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Glistening Gold & The Rumble In The Ruble – America’s “Tribute Scam” Is Unraveling Fast
Glistening Gold & The Rumble In The Ruble – America’s “Tribute Scam” Is Unraveling Fast
While a case can be made that for Moscow it would be a tremendous waste of hard-earned foreign exchange to try to counter a rig against their currency they simply cannot beat, as the entire fiat financial power of the US is against them.
As Pepe Escobar via DoomsteadDiner.net notes, Russia’s Central Bank by now should be all-out selling rubles for gold, and building Russia’s gold reserves.
Well, it is happening, somewhat.Last week, Russia’s Central Bank estimated gold reserves to have reached 1,415 metric tons in 2015 – over 17 percent more than 2014, valued at almost $48.6 billion. The share of monetary gold in Russia’s foreign currency reserves rose from 11.96 percent to 13.18 percent.
That’s still not good enough. Why? A harsh answer would be that the Russian Central Bank and the Ministry of Finance, as some analysts argue, are in effect run by saboteurs and vassals of the US financial elite, a.k.a. the Masters of the Universe.
Still, the Russian Central Bank did not intervene to prop up the ruble. And they should not. The best course of action would be to let the ruble go, ending almost all imports, thus forcing self-sufficiency. Or introduce capital controls, with only approved transactions involving foreign currencies. It did work for Malaysia, for instance, after the 1997 Asian financial crisis.
Forget about a China crash
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Pension “Armageddon” Got Closer Today
Pension “Armageddon” Got Closer Today
The IMF fears underfunded pension funds could be encouraged to chase returns through riskier investments such as direct credit exposure or by engaging in securities lending in order to improve their funding ratios….The IMF’s comments echoed similar warnings from the OECD in May, when the Paris-based body said pension funds’ move towards riskier asset classes could result in their solvency position being “seriously compromised” in turbulent markets. The Financial Times
Yesterday I published a post in which I outlined the reasons why pension fund underfunding is likely much worse than the level admitted by the funds themselves and industry professionals. The biggest culprit is “mark to market” of illiquid investments into which pension managers have “shoe-horned” themselves in order to give the appearance of rates of return that are higher on paper than in reality. A good friend and colleague of mine, who happens to be very bright, had this comment in response to my post:
Pension funds are collectively insolvent. Basically the asset managers running these funds have refused to MTM them properly, expecting the assumed X% annual return to normalize. Sorry, buddy: this IS the new normal (which is why the unfunded situation gets worse every year… assume 8% and get 0% for enough years and the chasm only widens… in fact, by the rule of 72, your funding gap will double every 9 years if that 8% gap is reality). This is where the rubber hits the road, the issue which is going to punch the middle class in the gut like a steel 2×4.
This is the same dynamic that torpedoed the big bank balance sheets when the housing/subprime credit bubble popped, as big chunks of home equity, mortgage and other credit products were marked close to par when in reality most of it was worth zero. And this is one of the primary reasons that the Fed is devoting significant resources to keeping the stock market propped up: pension fund insolvency is at risk.
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How Asset Manager BlackRock Gave Me the Willies About 2015 | Wolf Street
How Asset Manager BlackRock Gave Me the Willies About 2015 | Wolf Street.
BlackRock, the largest asset manager in the world and one of the big beneficiaries of the Fed’s policies, and of similar policies by other central banks, is in a bullish mood.
In its 2015 Investment Outlook, BlackRock is gung-ho about the US economy. Dominant among the forces behind that miracle is the Fed’s “ultra-loose monetary policy” that has “inflated US equity and home values.” Monetary policy will likely “remain highly stimulatory.” And “even if the Fed were to hike by a full percentage point, real short-term interest rates would still be negative.” So savers would continue to get annihilated, at least until they entrust their money to BlackRock.
BlackRock is a fan of Abenomics and the Bank of Japan which has taken over where the Fed left off. The BoJ monetizes the entire deficit of the government. Japanese institutions, including the huge Government Investment Pension Fund, have been pressed to sell their JGBs to the BoJ and plow this money into stocks and other assets, expressly to inflate their values. BlackRock is licking its chops.
And it’s looking with fond expectations to the ECB, which has essentially promised, despite German opposition, a big load of QE starting in 2015, on top of the negative deposit rates it is already inflicting on banks and increasingly their depositors.
