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Gold – A Perfect Storm For 2019

Gold – A Perfect Storm For 2019

This article is an overview of the principal factors likely to drive the gold price in 2019. It looks at the global factors that have developed in 2018 for both gold and the dollar, how geopolitics are likely to evolve, the economic outlook and how it is worsened for the dollar by President Trump’s tariff war against China, the availability and likely demand for bullion, and the technical position in paper markets. Taken together, the outlook is bullish for gold.

2018 reprise

For gold bulls, 2018 was disappointing. From 11 December 2017, when gold made a significant bottom against the dollar at $1243, it has ended virtually unchanged today, after being 4.2% up. Gold had to struggle against a rising dollar, whose trade-weighted index rose a net 3.7% over the same period, and as much as 9.4% from its mid-February low.

Dollar strength has been driven less by trade imbalances and more by interest rate differentials. A speculating bank for its own book or for a hedge fund client can borrow 3-month Euro Libor at minus0.354% and invest it in 3-month US Treasury bills at 2.36%, for a round trip of over 2.7%. Gear this up ten times or more, either on a bank’s capital, or through reverse repos for annualised returns of over 27%. To this can be added the currency gain, which at times has added enough to overall returns for an unhedged geared position to double the investment.

Not that these forex returns have been guaranteed, but you get the picture. The ECB and the Bank of Japan have been frozen into inactivity, reluctant to raise rates to correct this imbalance, and the punters have known it.

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

Washington Is Changing The World Order Against Its Own Interests

Washington Is Changing The World Order Against Its Own Interests

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The hubris and arrogance of Washington have been at work since the Clinton regime to destroy the power and relevance of the United States.

This website has an international audience. The most asked question from this audience is the world order. There is a realization that Washington’s control might weaken, a development people abroad see as hopeful. They ask me for verification of their hope.

Here is my answer:

The world order has already changed.  China has a larger and more powerful industrial and manufacturing based economy than the US, and China’s potential domestic consumer market is four times larger than that of the US. As economies are consumer based, China’s potential is an economy four times larger than that of the US.

Russia has a far more capable military with weapon systems unmatched by the US. The US is drowning in debt, and the illegal and irresponsible sanctions that Washington tries to impose on others are driving the world’s largest countries away from the use of the US dollar as world reserve currency and away from Western clearance systems such as SWIFT.  The United States already has one foot in the grave.  Any country sufficiently stupid to ally with the US is allied with a dead man walking.

President Eisenhower, a five-star general, warned Americans 57 years ago to no effect that the military/security complex was already a threat to the American people’s ability to control their government. Today the military/security complex is the Government.

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

The Trade War Distraction: Huawei And Linchpin Theory

The Trade War Distraction: Huawei And Linchpin Theory

Since the beginning of this year, I have been warning that trade tariffs initiated by Donald Trump would develop into a full-blown trade war with China, and perhaps other nations, and that the timing of this trade war is rather suspicious. Suspicious how? Almost every instance of further escalation was made by Trump around the exact time that the Federal Reserve was also making a large cut to its balance sheet or raising interest rates. Instead of focusing on the fact that extreme volatility has returned to markets because central banks are pulling the plug on life support, the mainstream media is holding up the trade war as the ultimate culprit behind the accelerating crash.

In other words, Trump’s trade war is acting as a perfect distraction from the crisis which the banking establishment has now deliberately triggered.

The initial response to my suggestion by a minority of liberty movement activists and skeptics was outright denial. Some people argued that the trade war would be over before it even began and that China would immediately capitulate in fear of losing the U.S. consumer market. Others argued that the trade war “had been started by the Chinese years ago” and Trump was simply “fighting back.”

Clearly, the trade war is not fading away as many assumed. As I predicted, it is only continuing to grow. And the notion that a trade war is necessary at this time in defense of the U.S. economy ignores certain realities. For example, the trade deficit itself was never “theft” by the Chinese, but a BARTER between the Chinese and the U.S. government and U.S. corporations.

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

DRAGONFLY: Google Employees Publicly Rebel Against Building a Dystopian New Search Engine

DRAGONFLY: Google Employees Publicly Rebel Against Building a Dystopian New Search Engine

More than 1,400 Google staff, many journalists, and human rights organizations are calling on Google to halt its controversial project called Dragonfly.

What is Project Dragonfly?

Dragonfly is a search engine specially built for China. It would unleash more censorship on a mass scale by selectively blocking certain search terms, apparently at the behest of China’s government. Human rights groups are blasting the company for aiding and abetting China’s mass surveillance and rights violations which could result in potential imprisonment.

It turns out Google’s employees had been unwittingly working on this project for a while until 2017 without knowing its intended purpose. News of this highly secret program finally leaked and no one is letting it get swept under the rug.

Thankfully, since the news leaked out, no amount of time has caused advocates and free speech lovers to forget this scandal. Those in the know are using the hashtag #DropDragonfly.

How would the Dragonfly search engine in China Work?

The search engine would censure terms like “human rights” and “religion.” Hundreds of Google employees have called this out as obvious freedom of speech violations.

BBC reported in August:

The search app would “blacklist sensitive queries”, The Intercept says, identifying and filtering websites currently blocked by China’s so-called Great Firewall.

According to documents it had seen, a search via the app would result in a list with banned websites removed and a disclaimer saying that “some results may have been removed due to statutory requirements”.

It said the BBC News website and Wikipedia would be among those blocked.

Employees of Google are horrified.

“We are Google employees and we join Amnesty International in calling on Google to cancel project Dragonfly…”

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

Coldest December on Record in China

China is also experiencing the coldest day record during December 6 below zero C. Snow is falling in Beijing to Shanghai. It has been in the 70s in Abu Dhabi and in Tampa Florida, so the cold is dipping lower and lower across the planet. Temperatures in China have been held under 4 below zero C on only seven December days since 2000. This is the coldest on record so far. The real question becomes when will people start noticing that the summers are dry and short with the winters getting colder?

Beijing Threatens “Severe” Retaliation Against Canada If Huawei CFO Is Not Released

Canada’s extraordinary arrest one week ago of Huawei CFO Meng Wanzhou, the daughter of Huawei founder and billionaire executive Ren Zhengfei, and its decision to charge her with “multiple” counts of fraud – a preamble to her likely extradition to the US to face charges of knowingly violating US and EU sanctions on Iran – has elicited widespread anger in Beijing, which declared Meng’s detention a “violation of human rights” during a bail hearing for the jailed executive on Friday.

That anger has apparently only intensified after the hearing adjourned without a decision (it will resume on Monday, allowing Meng’s defense team to argue for why she should be released on bail, contrary to the wishes of government attorneys who are prosecuting the case).

Meng

And with Canada insisting that it will prosecute Meng to the full extent of the law over allegations that she mislead banks about the true relationship of a Huawei subsidiary called Skycom, angry Chinese officials have decided to issue an ultimatum directly to the Canadian ambassador, who was summoned to a meeting in Beijing on Saturday and told in no uncertain terms that Canada will face “severe consequences” if Meng isn’t released, according to the Wall Street Journal.

China’s foreign ministry publicized the warning in a statement (though Canadian officials have yet to comment):

Chinese Vice Foreign Minister Le Yucheng summoned Canada’s ambassador to Beijing, John McCallum, on Saturday to deliver the warning, according to a statement from the Chinese Foreign Ministry.

The statement doesn’t mention the name of Huawei’s chief financial officer, Meng Wanzhou, though it refers to a Huawei “principal” taken into custody at U.S. request while changing planes in Vancouver, as was Ms. Meng. The statement accuses Canada of “severely violating the legal, legitimate rights of a Chinese citizen” and demands the person’s release.

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

Every Bubble Is In Search Of A Pin

Every Bubble Is In Search Of A Pin

The ‘Everything Bubble’ has popped

Now that the world’s central banking cartel is taking a long-overdue pause from printing money and handing it to the wealthy elite, the collection of asset price bubbles nested within the Everything Bubble are starting to burst.

The cartel (especially the ECB and the Fed) is hoping it can gently deflate these bubbles it created, but that’s a fantasy. Bubbles always burst badly; it’s their nature to do so. Economic suffering and misery always accompany their termination.

It’s said that “every bubble is in search of a pin”. History certainly shows they always manage to find one.

History also shows that after the puncturing, pundits obsess over what precise pin triggered it, as if that matters.  It doesn’t, because ’cause’ of a bubble’s bursting can be anything.  It can be a wayward comment by a finance minister, otherwise innocuous at any other time, that spooks a critical European bond market at exactly the right (wrong?) moment, triggering a runaway cascade.

Or it might be the routine bankruptcy of a small company that unexpectedly exposes an under-hedged counterparty, thereby setting off a chain reaction across the corporate bond market before the contagion quickly spreads into other key elements of the financial system.

Or perhaps it will be the US Justice Department arresting a Chinese technology executive on murky, over-reaching charges to bully an ally into accepting that unilateral US sanctions are to be abided by everyone, regardless of sovereignty.

How was it that the famous Tulip Bulb bubble came to a crashing end back in the 1600’s?  No one knows the exact moment or trigger. But we can easily imagine that in some Dutch pub on the fateful night on the Feb 3rd1637, a bidder on the most-coveted of all bulbs, the Semper Augustus, had an upset stomach and briefly grimaced when hit by a ripping gas pain:

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

Is China Really More “Dystopian” Than The UK?

Is China Really More “Dystopian” Than The UK?

RT reported that the UK’s so-called “National Data Analytics Solution” will see an algorithm process whichever of 30 separate data points have been recorded about a person in local and national police databases in order to predict which members of the population are most likely to commit a crime or be victimized by one, after which the state will dispatch local health and social workers to offer “counseling” to them in an attempt to prevent the computer’s envisioned scenario from transpiring. This program is being likened to the 2002 film “Minority Report” and carries with it a vibe of China’s controversial “social credit” system, albeit without any “rewards” being offered for law-abiding behavior. In fact, one can actually make the claim that instead of the UK copying China to a degree, it was actually China that learned from the UK seeing as how the island nation’s mass surveillance system used to be far ahead of the communist nation’s one.

The problem with “pre-crime” technology, however, is that it straddles the fine line between security and liberty in what is supposed to be a “democracy”, therefore making it uncomfortably out of place in the UK while being much more natural to implement in centrally controlled societies like China’s. While the European country insincerely pretends to be a “democracy” in the Western sense of how this system is commonly assumed to function, the East Asian one makes no such pretenses and is proud of having a different organizational model, which should be doubly disturbing for any British citizen because it means that their “democratically elected government” is actually less forthcoming about its nationwide surveillance strategy than comparatively more centralized China’s is. No value judgement is being made about either country’s governing system, but the purpose of this comparison is to point out the surprising similarities between the two that are usually lost on most observers.

National Data Analytics Solution

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

China Outraged At Arrest Of Huawei CFO, Warns It Will “Take All Measures”

So much for a trade war truce between China and the US, or a stock market Christmas rally for that matter.

Shortly after the news hit that Huawei CFO Wanzhou Meng — also deputy chairwoman and the daughter of Huawei’s founder — was arrested on December 1, or right around the time Trump and Xi were having dinner in Buenos Aires last Saturday, and faces extradition to the U.S. as a result of a DOJ investigation into whether the Chinese telecom giant sold gear to Iran despite sanctions on exports to the region, China immediately lodged a formal protest publishing a statement at its embassy in Canada, and demanding the U.S. and its neighbor “rectify wrongdoings” and free Meng, warning it would “closely follow the development of the issue” and will “take all measures” to protect the legitimate rights and interests of Chinese citizens.

Full statement below:

Remarks of the Spokesperson of the Chinese Embassy in Canada on the issue of a Chinese citizen arrested by the Canadian side

At the request of the US side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law. The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim. The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou.

We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.

Meng’s arrest will immediately heighten tensions between Washington and Beijing just days after the world’s two largest economies agreed on a truce in their growing trade conflict.

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

Blain: “I Think The Global Trade War Is Now A Shooting War”

Blain’s Morning Porridge submitted by Bill Blain

“Why So Serious?”

I think the Global Trade War is now a shooting war.

A few weeks ago one of my very smart CIO contacts warned me the real story of the year isn’t just the implications for supply chains from a Trade Spat, but a more fundamental “Tech Cold War” between China and the US for dominance. It’s a battle that will shortly reach epic proportions, force huge change in the global tech supply chain, and has massive implications for current incumbents.

Over this last few days, its all going off. The US, Australia, NZ and the UK have banned Huawei from new 5G systems over embedded spy tech and “security” issues. Now we learn that even as Xi and Trump were meeting, the CFO of Huawei was arrested in Canada for violating US sanctions on Iran! She is also the daughter of Hauwei’s founder.

I suspect the news will trigger a massive downtrade in stocks today. Brace, Brace, Brace!

The core objective of Trump’s trade war threats are to contain China’s becoming a technological equal and competitor after all its learnt from access and replication of US tech. If we see a full Tech War with lines drawn, then its potentially clobbers everything from Apple down. It means a choice between US Tech or China Tech.

“Made in China 2025” is the Chinese target of becoming the leader in tech, and avoiding just being a US manufacturing centre. Its happening – Hauwei’s lead in 5G is just one example.

More on this next week – but its going to be a massive story. Blade Runner anyone?

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

Trade Truce? Think Again: Canadian Authorities Arrest CFO of Huawei Technologies

At the request of the US, Canadian Authorities arrest Meng Wanzhou, CFO of Huawei Technologies, over Iran sanctions viol

Trade Truce? Deal with China in 90 days?

Think again on both counts: Canadian Authorities Arrest CFO of Huawei Technologies at U.S. Request

A spokesman for Canada’s justice department said Meng Wanzhou was arrested in Vancouver on Dec. 1 and is sought for extradition by the U.S. A bail hearing has been tentatively scheduled for Friday, according to the spokesman. Ms. Meng, the daughter of Huawei’s founder, Ren Zhengfei, serves as the company’s CFO and deputy chairwoman.

Ms. Meng’s arrest comes amid a year-long U.S. government campaign against a company it views as a national-security threat. In the past year, Washington has taken a series of steps to restrict Huawei’s business on American soil and, more recently, launched an extraordinary international outreach campaign to persuade allied countries to enact similar curbs.

U.S. authorities have suspected Huawei’s alleged involvement in Iranian sanctions violations since at least 2016, when the U.S. investigated ZTE Corp. , Huawei’s smaller Chinese rival, over similar violations. The Commerce Department released internal ZTE documents that showed the company studied how a rival identified only as “F7” had conducted similar business.

“China will see this as an escalation against Huawei and as an extraterritorial rendition,” said James Mulvenon, general manager at defense contractor SOS International. “There will be tremendous domestic pressure in China to get her back.”

Huawei is the world’s biggest maker of equipment for cellular towers, internet networks and related telecommunications infrastructure. It is also the world’s No. 2 smartphone brand.

Some of America’s closest allies, including most of the countries in the “Five Eyes” intelligence-sharing pact among English-speaking countries, have followed the nation’s lead.

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

15 Million People Were Just Blacklisted from Travel by China’s Social Credit Program and It’s Coming to America Soon

China’s social credit system is in full swing and has already blacklisted more than 15 million Chinese residents from travel. Is it coming soon to the U.S.?

Recently, The Organic Prepper reported some shocking news of China’s newest rollout: a social credit system.

It’s a system of surveillance and governance using a social scoring system based on the state’s perceived trustworthiness of the individual. Not only are social media and financial accounts tied into a person’s “score” – much like a credit score number – but also friends and associates are compelled to distance themselves from an offending person, otherwise, their score can be dropped too.

The program is called the Sesame Score. Symbolically this represents “open sesame”or doorways that are eithe r opened or blocked to the individual who tries to move freely.

A totalitarian dream

This is every totalitarian government’s ultimate dream: a society that polices itself, its thoughts, its beliefs and each other.

It’s the ultimate power imbalance and crushes individual will. If such a scoring system should be used it should be in cases of state or institution accountability such as checking politicians’ funding sources or Glassdoor.com where employees and interviewees can evaluate companies to let others know about the real company culture. But social scoring cannot work the other way around in a free society.

The ramifications of this are perfectly encapsulated by the episode of Netflix’s futurist show Black Mirrorcalled “Nosedive” in season 3 episode 1, where a woman trying to boost her social credit status quickly takes a turn for the worse. Out of all the shows in the series, that episode makes my heart pound right out of my chest because it seems the most real of all the surreal dystopian themes.

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

On The Road to a Post-G20 World

On The Road to a Post-G20 World

The trade war launched by the Trump administration against China may not have been solved by a 2½-hour dinner between Chinese President Xi Jinping and Donald Trump at the G20 in Buenos Aires on Saturday. But it may have opened a path towards a drastic realignment.

Way beyond the histrionics surrounding the “family pic” – and whose nods and winks signaled surefire geopolitical capital – the G20 walked and talked like a last gasp to “save” the current turbo-capitalist world (dis)order.

The sherpas at the G20 lost sleep for two consecutive nights trying to come up with a final declaration capable of appeasing Trump. As virtually every nation at the G20 supports multilateralism on trade, nobody wanted to upset even more the real Big Boss in Buenos Aires: Xi Jinping.

The climax in any case was the U.S.-China bilateral – which carried the potential, if things went downhill, to derail the global economy.

The White House spin was on immediate negotiations – lasting 90 days – over forced transfers of U.S. technology to China; intellectual property protection; an array of non-tariff barriers; and alleged Chinese cyber “intrusions”. If there’s no deal, Washington will raise tariffs on Chinese imports to 25 percent.

Xi and Trump at G20. (Official White House Photo by Andrea Hanks)

Now compare that with the key take away from Beijing, with Wang Yi, the vastly experienced Chinese Foreign Minister, describing the dinner conversation as “friendly and candid.” There were also no specifics on how substantial the allegedly “immediate” Chinese buying of American agricultural, energy and industrial products will be.

Wang, defiant, outspoken, and an expert on Japan, was promoted to state councillor last year, which means the Ministry of Foreign Affairs now has much more clout over other key Chinese institutions.

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

Five Academics Who Unleashed the “Demon” of Geopolitical Power

Five Academics Who Unleashed the “Demon” of Geopolitical Power

Photo Source pedrik | CC BY 2.0

As Washington’s leadership fades more quickly than anyone could have imagined and a new global order struggles to take shape, a generation of leaders has crowded onto the world stage with their own bold geopolitical visions for winning international influence. Xi Xinping has launched his trillion-dollar “Belt and Road Initiative” to dominate Eurasia and thereby the world beyond. To recover the Soviet Union’s lost influence, Vladimir Putin seeks to shatter the Western alliance with cyberwar, while threatening to dominate a nationalizing, fragmenting Eastern Europe through raw military power. The Trump White House, in turn, is wielding tariffs as weapons to try to beat recalcitrant allies back into line and cripple the planet’s rising power, China. However bizarrely different these approaches may seem, they all share one strikingly similar feature: a reliance on the concept of “geopolitics” to guide their bids for global power.

Over the past century, countless scholars, columnists, and commentators have employed the term “geopolitics” (or the study of global control) to lend gravitas to their arguments. Few, though, have grasped the true significance of this elusive concept. However else the term might be used, geopolitics is essentially a methodology for the management (or mismanagement) of empire. Unlike conventional nations whose peoples are, in normal times, readily and efficiently mobilized for self-defense, empires, thanks to their global reach, are a surprisingly fragile form of government. They seem to yearn for strategic visionaries who can merge land, peoples, and resources into a sustainable global system.

The practice of geopolitics, even if once conducted from horseback, is as old as empire itself, dating back some 4,000 years. Until the dawn of the twentieth century, it was the conquerors themselves — from Alexander the Great to Julius Caesar to Napoleon Bonaparte — whose geopolitical visions guided the relentless expansion of their imperial domains.

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The Elite Are Creating An Authoritarian ‘Beast System’, And Those That Dissent Could Lose EVERYTHING

The Elite Are Creating An Authoritarian ‘Beast System’, And Those That Dissent Could Lose EVERYTHING

They are transforming the Internet into the greatest tool of surveillance that humanity has ever seen, and if we stay on the road that we are currently on it is only a matter of time until our society becomes a hellish dystopian nightmare.  I wish that this was an exaggeration, but it isn’t.  Over the past couple of decades, the Internet has completely changed the way that we all communicate with one another.  At one time, all forms of mass communication were tightly controlled by the elite, but the Internet suddenly allowed us to communicate with one another on a massive scale without having to go through their gatekeepers.  This radically altered the landscape, and at first the elite were unsure of how to respond to this growing threat.  There was no way that they could roll back time to an era before the Internet was invented, and so they have decided to use it for their own insidious purposes instead.

Today, the Internet has become the centerpiece of their “Big Brother surveillance grid”, and they are gathering information on all of us on a scale that has never been seen before in all of human history.  But of course it was never going to stop there.  Over the past couple of years we have started to watch the elite use all of this information to punish those that are doing or saying things that they do not like.

Perhaps the most extreme example of this phenomenon is what is going on in China.  The following comes from BuzzFeed

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