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

2:36 PM china, currency war, fed, gold, stocks, thedailyeconomist, trump, yield curve No Comments

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From the rise of the Fed to Donald Trump... 100 years of Populism may find us full circle from central banks to the return of the gold standard

1:22 PM central bank, Donald trump, federal reserve, gold standard, income inequality, monetary policy, populism No Comments

President Donald Trump has not been shy about speaking out his thoughts on Fed policy, and indeed has broken a great deal of tradition by the Executive Branch in recent years not to interfere with the 'independent' central bank.

Presidents never, or rarely, comment on monetary policy or currency market moves for that matter (ex, the hackneyed meme “a strong dollar is the best interest of the United States.”) 

President Trump hit them all in this interview, from the Fed to the Euro and Chinese RMB (“dropping like a rock”).  It doesn’t surprise us. 

Recall our March 21st post, The Biggest Risk At The Fed.But this doesn’t concern us as much as the Fed’s independence.“Just let it rip”That is we are worried more about the freedom from White House pressure and interference in conducting monetary policy than getting a few bps wrong on the Fed Funds rate.   This is especially true and relevant given the strongman tendencies and  lack of respect for institutional norms of the current president.Here is Larry Kudlow, the president’s new chief economic adviser: Kudlow said of economic growth in the U.S., during a more than hour-long interview Wednesday on CNBC. “The market’s going to take care of itself. The whole story’s going to take care of itself. The Fed’s going to do what it has to do, but I hope they don’t overdo it.”  – CNN– Global Macro Monitor,  March 21, 2018  - Zerohedge

Yet while there have been a number of times in the central bank's 105 year history where administrations have butted heads with Federal Reserve, for the most part the bank has remained the authoritative body for all monetary policy.

What is perhaps most interesting is that the creation of the Fed occurred during the nation's last great populist movement (1900 - 1920), and ironically during the same two decades 100 years ago in which we are experiencing a revival of that same movement.  And where the original idea for our current central bank took place after a banking crisis in 1907, the rise of the latest populist movement appears to have also occurred almost exactly 100 years later following the Credit Crisis of 2008.

In fact you can almost pinpoint where this movement started in the month's long protests from what would become Occupy Wall Street, and where this would subsequently evolve into the TEA Party movement, the Ron Paul Revolution, and the rise of Donald Trump and Bernie Sanders during the 2016 election cycle.  But at the core of both of their ideals (Make America Great Again and the need for Socialism to deal with income inequality) is the fact that the underlying reason for where we are at remains a monetary system that is based on credit versus the tangibility of a gold standard.

And in a new analysis put out here on July 20 by Bank of America's Michael Hartnett, the banker asserts that the end goal of this round of populism is a full circle return to where the central bank ends, and the gold standard reemerges.

In his latest weekly Flow Show, BofA's Michael Hartnett touches on a familiar topic: the rise of global populism and where it ultimately ends: "the end of central bank independence", which he calls the ultimately populist policy.  

Confirming something we have said since inception and explaining - once again - the advent of such phenomena as Brexit, the European backlash against immigrants, and of course, Donald Trump, the BofA strategist writes that "central bank policies of QE, NIRP, ZIRP have unquestionably exacerbated the gap between Wall St & Main St in past decade." 

With the great divide between the haves and have nots continuing to grow - despite the election of numerous populist leaders in nations around the globe, most recently Malaysia, Austria, and Mexico - BofA warns that the inability of monetary & fiscal policy, global synchronized recovery, and record corporate profits to create sustained wage growth, investors must discount more protectionism, redistribution & ultimately debt monetization via central banks in coming years... all trends that a recession would dramatically accelerate. 

Hartnett then present the one asset class which he thinks will be the ultimate winner in the coming class wars:  gold is the secular beneficiary of the War on Inequality - Zerohedge

The two eras in American history where income inequality were at its greatest were both periods of time when the Fed conducted monetary policies of cheap credit (1920 - 1929 and 2009 - 2018).  And while the result for the first was a catastrophic Depression and a near overthrow of the government, the second result still remains to be seen unless the nation's monetary system reverses its course from one where debt and credit is the foundation to that of a gold standard where purchasing power is returned to the people.

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Original preppers: Russia evades Fed confiscation of their gold by losing it in a 'boating accident'

8:57 PM boating accident, bolshevik revolution, federal reserve, gold, preppers, romanovs, rothschilds, russia No Comments

While the title of this article is meant to be tongue in cheek, there are numerous anecdotes that can be gleaned within it following the recent discovery of a Russian vessel that is believed to have sunk carrying an estimated $133 billion in gold during the 1905 Japanese-Russo War.

In a recent interview with Reluctant Preppers, Dr. Jim Willie dropped a bombshell comment where he claimed that one of the primary reasons for the killing of the Romanov family following their ouster by the Bolshevik's in 1918 was so that the City of London/Rothschilds could use the Russian gold stored in their vaults to help fund the Federal Reserve.

Who was the wealthiest man on earth in 1905? Tsar Nicholas Romanov. His brother, King George of England, decided to kill him and steal his gold, take the bulk of it and move it to New York and start the Federal Reserve. The Federal Reserve's foundation gold is stolen Russian gold. Do you see why the Rothschilds want to keep Russia at bay? - Perpetual Assets

According to documents from the time of the sinking of the Dmitrii Donskoi, the value of the lost gold today would bring a price of nearly $133 billion.

According to the Telegraph, the Dmitrii Donskoi was carrying the fleet’s funds and went down with 5,500 boxes containing gold bars as well as a separate haul of 200 tons of gold coins. The gold was being stored in the ship's holds to stop the Japanese seizing it. Shinil Group estimates the gold would have a total value today of just over $130 billion. 

The ship then disappeared for over a century, however it now appears its remains may have been found. - Zerohedge

Inevitably, should the reclamation of this vessel actually recover even a modicum of the gold the ship was supposed to be carrying, it may seem ironic but the 'unforseen' use of the prepper term 'lost my gold in a boating accident' could prove beneficial for Russia as it would mean a return of a national treasure that was kept out of the hands of the banksters when they funded the overthrow of the government primarily to steal the gold held by the ruling family.

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The Daily Economist update for July 19 2018 - Financial Markets and Economic Wrapup

4:10 PM birth rate, china, dollar, fed, stocks, thedailyeconomist, trade war, yield curve No Comments

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It appears that the next public figure to get on the cryptocurrency bandwagon is none other than the former Trump adviser Steve Bannon

10:42 AM cryptocurrency, deplorable coin, deplorables, Donald trump, steve bannon No Comments

There are very few more controversial figures in American politics over the past three years than the former campaign adviser and manager to President Donald Trump.  And of course in this we are referring to Breitbart co-founder Steve Bannon.

Yet while most would think that since he left the administration a little less than a year ago that he would have simply faded into the woodwork like the doomed from the start former Communications Director Anthony Scaramucci, this is far from the truth as Bannon's latest endeavor appears to be in the creation of a new cryptocurrency.

Graphic courtesy of BTC Manager

Steve Bannon, former chief strategist to U.S. President Donald Trump, confirmed that he wants to launch a cryptocurrency of his own. 

Speaking to CNBC on Wednesday, the Breitbart co-founder said "they're the future," adding that "we're working on some tokens now, utility tokens, potentially, for the populist movement on a worldwide basis." 

Bannon first hinted at the idea in June, though at the time he was hesitant about revealing too much about his cryptocurrency plans, according to the New York Times. 

He did contemplate naming his token the "deplorables coin" at the time, referencing a term used by former Secretary of State and presidential candidate Hillary Clinton to describe Trump's supporters during the 2016 presidential campaign. - Coindesk

Celebrity driven cryptocurrencies have not fared well following the crypto bubble that emerged during 2017.  And in fact new data has revealed that around 80% of all cryptocurrencies and cryptocurrency based projects on the blockchain have failed, or at the very least fallen into the realm of 'penny stocks' according to their value.

It will be interesting to see if Bannon can revive a market that has not only lost investor sentiment, but for the most part has been taken over by Hedge Funds and Wall Street investment banks.  Yet either way, the former adviser to Donald Trump is a very shrewd businessman, and one has to wonder if his crypto idea contains much more than what we see simply on the surface.

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Wells Fargo proves once again why you shouldn't keep your money or wealth in a bank

10:19 AM corruption, customers, dodd frank, fraud, jp morgan, wells fargo No Comments

Back between 2011 and 2014, JP Morgan was fined 12 times for illegal financial activity which included Foreclosure Abuse (Robo-signing), illegal credit card practices, and Libor rigging which caused interest rates and payments to be increased for 10's of millions of Americans.  And in all of these activities, very few customers who were defrauded ever received compensation for being a victim of their schemes.

But sadly this institution is not the only one to defraud their customers in more than one way.  And despite the fact that an identity theft and credit card scandal by Wells Fargo led to the resignation of their CEO and several managers, it appears that fraud is simply the cost of doing business for this bank as a new scandal has emerged a little more than a year after their last major one.

Given the seemingly unceasing stream of scandal that has flowed out of Warren Buffett's favorite bank, Wells Fargo, it's hardly surprising that after doing everything from illegally repossessing the cars of American soldiers to fraudulently "cross-selling" credit cards and other products to millions of customers, the bank is now being called out for adding opaque products to the accounts of hundreds of thousands of customers - for services like pet insurance and legal services - without first explaining how to use them. - Zerohedge

When you couple in the fact that since 2010 when the Dodd-Frank banking Reform Act was passed, your money and deposits are no longer considered yours by the institution, and are instead both liabilities and capital they can use to leverage their own investment portfolios while also being allowed to confiscate (rehypothicate) that money should their speculative bets create insolvency.

As the world continues to accumulate record debt levels, economies begin slowing down thanks to central banks tightening their monetary policies, and the ongoing housing bubble begins to burst, there will not be many tangible warning signs telling you when the next financial crash or collapse will occur.  But even then there will be no excuse because everyone will have had 10 years or more to find one of the many alternatives out there to store and use their money that isn't held in a bank that treats its customers like a resource simply to be squeezed.

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The Daily Economist update for July 18 2018 - Financial Markets and Economic Wrapup

2:52 PM bitcoin, fed. inflation, gold, james comey, stocks, tariffs, thedailyeconomist, trade war, universal basic income, yield curve No Comments

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Trump Derangement Syndrome comtinues as former FBI Director Comey labels conservatives as un-American, and Dems call for illegal cyber attacks against Russia

8:35 AM cold war, cyber attack, deep state, democrats, james comey, liberals, russia, trump derangement syndrome, unamerican No Comments

Ironically, there is very little difference between partisan politics today, and what has taken place many times over the past several decades.  And perhaps the only real delimiters separating then and now is that today we have 24 news cycles, social media platforms, and a complete deterioration of journalism standards.

Nearly 50 years ago, Democrats in Congress and around the United States were shocked when then President Nixon visited China to try to 'break the ice' between the Far Eastern Communist regime and the the West's standard bearer for Capitalism.  And subsequently a decade and a half later, these same liberals were outraged when President Reagan met with the former leader of the Soviet Union Mikhail Gorbachev to discuss ways to find common ground between the two nations and potentially end the Cold War.

Fast forward to 2018...

With the failures of the Deep State and Military Industrial Complex in fulfilling their goals of creating chaos in the Middle East which began under the first President Bush back in 1991, and escalated under Bush II following the events of 9/11, there desperately grew a need to find a new 'enemy' to keep the nation at war, and the money flowing into their coffers.  And that new enemy once again turned into Russia.



Russia has become a serious thorn in the side of the intelligence agencies and the Deep State in their rebuking the U.S. State Department's program to overthrow the duly elected government of Ukraine, while also halting the West's attempt to overthrow Bashir Assad in Syria through their constructed terrorist group ISIS.  And as such, the full might of of the military, intelligence, and propaganda machines turned full bore towards Vladimir Putin and Russia, only to see their agenda blown apart with the election of Donald Trump as President.

Even before President Trump took office, the intelligence agencies have sought to discredit his administration and legacy by claiming that he only won the office due to Russia's interference in the 2016 election.  However not only do we now know that Obama administration officials in the DOJ, FBI, and CIA willfully attempted to frame Trump in a soft coup to ensure Hillary Clinton won the Oval Office, but even afterwards they have been pushing the lie that Russia and Putin control the President even now.

Which brings us to this week, and what appears to be the ultimate unhinging of the Democrats, the Deep State, and all those bought and paid for politicians who have everything to lose if Trump can achieve peace with their 'mortal enemy'.

Fired FBI Director James Comey says that anyone who votes for a Republican in November is un-American

Former FBI Director James Comey suggested over Twitter on Tuesday that anyone who votes Republican in the upcoming midterm elections is un-American. 

"Ambition must ... counteract ambition," wrote Comey, adding "All who believe in this country’s values must vote for Democrats this fall. Policy differences don’t matter right now. History has its eyes on us."  

In other words, any Republican who doesn't vote Democrat in November doesn't believe in American values.  

Comey's comments come on the heels of what some interpreted as a call for a coup against President Trump after the Helsinki summit with Vladimir Putin, when he tweeted"This was the day an American president stood on foreign soil next to a murderous lying thug and refused to back his own country," adding "Patriots need to stand up and reject the behavior of this president."  - Zerohedge

Democrats call for a new operation to cyber-hack Russian banks

Rep. Steve Cohen, (D-TN) - the guy who wanted to give disgraced FBI agent Peter Strzok the Purple Heart - told The Hill's Buck Sexton and Krystal Ball that Russian interference was clearly an act of war, and that the U.S. should have hit back with attacks on Russian targets.  

It was a foreign interference with our basic Democratic values. The underpinnings of Democratic society is elections, and free elections, and they invaded our country. A cyber attack that made Russian society valueless. They could have gone into Russian banks, Russian government. Our cyber abilities are such that we could have attacked them with a cyber attack that would have crippled Russia. -The Hill

In the end it appears that radio talk show host Michael Savage's analysis on liberals and Democrats has finally come to pass when he stated that 'Liberalism is a mental disorder'.

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Hong Kong preparing to integrate several banks onto a blockchain trade platform

10:41 AM banking, blockchain, cryptocurrencies, financial system, hong kong, trade No Comments

While cryptocurrencies remain the primary spotlight right now for blockchain technology, the integration of global financial systems onto this platform is beginning to accelerate.  And in an announcement made by the Hong Kong Monetary Authority in July 17, seven primary lenders will soon be connected through a trade platform run on the Blockchain.

The Hong Kong Monetary Authority and seven local lenders will launch a trade finance platform using blockchain technology in September, reflecting efforts by the city to bolster fintech development and close the gap with regional rival Singapore. 

“This trade finance platform is the first large-scale multi-bank blockchain project in Hong Kong arising from the fruitful results of one of the HKMA’s proof-of-concept works on trade finance in 2017,” said Howard Lee, deputy chief executive of the HKMA. 

Lenders taking part in the project include HSBC and Standard Chartered Bank, Bank of East Asia, Australia and New Zealand Banking Group Limited, Hang Seng Bank, and DBS Bank, according to a statement. – South China Morning Post

Blockchain technology allows users access to all documents and processes in a single location, and in real time.  And although the ledger itself is decentralized on servers around the globe, it appears set to become the future standard for financial and monetary transactions, as well as in global trade done through the use of Smart Contracts.

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Could IBM be experimenting with the eventual replacement of the dollar through a new crypto pegged to the U.S. currency?

8:34 AM banks, blockchain, cashless society, cryptocurrency, dollar, ibm, payment system 1 Comment

On July 17, IBM announced they will be teaming up with a Blockchain tech company named Stronghold to create a new cryptocurrency that would be pegged to the U.S. dollar.

According to IBM, the purpose behind their cryptocurrency experiment is to find ways to provide the banking system better and more efficient methods to be able to conduct payments, transfers, and transactions, while also solidifying the security that blockchain based processing provides for the monetary system.

IBM has teamed up with financial technology start-up Stronghold to launch a cryptocurrency that’s pegged to the U.S. dollar. 

The tech giant has put its weight behind a so-called “stablecoin,” a digital token that, in principle, is tied to an existing government-backed currency, in order to reduce the volatility associated with virtual currencies. 

In this case, the cryptocurrency, called “Stronghold USD,” is backed by Federal Deposit Insurance Corporation-insured U.S. dollars, IBM said Tuesday, with reserves being held by blockchain-focused asset manager Prime Trust. 

IBM said it will experiment with the virtual greenback to explore ways of helping banks and other financial institutions process payments faster and more securely. The aim of stablecoins is to reduce the volatility that is commonplace in the cryptocurrency market. - CNBC

IBM has been involved in helping to build the framework for a cashless society for many years now, and even their website boasts of a day in the near future when this will become reality.

With the growing availability of smartphones and 4G networks, there are even newer opportunities to enrich the customer experience and further enhance the convenience and security of mobile banking. As a result of increasing demand for computing power, advanced applications, and the cost effective, flexible delivery of infrastructure as a service (IaaS) and platform as a service (PaaS), cloud computing will be critical in the next evolution of mobile banking. 

In addition, cloud-based mobile application development facilitated by PaaS (such as IBM Bluemix) can enable rapid integration of advanced solutions to customer delivery. As mobile applications continue to increase in sophistication, the cloud will be at the center of what Gartner terms “the Nexus of Forces.” 

It’ll be a while yet, but maybe that cashless society won’t be a myth for much longer and song lines like “Money, get back. I’m alright Jack keep your hands off my stack” from Pink Floyd will eventually draw puzzled looks and an online search from the listener. -
IBM

With both the central and investment banks working on their own cryptocurrencies (such as Fedcoin) to first aid in the transfer of money at the financial and sovereign levels, once this becomes successful, the eventual next step will be to replace physical cash entirely with a digital blueprint, and one has to wonder if IBM's foray into cryptocurrencies is the proving ground for such a move. 

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Putin unmasks fraud of Mueller investigation by dropping bombshell of payments made to Hillary and the Clinton Foundation

3:26 PM clinton foundation, fusion gps, hillary clinton, mueller, president trump, russiagate, vladimir putin, william browder 1 Comment

Following last Friday's toothless announcement by Robert Mueller of 12 new indictments on Russian military officials for their alleged role in trying to 'rig' the 2016 election, Russian President Vladimir Putin dropped a bombshell today at the Helsinki Summit by claiming that a former investor in the Russian markets funneled $400 billion of illegally gotten gains to Hillary Clinton and her Foundation.

Vladimir Putin made a bombshell claim during Monday's joint press conference with President Trump in Helsinki, Finland, when the Russian President said some $400 million in illegally earned profits was funneled to the Clinton campaign by associates of American-born British financier Bill Browder - at one time the largest foreign portfolio investors in Russia. The scheme involved members of the U.S. intelligence community, said Putin, who he said "accompanied and guided these transactions." 

Browder made billions in Russia during the 90's. In December, a Moscow court sentenced Browder in absentia to nine years in prison for tax fraud, while he was also found guilty of tax evasion in a separate 2013 case. Putin accused Browder's associates of illegally earning over than $1.5 billion without paying Russian taxes, before sending $400 million to Clinton. - Zerohedge

Browder of course was also an instrumental part in the creation of the fake Fusion GPS dossier that was used to try to keep Donald Trump from winning the 2016 election.

William Browder is again in the news recently in connection with testimony related to Russiagate. On December 16th Senator Diane Feinstein of the Senate Judiciary Committee released the transcript of the testimony provided by Glenn Simpson, founder of Fusion GPS. According to James Carden, Browder was mentioned 50 times, but the repeated citations apparently did not merit inclusion in media coverage of the story by the New York Times, Washington Post and Politico. 

Fusion GPS, which was involved in the research producing the Steele Dossier used to discredit Donald Trump, was also retained to provide investigative services relating to a lawsuit in New York City involving a Russian company called Prevezon. As information provided by Browder was the basis of the lawsuit, his company and business practices while in Russia became part of the investigation. Simmons maintained that Browder proved to be somewhat evasive and his accounts of his activities were inconsistent. He claimed never to visit the United States and not own property or do business there, all of which were untrue, to include his ownership through a shell company of a $10 million house in Aspen Colorado. He repeatedly ran away, literally, from attempts to subpoena him so he would have to testify under oath.

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The Daily Economist update for July 16 2018 - Financial Markets and Economic Wrapup

2:08 PM bitcoin, bonds, dollar, gold, helsinki summit, meuller, poop, russia, san francisco, stocks, thedailyeconomist, yield curve No Comments

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Russia enters into the Helsinki Summit talks with one of its largest banks accelerating its dumping of the dollar

8:36 AM dollar, dumping dollars, energy, helsinki summit, oil, president trump, putin, russia No Comments

Russia has been by far the largest economy to embark upon a dollar dumping program when you look at the percentage of dollar reserves they have transferred into gold or other currencies.  And as President Vladimir Putin enters into talks with President Trump here on July 16, he does so with a new report out over the weekend where one of his nation's largest banks has accelerated the dumping of dollars.

One of Russia’s largest banks, VTB is seeking to decrease the share of US dollar transactions at home as locals are choosing the Russian ruble over the greenback. 

“There is one interesting thing I wanted to highlight. Since the beginning of this year, people seem to be less interested in making dollar deposits or taking out dollar loans, compared to ruble-denominated deposits and loans. We believe this to be an important step towards the de-dollarization of the Russian finance sector,” said VTB head Andrey Kostin at a Kremlin meeting with President Vladimir Putin. 

Russia has been seeking the ways of decreasing the dependence on the US currency after Washington and its allies imposed sanctions against Moscow in 2014. In May, President Putin said Russia can no longer trust the US dollar-dominated financial system since America is imposing unilateral sanctions and violates World Trade Organization (WTO) rules. Putin added that the dollar monopoly is unsafe and dangerous for the global economy. - Russia Today

Movement away from dollar hegemony by Russia has been going on since 2012 when the Eurasian energy giant initiated its first bi-lateral oil contract with China.  And ever since that time, Russia has embarked on a combination of gold accumulation as well as the selling of dollar denominated reserves in order to protect itself from punitive sanctions placed upon them by both Europe and the U.S..

Putin's largest 'Trump card' is their energy matrix that now includes multiple pipelines across the Middle East that feed directly into Europe.  And contrary to the belief that the dollar is world's primary reserve currency, the reality is that ever since it became coupled with oil back in 1973, energy, much more than the dollar, is the real global currency that runs the financial mechanism of geopolitics.

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China beginning to focus on lifeblood of global economy in Trade War by halting oil purchases from U.S. in favor of Iran

8:10 AM china, dollar, dollar hegemony, energy, iran, iran deal, oil, opec, president trump, trade war No Comments

While the 'Iran Deal' may in the end prove to be nothing more than a money laundering scheme that was propagated by President Obama and several European parties, there is very little support from most of the world in Donald Trump's choosing to tear up the agreement and reinstitute new sanctions on the Middle Eastern state.  And when you couple in the Trade War that the President has decided to embark upon with China and other countries, it should not be surprising that the Far Eastern economy has decided to use Iran as a geo-political chess piece against the U.S. by allowing one of its primary oil refiners to halt the purchase of American oil and instead replace it with Iranian energy.

Dongming Petrochemical, an independent Chinese refiner, said it has halted crude purchases from the US and turned to Iranian imports amid escalating trade tensions between Beijing and Washington. 

Dongming Petrochemical has nearly 6,300 employees, total assets of 30 billion yuan ($4.5 billion) and the primary processing capacity is 15 million tons per year, according to the company website. 

Chinese authorities are reportedly planning to impose tariffs on US crude imports and replace them with oil from West Africa and the Middle East, including Iran. Beijing said it was not going to fall into line with US sanctions banning business with the Islamic republic. – Russia Today

Under President Trump, the U.S. has been working hard to ramp up their energy exports and in essence try to coerce both Europe and the Far East into buying their higher priced crude and LNG products.  And with America having very little else outside of agricultural and automotive products to export to the rest of the world, hitting the U.S. where it does have a surplus of goods (energy), while at the same time giving the middle finger to Washington by doing business with Iran shows that China is not afraid of America's economic and foreign policy gambit.  In addition, this move could even cause more OPEC nations to side with China by transferring over to their new oil market programs which will mean an even greater erosion of dollar hegemony.

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With physical gold demand soaring last month in India and with central banks, how long can the cartel keep prices suppressed in paper markets

12:12 PM central banks, cftc, gold, gold price, gold silver ratio, india, manipulation No Comments

Back in 1980 the Hunt Brothers helped drive up the price of silver by attempting to corner the market before the CFTC came in and changed the rules.  Now that same agency is doing the opposite by allowing the banking cartel to summarily suppress prices without intervening to stop the manipulation.

But as with all markets and asset classes artificially controlled by a small group of players (often called a Monopoly in financial terms), the consequences usually result in extremes... as seen with the silver price nearly hitting $50 per ounce 48 years ago, and today that same metal now being held down an estimated $250 - $500 below what it would be if adjusted for inflation.

Depending on the gold/silver ratio used gives a broad array of inflation adjusted silver prices. The tables below shows the currency/gold ratio and the corresponding silver price using a gold/silver ratio of 40, 25 and 15. The gold/silver ratios of 40, 25, and 15 were chosen because when the gold price equaled the currency/gold ratio in 1983 the gold/silver ratio was 38. In 1979, when the gold price equaled the currency/gold ratio, the gold/silver ratio was 23. Finally, in 1980, when the gold price was 214% higher than the gold/currency ratio the gold/silver ratio was 15. – Seeking Alpha

So with this in mind the only question that remains is, what will happen to the price when the manipulation either stops voluntarily, or is forced upon the cartel when supply reaches near zero?  And that move towards dangerously low levels of supply is coming upon us very fast.

Central banks remain noted gold buyers and there are signs of demand picking up in India, says Standard Chartered Bank. Goldprices have fallen lately, which the bank blames on U.S. dollar strength. “Physical demand will be key to tracking how solid the floor for prices is, but in the seasonally slow period for demand, it will likely be fragile,” Standard says. “The exception here is potential demand growth in Turkey amid political and economic uncertainty. In an environment lacking strong investment demand, physical demand sets the price. But not everyone is selling gold – central banks added to reserves in May, demand in India has shown signs of life, and risk reversals suggest there is some hesitant appetite to establish long positions.” Gold prices started to edge lower in May and India’s gold imports rose by 36% that month compared to April, Standard says. Imports were down 31% year-on-year. However, Standard says, “If demand does pick up significantly counter-seasonally, inventory will likely be depleted quickly, pushing local premia higher.” Meanwhile, International Monetary Fund data show that central banks continued to add to their gold reserves last month, Standard says. Russia was the largest buyer, adding 18.4 tonnes, taking year-to-date purchases to 89.5 tonnes. - Kitco

Price suppression has made retail sentiment nearly non-existent for gold or silver outside of a few countries like India and China.  But since central banks are quietly accumulating it hand over fist, to be of any real use as either a monetary reserve or to back their currencies would mean that prices must be finally allowed to rise, and eventually go to their fair market levels.

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Mueller uses meaningless indictments to continue deep state vilification of both Russia and cryptocurrencies

10:07 AM cryptocurrencies, fake news, false flag, helsinki summit, indictments, mueller, president trump, russia No Comments

Just as the timing of school shootings, false flags, and even geopolitical events occur as smoke screens in the wake of something that potentially could change the status quo (see the 'random MP knifing just days before the Brexit vote), so too does the Deep State use information drops as a means to change the focus of attention from the people prior to the birth of a new paradigm.  And thus it should not be surprising that on July 13 the Mueller led Special Council came out with new indictments against Russian actors in attempt to derail President Trump's summit with Vladimir Putin.

The DOJ announced charges against 12 Russian intelligence officers for hacking offenses during the 2016 presidential election. The indictments were announced by Deputy AG Rod Rosenstein as part of Mueller's counsel probe into potential coordination between the Trump campaign and Russia. 

The charges include conspiracy to commit an offense against the U.S., conspiracy to launder money, and aggravated identity theft - along with releasing the stolen emails on the web. 

Rosenstein said two separate Russian units of the GRU intelligence agency stole emails and information from Democrats and then disseminated it via online personas, DCLeaks and Guccifer 2.0. He also said there’s no allegation in the indictment that any American was involved in the operation. -Bloomberg

Yet what was just as fascinating is how Mueller's crew even tried to vilify cryptocurrencies by tying them in with the accused hackers.

An 11-count federal indictment filed against 12 Russian military intelligence officers alleges that the group used cryptocurrency to remain anonymous in a scheme against the Democratic National Committee and Hillary Clinton’s presidential campaign in 2016. They are accused of using these digital coins to pay for the website used to release and publicize stolen election-related documents, keeping their true identities hidden. – Digital Trends

The ironic thing in all of this is that we have already seen this form of Kubuki Theater many times before, especially just recently during the FBI IG Report hearings where the media kept it off the front page by attempting to create a non-story regarding illegal immigrant children being separated from their parents.

The fact of the matter is this... President Trump's meeting with Russian President Vladmir Putin is as great a watershed moment as was his coup that could potentially soon see peace being made on the Korean peninsula.  And what is at stake in the upcoming Summit is the end of the establishment's attempt to overthrow leaders across the Middle East, as well as an end to their fake division that the last three administrations have propagated between the East and West.

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Republican Congress takes 2012 Democratic bill and makes it law where Americans now cannot leave if they owe IRS money

7:31 AM congress, freedom, irs, passport, tax debt, taxes, travel No Comments

Back in 2012, the primarily Democrat led Congress submitted a a piece of legislation titled, Senate Bill 1813 (Highway trust fund) which would have disallowed Americans owing more than $50,000 in taxes from leaving the country.  Now it appears that the Republicans have finished this work started by their colleagues across the isle as it has recently come to light that three years ago they gave the IRS the power to confiscate your passport if you owe the government a tax debt.

Former Congressman Bob Barr notes this week : 

In an extremely troubling move three years ago, the Republican-controlled Congress handed the Internal Revenue Service the power to strip individuals of one of the most important and tangible rights possessed by American citizens – their passports. The Service is now starting to use this hammer. 

The US, of course, has long been especially contemptuous of potential emigrants, as "the United States is one of only two countries (the other being Eritrea) that taxes its citizens no matter whether they reside." This acts as a sizable disincentive to Americans looking to move abroad. 

And now, if you fail to pay taxes while living outside the US, the IRS can simply revoke your passport if you return to the states. - Mises

Ironically, the U.S. does little to enforce tax collections against corporations who have used the offshoring of their revenues to avoid paying taxes.  And this of course led to companies like Apple and GE to hold trillions of dollars outside the United States until just recently when President Trump signed into law a bill that would provide them a one time reduction in taxes for bringing it back to America.

Your taxes are primarily the collateral which allows the government to borrow debt from the central bank, and with the National Debt now above $22 trillion, Washington needs to squeeze as much blood from the American turnips as possible to allow that spigot to continue flowing.  And thus the ability to seize your passport and limit your movements is just the newest freedom Americans have lost as the government clamps down on their 'federal plantation workers'.

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The Daily Economist update for July 13 2018 - Financial Markets and Economic Wrapup

3:32 PM bernie sanders, china, disney, dollar, gold, gold standard, jim willie, stocks, thedailyeconomist, trade war, yield curve No Comments

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Trump's trade war is a necessary precursor for a return to the gold standard

1:28 PM gold standard, jim willie, president trump, reserve currency, sound money, trade deficit, trade war No Comments

In the most recent update from Dr. Jim Willie in his Hat Trick Newsletter, the well respected analyst cites three necessary steps the Trump administration must do before the United States can ever return to a system of sound money, and back to a gold standard.

The United States has three requirements in returning to the Gold Standard. They will be extremely difficult to achieve. They each serve as essential requirements in a criterion. All three are urgently needed. The challenge is formidable for the nation to remain as a leading player in the global economy. The United States stands alone in volume of national debt. Many place the blame on the social net like welfare, Social Security, and other measures. However, the biggest element is clearly the military budget, hardly for defense in the last two decades. As CEO Jack Ma of Alibaba stated so succinctly, the USGovt has spent $25 trillion on the military with nothing to show for it except decayed infra-structure and global animosity for its aggression. A major item in recent years for the deficits has been Medicare, which is full of fraud and waste. Another major item is the raft of pensions like for government service, judicial service, and military service.
 REQUIREMENTS FOR THE GOLD STANDARD 

• Eliminate the $21 trillion USGovt deficit

• Source 10,000 tonnes Gold to support the currency

• Re-industrialize to work down $600 billion trade deficit – Jim Willie via Silverdoctors

This analysis by Dr. Willie brings us to an interesting look at the President's current gambit in the realm of global trade.

Over the past two decades the U.S. has almost completely destroyed its industry by offshoring most of its manufacturing, and by signing egregious trade agreements like NAFTA and GATT.  This also means that the U.S. is primarily reliant upon imported foreign goods with the rest of the world having to be willing to accept our currency as payment.  As a result, the trade deficit between the U.S. and its trade partners has soared to over $568 billion last year, with this year already on track to being even wors than in 2017.

So it should not be surprising that Trump is holding nothing back in his demands for nations to renegotiate their trade agreements if they want to continue to transact tariff free with the United States.

Subsequently, the U.S. has little to lose in regards to its already limited exports should a trade war escalate to the levels currently being threatened by the President.  But on the flip side, they have a great deal to lose when it comes to continued control over the global reserve currency.  And in the end this may have to be the one thing America can offer on the table if they want to lessen or eliminate their one-sided trade deficit in order to be able to return to a monetary system that doesn't rob them of their wealth the moment it gets instituted.

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The Daily Economist update for July 12 2018 - Financial Markets and Economic Wrapup

1:50 PM facebook, fed, gold, gold price, millennials, nasdaq, stocks, thedailyeconomist, yield curve No Comments

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Manipulation and depression of gold price has led one of world's largest producers of gold to see 75% of mines unprofitable

9:17 AM central banks, comex, futures market, gold, gold price, manipulation, miners, output, price suppression, supply No Comments

Futures markets were never originally supposed to be arenas of speculation, where investment banks, central banks, or wealthy players could manipulate prices through the sheer volume of their trades.  No, the purpose of a futures market was supposed to allow those who needed commodities such as energy, food stuffs, and metals to buy at a fair price, and to be able to hedge their bets in case their own production outputs fell below expectations.

But sadly today, futures markets are primarily a playground for the elite, where the skimming of profits through derivatives are the status quo.  And perhaps no other market can provide the best example of this than in the gold and silver one.

Over the past several years, the Comex has facilitated the use of naked shorting to allow investment banks to manipulate and depress the price of gold and silver by selling upwards of 580 contracts for every ounce of gold they control.  But sadly for the industry itself, this widespread manipulation has led even the world's largest producer of gold to see 75% of their mines no longer profitable.

South Africa’s 140-year-old gold industry – which was once the world’s largest – is now facing a major crisis. The country’s mineral council says 75 percent of gold mines are unprofitable or barely making money. 

The announcement comes as the sector enters wage talks with its employees. Around 200 employer and employee representatives are set to start the negotiations on Wednesday. The number of work stoppages in South Africa increased by eight percent over the past two years to 132. 

Motsamai Motlhamme, head of employment relations at the council, reportedly said the parties need to "find common ground in the interest of the sustainability of our industry."Most of the world’s deepest and historically richest gold mines are clustered some 40 miles south-west of Johannesburg. The deeper they go, the more expensive and difficult the work of extracting the ore becomes. The council said the mines are old, deep, with falling grades and productivity, and rising costs. As a result the industry has lost 70,000 jobs over the past five years. The cost of extracting the gold may soon exceed its value, experts say. – Russia Today

Ironically price controls, or manipulation in the long run, tends to do exactly the opposite of what the speculators want... it evaporates supply and output and causes the price to artificially soar once even a modicum of demand returns to that market.  And with gold being such an important part of governmental and central bank reserves in our fiat currency system, once a new crisis rears its head in the financial markets, demand will come back with a flurry and prices will skyrocket to extreme levels thanks in large part to today's current price suppression policies.

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The Fed has a new solution for indicators showing recession.... just get rid of them and create new models

8:33 AM central bank, economic models, economy, fed, inflation, recession, yield curve No Comments

When it comes to the economy and state of the financial system, perception is far more important than reality for the global central banks.  And following the Fed's 'removal' of their balance sheet data from their website a couple of weeks ago, the U.S. central bank now is looking to jettison long-standing recession indicators in favor of ones that make their propaganda of a good and strong economy fit the paradigm.

The US Federal Reserve could abandon the so-called yield curve, a key macroeconomic indicator which has been used to predict recessions for many decades. This comes as this indicator is pointing to a rapidly approaching recession, while other data suggest that an economic downturn is nowhere in sight. 

Yields on longer-term and shorter-term bonds vary. During an economic boom, investors pile into higher-yielding and riskier 2-year Treasuries, boosting their face value and suppressing the yield, while longer-term yields rise. The wider the gap — the healthier the economy, Fed policymakers would say. 

As recession nears, investors scramble to safeguard their assets, and buy longer-term bonds, which are more stable. Longer-term yields drop, while short-term yields go up due to higher market volatility. The yield curve gap is narrowing — and might even start to invert. According to conventional wisdom among economists, that's a sure sign of a recession. 

This enigma has inspired Fed policymakers to start looking for a new methodology that could make recessions and other economic shocks more predictable.
"We are doing a lot of work to see what metrics are there to give us signals about weakness in the marketplace. I want to make sure we do all that we can not to miss something," Raphael Bostic, President of the Federal Reserve Bank of Atlanta, said. – Russia Today

This of course is not the first time central banks or governments have changed economic models to fit a political or financial agenda.  In fact the very same models that led Fed Chairman Paul Volker to raise interest rates to 21% in 1981 to stop Stagflation show that inflation levels now are up as high as they were back then.  But since these models have been modified and prostituted so much over the past 35 years, the Fed is acting as if inflation were only 2.5% versus the 10% or more it actually is.

The flattening yield curve that leads to an inverted yield curve is one of the most accurate indicators of an economic recession.  So perhaps it should not be surprising that the Fed wants to get rid of it in their own models, especially so Powell can be like Greenspan and Bernanke and say that he had no clue that the financial system was on the verge of collapse in 2008. 

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While Milennials are considered among the world's least skilled and literate, our Founding Fathers built a nation at their age

6:01 PM achievements, age, founding fathers, government, literacy, millennials, revolution, skills No Comments

There was an interesting dichotomy I came across recently which made me wonder just how far Americans have declined when it comes to education and application.  And by this I mean what real achievements have those aged 22-37 really accomplished for American society?

Recently a 28 year old millennial shocked the nation by defeating a long-standing politician in a district in New York by selling herself as a younger Bernie Sanders.  But ironically when asked by the media how she defined Socialism (she called herself a socialist), she didn't even have a clue what it meant to be one.

Democratic socialist Alexandria Ocasio-Cortez couldn't explain the difference between socialism and Democratic socialism while appearing on ABC's "The View" on Friday. 

"Do you think that the future of the Democratic Party is socialism?" McCain asked. 

"First of all, there's a huge difference between socialism and Democratic socialism," Ocasio-Cortez claimed. "Democratic socialism, and really what that boils down to me, is the basic belief that I believe that in a moral and wealthy America and a moral and modern America, no person should be too poor to live in this country." 

Ocasio-Cortez was unable to provide any examples of how socialism and Democratic socialism were different. – Daily Wire

Perhaps Ocasio-Cortez's failure to even define her ideology comes from the fact that in a study done by Princeton University back in 2015, the millennial generation was not only dead last globally in basic math and literacy, but also last in relation to every other American demographic.

Researchers at Princeton-based Educational Testing Service (ETS) expected it to be when they administered a test called the Program for the International Assessment of Adult Competencies (PIAAC). Sponsored by the OECD, the test was designed to measure the job skills of adults, aged 16 to 65, in 23 countries. 

When the results were analyzed by age group and nationality, ETS got a shock. It turns out, says a new report, that Millennials in the U.S. fall short when it comes to the skills employers want most: literacy (including the ability to follow simple instructions), practical math, and — hold on to your hat — a category called “problem-solving in technology-rich environments.” 

Not only do Gen Y Americans lag far behind their overseas peers by every measure, but they even score lower than other age groups of Americans. - Fortune

Now this article is not being written simply to 'bash' millennials, but to compare their generation today to a similar group from the same age bracket 250+ years ago.  And in this we are talking about a very young group of men who not only fought a war against one of the greatest empires in history, but also wrote the foundation that would evolve into the government we have today.

Did you know that many of the Founding Fathers in 1776 were younger than age 25, and even as young as age 18?

• Marquis de Lafayette, 18
• James Monroe, 18
• John Trumbull, 20
• Aaron Burr, 20
• John Marshall, 20
• Nathan Hale, 21
• Alexander Hamilton, 21**
• Betsy Ross, 24
• William Washington, 24
• James Madison, 25
• Henry Knox, 25

In fact Thomas Jefferson was only 33 years of age when he wrote the Declaration of Independence.

These 20 and 30 somethings created a nation and government that has gone on to become the most powerful and wealthy in the history of the world, yet ironically many of today's millennials are actually trying to destroy their monuments and erase them from memory.

All empires eventually fall due to the apathy, immorality, and degradation of the peoples and government within that empire.  And whether it was the eventuality of Nero succeeding Julius Caesar centuries after he built the greatness of Rome, or the ignorance and intolerance we are seeing today from a large portion of society who couldn't even tell you who the first President of the United States was if asked, the skills and abilities of America's future have declined a great deal from a time past when men and women their own age achieved greatness on a scale few have ever seen.

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The Daily Economist update for July 11 2018 - Financial Markets and Economic Wrapup

2:04 PM bonds, central banks, china, gold, gold price, ppi, president trump, thedailyeconomist, trade war No Comments

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Are Trump's Trade Wars truly aimed at China and Europe, or are they really being instituted to kill the globalists and central bankers

11:41 AM central banks, china, europe, global financial reset, north korea, president trump, russia, trade wars No Comments

The North Korea gambit provided us with a very acute insight to how President Trump operates.  On one hand he publicly insulted and vilified North Korea and their leader Kim Jung-Un, but behind the scenes he proved that this was all just Kabuki Theater for the masses since he was not only able to achieve what the last few Presidents could not in formulating a denuclearization of the peninsula, but also in potentially ending a war that had been ongoing for almost 70 years.

So with this in mind we must look well below the surface when it comes to the Trade War that President Trump has initiated across the globe, and try to determine whether his motives are truly directed at China and the European continent, or if they are really focused towards destroying the central banker dream of achieving globalism and a new world order.

Since his election campaign, President Trump has been promoting the fact that he wants the U.S. to work as partners with Russia and China, and as mentioned recently, only as competitors rather than as adversaries.  And in response to this the Deep State has initiated a commission to attempt to keep Russia vilified using the guise of election tampering, and Congress has even gone as far as forcing Trump to continue with economic sanctions.

However as the President prepares for a summit with Vladimir Putin early next week, expectations are for this to be much more than a PR stunt.  And if what took place between the U.S., South Korea, and North Korea are any indication, then agreements have already been put in place regarding Syria, NATO, and economic sanctions where all that remains is the handshakes, photo ops, and signing of said accords.

Likewise we must look deeply at the Trade War Trump has instigated with Canada, Mexico, the EU, and China and see if this too is simply a smoke screen for something much greater.

Since President Trump began his quest to strike down the current global trade system, first by backing out of TPP and then calling for a renegotiation of NAFTA, dominoes have begun falling all over the world, including on the political end in places like Italy, Spain, Germany, and the UK.  In fact since snubbing world leaders during the recent G-7 meeting, political power in Britain and Germany has come under crisis, with Chancellor Merkel on the precipice of a vote of No Confidence, and Prime Minister May seeing several cabinet members bail out on her following last weekend's failure to come to a Brexit consensus.

Interestingly as well is the fact that many central banks over the past month or two are suddenly speaking out on the potential of a global recession.  And this appears to be completely in tune with them now attempting to scapegoat Trump to hide the fact that it has been their policies over the past eight years that have brought the world to the brink of collapse.

In public (on Twitter) it may appear that the President is little more than a buffoon, even going as far as insulting enemy and ally alike to stir up the pot.  But the reality is that Trump is an incredibly shrewd and clever negotiator, and knows that for the U.S. to survive the coming financial collapse he must first work with his 'competitors' to destroy the old system (and by this we mean in trade and banking) to allow a new one based on mutual trust to emerge, and with it a return to sound money and fair trade.

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China appears to have seized control over the price of gold from the United States

10:37 AM china, comex, dollar, gold, gold price, lbma, trade war, yuan No Comments

It is starting to appear that the Exchange for Paper (EFP) scheme that is going on between the Comex and LBMA is having interesting consequences for U.S. control over the gold price.  And by this we need to look at an interesting dichotomy occurring between gold and two different currencies.

Ever since the middle of June when the gold price fell below $1300 per ounce, the dollar has gained in strength as rhetoric over a trade war with China began to heat up.  But rather than move in accordance with history, and by this we mean that gold in the past would normally have prospered under chaotic conditions, it instead began to follow a different track, and emerge almost in lockstep with the Chinese Yuan.

June saw China accelerate their currency devaluation to alleviate the effects that the oncoming trade war was having with their exports.  And what is very interesting is that as this devaluation began to take place, the price of gold began to move in that same direction with the Chinese currency.

Chinese Yuan one month chart:

Gold one month chart:

As you can see, the price movements are nearly identical over the past month.  But according to work done by Craig Hemke over at TF Metals and Sprott Money, it may also have been going on for over a year now.

Now consider this. Since the PBOC began to actively devalue the yuan versus the dollar four weeks ago, the price of COMEX gold has tracked the yuan nearly tick-for tick. 

And so, here’s where it all gets quite interesting. What are the implications of China assuming control of the global gold price and the existing physical distribution centers in London and New York? Many have long speculated that the Chinese government and the PBOC have stockpiled thousands of metric tonnes of physical gold over the past two decades. It should come as no surprise that the world’s largest holder of physical gold would want some measure of control over its price. As David pointed out in his column, “he who owns the gold sets the rules”. But to what end would China be driving price? 

By linking the dollar price of gold directly to the yuan, the PBOC has eliminated for now a level of foreign exchange risk to their gold portfolio. Have they done this to enable themselves to continue acquiring physical gold from the west at a “set price” ahead of further yuan devaluations? Is the PBOC planning for a trade war or a liquidation of their massive U.S. treasury position? Or, instead, are they planning for something much more significant? – Silver Doctors

Since the Comex can no longer provide assurances for the contracts they sell by the fact they have to transfer them en masse over to London for resolution, and the LBMA itself doesn't have the gold in its vaults to accommodate what has already become more than the world's annual mine output here in just the first six months of 2018, it appears quite probable that China has now taken control over the pricing in the gold markets, and can at any time reverse the current trend for economic or geopolitical reasons.

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The Daily Economist update for July 10 2018 - Financial Markets and Economic Wrapup

3:12 PM bond yield, bonds, border, china, flattening yield curve, immigration, mexico, silk road, stocks, thedailyeconomist No Comments

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Recession alert ahead as yield curve falls to single digit basis points for first time in 11 years

2:16 PM 10 year treasury, 30 year treasury, cnbc, flattening yield curve, inverted yield curve, recession, yield curve No Comments

You know that the flattening yield curve is finally starting to 'get real' when even CNBC is forced to talk about it.  But for those of us in the alternative financial media, the threat of a coming yield curve inversion has been on our radar for several months now.

And finally here on July 10, the spread between the 10 and 30 year Treasury bonds hit its lowest level in 11 years by dropping into single digit basis points.

10 year Bond:

30 year Bond:

Yet while the spread between the 10 and 30 years yields closed out today at 9.9 bps, the swap curve has already inverted.

Which for the economy leaves just one thing to do...

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China appears to be setting up Dubai to be the gateway to both Europe and Africa along their new Silk Road

8:36 AM china, Dubai, gold, gold backed trade note, middle east, silk road, trade, trade war No Comments

While there are countless theories as to why President Trump has helped plunge the world into a global trade war at this time, it has not stopped China from continuing their quest to rebuild the old Silk Road here in modern times.

And not unlike the Silk Road of the past, where trade was conducted freely at ports, cities, and even outposts all along a route that encompassed thousands of miles, China's new version is very similar in that they are working towards bypassing bureaucratic authorities over trade (WTO, reserve currency use, sovereign regulation) and bringing a return to a time when nations set trade agreements based on each other's respective needs, and in their own currencies.

One of the more fascinating results or consequences of the ancient Silk Road was the fact that it helped spawn the religion of Islam since its foundations arose at one of the major outposts (Jeddah/Mecca) along the trade route.

And perhaps the significance of the Middle East in the Silk Road of the past is why it appears now that China is selecting one of the region's capitals to become the gateway from the East into Europe and Africa.

Dubai's Multi Commodities Center (DMCC), the largest free trade zone in the United Arab Emirates (UAE), expects a stronger Chinese presence in its trade community, due to China's increasing influence in the world trade scene. 

"The Chinese presence and contribution to the global economy and commodities trade always surprises me," said the DMCC's Executive Chairman Ahmed Bin Sulayem during a news conference presenting DMCC in Beijing on July 9. 

DMCC is expected on July 11 to sign a memorandum with the provincial branch of China Council for the Promotion of International Trade in Hubei province, to seek deeper understanding and cooperation. 

Bin Sulayem also foresees extensive opportunities for DMCC to attract Chinese companies. 

Nearly 70 countries (and regions) are connected in some way to the Belt and Road Initiative, and he believes Dubai and DMCC could be a gateway to both Europe and Africa for Chinese companies driven by the Belt and Road Initiative to go abroad. - ECNS

Dubai is also a significant spot because they are quickly becoming one of the world's most important gold trading hubs, which is expected to become the primary currency for trade as China gears up for a future gold trade note. 

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Certain gold backed cryptocurrencies could provide the liquidity and yield of paper gold but with the security of insured physical gold ownership

8:00 AM blockchain, cryptocurrencies, gold, insurance, jinbi, kinesis, wealth protection, yield No Comments

Arguments between paper gold buyers and physical gold owners often boils down to two primary concerns.  The first is liquidity, while the second is the belief that if you don't hold it, you don't own it.

Ironically, believers in the second argument don't seem to carry over these concerns when it comes to ownership of sovereign currencies as the majority of individuals in a given country are more than happy to see their money stored in a bank, and where reliance on electronic payment systems outweighs their use of physical cash.

Yet while there is much to agree upon that governments in the past do not have a good track record in protecting one's assets (particularly gold) from confiscation or nationalization, offshoring it through a reliable corporate entity can often negate this threat.

The advent of the blockchain, along with their offspring known as cryptocurrencies, has brought about a paradigm shift where not only can someone own physical gold that is insured and outside the purview of most government intrusions, but it also eliminates the debate for owning paper gold by allowing for liquidity as well as in some cases the ability to earn a yield on their gold.

The crypto currency market has taken on many similarities to the gold market over time, so it’s a natural progression to merge these two. Mining, like that of the computers that hash the bitcoin blocks, comes from these similarities. 

However, gold lacks the ease of use plus the quick and cheap transactions of currencies that operate on the blockchain. The marriage of these two markets should create a best of both worlds scenario for holders of the Jinbi. 

Jinbi is accomplishing this concept via deals with gold productions facilities in Dubai and Switzerland. When a token is purchased, these accredited facilities produce bullion in response. This bullion is then stored securely and insured with quarterly Bureau Veritas inspections to ensure holders that their gold is safe. 

All of this is then stored and secured permanently on the Ethereum blockchain, transparently, with all the information about the bullion available at any time. 

For any real currency there needs to be a high amount of trust towards the producers for it to be worth anything at all. When faith in a market is lost the value of a currency crashes. This can be seen time and time again all around the world. Jinbi is working towards a highly secure commodity with their token so faith doesn’t need to be a part of their monetary world. 

To accommodate this need they’ve teamed up with trusted and independent parties to ensure the value of their token. 

Produits Artistiques Metaux Precieux or PAMP, out of Ticino. Switzerland, produces the world’s top bullion brand as the most trusted refiners around. At the same time, Jinba’s other gold producer, Kaloti Refinery in Dubai, have an excellent history within the industry and specialize in African produced gold. - Techbullion

In the past gold was primarily used as a store of wealth, and not intended to function as an interest or yield bearing asset like stocks, bonds, or real estate.  But there are companies coming out with a platform and model that changes this by providing a yield simply for holding and owning physical gold in a cryptocurrency model.

Kinesis attaches a highly unique and rewarding multi-faceted yield system that is incomparable to anything available in any capital market. The yield system stimulates velocity and rewards participants for this by sharing the transactional activity with all participants. - Kinesis

In the past, governments held a monopoly over gold and gold production, and thus the need to hold it physically within your grasp was a prudent and often necessary formula.  However with the introduction of the blockchain and decentralized forms of currency that are backed by multi-national gold companies not bound by the strictures of a sovereign government, the only real due diligence one needs to do is to insure that the gold backed cryptos they buy into are trustworthy and reliable, and fully insured by reputable agencies.

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The Daily Economist update for July 9 2018 - Financial Markets and Economic Wrapup

2:18 PM bitcoin, cryptocurrency, fed, gold, gold price, inflation, iran, iran deal, russia, stocks, thedailyeconomist No Comments

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June cryptocurrency report: Ethereum gains market cap while Cardano, Iota, and Neo big losers

8:54 AM bitcoin, cardano, cryptocurrencies, ethereum, iota, june, losers, market cap, winners No Comments

In the wake of nearly half of all cryptocurrencies falling below the price point of a penny per coin, the month of June saw a limited number of cryptos gain in price while an increasing number of tokens lost out.

Ethereum Classic was one of the few decent winners, seeing their market cap improve by 20% while Binance Coin also saw a more than 10% improvement in value.  However these two cryptos were dwarfed by the number of losers for last month which saw a drop of between $40 and $60 billion in overall market cap for the sector.

June Crypto Winners 

Ethereum Classic can only be considered a winner in June because it did not drop and ended the month around the same level as it started, just over $15. Against Bitcoin Ethereum Classic made 20% in June ending at 246400 satoshis. The boost came from Coinbase which announced that it will soon be supporting ETC trading on its platform. 

Binance Coin made a little over 10% in June as traders ditched their altcoins into exchange based coins or stablecoins. Starting the month at $14.15 BNB climbed to $15.65 by the end of it to be the only crypto in the top 30 to make a gain in June. 

June Crypto Losers 

Ethereum got battered in June losing 25% from $575 at the beginning to $430 at the end of the month. ETH usually does a little worse than BTC but not as badly as most of the other altcoins which have all been trounced. Over $14 billion was lost from Ethereum’s market cap as trade volume fell by 25% over the month. 

Ripple’s XRP took a 28% hit falling from $0.61 to $0.43 throughout June. News about new partnerships and development for the company and cryptocurrency has had very little effect on its price. Bitcoin Cash started June at a touch under $1,000 but plummeted to $660 by the end of it resulting in a beating of 34%. 

The over-hyped EOS mainnet launch was riddled with bugs and centralization concerns and the ensuing FUD storm caused it to crash 37% in June from $12.25 at the beginning to $7.70 at the end. It reached a low point of $7.20 in June which is almost 70% down from its all-time high of around $23 two months ago at the end of April. 

Litecoin has been in a downward spiral for months now and June has been no different. Losing 36% over the month LTC slid from $118 to $75 at the end of it reaching its lowest level since late November. Lumens had an equally bad month falling 38% from $0.29 to $0.18. Cardano fared even worse with a 45% crash from $0.22 to $0.12. ADA has consistently been the worst performing altcoin in the top ten for several months now. 

A similar 45% hit was felt by Iota as it plunged from $1.75 to $0.95 over the thirty days of June. Neo also got smashed back to November 2017 levels with a 47% fall from $53 to $28. June has been the worst month for Neo since the rebrand last year. Tron, which had a more successful mainnet launch, could not benefit from price action as it lost 42% from $0.060 to $0.035 in June. – News BTC

July has started off the month a little bit better for cryptocurrencies, with Bitcoin gaining around $450 over the past week.  However volume and sentiment for the sector as a whole has been stagnant or declining, which doesn't bode well for the asset class gaining any real momentum going forward. 

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