Money, Politics, Finance and Economics.
Death by a Thousand Cuts?
The History of Islam, is the history of strife in and around the middle-east and Mediterranean Sea. Wherever Islam, has butted up against other religions, and cultures, there has been war, battles and strife.
In recent years, in the 1990s the war in the former Yugoslavia, was caused largely due to the influence of the U.S., which encouraged and provoked unrest, to bring the Socialist Republic, into the western sphere of influence, as Slovenia in the North, and Croatia in the North West seceded from the state that General Josip Tito had unified during the 1940s, at the end of the Second World War.. And of course if you remember, your history, the first World War was started in that region, when a Bosnian Serb called Gavrilo Princip killed Austrian Archduke Franz Ferdinand and his wife in Sarajevo, Bosnia.
But what few in the News media tell you, is that in Albania which sits alongside the former Yugoslavia, (and Kosovo) the majority of the population are Muslims – roughly 55% in Albania. The other Balkan States are a mixture of Slavs – Catholics originally from Northern Europe, and Greek Orthodox.
After the war began, those ethnic Serbians began ethnically cleansing Muslim Kosovans in the Moldovan region. – when 8,000 were killed in a genocide – remember Srebrenica? But, although Albania, has applied to join the EU., it is the poorest country in Europe, and if it IS granted membership, we are likely to see a tide of people leaving to find work elsewhere in the EU.
So, what does this have to do with today?
The wars in Libya, Iraq and Syria, to overthrow those hard-liners in power, is according to some, because those nations challenged the American dominated International Financial System, because these nations refused to have a Central Bank controlled by the Rothschild controlled IMF. In Iraq’s case, Sadam Hussein, began to sell oil for Euros. While, in 1998, it’s Saudi neighbours were obliged to sell their oil in Dollars, When Sadam Hussein fell, one of the first things to change was the oil price – back to dollars…
The Saudis, have a long-standing agreement – probably more like a veiled threat – that the U.S. would defend the Saudi Kingdom, from all threats as long as the House of Saud sold its oil in dollars, – and as we know back in 1974, when the agreement was negotiated between Henry Kissinger, and the Saudi ruler – that potential threat, was the Soviets, who were considered the biggest threat.
Libya too, threatened the dollar hegemony, when Muammar al-Qadaffi, began to build a consensus for a golden Dinar, of known size and weight, to be used in trade throughout Northern Africa. The Gold which he had traded oil for, has of course, mysteriously disappeared from the nation’s coffers in the aftermath of that revolution.
Syria’s Basher al-Assad, also judged a threat to western efforts, is also allied with the Russians, who have long had a naval base on the Syrian Mediterranean coast, and as we saw recently, Russia supported the President, to fight the CIA backed IS, who were encouraged to push for a new caliphate. But in reality, this was to scupper the deal between Assad, and Iran to pipe Iranian Gas from the Persian Gulf, where a huge gas field, has long been known about. Whereas, the Americans would prefer if Saudi and American oil interests exploited that gas and piped it to Europe.
But the oil wealth and the rising religious fervour in that part of the region, has been cause for a “Hijra” to be called.
The word Hijra (emigration) relates back to 622, when Mohammad and his followers migrated from Mecca to Yathrib (now Medina) and the 5+ million Syrians, Libyans, Somalis. Eritraens and other African nationals, that have faced the vagaries of the Mediterranean Sea in small boats and inflatables seem to think, that Europe in general, and Britain in particular is their future, but how many of them, are not Asylum Seekers, not refugees, but perhaps bear a cultural hatred borne of their religious texts, or teachings. It has been both a push from Islamic Nations, and a pull from Western European nations with birth-rates falling and so low that even the current population levels in Europe couldn’t be maintained. The objective of the emigration by the clerics is clear to make Europe an Islamic continent, and eventually the world.
Britain faces a unique position, because if your first language is not English, your second language, usually is… And that goes for 70% of the world’s population. And between China, and the Atlantic Ocean, just India, and Britain speak English widely.
With Muslim families typically having four or more children, and under Sharia Law, upto four wives, those European nations with large immigrant populations, will by 2050 have a huge and quickly rising Islamic population. The economic consequences of such a large contingent, demanding Sharia law, will if allowed, cause a major headache for Western Economies – even to the point of economic collapse.
How so? I hear you ask…
The Islamic faith is not just a faith, but a political philosophy too, and the consequences of such are not often discussed.
If you like your Traditional English Breakfast, with its Pork Sausages, and English or Danish Bacon, what will you do when Pork Farming is outlawed? Where will those few producers of Pork Dripping, Lard, and other Charcuterie producers find their income? Where will you go to dine, and have a glass or two of wine when alcohol is no longer permitted? What will happen to the few British Pubs that remain, when they too close for lack of demand or by religious diktat? And the Breweries that supply them?
Where will we go for summer holidays, when women are denied the chance to travel alone, And where will you women, wear revealing bathing costumes – bikinis, lingerie, or provocative clothing? What will happen to the fashion industry as restrictive dress codes challenge modern fashion elements, and what will publishers do when fashion magazines and designers are no longer needed? Where too those workers of publishing houses, whose purchasers of the likes of Razzle, Cosmopolitan, and Hello, are restricted in what they can publish, and advertise?
Where too will women work, if they are restricted from studying, and who will employ them, when/if they are so poorly educated, they lack sufficient skills except to pour coffee, and what will happen to the ham-burger suppliers and the chains of stores that cook them? Or if the Saudi interpretation that restricts women from even driving without a male chaperone? And what will women do, if the rape of a woman, requires four witnesses before it would be proved? While the punishment for such – unless proved – is “stoning”, or beheading of the woman!
As a recent video showed, on you-tube.com, young women of 18 and below being auctioned on the streets of London, by men wearing Arab Islamic dress, with arguments by Islamic preachers suggesting that taking a wife as young as one is within the teaching of Islam, and is acceptable, what does that say about how women are valued in society?
The economic consequences of having 50% of the population set-back more than 100 years, and essentially being restricted to the hearth and home once more by a patriarchal society is dire. Women’s rights would be set back a century. Who will staff the hospitals, nursing homes, and hotels – presupposing anyone would want to visit a nation that supported such hard-line policies. Who will work as P.A.’s to senior executives in the few corporations of any significance? What will those female aspirants to parliament do, when they are not allowed to engage in public life? Where will the future Margaret Thatchers, Theresa Mays, and Barbara Castles of these islands come from?
The western economies, with their liberties, which were hard won over many centuries, needs to beware of the Trojan Horse within, and to allow liberties to be set back, by a Liberal elite who have tolerated two classes of citizens to live in these nations is remiss at the least – those who follow, abide and vote for the policies, that our western societies believe in, are tolerant, while the other class, who use that tolerance to restrict those who live within their strictly enforced religious enclaves, are Fascistic. This, as other you-tube videos shows, non-muslims are being chased by physical presence from the streets where large Islamic populations live, and where there are protests against this, frequently this results in physical and emotional abuse, particularly of women, by young Islamic males.
If we do not address this growing division, by strongly enforcing the laws (and liberties) of the land, the consequences will be as stated – dire. As multi-culturism has been forced on a largely unsuspecting population, there are those segments of world society, that still insist – “There is only one way, and that way is theirs.”
But, what is also concerning, is that many followers of Islam, believe that non-muslims are second-class individuals. These hard-liners follow the strict interpretation of the Qu’ran. These are the people whose dress code and behaviour, are a throw-back to the 7th century, which is, and will be a source of division, and eventually war if we do not confront these sterotypes.
A photograph of a woman ballerina – posted by Alicia Keys on her twitter account – wearing a Burka, with her bare leg thrust forward provocatively, promoting equality, received short shrift from many Muslim women, who are forced by their patriarchal overlords to wear the garment.
Will this be a feminist issue? At the moment, those on the left seem more concerned with religious equality, rather than gender equality. If people do not awaken from this slumber, and this naiveté, there will come a day, when the realisation dawns, they were wrong, and that will be their new shocking reality.
So, in conclusion, will the imposition of Sharia Law , or even large populations of Muslims in the nation cause economic dislocation and collapse hinted at in the title?
Even the technological revolution waiting in the wings of Artificial Intelligence, and 3D technology – 3D printing, and 3D video and Image projection through holographic systems becoming commonplace, will perhaps not create sufficient new wealth and new jobs to support the rising number of people with little or nothing to contribute, save their muscle, and/or religious fervour.
And the rising demands on the Social Security budget, will cause the population to question who, what when and where social security is given.
– April 2nd, 2017
I woke up the other morning, sweating, heart pounding and breathing heavy. I didn’t know what time it was, but I knew it was early. I daren’t put the light on, or even check the clock by pressing the illuminate button, because I knew it would wake my wife. So I ended up lying there, tossing and turning, thoughts churning over in my mind.
I’d been dreaming, and the dream was one of those were you end up fighting some unknown foe. I quickly realised who I had been fighting, in this somnabulistic nightmare.
I’ve been studying, and watching a huge number of videos on Islam, and the history of it over the last 1400 years recently, and this must have been playing on my mind.
Of course this blog is not normally dedicated to religious topics, as it is usually too contentious, and people get upset when you challenge their deeply held beliefs, even if you use rationale and logic to do so – or especially because you do.
But, as I began thinking about the theology, I realised that there are economic consequences, quite serious consequences. I realised that there are monetary and economic forces at work, so I also began studying the history of the man who became the prophet, that so many revere in the world, and casting my analytical eye over the whole piece, reaching some surprising conclusions.
I was surprised to learn, that an Islamic Caliphate had existed pretty much since the death of Mohammad in 632 A.D., until 1924, when the last of the major European economies, rid itself of Islam, at least in its political role in the state. But, that at its height, it was bigger than the Roman Empire, of which we learned so much as children. Why weren’t we taught that?
The turnaround in fortunes began as Europe began to be more economic than spiritual, and the breakaway from the Papacy, by King Henry VIII, for his own ends, began the change.
That was followed by the reformation, when the schism in the Roman Catholic Church began, set in motion by Martin Luther, when he wrote: “The Ninety-Five Theses”.
This was reinforced by the renaissance, when science began to become the major driver of thinking, and the improvements in productivity this allowed, coupled with the movements from the countryside to the towns began to occur. The Gutenberg Press spread the word far and wide as cheap books became commonplace.
Europe expanded through education and enlightenment as European ships set sail towards the New World, to return, with wondrous trinkets from Native Americans, and fortunes in Gold and Silver as these new lands were discovered, explored and plundered. As mechanisation took hold, this cemented Europeans in the ascendancy as they could develop stronger economies, and build well-funded armies.
Mustafa Kemal Atatürk, was the founder and first leader of modern day Turkey and established the state, after the fall of the Ottoman Empire in the early 1920s when he created the Grand National Assembly on 23rd April 1920. He had studied Western nations, during his extensive military career, and began to build his new nation, on more secular lines.
Mustafa Kemal fought a final battle with the Islamic Caliphate Army, shortly after the signing of the Treaty of Sèvres, which was imposed by the allies on the Ottoman Turks, and by September 18, 1922, the occupying armies were expelled. On November 1, the newly founded parliament formally abolished the Sultanate, ending 623 years of Ottoman rule. The Treaty of Lausanne of July 24, 1923, led to the international recognition of the sovereignty of the newly formed “Republic of Turkey” as the successor state of the Ottoman Empire, and the republic was officially proclaimed on October 29, 1923, in the new capital of Ankara. Mustafa Kemal became the republic’s first President which finally broke up the Ottoman Empire.
On 1 March 1924, at the Grand National Assembly, (GNA) Mustafa Kemal said: The religion of Islam will be elevated if it will cease to be a political instrument, as had been the case in the past.
On 3 March 1924, the caliphate was officially abolished and its powers within Turkey were transferred to the GNA. Other Muslim nations debated the validity of Turkey’s unilateral abolition of the caliphate as they decided whether they should confirm the Turkish action or appoint a new caliph. The only political party of the GNA was the “Peoples Party”, founded by Mustafa Kemal on 9 September 1923.
He forbade women to wear the Hijab, ensured they got an education, by establishing free compulsory primary schooling and forbade men to wear the beard.
He made Turkey a secular state and gradually its importance in the region grew as its economy and population did, aided by membership of NATO and acting as a bulwark against soviet expansion, which meant American money went there.
The West (in the guise of the EU) dangled the carrot of membership, but the rhetoric of recent months, and the animosity between Muslim President Recep Erdoghan and the Netherlands, seems to have put paid to that – at least for a while. Turkey despite shooting down a Russian MIG fighter jet over Northern Syria, as it apparently ventured into Turkish airspace seems to have patched things up with Russia, as they apparently were co-aligned in fighting so-called “Terrorist groups”
In Russia’s case, they were fighting anyone who threatened their relationship with Basher Al-Assad, which is largely because if he falls, Russia loses one of its allies in the region, and probably the warm water port it has in Northern Syria. Turkey, meanwhile is intent on fighting the Kurds who have been pushing to have a homeland in South-Eastern Turkey, and Northern Iraq for decades, and Kurdish oil, would give them money and influence, which Turkey is wary of having, on its south-eastern flank.
The Tribes of Islam – Sunni and Shia, have been fighting amongst themselves for domination ever since the demise of Mohammad. Mohammad’s father-in-law – Abu Bhaqhar, and his cousin – Ali ibn Abi Talib, began feuding over who should succeed him, after his death by poisoning, in 632, and the interpretation of the religion, and these two strands of thought have been fighting for dominance ever since.
But one of the things that has perplexed me over the time I have been thinking about this problem, is that if a person is praying 5 times a day, how much time they have for study of scientific, and other critical thinking subjects. In fact according to one source, I was surprised to learn, that the whole of the Islamic world (of 1.4 billion souls) translates fewer books each year than tiny Liechtenstein.
But, the Islamic world has had two events happen, to help them:
In the 1920s, oil was found, in the Kingdom of Saudi-Arabia, and the Arab-American Oil Company (Aramco) was established, before it was nationalised some years later… This with the establishment of the Petro-Dollar system, by Henry Kissinger back in the 70s, gave the House of Saud, rising importance in the world, as dollars flowed into the Kingdom’s coffers. That immense wealth went into Palaces, British and American Defence Technology as the Kingdom purchased British Fighter Jets, and American missiles and equipment, which has provided the Kingdom, with an excuse to spend their wealth, and recycle some of that wealth into British and American jobs.
Behind the scenes, the Sunni dominated House of Saud, and the Shia dominated establishment in Iran, have been feuding: funding and promoting unrest throughout the region for decades. Whoever wins that battle, wins the battle for dominance in the whole of the Islamic world, and therein, lies the root of the problem for the west.
Back in the 70s, two important things happened… The oil-crisis, brought about by rising world demand, due to an increasing dependence on oil and oil derivative products such as plastics, fertilizers, chemicals, paints, and the pharmaceuticals industry etc; drove the price of oil, as it rose from circa $1.60 per barrel in 1969, to $41.00 per barrel briefly in 1980, and that meant huge amounts of wealth transferred from the west to the oil producing nations (Largely OPEC).
The second thing that happened was, that the ruler in Iran in 1978 was the U.S. installed Mohammad Reza Pahlavi – the last Shah of Iran. But a new twist was about to happen. On January 16, 1979, Pahlavi left Iran after a citizen’s revolt, and two weeks later, on February 1, the Ayatollah Khomeini returned to Iran. Khomeini had been exiled to various countries, including France, where he made several contentious speeches. He was arrested and exiled to Iraq, then Turkey and finally Paris, France in 1964, but shortly after his arrival back in Iran, on February 11, 1979, Khomeini appointed his first own prime minister, Medhi Bazargan. On March 30, 1979 a referendum took place in Iran and as a result, the monarchy was replaced with an Islamic Republic. After the Islamic Revolution, Khomeini became Supreme Leader of Iran.
As a young man, Khomeini, studied in Qom, an Iranian city, where he received a traditional religious education, but Khomeini, also had other plans. Wiley as a fox, Khomeini – intended to bring Islam to the world. The oil wealth, would allow him and his government to spread the word, and buy the support of those around him. Just as the House of Saud, and the hundreds of Royal Princes do in the Kingdom of Saudi-Arabia.
These two almost tribal nations, one espousing Sunni Islam, the other espousing the more traditional Shia, eye each other across the Persian Gulf. The Straits of Hormuz a narrow waterway, as narrow as the Dover Straits, separates the two nations. And through those straits, 40% of the world’s oil travels. If any one of these two nations decided to close the straits, oil would hit $200 barrel within days at soonest, and weeks at most.
The other choke point – The Baab-el-Mandeb (The Gates of Tears) sits on the other side of the Saudi Peninsula and allows entry to the Red Sea, and the short-route to Europe through the Suez Canal.
In 1973, Israel, Egypt, Jordan, and Syria went to war for the second time, the Egyptian President – Anwar Sadat, and Basher Assad of Syria attempted to take back the land won by Israel in the six days war in 1967.
Oil was hovering around $2.30 a barrel. Just days later, while the Israelis, the Syrians, the Jordanians and the Egyptians were still slugging it out acorss the Sinai Peninsula, The Libyan Colonel, who had taken power just four years before, and had nationalised the Libyan oil-fields, and their production technology, raised the price of oil heading to Italy. First to $3., then four, then six, and finally in one final flourish to $11.69. The war lasted almost three weeks, before a UN resolution and a threat by Leonid Breshneyev Soviet President, to put troops on the ground unless the U.S. did, brought hostilities to a swift halt. the War had lasted from October 6-24, 1973.
Reports emerged later that at the time Iran had charged as much as $17 per barrel during the crisis briefly. The small Islamic nations had risked everything against the Western Powers, and survived. The U.S., Italy, France, Germany, former Empire holder Britain, she who had controlled 50% of the earth’s land-mass at one time, were reduced to penury. No armies arrived, no foot-soldiers, no planes bombed their fields, and no jack-boots patrolled their streets, nor gun-boats patrolled their shores. These tiny Arab nations had stood up to the great western powers, and were emboldened. That winter, brought a severe crisis, in Britain, as inflation would reach 26.9%. Mineworkers went on strike, and then power workers. The UK government of Ted Heath was forced to bring in the three-day week to conserve fuel, and council workers joined the fray.
Heath announced a snap election for February 1974, and asked the question – “Who governs Britain?” the electorate answered not so emphatically – “Not you.”. The election was insufficient to give Labour a full mandate, and a brief pact between Labour’s Harold Wilson, and the Liberal’s Jeremy Thorpe maintained things until a second election in October that year, gave Labour a slight majority.
The Americans, had their own crisis that year end, as cars queued at gas-stations for $5.00 worth of fuel, and gas-stations ran out of fuel causing frustration at the Arab nations.
But what does all that have to do with us?
Find out in Part Two
I am reminded of my days as a child, playing Monopoly… Of course, the company that manufactured the board game: Parkers – or in the UK – Waddingtons – produced many versions for major markets. America, had its version, based on New York, Britain’s version used London, and Canada, Australia, and New Zealand – the rest of the five eyes – no doubt had their versions too. All told there were 103 versions (at least according to Wikipedia), so I suppose most people over 30, will have played it or seen it at some point in their life.
I was reminded of it, because of the new British £1.00 coin, which is a bi-metallic 12 sided beast, that reminded me of the coins that were made of plastic in the above mentioned game.
The new coin, according to several sources: “has a hidden security feature to make it difficult to counterfeit, but officials at the Royal Mint have not released any further details.”
“It is thought to involve material inside the coin itself which can be detected when electronically scanned by coin-counting or payment machines,”
“Three years in the making and costing £2 million to develop, it inserts a physical security layer within each coin that allows for thousands of coins to be scanned and verified in a matter of seconds, quickly separating the real coins from the duff ones.”
Of course the British Fiver (£5.00 note) is now made of plastic, and incorporates security features to make it more durable, and difficult for counterfeiters to produce without it being obvious. By October this year, the older paper based Fiver will be obsolete, and apart from the nice shiney new ones that made it into envelopes to be stored in drawers and cupboards for children when they were younger they will no doubt like most currencies of yesteryear, disappear into the realms of history.
That is a feature of all currencies… NOTE: A currency is for “current” transactions…
Money is a different beast altogether.
For anything to serve as Money, it has to have 7 functions. (Mike Maloney has a wonderful series of videos on You-tube, that tell the History of Money, should you wish to do further swotting up and if I were to watch or recommend just one, or two, I’d start with part 4)
Money has to be: A Medium of Exchange, A Unit of Account, Portable, Durable, Divisible, Fungible and a Store of Value.
Most of those are obvious, though Fungible might confuse a few people. Fungible just means that each unit is the same as each other unit so it doesn’t matter which one I use, they are all the same.
BUT, only Gold and Silver coins: where the size, weight and purity is known, can serve as money.
Therein lies a tale…
Because an ounce of Gold, or a Pound of Sterling Silver, remains the same over hundreds of years, and retains its size, weight and appearance, and therefore they are a store of value.
The story goes, that an ounce of Gold, will buy a quality suit of clothes from a top tailor on
This means that the government has to limit its activity because it will run out of money, unless it taxes its people more, and most governments are like Turkeys – they won’t vote for Xmas, by raising taxes on the population, because in democracies, people who raise taxes tend to get voted out of office.
The British Pound Sterling was so-called because the British Crown Royal Mint assayed it and using stamps, that were stamped into the metal, to verify its purity came up wiith the definition of 925 parts per thousand, which gave it its name.
This became the basis of our monetary system. Alongside this money, the British also had a Golden Crown and a Golden Guinea. The Golden Guinea was a one ounce coin of pure Gold, valued at £1.05 (21/- or 21 Shillings) A shilling was 1/20th of a pound. Of course at a time when 16 ounces of something was a pound, this wasn’t the same for Gold and Silver, as they are measured in Troy ounces which are heavier, than “Avoirdupois” ounces by a factor of 1.225 times, so was the equivalent monetary value at a time when the Silver:Gold ratio was legally defined as 16:1 or 15.5:1 at various times.
Britain left the Gold Standard during the early days of the first World War, to allow the nation to pay its war bills, for war munitions and this allowed it to expand the money supply without causing immediate deflation, or price inflation. America, did well out of it, as Europeans bought many of their materials from the U.S. like grain, and household goods.
So why do Governments, and their agents, want to steer you away from having real money?
That’s a good question.
If you get real money from your time, talents and energy, you could put your excess earnings into savings, and the government and Banksters would not be able to tax that. In order to pay for their actions, they need to steal your time and your freedom… People who are free from the drudgery of work, have too much time on their hands, and can think. And people who think, are a potential threat to those in power, as they have a tendency to spot the scams being run by governments.
In post WWI Russia, a young economist called Nikolai Dmitryevich Kondratieff produced a report that stated that the economy which tends to work in cycles, has a long-wave cycle of roughly two generations. Robert Beckman a financier during the 1980s, and author of the book “The Downwave” suggested a cycle of 54 years, but this obviously depends on when women begin having their first child. This became known as the “Kondratieff Wave”, and Kondratieff, to counter this cycle, suggested allowing the population to have small businesses like Britain, and other nations
For Lenin and Stalin, this proved too much. Kondratieff, who was tried for treason to the party spent 8 years in jail. While he was in jail, he did further research, and when he was released, he was tried again, and this time was convicted, and sentenced to death by firing squad…
His sentence was carried out that same day.
Both Hitler and Stalin, took gold out of the hands of the citizens, because as the old saw goes: “He who owns the gold, makes the rules.”
So, Governments, and their Central Banker paymasters need to restrict the population from using money, because it has limited capability to be taxed. And those on the inside, can’t get YOU, to pay for their pet projects, that many of them, will benefit from, further down the line.
So the new British pound stops those who wish to preserve their wealth, from storing cash at home, out of the Banking System, because periodically, they are forced to return their notes and coins to the Banking system to be replaced by their newer less counterfitable replacements.
Now when you have to replace large sums, the Bankers know how much you are storing out of the system, and if that sum exceeds typically £10,000, they are duty bound to report that to the Government under legislation to prevent money laundering (at least so they say).
In reality, it is about controlling the banking system and the flows of funds into and out of the system, because the government and the bank relies of a functioning banking system to set taxation policy (Govenment debts are owed to the Central Bankers and thus need to know who has the funds)
This new coin therefore, is just part of the ongoing strategy to get everyone into the banking system, (there are currently over 1.5 million people with no Bank account) and to ensure the Banks can make a profit from this, free banking has to go.
You have to ensure that you have a minimum of 10% of your assets held in readily exchangeable assets with “no counterparty risk”. That means Gold and Silver.
Of the two precious metals, Andrew Maguire a precious metals trader has proved conlusively, that the U.S. government’s Bankers (the Fed and its client Bullion Banks) have been manipulated to the detriment of precious metals owners. the ratio historically of price between silver and gold is in the region of 16:1.
During the 1990s, this ratio began to be manipulated, as the US. government, which had used 2.75 BILLION ounces of Treasury Department Silver, during WW2 as part of the Manhattan project, and had to shut down the facility that used that silver in 1992, for 3 years, while they recovered that silver, to sell, because demand was growing (due to widespread industrial uses) and that should have raised the price, and encouraged more companies to find and produce silver, which would have brought the price down again… THAT is how markets are supposed to work – Economics 101 as the Americans might say.
Monopoly is outlawed in most industries, because a monopoly can extract monopoly profits – take it or leave it… And yet we allow our government and its Bankers to ensure that we can only use their monopoly produced money… Is this fair? No!
The only way to beat this monopoly practice, is to purchase precious metals and to keep those under your own control…
The time has arrived.
Don’t forget to like and to post links to this, which is used to educate and inform.
Students of Literature, will recognise the title from the warning given to Julius Ceasar, as epitomised in the Shakespearean play of that name.
It was a warning to the general, to beware, by a soothsayer (who remains nameless). A warning that apparently he ignored. Of course, as the conspirators – the Senators, stabbed at Ceasar, and Marcus Brutus a former long-time friend plunged his knife into the man, Shakespeare’s Ceasar uttered those now immortal words – “Et tu Bruté” (And you Brutus?)
Of course, in the modern era, the last major play, that resembles this drama, is the death of John Fitzgerald Kennedy on November 22nd 1963, as he was brutally slaughtered by a conspiratorial cabal operating in the upper echelons of the power political scene in America.
Who all these conspirators are, has remained largely unspoken… But some people, are doing what should have been done 50+ years ago, by the Dallas Police, before the CIA and the FBI took over the post assassination conspiratorial machinations, to cover up their involvement, and to plant the idea in the public’s mind, that “it was a lone gunman” a Russian Sympathiser, who spent three years in Russia, but who was in receipt of $200 per month from the FBI as an informer, and who received special training by the CIA to learn Russian, before he allegedly dropped out by going to Russia and staying there for three years…
Those invoved in the Conspiracy carefully massaged the images and the Warren Commission headed up by the very man, that Kennedy had fired just a few months earlier as Head of the CIA to ensure the story remained “on message”.
Of course George Herbert Walker Bush, when asked where he was at the time of the shooting, had vague recollections of where he was, despite someone of that name making a call to J. Edgar Hoover’s office – Head of the FBI just hours after the shooting proving he was in a hotel in Dallas. And his recollections apparently varied on subsequent questioning of the same incident, The same George H. W. Bush who went on to be Carter’s head of CIA, and then Vice President, during the 8 years that Ronald Reagan was President, and almost made it to the presidency when President Reagan was shot, by a lone nutter… But the President in true Cowboy hero fashion, survived.
JFK’s brother Robert Kennedy who also later ran for political office also met a sudden death when yet another lone nutter (CIA – MK-Ultra participant?) allegedly shot him at close quarters as he emerged from the hotel kitchen into the glare of waiting reporters, TV cameras and waiting dignatories – and CIA operatives?
Here is the best documentary I’ve seen on this and other subjects…
JFK Jr., had his 3rd birthday just three days after his father’s death, and after growing up and becoming by, all accounts, an honourable man, handsome, suave, considerate and latterly a pilot and publisher of a magazine called “George” – Was this a clue to the mystery surrounding his father’s demise?
And of course, John F Kennedy Junior ALSO met an untimely demise, when his plane came down late in the evening, as his plane disappeared off his flight path and plunged into the Atlantic, just 1 minute after he called in to the Martha’s Vineyard Airport, to say he was at 2,500 feet and ready to descend to the airport… But he never made it, falling out of the sky almost vertically just 60 seconds later… Meanwhile, George Bush Junior, for the three days, was nowhere to be found… Hmmmm… “Curiouser, and Curiouser”…cried Alice…
You can get a better description of events here…
So what does this have to do with the Ides of March?
Well, as President Trump has already made known to the world, some of the things he wants to do is to “Drain the swamp”, and began the process, though CIA leaks have been made to discredit him, but even the MSM have had to eat some of their words. However, many things seem to be happening that suggests he won’t see out his full-term – one way or another…
Already people are setting Trump up for a fall… Here’s how Zero-Hedge put it
Roberto Gualtieri, chairman of the European Parliament’s economic and monetary affairs committee, also criticized Trump. “Some first concrete confirmations of a new more unilateral policy stance by the new U.S. administration, including on sensitive financial markets regulatory issues, raise concerns and require both thorough reflection and action from the EU side,” he told the committee.
Meanwhile, Draghi deflected accusations lobbed at him over the weekend by German finmin Schauble, who said not Germany, but the ECB and Mario Draghi, are responsible for the undervaluation of the euro:
And SGTReport who holds views similar to my own, regarding the economy, believes much the same with regard to Trump’s likely outcome, as those behind the scenes are attempting to undermine, discredit, or if they can’t impeach him, probably develop a plan to slay him, when they produced this video…
And of course #Pizzagate is just another FAKE News story…
And of course, it was Trump and those Russian hackers who stole the election… Except it wasn’t…
BUT, at least Trump is fighting back, and so are the Americans…
Those evil Bankers, Oil-men, Military Corporate CEOs and multi-million share-holders, and those working for them in the secretive security organisations – all 16 of them, are now going to have their teeth pulled as the fight-back begins…As Ron Paul, that arch-enemy of the Federal Reserve has already had his £0.02 worth..
So, if you’re in the markets, now might be prudent to lower your risk somewhat… Events have a habit of coming out of the blue, and given recent rises to bubble territory… and Cliff High’s, Jim Rickards’ and Bill Bonner’s and JIm Willie’s and Peter Schiff’s, David Morgan’s and Dr. Paul Craig Robert’s warnings a pull-back is long overdue.
This is an important adjunct to the above piece, as events come into focus:
The 15th March (Ides) is the day that Netherlands goes to the polls to elect a new leader. One in which the populist Geert Wilders is steadily making progress in the polls and is looking increasingly likely to win. BUT as Turkey and the Dutch go head to head over the latest political intrigue, will this mean Wilders gets more of the sympathetic vote, against the population concerned about the (as they see it) invasion of Islamists guaranteeing him the vote?
The second concerning thing is the reaching of the $20 Trillion debt ceiling in the U.S. on that date, while also the Federal Reserve on that day too will decide whether to raise interest rates for just the 3rd time in 10 years.
And, in the UK, after the House of Commons rejected the amendment voted for by the House of Lords, this frees the PM’s hands to announce the formal Brexit process.
And finally, Clif High – researcher, has been announcing over the last two months that March onwards is likely to be tumultuous, and after all that, I found this…(below)
Anyone who has been reading this blog for any length of time, will know my feelings on Precious metals, and this just threw petrol on the bonfire.
If you think this piece is good, and would like to post it or link to it, as long as we’re quoted as the originators, please do so.
And don’t forget to like us, or post a link on your facebook or twitter feed…
I haven’t posted for some time, because to be honest, there was just so much absolutely awful news, it is difficult to know which of the dozens of major news items to include, but as the threads of information come in, the picture is clearing and coming into focus…
This, economic situation is now so overbought, that I feel the Big Drop, will occur sometime in the next 12 months, because the U.S. economy, is probably going to be propped up. The next President will be, Donald J Trump, and of course, Hilary, who was bought and paid for by the corporataucracy – Wall St., Major Banks, senior Political figures and the mainstream media.
Donald Trump, amid accusations of his improprieties from decades ago emerged triumphant despite the accusations. Yet Hilary Clinton committed treasonous fraud, and lied under pain of perjury after she deleted 31,000 e-mails on her private e-mail servers, that Wikileaks, has now posted some of, that PROVE (https://www.wikileaks.com/podesta-emails/) that she was bought and paid for, by Wall St., the major U.S. Banks, and the 6 media giants who control the message that goes out to the American public.
The consitution of America, was set up to protect the people from big government, from the surveillance state, to protect the individual, from an over-bearing and over-arching government. People claimed rights, to be free from interference, and control, and yet, the events of 9/11, which many now suspect was a false flag event, has been used to bring about the control, that those in power seek, and want more of.
Adding to the many amendments that have occurred since 9/11, which have stripped Americans of their rights, are the recent changes to the medical system in America (ObamaCare) which is moving the nation towards a European style medical system, that some say, was designed to fail, which will mean that it will be nationalised, and when it goes, there will be many on the inside, who make out like bandits…
But, here’s some other events that have happened recently – Germany’s largest Bank was threatened with a $14 Billion fine, for the manipulation of the Silver Market (They admitted this, and are co-operating with the investigators). This just so happens to be the same sum, that the EC imposed on Apple, for alleged infringements of European Trading rules. (https://www.youtube.com/watch?v=SIiJndrN1bU)
This, figure was apparently amended so that Deutsche Bank will not be forced into bankruptcy to just $38 million, but no senior bankers will do any jail-time, despite the manipulation costing everyday investors, tens of thousands, if not millions of Pounds, Euros, Dollars and many miners in poor African and South American nations of jobs to feed their families and raise kids.
The problem is, that it was agreed under EC rules, and enacted legislation, that in future, no banks would be “Bailed out” by the state, or in reality the Central Banking Authorities wouldn’t, but the Banks would have to issue bonds, which would in reality, be underwritten by the state. This also meant that depositors, became unsecured creditors, and their deposits sequestered if the bank failed – the so-called “Bail-in” option. Angela Merkel couldn’t let Deutsche Bank be bailed out, but also couldn’t allow the Bank to be Bailed in, because the bank is so big, and so highly leveraged, with a derivatives book, built on just a 0.3% capital base, that risked bringing about the demise of the German economy, and plunging the Euro-zone into a full blown crisis.
However, in recent days, Janet Yellen has also admitted that the actions of the last 8 years since the Lehman crisis, have not worked, and yet, the Q.E. that has created more and more asset bubbles, in property, and on Wall St., and it is rumoured, that through the Exchange Stabilization fund, (ESF) the Fed, has already, using dark pools, been buying the stock-market, to support the value of many of these assets.
This is moving the American state towards Corporate Fascism, so that those in power control the people, and those in the financial oligarchy benefit, as the wealth of the middle-class, will be transferred to those in this cadré of financially connected people. In a downturn, the ability to profit from rapid fall in prices, (that’s how George Soros, was able to make a billion when the pound crashed out of the ERM) means that the wealth of the majority in Pensions, Investment Trusts and savings for retirement, gets transferred to these power players on the inside.
In recent days moves have been vocalised, to create a universal basic income in the U.S., – this is the equivalent of Fascism, which history teaches us, is that this is so similar to Communism, to be almost indistinguishable from one another. The only difference will be whether you can elect a leader, or whether the corporations chose the leader… and Mrs Clinton, was their choice.
This is also precisely how Nazi (National Socialist) Adolf Hitler, took control of the German economy in 1932, and directed it, towards military spending to artificially create jobs, but this also meant taking resources from other parts of the economy, to prop up those who were closely connected to him. The growth in military spending over the 14 years he was there, meant the economy suffered, as people were forced into manufacturing military equipment, and thus away from goods and services that benefitted themselves. And once those military expenditures were made, it became obvious that they would be used militarily.
The rhetoric being waged against President Putin of Russia, who have had a long standing alliance with Syria, dating back to the time of the Soviet Union, in the early 1960s, has a naval base on the Mediterranean Sea there, and is proof that those who are propagandists for Mrs Clinton, have an agenda, that was not being discussed. The mainstream media channels, do little to show how those opposition forces have blocked egress to the 250,000 Syrians living in eastern Aleppo, by blocking the streets, and allowing no humanitarian aid in, while ISIL/Daesh, is lobbing RPGs (Rocket Propelled Grenades) and mortars onto those of Western Aleppo – all which appears to be being supplied by Western supporters in Washington, who are ostensibly saying that they want to fight these opposition forces.
It also appears that when American forces attacked and killed the convoy of Syrian Troops (allegedly accidentally), the ISIL supporters appeared to have already been aware of this in advance, and simultaneously launched an attack, suggesting either prior information, or weak security over communications links.
These Islamic Militants, have a world view, that in America, would be challenged with the full force of the law and the increasingly militarized police forces that have been supplied with ex-military equipment, as if the police are being prepared for all-out unrest at home, amid rising disquiet from the public, about policing tactics.
So, why are these forces aligned against the Syrian Government? Why is the U.S. government so keen to ensure that the Syrian government falls, and the country descends into chaos, like the other multi-faith states of Iraq, Egypt, Libya and Afghanistan that have collapsed on the wake of western intervention? Is it to protect its major ally in the middle-east Israel? In recent years, Israel has been attacked on all sides by islamists protesting against the imposition of a jewish nation in their midst.
Israeli Oil and Gas industry was negligible ten plus years ago, but is now increasing as the Eastern Mediterranean is discoved to hold increasingly large amounts of gas and oil. Is the objective therefore to reduce these states to penury to create the conditions where the Oil majors can swoop in, “all in the cause of aid and inward investment – you understand” to buy up these assets while they are on the cheap, and to appoint puppet governments, and political systems supportive of the west?
As the rise in oil and Gas prices grew in the early 2000s, we saw that Russia was able to re-build its shattered economy, invest in new technology, and threaten the global hegemony of America, and its dollar control over the world of resources.
This obviously threatens the Neo-cons, who now control the so-called Deep State – a group of connected and powerful government insiders using their position in government departments and Corporate Headquarters, to enrich themselves, and press an agenda, that is skewed towards keeping America as the only super-power, while pushing the world towards a major World War, as they attempt to deny the rise of China, Russia, and to some extent India, with huge populations, increasing economic power, on the back of that increasing industrial and technological might. Witness that China now has its own Space Station, that 2 Chinese astronauts went to in recent weeks, and conducted experiments on silk worms while in the zero-gravity of space. This increasing confidence and ability obviously threatens the Americans who appear to be unwilling to give up their global leadership status without a fight – probably at the expense of its population.
This world view is based on the King Dollar, and the King dollar means suppression of alternatives such as precious metals, and other currencies. We saw that Libya was attacked because of Muammer El-Qaddaffi’s attempt to create a Golden Dinar, to circulate in North Africa especially for oil, while Iraq’s Saddam Hussein, began to sell oil for Euros in 1999, and plans were instigated as U.S. 4* General Wesley Clark, says in this widely reported interview that Washington had made the decision – “to take out 7 countries in 5 years”, and use the CIA created organisation – ISIS to destabilize these nations, so that the U.S. military can be called in.
And of course, those who promote war and financially back it such as the Rothschilds and Rockefellers of this world, further enrich themselves as they fund both sides, and the expenses created on the back of them. But these countries also, it should be noted, do not have a Rothschild controlled Central Bank.
President elect, Donald Trump explained to the American public, why they should vote for him, and he summed it up in one objective sentence, saying: “The current system favours the insiders, and they want to keep it that way – Donald Trump has no special interests except the people of America.”, and if you think, that the institutes of government have only your interests at heart, then you need to see this video… if you have young kids. I urge you to resist the urge to go out and commit medicide… Most of the medical professionals along with the American public have been misled too…
So, if President Trump expands the government spending on infrastructure, when will this take effect? And who will benefit. Whatever your political persuasions, this opens up investment opportunities, and I will attempt to uncover those Corporations who will be on the receiving end of this largesse.
But, if this increased spending begins to create inflation pressures, will the Fed raise rates, or will they continue to inflate this bubble, until it POPS!
And when it does? You can bet that the rush for the exits, will mean people rush to the only asset class, that has no-one else holding the bag… GOLD; (and its baby brother – silver!)
And of course, the miners, that have already risen well into double, and in some cases triple figures this year, will explode, even as the recent gold price has pulled back from its 2016 rise, catching its second breath. But who is listening? Maybe these guys know who are?
Until next time.
If you like this, remember to share this or publish a link to your Facebook page, or Twitter feed.
My reason for being interested in this, is largely because I have begun thinking about American hegemony which arose in the ashes of the second world war with its manufacturing industry still intact.
As a result of the Marshall Plan arrangement, a large debt of $12 Billion was created to enable the Europeans to rebuild their shattered economies. (And don’t forget, this was back when we still talked in millions for national economies)
This was owed to the U.S. by European nations, by giving them a line of credit to enable them to purchase American made goods, whilst rebuilding. At the time, America, who had raided the US citizens for their gold, had over 20,500 tonnes of Gold in its various vaults at Fort Knox, and under the Chase Manhattan Building, that the Chinese recently purchased. This gave the Americans the hegemony over Europe, who were the leading nations before that time.
This world hegemony, was cemented when the Soviet Empire collapsed in 1989, with the acceptance by those former communist states, that liberal democracy and private ownership were the way forward. When finally these nations began un-burdening their populations with rules regarding ownership of scarce resources, or manufacturing industries, and sold off these former state owned enterprises, (SOEs) the world was unipolar. And the dollar (formerly backed by gold) had given the U.S. immense advantages, in a world of rapid change.
Back in 1965, President de Gaulle of France told the world, that the current financial system, benefitted the Americans, because whereas the world had to pay for “stuff” such as oil, and food, and manufacturing goods, as well as the immense technological products that America seemed to have in the world of computing etc, with U.S. dollars. The Americans though, could just print up more dollars to buy that stuff. (Those technical advantages it has been argued by some, were as a result of the reverse engineering of captured alien technology, by America’s scientists such as Von Braun, who were former German engineers who departed for U.S. shores, after the fall of Hitler, and who themselves were alleged to have had visitations from the cosmos, but that’s another story, for another day.)
That link though, between America’s gold, and its place as the world reserve currency, ended on 15th August 1971, when President Nixon, got fed up with us Brits, and the French asking for some of their Gold back for pesky dollars, and closed “temporarily” the Gold window, ending the world’s right to return those dollars for something more tangible. The Central Bankers of the Fed, therefore, were keen not to let the world know just how much actual gold they had, as they massaged the books, by lumping together “Gold” and Gold Receivables” in a one line item in their balance sheet statement. In fact one commentator, Jeff Opdyke has already discussed document FT900, as giving clues to this. And Louise Auchincloss-Boyer, had told the world in 1974, that “All the gold in Fort Knox had gone” just days before she fell from her 10th floor apartment window – verdict probable suicide – Nothing to see here…(The Coming Battle)
But in the last few years as the amount of currency created by these banksters has flooded the world, those with an eye to the future have been stealthily, and not so stealthily buying up the ultimate insurance.
In fact the East – China, India and Russia to some extent have been the most avid purchasers, but a report emerged recently from Sprott Money, that now Norway’s and Switzerland’s Central Banks, are joinng the fray, when after the last 20+ years we’ve been led to believe that Gold was a barbarous relic of a bygone era, yet these two central banks, have each printed up $1billion and used it to buy Gold mining companies shares… So, printing up monopoly currency, to buy real assets is not just a Fed trick?
So, Why is the Fed so scared of Gold?
The answer to that question is simple: Gold’s price, tells you all you need to know about the value of currencies…particularly the dollar.
For 5,000 years, Gold has been exchangeable for other things, and money evolved from it, because they could make gold into small pieces for smaller purchases, and those pieces could be made into forms of adornment, making your wealth portable, durable, divisible, fungible and a unit of account, (which is all that real money is).
So, the value of a currency can be measured in gold – and vice versa. One troy ounce of Gold (31.15gms), currently buys around $1,334 of paper currency or circa £1,031 (as at 26th Sept, 2016 – $1.2937:£1) and Silver around $19.40, and those bits of paper and ink buy other things of value too, – oil, copper, tin, lead, bismuth, boron, Lithium, Gallium, Arsenic, and a myriad of other things. Coffee from Brasil, Uranium from Australia, Runner Beans from Kenya, Pop-music from Great Britain, i-Pads and i-Phones from China, Mercedes cars from Germany, and wine from France and Italy. The volume of stuff goes up in line with production and technological advantages, and the number of people producing them. Whilst the number of Dollars, Pounds Yen and Euros, goes up in line with those nations printing presses.
The problem for the American Federal Reserve is that Americans have got used to living on the cheap, and that means having King Dollar. But if other people don’t value that dollar, then they won’t give away as much “stuff” as the Americans would like, and in the final analysis, the value of any currency, is really only worth the amount of stuff it will buy, based on the labour, intellect, and materials, that go into finding or making that stuff… And Gold and Silver, take enormous capital injections, and immense energy and labour, with the appropriate management to find, smelt into doré bars, and finally to refine them into fine bars.
So a currency that is printed up in the Trillions on printing presses or computers, that only the Federal Reserve has access to, means those pieces of paper or electrons, shouldn’t really buy that much, unless they can be exchanged for Gold or some other valuable item from the rest of the world at a rate that is acceptable to both parties; and that is not likely to lose its value as fast as the pieces of paper – and therein lies the problem. America has little gold left. It has been used to manipulate the dollar, but the game is almost over. Dr. Jim Willlie says that the “End is Nigh.”, and dozens of others outside the Fed, and its MSM apparatchiks, agree.
With a gold backed dollar, the U.S. economy would have to compete on a fair basis world-wide, value for value, and not just use “funny money” to buy up scarce resources, or the time and talent of foreigners that have developed and built products. And America, would not be able to afford to station its forces in 147 different countries, nor wage wars on the scale they have hitherto either. And it would appear, the world is waking up to this injustice too…
Here below, Mike Maloney talks to Chris Martenson, and explains in simple terms how the Fed can magic up digital currency, and then use that new currency, to buy up assets that other people have sweated over, thought and laboured over, for huge amounts of time. And that is just not only immoral, but in the Fed, is called “Keynsianism”… And Mike in his inimitable style suggests the FED, is guilty of “manslaughter” at the very least.
Here also, Jim Sinclair, says emancipated gold, will ultimately reach $50,000 oz. It might, I suspect, but we are probably at least half a decade away from that, if not a generation (or two). Though if the SDR gets floated soon and becomes widely available as other currencies collapse, then it may – sooner, rather than later.
In one video, Dr Jim Willie discusseed with Elijah Johnson, the current state of affairs with respect of the American Dollar, and its status on international markets, including a mention I think that should be given wider prominence, a small matter of how the U.S. Navy fleet based in the Persian Gulf is having to pay for its diesel for its warships, with silver, as the Arabs, got tired of the depreciating asset – the dollar., or Treasury Bill, verging on negative yield, as the Fed does everything in its power to stimulate inflation, and more spending… However, for some reason, the video mysteriously disappeared from You-Tube; but Jim Willie suggests that Silver will be the straw that breaks the back of this Financial Camel…
So, what drives the price of Gold?
Obviously the difference between buys and sells, so the demand and scarcity of Gold has a bearing, but unfortunately, so do the paper derivatives used in the manipulation of the Gold price and the ratio of buys versus sells there too.. Which allows the major trading desks of the senior bullion banks, who are largely both the client banks, and owners of the Fed, to control the price to some degree – unless, they have no gold left to deliver, when a large buyer issues a buy order, and requests delivery. Which until now no serious buyer, has been prepared to do, though China, has been hoovering up gold around the world, in increasing amounts, and from its own mines, as well as those it owns overseas direct to its vaults since 2010.
JP Morgan-Chase Bank of New York too has been quietly buying, and has (according to Ted Butler of Butler Research) reputedly bought circa 500 million ounces of Silver – real physical silver, which presumably it will use to make major profits from in the fullness of time, but this might also be used to maintain price stability, if and when the derivatives markets blow up – which is increasingly likely, given the Shanghai Gold Exchange, which is tied to the physical market more closely, because participants must deposit gold (and presumably silver) in order to be able to sell on that marketplace.
This is likely to happen based on other factors.
So what are those other factors?
Those of use who follow commodities markets cannot fail to have noticed that price inflation, and Gold and Silver markets generally follow the currency volumes, which since 1970s, followed the price of oil, and which over a 12 year period from 1995, to 2007 went from circa $12/bbl, to $147/bbl briefly. Gold and silver followed on a little while later, peaking in price in late 2011, as the Fed flooded the world with dollars post the 2008 credit crunch. This action, largely echoed the events in the 1970s, when the oil price rocketed as a result of unrest in the middle-east and North Africa, as political machinations occurred there then too. Later, after the second line Banks went under, and the government, instructed the BoE to increase the money supply by 25%, we had inflation of 26.9% in Britain, and almost 25% in America. Back then we had powerful unions, who ensured their members were protected from these price rises by raising their wages, and industrial unrest reached a peak.
There’s a gold price chart in this piece that compares the 1970s price rises, with those in the period from 2000 to 2014, that shows you how the Gold prices have been shadowing the changes in that period, just circa 10x higher. Which gave rise to my confident prediction back then, that we would see $8,500 for Gold, and $500 for silver back when I first noticed it.
This time, the political changes, and plethora of service industries, has reduced that pressure, as people from Europe and further afield, immigrated into the UK, in large numbers, but as the Brexit vote showed, maybe now the people of Britain from the industrial heartlands, are fighting back, and even I have noted increased pay rates being offered at the bottom end of the pay spectrum as employers battle for the limited supply of labour as supplies from overseas dry up.
So, if the oil price drives the PM markets, what’s happening with oil?
I found this response to an item by Dr. Kent Moors, Professor at Duquesne University, and energy industry commentator, and governmental advisor on energy matters, articulating that the frackers in the American South-West are all leveraged to the price of money (interest rates) as well as the price of oil, so interest rate rises or low oil prices, will cause them to fail, if the price of oil falls much further, to below circa $40. Dr Moors suggested we could see a slew of bankruptcies later this year, as many as 130. I speculated in a previous piece, and even Wickipedia has mentioned this. According to – John England, Vice-Chairman Deloitte LLP, a statement on February 16, 2016 that – roughly 175 companies are at risk of bankruptcy and have more than $150 billion in debt, with the slipping value of secondary stock offerings and asset sales further hindering their ability to generate cash.
A crisis of this size, would help make the glut at the cushing oil terminal, and elsewhere disappear. The response below though has an interestiing perspective. In allowing the price of oil to climb the oil majors face issues, and a commentator obviously by someone close to the action wrote this, and which goes some way to suggesting where the price of oil, and thus where Gold and Silver are going.
September 15th, 2016 at 23:03 | #1Reply | Quote – Bob Schubring
I fully expect to see some volatility on the way up. Historically, Saudi Arabia has held the price of oil, such that between 10 and 20 barrels of oil, sold for the exact number of US doilars, that would buy 1 troy ounce of gold in the current-month futures contract. The Saudi Crown would intervene in either the gold or oil markets to achieve a correction, keeping the exchange rate between 10 and 20 bbl oil per oz gold, from 1985 until 2014. Over the past year, that price range shifted dramatically, remaining consistently above 20 bbl per oz and making three sharp peaks above 30 bbl per oz, at which point major trend changes struck oil, gold, silver, and currency markets, usually accompanied by a sell-off of stock. Since it’s record peak of 38 bbl per oz set this year, oil prices have risen against gold.
Any near-term rise in market volatility (eg a 10% correction in the stock market) will push up the dollar price of gold, thereby reversing what Saudi rulers consider a favorable trend. Even the very looniest nut-cases among them, see the futility of throwing away the Gift of Allah (their phrase for oil reserves) to get a wee bit of gold bullion, when by producing less oil, they historically bought more gold for the same amount of oil.
I really don’t think there will be a consensus amongst the Saudi rulers, if oil trades back to 35 barrels per ounce of gold, as the result of continued overproduction and overselling. The hardliners will recognize they cannot defeat the US by giving away cheap oil.
Whereupon, the younger and more pragmatic of King Salman’s brains trust, will focus on allowing spot crude prices to normalize, in time for the ARAMCO IPO. They’ll get that done, (insh’Allah), as soon as hardliners allow it.
What many in that Saudi brains trust actually want, is to acquire some distressed assets of struggling US shale and off-shore producers. The only cheaper place to wildcat for oil, than the New York Stock Exchange, is the office of the US Bankruptcy Trustee…and there will be a bumper crop of such bankruptcies this year. I won’t be at all surprised to see a sharp correction in November, in which crude prices retreat back toward $40/bbl before resuming the climb to the $60/bbl range in 2017.
So, that suggests we will see a pull-back in the Gold price, until then, before it begins its meteoric rise to our longer-term targets.
Money manager Michael Pento wrote a book a few years ago warning of “The Coming Bond Market Collapse.” All the signs say this calamity is very close. Pento explains, “Global central bank balance sheets have risen from $6 trillion in 2007 to $21 trillion today. That’s the increase in the size of central bank balance sheets. . . . I can prove to you when this bubble breaks, it’s going to be disastrous. . . . Just that they (European Central Bank-ECB) didn’t hint at expanding QE and look at what it has rendered us. That’s proof positive that everything that has happened since the 2008 collapse, that it’s just been artificial and ephemeral in nature. Once central banks even hint at pulling back from their QE programs and ZIRP and NIRP go away, bonds will crash, and when those sovereign bonds crash on a global basis, it’s going to take everything else down with it concurrently.” which will mean people flee into the only safe haven assets left – Gold, Silver and other precious metals.
In the meantime, those of us interested in shares in the junior commodities space, might be interested in some of the producers that are just about profitable at these low prices, with good resources, and an optimistic future if events turn out for the better. One – ASA Resources, a micro cap, with operations in several countries recently bought a slaughterhouse in South-Africa, which perplexed me, but it will in the longer term provide regular income, and some stability in terms of price, though may take the edge off the commodity space as their Gold and Nickel assets in Zimbabwe are about to erupt.
That said, Zimbabwe’s President Robert Gabrielle Mugabe, is suffering his own problems, as his brand of black socialism (he himself termed himself a Black Nazi) delivers the expected outcomes – a failing economy. Mugabe is now struggling for currency, and only the miners, with producing assets such as ASA, currently producing just short of 60,000oz p.a., are bringing in hard currency. But Mugabe’s problems go deeper. The Police and armed forces, that have traditionally supported Mugabe, are now turning against him, as the economy implodes because of a lack of currency for salaries. In fact hundreds of thousands are fleeing to South Africa, and over 3million have already fled..
When Mugabe goes – however or whenever that is – and at 92, that cannot be before much longer, the value of all profitable businesses will reach their true value. As I’ve mentioned to those that know me, the assets that ASA controls if fair value (i.e. cost price) were met, the company could be a £500-750 million Corporation. Given that it is currently valued at about £32m, that is a great deal higher than its value today.
Good luck and happy hunting.
If you like this piece, then please like it, or share links via social media, or your web-site.
Note: We are not investment advisers, and nothing in this should be considered as such. Share Prices can go down as well as up, and you should not risk more than you can afford to lose. You should also take appropriate investment advice from a professional adviser.