The Fed’s Built a Financial “Maginot Line”

 

Over the coming months, I believe we could see an economic meltdown at least six times the size of the 2007 subprime mortgage meltdown. That’s right: I believe we could see an economic meltdown at least six times the size of the 2007 subprime mortgage meltdown

Circumstances lead me to believe it could play out like the meltdown I experienced in 1998 after Long Term Capital Management (LTCM) failed.

This time, however, there will be several crucial differences that will leave investors and regulators unprepared.

In the national defense community, military commanders are known for fighting the last war. They study their prior failures in preparation for the next conflict. The problem is that each war inevitably involves new tactics for which they’re completely unprepared.

Russia and China Move to Dump the Dollar, Threatening the New World Order

 

As long predicted, the dollar’s dominance on the world’s economic stage is wavering and likely to completely collapse soon given the move away from the dollar by Russia, Iran, and China. 

Many have been predicting it. This writer spoke of it as early as 2004. The elite have dreaded it. It’s finally happened. The dollar is soon to be removed as the trading currency for oil and other commodities among Russia, Iran, and China. The effect on the U.S. economy will be catastrophic. However, in the long run it will serve to force the U.S. into a regional, rather than a global role.

The Termination of Cash Approaching Rapidly

The hunt for money is intensifying with the aid of banks no less. India was the balloon. They simply canceled the current with no notice and imposed a 90% tax on anyone holding the high denomination notes. This is how the world governments operate. The first bail-in was done in Cyprus. We were even contacted by members of the government trying to push back against the EU. We provided the solution, but the government did what the EU wanted because this was a test. If they got away with it in Cyprus, then the “bail-in” would become a contagion. The politicians lied, as usual, and said that policy would NEVER be applied in Europe. It is now standard around the world. We warned, Cyprus, then Greece – who would be next.

War On Cash Intensifies: Citibank To Stop Accepting Cash At Some Branches

Less than a week after India’s surprise move to scrap its highest denomination cash notes, another front in the War on Cash has intensified down under in Australia.

Yesterday, banking giant UBS proposed that eliminating Australia’s $100 and $50 bills would be “good for the economy and good for the banks.”

(How convenient that a bank would propose something that’s good for banks!)

This isn’t the first time that the financial establishment has pushed for a cashless society in Australia (or anywhere else).

Did Citi Just Confiscate $1 Billion In Venezuela Gold

Just over a year ago, cash-strapped Venezuela quietly conducted a 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 through a swap with Citibank.

As Reuters reported then, the deal would make more foreign currency available to President Nicolas Maduro’s socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices. Needless to say, the socialist country’s economic situation is orders of magnitude worse now.

According to El Nacional, “the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup.”

Mass Layoffs To Return With A Vengeance

Remember the mass layoffs of 2008-2009? The US economy shed millions of jobs quickly and relentlessly, as companies died and the rest fought for survival.

Then the Fed and the US government flooded the banks and the corporate sector with bailouts and handouts. With those giga-tons of liquidity sloshing around, as well as taking on massive amounts of new cheap debt, companies were able to finance their working capital needs, hire workers back, and even buy-back their shares en mass to make themselves look deceptively profitable. The nightmare of 2008 soon became a golden era of ‘recovery’.

Well, 2016 is showing us that that era is over. And as stock prices cease to rise, and in fact fall within many industries, layoffs are beginning to make a return as companies jettison costs in attempt to reduce losses.

Russia Breaking Wall St Oil Price Monopoly

Russia has just taken significant steps that will break the present Wall Street oil price monopoly, at least for a huge part of the world oil market. The move is part of a longer-term strategy of decoupling Russia’s economy and especially its very significant export of oil, from the US dollar, today the Achilles Heel of the Russian economy.

Later in November the Russian Energy Ministry has announced that it will begin test-trading of a new Russian oil benchmark. While this might sound like small beer to many, it’s huge. If successful, and there is no reason why it won’t be, the Russian crude oil benchmark futures contract traded on Russian exchanges, will price oil in rubles and no longer in US dollars. It is part of a de-dollarization move that Russia, China and a growing number of other countries have quietly begun.

Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble’

After all these years, the most famous investor in the world still believes that derivatives are financial weapons of mass destruction.  And you know what?  He is exactly right.  The next great global financial collapse that so many are warning about is nearly upon us, and when it arrives derivatives are going to play a starring role.  When many people hear the word “derivatives”, they tend to tune out because it is a word that sounds very complicated.  And without a doubt, derivatives can be enormously complex.  But what I try to do is to take complex subjects and break them down into simple terms.  At their core, derivatives represent nothing more than a legalized form of gambling.  A derivative is essentially a bet that something either will or will not happen in the future.  Ultimately, someone will win money and someone will lose money.  There are hundreds of trillions of dollars worth of these bets floating around out there, and one of these days this gigantic time bomb is going to go off and absolutely cripple the entire global financial system.

Wall Street concerned over China’s gold hoarding

Leung Hai-ming told the portal that China’s central bank took advantage of the US Federal Reserve’s quantitative easing program in 2013, when the price of gold fell by 27%. The bank bought in over 1,000 tonnes of gold, representing almost one third of the world’s 3,756 tonnes last year.

There is reportedly less than 180,000 tonnes of gold reserves left, and only 20% of that remaining gold is tradable. This means that the People’s Bank of China will likely keep hold of the gold, limiting the gold trading volume — a concern for both the US government and Wall Street traders.

Iran Strikes Back

At this pace, it’s only a matter of time an event this video portrays will happen again. One can only hope this time there will still be a safety net in place.

Iranian hackers took over a University of Michigan computer network during a massive cyber attack on U.S. financial systems last week that continued following comments on the strike by Defense Secretary Leon Panetta.

According to reports by a leading Internet security-monitoring firm, the cyber attacks against Bank of America, JPMorgan Chase, Citibank, and several other U.S. financial institutions began Oct. 8 when hackers gained control of the university’s College of Engineering network in Ann Arbor.