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Old 02-04-2019, 11:50 AM   #501
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You would think with all that buying, the gold price might have risen significantly in 2018...
didnt do bad in £sterling terms-

£ 950 - £1007 on the year and well up from the October low of £904
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Old 02-06-2019, 07:18 AM   #502
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So Venezuela's experiment with the supposedly oil backed "petro" is still nascent:
Quote :
...
Venezuela is notably one of the only nations to have launched a national cryptocurrency, and U.S. President Donald Trump ordered sanctions against the petro in March 2018, soon after it launched.

Nicolas Maduro, the nation’s president, has since made a number of efforts aimed to force the adoption of the oil-backed petro, both at home and abroad.

Back in December, Maduro said that the nation would move to sidestep the U.S. dollar and use petros for oil sales starting this year, soon after adding plans to appeal to OPEC for the token to become the “digital currency for oil.”

The country has also reportedly begun converting pension and salaries into petro from its fiat currency, the sovereign bolivar. Venezuela started selling petro to citizens last October via a government portal. Further, banks have been ordered to use the token, as have some businesses.
https://www.coindesk.com/venezuelas-...nder-new-rules

Now comes news that Iran is supposedly rolling out a gold backed crypto:
Quote :
Four banks in the Islamic Republic of Iran have developed a gold-backed cryptocurrency called PayMon, financial news website Financial Tribune reported on Jan. 30.

According to the article, the crypto asset has been developed in cooperation with the Parsian Bank, the Bank Pasargad, Bank Melli Iran and Bank Mellat. Iran Fara Bourse, an over-the-counter (OTC) cryptocurrency exchange, will reportedly list the new cryptocurrency.

The director of Kuknos, the blockchain company taking care of the technical aspects, said that the new crypto asset is a way to tokenize assets and excess properties of the banks. A billion PayMon tokens will be initially released, according to the article.

As Cointelegraph recently reported, Iran is allegedly negotiating with Switzerland, South Africa, France, the United Kingdom, Russia, Austria, Germany and Bosnia to carry out financial transactions in cryptocurrency.
...
https://cointelegraph.com/news/four-...cryptocurrency
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Old 02-07-2019, 07:24 AM   #503
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Today at 830am the Treasury Borrowing Advisory Committee (aka the TBAC ...) "released minutes of its Jan. 29 meeting held at the Hay-Adams Hotel in conjunction with the U.S. government’s quarterly refunding announcement.
...
... the most interesting part of the TBAC minutes was the discussion of the "unique challenges" faced by the Treasury over the medium term, especially the possibility of significant financing gap over next 10 years amounting to over $12 trillion and the potential need for more domestic investor participation if foreign reserve growth slows.

Specifically, the TBAC cautioned that the Treasury’s financing needs are expected to increase significantly even without factoring in recession possibilities over the next decade. Here, the TBAC warns that deficits to the tune of $1-$1.5trn a year, and cumulatively over $12trn, over the next decade, are coming and will have to be funded in the bond market. Meanwhile, as noted recently, the CBO stubbornly refuses to forecast a recession in the next decade, instead projecting a steady 1.5-2% real GDP growth over the next 10y. While the TBAC did not take a position on this laughable assumption, it warned that deficits typically rise 2-5% of GDP in recessions, which would translate to additional deficits of $0.5-1trn at current GDP levels, and warns that "these borrowing needs have to financed in the context of already high global dollar debt exposure."

But the bigger problem is that in the context of soaring deficit funding needs, the TBAC is worried that "foreign investors already hold significant dollar debt" which is why the US will have to increasingly rely on domestic savings to fund its future budget deficits.

The TBAC notes, tongue in cheek, that while the "USD is still the dominant reserve currency", reserve managers have been very gradually increasing allocation to other currencies, and that the USD share of FX reserves has steadily come down from 72% in 2000 to 62% now. It also pointed out that other countries with significant debt issuance needs (as a share of GDP) depend far more on domestic savings. As a result, "the Treasury should plan to meet financing needs more domestically than in the recent past."

Even more concerning, the TBAC notes, is that global FX reserves growth has stalled and global trade, as a share of world GDP, appears to have peaked, while underscoring what may be the most important transition in the global economy in decades, namely that China is now running a flat current account with the rest of the world, ...

As a result of these transformations, there has been an even lower official foreign demand for USTs, ...
...
While there are no definitive answer to the very concerning questions brought up by the TBAC, keep a close eye on future TBAC presentations and especially any future reference by this all-important committee made up of the most important banks and hedge funds in the US...

... which appears to be increasingly concerned not only about how the US will fund its exploding debt deficits but also about the reserve currency status of the US Dollar.
https://www.zerohedge.com/news/2019-...reserve-status
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Old 02-07-2019, 07:32 AM   #504
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...
Conclusion:
So, the Fed isn't buying and has in fact rolled off a massive quantity of mid duration US debt, foreigners aren't buying, banks aren't buying, insurers aren't buying, American's aren't buying savings bonds, state nor local governments are buying, and there is little to no spread to compensate any leveraged "investors" to buy mid to longer duration US debt. Yet the Treasury tells us that "other investors" (suddenly became hyper-interested just as QE ended) and have come up with over $3 trillion in cash since 2015 to buy low yielding US debt like never before?!? And this massive shift in buying into Treasury's has inexplicably had little to no negative impact on other asset classes (stocks, real estate, commodities)???


Is there any party (aside from central banks or central bank conduits) that could come up with such gargantuan quantities of dollars to yield so little and do it essentially without leverage??? Tell me again, who buys US Treasury's...and particularly who buys mid and longer duration US debt (responsible for setting the 30yr mortgage rate)??? Otherwise, this may sadly be the smoking gun of an active, accelerating, and perhaps unraveling Ponzi scheme?
More (details): https://econimica.blogspot.com/2019/...y-buys-us.html
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Old 02-12-2019, 07:39 AM   #505
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Looks like the concerns raised by the TBAC are getting serious attention:
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...
When Jerome Powell and the president sat down for dinner at the White House in early February one wonders what was on the agenda. Treasury Secretary Steven Mnuchin, who also attended the dinner along with Fed vice-chair Richard Clarida, joked that having the Fed chairman over to dinner was “somewhat of a covert operation … so it didn’t create speculation.” The Fed press statement that followed went to great lengths to assure Wall Street and the rest of the world that nothing of consequence happened. Individuals at this level of government, though, do not have hastily-called, high-profile meetings at the White House simply to socialize and attend to their friendship.

The rhinoceros in the room could very well have been how the federal government will go about financing the $12 trillion in debt Goldman’s Beth Hammack earlier brought to the Treasury Secretary’s attention and what role the Federal Reserve intends to play in the process. China and Japan, America’s two largest financiers by far, have withdrawn from the market and there is no certainty as to when they might return. That leaves domestic U.S. private investors and financial institutions to fill the yawning gap and, failing that, the Federal Reserve with a new round of quantitative easing.

How the $12 trillion debt bombshell is handled will carry very large implications for the stock and bond markets, the value of the dollar and consequently the price of gold. Some would say we are a long way from another round of quantitative easing, but we will remind our readers it was only a few months ago that we were assured of at least two additional rate hikes in 2019 and stepped-up quantitative tightening. Circumstances and response, as we have seen over the past few weeks, can change in a heartbeat. Ominously, San Francisco Federal Reserve president Mary Daly told reporters last week that the Fed is considering quantitative easing as a permanent option in the monetary toolkit and not, as Bloomberg put it, “just as a last-ditch measure to deploy in emergencies.” (Please see Balance Sheet Could Be in Regular Fed Toolkit/Bloomberg/2-8-2019)
...
http://www.usagold.com/cpmforum/nv1001-feb19/
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Old 02-12-2019, 09:22 AM   #506
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Gold did well in QE1 and QE2 but fell back hard during QE3

Why should I get excited about QE4 ?
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Old 02-13-2019, 07:16 AM   #507
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So, the NY Fed has a blog ...
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...
In sum, the period since the global financial crisis has not seen a widespread change in the international monetary architecture. While the dollar’s international status may have declined in some pockets, overall it remains dominant. Nevertheless, recent trends bear watching as history suggests that a currency’s dominant status is not immutable.
https://libertystreeteconomics.newyo...ngs-stand.html

It didn't use to be cool to talk about this issue in public.
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Old 02-13-2019, 07:23 AM   #508
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Venezuela hopes to create a trade bloc consisting of China, India and Russia to help the South American country settle oil payments in currencies other than the dollar, its oil minister said on Tuesday.
...
https://www.reuters.com/article/us-i...-idUSKCN1Q11GF

Is this significant? I suppose it depends upon how long Maduro and the new guy struggle for control of the country. If Maduro somehow maintains a grip on the country for the long term, then this could eventually develop into something (assuming that the country doesn't devolve into chaos and they keep producing/shipping oil). I just have the feeling that Maduro isn't going to last and the new guy will reverse course after the USA lifts sanctions.
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Old 02-13-2019, 10:16 AM   #509
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Originally Posted by rblong2us View Post:
would be ........... will be........... they hope others will join ........

stone cold reality ?
I happened upon this press release from the UK:

https://www.gov.uk/government/news/j...rade-with-iran

Seems like they (both Europe and Iran) still have a lot of work to do in actually building the INSTEX platform.
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Old 02-15-2019, 07:23 AM   #510
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I think this is an ominous sign. In the fallout of the 2007/2008 crisis, there was all kinds of talk amongst the Davos/G20 crowd about different ideas/plans for a NWO monetary system. That talk seems to have faded away as ZIRP (and, in some places, NIRP) seemed to stabilize the system.

Today, we have credit bubbles/stresses growing everywhere - zombie firms/junk bonds, consumer credit debt, headwinds for future treasury issuances, etc. The main global financial institutions (BIS, IMF, Fed, etc.) have all published warnings about the lack of powder to manage the next financial crisis. Still, we don't see chatter about any NWO monetary systems. Has the issue been decided? Or is the world too polarized now with all the nationalist political movements?

In any event, I woke today to find two items published by pillars of the financial establishment promoting gold to weather the next crisis. First, Rogoff wrote a piece for the World Gold Council. And the following was published in The Economist:
Quote :
...
Now imagine the world economy goes into a tailspin. There is panic selling of risky assets. Where should you seek safety? Cash is the most liquid asset; but which kind? The dollar is a natural focal point. Yet America’s fiscal indiscipline and its sizeable current-account deficit might give pause. Other currencies have their faults, too. There is one other destination you might consider, if only because others are starting to think the same way. And that is gold.
...
https://www.economist.com/finance-an...-case-for-gold

Maybe I missed something, but it really seems like they are getting the word out - the next crisis will be unmanaged, protect yourself with gold. It's going to be a bumpy ride.
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Old 02-19-2019, 07:18 AM   #511
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Damn, FT... That's harsh...

Quote :
While many investors are fretting over what stage of the business cycle we are in, the global monetary system is collapsing — with a whimper initially, but ultimately a bang. ...
...
... Central bankers have bought growth by sacrificing financial stability.
...
The other side of low growth in world foreign reserves is the low growth in the money supply of exchange-rate targeting regimes. These problems are particularly acute in China, with broad money growth at its lowest in the post-Mao era. The country’s debt-to-GDP ratio is rising at probably the fastest rate ever for a big economy in peacetime. This is the economy that we are told is de-gearing and reflating! It is not, and the burden of the economic adjustment enforced by the end of the growth in its foreign exchange reserves, and hence money supply, will probably be deflationary and will involve debt default. China will probably move to a flexible exchange rate, thus creating the freedom to grow and inflate away these debts. It is that exchange-rate adjustment that will destroy the current global monetary system.

The key consequence of this collapse will be the destruction of the euro. ...

In the financial, political and social maelstrom of a eurozone dissolution, investors should not expect property rights to be respected. The UK, where democracy and the rule of law will remain largely unchallenged, will become an attractive safe-haven investment for European investors facing increasingly authoritarian regimes and property sequestration on the mainland. Monetary collapses bring social and political ruptures and we now face two such collapses. It would be naive for any investor to assume that “government of the people, by the people, for the people” will survive such ruptures. The risks remain highest in Europe.
https://www.ft.com/content/271f4a2e-...4-d150b3105d21
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