With the hullaballoo from the recent Chinese devaluation, the rupture in the foreign exchange markets has shown signs of a panic.
*Updated 8/14 2pm EST
The financial sparring between East and West may have taken a very serious turn yesterday and I seriously believe a tactical nuke was set off.
IF this is the case, China will provide proof and they WILL retaliate.
Have the smoldering stages of what was a financial/technological/trade war now become hot with the first shot fired?
Golden Jackass Jim Willie joins Finance & Liberty for an in-depth update on China’s Financial War on the US, discussing:
– The Federal Reserve is using Belgium, Luxembourg, Ireland, the Cayman Islands, and Switzerland to export over $1 trillion of QE per quarter
– U.S. Treasury Bond market volume is dangerously low. What lies ahead for US Treasury Bonds?
– China has taken control of the International Monetary Fund
– The Eastern banking system will not accumulate U.S. Treasury Bonds anymore. Instead, they will convert U.S. Treasury Bonds into Gold bullion. Will the entire world follow suit?
– In what way will Silver play a role in the new monetary system?
The First of This MUST LISTEN 2 Part Interview is below:
The world has truly gone mad…
The “Devaluation Currency Wars” are in High Gear.
Well, this Currency War has Many Consequences, many as yet unseen, some unintended. And they spell Profit for the Prepared and Disaster for the Unprepared, which is why Deepcaster has already begun recommending positioning to prepare.
But this War is a Zero Sum Game. So how does it end?
Russia and surprisingly the Netherlands were the largest central bank buyers in December – accumulating a significant 30.34 tonnes between them as currency wars intensify.
The Netherlands, which has the ninth-biggest gold reserves, raised its bullion holdings for the first time in 17 years. It added 9.61 tonnes to bring total gold reserves to 622.08 tonnes.
Russia raised its gold reserves for a ninth straight month in December as the country continued its multi-month gold buying spree, adding to the fifth-biggest gold holdings in the world, data from the IMF showed yesterday.
Russia continues to dollar cost average into gold and increased its bullion holdings by another hefty 20.73 tonnes to 1,208.23 tonnes in December.
*Update: The Dutch Central Bank has quickly denied that the Netherlands have increased gold reserves for the first time in 17 years- is the cat out of the bag that quietly a global Central Bank gold run has begun?
The newest shot was just fired in the ongoing currency war. Yes, Mr. Draghi, feeling left out of all the “QE games” for years, has finally acquired his “monetary bazooka” license!
Riddle me this though: when given the chance to finally show the world what the ECB is truly made of in this currency war…..why, in Heaven’s name…. Did he fire a blank?!
Besides, who is this QE really intended to benefit?
Lastly, we take a look at two smaller European countries, who’ve made very different decisions in regards to the Euro currency, yet both of whom are in for a world of hurt.
In this MUST LISTEN interview, Hat Trick Letter Editor Jim Willie discusses the coming COMPLETE COLLAPSE of the US economy, & whether the Federal Reserve intends to buy up assets for pennies on the dollar in the aftermath of the collapse.
Willie also discusses’ China’s recent acquisition of JPM’s HQ at 1 Chase Manhattan Plaza, along with the world’s largest gold vault.
Did China make a move to secure physical gold assets in default by the banksters from a 4,000 ton gold lease?
Willie states that the Chinese have become the majority controlling interest in the Federal Reserve as well as major US cities such as San Francisco and NYC, and that China is currently overseeing the controlled demolition of the US Dollar!
Willie’s full SHOCKING interview claiming the Chinese now hold a controlling interest in the Federal Reserve is below:
Russia, Kazakhstan, Kyrgyzstan and Tajikistan Buy Gold – Bye Bye Petrodollar!
Russia continues to aggressively accumulate gold reserves. Its gold holdings increased again in June as the crisis in the Ukraine and relations with the West deteriorated.
The Russian central bank officially increased its gold holdings by 16.8 tonnes to 1,094.8 tonnes in June, the IMF’s International Financial Statistics report showed. In ounce terms, Russia increased its gold holdings by some 500,000 ounces, to 35.197 million ounces in June from 34.656 million ounces in May.
So far in 2014, Russia has now bought substantially more than their entire annual gold production of nearly 1,500,000 ounces.
Russia was not the only central bank to diversify foreign exchange reserves, primarily held in dollars, into gold. Allies of Russia also bought gold in June. The central banks of Kazakhstan, Kyrgyzstan and Tajikistan, all Russian economic and military allies all accumulated gold in June.
Currency wars are set to intensify and the buying by the former Soviet states is another manifestation of this.
Jim Rickards is dead wrong is in his assessment that the regulators are “asleep at the switch.” The regulators are not asleep at the switch. The manipulation is being done on BEHALF of the U.S. Government to support and defend the reserves status of the dollar. Without the reserve status of the U.S. dollar, the U.S. Government is nothing more than just of a bigger version of the many countries who have nukes but no real geopolitical power.
If the Government were to allow gold to trade freely, the price would quickly adjust to a much higher price level. It would happen in a way which shock and awe the world and completely erode away any “confidence” in the U.S. dollar as a currency. The regulators know this, the Fed knows this, and China knows this.
This is why China is accumulating more gold than is being produced by gold mines globally.
The Currency War, Stage 2, is already Manifest in another Way. Consider that the Economic/Financial Crises of the early 1930s were characterized by Bank Runs. We are already seeing such runs this year in Crimea, Ukraine and Rural China.
Defaults in China have left Depositors understandably nervous. Deepcaster’s Forecast: there will be more Bank Runs and they will spread, eventually to the Eurozone and U.S.A. Physical Gold and Silver and Tangible Assets such as Energy and Agricultural Products will be the Investors’ Salvation.
Intensifying Currency Wars provide Opportunities and Threats for those who Track their Dynamic Effects on Key Markets.
The West is not just confronting Russia, but potentially China and the other Shanghai Cooperative Organization members as well. Russia’s relationship with the SCO brings with it the possibility of using gold as a weapon against the West, because most governments involved with the SCO have been actively buying gold while western central banks have been providing it.
So far the SCO members have been content to accumulate the west’s gold on falling prices, being careful not to disrupt the market.
We cannot say the Ukrainian crisis is over. It is more than likely Putin will not be fully satisfied until there is a Russian-friendly government in Kiev. And if a senior Russian politician cares to have another conversation with China over maximizing turmoil on Wall Street, driving up the gold price is the obvious financial weapon of choice.
Russia and NATO are playing a game of financial chicken over Ukraine, which is deeply concerning.
Russia appears to have calculated that the West would not dare to precipitate a financial and trade war with the largest exporter of energy on the planet. However, it appears that the West is ignoring economic risks: Russia is not to be permitted to invade a sovereign territory next to the EU’s border, so it’s political principals before money. To make the situation considerably more serious, China has weighed in on Russia’s side, as she was bound to do as co-founder with Russia of the Shanghai Cooperation Organisation.
The point is not lost on those interested in gold: it amounts to a financial war between long-time bulls in Eurasia, and long-time bears in the West.
All the golden cards are held by China and Russia while we Westerners have none.
As the US & EU prepare to level economic sanctions on Russia over the Ukrainian crisis (& Russia threatens to retaliate with economic sanctions of its own against the dollar and freezing all US assets) a bank run appears to have begun in Crimea as citizens lined up Thursday to withdraw funds from Ukraine’s largest bank, Oshad.
The biggest factor driving gold prices at the moment is the increasing tension between the West and Russia over Ukraine. The EU agreed on a framework yesterday for its first sanctions on Russia since the Cold War.
This is a much stronger response to the Ukraine crisis than many expected and a mark of solidarity with Washington. Senior American military officials have been making hawkish sounds and warned that they are ready for a military response to Russia.
Russian government officials and businessmen are bracing for sanctions resembling those applied to Iran according to Bloomberg. Should Russian foreign exchange reserves and bank assets be frozen as is being suggested, then Russia would likely respond by wholesale dumping of their dollar reserves and bonds.
In retaliation, Russia could opt to only accept gold bullion for payment for their gas, oil and other commodity exports. This would likely lead to a sharp fall in the dollar and a surge in gold prices.
Currency wars could soon take the turn for the worst that many of us have warned of for some years.
“When the dollar collapse comes, it will happen in two ways: gradually then suddenly. That formula, famously used by Hemingway to describe how one goes bankrupt, is an apt description of critical state dynamics in complex systems. The gradual part is a snowflake disturbing a small patch of snow, while the sudden part is the avalanche. The snowflake is random yet the avalanche is inevitable. Both ideas are easy to grasp. What is difficult to grasp is the critical state of the system in which the random event occurs.”
Jim Rickards, Currency Wars
Major Fiat Currency Printers around the World are devaluing their currencies by “printing” ostensibly in order to bolster their economies.
But the consequences of The U.S. Fed’s QE for example, have been increasingly to artificially inflate financial Assets and enrich The Fed’s Mega-Bank Owners. It has not resulted in an improving U.S. Economy or Employment Picture.
But the Fed’s QE and related forms of Money Printing have unleashed Serious and Impending Financial and Economic Threats.
Is there a risk of losing control of the dollar and the gold price? Can the US continue to be this strong over longer periods of time? There is a risk here, these things trend in cycles. It’s worth to note the dollar’s potential risk, and such risk might be exposed and may even explode. There might be a possibility of a reshuffling of the international monetary system. Gold right now is priced in dollars, but more importantly is what the price of gold will do to the meaning of the dollar.
Chinese economic development and the gold market’s development have to follow China’s own theory. This is the most basic reason for us to dominate the market, to take root in the market.”
China represents the East, as its insatiable demand for buying physical gold continues unabated, while in the West, the elite’s central banks have pretty much depleted their
In the war for gold, both are still winning, but for vastly different reasons.
Maturing and Nascent Trends and New Developments should increase Social and Economic Turmoil and Greatly Increase Volatility in the Markets in 2014. Result: Mega Moves in Key Markets, the Most Salient of which we outline here.
These Mega Moves will create Great Opportunities for Profit for the Nimble and well-informed, and Great Losses for the Purblind or those in Denial of Economic and Financial Realities.
A Currency Devaluation War is quietly underway and it will end very badly for the Economy and the Markets.
A Major Consequence is that as the $US (and other Major Fiat Currencies) Tanks, we expect it will be reflected Mainly in appreciation of the Price of Tangible Assets e.g. Crude Oil (we are already seeing this) and Gold and Silver.