America

Just Another Fake News Story?

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Whilst browsing the internet, I come across many things, that deserve a wider audience, but am unable to offer any further evidence of these sometimes outlandish claims. Not so today.

This piece linked to below, really revolves around a much talked about subject, and one I have myself been involved in writing about, so this piece would appear to add further credence to the mystery.

http://themillenniumreport.com/2016/10/treason-who-did-911-and-why-did-they-do-it/

Who was responsible for 9/11?  WHY did they carry out the attacks of the World Trade Center (WTC)?  And if two planes brought down buildings one and two, how did building 7, a block or two away, across a wide expanse, collapse vertically, and yet was still upright when a BBC news anchor with a live link behind her, showing the building – that could be seen by all those sufficiently awake to notice, – was still visible, while we were being told that the building had already gone down?

The piece linked to above reads like an episode of: “The Bourne Trilogy” with a cast of characters taken from: Politics, Corporate Energy, Mafia and Banking Interests across the western world. I wrote too in the book  “The Coming Battle – 2013”  that events were spiralling out of control.

General Wesley Clark in a video interview explained that he was told in advance of plans to intervene in seven middle-eastern countries, all based on the lie of 9/11… The latest in a long line of black-ops “False-Flag” events, that were used to sway American -and in this case – worldwide opinion to permit those with their own agenda to influence events. And he also discussed what happened next and he recalled how the decision was taken back in 1991 –

It used to be that the propagandists with people inside the military and secret service industries, could modify the News agenda to get the outcomes that they wanted, and due to secrecy laws, their misdeeds would go unpunished for thirty years or more until after the secret documents could be widely accessed. BUT, the Internet has changed all that. The Mainstream News Organisations (MSM) exist to make money for their shareholders and senior management teams – and the corporations that advertise and market their wares on them, are generally large multi-nationals – the very corporations that the MSM is supposed to be keeping a beady eye on, in its role as defender of the public and the customer,  are the very same ones using politics to pursue their own agenda.

As ever, “He who pays the piper, calls the tune.”

So, as corruption apparently swirls around the world, I hear of imminent plans to rid the world of physical coins and notes – particularly in America, where many of the U.S.’s states, and institutions are seemingly hell-bent on destroying the last vestige of freedom – the freedom to spend as you like – by outlawing payment in anything other than digital means.

So will Gold and Silver be once more used to “Barter” with?

Will the closure of your bank, be the event that makes you take action?

Will the ATM closing, or your Bank closing one weekend and not re-opening again on Monday make you take action?

Will the disappearance of your pension fund make you take action?

The time has come.

 

 

 

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The Eighth Wonder of the World… And a Curse.

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“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” [Albert Einstein]

EyeOfTheStorm-Now

  1. 2008 – 2012
  2. 2012 – 2016
  3. 2016 – ? (2018-20?)

We are emerging from the eye of this particular storm…into more turbulent times ahead.

Uncertainty in politics, breeds uncertainty and volatility in economics and markets. People postpone major purchases until they have a clearer idea of how things will unfold. And businesses too, judge the future and make investment decisions accordingly. But the Debts built up during the 2008 crisis, have still to be repaid, and will now begin to unwind, or lead us into hyperinflation.

Having money in a bank account, that earns interest, is a distant memory for many people, as interest rates around the world have been reduced, eliminated or worse.

Britain’s and Western National Debts, have an interest charge levied on them, which is being, at least in part, controlled by the Federal Reserve, who came to Europe’s aid (again!) when it loaned $15 trillion during the heat of the last financial crisis. Britain too loaded itself up to the neck with debt, to help its banks, and latterly, International Banks from Greece, Spain, Ireland, and Portugal. and its current account is, as I have mentioned an enormous debt of — £1.7 Trillion. At a modest 0.0025% (¼%) that translates as …

Drumroll… £4,250,000,000 per year. (£4.25 billion…) However, even a modest increase to say 2% p.a. over the next 2 years, will likely kill the British economy, and with it, any hopes of a full recovery.

At 2% our debt repayments are: £34,000,000,000 – (£34 billion) enough to build approximately 50 new hospitals and staff them for a few years. Who said being a banker was easy?

But this image from Raoul Pal, tells the even bigger picture (even if it is a couple of years old).

Debt-2-GDP-Ratio

Whose debt is biggest?

The debt to GDP ratio includes pension and other obligations.  Is this why Britain’s politicians are so keen to import foreigners, to help pay off this debt?

Those savers who have worked hard all their life, and tucked away a little for their retirement, are earning precious little from their savings. Funds that perhaps they have ear-marked for a retirement home, a secure retirement future knowing that their money is safe in a Bank, or where they can get at it quickly, in the event of an emergency, to meet unexpected bills are shortly going to experience the greatest loss of value in their lives, through inflation.

In a world where money is finite: interest rates serve the function of allocating money to its competing potential users. Those that require investment money will bid for this scarce resource, driving up interest rates, in times of high demand. This rising interest rate trend signals to the business community, that there is high demand for money, and this can indicate that businesses are expanding, or that competition is increasing (usually early in the market cycle) and those who seek to spend for their current enjoyment, begin to realise that they cannot afford higher payments, and thus this slows the economy as spending is curbed.

When currency is infinite as is with Fractional Reserve Lending: the only brake on increased amounts is the Banker’s concerns as to whether they will get paid back, or not – and thus it might threaten their balance sheet. This leads to booms… and busts.

This has been the state of affairs ever since this practice was formed, but became worse when the world left the Gold Standard, and the U.S. finally severed the last remaining link to Gold on August 15th 1971, when Richard Milhous Nixon, closed the Gold Window.

Almost three years later Louise Auchincloss Boyer, fell from her 10th story window, just days after a story that she was alleged was to be the source of, that “All the Gold in Fort Knox has gone.” Her death was judged suicide… (Link: You can read the full story – Here )

Britain’s debt is even worse than I feared.

Late on Saturday night, I was researching Britain’s National Debt, and to my surprise and horror, I found it was even worse, than I suspected.

Anyone who has a mortgage, or variable rate loan, ought to be on pins and needles, as interest rates are set to rise, for a number of reasons.

Deutsche Bank’s chief economist David Folkerts-Landau just released a scathing report, aptly titled: “The ECB Must Change,” in which he calls the ECB out from a banker’s perspective, which is now eerily similar to a layman’s.

“After seven years of ever-looser monetary policy there is increasing evidence that following the current dogma, broad-based quantitative easing and negative interest rates, risks the long-term stability of the eurozone…

…Already it is clear that lower and lower interest rates and ever larger purchases are confronting the law of decreasing returns…. but the ECB’s response is to push policy to further extremes. This causes mis-allocations in the real economy that become increasingly hard to reverse without even greater pain. Savers lose, while stock and apartment owners rejoice…

Thereby ECB policy is threatening the European project as a whole for the sake of short-term financial stability…. The longer policy prevents the necessary catharsis, the more it contributes to the growth of populist or extremist politics…

A returning to market-based pricing of sovereign risk will incentivize governments to begin growth-friendly reforms and to tackle fiscal stability. Flagging the move should dampen adverse reactions in financial markets.

We believe that normalising rates would be seen as a positive signal by consumers and corporate investors. The longer the ECB persists with unconventional monetary policy, the greater the damage to the European project will be.”

Japanese Rate Rises?

And even in Japan, interest rate rises are being discussed:

Bank of Japan policy board member Takehiro Sato went public in a speech to business leaders two weeks ago. Here are some key quotes showing what amounts to complete opposition to the Bank of Japan’s current course:

“When there is a negative spread, shrinking the balance sheet, rather than expanding it, would be a reasonable business decision… leading to restraining loans to borrowers with potentially high credit costs and raising interest rates on loans to firms with poor access to finance.”

As for those borrowers, think SMEs, entrepreneurs, everyone from the middle-class down, and virtually everyone but the corporate interests that have succeeded in regulatory capture worldwide.

“A weakening of the financial intermediary functioning could affect the financial system’s resilience against shocks in times of stress.”

He also said:

“There is also the risk that financial institutions that have problems in terms of profitability or fiscal soundness will make loans and investment without adequate risk valuation… I detect a vulnerability similar to that seen before the so-called VaR (Value at Risk) shock in 2003.”

Taken together, Mr. Sato is essentially saying that negative rates are stunting the chances of economic growth, removing any chance to soften the blow when it comes, and is setting us all up for wealth destruction across the board, giving policy makers no capability to react if a downturn begins.

Japanese politicians seem to be taking the ball and running with it. A key policy chief of the opposition party is now calling for Prime Minister Abe and the BoJ to begin raising rates.

In particular, the new platform cites how these policies hurt savers, along with its failure to boost inflation, wages, and has a negative crash in trade balances.

And in America too, are Interest Rates set to rise?

Gerardo Del Real, the Outsider Club’s newest expert, is spot on on how this will pan out for the U.S. . Just last week, he had this to say, which bears repeating:

“So what to do? Understand that the big money, the portfolio managers, pension funds, and insurers cannot continue to invest exclusively in negative-yielding assets.

Understand that a trickle of the trillions they manage will work its way to the U.S. markets, the dollar, and gold. Not because they’re gold-bugs, but because they will have no choice.

Understand that of those three options — the U.S. stock market, the dollar, and gold — gold is the smallest market and therefore the most susceptible to the largest moves.

Within the gold market, the junior resource market — especially the junior gold companies — has been absolutely decimated, and provides the best risk-reward proposition.” (See my last post – Apocalypse Now)

Few people are more reviled by everyday people than bankers, and rightfully so.

They hide usury in the fine print and send Court Sherriffs to evict you from your home in their stead.

They distort and manipulate markets for their own gains, from LIBOR, to the gold fix, to silver prices, to exchange rates, and on and on.

Then, with the corruption of a wink and a nod, they use regulatory capture to remove all risk and collect cushy bailouts while manufacturing and commercial jobs disappear, wages shrink, and with it the tax base as neighborhoods fall into squalor.

Throughout the 80s, the North of England – Northumberland, Merseyside, Greater Manchester, South Wales were all hit hard as deep mined coal pits closed, and the industries that had grown up with them, went with them.

A piece written just over 100 years ago, after a Banking Panic in the U.S., brought about largely by the tactics of the Banks, and which surprisingly, our recent “Credit Crunch” appeared to be a mere replication writ large goes as below.

The writer, George Howard Earle, Jr. of the Real Estate Trust Company, in 1908 wrote:

A Central Bank as a Menace to Liberty

The solution of the problem of a central bank, with power to control the currency of the United States, to be at all adequate, must depend upon and be controlled by ultimate political principles.

The same principle that underlies the never-ending conflict between the advocates of a strong centralized government and what are called “states rights,” governs this question.

Taught in the school of experience and adversity, the early English and American patriots learned the salutary lesson that the development of peoples, as well as their happiness, depended more upon liberty – that is, the power to control and govern themselves, rather than to be controlled or governed by anybody else – than upon any other single thing; and they, therefore, in drafting our Constitution, always viewed government as an evil made necessary by the weakness and defects of human nature, and never extended it beyond that necessity.

Under the plan of freedom, of self-reliance, self-dependence, self-government, we have become the greatest, the happiest, the most powerful people of the world; but notwithstanding these proofs to justify the work of the Fathers, we have more and more concluded that we could have done a great deal better.

We are rapidly tending in the opposite direction, which must 506 inevitably destroy liberty by vesting all discretion in some form of central government, rather than in the people as individual, independent entities.

Starting with the theory that government but existed because of the defects of mankind, and was but an evil wherever it exceeded the necessity of restraining evil human tendencies, we have now reached the higher light wherein we produce schemes of regulating everything, until liberty is but a name, and we govern ourselves by theories entirely independent of the characteristics of the people to whom our systems are to apply.

It is difficult to find any one, nowadays, who has not some “counsel of perfection,” and founded on it, some theory of government that would work perfectly with a perfect race, in whom neither self-interest nor passion existed and that, consequently, did not need any government at all.

The same could be said of any central authority, whether in Britain, or further across Europe.

All control passed to others, means they will meddle. And in meddling, they will postpone the inevitable, but each time they postpone, the crisis merely gets bigger, and more unstable. Eventually, there is no-one big enough to stop it.

We will shortly find out, if this will be in the next credit crisis. Those who have salted away bit-coins, gold and silver, will fare best. Those who have borowed to feed their insatiable habit to spend, will not surprisingly, not do well.

Money, real money (Gold and Silver) takes time to make, is hewed from the ground at great expense, and whilst its value varies with the day, the month and the year, it’s value never disappears totally and increases over time – even if in fits and starts..

Credit created out of a Banker’s pen, printing plates, or these days computer, can disappear in a cloud of smoke. Over 200 currencies have disappeared since the dawn of the printing press, and fractional reserve lending, but Gold and Silver are still an ounce of Gold, and a Pound of Sterling Silver, from which Britain’s derived its name, and now our currency takes its name.

Central Bankers, therefore are more the problem, than the cure.

Here, Daniel Hannan – discusses the implications for the future with Emma Reynolds who puts forward the case to remain.. Daniel Hannan puts forward his reasons for wishing to leave.

A vote to Remain is a vote for…
Big Government
BIG Corporations
BIG Banks
and BIG BROTHER.

Britain, grew into the world’s superpower, in the 1800s, and now leader of the 64 nation Commonwealth, by extolling those things that we Brits hold dear. The law grew up from natural laws – “Common Law”, where people devised the behaviours they supported, and those they despised. Law was a higher source of guidance in man’s affairs, and it wasn’t handed down from  “on high” – i.e. from those holding the reins of power – as has been the case in most of the world – and particular the Eurasian legal systems – Roman Law, Napoleonic Law, or Regal Law.

This piece lays out the historical context.

When the money (Gold) runs out…

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As governments have used their ammunition in fighting to retain power for their Fiat currencies, the price of Gold and the Exchange Traded Product (ETP) or Exchange Traded Fund as it is more commonly called for Gold – the GLD has fallen.

But there comes a time in every charlatan’s performance when those watching no longer believe in the power of the magician pulling the strings behind the scenes.

In this case the arm of power behind the throne – the Central Banks – have sold or leased much of their Gold to Bullion Banks, who have sold this gold on the markets as their futures contracts came to an end, and the buyers took delivery, rather than as might have happened previously – settled in cash – it is increasingly obvious that as the number of contracts increase and more and more gold heads east to China and India, and north to Russia, and to numerous other central banks worried about their gold held in U.S. vaults, and have begun to increase their holdings, and repatriate their gold from overseas vaults, that it couldn’t go on forever.

And then this piece caught my eye…

http://www.kitco.com/commentaries/2015-09-29/Not-Enough-Gold-To-Pay-All-Holders-Of-Gold-Obligations.html

So what will happen when the gold does really run out?

Initially, I suspect Bankers will settle for cash, but probably have to pay a premium to do so, as those who own the metals contracts extract their pound of flesh. This will probably be under the radar, at first, but it will eventually leak out, and as more and more people have to settle for cash, the premiums will rise. This will feed through into the published prices, as the disconnect between the paper price and the settle price increasingly becomes obvious.

According to figures I’ve seen there are between 100 and 200 contracted ounces, for every real ounce in existence. This is how the Bankers came to dominate the world and its economies. The left hand not letting the right hand know the truth or what it was upto.

Fractional Reserve Lending meant lending out upto 10times the amount held on deposit. Of course this assumes they hold ten per-cent in reserve. BUT in the last ten years, those same bankers have had as little as 3 per-cent and that means they were lending out in excess of 30x their reserves. And that is the reason for the boom, and the bust when we had our Bear Sterns and Lehman moments.

If the Bankers persist in this lending and futures contracts binge, then it will end in disaster for the banks (and us) but at that point, the price of gold – both official and unofficial, will explode to the upside.

Of course in the meantime, as Harry Dent has stated on several occasions, the price may fall in the meantime, as first deflation due to demographics, and his convergence waves take hold, but as has been mooted on Bloomberg today, perhaps QE4 is but a printing press away?

And if it happens, when all that money leaks into the economy?

Can you say Boom?

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Digital Currency – The Last Refuge of a Banking Scoundrel?

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In the news over the weekend, we heard the story that Andrew Haldane, the chief economist and executive director for monetary analysis and statistics at the UK’s Bank of England, has tried to run up the flagpole, the prospect of a digital only currency. America too is discussing this.

Now, why would a Banker do this?

What is a Bank? Primarily it stores savings (Capital) for its customers, and loans out this money (well we’ll call it money for now) to businesses and others to finance the development of new products and services, which add value, assist in growth, employ people, and spread prosperity throughout the nation (or currency union).

However, when a country has excess savings, these are liabilities on the bank’s books, and has been touched on several times throughout the time of this blog, these have to be paid back. However, there may be times when there are fewer good opportunities to loan money out for the banks, with huge amounts of money sitting in savings and today is one such time.

The driving force behind this excess savings is demographics. Demographics is the study of populations. The studies look at birth, and death rates, gender etc, and at how those births and deaths impact the society, and the economy. Where we build schools, hospitals, and even infrastructure like industrial parks.

After the second world war, all those returning service personnel got busy making babies. It happened in America and the Pacific region in ’47, it happened in Europe in ’46, as those two major conflagrations came to an end.

Twenty years later in the sixties, those babies, now young adults drove the swinging sixties, and Carnaby Street, the music and fashion scene as they all began doing what young people do. The children of those people reached maturity 20 years later, in the 80s and early 90s, driving Punk music, New-wave and the New Romantics, the “Acid house” scene, and the Brit-pop and Indie scenes of the 90s. This was the shadow boom as you might call it. These children of the baby-boomers are driving the economy now, as they reach their 40s, and lead consumption spending, but soon this too will slow.

Of course the baby-boomers as they are known, those born after WWII, are now frantically saving for their retirements, buying buy-to-let properties, and investing in their pension funds and therein lies the rub. All that capital going into savings has led to several booms; in Technology, in Housing, and since the 2009 credit crunch, the stock-markets in general. But since early 2012, the baby-boomers have been retiring in droves at the rate of circa 8-10,000 people per day, in the U.S. alone, and because of the low interest rates, and the drive to “save the economy” the Central Banks have loaned the people, and their representatives (governments) huge amounts of money.

America has an $18 Trillion public debt. Britain is in an even worse situation (person for person) with a public debt of £1.4 Trillion ($2Trillion+) And those Bankers are now worried that they might not get their money back.

And what IS money? When money was just Gold and Silver, the Bankers got rich, by lending pieces of paper, that were exchangeable for Gold and Silver, that they had mysteriously created out of nothing more than paper and ink. This fractional reserve lending, grew their power, and grew their immense wealth.

The Houses of Rothschild, Morgan, Seif, Rockefeller and others who ran or owned Banks became the powers behind the thrones of more countries than could be imagined.

Digital Currency Drawbacks?

If we can just take our money “out of the banks”, this should force Bank Presidents to be prudent with it, or, as we saw with Northern Rock, we get a run on the Banks. When our money (or rather currency) is just digits on a Bank Balance sheet, we cannot. This means Bankers can fund whatever they want, without worrying about us cutting off their drug supply.

But a purely digital currency has several other drawbacks too.

With a purely digital currency, EVERY transaction will register on a computer somewhere. Tax Authorities will therefore be able to trace every transaction – And TAX it. That tax goes to pay salaries of government employees, but it also pays for those in politics, who may not always disclose where that money goes: Funding Wars overseas, providing incentives and making deals in private rooms under the guise of “National Security”, and it pays off the loans that bankers make to governments – all made possible by greater tax taking.

But a further worry is that the account details of every person will also need to be held somewhere too, making the prospect of 1984 as written about by George Orwell a frightening reality.

The informal economy disappears too.

Tipping a waiter, a Cabbie, a Pizza Delivery boy or even the Bin-man come Xmas time, becomes almost impossible. The loss of these ways of showing appreciation, potentially makes poor service a given, as with no financial incentive to provide excellent service, these people may offer mediocre service at best, or even leave the industry making many restaurants forced to pay higher wages forcing up costs, and thus reducing the number of visits per week, per month or per year. Giving someone a £50 note for a Birthday present, or Xmas present becomes impossible too. Teenagers everywhere will suffer, and grand-parents will actually have to get to know them and find out what their kids actually need – or want – and they may get a few unusual requests or worse…

But, the one big drawback for everyone, is not zero interest, it is negative interest rates. Which means charging you to hold your money. Anyone with savings in an account, or perhaps as the result of a house sale, becomes just another potential donor to a Banker’s lifestyle.

BUT the ultimate issue is one of liberty and trust. A business deal of old, demanded nothing more than the money, and a handshake. This relied on trust of the money, and the person. In a digital world, all trust comes down to is your credit rating, and your government granted identity number. Perhaps ultimately your radio frequency identification (RFID) chip implanted under your skin, so you don’t even need to carry a bank card.

But it also opens up a world of potential to deny you access to things the government thinks you shouldn’t see, or get access to. In effect WE become slaves to government, and the people who pull their strings, instead of government working for us. And that is the most important reason, why it should NEVER be considered the only way to pay.

“Bank paper must be suppressed and the circulation restored to the nation to whom it belongs.
“The power to issue money should be taken from the banks and restored to congress and the people.
“I sincerely believe that banking establishments are more dangerous than standing armies.
“I am not among those who fear the people. They and not the rich, are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt.”

Thomas Jefferson – Former President of the U.S. of A.

And in his farewell address to the people, March 3, 1837, President Andrew Jackson solemnly warned the people against the Banker’s power, after the recent financial crisis; as the “Credit Crunch” is still ringing in our ears, it appears VERY apposite

“We are not left to conjecture how the moneyed power, thus organized, and with such a weapon in its hands, would be likely to use it. The distress and alarm which pervaded and agitated the whole country, when the Bank of the United States waged war upon the people in order to compel them to submit to their demands, cannot yet be forgotten.

The ruthless and unsparing temper with which whole cities and communities were oppressed, individuals impoverished and ruined, a scene of cheerful prosperity suddenly changed into one of gloom and despondency, ought to be indelibly impressed on the memory of the people of the United States. If such was its power in a time of peace, what would it not have been in a season of war, with an enemy at your doors.

No nation but the freeman of the United States could have come out victorious from such contest; yet, if you had not conquered, the Government would have passed from the hands of the many to the hands of the few; and this organized money power, from its secret conclave, would have dictated the choice of your highest officers, and compelled you to make peace or war, as best suited their own wishes. The form of your Government might for a time have remained, but its living spirit would have departed from it.”
(Read more at: The Coming Battle 2013 )

And Finally, if the above comes to pass, what will our International trading partners make of a currency, that can be conjured up on a computer by a banker? If China sells us Cars, Computer Equipment, Smart-phones etc, and all they get in return is a ledger entry on a computer, what confidence will they have that those digits will be worth anything, when they decide to spend them, possibly years later. What would you do if you were China?

If we are ever to have international finance based on trust, then there is only one solution – currency must be in the final analysis, backed by precious metals. and those metals represent true value, even if their value may vary from time to time – but Gold is still gold, and Silver is still silver. Platinum, and Palladium too are useful – usable in catalysts, jewelry and other uses. Silver is usable in 10,000 uses and rising, and its value and availability are about to get a whole lot rarer, and a whole lot more expensive as a result.

So if this does come to pass, who is really in charge in the UK? The Government? or its Financiers?

If you want to move your money out of the Bankers’ way? Then Click Here to get started.
PS:
After posting this I discovered a video clip by Max Keiser of the Keiser Report, which mentions the speech by Andy Haldane. Let me know what you think below.


W.

The New Revolution

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Most people don’t know it, but there’s a quiet revolution going on. A revolution in energy supply.

Ever since the dawn of the first industrial revolution, when wood burning gave way to the first water wheels and windmills, and lignite burning, peat burning and then coal, energy has driven the economy. The new energy materials and technologies spurred the industrial revolution, releasing and then capturing that energy made mass production possible, bringing consumer products to the masses.

A second revolution happened in 1901, as oil which had been used in lamps for centuries, and used in petroleum as early as 1870, became cheap enough to drive the second wave of energy use, when Spindletop reservoir in Texas gushed forth, and the U.S. oil supply doubled in an instant. The oil-well took nine days to bring under control, and supplied 100,000 barrels of oil per day, wasting almost a million barrels of oil. However, that spurred further exploration, and all that added oil, made the mass-produced car, the plane and the modern economy possible.

Diesels, plastics, pharmaceuticals and modern agri-business with its NPK based fertilizer, were all made possible from oil. The discovery and development of these new technologies enabled them to win both world wars as technological advantage in the form of military superiority and the cost of moving men, supplies and machines to their required location all worked in their favour. But the spike to $147 per barrel in 2007, plus the talk of “Peak Oil” which was prevalent during the early 2000s, ushered in research into alternatives. And the dominance of oil producers in the unstable Middle-Eastern region was a powerful driver.

Read the rest of this entry »

A New Russian Winter, or the Calm before the Storm?

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Some weeks ago, before Xmas, I floated the proposition that “The West” might be about to shoot itself in the head, heart, AND foot, just to make sure.

My reasoning was that Russia, might be about to demand payment in Rubles for their gas and oil and other things, which would effectively shoot the west in the aforementioned organs, as they sought to ratchet up pressure on President Vladimir Putin.

The U.S. through its monetary influences and power in International Organisations – the World Bank, the IMF, BIS, Federal Reserve, and of course the ECB, Bank of England, U.N. and Bank of Japan etc, is waging a war against Russia, in a vain attempt at defending and extending its influence in the middle-eastern region, and throughout the near east, ostensibly to protect itself from the rise of China and a resurgent Russia. (more of which later)

The beginnings of this madness began with the end of the Soviet Union. The west in NATO, and through European organisations made agreements with the Soviets, to not encroach into former soviet countries, yet many of those countries, in order to avoid the risk of re-colonisation, chose to join the North Atlantic Treaty Organisation (NATO) and/or the European Union. (E.U.). This was also of course to strengthen the U.S’s Federal Reserve backed monetary system, which as I’ve mentioned numerous times is now no longer backed by physical precious metals.

Of course, when the U.S., under its attempt to extend its influence in the region, encouraged the western larger part of Ukraine to throw off its recently elected leader as it were, to rub Putin’s nose in it, and incurred the wrath of the Crimean Russians, and the Russian speaking ethnic Russians east of the Dneiper River, it essentially wandered into Russia’s back-yard, and that was the straw that broke the camel’s back.

The Crimeans, who are predominately ethnically Russian, were backed into a corner, as the new western backed government in Kiev, made the Russian language illegal.

Imagine if you were a Welsh speaking Welsh person, and the incoming British government, made your language illegal? Or Irish? or Highland Scottish and they tried to make Gaelic illegal?

You’d be pretty PO’d too…

The Crimeans, who felt Russian, spoke Russian, and historically WERE Russian – If we remember our history – Balaclava, near to Sevastopol, on the western coast of Crimea, is where the British Light Brigade, charged the Russian guns, to such detrimental effect, in 1854, and it is remembered in the rousing poem by Alfred, Lord Tennyson. So, a hundred and fifty years ago, this part of the world, was as Russian as it surely is today.

The President, of Russia, kept a low profile recently, and even disappeared from view for ten days, prompting mass media speculation by western media about his health. Of course, when he reappeared, the President issued a wry smile, and joked about “gossip”.

But behind the scenes, the Russian bear is fighting back against the Dollar hegemony. Of course the war of words is being ratcheted up as American military conduct war games in Estonia, this week-end, a former Soviet satellite nation, and right next to the Russian mainland.

Guyane Chichakyan a journalist for RT, posed an interesting question to one of the U.S. government’s PR spokespersons today (Saturday) when she asked Jeff Rathke of the U.S. State Department: Why was it that when Russia conducted military exercises on their own soil, it was supposedly raising tensions, but when Americans conducted military exercises several thousand miles away from home on Russia’s borders, it was in the guise of international peace and security.

The PR guy nearly choked on his reply, denying that they had ever said such a thing, to which, RT showed a clip of Jen Psaki of the U.S. State Department, on August 14th, 2014, doing just that, when referring to events in Ukraine and close to the Ukrainian border. As I mentioned some months ago, the next world war has already begun as a war of words, and for people’s hearts and minds. Every channel, both public and private will be used. It will in all inevitability end in a military war, though perhaps not on such a full-scale as the last one in 1939.

But perhaps also the anti-U.S. state of mind is gathering steam… As I mentioned some weeks ago, Britain applied to become a founding member of the AIIB (Asian Infrastructure Investment Bank) the alternative to the U.S. dominated World Bank and IMF, and we hear from the New York Times, that now Germany, France and Italy wish to join in defiance of U.S.’s (cough) “requests”.

Perhaps the dollar’s end as a major world currency is finally coming to an end, as a result of the mass Q.E. exercise of recent years.

It is time we all engaged our brains.

And then last week, I read this… http://russia-insider.com/en/2015/03/19/4696 which discusses just that.

If a shooting war does begin in earnest, money – hold in your hands money – will allow you to survive the inevitable inflation that will ensue, and the grey market will offer up far more than the government enforced, and controlled ones. If you value your freedoms, liberties, and the health and well-being of your family and friends, I strongly suggest you begin preparing – if you haven’t already.

Gold and Silver coins and widely accepted silver and gold ingots of widely known mints will prove to be good ways to secure your own future “essentials”. And Bitcoin, and other [Alt-coins] will enable international transactions. You can begin your own FREE collection of these precious [Alt-coins], when you set up an account by merely supplying an e-mail address.

We’re all slaves now…

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Over the previous weekend, I bought a DVD, of a film, I’d been hoping to watch for some time. I would have gone to the cinema, but my wife prefers Rom-Coms, to historical dramas, and my friends all live disparate lives, so I had to watch it home alone.

It featured that giant of the acting world – Daniel Day-Lewis, in a role he was nominated, and won an Oscar for, having been directed by Steven Spielberg – Lincoln.

The film tells the story of Lincoln’s finals months, as he negotiated with the Confederates who were on the point of being beaten in the Civil War, and also with his own Congress to add the 13th amendment to the constitution. Sally Field played his wife, and her part conveyed the pain that she and Lincoln had to endure as their sons enlisted, or were killed, and as his wife blamed him for their loss.

The 13th amendment effectively brought an end to slavery, and set forth the proposition, that all men were created equal in the eyes of the law, and thus the ownership of another human was contrary to God’s Laws.

The final debates took part in January, and after some political back-slapping and chicanery; The vote, took place, if the film was at all accurate, on 31st January 1865 – almost exactly 150 years ago. The Civil War ended barely three months later and the peace treaty was signed in April of that year.

I mention this, because as a resident and citizen of the U.K, like so many U.S. citizens, the politicians have so indebted us, as to effectively make us all debt slaves to the banksters.

When a Central Bank creates money out of thin-air, to buy up assets, the Bank owners effectively are able to buy assets on the cheap, that they can either sell later at inflated prices, or use to earn income from as a “Rentier”. Bonds being the case in point.

The term “rentier” derived from the French term just prior to the French Revolution, when the various kings, but especially King Louis XVI granted privileges to certain nobility and others who were similarly closely connected to the money power. These privileges granted (for example) the right to collect a toll on a bridge, river crossing or road.

The right to be the monopoly supplier and thus to extract monopoly profits from the citizenry, who became increasingly disenfranchised, dissolute and the poorer while the idle rich were kept in the lifestyles to which they felt obligated.

However, these changes over time, slowly strangled the economy to the point where free trade was stifled. To paraphrase Mrs Thatcher who once intoned something akin to – “They know the price of everything, and the value of nothing.”

These changes ultimately led up to the Revolution, and the former wife of the king – Marie Antoinette issuing her now infamous phrase. When she asked the king why the people were revolting – his reply was “they have no bread” (or words to that affect) to which her reply has become the stuff of legend: “Well let them eat cake.”, though historians suggest this was just “journalistic cliché”

Although these events were important, it wasn’t the real source of the revolution – that was probably because of the financial situation. John Law, a Scot, had introduced in the early 18th century a financial system that inflated land and property prices, disenfranchising those without property, though the economy was also not healthy due to poor harvests, rising food prices, and an inadequate transportation system (due to those privileges mentioned) that made transporting of goods costly and therefore food even more expensive.

The sequence of events leading to the revolution involved the national government’s virtual bankruptcy due to its poor taxation system and the mounting debts caused by numerous large wars between the British and the French.

However, the Americans too once were being bled dry by over taxing authorities in the form of taxes from King George III, and this led ultimately to the Boston Tea Party, where British Cargo Ships were boarded in the dark of the night, and their cargoes of tea bound for England were thrown overboard into Boston Harbour. Thus began the American Revolution.

Which leads me to today.

In the world of offshore asset protection and personal finance, you nearly always come across the claim that there are only two countries that actively tax their residents’ worldwide income: the United States and Eritrea. All other countries only tax income earned at home, though the UK is making steps in that direction.

But, that rule is apparently no longer true.

It turns out that in the early 1990s, Chinese tax officials went on a series of fact-finding missions around the world. One team enjoyed what The New York Times describes as a “long visit” with the IRS, and came away with “a two-volume bound copy of the U.S. tax code and a five-volume copy of I.R.S. regulations.”

After reviewing the materials, the Chinese government decided to write a tax code that would allow them to tax their residents’ worldwide income … the only problem is, they had no idea how to enforce it. And then FATCA came along. Now China knows how to achieve the same.

And given the recent spending on saving American, and other nation’s Banks, the Federal Reserve, have now indebted the people of America and the customers of Europe’s bailed out Banks, to the tune of more than $30 trillion.

With just 325 million Americans, and according to recent evidence, only 63% of the population actively engaged in the workforce, paying that debt has only two possible outcomes – little possibility, and no possibility.

Roughly, 180 million taxpayers, will need to pay almost $95,000.00 each, plus interest (whenever interest rates begin to rise) to pay down this debt, and that’s before any further spending by the successors to Obama’s legacy, or of the unfunded liabilities in medicare, medicaid, pensions or social care.

This indebtedness, is the basis of modern slavery. The UK debt per household is not quite as bad, but is bad enough. the last time I calculated it, it was a mere £76,000 per household of four, but when you break it down to taxpayers, it goes way up.

So you can be forgiven for trying to protect yourself. In the years that follow, I expect governments on both sides of the Atlantic to come after retirees pension pots. We hear so much of how political parties have learned their lessons in regards to spending, but people have short memories, and the parties have too often broken promises, then asked for forgiveness afterwards.

But, one of the ways that you can protect yourself, is with precious metals.

I know, you’ve probably heard this too many times over the last 15 years… You’re probably thinking – “What makes you think precious metals are the answer? “, or “Yeah, right!”.

In the last 15 years, Central Banks have again begun buying Gold, after 30+ years of sales, and falling interest rates, many have asked for their Gold back – Venezuela, Holland, Austria, Germany, or asked to audit their holdings – like Australia.

China has been buying up Gold like there is no tomorrow. India, has historically been the world’s largest buyer, but this has now been overtaken by China’s insatiable lust. And China has been covertly buying from its wholly owned miners, as well as using its huge dollar reserves to buy on the open market, as the Gold price has fallen from its high of 2011.

In fact Jim Rickards has mentioned that he believes that the intention is to protect its huge dollar reserves as the expected dollar collapse occurs, and they’re buying using the dollars they’ve earned selling to the U.S., and loaned the U.S. buying up the Treasury Bonds that have been issued over the last 8+ years but it appears they are now, along with Russia, net sellers of Bonds, and as Jeff Opdyke, Investment Director of Sovereign Society has regularly posted, when China announces its official holdings to the world – all hell will break loose. (though that was done last year in 2015, and to little fanfare)

Because now, they’re increasingly worried about the value of those dollar bonds, and as so many attest, the Chinese are masters of the long game.

It is even possible that China, through the BRICS Development Bank, which Britain recently joined, is seeking to back its currency (at least partially) with Gold, giving it the status that the U.S. has hitherto had.

As inflation begins to pick up in the years ahead, the urge to buy gold, to protect large dollar holdings, will gain traction, and all assets that rise in value with inflation will be chosen as the protection of last resort. But any asset that is the liability of someone else, that may fall to zero, will be sold. And what happens to any asset when everyone wants to sell at the same time?

As interest rates rise, loans will get more expensive, Bond values will fall, and loans will get called in.

Asset values, secured against loans, such as mortgages on property, will fall in value, just as they did in 2008, and that will mean we are back where we were in the “Lehman moment”. Except now, the debt load worldwide, has risen to such a size, that there is no-one big enough to bail out the Central Banks of the world.

Then governments will do what they have always done – seize their citizen’s wealth. (Chancellor Denis Healey famously remarked, he would ” Tax the Rich, until the pips squeaked.” in 1974)

Banks that fail, will seize their depositors money – Cyprus times ten – and Deposit Insurance will not be enough to save the Bank or its Depositors – too Big to fail.

Only precious metals held in the hands, or in secure vaults as custodian assets in safe political environments, with a history of ensuring the sanctity of custody and ownership – not deposit boxes, which governments have now legislated are Bank’s assets, will be safe.

Overseas held precious metals miners too, will mean an opportunity to increase your wealth as the coming collapse unfolds.

One junior miner with assets in at least four countries in Africa, with 18% of a Diamond mine in South-Africa, a 75% ownership of a Nickel mine and smelter in Zimbabwe, a similar ownership of a Gold mine and refinery in the same country, Diamond assets in Angola, and a growing asset base in Democratic Republic of Congo, with a huge gold-copper find there.

To-date, this 9 kilometre rift has only had 3 kilometres explored, and already 2.9 million ounces have been defined as a resource. This miner has a P/E of just 4 (meaning the company earned a quarter of its share value in one year)

Anyone, who has studied markets for any length of time, knows that on average a healthy PE ratio of about 15 is considered normal. Values in excess of 20 are considered expensive, and values below 10, are considered cheap. So a value of 4, means that if the value of the company increases 3 fold, it would still be cheap. I’ll leave you to draw your own conclusions…

And this mysterious company is? ASA Resources on two exchanges – London (AIM: ASA.L) and was  targetted for a hostile takeover, when its board were removed, and its name changed from Mwana Africa (MWA.L).

Of course, this is not a recommendation to purchase, but perhaps an instigation to do your own research…

And if silver is more your thing… One company I have followed for several years which to be honest has only just managed to survive the onslaught of the falling silver prices from the highs of 2011 down to the current silver price of around $16 might be worth your investment research. For many silver miners, the current silver price is below operating costs, but this miner, which was a producer for several years using a toll-mill agreement (i.e. Leasing someone else’s mill and smelter) has managed to survive after divesting itself of some assets, after a failed financing agreement had to be called in and payments went unmade.

There are many, who feel that the silver price, that has fallen so low, will equal the price of gold, as Silver’s industrial uses rise, silver has a wide range of applications. It is found in jewelry, electronics, batteries, mirrors, solar energy, and water purification, just to name a few (10,000 and rising) and the amount of available silver falls. Seventy five years ago, as U.S. president FDR, confiscated that nation’s silver (and Gold), the above ground stocks of precious metals had a 5:1 ratio in favour of silver. In 2013, that ratio had totally reversed, and there was now a 5:1 ratio in favour of gold. Furthermore, there are those who think we may run out of available mine-able silver – TOTALLY – by the mid 2020’s.

Silver is used in small amounts, so small, that recycling would be so costly as to make it almost impossible to achieve economically. And we currently use circa 680 million ounces each year. Though demand in recent years has risen so far, and so fast, with U.S. Silver Dollar Eagle sales rising to previously unheard of levels, that the current price of silver, which is widely believed to be manipulated to protect the dollar hegemony is likely to rise spectacularly, when the price can no longer be held down.

There are a number of reasons why silver may begin its meteoric rise this year. It has already risen from the low $14.00 range to $17, and most of that came in short bursts in February, and April.

India is the single largest consumer of bullion in the world. As the silver price went down globally, consumption went through the roof in India. India’s first quarter 2013 silver demand was up to $1.78 billion — a 311% increase from the previous year. In the first eight months of 2013, silver imports in India reached 4,000 tons, more than doubling imports during the entirety of 2012.

There were two driving forces behind this trend. First, India placed extremely tight restrictions on gold imports. As a result, sentiment in precious metals shifted towards silver. The second factor here is inflation. With the Indian Rupee inflating a staggering 9.3%, it’s no wonder the nation was buying as much silver as they can get their hands on. The peak silver import hit 5,819 tons in 2013, which was the all-time highest it had ever been.

Industrial applications for silver make up nearly half of global silver consumption, and a rebound in global manufacturing is going to drive up demand. The JP Morgan Global Manufacturing PMI has indicated growth for 19 months straight, while factories in the U.S., UK, and Asia reported increases in activity.

In 2013, there were two devastating landslides at Rio Tinto’s (NYSE: RIO) Bingham Canyon mine in Utah, one right after the other. Over 165 million tons of rock went down to the mine floor, suspending production indefinitely.

This event was, without exaggeration, a catastrophe. It was called the biggest non-volcanic landslide in the history of the United States, and is considered the first landslide to have triggered earthquakes (instead of the other way around, which is common). Fortunately, no one was injured by the slide.

The Bingham County mine is the second largest silver mine in the U.S. and accounts for a staggering 16% of national silver production. So we’re talking about four million ounces of silver per year that have essentially vanished — a strong catalyst for a rise in prices

Silver hit its peak value in 2010, going from $16.94 per ounce all the way up to $49. Since then, the price has come down, but demand hasn’t – it has only grown.

In the first quarter of 2013, silver ETFs purchased 20 million ounces of silver.  And in June of 2013, the world’s largest silver fund added a record of 572 tons to its inventory — more than all of its 2012 purchases combined.

This is incredibly important, because it shows us where smart money is going in the market.

And the company I was telling you about has a property in Zacatecas in Northern Mexico, a historical silver mining district. Four rounds of drilling have identified 50 million ounces in the proven category, and 80 million ounces in the probable category, The company is Arian Silver (AIM: AGQ.L)  with  113.69 million shares in issue, at 1.25 pence, when the silver price rises to $100.00+ I have been expecting, this company will rise with it.

 

However, I have also learned of another Copper, Gold and Silver miner, with huge reserves, and the cash to develop it, though some political interference from the government has squashed some of the enthusiasm, and taken some of the shine off it in Mongolia, which does not have a history of stable political institutions and a threat to improve the 30% government holding by an incoming President, brought the share price down thundering from its highs of $27, to its currentlevel. Turquoise Hill Resources though (TRQ.TSX) has huge resources, and is off the radar for many investors at the moment. A fresh rise in metals prices will bring this miner back into focus, and with such huge reserves, and a major corporation in Rio-Tinto, and with the share price at £1.91(C$3.52) as at 26/4/16 these are set to rise

TRQ - Moonshot in the making?
Production figures show rising production at a time of rising prices…

Inevitably we can not know when the Gold and Silver prices will rise to that extent, but it is my sincere view, that we are about 3-5 years away from the steepest rises, but that we may see smaller rises over the period between now and then.

You pays your money, and takes your choice.