Saturday, December 14, 2019

Russia May Turn To Oil-Backed Cryptocurrency To Challenge Sanctions & The Petrodollar

from ZeroHedge:

The gradual acceptance of digital currencies, with major exchanges about to launch bitcoin futures trading, may prompt some oil producing nations to ditch the US dollar in crude trade in favor of cryptocurrencies, an oil analyst says.

As RT reports, Russia, Iran and Venezuela have more than one thing in common.

All three are major oil producing nations dependent on the dollar since the global crude market is traditionally dominated by contracts denominated in US currency.

 

Moscow, Tehran and Caracas are also facing US sanctions; penalties which are proving effective since the sanctioned countries are dependent on the US dollar to sell their crude.

A decentralized currency – allowing anonymous transactions along with blockchain technology support to facilitate oil contracts – may be the ideal tool to allow the oil producing trio to turn their back on the greenback.

“The advent of cryptocurrencies, therefore, represents a fresh catalyst for commodity-producing countries wishing to abandon the dollar as a means of payment for oil,” said Stephen Brennock, oil analyst at PVM Oil Associates, in a research note seen by CNBC.

Several oil producers have already voiced plans to ditch the dollar in oil trading.

Last week, Venezuela announced it will launch its own cryptocurrency, the “Petro,” which will be backed by the country’s vast natural resource reserves.

Russia, China and Iran are currently pursuing currency swap agreements to eliminate the US dollar from trade.

One of the world’s biggest crude importers, China, has also announced the launch of the petro-yuan to replace the greenback in oil transactions.

Read More @ ZeroHedge.com

Finally, Gold Speculators Start To Bail, Setting Up A Big Q1 2018

by John Rubino, Dollar Collapse:

It took a lot longer than it should have, but gold futures traders have finally started behaving “normally.” The speculators who were extremely, stubbornly long – and who are usually wrong when they’re this excited — had maintained their over-optimistic bets when they should have been stampeding for the exits, making the last few months both boring and depressing for gold bugs and related investors.

This departure from the familiar script raised questions about whether the action in futures (aka paper gold) was still relevant in the age of Chinese physical gold exchanges and cryptocurrency. The jury’s still out on that one, but for now the numbers are reassuring.

The following table (courtesy of GoldSeek) shows speculators cutting way back on long bets and adding to short bets, while the “commercials” – who tend to be right at sharp turns — did the opposite, going a lot less short.

Same thing only more so in silver, where another week like the last one will bring net positions into balance for both groups, which has historically been extremely bullish.

Here’s the same data depicted graphically for gold: Note how both the speculators (silver columns) and the commercials (red columns) held their positions from spring into fall, producing the previously-mentioned boredom and depression. Also note the sharp drop in the most recent reporting week.

Read More @ DollarCollapse.com

OPERATION FREEDOM Sunday, December 10, 2017 – Keith Neumeyer, John Titus and Eric Dubin

by Dave Janda, Operation Freedom:

Topics Discussed: Counter-terrorism, Manipulation of financial markets, New World Order Syndicate, Obama Care, Free Market Health Reform, Putin, The Ukraine, ISIS, Syria, The Constitution, Natural resources, Reserve currency, Corruption, gold, silver, Global Elite, International Banking Cabal, debt, Federal Reserve, Too Big To Fail Banks, Crony Capitalism, Debt Ceiling, Financial implosion, Recession, Economic Depression, Freedom, Liberty

Click HERE to listen to Keith Neumeyer

Click HERE to listen to John Titus

Click HERE to listen to Eric Dubin

Read More @ DaveJanda.com

Lock In Your Gains and Hurt The Banks…All In One Move

by Turd Ferguson, TF Metals:

How many times have we stated that true physical demand is the only tool we have to defeat The Banks’ stranglehold on gold and silver. This podcast is designed to give you an idea of how to participate and help.

As you likely know, Hard Assets Alliance is our longest-running affiliate and sponsor. We’ve recently kicked it up a notch in the hope of driving more recognition, trading and physical demand through their unique platform.

In this podcast, the CEO and Founder of HAA, Olivier Garret, joins me for a brief discussion of an idea. What if the gold community took just a fraction of their retirement assets and rolled them into physical precious metal? Maybe folks could start by simply cleaving off the Central Bank-generated stock market gains from just this year alone?

Click HERE to listen

Read More @ TFMetals.com

The Biggest Bubble Ever, In Three Charts

by John Rubino, Dollar Collapse:

Each quarter, Credit Bubble Bulletin’s Doug Noland posts a “flow of funds” report that analyzes the debt and securities markets data released by the Fed in its Z.1 Report. It’s always shocking to see the numbers we’re dealing with, but even more so lately as history’s biggest financial bubble starts to dwarf its predecessors.

Here’s some of the scarier data in chart form, with Noland’s commentary:

To the naked eye, percentage debt growth figures for the most part don’t appear alarming. But there’s several unusual factors to keep in mind. First, the outstanding stock of debt has grown so enormous that huge Credit expansions (such as Q3’s) don’t register as large percentage gains. Second, overall system debt growth continues to be restrained by historically low interest-rates and market yields. Debt simply is not being compounded as it would in a normal rate environment. And third, it’s a global Bubble and a large proportion of global Credit growth is occurring in China, Asia and the emerging markets. U.S. securities markets continue to be a big target of international flows.

With global Bubble Dynamics a dominant characteristic of this cycle, it’s appropriate to place Rest of World (ROW) data near the top of Flow of Funds analysis. ROW holdings of U.S. Financial Assets jumped $724 billion (nominal) during the quarter to a record $26.347 TN. This puts growth over the most recent three quarters at a staggering $2.124 TN (16% annualized). What part of these flows has been associated with ongoing rapid expansion of global central bank Credit? It’s worth recalling that ROW holdings ended 2007 at $14.705 TN and 1999 at $5.639 TN. As a percentage of GDP, ROW holdings of U.S. Financial Assets ended 1999 at 57%, 2007 at 100%, and Q3 2017 at a record 135%.

 

Meanwhile, the Fed’s Domestic Financial Sectors category expanded assets SAAR $2.841 TN during Q3 to a record $95.213 TN. In nominal dollars, the Financial Sector boosted assets a notable $5.085 TN over the past three quarters, almost 8% annualized growth. Notably, the sector’s holdings of Debt Securities surged a nominal $775 billion in three quarters to a record $25.425 TN. Pension Funds were a huge buyer of Treasuries during the quarter (SAAR $1.075 TN). Over the past three quarters, the Financial Sector boosted holdings of Corporate & Foreign Bonds by nominal $427 billion to $8.026 TN. More very big numbers.

One doesn’t have to look much beyond the booming Rest of World and Domestic Financial Sector to explain ongoing over-liquefied securities markets. The numbers confirm a historic financial Bubble.

Total Equities Securities jumped $1.229 TN during the quarter to a record $43.969 TN, with a one-year gain of $5.923 TN (16.4%). Equities jumped to a record 224% of GDP, compared to 181% at the end of Q3 2007 and 202% to end 1999. Debt Securities gained $171 billion during Q3 to a record $42.385 TN, with a one-year gain of $1.080 TN. At 217% of GDP, Debt Securities remain just below the record 223% recorded in 2013.

 

This puts Total (Debt & Equities) Securities up $1.400 TN during the quarter to a record $86.080 TN. Total Securities inflated $7.003 TN, or 9.1%, over the past year. Total Securities experienced cycle tops of $55.261 TN during Q3 2007 and $36.017 TN to end March 2000. Total Securities ended Q3 2017 at a record 441% of GDP. This outshines the previous cycle peaks of 379% for Q3 2007 and 359% at Q1 2000. One more way to look at post-crisis securities market inflation: Total Securities ended Q3 $30.819 TN, or 56%, higher than the previous cycle peak in Q3 2007.

There’s no doubt that financial sector leveraging and foreign flows (especially through the purchase of U.S. securities) continue to play an integral role in the U.S. Bubble. Inflating asset prices and resulting bubbling U.S. Household Net Worth are instrumental in fueling the overall U.S. Bubble Economy.

As we think ahead to 2018, the question becomes how vulnerable U.S. securities markets are to waning QE and reduced central bank Credit expansion. Inflating a Bubble creates vulnerability to any slowdown in underlying Credit and attendant financial flows. And it’s the final parabolic speculative blow-off that seals a Bubble’s fate. It ensures market dependency to unusually large and inevitably unsustainable flows. The Fed’s latest Z.1 report does a nice job of illuminating the historic scope of the U.S. securities Bubble. U.S. securities markets have been on the receiving end of extraordinary international flows, while inflating securities and asset prices have spurred rapid financial sector expansion.

Note that in the two “% of GDP” charts today’s numbers are compared to the previous two bubble peaks when things had gotten so far out of hand that the following year saw massive financial crises. So the fact that we’ve blown through those two previous records portends interesting times ahead.

Read More @ DollarCollapse.com

A New Stealth Attack in EU’s “War on Cash”

by Don Quijones, Wolf Street:

And the definition of “cash” widens.

The EU’s Orwellian-dubbed Civil Liberties and Economic Affairs committee has approved tough new rules on cash that travelers might bring into or take out of the bloc. It’s also broadened the definition of cash to include precious stones and metals and prepaid credit cards.

For the moment the new definition does not include Bitcoin and other cryptocurrencies, for one simple reason: “customs authorities lack the resources to monitor them.”

Most importantly, the draft law will enable authorities to impound “cash” below the traditional €10,000 threshold, if criminal activity is suspected. The new rules would repeal the First Cash Control Regulation (CCR) from 2005, which requires individuals to declare sums over €10,000 when leaving or entering the EU.

The draft law still needs to be approved by the European Parliament. Then the legislation needs to be negotiated with EU governments. If the law is passed, anyone acting suspiciously carrying any amount of cash, whether in notes, precious stones, precious metals or prepaid credit cards, could face having their “money” impounded.

“Large sums of cash, be it banknotes or gold bullion, are often used for criminal activities such as money laundering or terrorist financing,” said Mady Delvaux, the Committee’s co-rapporteur. “With this legislation, we give our authorities the tools they need to improve their fight against those crimes.”

It could be argued that any legislation aimed at disrupting criminal financial networks is, de facto, a welcome move, but that would ignore the fact that many forms of modern-day tax evasion, avoidance and money laundering are conducted without cash through shell corporations located across multiple jurisdictions, including Luxembourg.

But the EU’s anti-cash measures are not aimed at the giant corporations and well-heeled individuals and families, including those that, thanks to their armies of professional lawyers and accountants, get to exploit the loopholes built into the system to stash their wealth far from the prying eyes of European tax authorities. No, the measures are aimed at average Joes and ordinary Janes, and the main objective is to further dampen their ability or willingness to use or carry cash.

This has long been a cherished goal of the EU, which began 2017 by announcing its intention to “explore the relevance of potential upper limits to cash payments,” with a view to implementing cross-regional measures in 2018. Any attempt by the European Commission to set a mandatory continent-wide limit is likely to be met with fierce resistance — at least in countries where cash is still revered, like Germany and Austria. Others are already so far down the path toward a cashless society that they’ll barely notice the difference.

Besides fighting crime and tax evasion, there are myriad other reasons why the EU and the ECB, along with banks, fin tech firms, credit card companies, national governments and UN agencies, want to pull the plug on physical currency:

  1. Cash has no middleman. One party pays the other party in mutually accepted currency and not a single intermediary (i.e. bank, fin tech firm or credit card company) gets to wet its beak.
  2. Increased technocratic control. In a world where every transaction must be electronic (i.e. traceable) and where biometric authentication systems have become the norm, the power of banks, corporations, tech firms, and governments over people’s every-day lives would be virtually unlimited.
  3. The death of financial privacy. Fyodor Dostoyevsky wrote in 19th century-Russia that “money is coined freedom.” Today, it is one of the last remaining things that gives people a small semblance of privacy, anonymity, and personal freedom in their increasingly controlled and surveyed lives. However, according to the European Commission’s own rulings, privacy and anonymity do not constitute “fundamental” human rights.

Read More @ WolfStreet.com

BRICS planned alternative gold market could mean severe consequences for not only Western control over gold, but also the dollar

by Kenneth Schortgen, The Daily Economist:

Many people forget that the original dollar reserve currency agreement in 1946 was based on a gold standard.  And it was only through the corruption of the U.S. government, as well as the desires of central banks to remove the metal from backing global currencies, that we reside in the debt fueled financial monstrosity we have today.

But through a combination of technological as well as geopolitical changes taking place over the past decade, there is a clarion call occurring that is seeking a way to return to the gold standard in some form or fashion.  And it may be coming from the coalition known as the BRICS, who’s planned gold trade platform could not only mean severe consequences to the West’s stranglehold over the gold markets, but could also put a dagger into the heart of the reserve currency itself.

The BRICS counties are considering starting an internal gold trading platform, according to Russian officials. When this happens, the global economy will be significantly reshaped, and the West will lose its dominance, predicts a precious metals expert. 

In 2016, 24,338 tons of physical gold were traded, which was 43 percent more than in 2015, according to Claudio Grass, of Precious Metal Advisory Switzerland. 

Gold moving from the West to the East 

“We have to put the BRICS initiative into a broader context. It is just part of a geopolitical tectonic shift which started decades ago. We have seen a constant outflow of physical gold from the West to the East. At the same time, the West has lost the economic war, and as a consequence, the focus now turns to the financial system. China dominates the world economy and has displaced the US as the world’s most formidable economic powerhouse,” he told RT. 

The creation of a new gold standard by BRICS is also a step to end the US dollar’s domination of the global economy 

“As Bejing and Moscow understand that America used the dollar to control the world, by implementing a new kind of ‘Gold standard 2.0’ they want to distance themselves from this control. Furthermore, the vast majority of the people in Asia sees gold as superior, or ‘real’ money, something the West has forgotten, because of all the paper wealth (credit) they have accumulated,” said Grass. 

Read More @ TheDailyEconomist.com

CBOE Website Crashes As XBT Trading Begins, First Trading Halt As Bitcoin Price Surges

from Zero Hedge:

Update: At precisely 8:31pm ET, the CBOE instituted the first ever XBT trading halt, which lasted for two minutes according to a notice on Cboe’s website. XBT contracts have since resumed trading. As a reminder, the Cboe can halt trading for 2 minutes after 10% swings, and 5 minutes at 20%, an attempt to prevent wild swings.

Notably earlier in the evenig they exercised discretion and decided nto to halt the XBT trading as the first opening spike occurred…

The CBOE’s website crashed within minutes of the CBOE open on Sunday – which also marked the launch of the first bitcoin futures to trade on a major exchange… 

… while the price of a bitcoin spiked 10% in five minutes as the new contract with the ticker XBT fluctuated wildly.

The embarrassing crash happened as the entire financial world was closely watching the first historic institutionalization of bitcoin:

Shortly after the initial snafu, the CBOE tweeted that “visitors to cboe.com may find site is performing slower than usual and may at times be temporarily unavailable” due to heavy traffic adding that “all trading systems are operating normally.”

Read More @ ZeroHedge.com

Exploding Chinese Debt Could Threaten World Financial System

by Peter Schiff, SchiffGold:

The US national debt stands at over $21 trillion and neither political party in Washington D.C. seems inclined to do anything about it. In fact, the GOP tax plan winding its way through the political process will add an estimated $1.5 trillion more to the debt over the next decade. And that doesn’t even account for the increases in spending that Congress will certainly approve over that timespan.

Of course, all of this government debt has serious ramifications. Corporations are also piling on credit. Last month, Mint Capital strategist Bill Blain predicted that “the great crash of 2018 is going to start in the deeper, darker depths of the credit market.”

Now consider this. China has an even bigger debt problem than the US, and analysts say it could threaten global financial security.

Jim Rickards recently listed a Chinese debt crisis as one of the possible snowflakes that could set off the next financial avalanche. As if on cue, the mainstream has picked up this narrative. As Business Insider reports it:

China’s ballooning levels of debt and dependency on credit to fuel growth continues to pose a major financial stability threat to the global economy, and could be the catalyst for the next crisis, according to the International Monetary Fund.”

The IMF recently completed a fact-finding mission to China. According to the international body, credit growth has outpaced GDP growth, creating a large “credit overhang.”

The credit-to-GDP ratio is now about 25% above the long-term trend, very high by international standards and consistent with a high probability of financial distress. As a result, corporate debt has reached 165% of GDP, and household debt, while still low, has risen by 15 percentage points of GDP over the past five years and is increasingly linked to asset-price speculation. The buildup of credit in traditional sectors has gone hand-in-hand with a slowdown of productivity growth and pressures on asset quality.”

The IMF listed three areas of “tension” this pileup of debt has created in the Chinese financial sector.

First, expansionary monetary and fiscal policy aimed at supporting employment and growth (sound familiar?) has led both national and local Chinese governments to provide huge incentives to keep failing companies afloat. Rickards said he saw the impact of this on his visit to China.

I was out in the countryside south of Nanjing not too long ago, visiting some of China’s famous ghost cities. I was with some Communist Party officials and provincial officials who were behind it all. Everything I saw, construction as far as the eye can see, magnificent in scope, was all empty. I’ve seen it firsthand. I turned to one of these officials and said, ‘This is all debt finance. This is all empty, so you have no revenue to pay the debt. So how are you gonna pay the debt?’ And he said, ‘Oh, we can’t. But Beijing’s going to bail us out.’ Not we hope Beijing will bail us out — but Beijing will bail us out. That isn’t an isolated viewpoint. It’s widespread.”

Second, “risky lending” has moved from banks toward “less supervised parts of the financial system.” As the IMF put it, Chinese investors are looking for increasingly complex ways to increase yields, which has led to “regulatory arbitrage and the growth of increasingly complex investment vehicles.”

Third, “widespread implicit guarantees have added to these risks.” According to the IMF, Chinese financial institutions seem unwilling to allow investors to lose money. This encourages even more risk-taking. They don’t see any downside.

A reluctance among financial institutions to allow retail investors to take losses; the expectation that the government stands behind debt issued by state-owned enterprises and local government financing vehicles; efforts to stabilize stock and bond markets in times of volatility; and protection funds for various financial institutions, have all contributed to moral hazard and excessive risk-taking.”

Read More @ SchiffGold.com