Erdogan Says Venezuelan Gold Will Be Processed In Turkey

 

Turkey’s President Recep Tayyip Erdoğan said on Tuesday that Venezuelan gold would be processed in the Central Anatolian province of Çorum.

Speaking at a rally ahead of local elections on March 31, the president said Çorum would reach a new level in terms of gold trade amid reports that Venezuela sells most of its gold to Turkish refineries. Continue reading

De-Dollarization Accelerates: Iran Unveils Gold-Backed Cryptocurrency

 

Four banks in the Islamic Republic of Iran have developed a gold-backedcryptocurrency called PayMon, financial news website Financial Tribune reported on Jan. 30.

According to the article, the crypto asset has been developed in cooperation with the Parsian Bank, the Bank Pasargad, Bank Melli Iran and Bank Mellat. Iran Fara Bourse, an over-the-counter (OTC) cryptocurrency exchange, will reportedly list the new cryptocurrency. Continue reading

Venezuela Has 20 Tons of Gold Ready to Ship. Address Unknown

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Venezuela Has 20 Tons of Gold Ready to Ship. Address Unknown (Yahoo!)

 

(Bloomberg) — Venezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country’s central bank.

The claim set off a welter of social media speculation and outrage. When asked how he knew this, Guerra provided no evidence. Continue reading

John Williams: “The Fed Will Crash Markets & The Dollar”

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Economist John Williams warns the Federal Reserve has painted itself into a very tight no-win corner.

No matter what the Fed does with rates it’s going to be a disaster. Williams explains, “You had some very heavy selling towards the end of the year and when you saw the big declines in the stock market you also saw that accompanied by a falling dollar and rising gold prices.” Continue reading

Russia De-Dollarizes Deeper: Shifts $100 Billion To Yuan, Yen, And Euro

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Russia is continuing to ramp up its efforts to move away from the American dollar.  The country just shifted $100 billion of its reserves to the yuan, the yen, and the euro in their ongoing effort to ditch the dollar.

The Central Bank of Russia has moved further away from its reliance on the United States dollar and has axed its share in the country’s foreign reserves to a historic low, transferring about $100 billion into euro, Japanese yen, and Chinese yuan according to a report by RTThe share of the U.S. dollar in Russia’s international reserves portfolio has dramatically decreased in just three months between March and June 2018.  The holding decreased from 43.7 percent to a new low of 21.9 percent, according to the Central Bank’s latest quarterly report, which is issued with a six-month lag. Continue reading

Is U.S. Geopolitical Strategy Experiencing a Monumental Shift?

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The defining question about global order for this generation is whether China and the United States can escape Thucydides’s Trap. The Greek historian’s metaphor reminds us of the attendant dangers when a rising power rivals a ruling power—as Athens challenged Sparta in ancient Greece, or as Germany did Britain a century ago. Most such contests have ended badly, often for both nations, a team of mine at the Harvard Belfer Center for Science and International Affairs has concluded after analyzing the historical record. In 12 of 16 cases over the past 500 years, the result was war. When the parties avoided war, it required huge, painful adjustments in attitudes and actions on the part not just of the challenger but also the challenged.

– From Graham Allison’s article: The Thucydides Trap: Are the U.S. and China Headed for War?

For the past two years, my geopolitical assumption has been that the Trump administration would more or less continue along with the reckless, shortsighted, and disastrous neocon/neoliberal interventionist foreign policy of the past two decades focused on undeclared regime change and proxy wars across the world, especially the Middle East. Given his strange obsession with Iran, I figured he’d start a conflict there and that this conflict would end up a bigger disaster than Iraq. Continue reading

America Has the Government It Deserves

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“Every nation gets the government it deserves,” said 18th century French philosopher Joseph de Maistre.

If true, and we suspect there is justice here… the United States is a nation of no-good deadbeats.

For the nation hosts a spendthrift government perpetually on the borrow.

By some metrics, the United States now takes on more debt in one year than it did in the first 200 years of its lovely existence.

Its gross national debt rose $1.27 trillion in fiscal 2018… to a record $21.5 trillion. Continue reading

The Committee to Destroy The World: The Federal Reserve

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The general belief among average citizens is that the purpose of central banks is to help the economy by fighting inflation and mitigating financial crisis. It’s a fairy tale that politicians like to encourage. If there were any truth to it, however, where was the Federal Reserve during the crisis of 2007? Rather than helping, it was widening the crisis with its easy money policies.

While central banks are not a government entity, their primary purpose is to create money for the benefit of the government. By mindlessly printing fiat currency, central banks create a shaky illusion of financial stability. In reality, each central bank is a monopoly that controls the production of distribution of currency and interest rates. Most importantly, it also controls gold reserves. While paper currency allegedly has the backing of the government, it is the central bank that controls the value of the currency at any specific time. Continue reading

The World Is Ganging up Against the Dollar

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Shutterstock

 

The U.S. has been highly successful at pursuing financial warfare, including sanctions. But for every action, there is an equal and opposite reaction.

As the U.S. wields the dollar weapon more frequently, the rest of the world works harder to shun the dollar completely.

I’ve been warning for years about efforts of nations like Russia and China to escape what they call “dollar hegemony” and create a new financial system that does not depend on the dollar and helps them get out from under dollar-based economic sanctions.

These efforts are only increasing. Continue reading

Signs Point to a Global Slowdown

Signs Point to a Global Slowdown

 

As gold has struggled through 2018, (down over 10% from $1,363/oz. on January 25 to $1,215/oz. today), my forecast for a strong year-end for gold has remained unchanged.

This forecast is based on a better-late-than-never realization by the Fed that they are overtightening into fundamental economic weakness, followed quickly by a full-reversal flip to easing in the form of pauses on rate hikes in September and December.

Those pauses will be an admission the Fed sees no way out of its multiple rounds of QE and extended zero interest rate policy from 2008 to 2013 without causing a new recession. Once that occurs, inflation is just a matter of time. Gold will respond accordingly. Continue reading

Russia Is Preparing For A “Perfect Storm” In The Global Economy

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In recent months, Russia – some claim – has “strenuously prepared for Putin’s meeting with Trump”.

What does this mean?

Firstly, in April the Central Bank of the Russian Federation dumped nearly a half of US Treasuries that it had on its balance sheet, reducing their stock from $96.2 billion to $48.7 billion. Continue reading

The Fed Is on a Collision Course

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U.S. Federal Reserve Eccles Building, 1937

 

Is the Trump economic boom a mirage? The data say yes, but the Fed models say no. The Fed has a long track record of sticking to its model-based approach and missing major turns in the U.S. economy.

Current Fed policy will push the U.S. economy to the brink of recession later this year. When that happens, the Fed will have to reverse course and ease monetary policy. This will send the dollar crashing while gold and the euro soar.

At first, the claim that the Trump economic boom is nothing special seems contrary to the happy-talk headlines coming from CNBC, Fox Business, Bloomberg and other mainstream business media outlets. Continue reading

Russia Is Liquidating Its US Treasury Holdings

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The buildings of Moscow City, the Moscow International Business Center (MIBC). © Vladimir Sergeev / Sputnik

 

The share of US sovereign debt bonds under Russian control has dramatically decreased in recent months. In March 2018, Russia held $96.1 billion in US Treasures, which it reduced to $48.7 billion in April.

A treasury bond is a fixed-interest government debt security with a maturity of more than 10 years. Treasury bonds make interest payments twice a year. The gradual sell-off of US sovereign debt started in 2011, and has intensified over recent years amid numerous rounds of sanctions imposed by the White House against Russia. Continue reading

The U.S. Dollar: A Victim of Its Own Success

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America’s most powerful weapon of war does not shoot, fly or explode. It’s not a submarine, plane, tank or laser. America’s most powerful strategic weapon today is the dollar.

The U.S. uses the dollar strategically to reward friends and punish enemies. The use of the dollar as a weapon is not limited to trade wars and currency wars, although the dollar is used tactically in those disputes. The dollar is much more powerful than that.

The dollar can be used for regime change by creating hyperinflation, bank runs and domestic dissent in countries targeted by the U.S. The U.S. can depose the governments of its adversaries, or at least blunt their policies without firing a shot. Continue reading

The Origin of Contagions lies in the Common Reserve Currency

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The question of money supply and inflation has been erroneously been set in stone predominantly by the debasement of Spain and Britain during the period of Henry VIII. This was really a period where there were various countries and their currency completely relied on the exchange market in Amsterdam, which was based entirely upon their metal content. This period was far less judgmental insofar as we have today where currencies rise and fall purely on anticipation of political events. During the middle ages, this influence of anticipating future value based upon possible political decisions was not readily dominant and the coins of one nation were compared entirely on their metal content.

For example, because of the French at war with Britain, they created a wave of inflation that spread like a contagion to other nations, namely Spain and Italy, because money was commodity based using gold and silver. In this way, there was really a single currency base among nations and the problems of one would be exported to all others by their debasement. Continue reading