 2008 bonds
  • Senior bonds not included in the voluntary conversion plan
  • The bank is also considering conversion plan for EU1b of hybrid bonds
  • The conversion price is seen at 85% of nominal value for riskier Tier 1 bonds, according to Ansa sources.
  • The Conversion price is seen at 100% of nominal value for less risky Tier 2 bonds
  • Monte Paschi will acquire €700m of MPS Capital Trust II securities, also Tier 1, at 20%
  • It will also acquire seven series of BMPS subordinated debt at 100%
Offer open to investors classified as “qualified investors” only for Upper Tier 2 securities - Zerohedge
Monte Dei Paschi is not the only European bank experiencing insolvency issues, but they could be opening the door for institutions like Deutsche Bank to have to follow suit since EU rules negate the possibility of a government funded taxpayer bailout.

When you take into account what occurred late last week in India, where their government abruptly eliminated higher denomination bills to attempt to force their citizens to keep their money solely in a bank, and couple this with the instability of banks all across Europe, the world is once again teetering on the potential of another credit crisis, only this time it will be your money that is used to bail them out unless you learned the lessons of 2008 and have your wealth stored in something much more tangible.

Got gold?

Monday, November 14, 2016

The dollar vs. gold dichotomy: As dollar strengthens it opens door for greater gold buying

As we have mentioned many times before here at The Daily Economist, you should not value gold simply in its relation to the dollar.  In fact, all one has to do is look at countries like Venezuela and now India to know that when a nation's currency loses confidence or value, gold soars to all-time highs in relation to their money.

Of course we in the U.S. quite often are only interested in what happens to things in relation to the dollar, and in many cases rightly so since it still holds the position as the global reserve currency.  But that in itself should not be a deterrent since the recent strength in the dollar has created an incredible buying opportunity for physical gold.

5 Day dollar chart:


One Week Gold Chart:


As you can see in the above charts, in the same period that the dollar climbed 400 bps to over 100 on the index, gold fell to $1216 and its lowest point vs. the dollar in some months.

But here is the catch many gold bugs fail to realize... when the dollar strengthens it means that your purchasing power in that currency is much greater, so you inevitably get more 'bang for your buck'.  It is only when the dollar is collapsing and gold prices are also falling that purchasing gold becomes a losing proposition.

A stronger dollar is bad news for foreign markets as seen by the historic drop in the Chinese Yuan as well as in the Euro and Yen.  And it also means that investors and traders there will be looking towards gold as a safe haven to protect against the devaluing of their currency, which will lead to even greater shortages in gold than we already have today.

Saturday, November 12, 2016

Gold price spread between Shanghai and London now up to $7 as recent price slam sends more buyers to China

Following the Presidential election on Nov. 8, the gold cartel dumped extraordinary amounts of paper gold contracts which not only reversed the $61 gains that occurred when it appeared that Donald Trump was going to win, but they also ended up slamming down the price by an additional $50 over the next two trading sessions.

Part of this was due to a massive rise in the dollar, which went from 96 to over 99 on the dollar index, and the deflationary scare that crept into the markets that many now believe will quash the Fed from raising rates in December.

In the meantime, the takedown of the gold price by the bullion banks through their dumping of 85,000 paper contracts, or over $10 billion in gold derivatives, was the equivalent of 12% of the global gold mining output annually.


Yet the chaos in the gold price had limited effects over in China, where the Shanghai Gold Exchange functions as the world's largest physical gold market.  And in one of the more interesting notes over the past days was that the spread between the London/Comex gold fix and the Shanghai daily fix is now $7, which is up $2 from just one month ago.

Shanghai morning fix Nov 11 (10:15 pm est last night): $  1265.29 
NY ACCESS PRICE: $1260.00 (AT THE EXACT SAME TIME) 
Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1267.47 
NY ACCESS PRICE: 1260.60 (AT THE EXACT SAME TIME/2:15 am) 
HUGE SPREAD TODAY!!  7.00 dollars - Harvey Organ

Thursday, November 10, 2016

Europe, not the U.S., were the biggest buyers of gold after Donald Trump won the presidency

As the election counts began coming in on the evening of Nov. 8, the markets reacted chaotically as the night wore on to the reality that Donald Trump victory was going to be the next President of the United States.  And this market turmoil led to the dollar, stocks, and gold all moving in extreme opposition to what the markets had anticipated when they closed for business on Tuesday.

Yet the most interesting thing occurred within hours of seeing the Dow futures down 840 points, the dollar down 300 bps, and gold up $61... these markets all reversed and by the time trading was over on Wednesday gold had lost all of its gains, the dollar had recovered all of its losses and more, and stocks closed well into the green.

So the question then remains is, does a Trump victory mean the end to the gold bull market, or was this 'recovery' a last ditch effort by the Fed and Treasury to prop up paper markets?

Perhaps the answer lies over in Europe where following the Trump victory gold sales all across the continent were occurring at a record pace.

Spot gold prices surged nearly 5 percent with Donald Trump's surprise U.S. presidential election win spurring purchases of physical gold 
The flurry of buying on physical markets mostly took place in Europe, after Trump's victory was declared, when the price of spot gold surged by nearly 5 percent to a six-week high of $1,337.40 an ounce. 
Gold gave up gains during U.S. trading and turned slightly negative, as the dollar moved higher and Wall Street stocks rose sharply. [MKTS/GLOB] 
"Overnight, there has been a tremendous increase in our sales," said Oliver Heuschuch, head of trading for Degussa's gold business, one of the biggest German physical dealers. 
"It's nearly treble the size of regular business."
Ahead of the election, analysts widely expected that a Trump victory would cause gold prices to rally as investors sought refuge in perceived safe-haven assets such as gold. 
Demand for physical gold and silver in the United States rose in the weeks prior to the vote, but in contrast to Europe there was little sign of buying in the United States on Wednesday. 
"Today's figures are already some of the best on record, even surpassing our performance following the Brexit vote," said Chris Howard, director of bullion at the United 
Kingdom's Royal Mint, about Signature Gold sales that involve customers buying gold that is stored at the mint. 
The Pure Gold Company in London said its sales spiked 42 percent early on Wednesday versus the prior day. - Reuters

Wednesday, November 9, 2016

As expected, Trump victory drives gold price back over $1300 as global markets uncertain of future

As we at The Daily Economist wrote yesterday, the opportunity for short-term anti-establishment bets in gold, currencies, and the stock markets came to fruition when Donald Trump successfully beat the odds and won the White House early on Wednesday morning.

Starting with his taking of Florida in the early evening, and culminating with his surpassing of 270 electoral votes around 2:30am, global markets treated the Trump victory like a Brexit part two, and gold was definitely a benefactor by rising over 5% at one point.

Gold jumped nearly 5 percent on Wednesday to its strongest in six weeks as investors snapped up safe havens with Republican Donald Trump winning the race for the White House over Democrat Hillary Clinton. 
It marked gold's biggest single-day gain since June 24 when it rose as much as 8 percent when Britain decided to leave the European Union. It closed up 4.8 percent that day. 
A Trump win, which many see could lead to economic and global uncertainty, may also push the U.S. Federal Reserve to hold off from raising interest rates next month, further burnishing gold's draw, analysts say. - CNBC
Despite the fact that Trump will not officially take office for another 72 days, his victory will reverberate around the world's markets for some time as the uncertainty of new fiscal and monetary policies that may or may not be beneficial to Wall Street will have a significant effect on gold going forward.

Tuesday, November 8, 2016

Brexit II moment for gold and stocks as markets are completely priced in for Hillary victory

Election day 2016 has finally arrived, and it is not only the American people who are preparing for a change in leadership but also the markets.  In fact, thanks to a simple press conference done on Sunday by FBI Director James Comey, the markets exploded yesterday with expectations that Hillary Clinton would come out successful in the Nov. 8 vote.

But as many analysts have discussed over the past month, the outcome of today's Presidential election could actually trigger a Brexit part deux type event, as stocks, gold, and currencies are completely priced in for a Clinton victory, and this means that today's trading could actually be life changing for individuals if Donald Trump ends up winning.

Rickards says that Trump "will probably win" and, if he, does stock markets will crash 10% and gold will rise $100 over night. 
The markets and polls believe Clinton will win and that is priced into markets in the same way that a 'Bremain' was priced into markets prior to the 'Brexit' vote. 
“If Hillary wins nothing happens, if Trump wins you will have an earthquake.” 
Should Trump win, which looking at the polls is not an impossibility, gold would likely surge $100 per ounce overnight, says Rickards. 
What Hillary did was appalling and there will be ‘another reckoning on November 8th’ which the market has failed to price in, creating a good scenario for gold. He says you don’t have to agree that Trump will win, but agree that that in reality he could win. 
For Rickards, this is an excellent opportunity for investors, particularly those who have an allocation to physical gold which he believes is set to rise in the coming months and years. - Zerohedge

Sunday, November 6, 2016

Moves up in gold and down in stocks over past 10 days signal the markets now believe in a strong Trump victory

For anyone who has taken the time to watch buying and selling activity in the gold markets over the past month, it was more than obvious that the takedown during the first week of October was both manufactured, and done at a time when the world's biggest physical market (China) was off for a national holiday.  And as such, once they returned gold has risen over each of the last four weeks back to above the $1300 support level.

But what is perhaps most interesting for the markets in general is the historic declines we have seen over the past 9 days in the Nasdaq and S&P 500, and the 7 days in a row for the Dow, where that measured amount of negative trading has not occurred since 1980.  And this is being attributed to the sudden shift in political winds where the markets now strongly believe that Donald Trump will win the election.

Image result for trump accepts gold for deposit
The S&P 500 ended lower on Friday for a ninth straight day, the longest losing streak for the benchmark index in more than 35 years, as investors stayed on edge ahead of an uncertain U.S. election. 
The tech-heavy Nasdaq also ended lower for a ninth-consecutive session, while the Dow industrials closed down for a seventh straight day. 
Investors have been unnerved by signs of a tightening presidential race between Democrat Hillary Clinton and Republican Donald Trump. 
Clinton had been thought to have a clear lead until the re-emergence last week of a controversy over her use of a private email server while secretary of state. 
"Investors are uncertain about the outcome of the election, and they have grown more uncertain since last Friday," said Walter Todd, chief investment officer with Greenwood Capital in Greenwood, South Carolina. - Reuters
The Donald Trump phenomenon is now being paralleled to that of the UK's earlier Brexit vote from back in June, where going into the final day the markets bet heavily on a Remain outcome.  And when this did not happen following the vote, stocks, currencies, and bonds all fell drastically, and gold rose by $100 in a single day.

Some analysts are expecting more of the same come Tuesday, with equities falling by perhaps 1000 or more points on Wednesday and gold going up $100 - $150 if Trump prevails.  But this may be just the beginning of a much larger financial crisis since central banks are too hamstrung to deal with another black swan type event.

Thursday, November 3, 2016

SDR's for trade between nations, gold for the rest of us when currencies collapse

It is inevitable that the monetary system the world has used over the past 43 years will not only come to an end, but all signs are warning that this end is very near.  Going back to 1988, one of the Establishment's primary propaganda publications issued a forecast of a new global currency replacing the dollar by 2018, and here in 2016 we have already seen the beginnings of that currency through the IMF's announcement to circulate the M SDR (Special Drawing Rights) under Chinese authority.

Image result for the economist world currency

This means of course that during the transition, all fiat currencies like the Dollar, Pound, Euro, and Yen will experience extreme devaluations, or in some cases like perhaps the Euro, outright elimination.

But how long until this actually takes place?

A month ago one of the chief architects of the Euro creation back in 1999 published an op-ed on how the currency was flawed, and that its days numbered thanks to the deteriorating confidence and value imposed upon it by the European Central Bank.  And as we know in Japan over the past 20 years, the UK in recent months, and through the dumping of dollars by foreigners against the current global reserve, the clock is ticking on whether nations can get together in time to agree upon a way for a global reset, or if greed will bring their inevitable downfall through some global financial crisis.

Right now the first or perhaps even primary model for the next global reserve currency already exists, and is being propagated in the markets and in trade.  But this currency, known as the SDR, will only be available for nations to trade with one another at a central bank or Ministry level, and this leaves the 99.99% of us dealing with the aftermath of our own money's devaluation.

Thus while the world banks and governments prepare for the SDR to save their financial systems, what remains for you and I are the physical forms of money that have been a part of economics from the beginning of civilization.

We’ll soon experience profound problems with the U.S. dollar. I expect to see inflation in some areas, deflation in others. On the world stage, we could see anything up to and including a full-fledged currency crisis. 
Collapse is a calamitous process that destroys wealth like a tsunami hitting a seacoast. 
We’ll see several stages of the collapse play out in any event, because central banks are out of room to steer monetary policy outside of a very narrow channel. 
The Fed didn’t raise interest rates in 2010–11, when it should have bitten down on the proverbial bullet. Now, as the world economy teeters on the edge of major breakdown, the Fed can’t cut rates to boost the economy. Even if the Fed’s traditional rate-cutting medicine worked — and it doesn’t always work — that bottle of economic snake oil is nearly empty. 
Aside from the Fed, other central banks around the world are in even worse shape. Many of them participated in the failed negative interest rate experiment. We can’t look to them for any help at all. 
Sauve qui peut! 
This will put increased importance on special drawing rights (SDRs), or world money, and gold as possible tools with which to truncate the next collapse. I expect that many nations will use SDRs as a method to protect themselves — certainly the U.S.
But if you’re not a country plugged into the central bank, what’s left for us mere mortals? Your best option is to use gold. - Daily Reckoning

Wednesday, November 2, 2016

Gold soars and stocks fall as markets now forecasting a Trump victory

For the first time since the early October beat down of gold, the precious metal crossed over $1300 per ounce as revelations from the FBI on re-opening the cast against Hillary Clinton has pushed the markets into believing that Donald Trump has a strong shot at becoming the next President of the United States.

In Monday's trading, gold rose over $10 and stocks fell to the point that the 18,000 level was breached on the Dow for the first time since August.  And in the pre-market today that trend is continuing as gold is up another $10 while stock futures are down another 39 points.

LA Times
In a study released last week the GFMS team at Thomson Reuters concluded that while a Clinton win would not have a dramatic impact on the gold price, a Trump triumph will put pressure on financial markets and the dollar, prompting investors to seek the relative safety of gold: 
According to GFMS a Trump victory could spark a rally to $1,400 and maybe even $1,500 in our view while a win for Clinton would likely see prices ebb lower. - Mining.com
Live New York Gold Chart [Kitco Inc.]

World stocks, the dollar and oil fell on Wednesday, while safe-haven assets such as gold and the Swiss franc rose as investors were rattled by signs the U.S. presidential race was tightening just days before the vote.
Investors were beginning to rethink their long-held bets of a November 8 victory for Democratic candidate Hillary Clinton amid signs her Republican rival Donald Trump could be closing the gap, deepening the recent decline across major stock markets. - NBC News

Tuesday, November 1, 2016

Investors, traders, and analysts expect gold to be higher in forecasts for 2017

Gold has been validated to currently be in the next leg of a Bull Market and investors, traders, and analysts all see the price going much higher in 2017.

In a poll conducted by Reuters on Oct. 28, 35 Wall Street participants confirmed that the gold price will go up next year, with the average price range being about $1331 per ounce.

Gold is expected to post its highest average annual price in four years in 2017, a Reuters poll showed on Friday, after bottoming out this year following three straight years of decline. 
The poll of 35 analysts and traders conducted over the last two weeks returned an average gold price forecast for 2017 of $1,331 an ounce. That would be the highest average since 2013, when the metal plunged 28 percent year on year. 
Respondents predicted an average gold price this year of $1,270 an ounce, slightly above the current average of $1,258. That reflects a stronger expected performance in the fourth quarter, when prices are expected to average $1,300. - Reuters
On a side note, the estimated price range of $1331 from Wall Street participants does not take into consideration geo-political or financial black swans, which like with Brexit, could send gold skyrocketing well above their current forecasts and closer towards gold's all time highs.