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Putin Knows The Monetary System Is A Credit Based Ponzi Scheme: Lawrence Lepard

Putin Knows The Monetary System Is A Credit Based Ponzi Scheme: Lawrence Lepard

Larry also lays out 4 key catalysts for higher gold, silver and bitcoin prices.

Friend of Fringe Finance Lawrence Lepard released his most recent investor letter a few days ago with his updated take on the seismic changes occurring in monetary policy globally as a result of the Russia/Ukraine conflict.

He takes us through history as to how this landscape has changed in the past, and what could be coming in years ahead.

Larry had joined me for several interviews last year and I believe him to truly be one of the muted voices that the investing community would be better off for considering. He’s the type of voice that gets little coverage in the mainstream media, which, in my opinion, makes him someone worth listening to twice as closely.

Lawrence Lepard (Photo: Kitco)

Larry was kind enough to allow me to share his most recent thoughts. Part 2 is below and Part 1 can be found at this link.

In Part 1, Larry reminded us of the history and structure of the world monetary system, starting in 1944 and ending in 1980, and how he uses that to make his investment decisions.

In Part 2, he picks up around 1980 and discusses current problems the Fed has.


1980-Present Gold Market 

In the chart below, you can see the effect that Paul Volcker’s policies had on the dollar price of gold. By pushing interest rates up to 20%, he managed to cool inflation and ultimately stop it. This brought the gold price back to the $260 to $400 range where it lived for quite some time.

The 1980’s and 1990s were marked by a period of dis-inflation and ultimately deflation given technological innovations and productivity gains from Microsoft, Intel and the like in the 1980s, and then the Internet in the 1990s…

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

When normality is exposed as a Ponzi

When normality is exposed as a Ponzi

Putin’s hubris, yes-men for generals, lack of fighting conviction among the men, poor logistics and strong Ukrainian leadership and determination have combined to turn the Russian invasion of Ukraine into a military quagmire.

Meanwhile, the West has upped the stakes in a financial war. The underlying assumption is that the Russian economy is weak and those of the Western allies are stronger. A few key metrics shows this is incorrect. The underlying resilience of the Russian economy and its financial system is not generally understood, and instead EU sanctions could end up undermining the whole euro system and the euro itself.

This article looks at how errors on the battlefield are likely to bring the financial and economic war between the West and Russia out into the open. By suspending access to them, the West has made the mistake of proving to Russia (and all other national central banks) the ultimate uselessness of currency reserves and the benefits of gold. As well as leading to the likely collapse of the entire euro system, this article explains how this financial war could end up with a de facto gold standard for the rouble and call an end for the entire fiat currency Ponzi scheme.

The destruction of the global fiat Ponzi scheme is a step closer

Being increasingly debased, western currencies serve to conceal deteriorating economic conditions, particularly in the US, EU, UK, and Japan. In China, less so perhaps. But China faces an old-fashioned property crisis which is sure to lead to further currency expansion and therefore, debasement of the renminbi. In this article about the state of the financial war between the US, UK and EU on one side, collectively the West, and Russia on the other, we focus on how the invasion of Ukraine is evolving into open financial warfare.
…click on the above link to read the rest of the article…

Here’s Why Our Monetary System is a Giant Ponzi Scheme

Here’s Why Our Monetary System is a Giant Ponzi Scheme

Monetary System

Ponzi schemes keep going until the perpetrator is stopped from the outside. They never stop by of their own volition. Bernie Madoff kept going until it all blew up.

In the year 2000 the Nasdaq composite exceeded a P/E of 200 before collapsing 78% by October 2002. The more successful a Ponzi the more egregious the bubble and resultant pain. The granddaddy of Ponzi — far greater than anything we’ve seen before — is our monetary system.

Let’s consider what money is. It is a technology that allows us to produce and consume not just in the present but across time.

It is, for this reason, that it needs to provide both a medium of exchange as well as a store of value. If for example a transaction needs to be made over a crop cycle then the value of the money needs to remain sufficiently stable over that time frame to allow the participants to make an exchange and not come out underwater. This benefits neither party to the transaction because, while in the short term party A may get an excellent deal from party B, if the deal is so “excellent” as to bankrupt party B, then no future commerce will be done and overall production declines causing less supply and a fall in the overall standard of living.

The money needs to be useful to both parties. In prisons they use cigarettes. Even if you don’t smoke enough inmates do and the cigarettes don’t change (consistency) and so they form a money.

Of course, over time we’ve used all sorts of things used as money: gold, silver, copper, even slaves. At primary school I used to use marbles and Garbage Pail Kids (ah, those were the days).

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

Contagion!

Contagion!

There has been a litany of bad news recently, including the U.S. August humiliation in Afghanistan, China’s aggressive actions against Taiwan and increased tensions with Iran, North Korea and Russia.

It will take the U.S. years, possibly decades, to recover from the debacle of August 2021 and the collapse of American prestige. All of these geopolitical events combine to undermine confidence in U.S. power.

When that happens, a loss of confidence in the U.S. dollar is not far behind.

And, perhaps most importantly of all recent bad news, is a market meltdown and slowing growth in China.

Greatest Ponzi Ever

I’ve long advised my readers that the Chinese wealth management product (WMP) system is the greatest Ponzi in the history of the world. Retail investors are led to believe that WMPs are like bank deposits and are backed by the bank that sells them. They’re not.

They’re actually unsecured units in blind pools that can be invested in anything the pool manager wants.

Most WMP funds have been invested in the real estate sector. This has led to asset bubbles in real estate (at best) and wasted developments that cannot cover their costs (at worst). When investors wanted their money back, the sponsor would simply sell more WMPs and use the money to pay back the redeeming investors.

That’s what gave the product its Ponzi characteristic.

The total amount invested in WMPs is now in the trillions of dollars used to finance thousands of projects sponsored by hundreds of major developers. Chinese investors are all-in with WMPs.

Now the entire edifice is collapsing as I predicted it would.

The largest property developer in China, Evergrande, is quickly headed for bankruptcy. That’s a multibillion-dollar fiasco on its own. Evergrande losses will arise in WMPs, corporate debt, unpaid contractor bills, equity markets and unfinished housing projects.

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

Massive Surge In U.S. Gold Imports Signals BIG TROUBLE Ahead For The Financial System

Massive Surge In U.S. Gold Imports Signals BIG TROUBLE Ahead For The Financial System

The U.S. imported a record amount of gold bullion in April during the global contagion and shutdown of many economies.  The United States imported more gold in April than it did during all of last year.  A lot of the gold imported into the U.S. was due to delivery issues, as many of the large gold refineries were shut down.

While the huge surge in U.S. gold bullion imports during April was mainly due to supply disruptions, it’s an IMPORTANT SIGNAL that all is not well in the Global Financial System.  The panic to get more gold to the U.S. exchanges suggests that there is way too much paper gold leverage in the system.

The highly leveraged gold trading system has worked fine for decades due to an important factor not considered by most in the precious metals community… and that’s rising global oil production.  Let me explain.  World GDP growth is tied to global oil production growth… PERIOD.  While a few other analysts and I have made this point, Jean-Marc Jancovici explained this to a large group of the OECD.

Total world oil consumption on a three-year average corresponding closely to total world GDP per capita on a three-year average.  While investors may deny this relationship, do so at your peril.

Because the world has been able to add 1-2% of new global oil production on average each year, except for the down-turns, the highly leveraged Financial Ponzi Scheme can continue to grow and expand.  However, when global oil production stops increasing on an annual basis, then global GDP growth is DEAD for good.  And, I mean it.

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

Welcome to the Crazed, Frantic Demise of Finance Capitalism

Welcome to the Crazed, Frantic Demise of Finance Capitalism

The cognitive dissonance required to ignore the widening gap between the real economy and the fraud’s basic machinery–speculation funded by “money” conjured out of thin air–has reached a level of denial that can only be termed psychotic.

When scams start unraveling, the scammers become increasingly frantic to maintain the illusion of legitimacy and the delusion of guaranteed gains that are the lifeblood of every scam. One sure sign that the flim-flam is about to collapse is the manic rise of FOMO, fear of missing out, as the scammers jam the Ponzi scheme’s stellar returns to new extremes.What greedy human can resist guaranteed gains, especially of the enviously grandiose variety?

The greatest scam of the past century is unraveling before our eyes. I’m calling it finance capitalism as a general descriptor of the dominant form of what’s called “capitalism” because calling it what it actually is–a fraud that’s destroyed the foundations of our economy and society–is, well, a much more difficult sell than “capitalism,” which still has some faint echoes of the open markets, etc. that characterized traditional capitalism, which I call naive capitalism because it is incapable of differentiating between the parasitic, predatory finance version cloaking itself as “capitalism” and actual capitalism, in which capital is put at risk, markets are transparent, etc.There are many labels for the distorted, corrupted “capitalism” that dominates our economy and society: I’ve long used state-cartel capitalism, others prefer monopoly capitalism or crony capitalism.

I now favor finance capitalism because the heart of the fraud is finance: printing “money” out of thin air without creating any value or any goods and services. If you can’t print “money,” then borrow it into existence–that’s just as profitable a fraud as printing it.

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

Money Minus Value, No Limit

Money Minus Value, No Limit


You understand, there will be no meaningful resuscitation of the dear, departed, so-called greatest boom in history. Ponzi schemes don’t “bounce back,” they collapse for the simple reason that the pieces holding them up were not really there. Such are the unanticipated consequences of a media over-saturated culture that we were so easily deceived by appearances.

The emotions entrained by this implacable disaster have barely expressed themselves in the social arena. The public is still too shell-shocked by the prospect of losing everything – jobs, incomes, status, chattels, a future – to commence what the shrinks call “acting out.” Anyway, half the country is still acting out over the election of Mr. Trump three years ago.

But, for the moment, an interesting debate rages internationally as to whether the Covid-19 virus was some kind of engineered event designed to bring about various political outcomes. One thread declares that the Democratic Party, its media handmaidens, and a helpful Chinese leadership used the virus to blow up the US economy and finally, after several botched attempts, get rid of the vexing Mr. Trump. It’s a tidy story, but I don’t buy it, for the simple reason that the entire global economy has blown up, including China’s, so you can file that meme in the Wile E. Coyote folder.

A gloss on that one is the idea that NIAID director Anthony Fauci and other medical experts are wicked conspirators bent on destroying American morale by overstating the threat of Covid-19. This includes the phrase that the novel corona virus is “just another seasonal flu,” and so ordering people to stay away from work and business was unnecessary. Again, you’d have to ask yourself why medical experts and other plausibly intelligent people in so many other countries would do exactly the same thing. They can’t all be orcs.

Is Lebanon’s central bank a Ponzi scheme ?

Is Lebanon’s central bank a Ponzi scheme ?

The situation in Lebanon is deteriorating. Traffic lanes have all been reopened, but a rift has emerged between those who favour the free flow of traffic and the road blockers. The Free Patriotic Movement of President Michel Aoun, the Shiite Amal Movement of parliament speaker Nabih Berri and the Hezbollah condemn road closures; while the Future Movement led by Saad Hariri, a Sunni, the Lebanese Forces of the Maronite Samir Geagea and the Progressive Socialist Party of Walid Jumblatt, leader of Lebanon’s Druze, have attempted to reintroduce the roadblocks.

In the current political landscape, pursuing a simultaneous fight against corruption does not seem possible. Gebran Bassil (Free Patriotic Movement) announced that all the leading members of his party would make public their bank accounts. He also tabled a bill aimed at verifying the assets of civil servants. However, several hurdles would render such measures unworkable (the waiver of bank secrecy being prohibited by law in these circumstances; nothing has been said about the bank accounts belonging to the family members of political leaders; etc.).

Actually, corruption in Lebanon is not a violation of the law; it is the law itself that generates it. For example, there are import taxes, which nobody pays since the law grants an exemption to the 17 recognized religious communities. It is therefore sufficient to have the import declared by a person from one of these communities to avoid paying the tax. Thus, the port of Beirut loses out on US$ 3 billion every year.

The liquidity crisis, which sparked the 17 October protest movement, has worsened. Banks only allow cash withdrawals in Lebanese pounds up to a maximum amount equivalent to US$ 500 per week.

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

Canada’s “Enron-style” Economics: Most Wealth Redistribution Occurs Off the Books

Canada’s “Enron-style” Economics: Most Wealth Redistribution Occurs Off the Books

Canada’s “Enron-style” Economics: Most Wealth Redistribution Occurs Off the Books - Peter Diekmeyer (25/11/2019)

The Trudeau Administration’s reappointment of Bill Morneau as the country’s Finance Minister last week was by far its most important. 

During his first term, Morneau managed to hold together a shaky Canadian economy, which for the past three decades has relied on driving borrowing and spending increases at a pace faster than economic growth just to keep the system afloat. 

It’s a Ponzi scheme, and insiders know it.

The question is whether Morneau—whose education, financial background, and previous work at the C.D. Howe Institute position him as one of the brightest lights in a weak Trudeau cabinet—can keep the game going. 

Morneau’s biggest challenge will be operating in an environment in which estimated off-the-books annual wealth transfers* caused by the federal government’s suppressed interest rate policies are twice the size of his official budgets. 

“Taxes on idiots” 

The challenge is that it is hard to manage off-book wealth distribution, because so few people know that it exists. 

That’s no accident. Economists figured out long ago that voters would never pay for bloated public spending if they knew its true cost. 

Over the years, governments have thus developed a variety of revenue sources that voters can’t see. Corporate and payroll taxes are one example. Lotteries and casinos, which have been described as “taxes on idiots”, are another.

Supressed interest rates, which rob pensioners and retirees of the benefits of a lifetime of thrift, act much the same way. 

Yet while economists distinguish between fiscal (overt) and monetary (off the books) policy, few have ever tried to quantify the difference. 

In truth, as we noted last week , the process is complicated.

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

New COMEX Pledged Gold – Shrinking the Pool of Registered Inventory

New COMEX Pledged Gold – Shrinking the Pool of Registered Inventory

For those who have at times struggled to understand the difference between COMEX inventory categories ‘registered gold’ and ‘eligible gold’, now your head can spin even more, since the CME’s COMEX has just introduced a new category – ‘pledged gold’.

This pledged category was first noticed on the infamous COMEX warehouse gold stocks report late last week by Nick Laird of GoldChartsRUsfame, with the pledged gold column intriguingly populated with an entry next to the New York vault of bullion bank, HSBC. What did this pledged column entry mean, we wondered, and where did it come from?

After some digging on the CME website, the answer was revealed. Pledged is a new gold inventory category representing COMEX gold warrants which have been deposited with CME Clearing as performance bond collateral, in other words margin collateral. CME defines performance bonds as follows:

“Performance Bonds, also known as margins, are deposits held at CME Clearing to ensure that clearing members can meet their obligations to their customers and to CME Clearing.”   

Before looking at how this relates to COMEX gold, a quick recap and some definitions are in order. Although COMEX gold futures rarely settle physically in gold, they are physically deliverable contracts which are capable of being settled in real gold. believe it or not. However in 2018, for example, COMEX gold deliveries totalled just 1.6 million ounces (51 tonnes), meaning that 99.98% of COMEX gold futures did not result in physical delivery, a Ponzi scheme if ever there was one.

But since 0.02% of COMEX gold futures do physically settle, at least by some shuffling of  warrants between bullion banks, the CME has therefore approved the vaulting facilities operated by nine vault providers in and around New York City and Delaware, which it refers to as depositories or approved warehouses, which can store gold that can be used for contract settlement.

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

How Individuals Can Reset The Financial System

How Individuals Can Reset The Financial System

We have often heard the predictions that the currency system will be reset at some point when the bankers can no longer keep the current ponzi scheme going. The current scheme involves the ability of the bankers to convince the population that pieces of paper rolling off a machine or digits created on a computer screen are real wealth. The education system has been successful in that regard. 

Very few people actually understand what real wealth is or anything about economics. They have been led to believe that these things are too complicated for them to understand and it should be left to the experts. These same experts get richer as everyone else gets poorer. That is the way they have rigged the system. 

Resetting the system and taking these con artists out of the loop can be as easy as refusing to accept paper or electronic money and only accepting gold and silver for payments. This sounds crazy on the surface but it is not impossible to do and it must be done before they can transition completely into electronic payment systems. Once they transition into electronic payments they will be able to control everything you do and buy. 

If they do not want you to own guns or ammo they can simply ban all of these types of transactions. If they do not want you to buy gold or silver they can ban those transactions. If they do not want you to stockpile food they can limit how much you buy from week to week. With no way to buy outside of the electronic system, you will be totally under their control even more than you are now. 

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

U.S. SHALE OIL INDUSTRY: Not In The Business To Make Money, But To Take Money

U.S. SHALE OIL INDUSTRY: Not In The Business To Make Money, But To Take Money

The U.S. Shale Oil Industry has been a financial trainwreck since day one.  And, with nearly $300 billion in public and private debt racked up by the shale industry since its inception, that hasn’t stopped investors from throwing good money after bad to continue the biggest energy Ponzi scheme in history.

Unfortunately, the worst is still yet to come because the industry hasn’t provided the market with analysis on what happens to the shale oil companies and investors holding their debt when production finally peaks forever.  I don’t believe the market has any idea just how quickly and violently the U.S. Shale Oil Industry could implode.  Get ready for the Sun to Set on the U.S. Shale Oil Industry.

Veteran oil analyst, Art Berman, mentioned in his interview on Peak Prosperity that he believes the oil industry “IS DONE.”  He also explains why the U.S. Shale Industry is not in the business of making money, but rather, taking money.  I highly recommend “ALL,” my followers to listen to the interview below as it confirms the dire energy predicament we face:

In my last video update, DOW, GOLD & SILVER: Markets Disconnect In 2019, I explained the following image below which is a typical shale well completion layout and the tremendous amount of equipment needed to frac and produce shale oil and gas.  What we need to understand about shale industry is that it consumes so much more energy (capex, equipment & labor) to produce oil, there is less available net energy to provide real economic growth.  Furthermore, a larger segment of the economy is driven by the enormous amount of shale energy activity that when it falls back into a recession-depression, it will have a much more negative impact on the U.S. economy.

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

Heroes & Whores

HEROES & WHORES

“Certainly one of the most important things I learned is that numbers can be deceiving. There is a logic to mathematics, but there is also the underlying human element that must be considered. Numbers can’t lie, but the people who create those numbers can and do. As so many people have learned, forgetting to include human nature in an equation can be devastating.”Harry Markopolos, No One Would Listen

Image result for harry markopolos

The quote I used from Harry Markopolos’ No One Would Listen book about the Bernie Madoff ponzi scheme in my last article triggered a bittersweet recollection. For me, the experience captured the true nature of our warped financial markets, a culture  glorifying wealthy arrogant criminal assholes, while ignoring or ridiculing honest, hard working, highly intelligent truth tellers.

The picture of Markopolos above shows an average looking middle aged guy, with a five o’clock shadow, bad haircut, and wearing a modestly priced suit and tie. Since reading about his fruitless effort to expose Madoff’s Ponzi Scheme and his fifteen minutes of fame in 2009, I have felt an affinity towards him. We both have a brother and sister. We were both brought up in Catholic households and went to Catholic schools. We both have degrees in finance. We have both had financial careers. We are both married with three sons. And we both believe facts and an accurate assessment of the numbers always reveals the truth.

Through his job as a portfolio manager with a small investment firm Bernie Madoff’s investing record was brought to his attention. As a numbers guy, he immediately began assessing the returns.  Markopolos said he knew within five minutes Madoff’s numbers didn’t add up. It took him another four hours to mathematically prove that they could have only been obtained by fraud.

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

Stock markets look ever more like Ponzi schemes

Stock markets look ever more like Ponzi schemes

The FT has reported this morning that:

Debt at UK listed companies has soared to hit a record high of £390bn as companies have scrambled to maintain dividend payouts in response to shareholder demand despite weak profitability.

They added:

UK plc’s net debt has surpassed pre-crisis levels to reach £390.7bn in the 2017-18 financial year, according to analysis from Link Asset Services, which assessed balance sheet data from 440 UK listed companies.

So what, you might ask? Does it matter that companies are making sense of low-interest rates to raise money when I am saying that government could and should be doing the same thing?

Actually, yes it does. And that’s because of what the cash is being used for. Borrowing for investment makes sense. Borrowing to fund revenue investment (that is training, for example, which cannot go on the balance sheet but still adds value to the business) makes sense. But borrowing to pay a dividend when current profits and cash flow would not support it? No, that makes no sense at all.

Unless, of course, you are CEO on a large share price linked bonus package and your aim is to manipulate the market price of the company. It is that manipulation that is going on here, I suggest. These loans are being used to artificially inflate share prices.

The problem is systemic. In the US the problem is share buybacks, which I read recently have exceeded $5 trillion in the last decade, meaning that US companies are now by far the biggest buyers of their own shares. That is, once again, market manipulation.

And this manipulation does matter.

People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick.

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

U.S. Public Debt Surges By $175 Billion In One Day

U.S. Public Debt Surges By $175 Billion In One Day

After the U.S. Government passed the new budget and debt increase, with the President’s signature and blessing, happy days are here again.  Or are they?  As long as the U.S. Government can add debt, then the Global Financial and Economic Ponzi Scheme can continue a bit longer.  However, the days of adding one Dollar of debt to increase the GDP by two-three Dollars are gone forever.  Now, we are adding three-four Dollars of debt to create an additional Dollar in GDP.  This monetary hocus-pocus isn’t sustainable.

Well, it didn’t take long for the U.S. Government to increase the total debt once the debt ceiling limit was lifted.  As we can see in the table below from the treasurydirect.gov site, the U.S. public debt increased by a whopping $175 billion in just one day:

I gather it’s true that Americans like to do everything… BIG.  In the highlighted yellow part of the table, it shows that the total U.S. public debt outstanding increased from $20.49 trillion on Feb 8th to $20.69 trillion on Feb 9th.  Again, that was a cool $175 billion increase in one day.  Not bad.  If the U.S. Government took that $175 billion and purchased the average median home price of roughly $250,000, they could have purchased nearly three-quarter of a million homes.  Yes, in just one day.  The actual figure would be 700,000 homes.

Regardless, we are now off to the races when it comes to adding GOBS of DEBT to continue a Ponzi Scheme that would make Bernie Madoff jealous.

There is so much that I want to write about and put into videos, but there is only so much time in the day.

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

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