The sudden dramatic collapse in the price of oil appears to be an act of geopolitical warfare against Russia. The result could be trillions of dollars in oil derivative losses; and the FDIC could be liable, following repeal of key portions of the Dodd-Frank Act last weekend. Senator Elizabeth Warren charged Citigroup last week with “holding government funding hostage to ram through its government bailout provision.” At issue was a section in the omnibus budget bill repealing the Lincoln Amendment to the Dodd-Frank Act, which protected depositor funds by requiring the largest banks to push out a portion of their derivatives business into non-FDIC-insured subsidiaries. Warren and Representative Maxine Waters came close to killing the spending bill because of this provision. But the tide turned, according to Waters, when not only Jamie Dimon, CEO of JPMorgan Chase, but President Obama himself lobbied lawmakers to vote for the bill.
Today, as the wrecking ball of debt tears down the future of our economy, a faint cry from the growing pile of rubble emerged. It comes as no surprise the statement made by the Fed today indicates zero urgency to raise interest rates. I hate to say it but in my last report, “Where’s the Can?,” I showed why the Fed has no interest in raising interest rates.
Referred to in today’s statement was inflation. It, presumably, remains well below the Fed’s target rate of 2%. Today’s low oil prices were described as having a transitory lowering effect on inflation. Funny! When gas is $4 a gallon how they exclude food and energy costs from normal inflation calculations. Then BOOM! The minute oil goes down they say inflation is in check because of low energy costs. Please will someone make up my mind? ...
Gold prices will recover next year as demand in China and India improves, according to Australia & New Zealand Banking Group Ltd., which forecast an advance for bullion even as the Federal Reserve raises interest rates. The precious metal will climb to $1,280 an ounce by the end of 2015, rising each quarter, strategists Victor Thianpiriya and Mark Pervan wrote in an e-mailed report dated Dec. 17. The forecast for end-2016 is $1,420, according to the report.
By Pam Martens Wall Street on Parade, New York Tuesday, December 16, 2014
Citigroup is the Wall Street mega-bank that forced the repeal of the Glass-Steagall Act in 1999; blew itself up as a result of the repeal in 2008; was propped back up with the largest taxpayer bailout in the history of the world even though it was insolvent and didn't qualify for a bailout; has now written its own legislation to deregulate itself; got the president of the United States to lobby for its passage; and received an up vote from both houses of Congress in less than a week.
And there is one more thing you should know at the outset about Citigroup: It didn't just have a hand in bringing the country to its knees in 2008; it was a key participant in the 1929 collapse under the moniker National City Bank. Both the U.S. Senate's investigation of the collapse of the financial system in 1929 and the Financial Crisis Inquiry Commission that investigated the 2008 collapse cited this bank as a key culprit. ...
The 8th largest economy on the entire planet is in a state of turmoil right now. The shocking collapse of the price of oil has hit a lot of countries really hard, but very few nations are as dependent on energy production as Russia is. Sales of oil and natural gas account for approximately two-thirds of all Russian exports and approximately 50 percent of all government revenue. So it should be no surprise that the fact that the price of oil has declined by almost 50 percent since June is absolutely catastrophic for the Russian economy. And when you throw in international sanctions, wild money printing by the Central Bank of Russia and unprecedented capital flight, you get the ingredients for an almost perfect storm. But those of us living in the western world should not be too smug about what is happening in Russia, because the nightmare that is unfolding over there is just a preview of the economic chaos that will soon envelop the whole world.
Will we ever tire of navigating the multiple layers of intermediaries between the customer and the provider, while corporate profits soar to unprecedented heights?
If we had to summarize what's wrong with Corporate America and the entire U.S. economy, we can start with all the intermediaries between the provider and the customer. There are a number of examples we're all familiar with.
One is healthcare, where a veritable phalanx of intermediaries filters the interactions between doctors and patients so heavily that the traditional practice of medicine has been nullified.
By traditional I mean the arrangement that was conventional a few short decades ago: you went to the doctor of your choice (typically, the same doctor your family used), he/she treated you, and you paid the doctor's bill in cash. Only hospitalization was covered by the minimal (and minimally limiting) healthcare insurance plans of the time.
The Silver Institute: Glistening Particles of Industrial Silver (Redacted)
Read The Silver Institute's Industrial Demand Report before you decide if owning silver is right for you. Click for instant access to the report.
Demand for silver for industrial purposes is increasing and the long term outlook for Silver’s use is exciting. The Silver Institute in conjunction with CRU Consulting released a report in early December announcing that industrial applications for silver will increase demand by 27% (142 million ounces) by 2018.
CRU Consultants stated, "Looking ahead, we are bullish on the industrial applications of silver, which will support the total silver demand in the long run. As technologies develop, a variety of new applications are emerging that have the potential for mass consumption, bringing with them prospects for augmenting industrial silver demand. CRU Consulting forecasts that the industrial applications of silver (excluding photography) will increase from 535 Moz in 2013 to 677 Moz in 2018 with the electrical and electronics sector contributing ....
Economist Harry Dent says falling oil prices will be a trigger for another economic calamity. Dent explains, “Normally, oil prices falling in a good economy like the 80’s and 90’s, where we have falling inflation and booming productivity and good demographic trends, this would be a good thing. It is a good thing for consumers and businesses, but it is a bad thing for financial markets and our whole debt structure. We have the greatest debt bubble in history. It’s the greatest asset bubble in history, including stocks, commodities, real estate and everything. The last time this bubble burst was in 2008 because of the subprime crises. A small tranche of loans went bad, and it triggered a whole debt crisis . . . that’s what I see. I see a fracking bubble here. What’s happened is because of demographic trends, which we predicted years ago, trends in developed countries are set to slow. It will be aging baby boomers spending less money, very simple to see. In addition to that, you get this fracking revolution with all the low cost money from the Fed stimulus and zero interest rates, and what you have now is we created two million extra barrels of oil a day just out of Texas and North Dakota.”
Something strange is going on in China. On one hand, as the chart below shows, China's trade surplus is growing and growing, and just hit record highs. In other words, China is - on paper - receiving record amounts of foreign currencies in exchange for its (mostly) goods exports.
That much is clear in the Chinese (record) trade balance chart below:
Yet on the other hand, a chart from Deutsche Bank shows something very peculiar: even as China's foreign reserves should be rising, they are not only dropping, but just suffered their biggest quarterly drop in the past decade! ...
Click through for the full read and all the charts. It definitely bears some thought.
Indian gold importers are offering a discount of $2 an ounce versus London prices for the first time in almost five months due to market oversupply. Indian dealers offer gold discount for first time in 5 months
The temptation is to create money out of thin air to solve the other problems: just create money (or borrow it into existence) to pay for old-age social security, youth unemployment, higher energy costs, and every other problem facing the status quo.
But this “solution” generates its own problem. Even more damaging, issuing money and credit doesn’t actually solve any of the other structural problems; it simply papers them over, allowing them to fester behind the façade of freshly printed money and debt.
The Anglo-American banking cartel is effectively setting the key prices for the world, in a sometimes arbitrary, almost capricious manner, according the intent of its policies and the private profits of its Banks.
And woe to the country that fails to use the United States Dollar for whatever they may choose to buy or sell under the two great empires, of the sea and of the earth. For those with eyes and ears open, let them see and hear.
But empires rise, and rage for their time upon the stage, and fall.
The situation in the Russian financial market over the next few days can be compared to the worst period of 2008 crisis, says the Deputy Chairman of Russian Central Bank Sergey Shevtsov.
"There are plenty of issues. In the coming days, I believe, the situation will be comparable to the most difficult period of 2008, but I think that the experience of the many crises the Russian financial system has gone through will help us make the right decisions," said Shvetsov.
Hmm. Do you suppose there is a contagion at work? Or worse, a full out currency war?
That our Congress is intent on taking from the many to enrich the few was on full display during passage of the new $1.1 trillion federal spending bill, as five provisions show.
In a Washington run by and for oligarchs, official theft happens suddenly and without warning. No public hearings. No public debate. Instead, as we saw in North Carolina and Wisconsin, it occurs with just abrupt moves to shift power and money from the many to the richest few.
And with little focus by our best news organizations on the consequences for people’s lives, especially if they are in the 90 percent, many people have no idea they just got officially mugged.
The continuing resolution to fund the government was combined with an omnibus spending bill to create a 1,603-page statutory monster called the “cromnibus.” Among the provisions that show how both political parties help corporations pick the pockets of the vast majority, while far too many mainstream journalists help obfuscate the awful truth:
Click through for the rest. Hat tip to @JessesCafe.
A "phenomenal" rise in India's gold imports is a concern and the government will watch the impact from a recent easing in gold import rules. 'Phenomenal' rise in India's gold imports a concern - trade secy
On December 11, 2014, the US House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses. The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorganChase, stepped into the ring. Perhaps what prompted his intervention was the unanticipated $40 drop in the price of oil. As financial blogger Michael Snyder points out, that drop could trigger a derivatives payout that could bankrupt the biggest banks. And if the G20’s new “bail-in” rules are formalized, depositors and pensioners could be on the hook. The new bail-in rules were discussed in my last post here. They are edicts of the Financial Stability Board (FSB), an unelected body of central bankers and finance ministers headquartered in the Bank for International Settlements in Basel, Switzerland. Where did the FSB get these sweeping powers, and is its mandate legally enforceable?
“Here is the key quote for the move to close down the gold business: ‘Gunvor executives decided to abandon the precious metals trading business partly because of difficulties in finding steady supplies of gold where the origin could be well documented.’
It is of course hard to identify gold’s origin when central banks are surreptitiously involved in the gold market, and when central planners work hard at keeping their activity secret.
Click through for the rest. Pretty interesting. Sort of thing that makes one scratch his head when looking at market prices.
Demand of gold and jewel in China will continue to rise in the coming 5 years, with the growth expected between 12-15%, said Kent Wong, Managing Director of Chow Tai Fook, in an interview in India. Newssummary: China Gold and Jewel Demand to Grow 15% in Coming 5 Years: Chow Tai Fook Jewellery