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Venezuela Defaults On A Debt Payment – Is This The First Domino To Fall?

Venezuela Defaults On A Debt Payment – Is This The First Domino To Fall?

Did you know that Venezuela just went into default?  This should be an absolutely enormous story, but the mainstream media is being very quiet about it.  Wall Street and other major financial centers around the globe could potentially be facing hundreds of millions of dollars in losses, and the ripple effects could be felt for years to come.  Sovereign nations are not supposed to ever default on debt payments, and so this is a very rare occurrence indeed.  I have been writing about Venezuela for years, and now the crisis that has been raging in that nation threatens to escalate to an entirely new level.

Things are already so bad in Venezuela that people have been eating dogs, cats and zoo animals, but now that Venezuela has officially defaulted, there will be no more loans from the rest of the world and the desperation will grow even deeper…

Venezuela, a nation spiraling into a humanitarian crisis, has missed a debt payment. It could soon face grim consequences.

The South American country defaulted on its debt, according to a statement issued Monday night by S&P Global Ratings. The agency said the 30-day grace period had expired for a payment that was due in October.

A debt default risks setting off a dangerous series of events that could exacerbate Venezuela’s food and medical shortages.

So what might that “dangerous series of events” look like?

Well, Venezuela already has another 420 million dollars of debt payments that are overdue.  Investors around the world are facing absolutely catastrophic losses, and the legal wrangling over this crisis could take many years to resolve.  The following comes from Forbes

…click on the above link to read the rest of the article…

The Unbearable Slowness of Fourth Turnings

THE UNBEARABLE SLOWNESS OF FOURTH TURNINGS

“The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.” – Strauss & Howe The Fourth Turning 

This Fourth Turning was ignited suddenly in September 2008 as the housing bubble, created by the Federal Reserve and their criminal puppeteer owners on Wall Street, collapsed, revealing the greatest control fraud in world history. A crisis mood was catalyzed as the stock market dropped 50%, unemployment surged to highs not seen since 1981, foreclosures exploded, and captured politicians bailed out the criminal bankers with the tax dollars of the victims.

The mood of the country darkened immediately as average Americans flooded their congressmen’s websites and phone lines with a demand not to bailout the felonious Wall Street banks with $700 billion of TARP. But they ignored their supposed constituents and revealed who they are truly beholden to.

Trust in the political and financial system disintegrated and has further deteriorated as the ruling elite continue to loot and pillage as if the 2008/2009 global financial meltdown never happened. From the perspective of the archaic social order there is no longer a crisis. The recovery narrative, flogged ceaselessly by the crooked establishment and their propaganda fake news corporate media mouthpieces, has convinced millions of willfully ignorant Americans progress is occurring.

…click on the above link to read the rest of the article…

Record Surge in Riskiest Loans Fattens Wall Street Banks

Record Surge in Riskiest Loans Fattens Wall Street Banks

Crackdown efforts by bank regulators are put on hold.

The volume of leveraged loans – the riskiest loans Wall Street banks provide – has surged 38% year-over-year and has already beaten the full-year record set in 2013, according to Dealogic. Total of leveraged loans outstanding has reached $1.25 trillion.

Nine of the 10 largest banks in the leveraged-loan business have already surpassed their respective 2016 full-year totals, according to Bloomberg data, cited by the Financial Times, including Bank of America (about $120 billion in leveraged loans so far this year); JP Morgan (about $110 billion), Goldman Sachs ($79 billion); and Barclays ($72 billion). Of the top ten, only Wells Fargo ($69 billion) is still lagging behind last year.

The fees are also record-breaking: $8.3 billion so far this year, just 6% below the full-year total of 2016.

The borrowers are junk-rated over-indebted companies. Leveraged loans are too risky for banks to keep on their balance sheet. So banks structure these loans, arrange them, and sell the structured products to loan mutual funds or ETFs so that they can be moved into retirement portfolios, or they repackage them into Collateralized Loan Obligations (CLO) to sell them to institutional investors, such as mutual-fund companies.

Leverage loans are bought and sold like securities. But the SEC, which regulates securities, considers them loans and doesn’t regulate them. No one regulates them.

Since 2013, bank regulators – the Fed, the OCC, and the FDIC – have been exhorting banks to be prudent with leverage loans, and they’ve been trying to crack down on leveraged lending because banks got stuck with these loans during the Financial Crisis. But that crackdown – however ineffectual it might have been – is now on hold because earlier this month, the Government Accountability Office questioned the legality of the standards set by the regulators.

And given the big-fat fees – potentially hitting $10 billion this year – banks are in no mood of cutting back.

…click on the above link to read the rest of the article…

SIGNIFICANT DEVELOPMENTS IN THE PRECIOUS METALS MARKET: Where We Go From Here

SIGNIFICANT DEVELOPMENTS IN THE PRECIOUS METALS MARKET: Where We Go From Here

As the U.S. Stock Market Bubble continues upward toward a giant pin, there are some interesting developments that precious metals investors will find quite interesting.  Yes, there’s still a lot of life left in the precious metals, even though pessimistic market sentiment has frustrated a lot of gold and silver investors.

Also, even though precious metals investment demand in the U.S. has fallen 40+% compared to the same time last year, it continues to be strong in other parts of the world.  For example, German physical gold bar and coin demand increased 8% in the first half of 2017 versus the same period last year, while U.S. fell by 45%.  Moreover, flows into European Gold ETF’s hit a record during the second quarter of 2017:

Now, if we look at what is going on with gold and Central Bank demand, Russia takes the first place.  According to the article by Smaulgld, Russia Steps Up Gold Purchase With Massive Buy In September:

In September 2017, the Central Bank of Russia added 1.1 million ounces (34.2138 tons) of gold to her reserves, raising her total to 1779.119 tons or 57.2 million ounces.

Central Bank of Russia has added 5.3 Million ounces (approximately 165 tonnes) in 2017 through September.

If you haven’t already checked out Louis’s work at Smaulgld.com, I highly recommend you do.  So, as the German public and Russian Central bank continue to increase their gold holdings, Americans have cut back considerably, or worse… have been liquidating.  Furthermore, the U.S. gold market is suffering another supply deficit this year.  As of July 2017, U.S. gold mine supply and imports totaled 288 metric tons (mt) while exports were 290 mt.  Thus, we have exported ALL of our gold mine supply and imports overseas.  (NOTE:  1 Metric Ton = 32,150 troy oz.)

…click on the above link to read the rest of the article…

The Downright Sinister Rearrangement of Riches

Simple Classifications

Let’s begin with facts.  Cold hard unadorned facts. Water boils at 212 degrees Fahrenheit at standard atmospheric pressure.  Squaring the circle using a compass and straightedge is impossible.  The sun is a star.

The sun is not just a star, it is a benevolent star. Look, it is smiling…  sort of. [PT]

Facts, of course, must not be confused with opinions, which are based upon observations.  Barack Obama throws like a girl.  The Federal Register is for idiots.  Two slices of chocolate cake are one too many.  Are these opinions right or wrong?

The answer depends on who you ask.  What’s certain about opinions, however, is that like bellybuttons, everybody has one.  Moreover, unlike free drugs from the government, everyone is in fact entitled to their own opinion.

Moving on from facts and opinions, the next classification we encounter is the wholly asinine.  This broadly contains the absurd and ridiculous.  Take most university teachers, barring natural science professors, for instance.  They’re wholly asinine.  The wholly asinine also extends to editors at the New York Times, Washington Post, circus hunchbacks, and the like.

Lastly, we want to mention the downright sinister.  This includes sociopaths like Hillary Rodham Clinton, John McCain, nearly all of Congress, the Federal Reserve, fractional reserve banking, Washington lobbyists, a good part of Wall Street, and much, much more.  Clearly, such people and professions don’t represent honest work.  Rather, they epitomize less than honest work that’s performed by less than honest people.
Sinister mafia boss from Arkansas, possibly checking classified material on private phone… [PT]     Photo credit: AP

Nixon Casts the Die

…click on the above link to read the rest of the article…

America First is a Joke. Wall Street Wins Again

America First is a Joke. Wall Street Wins Again

I know I must sound like a broken record by now, but Wall Street owns the U.S. economy and until that’s dealt with, the American public will continue to be preyed upon voraciously and lawlessly by some of the most unethical parasites the world has ever seen. Obama was a historical disaster on this issue, coddling and protecting banker oligarchs every step of the way. Trump’s no different.

The latest evidence that things are getting even worse came last evening when the U.S. Senate voted to deliver Wall Street another gift on a silver platter.

Rather than summarize what happened, let’s turn to two of the best resources on such topics, journalist David Dayen and finance focused website Wall Street on Parade.

First, here are a few excerpts from David’s latest article published at The InterceptAfter Day of Feuding, Jeff Flake and Bob Corker Join Trump to Upend a Major Consumer Protection:

With national attention focused Tuesday morning on a mushrooming feud between President Trump and Sen. Bob Corker, R-Tenn., followed by a feud in the afternoon between Trump and Sen. Jeff Flake, R-Ariz., the Senate gift-wrapped the biggest present Congress has so far bestowed upon Wall Street in the Trump era.

With a razor-thin margin, the Senate passed a resolution to nullify a signature regulation from the Consumer Financial Protection Bureau, which banned forced arbitration provisions. Such clauses, tucked into the fine print of contracts that nobody reads, deny consumers the ability to contest claims through a class-action lawsuit, and can allow banks and other financial institutions to rip off their customers with virtual impunity.

…click on the above link to read the rest of the article…

Weekly Commentary: Arms Race in Bubbles 

Weekly Commentary: Arms Race in Bubbles 

The week left me with an uneasy feeling. There were a number of articles noting the 30-year anniversary of the 1987 stock market crash. I spent “Black Monday” staring at a Telerate monitor as a treasury analyst at Toyota’s US headquarters in Southern California. If I wasn’t completely in love with the markets and macro analysis by that morning, there was no doubt about it by bedtime. Enthralling.

As writers noted this week, there were post-’87 crash economic depression worries. In hindsight, those fears were misplaced. Excesses had not progressed over years to the point of causing deep financial and economic structural maladjustment. Looking back today, 1987 was much more the beginning of a secular financial boom rather than the end. The crash offered a signal – a warning that went unheeded. Disregarding warnings has been in a stable trend now for three decades.

Alan Greenspan’s assurances of ample liquidity – and the Fed and global central bankers’ crisis-prevention efforts for some time following the crash – ensured fledgling financial excesses bounced right back and various Bubbles hardly missed a beat. Importantly, financial innovation and speculation accelerated momentously. Wall Street had been emboldened – and would be repeatedly.

The crash also marked the genesis of government intervention in the markets that would evolve into the previously unimaginable: negative short-term rates, manipulated bond yields, central bank support throughout the securities markets, Trillions upon Trillions of central bank monetization and the perception of open-ended securities market liquidity backstops around the globe. Greenspan was the forefather of the powerful trifecta: Team Bernanke, Kuroda and Draghi. Ask the bond market back in 1987 to contemplate massive government deficit spending concurrent with near zero global sovereign yields – the response would have been “inconceivable.”

…click on the above link to read the rest of the article…

BofA Lists 10 Triggers For The Next Crash: “It’s Coming Between Thanksgiving And Valentine’s Day”

BofA Lists 10 Triggers For The Next Crash: “It’s Coming Between Thanksgiving And Valentine’s Day” 

Back in mid-July, BofA’s chief investment strategist Michael Hartnett predicted that the “most dangerous moment for market will come in 3 or 4 months.” Well, we are now “between 3 and 4” months since the forecast fate and the most dangerous moment we have experienced since then, ironically, is today’s modest selloff on the 30 year anniversary of Black Monday. So looking back at his forecast, has Hartnett thrown in the towel on calls for a correction, and joined all the other BTFDers? Not quite: instead, Hartnett’s thesis has merely shifted, and he now contends that having entered the market’s melt up somewhat late, a bubble which as shown before has unleashed raging purchases of tech stocks and credit, especially junk bonds…

… he expects the upside S&P momentum to linger, bursting to 2,670 before finally getting swept under the bubble tide. When will this happen? “We believe sometime between Thanksgiving & Valentine’s Day,” or between 1 and 4 months, so even as Hartnett keeps the long-end of his forecast horizon fixed, he continues to expect that the next major move lower may come as soon as 1 month from today.

So how does Hartnett get to this conclusion, and what specific triggers is he looking for to launch the selling? Before we get there, here is an explanation of why we are where we are right now, i.e., what is the consensus trade.

What is consensus?

The zeitgeist of Wall Street can be summarized as follows:

  • Bullish credit and equities with “Goldilocks” macro conviction
  • No fear of the Fed (or ECB, BoJ…), expectations for a “good” rise in bond yields
  • Long positions in stocks, IG/HY/EM bonds, EAFE & EM equities, banks, a “sellers strike” in tech, shorts in commodities & government bonds…i.e. the death of mean reversion

Following his latest Fund Managers Survey (profiled here earlier this week), Hartnett notes that, obviously, “Clients are bullish risk assets”.

…click on the above link to read the rest of the article…

How The Elite Dominate The World – Part 2: 99.9% Of The Global Population Lives In A Country With A Central Bank

How The Elite Dominate The World – Part 2: 99.9% Of The Global Population Lives In A Country With A Central Bank

Even though the nations of the world are very deeply divided on almost everything else, somehow virtually all of them have been convinced that central banking is the way to go.  Today, less than 0.1% of the population of the world lives in a country that does not have a central bank.  Do you think that there is any possible way that this is a coincidence?  And it is also not a coincidence that we are now facing the greatest debt bubble in the history of the world.  In Part I of this series, I discussed the fact that total global debt has reached 217 trillion dollars.  Once you understand that central banks are designed to create endless debt, and once you understand that 99.9% of the global population lives in a country that has a central bank, then it finally makes sense why we have accumulated so much debt.  The elite of the world use debt as a tool of enslavement, and central banking has allowed them to literally enslave the entire planet.

Some of you may not be familiar with how a “central bank” differs from a normal bank.  The following definition of a “central bank” comes from Wikipedia

A central bank, reserve bank, or monetary authority is an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and usually also prints the national currency,[1] which usually serves as the state’s legal tender.

 

…click on the above link to read the rest of the article…

Empire Destroying Wars Are Coming to America Under Trump – Part 3

Empire Destroying Wars Are Coming to America Under Trump – Part 3

The first two parts of this series focused on how Trump-specific factors could lead the American empire into another series of foolish and highly destructive wars. Part 1 discussed my concerns regarding Iran deal certification, as well as Trump’s increased coziness with Arkansas Senator Tom Cotton, who appears to get turned on by the use of violent force. Part 2 considered how Trump might sell his wars by promoting an environment of slobbering, superficial patriotism, and also speculated that corporate media might rally behind Trump if the target of his aggression happens to be Iran.

Today’s piece will be slightly different. The prior posts focused on Trump-specific angles with regard to how America’s forthcoming military mistake might play out, but I want to make one thing clear. While Trump carries his own unique risks when it comes to militarism overseas, this is all much bigger than Trump.

In the aftermath of the financial crisis, I’ve become convinced that the U.S. empire will never reform on its own. There’s simply too much money and power at stake, and we already know oligarchs are above the law under our two-tier justice system. The biggest financial criminals of a generation were not only spared prison for their actions, but were handsomely rewarded. Wall Street ran the Obama administration before, and it runs the Trump administration now. It’s become clear to me that these lawless elite crooks and their enablers will continue with their insane and oppressive policies until the whole thing collapses. Whether Trump, Pence or Hillary Clinton run the charade doesn’t change where this train is headed.

…click on the above link to read the rest of the article…

Empire Destroying Wars Are Coming to America Under Trump – Part 1

Empire Destroying Wars Are Coming to America Under Trump – Part 1

There are a variety of reasons Trump supporters voted the way they did in November, but one clear message many found attractive was the idea his administration would be driven by an “America First” doctrine. America first meant a lot of things to a lot of different people, running the gamut from economic populism and immigration, to an avoidance of barbaric and costly overseas wars. The economic populism part was the biggest ruse from day one, a betrayal which (as we had seen under Obama) became undeniable as soon as he started appointing lifelong swamp-dwelling billionaires and Goldman Sachs partners to run his administration. Irrespective of who you elect, Wall Street runs the empire, as Trump proved once again.

The coming massive pivot when it comes to destructive wars abroad will take a little longer, but the writing’s been on the wall for months. I’ve published several posts on the topic, with the most popular one titled, Prepare for Impact – This is the Beginning of the End for U.S. Empire.  Here’s an excerpt:

This is not the sort of thing you see in a confident, brave, and civilized nation, it’s the sort of stuff you’d expect to see toward the end. It’s the stuff of craven war-mongers, of dishonest cowards, of a totally deranged and very dangerous media. The signs are everywhere; imperial decline is set to accelerate rapidly in the coming years…

Expect more of all the above as the U.S. empire enters its most devastating phase of collapse. Think about what it might mean for you and your family and prepare accordingly.

…click on the above link to read the rest of the article…

3 Uncommon Signs that an Economic Collapse Could Happen Soon

3 uncommon signs of economic collapse

As stocks continue to climb and the U.S. economy sustains its third longest period of expansion in history, market forecasters are seeking clues for when our next crisis may strike. So far, three uncommon signals have them worried.

Here’s an explanation of the three uncommon signs causing alarm, and what they mean for your savings…

Sign #1: Resurgence of Synthetic CDOs

The riskiest plays on Wall Street are made using financial instruments known as derivatives.

Derivatives are named for how they “derive” their value from the underlying assets on which they’re based. They give investors the ability to leverage assets — that is, control large quantities of an asset without actually buying or selling it.

Depending on how the underlying asset performs, derivatives can generate either massive gains or crushing losses.

But it’s when big banks and financial institutions start gambling in derivatives that things become especially dangerous. And that’s exactly what happened in the case of our last crisis: A slew of “too big to fail” organizations took on excessive risk through derivatives (mortgage-backed securities and others), and they couldn’t shoulder their losses when the bets went bad.

Now one of the most potentially destructive derivatives is regaining popularity after being shunned by Wall Street for years because of its role in the 2008 collapse.

The derivative is called a synthetic collateralized debt obligation (CDO), and Citigroup is spearheading its resurgence.

Granted, post-2008 regulations do make the market for these kinds of derivatives less liable to spark another collapse, and Citigroup executives claim to be pursuing this endeavor responsibly (we can trust them, right?). But Bloomberg reports the positive trend toward CDOs is still a negative sign (emphasis ours):

…click on the above link to read the rest of the article…

21st Century Shoe-Shine Boys

Anecdotal Flags are Waved

“If a shoeshine boy can predict where this market is going to go, then it’s no place for a man with a lot of money to lose.”

– Joseph Kennedy

It is actually a true story as far as we know – Joseph Kennedy, by all accounts an extremely shrewd businessman and investor (despite the fact that he had graduated in economics*), really did get his shoes shined on Wall Street one fine morning, and the shoe-shine boy, one Pat Bologna, asked him if he wanted a few stock tips. Kennedy was amused and intrigued and encouraged him to go ahead. Bologna wrote a few ticker symbols on a piece of paper, and when Kennedy later that day compared the list to the ticker tape, he realized that all the stocks on Bologna’s list had made strong gains. This happened a few months before the crash of 1929.

Joseph Kennedy in 1914, at age 25 – at the time reportedly “the youngest ever bank president in the US”
Photo credit: John F. Kennedy Presidential Library and Museum, Boston.

Kennedy sold all his stock market investments over the next several months and put the money in what he considered the safest banks. He had already made a fortune in the bull market, and reportedly augmented it later by going short in the bear market. We are pretty sure his meeting with the market-savvy shoe-shine boy wasn’t the only reason for which he decided to sell. He did mention the anecdote later in life though and the experience served to solidify a conclusion he had already arrived at: It was very late in the game and the market was likely to  crack badly fairly soon.

…click on the above link to read the rest of the article…

 

Rickards: “There Are Three Things Going On With Gold Right Now”

Rickards: “There Are Three Things Going On With Gold Right Now”

Jim Rickards joined Kitco News and Daniela Cambone to discuss the latest news and analysis from gold markets, geopolitics and even bitcoin.  The Wall Street veteran took on the bigger picture facing metals investors and what could be just around the corner in a bubbling market.

Jim Rickards is the editor of Strategic Intelligence and is the New York Times best-selling author of The Road to Ruin. Rickards’ worked on Wall Street for decades and has advised the U.S intelligence community on international finance, trade and financial warfare.

When asked why certain geopolitical tensions have greater impacts on gold and hard assets than others Rickards remarked, “There are two things going on,

“… first is that the North Korean missile threat goes from high tension to back down again. This is a very serious threat and we are headed for war with North Korea. While I don’t know what it will take to not just get gold to go up but stocks and other sectors, ultimately markets are going to be impacted.”

People seem to have very short attention spans but that’s not how to think about it. It’s possible to see that Kim Jong-un is not deviating from his path to get nuclear weapons, the U.S will not allow it. There’s no middle ground there. It would be great if we could have diplomacy. I think we should also ratchet up sanctions on China. But I don’t see either of those happening.”

Don’t underestimate the extent to which gold is being impacted by hedge funds, leverage players, and others that are in the mix for the current high in gold. They don’t really care if it is gold, soybeans, etc. but it is simply another commodity. They receive a nice profit with tight profits, tight stops.”

…click on the above link to read the rest of the article…

Can We Harness Americans’ Retirement Savings to Create Local Sustainable Economies?

What would it take for you to pull your retirement savings out of Wall Street and invest it in things that enrich your local community? Could you invest your IRA or 401(k) in, say, a local farm, solar cooperative, worker cooperative, or housing cooperative?

These questions are so worthy of answers that 15 volunteers and staff of Sustainable Economies Law Center gathered last year for a day at the law library to imagine and design a cooperative that would enable everyday people to direct their retirement savings into local investments. We sought to understand the applicable financial and tax regulations and assess the possibility that ordinary people could come together and form the required custodial entities to enable self-directed IRAs for themselves and their communities. Our key takeaways were: 1) It would be challenging, but not impossible; and 2) There’s so much we can do in the meantime!

This year, we’re continuing our study. While this is a work-in-progress, here are some early conclusions:

  1. Self-directed IRAs have made a visible difference in my community. In 2012, I provided legal services to an organization called Wild & Radish when they acquired 10 acres of land. Now, that land has vegetables, fruit trees, goats, bees, and an ecovillage, and it has become the home base for one of the Bay Area’s most inspiring nonprofits, Planting Justice. It is also home to a heritage seed farm operated by Multinational Exchange for Sustainable Agriculture. To help make the substantial down payment, Wild & Radish and Planting Justice received five loans, totaling $90,000, from the self-directed IRAs of their fans and supporters. The lenders have been repaid on schedule with 3-4% interest. However, the return on investment is far greater, because, five years later, I can think of countless ways these groups have enriched the life of our community.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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