China’s ICBC to set up offshore yuan center in Los Angeles

By Joseph Nordqvist

Los Angeles signed an agreement with China’s Industrial and Commercial Bank (ICBC) to create an offshore yuan center in California as a means of boosting cross-border yuan trade.

According to a statement by the ICBC, creating an offshore RMB center in the largest state of the US would help begin structuring a better yuan trade with China.

Many other countries have already set up offshore yuan trading hubs and the US is a little late to the show.

However, according to a Chinese bank executive, the reason behind this is that the US dollar is currently the world’s dominant currency and many American firms are reluctant to accept the yuan.

China wants its currency to be used by international investors and eventually make it into a global reserve currency.

Approximately 15 percent of Chinese trade was settled in yuan in the first nine months of 2014, a significant increase from only 1 percent in 2009.

ICB data indicates that in the first nine months of this year cross-border payments between the United States and China was over over 160 billion yuan.

The ICBC’s cross-border business was worth nearly 28 trillion yuan in the first nine months of 2014 – an 80 percent increase from the same period in 2013.

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Hyperinflationary Depression may be in the U.S. Future

The following is an article I wrote for one of my previous web sites it still applies today and with continued dedollarization I think it could begin in the near future.

Things to look for - it is beginning today!

Timeline and event sequence is approximate, one should not make make exact predictions regarding a dynamic macro economy like the U.S.. "It will go something like this"

Let's skip the Orwellian Newspeak of QE and stick to the Oldspeak – printing money - 600 Billion of it. QE1, the first round of money printing was a bond buying blitz of about 2 Trillion over 2 years. QE2 is about one-third the size, delivered in one-third the time. They will also reinvest the principal of maturing bonds they own into new government debt increasing QE2 by as much as another $300 billion. The Fed will own more US Treasuries than China.(868 Billion) We are buying our own debt with money printed out of thin air. So, they have continued to print the hell out of money at the same pace and an additional 300 bill for good measure. On top of that, this year, the Fed will buy $40 billion of investment banks toxic mortgages every month. The Fed has shown now, through past history, they will print as much money as necessary to avoid a deflationary depression. The final debasement of the dollar has begun and hyperinflation is the United States future.

 The prices of nearly all agricultural commodities have been moving up. In the past, cotton prices are up 54%, corn prices are up 29%, soybean prices are up 22%, orange juice prices are up 17%, and sugar prices are up 51% "you get the point, there is a lot more". The year over year price of pork is up 60%. This may be the year consumers notice that consumer commodity prices are moving up or the size of the packing is decreasing while maintaining the same price. These higher commodity prices will continue reaching the marketplace, monthly CPI will be at an annualized rate of at least 5%. ( Real CPI, not the fudged ones the FED uses as not to raise interest rates or raise Social Security payments as index to inflation.  " I have not figured that one out yet, the old folks have had their interest on their savings accounts stolen by the FED for years to recapitalize banks. Moreover  increased Soc Sec payments have been squirmed out of with false inflation numbers, and accordingly, the sheepish baby boomers say nothing". Food prices will continue to move up and other higher commodity prices will begin to reach the market place. Meanwhile consumers pay checks will remain stagnant due to large corporate, government and small business cuts to maintain profitability from increased commodity prices, budget constraints and government regulations, such as Obama Care and EPA restraints.

The Obama administration, the Fed, and the majority Keynesian economics pundits will be singing the praises, "our consumption economy is back, people are spending again, the economy is moving in the right direction, look!, the market is at an all time high!". That won't be the case, forced consumption spending through inflation, money printing and conversely, voluntary exchange are much different as are high U.S. stock market prices and the value of the U.S. dollar. Zimbabwe had the best performing Stock Exchange in the world, but the worst paper currency. Really," The Fed’s unending quantitative easing (money printing) has acted like a stimulant drug on the market. The Fed buys $40 billion of the investment banks toxic mortgages every month and some of that money has found it’s way into the stock market. Without the Fed the market would still be thousands of points lower". (Lou Scatigna The Financial Physician) Soon, the American people will begin to catch on. Real Annualized CPI could be pushing 10%. But, the so-called quantitative easing will have pushed the value of the dollar much lower. Perhaps the race to the bottom currency war, could devolve into a trade war. With the commodity prices already rising sharply, a trade war would force import prices up also.

Remember, at the end of the year we still probably have a weak economy (1st Qtr GDP -2.9%) and still have emergency .25% interest rates that don't seem to be sparking growth & investment for the past couple of years. Assuming this is correct, this will deter the Fed from raising rates if need be. There will also be a U.S. fiscal deficit that is close to 10% of GDP annually, which is probably unsustainable—especially considering that the total U.S. debt, including off budget items, is well over 100% of Gross Domestic Product . QE (money printing) plus debt & deficits is already making the markets nervous. Wait till you see what happens when the average American get nervous about the U.S. Economy and the U.S. Dollar.

The Austrian Economists have predicted, the U.S. dollar should have already hyperinflated, meanwhile the financial media have laughed at them. What the Austrians, who are correct, have missed or what they fail to mention is the fact that the United States exports a large portion of their dollars as a result of the petrodollar system set up by Henry Kissinger in the early seventy's when they closed the gold convertibility window. Basically, the dollar went from being backed by gold to being backed by an increasing demand for world energy priced in U.S. Dollars An ever increasing demand for energy dollars allows the U.S. to continue printing for an extended period of time before hyperinflation sets in.

After President Nixon closed the international gold window in 1971, leaving the dollar a fully fiat currency or hyperinflatable, Henry Kissinger went to the middle east and made deals to protect oil producing countries as long as they price their oil in dollars. The worlds largest oil producers price their oil in dollars creating an ever increasing demand for the U.S. Dollar. This increasing demand for the dollar allows the U.S. to export part of their inflation and slow the inevitable onslaught of hyperinflation while they continue to print. Economist Jerry Robinson (FTMDaily.com) refers to this as the Petro/Dollar System. I would refer to it as a Psuedo World Reserve currency that will eventually bite you in the ass. This is why middle eastern foreign policy is so important to the United States and why they pushed Iraq out of Kuwait in the first gulf war. Additionally, Dictator Saddam Hussein of Iraq, another large oil producing nation, began selling oil priced in Euros instead of dollars, we all know what happened to him. Needless to say, Iraq now prices oil in dollars. One would guess, both U.S. - Iraq wars were to maintain the free flow of oil at market prices, with an additional benefit of the later one being to finish the sentence, one should say, "maintain the free flow of oil at market prices and priced in U.S. dollars".

Moreover, as of right now Iran is trading oil in a basket of currencies and  the U.S. has pissed off Russia and China so bad they have certain deals to trade oil and natural gas in their own currencies. This can lead to a decrease in demand for energy dollars and in turn they come flooding back to the U.S. in the form of a currency crisis. The FED is scared to death of any deflation. They must inflate the debt away. In my opinion, without the corresponding Geopolitical and foreign policy of the U.S. to maintain the petrodollar system it will lead to hyperinflation and eventually a deflationary depression. Conversely, other economist's consider the fact that interest rates will eventually be forced up by the markets and the U.S. will no longer be able to afford the interest payments on the national debt and deficits. This is also a possibility.

However, the U.S. will face a crisis or at least a semi crisis in the next 5 days to 5 years. No country or empire in the history of the world has managed to get out of this type of fiscal condition without one. Semi crisis may be an event like the great depression and crisis could be a hyperinflation currency collapse followed by a deflationary depression.    

Sources

Gonzalo Lira - http://gonzalolira.blogspot.com

Jerry Robison - http://ftmdaily.com/

Lou Scatigna - http://thefinancialphysician.com/2013/03/stock-market-hits-record-high-as-the-economy-struggles/

Mike Maloney: The Dollar As We Know It Will Be Gone Within 6 Years

Peak Prosperity

The coming seismic monetary shift

by Adam Taggart

This week’s podcast sees the return of Mike Maloney, monetary historian and founder of precious metals broker GoldSilver.com.
Based on historical patterns and the alarming state of our current monetary system, Mike believes the fiat US dollar is in its last years as a viable currency. He sees its replacement as inevitable in the near term — as in by or before the end of the decade:

All of this is converging with the crazy experiments the Federal Reserve has done.
I absolutely believe that there are economic consequences to this that are inescapable. The Fed is not just in a box; a trap has been set. And before the end of this decade, if there is still a US Dollar around it will not be this US Dollar. It will be a dollar that is tied to a very different monetary system.
The last three shifts in our monetary system were little baby steps off of the classical gold standard where it was fully backed. We went down to a 40% reserve ratio with the Federal Reserve in the United States during the Gold Exchange Standard. Then the Bretton Woods system didn’t have a reserve ratio specified, but I believe the dollar was about 8% backed by gold by the time Nixon took us off of gold in ’71. Now, the only backing that the US Dollar has is the promise to tax us all in the future: it is US Treasury bonds, or the Fed doing its quantitative easing and buying mortgage-backed securities.
And how corrupt is the notion that you can give some entity the power to have a check book that has a $0 balance and they can go out and buy anything they want with that and it just creates currency? That is corrupt in itself.
Think about how immoral this is. First of all, the Fed whipped up that currency not out of thin air but by indebting the public. They buy a Treasury bond or a mortgage-backed security, and now they own the mortgage on your house or they own a Treasury bond that you are going to work for in the future and pay taxes to pay off. And so they give all of this currency to the banks, and then they pay them interest to not loan it out or otherwise stimulate the economy. So they are giving them the gift of interest.
By the way, any profits that the Fed has at the end of the year are supposed to get turned over to the Treasury. Well, they are paying the banks interest that reduces the amount that they give to the Treasury by exactly that amount. So in other words, the public is paying those banks interest. That’s where all of the interest comes from. We’re not seeing those profits passed on to the Treasury anymore.
Anyway, I do think that this system is coming to an end before the decade is out. The other shifts in our monetary system were baby steps off of gold. Now we have to go from nothing most likely back to something. And it’s going to be a financial, economic convulsion the likes of which the world has never seen. It is going to affect everybody on the planet. During the last three monetary shifts, it was only the world’s central banks and big international banks that were affected and were worried. The common man didn’t even know what was going on. With this one, everybody is going to feel it. Everybody is going to know it. You will either be a winner or a loser, but everybody is playing this game.

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Follow the link to the interview on Peak Prosperity 

HHS Report: Percentage of Americans on Welfare Hits Recorded High

(CNSNews.com) – According to the 2014 version of a report that the Department of Health and Human Services is required by law to issue annually, the percentage of Americans on welfare in 2011 was the highest yet calculated. The data for 2011 is the most recent in the report.

HHS has calculated the percentage of all persons in the United States who live in families that receive “welfare” going back to fiscal 1993. It has not calculated a percentage for years prior to that.

As defined in the report (“Welfare Indicators and Risk Factors”), a welfare recipient is any person living in a family where someone received benefits from any of just three programs—Temporary Assistance to Needy Families (formerly Aid to Families With Dependent Children), Supplemental Security Income, and the Supplemental Nutrition Assistance Program (or food stamps).

By this measure, according to the report, 23.1 percent of Americans were recipients of welfare in 2011. Since 1993, the earliest year covered by the report, that is the highest percentage of Americans reported to be receiving welfare.

A startling 38 percent of all children 5 and under in the United States were welfare recipients in 2011, according to the report.

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Boom: U.S. Seen as Biggest Oil Producer After Overtaking Saudi Arabia

I was expecting this soon, the below article from Bloomberg suggests that the U.S. is now the worlds largest energy producer. From one who lives in Texas you can tell from the activity south in the Eagle Ford area and now more activity every day in the West Texas Cline shale play area.

Bloomberg.com
By Grant Smith 

The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery, Bank of America Corp. said.

U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report today. The country became the world’s largest natural gas producer in 2010. The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids.

“The U.S. increase in supply is a very meaningful chunk of oil,” Francisco Blanch, the bank’s head of commodities research, said by phone from New York. “The shale boom is playing a key role in the U.S. recovery. If the U.S. didn’t have this energy supply, prices at the pump would be completely unaffordable.”


Oil extraction is soaring at shale formations in Texas and North Dakota as companies split rocks using high-pressure liquid, a process known as hydraulic fracturing, or fracking. The surge in supply combined with restrictions on exporting crude is curbing the price of West Texas Intermediate, America’s oil benchmark. The U.S., the world’s largest oil consumer, still imported an average of 7.5 million barrels a day of crude in April, according to the Department of Energy’s statistical arm.

Big Time Investment

“There’s a very strong linkage between oil production growth, economic growth and wage growth across a range of U.S. states,” Blanch said. Annual investment in oil and gas in the country is at a record $200 billion, reaching 20 percent of the country’s total private fixed-structure spending for the first time, he said.

A U.S. Commerce Department decision to allow the overseas shipment of processed ultra-light oil called condensate has fanned speculation the nation may ease its four-decade ban on most crude exports. Pioneer Natural Resources Co. and Enterprise Products Partners LP will be allowed to export condensate, provided it is first subject to preliminary distillation, the companies said June 25.

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Bad to worse: US economy shrank more than expected in Q1

The economy is probably in recession now, if one would take in to account what the true inflation rate is, this is a serious decline , perhaps 5-^ percent? - Gary

The U.S. economy contracted at a much steeper pace than previously estimated in the first quarter, but there are indications that growth has since rebounded strongly.

The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy’s worst performance in five years, instead of the 1.0 percent pace it had reported last month.

While the economy’s woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government’s first estimate was published in April, which had the economy expanding at a 0.1 percent rate.

The difference between the second and third estimates was the largest on records going back to 1976, the Commerce Department said. Economists had expected growth to be revised to show it contracting at a 1.7 percent rate. Sharp revisions to GDP numbers are not unusual as the government does not have complete data when it makes its initial and preliminary estimates.

The latest revisions reflect a weaker pace of healthcare spending than previously assumed, which caused a downgrading of the consumer spending estimate. Trade was also a bigger drag on the economy than previously thought. The economy grew at a 2.6 percent pace in the final three months of 2013. With the first quarter in the rear view and the April-June period looking stronger, investors are likely to ignore the report.

Consumer Metric Institute:And lastly, for this report the BEA assumed annualized net aggregate inflation of 1.27%. During the first quarter (i.e., from January through March) the growth rate of the seasonally adjusted CPI-U index published by the Bureau of Labor Statistics (BLS) was over a half percent higher at a 1.80% (annualized) rate, and the price index reported by the Billion Prices Project (BPP -- which arguably reflected the real experiences of American households while recording sharply increasing consumer prices during the first quarter) was over two and a half percent higher at 3.91%. Under reported inflation will result in overly optimistic growth data, and if the BEA's numbers were corrected for inflation using the BLS CPI-U the economy would be reported to be contracting at a -3.51% annualized rate. If we were to use the BPP data to adjust for inflation, the first quarter's contraction rate would have been an horrific -5.62%. 

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Is the Fed distorting everything? The Mises View

Employment Update:Texas Leads the Way

Bloomberg News
Published: 20 June 2014 09:47 AM

Texas still leads the nation in producing jobs. Texas employers added 56,400 jobs in May, the most in the nation, figures from the Labor Department showed today.

Payrolls climbed in 36 U.S. states in May and the unemployment rate fell in 20, showing the labor market continued to strengthen across the nation.

Texas led all gainers followed by Pennsylvania with 24,700 more jobs,  the Labor Department reported.

A total of 383,100 jobs were added in Texas in the past 12 months, making it the largest such job increase in the state in nearly 17 years, the Texas Workforce Commission reported.

The state's seasonally adjusted unemployment rate dropped to 5.1 percent in May, down from 5.2 percent in April.

Lowest Unemployment


Midland, Texas, had the lowest unemployment rate at 2.3 percent, while Yuma, Arizona, had the largest year-over-year unemployment rate decrease in April, with joblessness falling 3 percentage points. 

Highest Unemployment

The Yuma area also had the highest unemployment rate in April at 23.8 percent.

Total US debt soars to nearly $60 trn, foreshadows new recession

America – its government, businesses, and people – are nearly $60 trillion in debt, according to the latest economic data from the St. Louis Federal Reserve. And private debt – not government borrowing – is the biggest reason for the huge deficit.

Total US debt at the end of the first quarter of 2014, on March 31 totaled almost $59.4 trillion – up nearly $500 billion from the end of the fourth quarter of 2013, according to the data. Total debt (the combination of government, business, mortgage, and consumer debt) was $2.2 trillion 40 years ago.

“In 50 short years, debt has gone from being a luxury for a few to a convenience for many to an addiction for most to a disease for all,” James Butler wrote in an Independent Voters Network (IVN)op-ed. “It is a virus that has spread to every aspect of our economy, from a consumer using a credit card to buy a $0.75 candy bar in a vending machine to a government borrowing $17 trillion to keep the lights on.”


According to a 2012 study published in the Economist, rapid growth in private debt is a better predictor of recessions than increases in public debt, growth in money supply, or trade imbalances. Consumer credit in the US rose by 22 percent over the last three years, reaching a record-high $3.18 trillion in April, the Fed reported on Friday.

Credit card use (or revolving credit) rose by $8.8 billion, while non-revolving credit like auto loans and student loans made by the government surged up by $18 billion in April. Non-revolving credit jumped by 8.2 percent over the last year, while revolving credit only rose 2.2 percent over the same time period.

“For a while after the recession it was trendy to cut up your credit cards and get out of debt,” Michael Snyder wrote in an InfoWars op-ed. “But that fad wore off rather quickly, didn't it?”

Snyder noted that 56 percent of all Americans have a subprime credit rating, and that the average monthly car payment in the US is $474. He added that 52 percent of homeowners are overextended on their mortgages and “cannot even afford the house that they are living in right now.”

Debt is hurting young adults the most. Millennials say they are spending at least half their monthly paychecks on paying off debt, a recent Wells Fargo survey found. And two years out of college, half of all graduates are still relying on their parents or other family members for some sort of financial help, according to a University of Arizona study, which also found that only 49 percent of graduates are working full-time.

“Whether or not a weak labor market is increasing the need for intergenerational support — a likely driver in today’s economy — our data clearly showed that many young adults today may not be earning enough to make it on their own, even when working full time,” the report stated.

Most of the debt that young adults face is student loan debt, which totals more than $1.2 trillion, according to the Federal Reserve. Of that debt, approximately $124 billion is more than 90 days delinquent.

“What we have done to our young people is shameful. We have encouraged them to sign up for a lifetime of debt slavery before they even understand what life is all about,” Snyder wrote.

More…

Putin Advisor Proposes "Anti-Dollar Alliance" To Halt US Aggression Abroad

Zerohedge.com

It has been a while since both Ukraine, and the ongoing Russian response to western sanctions (which set off the great Eurasian axis in motion, pushing China and Russia close together, and accelerating the "Holy Grail" gas deal between the two countries) have made headlines. It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine's Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades.

However, "out of sight" may be just what Russia's political elite wants. In fact, as VoR's  Valentin Mândr??escu reports, while the great US spin and distraction machine is focused elsewhere, Russia is already preparing for the next steps. Which brings us to Putin advisor Sergey Glazyev, the same person who in early March was the first to suggest Russia dump US bonds and abandon the dollar in retaliation to US sanctions, a strategy which worked because even as the Kremlin has retained control over Crimea, western sanctions have magically halted (and not only that, but as the Russian central bank just reported, the country's 2014 current account surplus may be as high as $35 billion, up from $33 billion in 2013, and a far cry from some fabricated "$200+ billion" in Russian capital outflows which Mario Draghi was warning about recently). Glazyev was also the person instrumental in pushing the Kremlin to approach China and force the nat gas deal with Beijing which took place not necessarily at the most beneficial terms for Russia.
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For third straight month, China cuts US debt holdings

Jack Freifelder in New York (China Daily USA)

China cut its holdings of United States government debt in April for the third straight month, which may reflect a continuing move from US assets, according to an analyst.

China, the largest foreign holder of US Treasuries, held $1.26 trillion in US debt as of April, down $8.9 billion from the previous month and below the $1.27 trillion mark for the first time since August 2013, the US Treasury Department said Monday in a monthly report. China’s holdings hit a high of $1.317 triillion in November.

Kent Troutman, a research analyst at the Washington-based Peterson Institute for International Economics (PIIE), said the decreases each month could be due to benign shifts in the portfolio.

"April is the first month where there is a larger decrease, but it is still small. What is worth noting, however, is that, even if China’s holdings of US Treasuries are flat, its share of overall foreign exchange reserves is declining," Troutman wrote Monday in an email to China Daily.

"What we’ve seen in the past four months, if we accept that the data accurately reflects China’s true holdings of US assets, is the continuation of a shift that began in 2010 of diversifying their portfolio away from US assets," he said.

Japan remained the second-largest US creditor in April, increasing its debt securities by $9.5 billion to $1.21 trillion.

Foreign demand for US assets strengthened as net foreign purchases of long-term securities totaled $24.2 billion in April, compared to purchases of $4 billion in March, the data showed.


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Silver & Gold - Hidden Secrets Of Money Ep 1 - Currency vs Money - Mike Maloney

Excellent series of videos form Mike Maloney

5 part series 

No Fiat Currency in the history of the world has ever survived!

Do you think the U.S. Dollar will be the first?

19 Ways You’re Wasting Money At The Grocery Store

Are you still spending too much money at the grocery store even with coupons and reading tips on how to save money while shopping?

Maybe that’s because some of your own shopping habits are making you buy more and spend more.

Take a look at our list of bad grocery shopping habits, and get rid of them once and for all!

1. Not checking what’s left in your pantry and fridge. Before you head to the grocery store, do a quick inventory of what’s left in your kitchen. Maybe that half-gallon of milk will last you through the week and you don’t need to buy another gallon after all. Not checking what’s left in your kitchen can make you buy more things than you actually need.

2. Not making a grocery list. Having a grocery list can help you shop faster and, of course, get everything you need. Forgetting to buy something is not only annoying and wastes time, but it also wastes money. When is the last time you went to the store to pick up that one thing you forgot to buy and ended up with a few extra things in your basket?

3. Avoiding crowds and shopping earlier in the week. Shopping on weekends or during busy hours can be really hectic — we get it. But not only do you buy more when you’re leisurely strolling through the aisles, but also retailers put out more coupons and deals during the latter half of the week when they know there will be more customers.

4. Bringing your kids to the store. While grocery shopping might seem like a fun family activity, it’s not helping you save any money. Kids will inevitably beg you for that candy bar or sugary cereal, and you’ll eventually give in.

5. Going to the store hungry. We've all made this mistake. Going to the grocery store hungry is a surefire way to buy things you don’t really need. Try not to shop with your nose, and avoid the freshly baked section if possible.

More…

James Rickards-Financial Collapse and Massive Shortages in Gold Coming

Financial Collapse and Massive Shortages in Gold Coming 

By Greg Hunter’s USAWatchdog.com

Financial expert and best-selling author James Rickards’ latest book predicts “the coming collapse of the international monetary system.”  One of the sign posts is countries like Russia declaring it will shed the U.S. Dollar as reserve currency in international trade.  Rickards explains, “Putin said he envisions a Eurasian economic zone involving Eastern Europe, central Asia and Russia.  The Russian Ruble is nowhere near ready to be a global reserve currency, but it could be a regional reserve currency.”

Rickards’ latest best-selling book, “The Death of Money,” was released in April.  Even Rickards is surprised at how fast the economic situation is unfolding.  Richards says, “If you ask me what has happened since you finished writing the book that comes as a surprise, I would say a lot of the things I talk about in my book are happening faster than I would have expected.  Things that I thought would happen in the 2015 or 2016 time frame seems to be happening now in some ways.  If anything, the tempo of events is faster than expected.  Therefore, some of these catastrophic outcomes may come sooner than I wrote about.”

Rickards goes on to say, “Right now, we are on the precipice now.  When you are on the precipice, it doesn’t mean you fall off immediately, but you are going to fall off because you can see the forces in play.  What I tell clients and investors is it’s not as if we are going to make some mistakes and some bad things are going to happen.  The mistakes have already been made.  The instability is already in the system.  We’re just waiting for that catalyst that I call the snowflake that starts the avalanche.   You don’t worry about the snowflakes; you worry about the snow and that it’s unstable and it’s just waiting to collapse.  That’s what the system is right now; we are just waiting for a catalyst.  People ask me all the time, what could it be?  Technically, my answer is it doesn’t matter because it will be something.  It could be a failure to deliver physical gold.  It could be an MF Global financial failure.  It could be a natural disaster.  It could be a lot of things.  The thing investors need to understand is the catalyst doesn’t matter.  It’s coming because the instability is already there.”

On gold manipulation and when it will end, Rickards says, “It will end when the physical shortage gets to the point that someone fails to deliver; which, at that point, there will be a buying panic.  There could be a buying panic or what some people call a demand shock.  One of the things I said about gold manipulation is if I was the manipulator, I would be embarrassed at this point.  The manipulation is obvious.  The evidence is coming in from all directions. . . . The manipulation is clear.  When will it end?  It will end when there is a physical shortage that pops up somewhere, or it will end with a short squeeze.”
James Rickards, author of the best-selling new book called “The Death of Money.”

rest of story - USAWatchdog >>>

The great deceiver: The Federal Reserve

Dr. Paul Craig Roberts

Is the Fed “tapering?” Did the Fed really cut its bond purchases during the three month period November 2013 through January 2014? Apparently not if foreign holders of Treasuries are unloading them.

From November 2013 through January 2014 Belgium with a GDP of $480 billion purchased $141.2 billion of US Treasury bonds. Somehow Belgium came up with enough money to allocate during a 3-month period 29 percent of its annual GDP to the purchase of US Treasury bonds.

Certainly Belgium did not have a budget surplus of $141.2 billion. Was Belgium running a trade surplus during a 3-month period equal to 29 percent of Belgium GDP?

No, Belgium’s trade and current accounts are in deficit.

Did Belgium’s central bank print $141.2 billion worth of euros in order to make the purchase?

No, Belgium is a member of the euro system, and its central bank cannot increase the money supply.

So where did the $141.2 billion come from?

There is only one source. The money came from the US Federal Reserve, and the purchase was laundered through Belgium in order to hide the fact that actual Federal Reserve bond purchases during November 2013 through January 2014 were $112 billion per month.

In other words, during those 3 months there was a sharp rise in bond purchases by the Fed. The Fed’s actual bond purchases for those three months are $27 billion per month above the original $85 billion monthly purchase and $47 billion above the official $65 billion monthly purchase at that time. (In March 2014, official QE was tapered to $55 billion per month and to $45 billion for May.)

Why did the Federal Reserve have to purchase so many bonds above the announced amounts and why did the Fed have to launder and hide the purchase?

Some country or countries, unknown at this time, for reasons we do not know dumped $104 billion in Treasuries in one week.

Another curious aspect of the sale and purchase laundered through Belgium is that the sale was not executed and cleared via the Fed’s own National Book-Entry System (NBES), which was designed to facilitate the sale and ownership transfer of securities for Fed custodial customers. Instead, the foreign owner(s) of the Treasuries removed them from the Federal Reserve’s custodial holdings and sold them through the Euroclear securities clearing system, which is based in Brussels, Belgium.

We do not know why or who. We know that there was a withdrawal, a sale, a drop in the Federal Reserve’s “Securities held in Custody for Foreign Official and International Accounts,” an inexplicable rise in Belgium’s holdings, and then the bonds reappear in the Federal Reserve’s custodial accounts.

What are the reasons for this deception by the Federal Reserve?

The Fed realized that its policy of Quantitative Easing initiated in order to support the balance sheets of “banks too big to fail” and to lower the Treasury’s borrowing cost was putting pressure on the US dollar’s value. Tapering was a way of reassuring holders of dollars and dollar-denominated financial instruments that the Fed was going to reduce and eventually end the printing of new dollars with which to support financial markets. The image of foreign governments bailing out of Treasuries could unsettle the markets that the Fed was attempting to sooth by tapering.

A hundred billion dollar sale of US Treasuries is a big sale. If the seller was a big holder of Treasuries, the sale could signal the bond market that a big holder might be selling Treasuries in large chunks. The Fed would want to keep the fact and identity of such a seller secret in order to avoid a stampede out of Treasuries.

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Non-Farm Employment Nonsense: Down The Rabbit Hole

The US economy is a house of cards. Every aspect of it is fraudulent, and the illusion of recovery is created with fraudulent statistics.   – Dr. Paul Craig Roberts

While mainstream America will be greeted with news about the huge number of new jobs “created” in April, the truth is that the number of people employed in this country declined in April – by a significant amount.

I’m not going to go through the brain damage of dissecting the numbers other than report the fact that the Labor Force declined by 806,000. Most of that number is likely people who fell off the cliff of long-term jobless benefits. The labor force participation rate is now below 63%. The last time it was this low was March 1978.  This graph shows the “Civilian Labor Force Participation Rate,” which is the number of people employed plus the number of people considered “unemployed” as a percentage of the size of “working age” population.

In addition to nearly  one million people “disappearing” from the labor force, the Government’s nefariously fraudulent “birth/death” model plugged 234,000 jobs into its statistical model.

Given the natural monthly growth of the population in this country, and given that over a million workers either disappeared down the rabbit hole or were fabricated by the Government statisticians,  it is likely that April in actuality experienced a big decline in jobs.  But the Government would never admit to that.

At least we can see from the reaction to the number in the markets that the stock market and the gold/silver market do not believe the report. More >>>

Payrolls in U.S. Rise by Most Since 2012, Unemployment at 6.3%

Here is your first example of messaging the statistics,  the "Participation Rate" which means nearly 900,000 people dropped out of the work force, that will negate any gain. the second example is the GDP numbers below in next story excerpt.

By Michelle Jamrisko May 2, 2014 5:30 AM MT

Employers boosted payrolls in April by the most in two years and the jobless rate plunged to 6.3 percent as companies grew confident the U.S. economy is emerging from a first-quarter slowdown.

The 288,000 gain in employment was the biggest since January 2012 and followed a revised 203,000 increase the prior month that was stronger than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 218,000 advance. Unemployment dropped from 6.7 percent to the lowest level since September 2008 as fewer people entered the labor force. Wages and hours worked were stagnant.

Households spent more freely as the first quarter drew to a close and manufacturing accelerated, helping explain why companies such as Ford Motor Co. (F) are taking on more workers. The figures corroborate theFederal Reserve’s view that the expansion is perking up after stagnating last quarter.

“The job market is starting to click on all cylinders — the engine is not running very fast, but all cylinders are moving,” Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, said before the report. His firm is the second-best forecaster of payroll growth for the past two years, according to data compiled by Bloomberg. For the Fed, it “fits right within their wheelhouse, and wouldn’t alter in any way what they’re likely to do.”

Forecasts for April payrolls ranged from increases of 155,000 to 292,000, according to the Bloomberg survey of 94 economists. Last year, the U.S. added more than 194,000 jobs each month, compared with about 186,000 in 2012. Economists surveyed by Bloomberg on April 4-9 project payroll gains to match 2013.

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U.S. Economy Starts Year With a Whimper

 I would imagine, the economy might have contracted in the 1st quarter but the government would not release a negative number which could easily be massaged up without any flack from the major media.

GDP Growth Stalls as Frigid Weather, Weak Exports Curtail Activity

Wall Street Journal

U.S. growth nearly stalled in the first three months of the year, fresh evidence that the economic expansion that began almost five years ago remains the weakest in modern history.

Gross domestic product, the broadest measure of goods and services produced across the economy, grew at a seasonally adjusted annual rate of 0.1% in the first quarter, the Commerce Department said Wednesday. It marked the second-worst quarterly performance since the recession ended in mid-2009.

The weak GDP reading came as Federal Reserve officials voted to continue withdrawing their support for the economy based on the expectation—shared by many private economists—that growth would rebound, as it already started doing as the weather improved. “Economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions,” the central bank said in its policy statement Wednesday.

Harsh weather likely slowed first-quarter business investment and discretionary consumer spending. It could have even blocked exports—which notched their sharpest decline since the recovery began—from reaching ports.  More >>>

America’s Mysterious Third Largest Treasury Holder Ramps Higher

The “Shocking” Buying Spree Of America’s Mysterious Third Largest Treasury Holder Ramps Higher

I can not believe this. No way the small country of Belgium is buying all these Treasury Bonds. This may be worth researching for FED involvement. 

From: ZeroHedge
When we reported last month that in a shocking twist, “Belgium” holdings of Treasurys had soared by a massive amount in the past three months, making the tiny country the third largest holder of US paper, our Belgian readers took offsense alleging it is impossible that Belgium itself could be buying all this paper, explaining it was all Euroclear. Well, yes: we know and noted that, which is why those same readers probably should have actually read the part in the post which said: “our question is: just who is Belgium being used as a front for?
Recall that for years, the “UK” line item on TIC data was simply offshore accounts transaction on behalf of China. Of course, since China hasn’t added any net US paper holdings in the past year, the UK, and China, are both irrelevant in the grand scheme of things. ”
So yes, to clarify for our trigger-happy Belgian (non) readers: it is quite clear that Belgium itself is not the buyer. What is not clear is who the mysterious buyer using Belgium as a front is. Because that same “buyer”, who to further explain is not China, just bought another whopping $31 billion in Treasurys in February, bringing the “Belgian” total to a record $341.2 billion, cementing “it”, or rather whoever the mysterious name behind the Euroclear buying rampage is, as the third largest holder of US Treasurys, well above the hedge fund buying community, also known as Caribbean Banking Centers, which held $300 billion in March.
In summary: someone, unclear who, operating through Belgium and most likely the Euroclear service (possible but unconfirmed), has added a record $141 billion in Treasurys since December, or the month in which Bernanke announced the start of the Taper, bringing the host’s total to an unprecedented $341 billion!

Also of note: Chinese holdings of US Paper dropped by $2.7 billion to $1273 billion, offset by Japan’s $9 billlion increase in holdings to $1210 billion, as the convergence between the two countries resumes.
One thing that is certain: the mystery buyer is not Russia, which in February, or just as the Ukraine conflict was starting, sold another $6 billion, bringing the Russian total to $126 billion, the lowest since 2011, and the biggest annual drop, -24%, in holdings in history.

Banksters settling with regulators.

Banksters ripping off the public, settling with regulators for nothing.......and nobody goes to jail again.

Bank to pay $800 mln for credit card practices
NEW YORK (MarketWatch) – Bank of America Corp. BAC +0.12% has reached a settlement agreement for $800 million over its credit card practices with U.S. regulators, reports The Wall Street Journal. The bank is expected to settle with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency over allegations it pushed customers to sign-up for extra credit-card products. The settlement is expected to be announced on Wednesday and marks the five settlement over credit card practices with a major bank. Last year, the CFPB settled on similar allegations with American Express Co.

Beef prices hit all-time high in U.S.

Beef prices hit all-time high in U.S.

Extreme weather has thinned the nation’s cattle herds, roiling the beef supply chain from rancher to restaurant.
LA Times
Come grilling season, expect your sirloin steak to come with a hearty side of sticker shock.

Beef prices have reached all-time highs in the U.S. and aren’t expected to come down any time soon.
Extreme weather has thinned the nation’s beef cattle herds to levels last seen in 1951, when there were about half as many mouths to feed in America.
“We’ve seen strong prices before but nothing this extreme,” said Dennis Smith, a commodities broker for Archer Financial Services in Chicago. ”This is really new territory.”
The retail value of “all-fresh” USDA choice-grade beef jumped to a record $5.28 a pound in February, up from $4.91 the same time a year ago. The same grade of beef cost $3.97 as recently as 2008.
The swelling prices are roiling the beef supply chain from rancher to restaurant.
Norm Langer managed to go two years without raising prices at his famed Westlake delicatessen.
But last week, he reluctantly began printing new menus showing a 50-cent increase for sandwiches at his 67-year-old restaurant.
Langer accepts it’s one of the perils of business when your bread and butter happens to be corned beef and pastrami. But he fears he may have to raise prices again, driving away customers.
“No beef, no delicatessen. That’s the bottom line,” Langer said after a typically frenetic lunch service. “Jewish delis aren’t vegetarian, they’re based on corned beef and pastrami. Things are beyond my control. With the price increase, I hope my customers are tolerant.”
Langer said beef prices are the main reason his wholesale food costs have risen 45% in the last two years — much of it passed from his longtime supplier, R.C. Provision Inc.
The half-century-old Burbank company prepares corned beef, pastrami, roast beef and chili for L.A. icons such as Canter’s Deli, Pink’s Hot Dogs and Original Tommy’s Hamburgers. All the restaurants have to do is heat it up or slice it to their liking.
It’s been an increasingly difficult endeavor, with slaughterhouses driving up their prices for brisket and navel, an extra fatty portion of the belly crucial for making unctuous pastrami.

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