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?

Monday, April 30, 2018

Iran joins Venezuela in creation of a sovereign cryptocurrency to fight against dollar hegemony and future U.S. sanctions

On April 29, Iran announced the creation of a sovereign cryptocurrency intended to protect the oil producing nation from any future sanctions the U.S. may impose upon them as they prepare to rip up the Iran Deal.

In addition to this potential attack against their financial system, Iran may also use this new cryptocurrency as a means to bypass the dollar, especially with their recent entry into the Eurasian Economic Union (EEU).

Mohammad Javad Azari-Jahromi, Iran’s information, and communications technology minister said the experimental cryptocurrency is now ready, ahead of a possible return of U.S. economic sanctions. 
The Iranian cryptocurrency was jointly developed by the CBI, the state-run Post Bank, and Iran’s Information and Communications Technology (ICT) ministry. 
“Last week in a joint meeting aimed at exploring the progress of the project, it was announced that the experimental model is ready,” Azari-Jahromi said, as reported by state news agency IRNA. 
Azari Jahromi previously said the experimental Iranian cryptocurrency would be backed by assets, in the same way that gold allegedly supports the Malaysian cryptocurrency GoldX
When asked if Iran is developing its own cryptocurrency to circumvent U.S economic sanctions, Azari-Jahromi replied coyly, “All cryptocurrencies are capable of circumventing sanctions because they are not under the supervision of the U.S. financial regulatory body, and the national digital currencies are naturally capable of this.” – BTC Manager

UN children's organization wants to co-opt your CPU to mine Bitcoins for their charity scheme

UNICEF, which is a children charity arm of the United Nations, has come up with a new scheme to try to collect donations for their projects and programs.  And that scheme is to entice individuals to give up CPU time on their personal computers to mine Bitcoins for them.

UNICEF Australia wants you to fund its charitable missions using your computer’s processing power. 
The UN program that provides humanitarian and developmental assistance to children and mothers in developing nations has now launched The Hope Page, which allows the users to donate to its cause by mining cryptocurrency. 
The Hope Page uses Coinhive’s opt-in version that gives the users an option to mine Monero for the website they are visiting. 
When you’re on Hope Page, your web browser uses your computer’s processor to solve cryptocurrency algorithms. You can select how much processor power you want to donate to this task — between 20 to 80 percent. – The Next Web

As commodity backed cryptocurrencies continue to expand, it was inevitable that someone would be the first to make a Bacon Coin

Since the beginning of the year we have seen the emergence of a donut backed crypto, a coffee backed one, and now on April 30 we can add a bacon backed cryptocurrency to the ever growing list of commodity backed tokens.

Oscar Meyer has announced the creation of the Bacoin, which is a cryptocurrency backed by their industry standard for production of the breakfast meat, and which will allow token owners to exchange their crypto for real bacon products.

For nearly 100 years, Oscar Mayer has set the gold standard of bacon by providing a superior quality, great-tasting product that cooks up perfectly every time. Now Oscar Mayer is paving the way in the burgeoning cryptocurrency landscape by introducing Bacoin, the first-ever cryptocurrency backed by the gold standard of Oscar Mayer Bacon. 
Similar to other cryptocurrencies, the value of Bacoin can be volatile. However, Bacoin stands out by the fact that Bacon lovers can boost value by spreading the news via Twitter and email on OscarMayerBacoin.com. The more they share, the greater Bacoin is worth. When ready, Bacoin owners can select the best time to cash out and receive real packs of Oscar Mayer Bacon. For more details on how Bacoin works, check out this video from the architect of Bacoin, Keith Sizzle. - WLNS

Sunday, April 29, 2018

In an interesting revelation and comparison to Bitcoin by the central bank, the St. Louis Fed admits that the dollar has no real intrinsic value

If the only thing propping up the U.S. dollar is the 'full faith (confidence) and credit of the United States government', then what should one believe about out currency if a Federal Reserve regional bank admits publicly that the dollar has no real intrinsic value?

In a very enlightening revelation on April 25 by the St. Louis Fed when they attempted to compare the dollar with Bitcoin, the very first thing they attributed to both was the fact that neither had any 'intrinsic value'.

Even though bitcoin and other cryptocurrencies may seem exotic, they share some qualities with regular currency. Here are a few ways that bitcoin is like the cash you know, whether in principle or in practice. 
1. No Intrinsic Value 
Economists Aleksander Berentsen and Fabian Schär explained in a recent St. Louis Fed Review article that bitcoin units have no intrinsic value. In economic terms, something lacking intrinsic value means it has no value of its own. But as the authors noted, “[s]tate monopoly currencies, such as the U.S. dollar, the euro, and the Swiss franc, have no intrinsic value either.” – St. Louis Fed
Ironically, no currency in the world has any real intrinsic value, and relies solely upon the ability of a government to enforce, coerce, or dupe people into believing that it can act in the stead of real money.

In the end, all fiat currencies eventually decline to their true value which is zero.  And how long will the current game last for the dollar in this capacity, especially since more and more countries begin ditching it as a global reserve and medium of exchange?

Over the past 100 years the purchasing power of gold today is nearly three times greater than the dollar when modified for inflation

Many people have seen the charts that show the fact that ever since the U.S. adopted a private central bank back in 1913, the purchasing power of the dollar has lost between 96 and 98% of its value 104 years later.


Meanwhile, there has only been one asset that has not only held its purchasing power over that time, but in fact appears to have exceeded the global reserve currency by a rate of 267%.  And that asset of course is gold.

If you were to hold $1,000,000 in U.S. currency in 1913 at the advent of the Federal Reserve, your purchasing power would have been exactly what you held in cash.  And this was primarily because the dollar was tied to gold at the moment of the central bank's introduction to the monetary system.

Also in 1913, gold was valued at $20.67.  So $1,000,000 in gold would equate to owning 48,379 ounces.

Fast forward to 2017.

Because of the fact that the dollar began to devalue almost immediately after the Federal Reserve was created, the Bureau of Labor Statistics has estimated that the average amount of inflation per year comes out to 3.13%.  So if we were to take this number and engineer it into a purchasing power model, the amount of dollars one would need today to have the same purchasing power they did in 1913 would be:

1913:  $1,000,000
2017:  $24,725,858


Now let's take a look at gold, and what its purchasing power would be if you had held $1,000,000 in bullion rather than dollars/Federal Reserve notes.

1913:  48,279 ounces at $20.67 = $1,000,000
2017:  48,270 ounces at $1324  (Today's currency gold spot price) = $64,054,184

So not only did gold hold onto its purchasing power in relation to the dollar over the past 104 years, but it actually provides you 267% more.

In fact this amount of purchasing power for gold is probably even lower than it should be due to the fact that the gold price is manipulated and suppressed in the paper markets that currently determines the spot price.

So in the end, perhaps those that vilify gold under the auspices that it doesn't provide a 'yield' like stocks and bonds do never actually look at the fact that gold is money, and is better comparable to purchasing power versus accumulation.  Because you would need 24 times the amount of dollars you had in 1913 to buy the same amount of goods, but you wouldn't even have to have acquired a single additional ounce to be able to purchase nearly 3 times the amount of goods over that same period of time.

Saturday, April 28, 2018

Return of the NINJA loans? Fannie once again lowers borrowing standards to help keep housing bubble from popping

During the first housing bubble phenomenon in the U.S., lending standards become so distorted that mortgage companies and Fannie Mae were willing to provide money to anyone who had a heartbeat.  In fact one of these types of lending programs became known as NINJA loans (No income, No job).

And now that the second housing bubble appears to be starting to deflate around the country, mortgage lenders once again are willing to do anything to keep the good times going, including lowering down payments to a paltry 3%, and looking the other way on an individual's income.

WTF?!
It's been a while since the US made a wholesale push to get more cash and income-strapped households into the ever more unaffordable American dream of owning a house, three years to be exact, which is when nationalized housing agency Freddie Mac last rolled out a conventional mortgage that only required a 3% down payment for certain borrowers. 
The problem is that what modest requirement the mortgage program had back in 2015, meant that most Americans who needed access would be excluded. The program, which as we described at the time was designed for qualified (that being the key word) low-and moderate-income borrowers - i.e., Millennials - saw limited progress over the last few years, with FHFA Director Mel Watt telling Congress last year that Freddie’s 3% down program (along with a similar one from Fannie Mae) was continuing to grow. 
It just wasn't growing fast enough, because while putting 3% down may not have been especially challenging for most Americans, having even the modest income required to go along with it, was. 
So fast forward to last week, when Freddie Mac announced on Thursday it was about to supercharge its 3% down program and launch a widespread expansion of the offering, when it announced that it is rolling out a new conventional 3% down payment option for qualified first-time homebuyers, - effectively the same as the 2015 program... with one small difference: there would be no geographic restrictions; more importantly there no longer will be any income restrictions. - Zerohedge


STO's could replace ICO's as cryptocurrency sector transforms into tokens that are backed by stocks and company earnings

With Initial Coin Offerings (ICOs) being the primary means of implementing a new cryptocurrency, regulators around the world have been focusing on them as a means to control or disrupt the crypto sector.  So with this in mind, a new form of cryptocurrency offerings are emerging which are dedicated not specifically to resources (like gold, coffee, or diamonds), but instead to equities (stocks) and company earnings.

Welcome to the era of Security Token Offerings (STOs).

In an ICO, coins or tokens are put up for sale as a form of crowdfunding. Instead of voting rights or dividends that come with shares of a company, "utility tokens" promise access to a network, platform or service. But they're often backed by an abstract idea, or nothing at all. 
The process has facilitated the rise of cryptocurrencies like Dogecoin, a Shiba Inu dog meme-turned-cryptocurrency that has a passionate following on sites such as Reddit. Whoppercoin, Pandacoin, Trumpcoin and PutinCoin have also raised money through initial coin offerings. 
Similarly, in a security token offering, you can buy coins or tokens. But unlike in many ICOs, these tokens must be backed by something tangible, such as assets, profits or revenue of the company. They act almost exactly like a share of a company but are "programmable," to do things like conduct proxy voting, because they're built on blockchain technology, according to one expert. 
"You can program a token, but a static share certificate just sits there and collects dust," said Trevor Koverko, CEO of Polymath, a platform that helps people launch securities tokens. - CNBC
Sadly for investors, this program seems like a virtual scam since if a company already provides dividends to owners of their primary stock, then adding in a token process will only dilute those proceeds.  And if a company does not have a dividend program, then they risk investors simply bypassing the purchasing of their shares in order to benefit from dividends paid to token holders only.


U.S. financial system so adverse to gold that they are shipping all mine production overseas to Hong Kong

Besides leasing programs, price suppression through the futures markets, and a mainstream media that vilifies gold at every turn, the U.S. financial system has gone all in for believing that gold will never have a place in monetary system.  And in a new report from SRS Rocco on April 28, it appears that we are even shipping all of our own mine output to China.

The U.S. gold exports to Hong Kong surged in February consuming nearly all of the domestic gold mine supply.  According to the USGS recent Gold Mineral Industry Survey, February gold exports to Hong Kong more than doubled compared to the prior month.  This was an interesting increase in gold demand from Hong Kong as the market price increased slightly month over month. 
Not only did gold exports to Hong Kong jump, but total U.S. gold exports also increased 40% from 36.1 metric tons (mt) in January to 50.4 mt in February.  The top three countries that received the majority of U.S. gold exports were Hong Kong (15.5 mt), the United Kingdom (12.1 mt) and Switzerland (11.7 mt). – SRS Rocco via Silver Doctors
Perhaps the biggest irony in all of this is that a Congressman from West Virginia has submitted a bill to once again back our currency with physical gold, but if we are shipping it offshore as fast as we mine it, how would we have any gold to back this legislation? 

Friday, April 27, 2018

The Daily Economist update for April 27 2018 - Financial markets and economics wrapup


Thursday, April 26, 2018

U.S. economy along with the Fed desperately hoping on higher oil price so that returning Petrodollars will keep markets going

As bond markets in the West show signs that foreigners no longer want dollar denominated assets, an interesting thing is occurring that may just provide short-term salvation to economies that desperately need an infusion of liquidity.  And this surprising catalyst is the sudden rising of oil prices and the return of Petrodollar flows.

The recent surge in oil prices is poised to boost global assets as crude-producing states deploy replenished stashes of petrodollars, according to a growing chorus of analysts. 
It’s the potential reversal of part of the global "quantitative tightening" that was said to have occurred as oil prices dropped precipitously, and could amount to an extra shot of liquidity at a time when central banks are beginning to normalize monetary policy. 
"The increase in oil prices is generating a shift in flows and incomes across the world, effectively reversing the previous big shift seen between 2014 and 2016," wrote JPMorgan Chase & Co. analysts led by Nikolaos Panigirtzoglou. They estimate that energy producers stretching from the Middle East to Norway saw their oil-related revenues plunge from $1.6 trillion in 2014 -- when crude reached $115/bbl -- to less than $800 billion in 2016, when it fell to $27. 
The drop in oil-related proceeds roiled global markets by cutting off producers’ demand for imported goods and curtailing the ability of big sovereign wealth funds and central banks to buy foreign assets. Those funds and FX reserve managers may have purchased $160 billion less in public stocks and $80 billion less of bonds as a result of the slump in crude during the two year-period, JPMorgan said in research published on April 20. – World Oil
With central banks having to switch over from Quantitative Easing to Quantitative Tightening due to the fact that half a decade of lower oil prices have forced them to have to print tens of trillions of dollars to sustain a modicum of liquidity to stave off deflation, markets are cheering the return of higher oil while at the same time it becomes a Damocles Sword over consumers who are fully tapped out, and in more debt today than during the 2008 financial crisis. 

Bitcoin Milestone: 17th million Bitcoin could be mined as early as today which also means production costs will continue to grow exponentially

It is ironic that as more and more Bitcoin miners came online last year than ever before, the amount of cryptocurrency mined has actually declined year over year.  And as the next milestone for Bitcoin comes upon the markets, perhaps even as early as today, the result will mean that extracting the cryptocurrency will exponentially get harder, and much more expensive.

17th Million Bitcoin watch:

Barring an unforeseen event, the 17 millionth bitcoin is likely to be mined in the coming day, data from Blockchain.info shows, a development that would mark yet another milestone for the world's first cryptocurrency. That's because as per bitcoin's current rules, only 21 million bitcoin can ever be created. 
Stepping back, the milestone, the first million-bitcoin marker to be crossed since mid-2016, is perhaps noteworthy as yet another reminder of the technology's core computer science achievement - digital scarcity created and enabled by shared software. – Coin Desk
However as noted above, an article we published just a few days ago shows that Bitcoin miners now need a minimum of $8600 per coin just to break even.  And with each subsequent coin being harder and harder to mine, this break even cost will only get higher.

Gold's favorite historical catalysts of inflation and higher oil prices appear to be signalling that higher metal prices may be just around the corner

While it is a given that price suppression and manipulation in the gold and silver markets is a fact of life, it is also correct to say that central and bullion banks cannot keep prices down forever.  And most often the biggest catalyst for gold moving higher is a rush by investors into the metal as a safe haven asset.

Which is why today it is more important to watch fundamental indicators in the markets more than it is to study technical trends.  And with the 10 year Treasury closing above 3% yesterday, and oil prices starting to break out of a six year bear market, the return of inflation appears to be very real, and is historically the launching pad for investors to suddenly rediscover gold as a primary safe haven.

When gold prices are high, major mining companies scramble for new discoveries.
Eventually when they start mining those deposits, though, the supply of gold increases, pushing prices down. 
As the price falls, the miners’ profit margins fall, which causes investors to lose interest and the miners to reduce production. 
This causes supply to fall, prices to increase, and the cycle starts all over again.
In a way it’s almost comical. And that brings us to today. Well, technically yesterday. 
We’ve been seeing for more than a year that interest rates have been rising. 
Yesterday afternoon the yield on the 10-year US Treasury note surpassed 3% for the first time since 2014. 
And oil prices have been rising steadily as well. 
Financial markets don’t like this combination– it means that inflation is coming. Big time. And stocks plummeted worldwide as a result. 
Now, that immediate reaction was probably a bit too panicky. 
But the deep concern that inflation is coming (or has already arrived) is completely valid.
Inflation is a HUGE problem. And the traditional hedge in times of inflation is GOLD. 
But remember– new gold discoveries have collapsed in the past 15 years. 
And, as Lassonde said above, there are few discoveries on the horizon to make up the difference. – Sovereign Man




Wednesday, April 25, 2018

The Daily Economist update for April 25 2018 - Financial market and economic wrapup


Interview with The Daily Coin regarding the the online Populist Movement and on my new book, A journey Distilled: The Narrow Road to Enlightenment

Below is an interview I did yesterday with Rory Hall of The Daily Coin regarding the frequency shifts that the world is experiencing today in politics, economics, and spirituality, and also on my new book, A Journey Distilled: The Narrow Road to Enlightenment.


The Book is about a process every believer in Christ needs to take in order to forge and create a lasting and intimate relationship with God.  It is about the steps one must take to change their 'old self' into the 'New Man' that Christ talked about, and where the church has failed in their first estate of training discipleship in new believers.

You can get a softback here at The Book Patch, or the E-Book over at Amazon.




Universal Basic Income, like Socialism, appears to only work until you run out of other people's money

It was the former Prime Minister of Britain who once said, 'Socialism works until you run out of other people's money'.  And ironically this appears to also be the case for the world's first Universal Basic Income experiment as the nation of Finland has decided to scrap the program just two years after implementation.

With high-profile champions such as Richard Branson, Facebook boss Mark Zuckerberg, and Tesla CEO Elon Musk, backing the idea of governments giving non-working people money (from working people) to do nothing - what could go wrong? 
Well, two years after enthusiastically beginning its experiment with a universal basic income - in which people are paid an unconditional salary by the state instead of benefits - Finland is abandoning the project as government enthusiasm wanes and additional funding requests are rejected. 
Proponents argue that: 
  • The lack of expensive means-testing leads to a higher proportion of the budget going to recipients. This would be more efficient
  • The transparency of universal payments would drastically reduce the need to detect benefits fraud
  • One scheme could replace the current complex arrangement of government benefits, rebates and tax rebates
  • Work will always benefit recipients of this welfare, rather than the ‘benefits trap’ that leaves part-time workers
Critics argue that: 
  • Universal income may be inflationary and, in attempting to move all individuals out of poverty, it may simply raise the level of the poverty line
  • It may reduce the incentive to work and studies have found some evidence to support this 
  • A reduction in taxable income would reduce the government’s ability to cover other expenses, such as healthcare -  Zerohedge

Forget tracking tech company stocks, Nasdaq now preparing to also become a cryptocurrency exchange

It appears that cryptocurrencies have truly become a viable asset class as on April 25, the CEO of Nasdaq announced in an interview that they were in the process of wanting to open their trading platform up to also become a cryptocurrency exchange.

Speaking to CNBC this morning, CEO Adena Friedman extolled the virtues of cryptocurrencies and said that the long-standing equity platform for tech stocks could also soon be trading in Bitcoin and other cryptocurrencies.

Once the space matures, Nasdaq is open to becoming a platform for trading cryptocurrencies like bitcoin, according to the company's CEO. 
"Certainly Nasdaq would consider becoming a crypto exchange over time," Nasdaq CEO Adena Friedman told CNBC's Squawk BoxWednesday. "If we do look at it and say 'it's time, people are ready for a more regulated market,' for something that provides a fair experience for investors." - CNBC
Nasdaq's pursuit of becoming a major hub for crypto trading follows recent commentary made by officials at the New York Stock Exchange who said that more Americans trust in Bitcoin than they do in the Federal Reserve.

As we near the end of the week, is today's down move for Bitcoin once again due to Friday's CME expiration date?

Going back to its origination on Dec. 17, every single time over the past three months that Bitcoin's CME futures contract came up for expiration, the price was summarily pushed lower leading into expiration.  And with the cryptocurrency having experienced two straight weeks of gains here in April for the first time in three months, was today's beatdown of the price below $9000 once again due to Friday's upcoming contract expiration?

No obvious catalyst for the big drop this morning - aside from perhaps Chinese police seizing mining equipment in Tianjin - but Bitcoin Cash is plunging and Bitcoin is back below $9,000 as the entire crypto space is getting hit... - Zerohedge

Tuesday, April 24, 2018

Recent moves in cryptocurrencies have once again brought the sector's market cap back above $400 billion

It is a very true axiom in the cryptocurrency sector that a rising tide lifts all boats.  And the recent moves up by Bitcoin in particular have raised the overall market cap for the cryptocurrency market back above $400 billion.

The bitcoin price has surged to $9,200 over the past 24 hours by recording an increase of around $400. It successfully maintained its momentum in the $9,000 region, which investors perceive as an important level that could lead the bitcoin price to enter the $10,000 in the short-term. 
Today, on April 24, some of the best performing altcoins include ICON (ICX), Ethos (BQX), EOS, and Kyber Network (KNC). All of these ERC20 tokens have recorded more than 10 percent gains against bitcoin which also recorded a solid gain of its own at around 3 percent. 
ICON’s daily trading volume has reached 15,500 BTC, with around 50 percent of that coming from the world’s largest cryptocurrency exchange Binance and the other 50 percent from South Korean cryptocurrency trading platforms Bithumb and Upbit. - CCN

China gets into the gold backed cryptocurrency game with two of their mining companies signing agreement with Macau Blockchain entity

A Macau blockchain company has signed a new agreement with two Chinese miners to backstop their gold backed cryptocurrency with physical metal.

Macau Quantum Gold Blockchain Technology Limited is looking to do what most cryptocurrencies have been unable to do, and that is act as an accepted crypto in China and across other parts of Asia.

Local company Macau Quantum Gold Blockchain Technology Limited announced this Tuesday that it has entered into an agreement with two Chinese mining groups to back its gold-value based cryptocurrency. 
The company registered in the Macau SAR last year developed and issued a cryptocurrency named ‘Quantum Gold Token’ (QTG Token), with the token value being backed by physical gold reserves. Shanghai-based mining group Zenda Gold Mining Co. was described as the largest partner, with the second being a smaller private company. Both companies manage mines in Africa. 
“Every time we get a mine partner our value will go up. We are not targeting an explosive increase; we are aiming at a stable price […]. In the future we will be able to collaborate with other gold industries such as jewellery” the company founder, Steve Pang, told Macau News Agency (MNA). – Macau Business

Cryptocurrency pump and dump? Bitcoin Cash miners destroying tokens to pump up price

When it comes to the 'Wild West' that is the cryptocurrency sector, never be fooled that fraud doesn't occur as much if not more than in the controlled manipulated markets of sovereign governments.  And in a new report out on April 24, it appears that one of the miners for the cryptocurrency Bitcoin Cash is purposely 'burning' (destroying) tokens it mines in order to cause the price to rise by artificially limiting supply.

The cryptocurrency market is hot again after more than three months of losses. The rally leader is bitcoin cash, which has more than doubled in price in April. 
The reason for the rise of bitcoin cash is reportedly that one of the largest mining groups, Antpool, has been “burning” the bitcoin cash coins it created to solve the mathematical problems in the network and also cut the supply, thus propping up the price. 
"Antpool has burned $12 worth” of bitcoin cash a day, Kyle Samani, managing partner at crypto hedge fund Multicoin Capital told Bloomberg. "This was purely a PR game so they could say ‘reducing supply.’” 
Another analyst says that it is hard to keep up projects such as bitcoin cash, and miners are burning the crypto-cash just to keep it going. – Russia Today

Russia accepts Iran into the EEU while also extending oil for goods program meant to bypass the dollar

On April 24, Russia's Prime Minister Dmitry Medvedev announced that they had accepted Iran's proposal to join the Eurasian Economic Union (EEU).  And this comes just a few days after Russia extended a program with the Middle Eastern power to facilitate their year old oil for goods trade which was created so that Iran could completely bypass the dollar.

Russian Prime Minister Dmitry Medvedev has approved a draft interim agreement establishing free-trade zone between the Russia-led Eurasian Economic Union (EEU) and Iran. 
The corresponding order was published on Tuesday on the website of the Russian government. The agreement provides for the formation of a free-trade zone for certain goods and is subject to ratification, as it contains rules different from those stipulated by the Russian law. 
Talks between the two countries on a free-trade deal started three years ago but were repeatedly postponed. According to Russian Energy Minister Aleksandr Novak, who is also co-head of the Russian-Iranian Intergovernmental Commission, the agreement “will obviously trigger further development of our bilateral trade and expansion of investment cooperation.”Russia Today
With Iran, Qatar, and Venezuela all conducting oil trading outside the dollar, and Saudi Arabia on the cusp of being willing to sell their oil to China in Yuan rather than the global reserve, the next big step towards ending the Petrodollar system appears to be in play as trade in goods and commodities outside of just energy is beginning to ramp up.

Monday, April 23, 2018

The Daily Economist update for April 23 2018 - Financial Markets and Economic Wrapup


Even as the manipulation continues, so too is inflation and it is making the inevitable fair value price for gold and silver even higher

Gold and silver investors know that the price will not truly move to their fair value levels until central and bullion bank manipulation stops, or the world enacts a global reset.  And while the powers that be over the banking system continue to be able to suppress the price in daily trading, what they cannot control is inflation and the inevitable explosion that will occur when the true value for gold and silver one day comes.

Just as the central banks were able to suppress the price back in 1980 when it had climbed from $35 per ounce to just under $850 (2400%) in less than a decade, so too did gold move in equivalent leaps between 2002 and 2011 ($240 - $1950) when they were unable to control the market following the 2008 financial crash.

Now however the environment is much different, and besides the tens of trillions of dollars in money printing that has taken place not just in the U.S. but around the world, global debt has reached a point where it is now 3.25 times annual GDP.  And like in the 1970's when the central banks could no longer control the inflation that emerged following money's removal from the gold standard, one day soon the inflation created from QE (money printing) will skyrocket gold and silver the same way it did in the 1970's and early 2000's.

So what should the real value of gold and silver be today if inflation were allowed to freely manifest itself in the global economy?  Long time and well respected analyst Egon Von Greyerz has done the research and the numbers point to $16,450 gold and $761 silver.

Today at $1,350, gold is as unloved and undervalued as it was when we bought in 2002 at $300. On an real inflation adjusted basis gold at $1,350 today is at the same level as in 2002. (see chart below) and also at a 300 year low. The 1980 gold peak at $850, adjusted for inflation, would be $16,450 in today’s money – 12x higher than currently. That price is more in line with our own targets.


Silver is even more undervalued. On the same inflation adjusted basis, silver is also at a 300 year low. At $17.20 today, inflation adjusted silver is the same as in 2000 at around $4. And the 1980 silver high of $50 would today be $761 – a 44x increase from here. - Silver Doctors

Unlike stocks today, gold and silver are truly a buy and hold investment.  And if you think they do not hold any real value or significance in the global financial system, just ask Russia, China, Germany, Austria, Holland, and Turkey what they feel as they continue to either accumulate more gold, or have it repatriated into their vaults.

Once the powers that be lose control over their debt and credit monster that they created following the 2008 financial crisis, gold and silver will in a very short amount of time recoil from the years it has been suppressed and manipulated.  And if history is any example (1980 and 2011), then the above price projections may actually be low, meaning gold and silver are both right now two of the best valued investments in history.

The Vampire Squid (Goldman Sachs) makes ready to try to become masters of the cryptocurrency universe

"Oh look!  The police have themselves an RV." - Die Hard

Similar to how JP Morgan's CEO Jamie Dimon tried to deceive the markets on what the bank thought of Bitcoin and other cryptocurrencies by vilifying them in public and buying them in private, Goldman Sachs' Lloyd Blankfein too was following in those same footsteps when he repeatedly tried to discount the asset class through the media.

But inevitably the truth always comes out and with Goldman's hiring of Justin Schmidt as their new head of their digital asset market desk, the Vampire Squid appears set to try to become the new masters of the Bitcoin universe.

Four months after we reported that Goldman Sachs is preparing to launch a cryptocurrency trading desk, an announcement which coincided with bitcoin trading near its all time highs just shy of $20,000, the bank announced that in its first official expansion to this (r)evolutionary new venture, Goldman has hired Justin Schmidt as head of digital asset markets to help it navigate client interest in trading bitcoin and other crypto assets, and to allow clients gain exposure to cryptocurrencies. 
Schmidt, 38, joined the securities division in New York as a VP and head of digital asset markets, said bank spokeswoman Tiffany Galvin-Cohen. He previously worked at quantitative trading firms Seven Eight Capital LLC and WorldQuant LLC and has computer science degrees from the Massachusetts Institute of Technology, according to his LinkedIn profile.- Zerohedge
Goldman already had exposure into cryptos as earlier this year they dipped their toes into the cryptocurrencies waters by having one of their partners (CIRCLE) enter into the sector as a cryptocurrency exchange.

Iran officially dumps the dollar to move onto the Euro standard

As more and more nations work towards divesting their financial systems of dollars... either through gold repatriation, selling of treasury reserves, or via bi-lateral trade agreements, the less power Washington is able to hold over these countries.  And now it appears that Iran may be at the point where economic sanctions imposed against them are for all intents and purposes moot as they have officially dumped the dollar for the Euro standard.

As part of its years-long effort to reduce reliance on US currency amid a deepening standoff with Washington, Tehran has announced it will start reporting foreign currency amounts in euros rather than dollars. 
The governor of Iran’s central bank (CBI) Valiollah Seif said that Supreme Leader Ayatollah Ali Khamenei had welcomed his suggestion of replacing the dollar with the euro in foreign trade, as the “dollar has no place in our transactions today.” The new policy could reportedly encourage government bodies and firms linked to the state to increase their use of the euro at the expense of the American currency. 
France will start offering euro-denominated credits to Iranian buyers of its goods later this year to keep its trade out of the reach of US sanctions, said the head of state-owned French investment bank Bpifrance. – Russia Today
Iran is the third nation to either fully or in part remove itself from the long-standing Petrodollar system.  And as America's influence in the Middle East continues to wane, coupled with China's new Yuan-denominated oil futures market, it is only a matter of time before the Petrodollar standard completely ceases to exist, and the U.S. loses its ability to use dollar hegemony as a weapon in its foreign policies.

Sunday, April 22, 2018

New analysis suggests that Bitcoin miners need a price of at least $8600 to be profitable

It is perhaps fortunate that Bitcoin has seen a resurgence in price this week because a new study done by Wall Street analysts suggests that the new cost of mining a single Bitcoin has ballooned to over $8600.

Mining bitcoin, the world's largest cryptocurrency by market capitalization, is not as profitable as once thought, according to one team of analysts on the Street who views this as a negative headwind for the price of the volatile digital asset.  
If bitcoin fails to break past $8,600 soon, analysts at Morgan Stanley expect cryptocurrency mining demand to fall significantly, weighing on component makers who have received a boost from the high-growth business amid the crypto frenzy, including Asian chipmaker Taiwan Semiconductor 
At a price of $8,507 at 4:37 p.m. UTC, BTC reflects an approximate 57% fall from highs reached near $20,000 in December, and a near 600% gain over the most recent 12 months. The digital coin's stellar run, compared to the benchmark S&P 500's 13.4% gain over a year, led many once on the sidelines to get into crypto investing due to fear of missing out on the next big thing in tech. While initial coin offerings (ICOs) in 2018 have already raked in more money than the entirety of last year, fears of heightened regulation on the red-hot cryptocurrency markets has put bitcoin's rally to a halt and drove a series of sell-offs this year. - Investopedia
Of course the cost of electricity and server farms to mine Bitcoin and other cryptocurrencies isn't the only pitfall being seen for this industry.  Accelerating taxation on local grids have even caused a few municipalities to ban mining rigs since it was causing the city to have to buy extra electricity at higher costs for their regular citizens.

Ironically, the future of cryptocurrencies do not appear to be tied to the need to mine said cryptos since most incoming ICO's simply sell a set amount of their tokens during their initial offering and then later increase the supply at future intervals.  This of course negates the perceived benefits that cryptocurrencies often promote in their ability to bypass inflationary moves, but in the end this became a fallacy when the cost of mining increased almost to the point where it is now becoming exponential.

Did the Feds pressure Coinbase to cut off Wikileaks from using their exchange?

An interesting thing occurred this week in the cryptocurrency sector that begs one to ask the question of whether the U.S. based exchange Coinbase is now being coerced into becoming a tool for Federal agencies.  And the reason for this is that Coinbase suddenly, and with little notice, cut off Wikileaks from using their exchange for cryptocurrency services.

This hasn't been the best week for WikiLeaks, to put it mildly. Coinbase has shut off the WikiLeaks Shop's account for allegedly violating the cryptocurrency exchange's terms of service. In other words, the leak site just lost its existing means of converting payments like bitcoin into conventional money. While Coinbase didn't give a specific reason (it declines to comment on specific accounts), it pointed to its legal requirement to honor "regulatory compliance mechanisms" under the US' Financial Crimes Enforcement Network. 
This doesn't prevent WikiLeaks from accepting cryptocurrency, but it will have to scramble to find an alternative if it wants to continue taking digital money from customers buying shirts and coffee cups. Unsurprisingly, the organization is less than thrilled -- it's calling for a "global blockade" of Coinbase, claiming that the exchange is reacting to a "concealed influence." - Engadget
The U.S. government has already put strong regulatory pressures on Coinbase to disclose trading activities on its exchange so that agencies such as the IRS can attempt to track down tax evaders.  And of course the so-called 'War on Terror' allows the Feds to intercede in any business or operation under the guise that they might aiding in the facilitation of money laundering or 'funding terrorism'.

While there is not yet any provable evidence that the Federal Government is involved in this action by Coinbase to cut off Wikileaks from using its services for cryptocurrency donations and product purchases, it is too much of a coincidence that this attack against Wikileaks comes just days after the New York Attorney General started an investigation into crypto exchanges.

Following the end of tax season, Bitcoin breaks four month trend and experiences two straight weeks of gains

It has been quite a while since Bitcoin was able to break out of a series of ranges that lead up to April 17 and the end of tax season the United States.  However since that time the cryptocurrency has done something the sector hasn't seen for nearly four months...

Two straight weeks of gains.

Bitcoin bulls are celebrating the virtues of the biggest cryptocurrency again.
The digital coin gained as much as 4 percent Friday, putting it on pace for its first back-to-back week of gains this year. The mini-rally is helping to ease the pain from the more than 50 percent loss in the first quarter that followed last year’s 1,400 percent surge. 
The increase has bought the gains over the two-week period to almost 29 percent. Other crypto tokens rallied Friday, with Ripple jumping as much as 19 percent, Ethereum climbing 7.5 percent and Litecoin adding 4 percent. - Bloomberg
What will be of interest in the coming days for Bitcoin is its price movement later in the week as the next CME Futures contract expiration comes due.

Friday, April 20, 2018

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


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

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

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

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

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

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

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

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

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

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

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

Thursday, April 19, 2018

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

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

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

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

How quickly the cryptocurrency sphere is evolving.

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

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

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


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

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

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

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

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

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

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

10 year U.S. Treasury:


30 year U.S. Treasury:


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

Wednesday, April 18, 2018

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


Gold's consolidation above $1340 setting up for strong second quarter as weaker dollar and rising inflation bode well for metal

Gold rose sharply higher this morning to move above the $1350 level and validate its recent consolidation in the $1340's.  And now some analysts are forecasting that this consolidation will bode well for the yellow metal's prospects in the second quarter as dollar weakness continues and bond markets point towards rising inflation.

The second quarter expects to see another gold rally pushed by strong physical demand and the weaker US dollar, according to Boris Mikanikrezai, precious and base metals strategist at Metal Bulletin. 
“The resilience of gold prices in spite of the substantial wave of speculative selling since mid-March (~71 tones, corresponding to a 17 percent drop in net long spec positions) is encouraging insofar as it suggests the presence of buying pressure elsewhere in the market, e.g. physical demand,” the analyst wrote in his weekly report for Seeking Alpha. 
According to Mikanikrezai, exchange-traded fund (ETF) buying interest for gold is at its strongest since September 2017. “Once bullish speculative sentiment toward gold resumes, I expect a strong price reaction. I have a long position in IAU (iShares Gold Trust), expecting a fresh 2018 high in Q2,” the strategist said. 
The industry expert sees a weaker dollar and lower US real rates in the coming months on the back of three main drivers, with the US Federal Reserve the primary driver. Mikanikrezai expects “a dovish hiking cycle” in the next few months based on “[the] Federal Open Market Committee’s patience to see inflation moving back first toward its target of two percent.” 
Inflation is seen as the second driver pushing gold higher, with an expansionary path projected to move further, boosted by strong oil and a tight labor market. The third boosting element for the yellow metal is the US deficit rising due to this year’s fiscal stimulus. – Russia Today