• Category Archives Geopolitics
  • After Slamming Bitcoin As A Money Laundering Tool, JPMorgan Busted For Money Laundering

    Score one for the poetic irony pages.
    Two months after JPMorgan CEO Jamie Dimon lashed out at bitcoin, calling it a “fraud” which is “worse than tulip bulbs, warning it won’t end well”, will “blow up” and “someone is going to get killed” and threatened that “any trader trading bitcoin” will be “fired for being stupid” as it was merely a tool for money-laundering, today Swiss daily Handelszeitung reported that the Swiss subsidiary of JPMorgan was sanctioned by the Swiss regulator, FINMA, over money laundering and “seriously violating supervision laws.”
    As the newspaper adds, the Swiss sanctions relate to breaches of due diligence in connection with money laundering standards. In other words, JPMorgan was actively aiding and abeting criminal money laundering.

    This post was published at Zero Hedge on Nov 17, 2017.


  • How Corporate Zombies Are Threatening The Eurozone Economy

    The recovery in Eurozone growth has become part of the synchronised global growth narrative that most investors are relying on to deliver further gains in equities as we head into 2018. However, the ‘Zombification’ of a chunk of the Eurozone’s corporate sector is not only a major unaddressed structural problem, but it’s getting worse, especially in…you guessed it… Italy and Spain. According to the WSJ.
    The Bank for International Settlements, the Basel-based central bank for central banks, defines a zombie as any firm which is at least 10 years old, publicly traded and has interest expenses that exceed the company’s earnings before interest and taxes. Other organizations use different criteria. About 10% of the companies in six eurozone countries, including France, Germany, Italy and Spain are zombies, according to the central bank’s latest data. The percentage is up sharply from 5.5% in 2007. In Italy and Spain, the percentage of zombie companies has tripled since 2007, the Organization for Economic Cooperation and Development estimated in January. Italy’s zombies employed about 10% of all workers and gobbled up nearly 20% of all the capital invested in 2013, the latest year for which figures are available. The WSJ explains how the ECB’s negative interest rate policy and corporate bond buying are keeping a chunk of the corporate sector, especially in southern Europe on life support. In some cases, even the life support of low rates and debt restructuring is not preventing further deterioration in their metrics. These are the true ‘Zombie’ companies who will probably never come back from being ‘undead’, i.e. technically dead but still animate. Belatedly, there is some realisation of the risks.

    This post was published at Zero Hedge on Nov 17, 2017.


  • Another Step Forward for Sound Money: Location Picked for Texas Gold Depository

    The Texas Bullion Depository took a step closer becoming operational earlier this month when officials announced the location of the new facility. The creation of a state bullion depository in Texas represents a power shift away from the federal government to the state, and it provides a blueprint that could ultimately end the Federal Reserve’s monopoly on money.
    Gov. Greg Abbot signed legislation creating the state gold bullion and precious metal depository in June of 2015. The facility will not only provide a secure place for individuals, business, cities, counties, government agencies and even other countries to store gold and other precious metals, the law also creates a mechanism to facilitate the everyday use of gold and silver in business transactions. In short, a person will be able to deposit gold or silver in the depository and pay other people through electronic means or checks – in sound money.
    Earlier this summer, Texas Comptroller Glenn Hegar announced Austin-based Lone Star Tangible Assets will build and operate the Texas Bullion Depository. On Nov. 3, the company announced it will construct the facility in the city of Leander, located about 30 miles northwest of Austin. According to the Community Impact Newspaper, the Leander City Council has approved an economic development agreement with Lone Star. Construction of the depository is expected to begin in early 2018. Lone Star officials say it will take about a year to complete construction of the 60,000-square-foot secure facility located on a 10-acre campus.

    This post was published at Schiffgold on NOVEMBER 16, 2017.


  • Saudi Coup Signals War And The New World Order Reset

    For years now, I have been warning about the relationship of interdependency between the U. S. and Saudi Arabia and how this relationship, if ended, would mean disaster for the petrodollar system and by extension the dollar’s world reserve status. In my recent articles ‘Lies And Distractions Surrounding The Diminishing Petrodollar’ and ‘The Economic End Game Continues,’I point out that the death of the dollar as the premier petrocurrency is actually a primary goal for establishment globalists. Why? Because in an effort to achieve what they sometimes call the “global economic reset,” or the “new world order,” a more publicly accepted centralized global economy and monetary framework is paramount. And, this means the eventual implementation of a single world currency and a single global economic and political authority above and beyond the dollar system.
    But, it is not enough to simply initiate such socially and fiscally painful changes in a vacuum. The banking powers are not interested in taking any blame for the suffering that would be dealt to the masses during the inevitable upheaval (or blame for the suffering that has already been caused). Therefore, a believable narrative must be crafted. A narrative in which political intrigue and geopolitical crisis make the “new world order” a NECESSITY; one that the general public would accept or even demand as a solution to existing instability and disaster.
    That is to say, the globalists must fashion a propaganda story to be used in the future, in which “selfish” nation-states abused their sovereignty and created conditions for calamity, and the only solution was to end that sovereignty and place all power into the hands of a select few “wise and benevolent men” for the greater good of the world.

    This post was published at Alt-Market on Wednesday, 15 November 2017.


  • Russell Napier: Debt Deflation Worries Are Starting to Rise Again

    There’s been very little deleveraging after the last financial crisis and, in fact, debt levels are at new records globally, which means investors should be thinking about the risk of ‘debtflation,’ Russell Napier, editor of The Solid Ground, told FS Insider last week (see Russell Napier on Debt Deflation: Too Much Debt, Not Enough Money for audio).
    No Deleveraging
    It isn’t the case that we’ve seen much deleveraging since the financial crisis, Napier noted. Globally, the debt-to-GDP ratio is at an all-time high, he added, significantly above the levels seen in 2007.
    Though there has been some deleveraging in the household sector, Napier stated, this isn’t the whole picture. It ignores the releveraging of the government during the last crisis, and also that corporations have been adding significant amounts of debt.
    If we look globally, emerging markets are fueling the rise to a new high in the debt-to-GDP ratio. It isn’t just China either, but other countries as well that are responsible for this effect.
    ‘If the world was fragile in 2007 because there was too much debt and not enough GDP, it is significantly more fragile today,’ Napier said.

    This post was published at FinancialSense on 11/14/2017.


  • Nobody Is Going to Bail Out Venezuela

    Henkel Garcia U, Andres Bello Catholic University (UCAB)
    Venezuela, the South American country convulsed by economic and humanitarian catastrophe, has defaulted on some of its debt after missing an interest payment due in October.
    Even as investors meet in Caracas to discuss restructuring US$60 billion in foreign debt, the country is in urgent need of international financial assistance.
    Yet few nations are rushing in to offer financial assistance to the ailing country. Under the authoritarian regime of Nicols Maduro, Venezuela is isolated in Latin America, and the United States, Canada, and the European Union have all imposed sanctions against Venezuelan officials. Maduro has at times suggested he would not even accept humanitarian aid.
    Still, no indebted nation is totally alone in this world. As a financial analyst, I know there are always international players who see opportunity in the problems of others. And for Venezuela, my home country, all hope of a bailout rests with China, Russia, and the International Monetary Fund.
    Will they do anything to help?

    This post was published at FinancialSense on THE CONVERSATION /1/15/2017.


  • Claudio Grass Interviews Mark Thornton

    Introduction
    Mark Thornton of the Mises Institute and our good friend Claudio Grass recently discussed a number of key issues, sharing their perspectives on important economic and geopolitical developments that are currently on the minds of many US and European citizens.
    A video of the interview can be found at the end of this post. Claudio provided us with a written summary of the interview which we present below – we have added a few remarks in brackets (we strongly recommend checking the podcast out in its entirety – there is a lot more than is covered by the summary).
    Interview Highlights
    We currently find ourselves in a historically and economically significant transition period. The already overstretched bubble in the markets is still expanding, but we now see bold moves by the Fed to reduce its balance sheet, at the same time the ECB plans to taper, overall presenting us with a fairly deflationary outlook. This reversal of the expansionary policies of the last decade can be seen as the first step toward a potentially ferocious correction in the not-too-distant future.
    The ECB is trapped, as it already holds 40% of euro zone sovereign debt. At the same time, Spain, Italy and Greece continue to potentially present major challenges, as a banking crisis could easily reemerge in these countries [ed note: banks in Europe have managed to boost their capital ratios, but the amount of legacy non-performing loans in the system remains close to EUR 1 trn. Moreover, TARGET-2 imbalances have recently reached new record highs, a strong sign that the underlying systemic imbalances remain as pronounced as ever]. Mario Draghi intends to reduce the ECB’s asset purchases from EUR60 billion to EUR30 billion per month. He may soon realize that if the ECB does not buy euro zone bonds, no-one will.

    This post was published at Acting-Man on November 14, 2017.


  • Asian Metals Market Update: November-14-2017

    Political developments in the UK will be the key for gold prices. It seems NATO politicians are getting into the habit of blaming the Russians for their election losses. These are just baby steps towards a long term full-fledged armed conflict. Theresa May blaming Russians for her political misery is just another failed diversionary political tactic. The UK has more Asians. Asians are not idiots like Americans where Russian ghost works in everything.
    The gold will price be dependent on interest rate expectations for next year. December’s interest rate hike is more or less factored in by the markets.

    This post was published at GoldSeek on 14 November 2017.


  • Uncertainty Hits American Farmers and Mexican Consumers

    NAFTA 2.0 gets complicated. With the fifth round of NAFTA negotiations scheduled to begin next week, Mexico finds itself facing a very uncertain future. The free trade agreement upon which its entire national economic model was built is now looking precariously fragile. Ildefonso Guajardo, Mexico’s economy minister, told the Mexican Congress last week that the way things stand, an end to NAFTA ‘cannot sanely be ruled out.’
    In such an event, the resulting economic pain for Mexico could be considerable, according to calculations from Banco Santander. It forecasts a 15% drop in exports and a 16% fall in imports if the US declared a full trade war rather than reverting to World Trade Organization tariff rules. Moody’s Investors Service estimates Mexico’s economy could shrink as much as 4%.
    The biggest problem for Mexico’s economy is the sheer scale of its dependence on trade with the US: 81% of its exports go to the U. S., and about half of its imports come from there. Mexico is so deeply integrated into US supply chains, particularly manufacturing production that the IMF describes Mexican and American industrial production as ‘co-integrated.’ Increases in American economic output are transmitted one-for-one to Mexican output.

    This post was published at Wolf Street on Nov 13, 2017.


  • Mideast Turmoil: Follow the Oil, Follow the Money

    In this scenario, time is running out for Saudi Arabia’s free-spending royalty and state– and for all the other free-spending oil exporters.
    While there are numerous dynamics at work in the turmoil roiling Saudi Arabia and by extension, the Mideast, one way to cut to the chase is to follow the oil, follow the money. Correspondent B. D. recently posited a factor that has been largely overlooked in the geopolitical / fate-of-the-petrodollar discussions: Perhaps the core dynamic is a technical one of diminished oil production. Here is Bart’s commentary: “I think the Saudis may be quickly running out of profitable oil to produce/export. I think they tried to over-produce for a while to damage the competition… and they now have production issues resulting from that. (As has happened in the past) I think they may have recently slipped over the event horizon for being the world’s swing producer of ‘cheap-ish and abundant’ oil. That has huge ramifications for the global markets ability to quickly respond to supply/demand fluctuations.

    This post was published at Charles Hugh Smith on MONDAY, NOVEMBER 13, 2017.


  • Stockman: US Entry Into World War I Was A Disaster

    103 years ago, in 1914, the Federal Reserve opened-up for business as the carnage in northern France was getting under way.
    ***
    And it brought to a close the prior magnificent half-century era of liberal internationalism and honest gold-backed money.
    The Great War was nothing short of a calamity, especially for the 20 million combatants and civilians who perished for no reason discernible in any fair reading of history, or even unfair one.
    Yet the far greater calamity is that Europe’s senseless fratricide of 1914-1918 gave birth to all the great evils of the 20th century – the Great Depression, totalitarian genocides, Keynesian economics, permanent warfare states, rampaging central banks and the follies of America’s global imperialism.

    This post was published at Zero Hedge on Nov 13, 2017.


  • Technical Scoop – Weekend Update Nov 12

    Weekly Update
    ‘Buy when it snows, sell when it goes’
    – old stock market proverb
    November traditionally marks the start of the best six months of the year for stock markets. At least, that is what the record shows. The Dow Jones Industrials (DJI) has since 1950 had an average gain of 0.6% from May to October vs. an average gain of 7.5% from November to April. The period November to May has had over three times as many up periods as it has had down periods vs. the period from May to October which had only 1.5 times advantage in ups to down.
    Of course, the strategy doesn’t work all of the time. Double-digit returns for the May/October period have occurred eight times since 1950. The most recent was the period just completed from May 1, 2017 to October 31, 2017 when the DJI jumped 11.6%. The best one was a 19.2% gain in 1958. In 2009, the May/October period gained 18.9%. But that was following one of the worst ever November/April periods that saw the DJI fall 12.4%. The November/April period has seen only three occurrences where it lost more than 10%. The most recent was the above-mentioned 2008 period where the DJI fell 12.4% while the other two occurred in 1969 and 1973. Interestingly enough, the first November/April period in 1969/1970 saw the Cambodian invasion while the 1973/1974 period was the OPEC oil embargo and the Watergate crisis.
    Since we are just coming off a May/October period that saw double-digit returns it is interesting to look at what happened in the ensuing November/April period. As we noted there have been eight occurrences of double-digit returns for the May/October period. We summarize in the table below.
    As can be seen from the table there were no occurrences of the DJI falling in the November/April period following double-digit gains in the May/October period. On five occurrences, the gains were also in double digits. On average, the November/April period saw gains of 14.6% following the May/October period that saw average gains of 14.5%. What all of that suggests is the coming six months could see double-digit gains once again for the DJI and the stock market as a whole.

    This post was published at GoldSeek on 12 November 2017.


  • Is There Any Way Out of the ECB’s Trap?

    The ECB faces the Devil’s Alternative that Frederick Forsyth mentioned in one of his books. All options are potentially riskly. Mario Draghi knows that maintaining the so-called stimuli involves more risks than benefits, but also knows that eliminating them could make the eurozone deck of cards collapse.
    Despite the massive injection of liquidity, he knows that he can not disguise political risks such as the secessionist coup in Catalonia. The Ibex reflects this, making it clear that the European Central Bank does not print prosperity, it only puts a floor to valuations.
    The ECB wants a weak euro. But it is a game of juggling to pretend a weak euro and at the same time a strong economy. The European Union countries export mostly to themselves. Member countries sell more than two-thirds of their goods and services to other countries in the eurozone. Therefore, the more they export and their economies recover, the stronger the euro, and with it, the risk of losing competitiveness. The ECB has tried to break the euro strength with dovish messages, but it has not worked until political risk reappeared. With the German elections and the prospect of a weak coalition, the results of the Austrian elections and the situation in Spain, market operators have realized – at last – that the mirage of ‘this time is different ‘in the European Union was simply that, a mirage.

    This post was published at Ludwig von Mises Institute on 11/09/2017.