• Tag Archives Fiat Currency
  • The Fed’s Everything Bubble And The Inevitable Asset Crash

    Do not mistake outcomes for control – remember, there is no such thing as control – there are only probabilities. – Christopher Cole, Artemis Capital
    Central Banks globally have created a massive fiat currency fueled asset bubble. Stock markets are the largest of these bubbles – a bubble made worse by the Fed’s attempt to harness the ‘power’ of HFT-driven algo trading. At least for now, the Fed can ‘control’ the stock market by pushing the buttons that unleash hedge fund black box momentum-chasing and retail ETF buy orders whenever the market is about to head south quickly.
    However, the ability to push the stock market higher without a statistically meaningful correction is a statistical ‘tail-event’ in and of itself. The probability that the Fed can continue to control the market like this becomes infinitesimally small. The market becomes like a like a coiled spring. The laws of probability tell us this ‘spring’ is pointing down.


    This post was published at Investment Research Dynamics on October 22, 2017.


  • Move To Digital Currencies Accelerates As PBoC Successfully Tests Algos For Digital Money

    In a story that seems to have gone largely unnoticed by the western press, the China Daily reported that the PBoC has successfully designed a prototype that can regulate its future supply of digital fiat currency.
    In a report, ‘PBoC inches closer to digital currency’, the newspaper stated that China’s central bank ‘has completed trial runs on the algorithms needed for digital currency supply, taking it a step closer to addressing the technological challenges associated with digital currencies, according to a top official associated with the project.’
    China’s has been preparing for digital currency since 2016. In June this year, the PBoC ‘finished several digital money trials involving fake transactions between it and some of the country’s commercial banks.’ Given over-invoicing of imports and the shenanigans in the shadow banking/WMP sector, we suspect that the commercial banks took to these trials like proverbial flies to feces.
    The China Daily article goes on to suggest that, while there is no timetable, ‘China is likely to become the first country that would deploy a digital fiat currency.’

    This post was published at Zero Hedge on Oct 16, 2017.


  • Europe’s Weight In Gold and Silver

    Gold, and silver, have always been valuable. Through upturns in fiat currency, downturns in commodities, and everything in between, the precious metals have always been a useful indicator and base level for the worth of things internationally.
    Learn How to Exploit the Gold Frenzy! Far from being the hallmark of huge institutions, like the Federal Reserve, you can take advantage of the evergreen currency to secure your own ‘reserve’.
    Why Use Gold?
    There have been few occasions where government has been criticized for keeping hold of gold reserves. Quite apart from it, in fact, with the British government panned for selling back in 2002.
    Buy Silver Quarters – In Stock, Ships Fast! There has never been a better time in fact, with measures over the world being taken up that can threaten your ‘liquid’ cash flow. Over in Europe, there has been legislation introduced as the EU attempt to prevent bank runs that threatens your ability to withdraw your own cash in the event of adverse economic conditions.

    This post was published at GoldSilverWorlds on October 12, 2017.


  • DOLLAR BLOW: China Launches New ‘Yuan-Ruble’ Payment Mechanism

    The US received a major blow to its global hegemony, and one which is sure to trigger more fighting talk from hawks in Washington.
    This week it was announced that China has established a ‘payment versus payment’ (PVP) system to clear Chinese yuan and Russian ruble transactions. The aim, we’re told, is to to ‘reduce risks and improve the efficiency’ of its foreign exchange system.
    The new mechanism, which could rival the long-held monopoly of the US SWIFT inter-bank payment system (allowing for simultaneous settlement of transactions in two different currencies) was launched on Monday after receiving approval from China’s central bank, according to a statement by the country’s foreign exchange trading system.
    However, financial oligarchs in Wall Street will view this move as an act of aggression in challenging the preeminence of the US dollar as the planet’s global reserve currency – which is inextricably tied and nearly completely dependent on the US ‘Petrodollar’ to prop-up the value of the US fiat currency. Georgetown University scholars note here:
    Since petrodollars and petrodollar surpluses are by definition denominated in U. S. dollars, then purchasing power is dependent on the U. S. rate of inflation and the rate at which the U. S. dollar is exchanged (whenever there is need for convertibility) by other currencies in international money markets. It follows that whenever economic or other factors affect the U. S. dollar, petrodollars will be affected to the same magnitude. The link, therefore, between the U. S. dollar and petrodollar surpluses, in particular, has significant economic, political, and other implications.

    This post was published at 21st Century Wire on OCTOBER 13, 2017.


  • Gold Breakout Signals A Financial Hurricane Coming Onshore

    I found it amusing that Mohamed El-Erian wrote an opinion piece for Bloomberg which asserted that gold is not much of a ‘safe haven these days.’ His thesis was entirely devoid of material facts. His underlying rationale was that safe haven capital was flowing into cryptocurrencies rather than gold. I guess if one has a western-centric view of the markets, that argument is a modicum of validity. However the scope of the analysis omits that fact that the entire eastern hemisphere is converting fiat currency at a record pace into physical gold that requires bona fide delivery outside of western custodial roach motels.

    This post was published at Investment Research Dynamics on September 1, 2017.


  • AHEAD: “BREAKDOWN IN FIAT CURRENCY SYSTEM” | Kenneth Ameduri

    The following video was published by FinanceAndLiberty.com on Aug 13, 2017
    CrushTheStreet chief editor Kenneth Ameduri joins FinanceAndLiberty to discuss the global economy. He explains the US has experienced the worst productivity in 35 years, and money printing has gone into overdrive.
    Where are paper currencies headed? “The world is looking for a free market alternative to be able to put their money in,” he says. This shift is why we’re seeing money flow into cryptocurrencies, gold, and silver. Bitcoin and other cryptocurrencies are “big competition for the Dollar, for the Euro.”


  • Really Bad Ideas, Part 3: Government Debt Isn’t Actually Debt

    The failure of fiat currency and fractional reserve banking to produce a government-managed utopia is generating very few mea culpas, but lots of rationalizations.
    Strangest of all these rationalizations might be the notion that government debt is not really a liability, but an asset of sorts. Where personal and business loans are bad if taken to excess, government borrowing is not just good on any scale, but necessary to a healthy economy. Here’s an excerpt from a particularly assertive version of this argument:
    What if every government paid off its national debt?
    (Medium.com) – IT might make you feel better but tomorrow if the US Federal Government, or Australia or the UK repaid the entirety of its national debt, it would make not one dollar’s difference to your bank account. In fact the economy would tank.
    ‘If America repaid all its national debt tomorrow, we very likely would crash into the mother of all great depressions long before the debt is ‘paid off”, says economist, Professor Randall Wray.

    This post was published at DollarCollapse on August 9, 2017.


  • Preparing to Barter and Trade Is NOT a Loony Idea

    Let’s start with this fact; fiat (paper) currencies die – often spectacularly. That is why precious metals may someday be needed for barter and trade. Anyone who thinks it is silly to worry about such a thing is putting blind faith in Federal Reserve Notes.
    The U. S. dollar is having a great run, no question. It will soon be 50 years since Nixon closed the gold window, thereby converting the dollar to a purely fiat currency. Five decades is longer than most purely fiat currencies survive.
    Humans carry a normalcy bias. That helps explain why so many assume the unbacked Federal Reserve Note, which has served so long as our currency, will continue to serve in the future.
    If you test that assumption, it quickly gets hard to defend.
    Point to the exponential growth in U. S. debt, the unrestrained government spending throughout both Republican and Democratic administrations, and the extraordinary monetary policies of the Fed (particularly in the past decade) and reasonable people should acknowledge that the reign of ‘king dollar’ is unlikely to last forever.
    Most people don’t know the first thing about the dark history of fiat currencies around the world. Governments use them to borrow and print without limits. Suffer no delusions – fiat currencies were invented for precisely that purpose. The gold in the treasury has never been sufficient for the wars, social programs, and graft which are the hallmarks of a growing government.

    This post was published at GoldSeek on 31 July 2017.


  • ‘Low Inflation’ In Not ‘Good’ – It’s Pure Propaganda

    Analysts who advocate a monetary policy that targets ‘low inflation’ are the equivalent of chickens in the barnyard rooting for Colonel Sanders to succeed. This idea that a low level of inflation being good for the economy is beyond moronic.
    The fiat currency money system era was accompanied by the erroneous notion that a general increase in the price of goods and services is ‘inflation.’ But technically this definition is wrong. ‘Inflation’ is the ‘decline in the purchasing power of currency.’ This decline occurs from actions that devalue a currency. Rising prices are the visible evidence of ongoing currency devaluation.
    Currency devaluation occurs when the rate of growth in a country’s money supply exceeds the rate of growth in real wealth output. Simply stated, it’s when the amount of money created exceeds the amount of ‘widgets’ created, where ‘widgets’ is the real wealth output of an economic system.

    This post was published at Investment Research Dynamics on July 26, 2017.


  • Thoughts On Gold

    From Jim Richards’ Strategic Intelligence:
    ‘Russia and China are well-positioned to execute the greatest gold short squeeze in history. Of course, they have no interest in doing so right now because both are still buyers who favor low prices. At some point, they will flip to hoarders who favor high prices, but not yet.’
    From Hugo Salinas Price:
    ‘The present monetary system of the world, based on the dollar, is on its death-bed. A fiat currency – such as the dollar – cannot be replaced by another fiat currency, he explains. Therefore the world will necessarily have to take up [precious metals] as the world’s money.’
    ************* From Steven Warrenfeltz of http://www.free-bullion-investment-guide.com
    Gold and Silver Are Moving Back Up
    GOLD (Warrenfeltz comments)
    Last week, after the dust settled from gold’s price drop, a ‘falling expanding wedge’ formed in gold’s price chart (below).
    All falling wedges are positive technical patterns, however for gold to confirm the pattern it will need to break above the upper resistance trend-line of the wedge.
    In addition, gold’s MACD (lower indicator) is showing that its direction is about to change from negative to positive, so we should continue to see gold climb this week, but some profit taking is also expected as it moves up.

    This post was published at GoldSeek on 19 July 2017.


  • Jeff Berwick Exposes The Fed & The Entire Matrix Control System on The American Intelligence Report

    The following video was published by The Dollar Vigilante on Jul 13, 2017
    Jeff is interviewed on The American Intelligence Report, topics include: fiat currency and the Freemasons, the Federal Reserve and the end of the gold standard, the real causes for the US civil war, bypassing the current economic system entirely, gold silver and bitcoin, privacy and crytocurrencies, altcoins, Litecoin, changes to the bitcoin software, Dash and anonymity, Ethereum, the TDV newsletter’s great track record


  • Faced With Rampant Inflation, Argentines Turn to Barter

    Instead of selling his soybeans for devalued pesos, Gustavo Tione exchanged 30 tons of soy for about 8,000 liters of diesel from the state-run oil company. This is just one example of a growing barter economy in Argentina as a 24% inflation rate rapidly erodes the value of the country’s currency.
    As Bloomberg reports, the rise of barter is simple economics. Commodities hold their value better than than cash.
    So, why bother with fiat currency if you don’t have to?
    Barter is the most basic economic transaction. You give me something I want or need. In exchange, I give you something you want or need.
    YPF, the Argentine energy company, uses barter to bypass the peso. The company barters with farmers, trading fuel for wheat, soy, and corn, and then sells it on the dollar-based export market for grain. Of course, this scheme will fall apart if the dollar crashes. Nevertheless, it illustrates the power of barter.

    This post was published at Schiffgold on JULY 12, 2017.


  • Time for a new gold standard for Asia

    Over half the world’s population, living in the Eurasian land mass, understands that gold is money. The leaders of the Asian nations also know that this is true as well. The leaders of the security and economic alliance of the Shanghai Cooperation Organisation, which now incorporates most of these peoples, also know that to become independent of Western hegemony and to forge their own way, they must abandon Western financial systems and markets, replacing them with a new monetary order, serving their own needs. This is demonstrated in the establishment of parallel multinational financial institutions, duplicating and replacing dollar-centric development banks and settlement organisations.
    The direction of travel for the SCO is to eliminate the use of the dollar for cross-border settlements between SCO member states: that much has been made clear. The replacement monetary arrangement must avoid the fundamental weaknesses of the dollar as a fiat currency, partly because these weaknesses will be exposed as the emergence of the SCO undermines the dollar, and partly because the principal drivers of SCO economic policy, China and Russia, have shown through their actions that they have a different vision of their destiny from imperial America.
    This article considers the issues involved, the geopolitical sensitivities, and proposes how sound money might emerge to replace the existing fiat-money regimes.

    This post was published at GoldMoney on July 06, 2017.


  • Fine Gold versus F.I.N.E. Central Banks

    Gold is one of nature’s finest creations.
    On the other hand central banks create trillions of fiat currency units – dollars, euros, yen, quataloos, whatever – from nothing and use those currency units for purchases … Apple stock, salaries for a thousand Ph. D. economists, office buildings, lobbyists, politicians, gold bullion etc.
    It is unfair that the Fed creates trillions of dollars from nothing and values those dollars equally with other dollars created from the efforts of millions of businesses and individuals.
    UNFAIR? Of course it’s unfair. That’s the point! With their ‘unfair’ ability to create fiat currency that spends the same as existing currency, central bankers increase their power and wealth at the expense of citizens. They own or control governments, congressmen, CEO’s, commercial bankers and more.
    Don’t expect this to change. Those in power like things as they are.

    This post was published at Deviant Investor on July 5, 2017.


  • Gold And Silver – Why No Rally? Lies, Lies, And More Lies.

    One thing certain of all politicians, no matter where in the world, they all lie. The US federal government, that captive political body beholding to Wall Street interests, also a subsidiary of the international bankers that controls the West and all fiat-issued currency, is one of the worst when it comes to lies and deceit, primarily because Europe can only play a poor second fiddle to federal US dictates. South America can offer no resistance, nor can South Africa.
    China is beginning to flex its overblown might, and Russia, while in opposition, remains under attack by the West, led by the Neocons [Nazi-types] from the US Deep State trouble makers. The only thing the federal US government does is start wars, and if there is a war going on anywhere around the globe, the US is either directly or indirectly responsible. Wars feed the [fading but still formidable] military might as a means of keeping the fiat Ponzi scheme, aka the ‘dollar,’ alive as the [diminishing] world reserve fiat currency.
    Every US administration, at least since the 16th president, Lincoln, in 1861, has been utterly deceitful to the American, indeed world-wide, public. Almost everything that comes from every administration is based on lies, lies, and more lies. Bush, the first, Clinton, Bush the second, Obama, and now Trump, have been ardent liars about everything.
    The Bushes and Clinton were willing sycophants serving the interests of the elites at the expense of all Americans. ‘Yes, we can’-Obama was full of naive hope that quickly turned into yet another executioner for the elites, not fulfilling a single campaign promise and basing his entire presidency on selling the American interests to Wall Street and the international bankers. Obama was a sickening excuse for a president and hid his lying character from the American public.

    This post was published at Edge Trader Plus on Saturday 1 July 2017.


  • Short All Retail, Especially Amazon

    ‘Bubbles require ever more money to sustain them. Currently that’s not happening. A severe market selloff could come at any moment.’
    The quote above is from Fred Hickey, who writes the The High-Tech Strategist newsletter. Mario Draghi, Chairman of the ECB, is under pressure to reduce the Central Banks’ asset purchases (it’s buying corporate bonds, including junk-rated bonds). Apparently some Dutcn legislators presented Draghi with a tulip in reference to the Dutch tulip mania in the 1630’s.
    The Bank of Japan and the Chinese Government are working to reduce their money printing. The Fed is still buying mortgages but it seems determined to slowly tighten monetary policy. The problem faced by these Central Planners is that they’ve created a massive global Ponzi scheme that requires an increasing amount of liquidity (money printing + credit expansion) in order to sustain valuation levels. Once they slow down the liquidity spigot, all fiat currency- driven assets (except physical precious metals) are at risk of collapsing.
    The Dow finished the week closing down 4 days in row to close essentially unchanged for week (up 9 pts). The SPX also was flat for the week (up 6 pts). It managed to squeak out a slight gain on Friday to avoid 4 consecutive down days. Both the Dow and SPX started out Friday with a big rally from Thursday’s close but faded over the last 2 hours of trading on no apparent news triggers. This for me is a possible indicator that the stock market losing energy.

    This post was published at Investment Research Dynamics on June 27, 2017.


  • India GST News Powers Gold Higher

    Gold is the world’s ultimate asset, and another spectacular week is underway for investors. While May was mostly sideways (and lower for many gold stocks), it’s starting to look like the month of June could be a serious ‘barnburner’. Please click here now. Double-click to enlarge this daily bars gold chart. Gold tends to stage a decent rally in the days following the release of the US jobs report. That’s in play now, as I suggested it would be, but the rally is also on ‘Indian demand steroids’. Please click here now. It’s unknown how big black market demand is, but the official demand alone came in at over 100 tons for May! This weekend’s government announcement of a 3% GST rate on gold sales has sent Indian jewellery stocks skyrocketing. The new GST effectively cuts the total tax rate in the state of Kerala, which I have dubbed ‘world gold demand headquarters’. In my professional opinion, the bear cycle in Indian demand is over. Once the Diwali festival buying season arrives, I’m predicting that imports could reach a new single month record high of 200 tons. Please click here now. Double-click to enlarge this big picture gold chart. With the bear cycle in Indian demand over, gold is likely to begin its rise out of the huge $1923 – $1045 consolidation pattern. Gold is essentially poised to play ‘catch-up’ with the skyrocketing price of anti-fiat currency bitcoin, and begin a steady rise to my targeted $2800 price level.

    This post was published at GoldSeek on 6 June 2017.


  • Is Bitcoin Standing In For Gold?

    In a series of articles posted on http://www.paulcraigroberts.org, we have proven to our satisfaction that the prices of gold and silver are manipulated by the bullion banks acting as agents for the Federal Reserve.
    The bullion prices are manipulated down in order to protect the value of the US dollar from the extraordinary increase in supply resulting from the Federal Reserve’s quantitative easing (QE) and low interest rate policies.
    The Federal Reserve is able to protect the dollar’s exchange value vis-a-via the other reserve currencies – yen, euro, and UK pound – by having those central banks also create money in profusion with QE policies of their own.
    The impact of fiat money creation on bullion, however, must be controlled by price suppression. It is possible to suppress the prices of gold and silver, because bullion prices are established not in physical markets but in futures markets in which short-selling does not have to be covered and in which contracts are settled in cash, not in bullion.
    Since gold and silver shorts can be naked, future contracts in gold and silver can be printed in profusion, just as the Federal Reserve prints fiat currency in profusion, and dumped into the futures market. In other words, as the bullion futures market is a paper market, it is possible to create enormous quantities of paper gold that can suddenly be dumped in order to drive down prices. Everytime gold starts to move up, enormous quantities of future contracts are suddenly dumped, and the gold price is driven down. The same for silver.

    This post was published at Investment Research Dynamics on May 31, 2017.


  • Gold’s Advantages Over Fiat Currency – An Interview with Claudio Grass

    Central Banks Produce Dire Consequences for the Free Market Todd ‘Bubba’ Horwitz has recently produced a podcast with our friend Claudio Grass of Global Gold, which we can be called up further below. Bubba has provided a summary of the topics discussed, an edited version of which you find below as well.
    ***
    Today on The Bubba Show, Bubba welcomes back Claudio Grass from the Mises Institute, author and founding member of Global Gold. Bubba and Claudio discuss current market conditions and what to expect. Claudio expresses concerns about the economy; he believes central bank economists are wrong with their read on economic conditions.

    This post was published at Acting-Man on May 24, 2017.


  • Central banks kept conspiring against gold long after it left the financial system

    A central bank Gold Pool which many people will be familiar with operated in the gold market between November 1961 and March 1968. That Gold Pool was known as the London Gold Pool.
    This article is not about the 1961-1968 London Gold Pool. This article is about collusive central bank discussions relating to an entirely different and more recent central bank Gold Pool arrangement. These discussions about a second Gold Pool began in late 1979, i.e. more than 11 years after the London Gold Pool had been abandoned. This article is Part 1 of a 2 part series. Part 2 will be published shortly.
    These discussions about a new Gold Pool arrangement took place in an era of soaring free market gold prices and in the midst of the run-up in the gold price to US$850 in January 1980.
    The discussions and meetings about a new Gold Pool in 1979 and 1980 and beyond which are detailed below, occurred at the highest levels in the central banking world and involved the world’s most powerful central bankers, some of whose names will be familiar to readers. The aim of these central bank discussions and meetings was to reach agreement on joint central bank action to subdue and manipulate the free market gold price in the early 1980s. Many of these collusive meetings were private meetings between a handful of Group of 10 (G10) central bank governors, and took place in the actual office of the president of the Bank of International Settlements in Basel, Switzerland.
    Above all, these central bank meetings show intent. Intent by a group of powerful central banks to manipulate a free market gold price so as to distort free market gold pricing signals. So these documents are timeless in that regard. The documents also illustrate the concern that a rising gold price in the free market creates for senior central bankers, and importantly, also shows that these same central bankers have no qualms, at least from a legal or moral perspective, of intervening to manipulate a gold price when they see it as a threat to their fiat currency monetary system.

    This post was published at GATA