The Israel Deception

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

Tuesday, May 9, 2017

China to challenge both the LBMA and Comex through the creation of a new gold and silver futures trading platform

The London Metals Exchange, which is a Hong Kong owned subsidiary out of London, is ready to take on the Western futures markets by introducing their own gold and silver trading platform starting on July 10.

This new program by the LME will function on the London markets and provide a fully functional futures trading market in which investors can settle for both cash, or physical gold and silver delivery.

London Metal Exchange, a subsidiary of Hong Kong Exchanges and Clearing, will launch gold and silver spot and futures trading in London on July 10 in a bid to capture the increasing demand for trading of precious metals in London, the exchange said on Monday. 
The LME gold and silver product will launch at a time when HKEX is planning to introduce gold futures in the third quarter of this year should it secure approval from the Securities and Futures Commission. The trading in the two markets however, would remain separate, and there will be no cross trading. 
“The HKEX and the LME gold products would be traded in different markets and different time zone,” said Kate Eded, LME head of precious metals who was speaking at a workshop in Hong Kong on Monday. 
The gold and silver contracts to be launched at the LME would be traded in US dollar which will include spot trading and trading of future contracts with a maturity of up to five years. Investors could choose cash or physical settlement. Five banks including Morgan Stanley and Goldman Sachs would help quote prices to maintain liquidity of the markets. - South China Morning Post
Unlike the LBMA, and especially with the U.S. based Comex, these markets are primarily used for derivative paper trading and rarely perform any actual metal deliveries.  And with the LME being tied to both Hong Kong and London, the potential for China to eventually usurp control over the global price for gold and silver from the LBMA and the Comex moves another step closer as true metals investors will find it more favorable to migrate to an exchange that deals with physical deliveries of actual metals.

Monday, May 8, 2017

Money psychology: Is Bitcoin price already too high for desirability as a currency?

The advent of Bitcoin, as well as rise of the blockchain and its growing number of different crypto-currencies, is bringing forth a great debate on whether these constructs of digital money are the wave of the future for consumers, savers, and investors.

But there are a few very interesting things that are bing missed by most individuals in the Bitcoin eco-sphere, and these are the psychology of money, and the fact that as Bitcoin has now crossed over $1600 per coin, and is being forecast to possibly go as high as $4000 by the end of the year, has the crypto-currency priced itself out of the general market?  And perhaps even more, has it already destroyed its psychological value to individuals as a viable form of money?

A layman's definition of what money is can be determined as this:  An idea backed by confidence.  And for something to be considered a medium of exchange (money) it must have the intrinsic properties that all monies have (store of value, divisible, fungible, portable, etc...), but it also must have the confidence, be it forced (by government), or voluntarily accepted (by critical mass of consumers and retailers), to act as a recognized medium of exchange.

Thus as the price of Bitcoin in dollars as well as other currencies skyrockets due to speculation and investor sentiment, the question that has to be asked is whether or not Bitcoin has priced itself out of the ability to become an accepted currency, simply by the fact that the majority of individuals today can only afford to purchase fractions of the currency, rather than whole Bitcoin's themselves.

Picture this.  A person has $20 they can afford to use to purchase Bitcoin, so they create a digital wallet and go through an exchange to buy some of the crypto-currency.  Now this individual understands the basics of monetary division when it comes to dollars as they have used quarters, dimes, nickles, and pennies for nearly all of their lives.

But at today's price, $20 will buy that individual only .0125 of a Bitcoin, which in physical terms would equate to a penny and a quarter of a penny.  So psychologically, that individual has exchanged $20 for a penny.


Now of course in the crypto-currency realm .0125% of a Bitcoin is not valued at one cent, but you can see the psychology of this as people used to dealing in round numbers and limited fractions in their money now have to go outside the box to try to come to the understanding that it will be unlikely they will ever own a single full Bitcoin since more than half of Americans alone cannot even afford to pay $500 if a sudden emergency required them to come up with those funds in addition to their normal budget.

Then of course there is the reality that the amount of retailers who deal in Bitcoin is still quite limited, and the marketing of Bitcoin as a viable medium of exchange in the mainstream is almost negligible.  And also the fact remains that if people don't see Bitcoin promoted in the mainstream media, or shown in some viable application from the commercial advertising they are programmed to trust, then Bitcoin, as well as other crypto-currencies, will remain as fringe ideas and concepts, or as simply a construct traded in financial markets under the guise of a speculative investment.

Saturday, May 6, 2017

Paper gold leverage over 500/1 in order to protect dollar and trillions in derivatives

For those who either invest, trade, or save in precious metals, the past month has not been kind to the value of their holdings.  And in fact, sentiment against gold and silver ownership because of the volatile price swings has really been forged over the course of about six years going back to 2011 when each were crushed by manipulation when they were sitting at their all-time highs.

But to understand the gold market one must understand how its price is tied not to the physical metal itself, but to paper derivatives traded daily on the Comex.  And more importantly, why both the futures market and the regulators allow the bullion banks to sell contracts in which they do not have the actual gold to backstop these trades.

In essence it comes down to two simple and desperate needs... the first is to protect the dollar, and the second is to protect the trillions of dollars worth of derivatives held by the banks which would result in the complete implosion of the Western banking system.

As you can see in the 10-year chart of the dollar below, in 2011 the reserve currency was on the brink of collapsing as it fell below 73 and the last maginot line of support.


And like in 1980 when trust in the dollar was at a previous crossroads, gold and silver were the few assets that individuals could go to for protection against inflation and the collapsing currency.

Former Fed Chairman Paul Volker stated after he saved the dollar by raising interest rates to over 20% in 1981 that the one thing he wished he had done in his process was to manipulate the gold and silver price.  And that lesson was carried over to 2011 when the Fed formulated a program to manipulate and control the price of gold in tandem with their programs of QE which would introduce 10's of trillions of dollars into the monetary system.


Fast forward to 2017.

Unlike from 1980 to around 2002, when the price of gold remained relatively low in the mid-200's due to the exuberance of the Dot Com stock market frenzy and the lack of sentiment in the precious metals, gold demand since 2008 has remained fairly strong and fairly constant, requiring the bullion banks at the behest of the Fed to continuously push down the price using derivatives and naked shorts.  But in doing so what they have also done is create a leverage so vast that according to well respected metals analyst Andrew Maguire, that leverage is now at 500/1 paper contracts to every physical ounce.
As an example, at the BIS (Bank for International Settlements) opex expiry at 3pm UK time on the 30th of April, it was clear by the footprints that they were grossly offside on trillions of dollars worth of derivative positions which they were forced to defend. Anyone doubting that officially transacted BIS gold derivatives exceed $1 trillion, need look no further than their agent banks’ OCC positioning and add this to the Reserve Bank of India’s estimation that there is 92/1 leverage. However, this conservative estimate does note include related derivatives which estimate leverage to be (a staggering) 500/1. - King World News
Owning physical gold and silver is not a short-term trade scenario, but protection for your wealth over a long period of time when the natural cycle of booms and busts, or the collapse of a currency via inflation or loss of confidence, reaches its inevitable outcome.  And just like the way cheap money has artificially propped up stocks, bonds, housing, and other assets, when they eventually break, just as they did in 2008, the collapse of each of these will be horrific, and even greater than the 60% drop we saw in prices between 2008 and their bottoming out in 2010.

Friday, May 5, 2017

As gold demand comes down 18% globally for Q1, China and India are still buying like crazy

On May 4 the World Gold Council reported their year over year Q1 numbers for gold demand and saw a huge global decline of 18% from the prior first quarter in 2016.  However, this drop only appears to be primarily in the West as both China and India saw large spikes in buying during the same period.
A slower pace of central bank buying helped push gold demand down 18% year-on-year in the first quarter, according to the World Gold Council
Gold Demand Trends quarterly report showed global gold demand was 1,034.5 tonnes, with the year-on-year decline reflecting the strength of the first quarter of 2016 (which was the strongest ever first quarter). - Barrons
Chinese Q1 numbers:

China's demand for gold bars and coins soared 30 percent year-on-year to 105.9 metric tons in the first quarter of this year, the fourth strongest quarter on record, according to a report released by the World Gold Council on Thursday. 
Overall demand for gold in the Chinese market grew 8 percent year-on-year to 282.4 tons, making China the world's top gold consumer, according to WGC data.
Global demand for gold in the quarter was 1,034.5 tons, an 18 percent year-on-year decrease from the record high level recorded for the first quarter of 2016. - China Post
Indian Q1 numbers:
Gold demand in India increased by 15 per cent during the first quarter of 2017 to 123.5 tonne, signalling a return of optimism in the industry, according to World Gold Council (WGC). 
The total gold demand in the country stood at 107.3 tonne in the January-March of 2016, impacted by jewellers' strike over excise duty introduction. - India Times

Thursday, May 4, 2017

Gold price divergence between London and Shanghai climbs to $28 following continued beatdown in paper markets

With economic and geo-political events allowing for the West to continue to beatdown the gold price in the paper markets over the past four weeks, the divergence in price between the London daily gold fix and the Shanghai Gold Exchange has risen to over $28 in just the past few days.

In fact just two weeks ago on April 21, the difference in price between the two markets was just $8.

Shanghai Gold Fix:


London Gold Fix:


After Sharia Finance law changes, Dubai going full bore into gold as it works to create world's first gold backed digital currency

When the global body that oversees all things financial under the Islamic code of Sharia law accepted the personal ownership of gold back in December, the nation of Dubai appears to now be going full bore towards becoming ground zero for this potentially lucrative market.  And with their new partnership last month with the Shanghai Gold Exchange to facilitate futures contracts for gold delivery from Asia, they are not simply waiting on the laurels for their next new product.

And what might that product be?  How about a gold backed currency expected to run on the blockchain in the digital sphere.

Image result for gold backed digital currency
(Image use courtesy of News BTC)
Linking a digital currency to gold is an intriguing concept. Various countries want to issue national digital currencies linked to their regular valuta. OneGram, a company in Dubai, is doing things very differently. The Islamic financial services and technology company is looking to establish the world’s first gold-backed digital currency. For some investors, this will create a product combining the best of both worlds. 
Combining digital currency and a gold-backed asset is an intriguing turn of events. Investors often see gold as a safe haven asset during turbulent financial periods. At the same time, the interest in digital currency and cryptocurrency has never been higher. OneGram acknowledges both trends and aims to provide the best of both worlds to traders around the globe. - News BTC
Currently the paper gold markets see more activity than the physical gold markets because most investors would rather trust in other entities storing their gold than them taking delivery and dealing with the demands of physical ownership.  However, as the new Silk Road project seeks to eventually encompass nearly 2/3rds of the world in the coming years, and China is striving towards the implementation of a gold backed trade system to counter the dollar and ensure bi-lateral trade stability, having your money stored in gold but accessible through a digital format will be a great alternative from what was done in ancient times when you had to transport camel loads of gold for use on the original Silk Road.

Wednesday, May 3, 2017

What happens with Bitcoin in Vegas, stays in Vegas as privacy benefits of crypto-currency shield consumer's vices

When used as originally intended, Bitcoin provides a way for users of the crypto-currency to conduct commerce where they are shielded from publicly scrutiny in their transactions.  And in a place like Las Vegas, where any and all vices can be purchased, more and more companies who traffic in vice are using Bitcoin as the means to protect their clients be they famous or common.

Image result for bitcoin sin city
Enterprising businesses and independent contractors in Las Vegas seeking to protect their clientele by hiding the paper trail of their expenses are using cryptocurrencies, including the popular bitcoin, in increasing numbers. 
Bitcoin and similar cryptocurrencies are being used in US gambling capital Las Vegas, Nevada, with ever-increasing frequency, as entrepreneurs and independents alike seek to take advantage of networked financial anonymity. 
While sex workers in the desert mecca of hedonism have been using bitcoin for several years, now businesses, including strip clubs, are implementing the cryptocurrency networks for anonymous transactions. 
Recently, Las Vegas's Legends Room strip club announced that it will not only take bitcoin as payment for all services, but will also create its own proprietary cryptocurrency for clients to use to make payments and also to trade or gift among themselves. 
By setting up their own cryptocurrency, Legends will enable clients to use networked anonymous financial transactions tied to the current exchange rate of bitcoins, which can then be rented or sold. 
"Liquidity: if you own a membership and want to sell it, you can just sell your tokens in an exchange," a club spokesperson told Ibtimes.com. 
Sex workers operating independently are using cryptocurrencies with increasing frequency as well, as the anonymity benefits a trade that finds it necessary to fly under the radar. - Sputnik News
While politicians and law enforcement try to use the argument that crypto-currencies are solely the purview of drug cartels and money launderers, the fact is that many everyday transactions by individuals constitute the need for privacy and/or anonymity, and thus Bitcoin satisfies this requirement no matter what a person may be looking for during a stay in Sin City.

Schizophrenic gold market has highest level of long open interest since November while price continues to drop

Despite the fact that naked short contracts for gold (and silver) in the future's market continue to be dumped by a combination of bullion banks, hft algorithms, and perhaps even the Federal Reserve's own trading desk, open interest on the long side of the monetary metals continue to increase as well.  And while this buying has not been enough to keep the price from falling close to $50 over the past three weeks, geo-political events coupled with what appears to be a declining economy are leading investors to rush into gold at levels not seen since last November and following the Presidential election.

Investors continue to pour their money into the safe haven of gold, pushing net long positions of the precious metal to their highest level in five months. 
Amid rising tensions over the nuclear issue on the Korean Peninsula, surprise missile strikes in Syria and the first round of the French presidential election, investors have felt little need to pull out their assets out of the precious metal. Instead, a series of events have led net long positions of gold to reach 200,677 contracts, or 624.2 tons, as of April 25, up 2.5% from a week before, according to the U.S. Commodity Futures Trading Commission. The position marks the highest level since early November last year. 
Meanwhile tensions on the Korean Peninsula remain, as North Korea on Monday suggested that it would continue its nuclear weapons tests despite repeated warnings from U.S. President Donald Trump. 
While some concerns are lingering, other political risks are looming too. The latest one is the tax reduction plan proposed by Trump last week. The proposal, which would cut corporate tax to 15% from 35%, is seen as unlikely to win support, and "investors are questioning its viability," said Koichiro Kamei, a financial and precious-metals analyst. "Uncertainty is spreading over the Trump administration's ability to deliver on its promises, and it is making investors reluctant to let go of gold." - Asia Nikkei

Tuesday, May 2, 2017

Japan to join China in weaning Asian economies off the dollar by facilitating direct yen currency swaps

Despite the fact that Japan is lacking a equivalent payments system to SWIFT like China now has, they will soon be joining the world's second largest economy in helping to wean the rest of Asia off the dollar by facilitating direct bi-lateral currency swaps.

Focusing primarily on the ASEAN economies, and jumping in as a competitor to the Yuan's growing dominance in the region, Japan is preparing to introduce a new program that will seek to establish currency swap agreements with most Asian countries that will include allowing them to use the Yen as a currency reserve, and even as a medium of exchange to buy or sell dollars.

Image result for japan currency swaps
Japan seeks to establish bilateral currency swap frameworks with members of the Association of Southeast Asian Nations as a hedge against tight fund supplies in a financial crisis and also as a counter to the growing influence of the yuan. 
The Finance Ministry will propose the initiative soon. Japan's finance minister and central bank chief will meet with their ASEAN counterparts for the first time in four years, to coincide with the Asian Development Bank's annual meeting starting May 4 in Yokohama. 
Tokyo hopes the initiative will make Asian countries' financial systems and currencies more stable. Its first negotiations will involve Indonesia. 
The swap arrangements would let Japan supply foreign banks and other institutions with yen funds chiefly via the respective country's central bank. Financial institutions could unwind yen holdings under that framework, which may improve liquidity and stem the ripple effect during a financial crisis. 
ASEAN countries could even procure the dollar with the yen, then employ the greenback in propping up their own currencies. 
Japan's move comes as ASEAN members look to wean themselves off the dollar, a trend that could support wider adoption of the yen. In 2015, Vietnam set a zero interest rate on dollar deposits in a bid to encourage the use of other currencies. Indonesia mandates that settlements made inside its borders be in the rupiah. 
Japan also is taking aim at China, which is busy trying to internationalize the yuan. The International Monetary Fund says the yen accounts for 4.21% of foreign currency reserves held by countries, beating the yuan's 1.07%. However, Beijing has entered into bilateral currency swap agreements with Malaysia, Thailand and other Asian countries. Singapore and the Philippines decided to add the yuan to their foreign currency reserves last year. - Nikkei Asia

Japanese firms rushing in to try to stake claim to Bitcoin exchange license following crypto-currencies legalization

Like a stock IPO, there is nothing greater to corporations, banks, and financiers than the advent of a new industry they can seek to dominate and monetize.  And with Japan recently legalizing Bitcoin as a viable currency within their economy, the number of entities rushing in to stake a claim to the limited number of Bitcoin exchange licenses is growing.

So far at least 18 companies have filed an application for a Bitcoin exchange license, and this will only grow as the crypto-currency's value escalates, and the number of individuals wanting to own some increases.

Image result for japan bitcoin
Eighteen companies are applying for the new license required to operate a cryptocurrency exchange in Japan. 
The licensing scheme, which Japan introduced in April, aims to ensure exchanges operate in full compliance with financial regulation and anti-fraud procedures.
As a result of the applications, some of which come from extant Japanese exchanges such as bitFlyer, ten new players are slated to debut on the market to meet a forecast surge in demand. 
These include SBI Holdings’ SBI Virtual Currencies, GMO Internet, Kabu.com Securities and Money Partners Group, Nikkei reports on Tuesday. 
Japan is witnessing something of a Bitcoin renaissance in 2017. A giant uptick in trading quickly combined with a cementing of regulatory perspective see business deals come thick and fast. - Coin Telegraph
Perhaps one of the few questions remaining regarding Bitcoin is whether the crypto-currency will eventually function primarily as an alternative form of money, or whether it will become dominated through financialization and speculation as most currencies and commodities are today through derivatives and rigged Forex trading.