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Showing posts with label capital controls. Show all posts
Showing posts with label capital controls. Show all posts

Tuesday, April 18, 2017

Venezuela is the new Greece as Maduro forced to sell gold and give up oil assets to deal with debts

At least with Hugo Chavez, the former Venezuelan President understood that gold was an important reserve to help hedge against the nation's declining oil revenues following the Great Recession.  But unfortunately for the people of Venezuela, the individual who followed him into power after Chavez's mysterious death is as ignorant about finance and economics as anyone can be.

But hey, what would you expect from a former bus driver?

Not counting the currency debasement that President Maduro has created which has led to more than a year's worth of hyperinflation from his socialist policies and capital controls, the Venezuelan dictator also chose to lease the very gold his predecessor had returned to the country.  But as things have continued to spiral downward, Maduro is being forced to sell it outright just to get some hard currency to at least pay the military as civil unrest reaches epic proportions.

Image result for maduro hyperinflation
It was almost exactly two years ago when a cash-strapped Venezuela quietly conducted its first, little-noticed gold-for-cash swap with Citigroup, as part of which Maduro converted part of his nation's gold reserves into at least $1 billion in cash courtesy of the US bank. As Reuters reported then, the motive was simple: convert $1 billion of the country's gold into much needed dollars to fund imports and keep the economy from sinking. However, instead of selling the gold outright, a move which would have been met with a firestorm of protests from political opponents and allies alike, leased it to Citi instead. 
Specifically, Venezuela provided 1.4 million troy ounces of gold to Citi in exchange for cash. And while Venezuela would have to pay interest on the funds, it got the key benefit of being able to maintain the gold as part of its foreign currency reserves. After all, the gold was "merely rehypothecated", if only on paper, the actual physical gold would be transferred to an unknown vault of Citi's choosing where it would become an asset effectively controlled by the bailed out US ban (there was a brief scare last July when Citi warned it would close the account of the Venezuela Central Bank, which prompted us to ask if Citigroup was about to confiscate $1 billion in Venezuela gold). 
While it is still unknown if Citi did in fact confiscate a substantial chunk of Venezuela's sovereign gold, what is worth noting is that even just two years ago, Venezuela was in far better economic and social shape than it is currently, which ultimately prompted Maduro's choice of picking a swap instead of an outright sale of the country's gold. Now, however, with hyperinflation rampant, with daily protests, many of which turn violent and deadly, and with the opposition set to unleash the "mother of all protests" on Wednesday even as Maduro has ordered the army to take to the streets, the president has far fewer qualms about preserving even the illusion of stability at this point. What he does need, however, is access to dollars, be it to pay Venezuela's creditors, provide funds to the cash strapped state-owned energy company PDVSA, or simply to pay the army which is the only thing keeping the nation away from a revolution, and Maduro from facing a deadly endgame. 
Which is why Maduro is about to do what he did two years ago, only on a vastly greater scale, and perhaps simply sell Venezuela's gold outright. - Zerohedge
However, this news isn't the only economic calamity for Maduro to hit the wires today as Russia has chosen to seize a Venezuelan oil tanker to use as collateral for the $30 million the nation owes in delinquent port fees.

It is estimated that Venezuela has some of the largest oil reserves in the world, as well as untapped minerals that could save the country from its monetary hell.  But with Hugo Chavez having nationalized (stolen) corporate property and equipment from foreign entities several years ago, Venezuela no longer has the skills, resources, or cash to produce their way out of debt, and thus the Bus Driver in Chief is left with little options but to sell the nation's gold just so he can stay in power a little bit longer.

Tuesday, March 21, 2017

As European countries rush headlong towards the cashless society, the Swiss still consider cash to be king

Like with most central bankers and politicians, their justifications for nearly any new monetary agenda is steeped in the foundation of imposing greater controls over people, and removing their freedoms to conduct commerce as they see fit.  And perhaps no greater example of this can be seen in the global movement to ban cash, and usher everyone into a completely digital society.

Several European countries like Sweden, Norway and Denmark are already well on their way towards the banning of physical cash, and many other EU nations have imposed capital controls disallowing the use of cash in large transactions.  And even the advent of crypto-currencies has helped spawn the idea of a cashless Africa, with nations like South Africa and Rawanda working hard towards forcing everyone onto a digital banking model.

But one country is remaining defiant in the wake of this global move to take away physical currency from the hands of the people, and that nation is the one who's history is steeped in banking, and the right of individuals to do with their money as they see fit.

Image result for cash is king no cashless society
When it comes to cash and its future, Swiss authorities seem to have a totally opposite view to that of their Indian counterparts -- for them cash is "more reliable" and enjoys a low opportunity cost. 
Among other benefits over cashless payments, cash provides "more effective budget control" and can be used without any technical know-how, while it also offers a comprehensive protection with regard to financial privacy, a top official of Swiss National bank (SNB) has said. 
Amid a debate on future of cash globally and the ambitious demonetisation move carried out by India, SNB's deputy head Fritz Zurbruegg said there remains a continuing robust demand for cash among general public and banknotes are like the country's 'calling cards' in case of Switzerland. - India Times
The truth of the matter is, the recent push for a cashless society has little to do with convenience, and more with the failed banks and central banks who have leveraged their monetary systems to the point of insolvency.  And they believe that their last chance at survival is to eliminate the one factor that keeps them from expanding money supplies even more through a digital system, and that is the anchor of physical cash and the fear that individuals could bankrupt them in a day if they called for a run on their institutions.

If politicians and establishment economists really wanted to 'stop' money laundering, and the funding of drug cartels or terrorism, then all they would need to do is shutdown or nationalize the banks themselves for they are the ones who are committing this avenue of crime.  But since the West has almost completely merged into a fascist state, where governments and corporations act as one in their own common interests, then that leaves the people who have done nothing wrong to become their scapegoats, and this means that their agenda is really dedicated towards taking away our money so that they can take their fraud and theft to even greater and higher levels.

Saturday, March 18, 2017

Bitcoin crashes down to near $1000 as China sets new parameters to monitor identities of users

As we have mentioned numerous times in previous articles here at The Daily Economist, Bitcoin's primary kryptonite is not in the digital currency itself, but in the third parties that would seek to manipulate its original scope for their own benefits.

By this I refer to the supplemental constructs that have emerged to help facilitate Bitcoin use such as with currency exchanges, or the introduction of capital controls by sovereign entities that countermand the crypto-currencies benefits of transparency and security.

Recently Bitcoin has experienced massive volatility over the past couple of months, intrinsically tied to one of the above mechanisms.   First there was a price spike due to Chinese investors using the crypto-currency as a way to get their wealth out of the Yuan and into something else, and this was then followed by a just as severe a drop in price when the Chinese government halted their local Bitcoin exchanges because the facilities were re-hypothicating customer accounts for pooled transactions.

A few weeks later the price once again soared to a new all-time in the speculation that the SEC might approve of a Bitcoin ETF that would financialize the digital currency on U.S. exchanges.

And now on March 18, the newest intrusion on Bitcoin has emerged when the Chinese government announced they were instituting identity monitoring to their Bitcoin exchanges which in part led to the crypto-currency falling more than $100 USD.

China's central bank is moving to regulate its domestic bitcoin industry, circulating new guidelines that, if enacted, would require exchanges to identify clients and adhere to banking regulations. 
Recent scrutiny by the central bank has already led exchanges to impose trading fees and suspend withdrawals of bitcoin from their platforms. Chinese investors have fled the market. 
A draft of the guidelines says Chinese bitcoin exchanges would be subject to current banking and anti-money-laundering laws, and required to collect information to identify their clients, according to people familiar with the matter. They say the rules, if implemented, would require exchanges to install systems for collecting and reporting suspicious trading activity to authorities. The People's Bank of China would be in charge of handling violations by the exchanges. - Marketwatch

Friday, February 3, 2017

India's next monetary restriction is to limit the amount of cash allowed for transactions

The world's seventh largest economy has suddenly become a petri dish for monetary experimentation towards the end goal of bringing about a cashless society.

Beginning in November of last year, Prime Minister Modi banned the two largest denominations of their currency, causing utter havoc as 1.3 billion people scrambled to exchange their bills before a December 15th deadline.  This move was then quickly followed by capital controls which only allowed individuals to take out the equivalent of $60 per day from their bank accounts.

Then earlier this week the Modi government began compiling a study to create a universal basic income for every citizen in the country.  This of course would force everyone, even the several hundred million who don't have access to the internet, to become part of a cashless financial system.

And finally on Feb. 1 a member of Modi's finance office submitted a proposal that would make it illegal for individuals to use cash for purchases and transactions larger than the equivalent of $4500.

Image result for no rupees for you
India's war against black money has led to several new policies and orders of late, one of which was announced by Finance Minister Arun Jaitley on Wednesday in his Union Budget presentation in the Parliament. 
The country has banned all cash transactions above Rs 300,000 (roughly $4,500) from April 1. 
This move follows last year's ban on high-value currency notes that had sucked in 86% of the cash in circulation and sent India's 1.3 billion people into a collective frenzy. - AOL Finance

Saturday, January 7, 2017

War on cash in Greece, Australia, India, China, and Venezuela opening door for need to have gold and Bitcoin

2016 was the year where economic 'experts' dropped hints in newspaper op-ed's and university white papers on how governments needed to eliminate cash to sustain the debt bubbles central banks had created through their absurd monetary policies following the 2008 financial crisis.  And while many individuals pushed off the idea of banning physical cash as hyperbole and 'ivory tower' nonsense, by the end of the year at least three countries had begun testing this option, with two more implementing capital controls to achieve the same thing here in early 2017.

Image result for war on cash

In late November, India's Prime Minister Modi issued a sudden mandate where the largest two denominations of currency were being completely absolved, and that the people had until December 15 to turn in their bank notes for new script.  This led to an economic revolt where most people tried to exchange their money for gold or gold jewelry, shooting up the price in some cases to around $3600 per ounce.

This move in India was soon followed by the country of Venezuela, where President Maduro called for the elimination of the $100 Bolivar note to try to keep the Venezuelan people from using their near worthless money to buy food and other goods from neighboring Columbia.

Yet the questions one has to ask are, were these moves independent of one another, or were these nations being used as test cases to see how the public would react to restrictions on owning and using cash?

If we put these inquiries on the back shelf for the moment to look at two other nations instituting restrictions on cash through differing forms of capital controls, the most important focus should be on the reactions of the people to their governments restricting their ability to do as they please with their money, and in what assets they are moving into to escape those restrictions.

That answer of course is the movement of wealth into both gold and Bitcoin.

Image result for gold and bitcoin

In the case of India, people looked towards their long-standing tradition of physical gold, and helped created shortages as they lost nearly all confidence in their fiat money itself.  But over in China, where the government instituted capital controls restricting the offshoring of money in an attempt to counteract growing liquidity problems in their banking system, investors and individuals looked to Bitcoin as the quickest and most liquid way of transferring their Yuan into some other currency or asset outside their borders.

Heading into the second week of the new year, two additional countries are preparing to join in the war on cash and put their own peoples to the test on whether they will accept the elimination of cash, or if they will rebel en masse to this loss of economic freedom.  And for both Greeks and Australians, the coming days will see what their reactions will be and if they too will seek solace in alternative forms of money, or if they will simply accept the inevitable and quietly cede their personal sovereignty to function under a digital system run at the political whims of their governments.

Wednesday, January 4, 2017

Bitcoin price could surpass gold in dollars by the end of the week

As the price of Bitcoin crushed through the $1100 resistance level with great gusto last evening, it appears to only be a matter of time before the crypto-currency reaches and surpasses its all-time high of $1165.

But perhaps what is even more astonishing is that Bitcoin is now only $20 from equaling the dollar price for gold, which currently stands at the same all-time high price that Bitcoin achieved back in 2013.
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Bitcoin prices are up $100 on the day, having already shot past the $1,100 mark. 
Markets have risen nearly 10% over the course of the day’s trading, according to data from the CoinDesk Bitcoin Price Index (BPI), which hit a high of $1,141 at time of writing before falling back. 
With the move, global exchange averages have inched closer to the BPI's all-time high of $1,165.89, set on 30th November, 2013, leaving them roughly $25 below that level. 
The digital currency's price appreciated sharply after crossing the $1,100 line, quickly spiking to a high of $1,129.28, before meeting some resistance. - Coindesk
This anomaly in price between gold and Bitcoin is centered around a two-fold dichotomy, where manipulation of one is much easier for the banks to accomplish since they can do so simply by dumping thousands of bogus paper contracts.  And at the other end of the spectrum is the ongoing global currency crisis that is occurring from Venezuela to China, making it much easier for individuals and investors to move their money around using Bitcoin rather than through purchasing gold or silver and trying to utilize them as a medium of exchange.

While there may some short-term resistance for Bitcoin to reach and surpass its all-time high price of $1165, the chances are very good we could see this happen before the market close on Friday in Asia.  But either way, with Bitcoin, gold, or silver, all three have quickly become the money of choice for people seeking to protect themselves from the cash bans, capital controls, and overall destruction of the sovereign money they primarily use.

Sunday, January 1, 2017

India's next step in war on cash is confiscation of physical assets like gold, silver, and real estate

In December India's Prime Minister implemented a new program to both eliminate high currency denominations, and to go after consumers who use cash outside their banking system.  This of course led to financial turmoil in a nation that conducts 98% of of its transactions in cash, and where less than 36% of the population has a bank account.

In response to the banning of certain denominations of currency, many Indians rushed into exchanging their cash for physical assets such as gold, jewelry, and even silver, and according to India's Finance Minister on Dec. 30, this is the next thing the government will go after now that physical Rupees have been limited in their economy.

As the government takes stock of the black money post demonetisation, its mulling the next step now. The focus is set to be on tracking down 'black wealth' or the illegal money pumped in real estate, gold and silver. 
Minister of State for Finance Santosh Gangwar while speaking to India Today disclosed that noose will tighten around tax evasion routes in physical assets. 
"We are doing crackdown on banks as we are getting information. Black money has a face, people can pump it in real estate, buy gold or silver. We will be stopping it," Gangwar said. 
Already, the government has amended the benami property act to detect the money laundering the real estate. Benami Transaction (Prohitibion) Amendment Act 2016 that came into effect on November 1. It aims at checking illegal money parked by tax evaders in property that is registered under multiple owners. 
"When PM was campaigning for Lok Sabha he had black money on the agenda, that's what he has delivered now and we will take it further," the minister added. 
Currently PAN card is required for selling gold, silver and jewellery over Rs 2 lakh. Since demonetisation, I-T sleuths have been keeping a hawk eye vigil at jewellers and bullion traders to track fake 'gold sale' for routing denotified currency. - India Today
The Indian government labels 'black wealth' as any asset or transaction that is done outside the banking system, and outside the government's ability to track and tax the exchange.

India won't be the only country in the coming days to usher in severe capital controls that restrict the ownership of cash and gold, or allow individuals to transact outside the nation's financial system, as just last week the EU began construction of new restrictions regarding the purchase of assets like gold from outside the Eurozone.

As the world rushes headlong into new currency, debt, and insolvency crises, governments will continue to crack down on the people's ability to choose whether they want to function in their collapsing systems.  And with so many options available now such as Bitcoin, Paypal, Goldmoney, Karatbars, etc... to both store your wealth and transact outside of banks, the coming year may see an even greater acceleration of capital controls by government's as they strive to protect their own dying platforms at the expense of the people and their money.

Friday, November 25, 2016

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

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

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

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

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

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


Saturday, November 19, 2016

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

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

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

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

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

Wednesday, November 16, 2016

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

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

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

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

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

Sunday, October 16, 2016

The only real option if you offshore your money is to keep it in gold

If you take into consideration all the extreme monetary policies and capital controls instituted by governments and central banks over the past six years you would come to the realization that offshoring some or a large portion of your wealth is no longer a luxury, but a necessity.  But in many of these controls that several governments have created to try to monitor, tax, and even confiscate one's wealth if they try to protect it from devaluation, the only real option is to transfer it into some form of asset that is outside the banking system.

And more than any other facility possible, that option is gold.

Under current U.S reporting laws, if you own gold offshore in an individual name, it is not a requirement that you report it to either the IRS or the U.S Treasury. However, if the title of the gold is held in the name of a legal entity, it must be reported but if it is held in your offshore account, it is reportable. So, owning and holding gold in an offshore account is completely legal. 
There are several reasons why people use offshore accounts to own and store gold. These include offshore confidentiality, protection, tax planning, privacy, and investment diversification among other things. A carefully planned and executed offshore account can assist you with each of the areas mentioned above. By transferring your gold to an offshore account, you are also protecting your asset to the fullest extent. 
It is easy to have some or all of your gold in an offshore account waiting for you when you need it. If in the event of a price movement you want to sell it, you can always hire a local lawyer and instruct them to act on your behalf. Considering that many countries, especially those in Asia, view gold as something in demand or money, it is often easy to sell and fetch better prices in Asian countries. 
If you choose to store your gold in a private vault facility, you also add a unique layer of privacy to your asset. This is because precious metals held in non-bank facilities, and more so gold, are not subject to government reporting. From Switzerland and Singapore to Austria and Hong Kong, there are many gold storage facilities in these privacy-friendly countries. - SMHPA
The financial system stands on the cusp of its next great crisis, with several banks this week forecasting collapse in multiple markets and infrastructures.  And whether it is in Germany with Deutsche Bank, Italy with their faltering banks, or the realization that the Fed, ECB, and Bank of Japan are out of options, the threat of bank bail-ins are now very real, as is the institution of even greater capital controls that will limit your ability to protect your wealth in the very near future.

Friday, September 30, 2016

If the rich aren't willing to store their gold in banks, then why should you trust them either?

Following the 2008 financial crisis the United States began a form a capital controls to try to keep individuals, businesses, and trusts from moving their wealth offshore.  And one of their primary controls is through a law known as FATCA, which gave the IRS a modicum of authority backed by SWIFT to find out all personal accounts and information held in foreign banks by American citizens.

But as we saw in the Panama Papers scandal earlier this year, what is meant as restrictions for 'little people' is barely a bump in the road for the elite and super wealthy who have access to alternatives that the 99% do not.  And one of these alternatives is the ability to offshore their wealth into special private vaults that are outside the touch of the U.S. government, and which may hold thousands of tons of gold outside the banking system.

For decades, Switzerland had a reputation for bank secrecy that made it the most sought after tax haven for billionaires from around the globe.  But, after more than 80 years of secrecy, a series of bilateral agreements with countries around the world, including America’s Foreign Account Tax Compliance Act (FATCA), have forced the private-banking industry in Switzerland to embrace an entirely new era of transparency that requires a full exchange of tax-relevant information with more than a hundred countries. 
Which, as Bloomberg points out, has been a huge boon for Swiss operators of private vaults which are not subject to the same transparency and reporting requirements as banks.  In fact, these super-secret, privately operated storage facilities buried around the Swiss Alps can basically store anything from anybody because they're not even required to report suspicious activity to Switzerland's Money Laundering Reporting Office.  
“There is growth in gold,” Wipfli says. “Since 2008 there has been a real interest in alternatives to bank deposits.” The company explicitly taps into that demand. Swiss Data Safe “is independent from the banking system and any other organization or interest group,” according to a PowerPoint presentation Wipfli shows clients. The company and its anonymous rival aren’t regulated by the Swiss financial-services regulator Finma. 
Nor do such companies have to report suspicious activity to Switzerland’s Money Laundering Reporting Office.In the past, submissions to the agency have led the Swiss attorney general to open investigations into corruption at FIFA, the global soccer body, and banking ties to Brazil’s Petrobras bribery scandal. 
Moreover, American citizens aren’t required under FATCA to declare gold stored outside of financial institutions either.  So perhaps it's no surprise that, according to the Swiss defense department, of the roughly 1,000 former military bunkers still in existence across Switzerland, several hundred of them have been sold to private individuals who are now operating them as private storage sites for the gold stash of the world's wealthiest of billionaires. - Zerohedge
The elites know that they cannot trust holding their wealth in a bank, and often go to extraordinary lengths to ensure it remains outside the hands of governments, regulators, and law enforcement.  So if the rich do not trust the banks to hold their money and assets, then why should you?

Sunday, August 14, 2016

India to start tracking cash purchases of gold by its citizens

India's central government is implementing a new policy to deter citizens from purchasing gold using cash.

Under the guise of stopping 'black market' gold purchasing, jewelers are now being required to document cash purchases of gold by anyone, and not to allow annual purchases using cash of over Rs 2 lakh, which is around $3000 U.S. dollars.

Every gold purchase+ made through cash will now have to be tracked by jewellers, irrespective of the bill size, as part of the central government's drive against black money. 
Jewellers are to keep track of the total cash purchase+ made by a customer's during the year, to check if it exceeds the threshold limit of Rs 2 lakh. What's more, the income tax department will keep a close tab on each jeweller to see if any such purchase is going unreported. 
According to current rules, a jewellery buyer will have to produce PAN card+ only when the purchase is over Rs 2 lakh+ . But PAN card is not mandatory for purchases below Rs 2 lakh. "This has led to scopes for a section of people who keep purchase below Rs 2 lakh to avoid any surveillance. Instead of buying gold in bulk, they go for repeated cash purchases and much of it gets unnoticed," said Priyabrata Pramanik, additional director (Income Tax, intelligence and criminal investigation). Such incidents of evading regulatory radar has prompted the central government to ask jewellers to be more proactive. - Times of India
India has been using capital controls such as these to put pressure on its people to deter gold buying in lieu of alternative consumer spending using the Rupee currency.  This of course has led to a massive black market smuggling operation to try to bring more gold into the country.

Gold is the enemy to fiat currencies and the current global financial system which has allowed governments to expand monetary supplies far beyond fiscally responsible levels.  And the biggest fear to central banks today is that people will suddenly awaken to their schemes of quantitative easing and negative interest rates, and decide to rush headlong into the metal causing a financial collapse that would not only destroy most global currencies, but also bring down governments that rely upon infinite money printing to protect their establishment, and keep themselves in power.

Monday, February 29, 2016

It didn’t take long for Japanese citizens to rush to get their money out of their banks thanks to NIRP

If the world ever wanted to see in real time what people do when their government puts a tax on their savings, then all they need to do is take a look at Japan now that their central bank has implemented a negative interest rate policy (NIRP).  Because just weeks after the Bank of Japan’s (BOJ) head Kuroda announced the new policy out of thin air, runs to get cash out of banks have begun in earnest, with sales of personal safes exploding across the country and people stacking them with millions of 10,000 yen currency bills.
NIRP is a draconian tax on anyone with money in a bank account, or paper investment account, and is done in the attempt to force the spending of money whether the people want to do this or not.

Read more on this article here...

Sunday, January 17, 2016

Venezuela in crisis: Oil nation put into 60 day state of economic emergency

Last week we focused on Canada, and the economic crises that has exploded across that country due to low oil prices, and massive debts created in the building of a housing bubble.  And with markets crashing all across the world over the first 17 days of 2016, the situation in another oil producing country is also dissolving into economic crisis.
On Jan. 15, Venezuelan President Nicolas Maduro declared a 60 day state of economic emergency for the South American nation in what appears on the surface to be an escalation of capital controls that have already destroyed their economy for almost a decade.

Read more on this article here...

Sunday, November 29, 2015

Congress tries again to sneak in bill to take away your passport if you owe on taxes

Back in 2012, Congress began integrating new restrictions and capital controls on the American people in an attempt to keep wealth from fleeing across borders and out of the U.S. banking system.  During that legislative session, the Senate voted on a rider in the Highway appropriations bill numbered 1813, to restrict any confiscate any American’s passport from those who owed $50,000 or more in tax obligations.  This legislation was eventually killed in the house three years ago, but on Nov. 20 it is being brought up again in this year’s same appropriation bill.
passport
Titled, Developing a Reliable and Innovative Vision for the Economy Act, this bill contains numerous pork projects that go beyond simply funding America’s highway system, and like most appropriation bills submitted by Congress, contains a combination of taxpayer waste and removal of civil rights, similar to how the NDAA was pushed through a few years ago in a Defense appropriations bill.
Read more on this article here...

Friday, November 6, 2015

Got Karatbars? Chinese using Bitcoin as conduit to buy more gold and to get out of paper money

Over the past month, the crypto-currency known as Bitcoin has seen a massive spike in price in relation to the dollar, and to other currencies.  But while many in the alternative economy pin their hopes that this move is a confirmation that the world is jumping on board the Bitcoin bandwagon, the truth is a bit more complex.

Since the Chinese government clamped down on speculators by issuing a number of capital controls since late July, many investors in the Far Eastern country have found it difficult to dispense of their paper based assets in a controlled fashion.  And by this, to get their money out of China and into assets that are protected from the government through the buying of foreign property and even physical gold.

Their solution?  Use Bitcoin to launder their Yuan into another currency so that they can use that to buy more gold.


In August, bitcoin fell to a low for 2015 near $200 amid turmoil in the Chinese and global stock markets.  But bitcoin transaction volume has been growing. Blockchain.info data shows that unique bitcoin wallet addresses—which are how users manage and trade bitcoin—are at an all-time high.  
Some have multiple bitcoin addresses, but such a spike suggests there are new users as well. 
Most bitcoin experts once again see Chinese demand as key.  As China has been devaluing its currency, the yuan, throughout the year and the Chinese are aware of the growing risks posed to the yuan and indeed the dollar and other fiat currencies. 
Also, their recent experience of the stock market crash has made bitcoin and, of course, gold more attractive again. Hence the surge in demand for gold in China again. China’s gold buying rose 7.83% year on year to 814 tons in the first three quarters, industry data from the China Gold Association (CGA) showed yesterday. 
Bitcoin is an easy way for people to swap out of yuan. Goldman Sachs analysts estimated earlier this year that 80% of bitcoin volume is exchanged in and out of the Chinese yuan. Once converted to bitcoin, the owners can then swap back into other fiat currencies and indeed, physical gold. - Goldcore
The fascinating dichotomy going on right now is that while the price and value of Bitcoin is increasing, and more than doubling from its August lows, the price of gold in dollars has been crucified, and as of today, pushed down below $1100 for the first time in months.  This arbitrage from Yuan to Bitcoin to Gold will only tighten the already short supply of gold in the markets, and lead the world into the eventual showdown that will wrest control from the corrupt Western banks that have manipulated the price to the point that there are now more than 290 paper claims for every single ounce of gold in the Comex markets.  (Comex uses this market to determine global gold prices)


And while the Chinese people are seeking new ways to offshore their money, and to get it into something of real value, for the rest of the world, the majority of the global population outside of China is not in Bitcoin, and few have any real desire to be a part of the crypto-currency revolution.  Yet at the same time many of these people have come to the realization that the paper fiat system of money and banking is dying, and that they need to find a way to protect themselves from the coming policies of negative interest rates, the banning of cash, and potential bail-ins that are all now par for the course when the next financial crisis finally hits.

So what alternatives do those of us have if we don't have millions of dollars, and access to platforms like Bitcoin to convert our dollar based assets into something more tangible?

The solution may be in a company called Karatbars




Buying gold through Karatbars is one of the easiest things on the net.  In fact, the business model of Karatbars is to sell gold in affordable quantities, such as 1, 2.5, and 5 gram increments, and allow customers to get into the metal without having to shell out $1200+ for a single ounce coin.

And as added perks to signing up with Karatbars, as a customer or affiliate, Karatbars is working on a new e-wallet system that functions just like an offshore bank account, and is outside the authority of the banking system.  From there, you can take your fiat currency in any denomination... dollars, euros, yen, etc... and purchase physical gold which can either be delivered directly to you, or stored for free at one of Karatbar's vaults.

Additionally, any gold that you buy can easily be sold back to Karatbars, or any metals dealer, and if with Karatbars it is then exchanged for currency that is uploaded to you through a pre-loaded debit Mastercard which is connected directly to your e-wallet.  And as we know, MasterCard is recognized in nearly every country around the world, and usable in any currency that accepts it.

But perhaps the best feature with Karatbars is their affiliate program, where you can earn money off commissions from getting others to sign up and become a customer or affiliate.  Not only do you receive commissions from their purchasing of physical gold, but you also earn commissions from anyone who buys a commission package, with that money going directly into your debit MasterCard when you have enough units to cycle.

Imagine the ability to earn the money in which to buy your gold savings simply by purchasing a commission affiliate package one time, and then getting others to sign up and do the same thing.

How many businesses or entrepreneurs can build an infinite business with spending less than $400 of their own money?  And there is never a mandatory requirement to buy beyond what you desire, on your own schedule.  And there is nothing to lose, because you're using money (paper dollars) to buy gold (physical money) and in the end you don't lose a thing.


The global financial system, along with dozens of respected economists, are telling us that now is the time for the end of our current form of money, and the beginning of the transition into a new monetary system that is expected to be backed by gold.  And with banks, governments, and even Harvard professors mandating that central banks have no choice but to eliminate cash from usage by the people to stave off collapse, will you wait until it is too late to make a decision on how you will protect your wealth, and be able to function within the coming new monetary system?

To learn more about Karatbars, you can contact the individual who sent you this article, and click on their referral link to open a free account and begin buying, or building your own gold savings or business with the company of the future.

Wednesday, October 14, 2015

Following Greek elections, government imposes new capital controls on public workers and retirees

Less than three weeks ago, the people of Greece willingly voted to keep the Syriza party in power, despite the fact they had to know that this would mean further austerity measures already crushing the economy after five years of such measures.  But for those who chose to take one taskmaster (austerity) in exchange for another (default), the consequences of this choice is now beginning to emerge.
Civil servants, or those working for the government, along with retirees receiving pensions will now experience a program of capital controls which will limit their ability to withdrawal large amounts of cash from banks or ATMS.  In fact, this new policy will only affect public workers and retirees as regular citizens will be able to withdrawal greater amounts than what is being proscribed to civil servants.

Read more on this article here...

Thursday, October 8, 2015

Increase in bank ATM fees is just another way to wean Americans off cash

Despite the fact that since 2008, where banks have had almost unlimited access to ‘free money’ through the Federal Reserve’s discount window, their balance sheets have been short liquid capital since most of this borrowing has been used to build a network of paper assets and derivatives.  And because of policies that now see very little cash being kept on hand in local bank branches to support customer needs, commercial banks have returned to instituting massive numbers of customer fees that were once removed a decade ago during a time when banks were in fierce competition to signup new depositors.
And one fee in particular, and which has a greater agenda than just providing extra income to financial institutions, is the increasing of ATM fees for non-bank customers.

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Sunday, September 13, 2015

Capital controls are springing up that question your traveling with gold or silver

The well known offshore economist Doug Casey discovered some new and disturbing things lately while travelling throughout the boundaries of South and Central America.  In fact, what occurred during his trips through customs in a number of countries appears to be a growing trend for anyone who might be needing to travel with their wealth on their persons if stored in the form of gold and silver coins.
These events that Casey shared on in his most recent publication are in regards to what appears to now be de facto capital controls that mandate officials not only question, but also investigate anyone carrying physical gold and silver on their person, or in their luggage when they cross over from one country into another.

Read more on this article here...