Wednesday, January 04, 2017

The Consequences Of Helicopter Money
"With so much U.S. government debt in foreign hands, a simple decision by foreign countries to become net sellers of U.S. Treasuries is enough to cause interest rates to rise thus slowing economic growth and increasing U.S. deficits at the same time. If such net selling accelerates, it could lead to a debt-deficit death spiral and a U.S. sovereign debt crisis of the type that have hit Greece and the Eurozone periphery in recent years. In short, helicopter money, which both Trump and the Fed may desire, could have far less potency and far greater unintended negative consequences than either may expect."
- Jim Rickards*
LINK HERE to the essay

30 comments:

Anonymous said...


Infographic: Gold ETF Mechanics

Gold-backed Exchange Traded Funds (ETFs) have grown strongly in scale and popularity over the last decade and their combined gold holdings now surpass all but the largest central bank gold reserve holdings. However, its important to understand the mechanics of these gold-backed ETF investment vehicles and to appreciate what they can and can't provide to gold investors.

This infographic takes you on a tour of gold-backed ETFs and illustrates insights into how these products really work, including the following:

The contemporary gold holdings of the world's largest gold-backed ETF platforms
Why holders of gold ETFs are holders of units / shares, not gold holders
The characteristics and common objectives of gold-backed ETFs
How the world's largest gold ETFs support and perpetuate the opaque practices of the London Gold Market
The secretive vault network within which many large gold-backed ETFs allocate and store their gold in
How the amount of gold represented by an ETF unit erodes over time
The summary mechanics and infrastructure of many of these gold ETF vehicles


https://www.bullionstar.com/blogs/bullionstar/infographic-gold-etf-mechanics/

Anonymous said...

"The business interests of the US-companies that dominate the global IT business and payment systems are an important reason for the zeal of the US-government in its push to reduce cash use worldwide, but it is not the only one and might not be the most important one.

Another motive is surveillance power that goes with increased use of digital payment. US-intelligence organizations and IT-companies together can survey all international payments done through banks and can monitor most of the general stream of digital data. Financial data tends to be the most important and valuable.

Even more importantly, the status of the dollar as the worlds currency of reference and the dominance of US companies in international finance provide the US government with tremendous power over all participants in the formal non-cash financial system. It can make everybody conform to American law rather than to their local or international rules."

Norbert Haering, A Well Kept Open Secret

http://linkis.com/norberthaering.de/en/Z4kgZ

Anonymous said...

Central-Bank Bashing Has Gold Only Asset Safe From Meddling




For those who lose faith in central banks, gold may be the last holdout. It retains its appeal as an asset that once underwrote the monetary system and it can’t be created at will like currencies and bonds, said Matthew Turner, a Macquarie Group Ltd. economist.

Mahon is betting that gold will rise if political intervention causes central banks to miss inflation and growth targets. In the past few months he’s built up a 4 percent allocation to bullion in his 1.7 billion pound ($2.1 billion) Dynamic Asset Allocation Fund, which outperformed 80 percent of peers last year. Jim Rickards, author of New York Times best seller Currency Wars: The Making of the Next Global Crisis, is even more bullish: he recommends putting 10 percent into gold.
https://www.bloomberg.com/news/articles/2017-01-13/central-bank-bashing-makes-gold-only-asset-safe-from-meddling

Anonymous said...


Family Affair for Davos Future of Finance Session

Two of five panel members pondering the future of finance at the World Economic Forum are related. Carlyle Group co-founder David Rubenstein is married to Alice Rogoff. Harvard Economist Kenneth Rogoff is Alice's cousin.

What are the odds that 40% of the expert guest would come from the same family?

http://peureport.blogspot.com/2017/01/family-affair-for-davos-future-of.html

Anonymous said...

Central Banks Embrace Risk in Era of Low Rates Bankers invest bigger share of growing currency reserves in equities, corporate bonds in effort to wring out higher returns

By keeping interest rates low and in some cases negative, central banks have prompted some of the most conservative investors to join the hunt for higher returns: Other central banks.

Central banks from Switzerland to South Africa are investing a bigger share of their growing foreign-exchange reserves in equities, corporate bonds and other riskier assets.

Branching out from the traditional central-bank practice of investing primarily in ultrasafe government bonds such as U.S. Treasurys means taking on more risk. But at a time when global growth, interest rates and potential returns on many assets are low, many central bankers are becoming increasingly focused on maximizing investment returns.

“When yields started to get really low and closer to zero in 2014, we decided to start equity investments,” said Jarno Ilves, head of investments at the Bank of Finland, who said he plans to increase his allocation to stocks.

Invesco Ltd. recently released a report on central- bank investment after surveying 18 reserve managers across Europe, the Middle East and Africa in 2016. A net balance of 80% and 43% of respondents to questions on asset allocation said they planned to invest more in stocks and corporate debt, respectively. Low government-bond returns were behind the moves to diversify, said 12 out of 15 respondents, while three declined to answer.

The shift has significant implications for markets and the global economy, analysts say. Many central banks are hiring outside managers to handle the nontraditional assets in their portfolios, presenting an opportunity to a financial industry struggling with stagnant revenue growth.

At the same time, efforts to invest reserve funds more broadly mean that more markets will be subject to what some critics describe as central-bank distortion, as large and often price-insensitive buyers run the risk of driving up prices and reducing prospective returns for other market participants.



These central banks in developed economies care relatively little about whether such investments make profits or losses—though they can matter politically—because they can always print more of their currency. So risk is less important, analysts say.

http://www.wsj.com/articles/central-banks-embrace-risk-in-era-of-low-rates-1485133603

they have enough money to buy equities, fixed income, and real estate.....but WAGES MUST REMAIN LOW.?

Anonymous said...

Goldmoney CEO: The volatility makes gold as a currency more important than ever

Roy Sebag, CEO of Goldmoney, joins BNN's Catherine Murray for a look at the latest developments in the crypto-currency space, why Bitcoin could become the new gold standard for volatility, and why gold continues to make its case to become the gold-standard for currency again.


http://www.bnn.ca/video/goldmoney-ceo-the-volatility-makes-gold-as-a-currency-more-important-than-ever~1041695

Rise of alternative money

Anonymous said...


Currecide: The Globalists’ Planned Annihilation of Your Savings and Freedom
January 25, 2017

Stewart Dougherty is back with another guest post. I believe this is his best work to date. I wanted to share some his thoughts from out email exchanges, which are raw, unedited and quite insightful:

I totally agree with what you wrote me previously about gold going ballistic this year. It’s probably better set-up right now than at any other time in history, for a large number of reasons. I hope it can finally overwhelm, once and for all the schemers who work to keep it down.

I continue to think that cash elimination is the biggest story out there. It is a fraud of epic proportions, and its implications are dark and deeply disturbing. I realize that I keep coming back to this theme, but it’s because it registers with me as being so incredibly important. Sometimes, you have to say something five times before people say, “Wow. This is important. I better do something about it.” If people decide to “do something about it,” they are going to find that their options are limited. Gold being one of the few of them. Gold demand would go nuts if only the people could finally understand why they need to buy it right now. I feel a bit like Don Quixote, but I also think that the dam of realization is coming very close to breaking, and that there could be an outright flood of new, popular awareness and action.

After a decade’s worth of sharply detailed and psychologically painful analysis, Dr. Rudolph Rummel determined that in the 20th Century, governments killed 262 million of their own citizens. This was in addition to the roughly 40 million persons killed in combat during the same century, in government-waged wars. In all, governments were responsible for the murder of more than 300,000,000 people in the 1900s alone.

Rummel coined a term for this mass annihilation: “Democide,” which he defined as “the murder of any person or people by a government, including genocide, politicide and mass murder.”

He concluded that the root cause of the 20th Century democidal onslaught was the addiction to and miscarriage of power. Recasting Lord Acton’s famous quote, Rummel said: “Power kills; absolute power kills absolutely.”

Summarizing what he had learned from his research into the recurring problem of government mass murder, he wrote: “The problem is power. The solution is democracy. The course of action is to foster freedom.”

Last week in Davos, Switzerland, a small clique of rich and powerful people met to refine and advance their command, control and exploit agenda for humanity, the primary objective of which is to destroy human freedom.

Despite the warning shots aimed their way by an increasingly plundered and disgusted populace, it was clear that the Davos elite had not heard or sensed a thing.

http://investmentresearchdynamics.com/currecide-the-globalists-planned-annihilation-of-your-savings-and-freedom/

Anonymous said...

Reassessing the Role of Precious Metals as Safe Havens https://papers.ssrn.com/sol3/papers.cfm?abstract_id


Reassessing the Role of Precious Metals as Safe Havens - What Colour is Your Haven and Why?

Sile Li
Trinity Business School, Trinity College Dublin

Brian M. Lucey
Trinity Business School, Trinity College Dublin; University of Ljubljana - Faculty of Economics

January 27, 2017


Abstract:
The role of gold as a safe haven asset has been extensively studied in recent years. This article extends previous literature and examines time varying safe haven properties versus equities and bonds of four precious metals (gold, silver, platinum and palladium) across eleven countries. Results suggest that the metals each play safe haven roles; there are times when one metal is not while another may be a safe haven against an asset. The second part of this article attempts to identify robust economic and political determinants of precious metals’ safe haven properties applying zero-inflated Poisson regression (ZIP) and extreme bound analysis (EBA). Economic Policy Uncertainty is found to be a positive and robust determinant of a precious metal being a safe haven. This holds across countries. Stock volatility, exchange rates, interest rate and credit spreads are also found to be significant, but results are quite mixed for different markets and are fragile of model specification.

Anonymous said...

COMEX PHYSICAL GOLD DELIVERIES RISE 729% YEAR OVER YEAR!

Far more important than the temporary manipulation of options dealers, however, is the physical market for real gold. January is an off-month for deliveries at COMEX. However, the number of gold futures contracts that stood for delivery this month resembles an active delivery month. That is interesting because COMEX has always been primarily a paper based exchange. Physical delivery is the exception rather than the rule. Delivery has always been theoretically possible, but it has been rarely done. In January 2016, for example, the holders of only 172 COMEX futures contracts demanded physical gold. In comparison, by January 27, 2017, the holders of 1,254 COMEX futures contracts held them to maturity and demanded their gold! That is a whopping 729% increase yoy!

http://averybgoodman.com/myblog/2017/01/29/comex-physical-gold-deliveries-rise-729-year-over-year/

Anonymous said...

How to Make America Great Again?
The Petition: Make Money Great Again
We The People request the new administration Make Money Great Again; that gold and silver may freely be used as money alongside United States dollars.


https://www.mmga.org/

Anonymous said...

Former Reserve Bank of India Governor: gold is the ultimate global currency http://indianexpress.com/article/business/economy/gold-is-ultimate-global-currency-y-venugopal-reddy-4499737/ …

Anonymous said...

Utah Bill Would Set Stage For State #Gold and #Silver Depository, Further Encourage Use of Metals as Money http://blog.tenthamendmentcenter.com/2017/02/utah-bill-would-set-stage-for-state-gold-and-silver-depository-further-encourage-use-of-metals-as-money/

Anonymous said...

FT: "Would it matter if Fort Knox turned out to be empty?"

As London seeks transparency, the US will not allow auditors near its gold reserves
More than any other, the gold market is built on confidence. The LBMA thinks greater transparency will help build it further, attracting more business to London, and it could be right, although those buying as an insurance policy against Armageddon would surely want actual metal. A paper certificate might not command the same respect in a global crisis. Much of the world’s excavated gold is thought to be in Fort Knox, but nobody can be sure, since the US government will not allow the auditors in. There may be nothing more there than millions of gold-painted bricks inside a fancy security system. Would it matter if Fort Knox turned out to be empty? In theory, its gold backs the greenback. In practice, there has been no connection since President Nixon broke the tie. Apart from wondering where it all went, would we, or the US taxpayer, be any worse off? These are deep waters, Watson . . .
https://www.ft.com/content/db95896a-ef68-11e6-930f-061b01e23655

Anonymous said...

The Great Rotation…Into Gold?
An asset allocation survey by the U.S. Council of Institutional Investors shows that commodities in general account for only 1.8% of pension fund investments. That means only a fraction of that 1.8% is invested specifically in gold and silver.8 U.S. Treasury bonds are viewed as a “safe-haven” asset because of the perception that they have zero risk of default. The bond bull market that started in 1981 has also helped reinforce the idea that you can’t go wrong with bonds. But, if we enter into a more inflationary environment, bond investors will continue to lose money, and that could trigger an outflow of capital into assets that have historically worked as inflationary hedges. Those assets could include gold and silver.

In 1980, gold made up 2.74% of global financial assets. Today, it’s just 0.58%.9 In other words, there’s a lot of room for institutional investors to invest more heavily in gold. A great rotation from bonds into stocks may very well be under way. But, if inflation starts to get out of hand, we could also see some of that outflow from bond funds end up in gold. This asset allocation adjustment would just be another tailwind for gold.

Does your portfolio contain a significant amount of bonds? If inflation continues to rise, would you consider moving out of bonds and into precious metals? Please share your views with us by leaving your thoughts in the Comments section.

http://www.dailypfennig.com/2017/02/12/great-rotationfrom-bonds-gold/


Anonymous said...

‘Fed Up’ exposes the elite rot inside the Federal Reserve

Such criticism is generally limited to what the Fed does, or doesn’t do, in terms of policy. Not so with Danielle DiMartino Booth, author of “Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America,” who attacks the culture of the Fed, starting from the bottom up.

She takes on the research staffs of elite, Ph.D. economists — “the MIT mafia” — who are married to their mathematical models and focused on publishing in peer-reviewed journals. She exposes the institutional groupthink — “groupstink,” she calls it — and disdain for dissenting views. And she reserves her most strident criticism for those at the very top.

She came armed with an M.B.A., not a Ph.D., which made her suspect in the eyes of staff economists as she gradually worked her way up to Class I Clearance, with access to all policy-related material and briefings.

In her columns, DiMartino Booth had warned about lax mortgage-lending standards, a housing bubble and escalating systemic risk. Once ensconced at the Fed, she was left to wonder why so many “highly educated and well-paid economists” were “oblivious as the worst financial crisis since the Great Depression was about to break over their heads.” (One of the main reasons is the Fed’s reliance on econometric models that don’t include anything related to the financial system, such as debt or credit.)



Janet Yellen, the current Fed chairwoman, is subject to withering criticism in the book. From 2004-2010, Yellen was president of the San Francisco Fed, whose district encompasses nine Western states and was ground zero for the housing bubble and subsequent bust. DiMartino Booth portrays Yellen as an uber-dove and devout Keynesian, someone who was “oblivious as the housing market in her region imploded on multiple fronts.”

The Fed regularly publishes a summary of economic conditions in the 12 federal reserve districts, but when real-world information contradicts the Fed’s econometric model, the model wins. DiMartino Booth provided Fisher with real-time information — not seasonally adjusted, to the consternation of the staff — gleaned from an array of market sources and data sets.

http://www.marketwatch.com/story/fed-up-exposes-the-elite-rot-inside-the-federal-reserve-2017-02-14?



Anonymous said...

This Country Wants Everyone to Have 100 Grams of Gold

Kyrgyz National Bank governor wants everyone to own some gold
Central Asian country’s central bank purchasing more bullion

A landlocked nation perched between China and Kazakhstan is embarking on an experiment with little parallel worldwide: shifting savings from cattle to gold.

One of the first post-Soviet republics to adopt a new currency and let it trade freely, Kyrgyzstan’s central bank wants every citizen to diversify into gold. Governor Tolkunbek Abdygulov says his “dream” is for every one of the 6 million citizens to own at least 100 grams (3.5 ounces) of the precious metal, the Central Asian country’s biggest export.

Tolkunbek Abdygulov
Photographer: Baktybek Meimanbekov/National Bank of the Kyrgyz Republic

“Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he said in an interview. “I’ll try to turn the dream into reality faster.”

In the two years that the central bank has offered bars directly to the population, about 140 kilograms of bullion have been sold, Abdygulov, 40, said by phone from the capital, Bishkek.

“We are hopeful that our country’s population will learn to diversify its savings into assets that are more liquid and -- more importantly -- capable of retaining their value,” he said. In rural areas, cattle is still the asset of choice for investors and savers, according to Abdygulov.

https://www.bloomberg.com/politics/articles/2017-02-15/currency-pioneers-build-nation-of-gold-bugs-on-ex-soviet-fringes

Anonymous said...

Alan Greenspan: 'I view gold as the primary global currency.'

"I view gold as the primary global currency," Greenspan said in the February edition of Gold Investor.

He also said (emphasis added):
"Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today we would not have reached the situation in which we now find ourselves. We cannot afford to spend on infrastructure in the way that we should. The US sorely needs it, and it would pay for itself eventually in the form of a better economic environment (infrastructure). But few of such benefits would be reflected in private cash flow to repay debt.
http://markets.businessinsider.com/commodities/news/greenspan-defends-gold-standard-infrastructure-2017-2-1001758059-1001758059 …

Anonymous said...


Shelton: Fed's 'flawed model' made inequality of wealth & income...
Wednesday, 15 Feb 2017 | 3:42 PM ET

Judy Shelton, Trump economic advisor, discusses a "flaw" in the Fed's model, and whether she would consider filling the open position at the Fed.

http://video.cnbc.com/gallery/?video=3000593556

Anonymous said...

Six central bankers and a financial regulator get dragged to court
By Don Quijones, Spain & Mexico, editor at WOLF STREET.

Untouchable. Inviolable. Immunity. Impunity. These are the sort of words and expressions that are often associated with senior central bankers, who are, by law, able to operate more or less above the law of the jurisdictions in which they operate.

Rarely heard in association with senior central bankers are words or expressions like “accused”, “charged” or “under investigation.” But in Spain this week a court broke with that tradition, in emphatic style.

As part of the epic, multi-year criminal investigation into the doomed IPO of Spain’s frankenbank Bankia – which had been assembled from the festering corpses of seven already defunct saving banks – Spain’s national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements’ Financial Stability Institute), Fernando Restoy. It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV (the Spanish equivalent of the SEC in the US).

The six central bankers and one financial regulator stand accused of authorizing the public launch of Bankia in 2011 despite repeated warnings from the Bank of Spain’s own team of inspectors that the banking group was “unviable.”

Though they have so far only been called to testify, the evidence against the seven former public “servants” looks pretty conclusive. Testifying against them are two of Banco de España’s own inspectors who have spent the last two years investigating Bankia’s collapse on behalf of the trial’s presiding judge, Fernando Andreu. There are also four emails from the Bank of Spain’s inspector in charge of overseeing Bankia’s IPO, José Antonio Casaus, to the assistant director general of supervision at the Bank of Spain, Pedro Comín, that very clearly express concerns about the bank’s “serious and growing” profitability, liquidity, and solvency issues.
As the court’s edict reads, the contents of the emails unequivocally demonstrate that the Bank of Spain’s management was perfectly aware of the “inviability of the group” as well as “the fabricated financial results it had presented.” Yet, together with the CNMV, it lent its blessing to those results, knowing full well they bore no relation to reality .

http://wolfstreet.com/2017/02/18/spain-central-bankers-financial-regulator-in-court-bankia-ipo/


Anonymous said...


Infographic: Bullion Banking Mechanics

Bullion banks are some of the most influential participants in the global gold market. But who are these players and what do they actually do? And most importantly, how can these bullion banks trade thousands of times more gold each year than is actually in existence?

This infographic lifts the lid on bullion banking, looking at the world of fractional-reserve paper gold trading built on the unallocated gold account system. Topics covered include:

The identities of these bullion banks
The fractional reserve nature of bullion banking and the paper gold creation process
How the staggeringly large paper gold trading volumes are generated
The gold price discovery process and how the price of gold is set in London by unallocated trading which channels gold demand away from real physical gold and into paper
The secretive nature of the bullion banking club and how its activities in the City of London are deliberately shrouded in secrecy
How new competitors into the London Gold Market claim to be providing competition but are actually perpetuating the underlying unallocated gold account system of trading

https://www.bullionstar.com/blogs/bullionstar/infographic-bullion-banking-mechanics/

Anonymous said...


Alan Greenspan Endorses The Gold Standard
February 20, 2017Financial Markets, Gold, Market Manipulation, Precious Metals, U.S. Economyfake news, fiat currency, the gold standard, World Gold Council

In his remarkable essay, “Gold and Economic Freedom,” written in 1966, Alan Greenspan stated:

Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

Greenspan of course went to become the front-man for the interminably corrupted Central Bank system, which is utilized as a wealth-confiscation and control mechanism for the elitists who control western Governments (Mayer Rotschild: “let me issue and control a nation’s currency and I care not who writes the laws”).

Interestingly, Greenspan is spending his final years coming clean about fiat currencies and the fractional banking system, as reviewed here in The Daily Coin: LINK. Most recently, in an interview with the World Gold Council’s “Gold Investor” publication, Greenspan fully endorses a return to the gold standard:

If the gold standard were in place today we would not have reached the situation in which we now find ourselves. We cannot afford to spend on infrastructure in the way that we should. The US sorely needs it, and it would pay for itself eventually in the form of a better economic environment (infrastructure) LINK

We can only speculate the reasons why Greenspan has gone full circle back to his views expressed in his 1966 seminal essay about gold and is “coming clean” about economic systems based on fiat currencies rather than a gold standard. But the fact that the former fiat money “Maestro” is now advocating the gold standard reinforces its validity.

In today’s episode of the Shadow of Truth, we discuss the effort underway to discredit gold by the mainstream media using misinformation, disinformation and outright lies in the context of Greenspan’s stunning admissions:https://www.youtube.com/watch?v=7u2-Z87lskY

Anonymous said...


Bloomberg News Admits The Fed Manipulates Gold
February 21, 2017Financial Markets, Gold, Market Manipulation, Precious MetalsFOMC, GATA, gold manipulation, March rate hike

“Yellen Can’t Halt Trump Gold Rally That Funds Bet Against” – That was the headline in a Bloomberg news report that was released on Sunday afternoon. There’s a lot going on in that headline – none of it accurate except for the fact that gold is moving higher despite the efforts of western Central Banks to cap the price.

The basic premise of the report is that gold is moving higher in defiance of the Fed’s apparent move to raise interest rates. Reading through the report reveals even more misleading and completely false information than is conveyed by the headline. Here’s a link if you want to read the article: Bloomberg/Yellen/Gold.

The headline itself and the article content are both highly problematic, riddled with disinformation and completely inaccurate assertions. Anyone actually who might have read the article and trusted the content has been taken down to “ground zero” intellectually. Propaganda for the ignorant. I will be reviewing several ways in which the article content is inaccurate, if not intentionally fraudulent, in the upcoming issue of the Mining Stock Journal.

That said, the headline outright acknowledges that the Fed’s goal with respect to the price of gold is to prevent it from moving higher. The idea that Yellen “can’t halt” the rising price of gold implies that such intervention is part of the Fed’s mandate. It’s the first time I can recall in 16 years of researching, trading and investing in the precious metals market that the mainstream financial media, unwittingly or not, has acknowledged that the Federal Reserve attempts to intervene in the gold market.

http://investmentresearchdynamics.com/bloomberg-news-admits-the-fed-manipulates-gold/

Anonymous said...

Score One for the Bank Whistle-Blowers


The former employees, Paul Bishop from World Savings and Robert Kraus from Wachovia, filed the suit in 2011 under the False Claims Act; they seek damages from Wells Fargo on behalf of taxpayers for improprieties that occurred before and during the mortgage crisis.

Both men were fired after they told their superiors about the frauds. Mr. Bishop was a residential mortgage sales representative at World Savings, while Mr. Kraus was vice president and controller for the Real Estate Capital Markets group and the Corporate and Investment Bank Finance group at Wachovia. His expertise was in commercial real estate lending.

According to the lawsuit, the fraud identified by Mr. Kraus involved accounting maneuvers using an off-balance sheet entity that made Wachovia’s books look better than they were. Insiders at the bank had a name for the entity: the Black Box.

If Wachovia wanted to hide certain loans from internal or regulatory review, bank officials would temporarily move them to the Black Box, Mr. Kraus contended. This was problematic because accounting rules stated that off-balance sheet vehicles must be “demonstrably distinct” from the entities transferring loans to them. The Black Box was not, so the loans in it should have been consolidated onto the Wachovia balance sheet.

How big was the Black Box? As of Aug. 1, 2005, it contained some $6 billion in loans and other assets, the lawsuit said. That amounted to almost 13 percent of Wachovia’s equity capital at the time.

The plaintiffs contended that the use of the Black Box obscured risks at the bank and violated Sarbanes-Oxley, the Enron-era law that required executives to certify the accuracy of their companies’ financial reports. The Black Box kept billions of dollars in commercial real estate loans “outside the prying and meddling eyes of its regulators, shareholders, and risk management, internal control and accounting personnel,” the lawsuit said.


For both of the plaintiffs, the case has provided a wrenching education about what happens to those who speak truth to power.

Mr. Kraus, for example, has been unable to find work as a finance executive even with his deep experience and a master’s degree from New York University. He currently works at a McDonald’s in North Carolina and narrowly avoided losing his home to foreclosure.

“When you blow the whistle, you better be clear that you are on your own,” said Mr. Bishop, who is 69. “I naïvely believed there was a system behind me that would enforce the rules.”


https://www.nytimes.com/2017/02/24/business/score-one-for-the-bank-whistle-blowers.html?

Anonymous said...

Energy, Money, and the Destruction of Equilibrium

I see many economists and entrepreneurs as opponents even if that is not the intention of the economists. Academic economists are most needed by those who have power and want to keep it. Multinational corporations, banks, and governments. The last thing those entities want is disruption, their principal and interlocking goals are stabilization and optimization of the existing order. They have an incentive to “optimize” the current system and extract rents.

I would argue that hyper focus on optimization is the enemy of creative beings such as ourselves and makes us very unhappy and leads to blow-back from human beings. And rightfully so. But that blow back can get ugly.

- From the piece: Energy, Money, and the Destruction of Equilibrium

Earlier today, a reader named Brett Maverick Musser, who works in Operations at Airbitz sent me an article he published on Medium, and I thought it was excellent.

With permission, I have reposted the entire piece below:

Energy flux is the driver of change in our galaxy. Nothing happens without a flow of energy. And what is energy? Energy is the ability to perform useful work. And in physics, what is useful work? Work is useful if it overcomes inertia or resistance in order to generate motion.

Energy not money makes the world go round. Energy is destiny.

A failed paradigm and fake prices

To paraphrase Paul Romer author of the scathing paper “The Trouble With Macro”, economics has had a ‘considerable observed regression since the 1970s’ yet hides behind mathematical elegance and authority that the public at large is not sophisticated enough to rebuke nor powerful enough to eschew. Never ending zero interest rate policies, negative interest rates and other forms of financial alchemy perpetuated by central banks all over the world are intellectual concessions that the existing paradigm of economic thought and authority is just flat wrong. No matter what the economic leaders say, these actions prove to me and many others that their mental models of the world have failed. The status quo has ventured into the shallow sea of un-reason just to keep the global socio-economic system afloat. They’re able to hide behind authority and academic vocabulary which if put in plain terms for the lay person could be described as theft, ponzi, tyrannical and moronic.

We’ve descended into an agrarian-like economic growth environment.

When the cost of money creation is basically nothing and its a good that can be exchanged for anything else, it makes sense that so many of the wealthiest come from the financial industry. They get a declining asset first, and it always gets replenished with no energy cost to them. Its no wonder we’ve become less productive as our financial system has taken over our means of production and has effectively turned the global economic system into a giant private equity LBO where money is debt, profits are private, losses are socialized, workers are commoditized , and the world with all of its complexity and ambiguity reduced to an impressive excel spread sheet.

Parasitic finance disguised as free markets, free trade, globalization, and inclusiveness. Creation and transformation is not the prerogative but a successful financial exit. A transactional society not a meaningful society.

https://libertyblitzkrieg.com/2017/02/27/must-read-of-the-day-energy-money-and-the-destruction-of-equilibrium/#more-42478

Anonymous said...

Thinking of Russia as the single, great remaining nation of what was once "The West", I thought that the Russian people would also welcome, with great joy, the possibility of putting their savings into silver money. I still think this is possible, and I put my thinking into a series of articles dealing with the monetization of the silver ruble coin. I had planned to present these articles at a meeting of the St. Petersburg International Economic Forum - SPIEF - in June, 2016. However, on account of illness it was not possible for me to be present. I do not wish to continue to harp upon the proposal; I presented my thoughts, and they are surely in the hands of responsible persons, and I must defer to their judgment on a matter which affects Russia internally, however much I believe in the value of my proposal. Perhaps - after I am gone - my proposal may be put into effect in Russia.

As a postscript, now that Mexico is in grave problems, due to the tempestuous decisions of Mr. Trump, our Congress has revived - motu propio - of its own accord, the proposal of a monetized silver coin for Mexico.

The national indignation at the treatment the Trump is giving Mexico, has produced a wave of national feeling that may, perhaps, give life to the proposal of a parallel currency based on the silver coin as money.

I think it would be a master-stroke of "asymmetrical" politics, and would elevate to the skies the prestige of Mexico around the world.

Many millions of Americans who have been saving large amounts of silver coins would be thrilled to hear that Mexico had monetized a silver coin.

We shall see what transpires in the coming weeks and months.

http://goldenfront.ru/articles/view/hugo-salinas-price-putin-should-introduce-silver-ruble-restore-monarchy/

Anonymous said...


We the people ask the federal government to Call on Congress to act on an issue:
Stop the precious metals manipulation in the Stock Market.
Created by M.O. on March 03, 2017


https://petitions.whitehouse.gov/petition/stop-precious-metals-manipulation-stock-market-0

Anonymous said...


Idaho Ends income Tax on Precious Metals, Arizona is Up Next


Gold and Silver Are Money

In a first and significant step towards the remonetization of Gold and Silver, Idaho voted tonight to remove income tax on precious metals. This is the first step in what will likely be a cascade of other states following suit.

Last week we discussed here the Arizona Senate Finance and Rules Committees' calling out the Fed on Gold Taxation by considering legislation (HB 2014) officially defining gold, silver, and other precious metals as legal tender. The bill also exempts transactions in precious metals from state capital gains taxes, thus ensuring that people are not punished by the taxman for rejecting Federal Reserve notes in favor of gold or silver.



The main arguments in favor of removing taxation on Precious metals can be summarized as this:

taxation on any appreciation in Gold's value undermines its value as an inflationary hedge
If gold and silver are priced in USD, then their price changes are a reflection on the USD buying power, nothing more
You don't pay tax when the buying power of the USD increases when buying EU goods. So why should Gold be treated differently?
The removal of income tax and capital gains tax puts Precious Metals on a level playing field with FIAT currencies

War Has Started

Our Quick Analysis says two types of states will get in line behind Idaho.

States in which a significant portion of their GDP is based on the mining of Precious Metals like Arizona, Nevada, and Utah
Arizona votes soon on its version called HR Bill 2014. Utah has already passed its own version
States who have a strong Libertarian streak running through them, like Idaho,other Pacific Northwestern states and Maine

The wild card states are falling in favor of Precious Metals too. States like Alabama and Tennessee are in the process of removing sales tax on Precious Metals. In total almost 20 states have already taken that step.

We feel that this is the beginning of a trend, not a toothless attempt. The people are speaking. All in all there is a unity across party lines, geography, and state industry. This is not going away. Bottom up movements, especially those in a populist environment do not go away. It could end with grass roots pressure on The Fed to not only end Federal taxation on Gold and Silver, but an actual Fed Audit


https://www.marketslant.com/articles/idaho-ends-gold-and-silver-taxation-arizona-next

Anonymous said...


Saturday, March 25, 2017
OMG An Idaho Politician Just Said This About Gold
Jp Cortez sets the scene:

During the March 14th floor debate on Idaho’s House Bill 206, a measure that promotes sound money by removing Idaho income taxation from precious metals, Democrat Representative Mat Erpelding — the House Minority Leader — couldn’t help himself and had to share his two cents, even after asserting that he had no opinion on the bill (but then voted against it).

Thank you, Mr. Speaker. I don’t have an opinion on this bill. However, I do have an opinion on facts. Facts are somewhat important,” Representative Erpelding said with an air of superiority. “If we say that gold is going to protect us from inflation, I want to point out that in 1868, gold was $27 an ounce, and today gold is $1,218 an ounce. So, we can’t say that gold is going to protect us from inflation when you have that type of a price range over the last hundred years. So, I just want to point out that facts are important.

Huh? The purchasing power of the dollar versus gold has fallen nearly 98% and gold therefore offers no protection against inflation?
Despite Minority Leader Erpelding’s objection, House Bill 206 overwhelmingly passed in the House 56–13. Next, sound money supporters hope to receive a hearing and a vote in the Idaho Senate.
See the video:

http://www.economicpolicyjournal.com/2017/03/omg-idaho-politician-just-said-this.html#comment-form

Anonymous said...


CNBC Asia's "Squawk Box" program with Bernie Lo in Hong Kong this
morning gave GATA secretary/treasurer Chris Powell five or six minutes to
discuss recent developments in gold market rigging by central
banks. A two-minute, 30-second excerpt from the interview is
posted at the CNBC archive here:

http://video.cnbc.com/gallery/?video=3000606716

Anonymous said...

Notes From Underground: Nothing Focuses the Mind Like a Hanging

First things first, let’s talk about the gorilla in the room, former Richmond Fed President Jeffrey Lacker leaked confidential information and the entire FED has had its reputation tarnished (stifle your laughter). The bigger question is how much is being covered up. Who else was involved in discussing matters of great sensitivity? As my readers know I have raised the issue of the G-30 and Davos being convocations for the exchange of very privileged information. Just google the G-30 and look to see its membership. The dissemination of potentially sensitive market-moving information to highly paid analysts raises serious questions of impropriety. In an effort to the level the playing field (and yes, I was most probably harmed by the leaks to Medley), the FED should not release its speeches or market information to any journalists covering the Federal Reserve.

Journalists do receive all FED communication before its release to the public so they can prepare their stories, but of course the articles are embargoed until the actual release time. There have been instances where news was inadvertently released a few minutes early.

(Steps on soap box) In today’s algo- and high frequency trade-driven markets the media organizations shouldn’t have a 30-minute lead time in order to CRAFT headlines that are volatility drivers for the word-driven algo traders. This creates volatility that rewards the HFTs while punishing other investors. It is time for the FED and SEC to wake up and protect the integrity of the markets. Also, Jeffrey Lacker should serve a long prison term and anybody else who is involved in leaking market-moving information.

https://yragharris.com/2017/04/05/hanging/#more-3327