from The Money GPS :
Bank of Canada Shuts Out Free Market Economists from Key Policy Conference – Peter Diekmeyer
by Peter Diekmeyer, Sprott Money:
Next week’s Bank of Canada policy conference appears set to deliver standard talking points. Not a single free market economist has been invited and a BOC spokesperson confirmed that the alternative-financial press is also being shut out.
The BOC event, titled Monetary Policy Framework Issues: Toward the 2021 Inflation Target Renewal , takes place during a critical time for Canada’s central bank.
Bank of Canada economists emerged from the 2008 financial crisis red-faced, after having failed to predict the event in advance, despite the clear warning signs and having some of the country’s most respected practitioners on staff.
The BOC then had to bail out Canada’s big five banks, whose solvency the monetary authority is charged with overseeing.
Questions regarding Poloz’s “trickle down”economics
Things do not appear to have improved much under the reign of Stephen Poloz, its current Governor.
The Bank of Canada ranks last among the G-7 central banks in terms of its gold holdings, this during a time of record high Canadian household debts and one of the planet’s biggest housing bubbles.
There are also increasing questions regarding Mr. Poloz’s “trickle down” economics strategy, which consists of leveraging “considerable economic stimulus” to boost asset prices, in the hope that a resulting “wealth effect” will trickle down to the poor and the young.
Government-financed academics, officials and a government financed NGO
A quick look at the presenters at the upcoming event reveals the usual “broad range of opinions” that Canada’s central bank consults.
The 20 panelists, almost all of whom are financed or regulated by government, include:
- Four Canadian government employees
- Eight academics from Canadian universities, which draw the vast majority of their funds from government.
- One presenter from a Canadian think tank that received a reported $30 million in government money
- One representative representing Canada’s big banks, which were bailed out by governments during the last financial crisis.
Bank of Canada officials were unable to identify a single presenter who had published a paper about a free market thinker (Eg. Ludwig von Mises, Murray Rothbard, Nicolai Kondratieff or Carl Menger etc….) during the last ten years.
Dearth of free market thinkers
In fairness to the Bank of Canada, free market thinkers have been essentially banned from public discourse in Canada.
Universities refuse to hire them and major “business” think tanks such as the C.D. Howe Institute and the Fraser Institute, are stuck fighting rear guard actions against the state, and are thus forced to spend a huge proportion of their meager funds on technical specialists, who try to come up with creative arguments for relief from various regulatory clauses.
The upshot, is that the best they can hope for are incremental successes in holding back a ravenous state, which now eats up half of the country’s income.
That said, according to Tim Moen, leader of the Libertarian Party of Canada, the Bank of Canada has never once asked for the names of possible panelists or outside opinions. Redmond Weissenberger, president of Mises Canada, also confirmed that he was not asked for input either.
The BOC’s favorite media sources
The good news is that the Bank of Canada’s event will be covered by a select group of mainstream media. They will no doubt compensate for the fact that the alternative financial press has been shut out of the conference due to a “lack of space.”
Poloz’s favorite “by invitation only” news sources include:
- The Wall Street Journal
- Market News International
- Bloomberg News
- The Financial Post
- The Toronto Globe and Mail
- Reuters
- The Canadian Press
(Full disclosure, this writer has contributed to several of these publications).
The other good news is that parts of the event will be podcast.
Read More @ SprottMoney.com
THE U.S. PETRO DOLLAR BREAKDOWN CONTINUES: Big Moves In Gold & Silver Ahead
by Steve St. Angleo, SRSrocco:
The four-decade long monopoly of the U.S. Petro-Dollar as the world’s reserve currency is coming to an end. Unfortunately, most Americans have no clue that when the Dollar loses its reserve currency status, life will get a lot tougher living in the U.S. of A. Let’s say, Americans will finally receive “Precious metals religion.”
The U.S. Dollar Index fell considerably yesterday and is now down below a key support level. In early morning trading yesterday, the U.S. Dollar Index fell to 91.46, down 73 basis points:
According to technical analyst, Clive Maund, in his recent article, DOLLAR update as LOSS OF RESERVE CURRENCY STATUS LOOMS..., he stated the following:
The dollar is on course to lose its reserve currency status. This is not something that will happen overnight, it will be a process, but at some point there is likely to be a “sea change” in perception, as the world grasps that this is what is happening, which will trigger a cascade of selling leading to its collapse, whereupon gold and silver will rocket higher.
In that article, Clive posted the following chart on the U.S. Dollar Index (USD index) and its key support level:
As we can see, traders are looking closely to the Key support area at 92.5 for the USD index. With the USD index now below that key support area, it could spell real trouble for the Dollar if it closes below that level at the end of the week. After the markets opened today, the Dollar fell to a low of 91.08. So, it looks like the Dollar will close this week well below the key support area.
Now, part of the reason for the selloff in the Dollar may have been due to the disaster that took place in the 10-year U.S. Treasury Repo market today. According to Zerohedge’s article “We’ve Never Seen Anything Like This”: Repo Market Snaps As 10Y Suffers “Epic Fail”:
The pressure on the U.S. Treasury 10-year repo market is likely a reaction to what came out of the annual BRICS summit in China yesterday, According to the article, Escobar Exposes Real BRICS Bombshell: Putin’s “Fair Multipolar World” Where Oil Trade Bypasses The Dollar:
“To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.
Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan and convertible into gold.
This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan.
This announcement by Putin that oil trade should by-pass the Dollar came a few days after China announced that they plan to start trading oil on their Shanghai Exchange in Yuan, which will be backed by gold. While we have heard for years that China was going to back their currency or trade with gold, we now see actual plans to start implementing it sometime this year.
By China backing its new oil trading benchmark in Yuan with gold, it provides countries with a great deal of confidence in trading oil in another fiat currency besides the U.S. Dollar. Thus, countries that acquire a lot of Chinese Yuan by trading oil don’t have to worry about devaluation as they can convert Yuan into gold.
This Is Bad News For the Saudi-Petro Dollar System
The Petro-Dollar system that has been the foundation of world oil trade for the past four decades is now about to become obsolete. Even though many countries will continue trading oil in Dollars in the future, a larger percentage will likely move into trading oil in Chinese Yuan as it provides a “gold-backed protection” against fiat currency devaluation.
Not only is the Petro-Dollar under severe pressure, so is Middle East’s largest oil exporter that was the foundation of this monetary system back in the early 1970’s. Ever since the price of oil peaked in 2014 and has fallen by more than half to $49 currently, this has put an enormous strain on Saudi Arabia’s financial bottom line. In the past three years, Saudi Arabia sold over $250 billion of its foreign exchange reserves, which are mostly in U.S. Treasuries, to fund its national government.
Read More @ SRSrocco.com
Dear President Trump: America is in for a Rude Awakening in January
by Jim Rickards, Daily Reckoning:
Over the last couple of years I’ve been all over TV… from Fox News to CNBC, CNN and Bloomberg. I’ve been telling our fellow Americans that the financial global elite was planning to issue their own globalist currency called special drawing rights, or SDRs.
And that those elites would use this new currency to replace the U.S. dollar as the global reserve currency.
I’ve even written about this extensively in my best-selling booksThe Road to Ruin and The New Case for Gold.
I’m sure some people in the mainstream media thought I was out of line — but the United Nations and the International Monetary Fund (IMF) have both confirmed this plan to replace the U.S. dollar is real. I’ve made this warning many times, but it seems to be falling on deaf ears. That’s why I’m writing directly to you.
Here’s the proof that the U.S. dollar is under attack, right in front of our eyes:
The UN said we need “a new global reserve system… that no longer relies on the United States dollar as the single major reserve currency.”
And the IMF admitted they want to make “the special drawing right (SDR) the principal reserve asset in the [International Monetary System].”
More recently, the IMF advanced their plan by helping private institutions, such as the UK’s Standard Chartered Bank, issue bonds in SDRs.
Although our mainstream media ignored this major event, the UK media reported:
This is all happening. And on January 1st, 2018, this trend to replace the U.S. dollar will accelerate. That’s when the global elite will implement a major change to the plumbing of our financial system.
It’s a brand-new worldwide banking system called Distributed Ledger Technology. And it will have a huge impact on seniors who are now preparing for retirement.
When this system goes live, many nations will be able to dump the U.S. dollar for SDRs.
For now, the U.S. dollar is still the world’s reserve currency. Other nations have to hold and use the U.S. dollar for international trade, instead of their own currencies.
This creates a virtually unlimited demand for U.S. dollars, which allows us to print trillions of dollars each year to pay for wars, debt and anything we want. It keeps our country operating.
Now, we can see that the global elites are working to unseat the U.S. dollar as the global reserve currency.
Here are the three key pieces of information that prove this will happen.
Fact #1 — The IMF issues a globalist currency called special drawing rights, or SDRs.
Fact #2 — The IMF has confirmed they want to replace the U.S. dollar with SDRs.
Fact #3 — The IMF has confirmed Distributed Ledgers can be used for “currency substitution”… and they’ve even set up a special task force to speed up implementation.
The IMF is using this technology to create an SDR payment system, because that’s the currency they issue.
As you know, Christine Lagarde, head of the IMF, is the woman in the middle.
When asked about the task force, she said:
“As I see it, all this amounts to a brave new world for the financial sector.”
Yes, a brave new world where the dollar is no longer the world reserve currency.
Barbara C. Matthews, a former US Treasury Department attaché to the European Union, has reached the same conclusion.
She said the link between the globalists’ currency and Distributed Ledgers “is impossible to avoid.”
And that “the IMF seems to be exploring the possibility of permitting a broader use of [their globalist currency] beyond internal transactions among member central banks.”
Make no mistake, if the IMF is planning to use Distributed Ledgers to replace the U.S. dollar with SDRs. And just to be clear, when SDRs take over, the American people will be left with devalued dollars.
Read More @ DailyReckoning.com
Brick & Mortar Meltdown: Bon-Ton Department Stores Hires Bankruptcy Advisor
by Wolf Richter, Wolf Street:
Vitamin World plans to file for bankruptcy, Perfumania Holdings just filed. And Toys R Us… All in just two weeks.
Bon-Ton Stores, Inc., which operates about 260 department stores largely in the Northeast and Midwest under the names Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s, and Younkers, has hired PJT Partners, which describes itself as “a leading advisor to companies and creditors in restructurings and bankruptcies around the world.”
Faced with falling sales and customer traffic, the company is trying to refinance debt and prepare for a possible bankruptcy filing, “people familiar with the matter” told the Wall Street Journal.
Bon-Ton had already hired turnaround firm AlixPartners to help improve its operations but added PJT to focus on the financial aspects, “the people” told the Journal.
Bon-Ton’s debt and shares found their way onto WOLF STREET for the first time in November 2015, in Capital Destruction Rages Beneath S&P 500 Tranquility after it reported crummy results, blaming the “unseasonably warm weather” and “continued weakness in overall traffic trends.” That day, its already beaten-down 8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} notes plummeted well below 40 cents on the dollar, and its shares crashed 39{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to $1.21.
In January 2016, Bon-Ton’s 8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} notes reappeared in Defaults and Restructuring Next for Retailers, at which time they traded at 33 cents on the dollar.
Yesterday, the notes traded at 40 cents on the dollar, and the stock was down to $0.69 a share.
In May 2015, shares had traded at around $7. In May 2007, at around the peak of the boom in leveraged buyouts – when there were hopes that a private equity firm would buy out the retailer, as they had done with so many others that have now become part of the brick-and-mortar meltdown – shares had spiked to over $56. But that LBO didn’t happen.
So signs that Bon-Ton was in trouble have been out there for over two years, but in an era of unlimited liquidity and artificially low interest rates, waiting for the inevitable requires patience.
In the last quarter, Bon-Ton reported that sales fell 7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to $505 million on dropping customer traffic. Sales have been falling every year for at least three years. Its growing online sales didn’t make up for the plunge in brick-and-mortar sales. Bon-Ton generated a quarterly net loss of $33 million, on top of the $134 million it had lost over the past three years.
It reported total long-term debt of $856 million plus about $300 million in capital leases, financing obligations, and “other long-term liabilities.” Its cash balance was down to just $6.3 million, and on July 29, it still had $171.5 million available to borrow under its credit line with Bank of America – so it’s not going to run out of money tomorrow. But the day is approaching.
In its report on retailers in July, Standard and Poor’s warned about weak recovery for creditors in case of default by a slew of retailers that are headed for a debt restructuring or bankruptcy, including Bon-Ton.
And it pointed out that a number of recently defaulted retailers weren’t able to restructure and continue but instead “have largely closed shop and liquidated their assets.” Among them were The Limited, American Apparel, Wet Seal, and Sports Authority, all heroes of our Brick-and-Mortar Meltdown theme. Alas, “recovery prospects in a liquidation scenario are often dramatically lower than when a company continues to operate,” and this “is especially true in the retail sector because most retailers are asset light – meaning most creditors are highly dependent on profitability and cash flow as a source of repayment.
Indeed, what assets does a retailer have that leases its stores? Inventory to be sold off at liquidation sales. Bon-Ton lists $658 million in merchandise, which is likely worth less when sold at a fire sale. But it has $200 million in accounts payable, $856 million in long-term debt, and $300 million in other obligations, plus things like accrued payroll and benefits. So creditors are going to come up woefully short in a liquidation.
Bon-Ton is just the current episode.
On September 6, Toys R Us was said to have hired a bankruptcy law firm. The company was subject to $6.6 billion LBO in 2005, and by now, the private equity firms involved – Kohlberg Kravis Roberts (KKR), Vornado Realty Trust, and Bain Capital Partners – have stripped out cash and piled on enough debt to topple the company.
On September5, 2017, Vitamin World, a vitamin and supplement seller with 345 stores, was said to have plans for a bankruptcy filing as early as this month, hoping to get out of exorbitant lease agreements for a number of its stores, people familiar with the plans told Reuters . CEO Michael Madden said that the agreements were negotiated by its previous owners, vitamin maker NBTY Inc. The current owner, private equity firm Centre Lane Partners acquired it last year for about $25 million.
Read More @ WolfStreet.com
Venezuela Is About to Ditch the Dollar in Major Blow to US: Here’s Why It Matters
by Darius Shahtahmasebi, The Anti Media:
Venezuelan President Nicolas Maduro said Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week, Reuters reports. According to the outlet, Maduro will look to use the weakest of two official foreign exchange regimes (essentially the way Venezuela will manage its currency in relation to other currencies and the foreign exchange market), along with a basket of currencies.
According to Reuters, Maduro was referring to Venezuela’s current official exchange rate, known as DICOM, in which the dollar can be exchanged for 3,345 bolivars. At the strongest official rate, one dollar buys only 10 bolivars, which may be one of the reasons why Maduro wants to opt for some of the weaker exchange rates.
“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.
Maduro hinted that the South American country would look to using the yuan instead, among other currencies.
“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.
Venezuela sits on the world’s largest oil reserves but has been undergoing a major crisis, with millions of people going hungry inside the country which has been plagued with rampant, increasing inflation. In that context, the recently established economic blockade by the Trump administration only adds to the suffering of ordinary Venezuelans rather than helping their plight.
According to Reuters, a thousand dollars’ worth of local currency obtained when Maduro came to power in 2013 is now be worth little over one dollar.
A theory advanced in William R. Clark’s book Petrodollar Warfare – and largely ignored by the mainstream media – essentially asserts that Washington-led interventions in the Middle East and beyond are fueled by the direct effect on the U.S. dollar that can result if oil-exporting countries opt to sell oil in alternative currencies. For example, in 2000, Iraq announced it would no longer use U.S. dollars to sell oil on the global market. It adopted the euro, instead.
By February 2003, the Guardian reported that Iraq had netted a “handsome profit” after making this policy change. Despite this, the U.S. invaded not long after and immediately switched the sale of oil back to the U.S. dollar.
In Libya, Muammar Gaddafi was punished for a similar proposal to create a unified African currency backed by gold, which would be used to buy and sell African oil. Though it sounds like a ludicrous reason to overthrow a sovereign government and plunge the country into a humanitarian crisis, Hillary Clinton’s leaked emails confirmed this was the main reason Gaddafi was overthrown. The French were especially concerned by Gaddafi’s proposal and, unsurprisingly, became one of the war’s main contributors. (It was a French Rafaele jet that struck Gaddafi’s motorcade, ultimately leading to his death).
Iran has been using alternative currencies like the yuan for some time now and shares a lucrative gas field with Qatar, which may ultimately be days away from doing the same. Both countries have been vilified on the international stage, particularly under the Trump administration.
Nuclear giants China and Russia have been slowly but surely abandoning the U.S. dollar, as well, and the U.S. establishment has a long history of painting these two countries as hostile adversaries.
Read More @ TheAntiMedia.com
