July 19, 2019
Here’s How Gold Moved This Week:
Gold now sits at $1,425 US/oz. from kitco.com
The debt problem that brought the meltdown and bailouts of 2008 hasn’t gone away.
The banks are bigger now, but they see the problem and are protecting themselves. The ones with power are using whatever they can to borrow and expand the system as far as they can, while taking the hardest, most liquid assets for themselves. For example, JP Morgan has an enormous amount of silver, and the banks are holding large reserves of currency to save themselves in the next crisis.
But it’s not all roses for the banks.
Clients, mostly hedge funds, are pulling $1 billion a day out of Deutsche Bank because of the soaring risk, fearing another Lehman Brothers like indefinite freeze of their funds. There’s no equity value there anymore – the bank has $45 trillion euros in derivatives. And the derivatives in the system are what’s making the global system unsustainable. It can’t be paid. There isn’t enough currency in the world to pay it and keep the system going.
So Deutsche Bank is getting out of the risk and the derivatives game, and shifting it to France’s BNP Paribas. So they want to play the game, but they’re trying to keep the confidence by changing the team name on the shirt. They’re shifting the risk to an up-and-coming bank that the players can “believe in” for another run up to extend the debt game.
Funny thing, Deutsche Bank said this week that if there’s a currency war then gold wins.
Cash is leaving the European banking system. A German bank is trying to save itself and transfer the clients and tech to a French bank, but it’s a mess there. That’s why the U.S. stock market is still roaring. The rest of the world is a mess and the U.S. is the safest of the unsafe places to play the game.
So the U.S. stock market will keep rising, for now, as Martin Armstrong talks about with Greg Hunter at USA Watchdog.
The big money, the hedge funds, are trying to get ahead of what Jim Rickards calls “Ice Nine” in his bestselling book The Road to Ruin.
The system has too much debt and risk. It’s due for a reset and rewriting of the rules of global finance. The trigger might be a war, natural disaster, or some other geopolitical reason. The musical chairs music will stop and everyone will scramble for cash before the big defaults and bankruptcies bring the party to a painful end.
At that time the elite will freeze the system, says Rickards. First, money market funds, then bank accounts, then stock exchanges, and maybe ATMs will be reprogrammed to let you have only $300 per day. Your money is frozen while they rewrite the rules to save themselves and keep the Central Bank system going.
I talk about this in the song “Not Much of a Holiday”.
The big money is now quietly buying gold and other hard assets.
Central banks are buying physical gold, getting ready for new rules and an uncertain time.
Stan Druckenmiller recently got out of the stocks and into US bonds, and gave gold a shout out, because he believes the US economy will deteriorate.
Martin Armstrong says the global cash will keep flowing into the US, because it’s the best of the horrible options, until the US can’t take it and then crashes, flipping from deflation to inflation in 2020 – 2021.
Ray Dalio said this week that gold will be the top investment in an upcoming shift for global markets.
He’s saying the same thing we’ve been saying: a closed system extends out as far as it can then reverves and contracts. The Rod and the Ring.
As I’m writing, a UK-flagged oil tanker has turned suddenly into Iranian waters, and it appears a second has also been diverted.
Yesterday, the US took out an Iranian drone after it came too close and ignored calls to stop threatening the safety of the ship and crew.
The sanctions against Iran for racing towards nuke capabilities is working. The Iranians are stressed economically and need to enflame the situation in order to try to get relief by pressure, instead of stopping their enrichment.
It’s a way of delaying, and a way of making a problem bigger so the opponent does what you want to save face and avoid a war. It’s a dangerous game, and all sides know.
There’s still trade sabre rattling and a shift back and forth from being close to a deal to being a long way off. That’s part of the bargaining process.
Meanwhile, the U.S. is collecting tariffs on imports. Contrary to some thoughts, the increased cost has mostly been carried by the Chinese suppliers and manufacturers. Both nations want to make a deal, and the delay benefits the US, as companies move out of China and back to the US, or to other nations to manufacture to avoid the extra cost and uncertainty.
Facebook is planning to launch its own digital currency called Libra. We’re looking at the further move from the mechanical age to the electric age. Books, movies, music, news and now money. It’s a coming force where we have private versus public dominance.
Facebook reps answered questions from the U.S. government this week. Libra would not be decentralized so it’s not really a cryptocurrency, but it is digital, it would act as a bank, and it would immediately be enormous and threaten the system.
The US government is strongly telling Facebook and their crew that the U.S. won’t let anything threaten the US financial system. Facebook will have to prove that it looks after privacy (ahem) and that Libra can’t be used by bad actors to do illegal acts. It’s funny to see the government worried that Libra is fiat…”backed by nothing”. Like…..the US dollar and all currencies.
Actually, to be honest, the global financial system is backed by a gun. Force. You must use the government currencies to pay taxes and to do international trade. If you don’t then you come against the full force of the government and military. That’s the definition of fiat…let it be so because I declare it. I talk about it in the song Bitcoin Barbarians:
Ruled and run by a dollar and a gun,
The world is spun by some media fun,
The Ponzi game in Caesar’s name is virtually done,
There’s a new race…
Loss of confidence in the system is what will force a change. Remember, the Federal Reserve Chair, Jay Powell, said last week that two or three reserve currencies working together for global trade is just fine.
And so the bargaining has begun.
World Without an Anchor
words and music | Elaine Diane Taylor
©2019 Elaine Art & Media
Single available on iTunes.
In a world without an anchor
you’re subject to the sea
Right before a tempest
Left screaming at the breeze
Walls of rage and water will test what you have learned,
That in a world without an anchor coins are tossed and boats will burn.
There’ll be ships that lie deep (in) state beyond (the) reach
Who will wear a yellow vest?
Who will wash up on the beach?
from “World Without an Anchor”
Not Much of a Holiday
words and music Elaine Diane Taylor
© 2015 Intelligentsia Media, Inc. All rights reserved.
Single available on iTunes
Bank holidays and long lines at ATMs to get enough for the day. Debt deals behind closed doors. The media telling us what to believe. China building islands in the South China Sea and claiming all the international waves. Markets close and rockets crash. Silken road, treasure, files hacked. Oil, fusion cold. News and nations all sold. More dealing to come. More standing in line for those who owe. Who owes? There’s a long line of nations in debt and this is far from done.
Preparing for the Fall live boutique album available on iTunes — featuring Wag the Dog, Black Swan Dive, American Pie and Gods of the Copybook Headings.
Coins and Crowns
words and music Elaine Diane Taylor
© Intelligentsia Media Inc. All rights reserved.
from the album Coins and Crowns available on iTunes
The costs go up and the jobs go down. Hunger goes up and hope goes down. Then anger goes up and it all goes down.