Collectivist Banking

If you are going to buy gold, watch for this manipulation and get a better price. DON’T BUY PAPER “GOLD.”

Gold Gunfight at the COMEX Corral…from Rico

CME’s COMEX has been manipulating the ‘spot’ price of Gold for years by dumping massive amounts of “Paper Gold’ naked shorts at strategic times (like O’my God it’s early, say 3:00 am before anyone is awake and trading) and seemingly on cue (NFP Fridays, FOMC, etc). This, combined with a chronic shortfall of physical metal that can be delivered to cover redemptions of paper contracts, has meant that as the price of physical Gold gets moved around the plate of the Bullion Banks, the only thing used to ‘settle’ these Paper Gold contracts has been unredeemable FRN’s (aka USD).
– The game appears to have changed suddenly.

Of late, the spot price of Gold has been moving in seeming correlation with the USD/CNY exchange rate instead of the COMEX. This suggests China has increasing influence over setting the Gold spot, while COMEX has decreasing influence.
– I’d suggest watching the USD/CNY exchange rate in future. Gold could reach $1400 if the US revalues to below 6 Yuan, and it could reach $1600 @ 6.25 Yuan if China revalues Gold to the Yuan.

Either way, owning COMEX Paper Gold is a lot like bringing a picture of a gun to an actual gunfight, and right now China-Russia-India have the real/physical Gold, COMEX does not.
– Decide for yourselves which you’d prefer to hold when this gets ugly. Paper is infinite, but the ability to pay with paper is not; on the other hand, physical is finite, but the ability to pay with physical is not.

Paper or physical?
– Now, just as an exercise in fun, consider the USD priced in Gold and then answer the above question.


Laissez le bon temps rouler

For a bit longer, they might.
At some point some one is going to point out the Bankers have no clothes. That will make the European Poobahs grab for their fig leafs right along with our Fed and Wall Street. “What’s in your wallet?” will take on new and virulent meaning.

BIS fears ‘snapback’ crunch as rising rates meet record global debt

World debt ratios have spiralled to record levels during the era of super-easy money and markets are showing tell-tale signs of late-cycle excess, leaving the international financial system acutely vulnerable to a jump in borrowing costs.

Any reversal in our fortunes could be “quick and sharp”, says the Bank for International Settlements, the venerable global watchdog based in Switzerland and the scourge of dissolute practice.

The warnings cascade from the BIS’s annual report released over the weekend, always a sobering read for investors and central bankers alike. [snip]

Fiat money is and was a Socialist joke that most didn’t catch and now are living the tag line. There is much more to come as Trump adjusts that unequal trade situation.

That great adage from when I carried the tin of the US Marshal’s Service comes to mind: “When you hear hoofbeats, think horses, not zebras. You won’t make a mistake of looking in the wrong direction.

Collectivist Banking

This certainly didn’t take long in occurring. Anytime the Socialist of the EU get a chance to screw the pooch, they do. This time it is Italy’s turn in the barrel.

Here comes another global financial crisis …

Is another global financial crisis on the horizon?

Investors are increasingly worried that an escalating political crisis in Italy could lead to a populist, euroskeptic government taking power. As a result, there’s rising uncertainty about whether the country might eventually abandon the euro currency zone or default on its giant debt pile. To make things worse, the Trump administration continues to toy with the idea of a trade war with Europe and China. That would be the last thing the global economy would need if the Italian situation deteriorates further. Debt crises and trade wars are a toxic combination.

To fully understand the risk, it’s helpful to recall that before there was a Brexit, there was the threat of Grexit. There was widespread concern a few years ago that Greece’s government debt crisis would force it to exit the eurozone, and that such a shock departure would be a crushing blow to both the broader European economy, in the middle of recession, and the American economy, which was still recovering from its own downturn. [snip]

Thankfully, the worst didn’t happen. Europe muddled through thanks to a combination of Greek debt bailouts and massive money printing by the European Central Bank. But Italy poses a far bigger threat than Greece ever did.

Italy is the eurozone’s third-largest economy, 10 times the size of Greece’s. It also has the world’s third-largest sovereign debt market, some $2.7 trillion. Only Greece has a higher public debt-to-GDP ratio in the eurozone. My AEI colleague Desmond Lachman, a former International Monetary Fund official and Wall Street emerging market strategist, argues that Italy’s troubles have the potential to roil the global economy much like the 2008 Lehman bankruptcy. (The 10th anniversary of “Free Market Day” is coming!) America wouldn’t be spared.

That’s just one of the problems with Donald Trump’s America First worldview. It ignores how America is deeply and irreversibly enmeshed in the global economy through linkages we probably don’t fully understand, as the original global financial crisis of 2008 showed.

Italy is a mess. It’s too big to fail, but also too big to bail out. To a large extent, it will need to save itself though economic reforms that boost its lagging productivity and reduce its debt load as a share of the economy. And America cannot simply sit idly by and pretend that this is not our problem. [snip]

Italy must get its financial house in order. But America also has a role to play, such as avoiding trade disputes with Europe or China that will exacerbate market tension and potentially weaken global growth. There is little evidence that any of the trade actions currently being contemplated by Team Trump would have much impact on economic or job growth. But a second global financial crisis surely would.

Typical of the Socialist/Progressive politicians and bankers, they now want other peoples money (OPM) to solve their debt.
The world governments have been playing with Monopoly Money; it’s worth is zero. The answer to the value of the fiat paper is to print more.

Collectivist Banking

The markets are worried over the sudden appearance of red flags. A new interest in bonds and the economic conditions of one and several EU countries spurs the change in view.

Red Flags Are Suddenly Soaring in Markets

Europe’s deepening troubles and disappointing global growth signals are sparking a rally in haven bonds

Italy’s bond market is in meltdown, its politics in crisis after President Sergio Mattarella blocked the formation of an antiestablishment government and its credit rating under threat.

That is all now making bigger waves: Europe’s deepening troubles and disappointing global growth signals are sparking a sudden rally in haven bonds like U.S. Treasurys. Risk aversion is back.

The moves are notable because haven bond yields have until now shown little reaction to the creeping tide of unsettling news that has emerged in 2018. The overwhelming focus has been on how far and fast yields might rise, particularly in the U.S. [snip]

In the eurozone, the move in German yields makes the selloff in Italian debt look even more extreme. The gap between 10-year German and Italian bond yields—a key indicator of market stress—has now risen above 2.5 percentage points, its widest since 2013.

In the U.S., the move may put renewed focus on the flattening of the Treasury yield curve, another potential sign of economic distress, since short-dated yields are supported by expectations of further Federal Reserve rate increases.

Worries that Italy could cause the eurozone to fragment are also pushing up the dollar, adding further momentum to a move that has already caused turmoil in emerging markets. The euro has fallen to its lowest since July, below $1.16. [snip]

Italian bonds and stocks are just the latest in a string of risk-seeking trades that have run into trouble in 2018. It may be some small relief that haven bonds are now providing an offset. However, it is also a sign that the benign conditions that prevailed for investors until recently are under heavy fire. The market ride is set to get bumpier.

To quote a famous business mogul, one J.P. Morgan, “The markets go up and they go down.” This is a truism the Millennials and the Snowflakes need learn. They won’t find such sagacity on Game Boy instructions.

Big Spenders

How is your financial report card? Learned anything yet?

Credit = Debt…from Rico

Credit is not access to wealth, it is access to debt.

Sure, the US national debt is $21 trillion and rising, but the total of all forms of debt in America is $70 trillion…and also rising.

At some point this will “hit the wall” and what debt that cannot be repaid, won’t be…and a lifestyle sustained by ever-increasing debt, won’t be.


The usual gang of suspects is afoot today spreading their brand of joy and ‘liberty’. Currency manipulation to monetary meltdown will be solved by the Governments around the world and at home. Only problem is they’re the ones who caused the troubles. Of course free speech can’t be unpunished either.

Policing our financial well-being is job #1 at DoJ. These stalwart ferrets will uncover and expose to sunlight the hooligans with the same alacrity as the Russian probe.

DOJ launches investigation into bitcoin price manipulation: report

The U.S. Department of Justice has opened a criminal investigation into whether traders are manipulating the price of bitcoin and other cryptocurrencies, said a Bloomberg report on Thursday citing unnamed sources. Investigators are focused on illegal moves that can affect prices, such as spoofing, which refers to flooding a market with fake orders. Bitcoin BTCUSD, -2.86% recently was changing hands around $7,388, after falling sharply Wednesday.

We here at Loon Watch are observing the workings of our highly esteemed and incorrigible DoJ. After seeing them root out the Russian infiltration of the Trump Administration We rest easy that they’ll find the culprit for these shenanigans.

This is quite interesting since Islam forbids collection of interest. But as we have seen in the past, political choices brush such things aside.

Turkey’s Currency Meltdown

Investing in emerging markets is like watching the tides without the moon as a guide. Capital flows in and out in surges, and woe to the country that gets caught with bad policies when the tide suddenly goes out. Argentina has been getting that re-education of late, and now Turkey is watching capital flee for safer climes.

Turkey’s lira fell as much as 5% on Wednesday, and it’s lost more than a fifth of its value this year, adding to a long decline that is forcing extreme monetary measures to compensate. Much of the blame lies with President Recep Tayyip Erdogan, as Turkey has been running a current-account deficit that is on trend to exceed 6% of GDP. Turkey has been growing rapidly but the growth has been heavily financed by dollar-denominated investment.

Meanwhile, Mr. Erdogan has been beating the central bank like it’s Syria’s Bashar Assad. In Ankara this month, he called high interest rates “both the mother and father of all evils.” Investors took this to mean he’s exerting political control over Turkey’s central bank even as inflation has reached nearly 11%.

With capital fleeing, Mr. Erdogan is getting higher interest rates in any case as the central bank tries to stem the lira panic. On Wednesday the bank lifted a key lending rate to 16.5% from 13.5%. Consider this the price of the lost credibility of Turkish institutions under Mr. Erdogan’s increasingly authoritarian rule. Dictators are rarely good economic managers because they want to dictate fiscal and monetary policy as much as they do every political choice. [snip]

From the “How come department” the question presented is why do all tyrants wind up in the same place. Well, this is just another show to enjoy as the curtain rises on Act II of “Schadenfreude, how do I love thee”.

Again, the Progressive “Policy of Tolerance” graces us with it’s benevolence.

He was suspended for wearing a Trump shirt. Now, he’s suing his Oregon school district

An Oregon high school student is suing his school, saying it violated his First Amendment rights when it suspended him for wearing a Trump T-shirt.

The student, 18-year-old Addison Barnes, told FOX 12 that he was asked to cover up a T-shirt he was wearing that said “Donald J. Trump Construction Co.” on it, or leave school. The shirt also included a Trump quote: “The wall just got 10 feet taller.”

According to KGW, Barnes wore the shirt to his People and Politics class at Liberty High School in Hillsboro in January, and he told the TV outlet he knew they’d be discussing immigration in class that day.

The school official who pulled Barnes out of class to ask him to cover the shirt also told him at least one student and one teacher had been offended by the shirt, The Associated Press reported. [snip]

“The high school, ironically named Liberty High School, had violated his free speech rights,” Barnes’ attorney, Mike McLane, told KGW. The Associated Press reports that McLane is also the leader of the Republican minority in Oregon’s House of Representatives. [snip]

Left unsaid was the condition of the offended student and teacher. Did they need counseling or a trip to the mental trauma center.


You keep hearing that inflation is low. The Government proves it by either very small COLA’s or none at all in Social Security checks and other Federal distributions. The Government likes it that way. It keeps the cost of debt repayment low. Since the Government has spent every tax dollar received and borrowed that amount to spend, low payments are a necessity. Otherwise we shall look like Venezuela. And we may yet.

Inflation….would they LIE? Say it ain’t so…from Rico

Of course governments lie. They lie all the time when it suits their purposes, and “inflation” [read: cost of living] is but one example of this mendacity.
– When a government is in debt…not just up to, but far above, it’s eyeballs then low interest means lower payments to service the debt.

No ‘official’ inflation is a good thing. For government.
– For you, not so much.

Take a good look at the chart below reflecting the US inflation rate. Recall that the FED’s ‘target rate’ is 2% (that ‘joke’ still makes me laugh every time I hear it, talk about liars!…not that a privately-owned, for-profit, bank would lie about anything mind you).
– Doesn’t sound so bad, or very scary, does it?

Except to everyone else who actually has to pay for their cost of living (instead of borrowing endlessly like government does), they know better.

Go here to ‘see’ what your real [read: no offishul BS] cost of living actually is:
just put down any beverages, swallow, and be sure you’re sitting down when you go to the link.

The true inflation numbers will
show you why you cannot get ahead.