Deutsche Bank, HSBC Accused of Silver Fix Manipulation

By Patricia Hurtado Jul 25, 2014

Deutsche Bank AG (DBK), HSBC Holdings Plc (HSBA) and Bank of Nova Scotia were accused in a lawsuit of rigging the price of billions of dollars in silver, an allegation similar to earlier suits involving the London gold fix.

The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.

“The extreme level of secrecy creates an environment that is ripe for manipulation,” according to the complaint. “Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits.”

The lawsuit is the latest to be brought against banks alleging manipulation of a benchmark. Suits have been filed against Deutsche Bank and Bank of Nova Scotia, HSBC and other banks in federal court in New York over allegations involving the London gold fix

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When you see this happen, you’ll know it’s game over for the dollar.

Bill Holter says the new BRICS Bank is just another nail in the Dollar's coffin. It's half as big as the IMF and it gives countries the ability to escape the dollar and the jurisdiction of the US and the DOJ. The world has had enough of the US, witnessed by Germany's recent expulsion of the CIA station chief. It's all beginning to rapidly unravel. Be prepared! Podcast >>>

Probably one of the the best news letters I have come across is Simon Black's SovereignMan, I love the way he relates all the coming economic events to past history. This has all happened before in a previous time and place.

by Simon Black
www.sovereignman.com

July 15, 2014
Malaga, Spain

Exactly 70 years ago to the day, hundreds of delegates from 44 nations were busy at work in Bretton Woods, New Hampshire creating a brand new financial system.

World War II had just ended. Europe was in ruin.

And since the US was simultaneously the largest economy in the world, the primary victor in the war, and the only major power with its productive capacity intact, it was easy to dictate terms: the dollar would dominate the new system.

Every nation would hold dollars as the primary reserve currency, and the dollar would be redeemable for gold at $35/ounce.

Also, global commerce would be conducted and settled in dollars, and these settlements would clear through the US banking system.

Naturally this created substantial demand from foreign governments who needed to begin accumulating dollars for trade and reserves.

So through a variety of programs, from the Marshall Plan to the IMF and World Bank, the US began flooding the world with dollars.

Initially everything went according to plan.

But soon the US government realized something important– foreign demand for the dollar was so strong that they could get away with printing more dollars than they had gold.

This allowed them to run all sorts of deficits and spending initiatives– more war, more welfare, more waste… all with minimal accountability.

Initially the consequences were insignificant.

Sure, the price of gold in London was a few dollars higher than in the US (they called this the ‘gold window’).

But demand for the dollar was still strong. So why bother changing?

By 1971, the situation had gotten far worse. Another decade of war, excessive spending, trade deficits, and money printing had pushed many foreign nations to their breaking points.

Foreign nations’ dollar reserves far exceeded the US government’s gold holdings. And with confidence waning, many began redeeming their dollars for gold.

Only days later, Richard Nixon put a stop to this and unilaterally terminated the US dollar’s convertibility to gold.

Think about the magnitude of this decision: Nixon was effectively defaulting on US obligations to the rest of the world– a complete betrayal of their trust.

Yet despite this massive shock that reset the global financial system, the dollar somehow managed to remain the world’s #1 reserve currency.

You’d think they would have been grateful, thanking their lucky stars that the rest of the world gave them a second chance. But no.

Over the past 43 years, the US has continued to print, devalue, and mismanage the dollar.

Along the way, they’ve created epic bubbles and financial shocks.

They’ve run up the biggest deficits and debt levels ever seen in the history of the world.

They’ve bickered internally to the point of shutting down government.

They’ve passed arrogant, painful regulations and commanded the rest of the world to comply under threats tantamount to financial homicide.

They’ve unleashed their tax and securities authorities to terrorize anyone doing business with the US.

They’ve totally ignored foreign pleas to restructure the IMF and World Bank.

They’ve slammed foreign banks with record fines simply for doing business with nations that the US doesn’t like.

They’ve waged pointless wars. They’ve spied on their allies. They’ve meddled in other nations’ affairs.

And they’ve demonstrated absolutely no willingness or ability to improve.

Simply put, other nations are done. Fed up, really. And it’s not just words.

Consider that in a matter of months, the US will be overtaken by China as the world’s largest economy.

Not to mention, the total combined GDPs of China, India, Russia, and Brazil are roughly the same as the US and EU combined.

Just as the US was the biggest player back in 1944, China is the biggest player today. So it seems clear that the renminbi will become a critical component of a new financial system.

The renminbi already has experienced rapid growth as a dollar alternative for trade; in May, cross-border settlement surged 52% from the year prior.

Renminbi settlement banks are being set up from London to Canada, and the central banks of both France and Luxembourg have signed agreements for renminbi clearing.

There have already been numerous Western companies (like McDonalds) that have issued renminbi-denominated bonds.

And even the provincial government of British Columbia issued a renminbi bond earlier this year. It was a whopping five times oversubscribed.

I’d expect within the next 2-3 years we’ll start seeing trade settlement in renminbi, even when none of the parties are in China.

Today, for example, a transaction between a Paraguayan merchant and a company in Angola will likely settle in US dollars.

Soon, I think we’ll start seeing that transaction done in renminbi. And once that happens, you’ll know it’s game over for the dollar.

Shortly after, national governments in western countries will issue renminbi bonds (perhaps Greece or Portugal will be first). And eventually, even the US government itself.

Today, 70 years after Bretton Woods, leaders from China, Russia, India, Brazil, South Africa, and several other nations are hard at work in Fortaleza, Brazil creating a new development bank that will compete against the US-controlled World Bank.

This is a major step in an obvious trend towards a new financial system. Every shred of objective data is SCREAMING for this to happen.


It’s a different world. Everyone realizes it except for the US government, which is still living in the past where they’re #1 and get to call all the shots.

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Group’s political influence is growing

China Daily Web Editor: Wang Fan

The Fortaleza summit of the BRICS leaders is a milestone. For the first time, the meeting of the group’s five members is not merely a business forum but is branded with strong political elements.  [Special coverage]

Global politics – including unrest in Iraq and Ukraine – are part of the summit discussions.

The political aspects are reflected in the Fortaleza Declaration issued by the leaders on Tuesday.

The proportion of the agenda that is devoted to political elements greatly outweighs that of previous years. For the first time the discussions include political coordination. The first part of the leaders’ private dialogue dealt with global governance and regional crises. The second part deals with economic and financial cooperation.

Observers said the inclusion of the political agenda would give developing nations an increasingly united voice, and thus more clout on major global issues.

To that end, the sixth BRICS summit has embarked on a course that positions the group for a bigger role in both the political and economic spheres of the world, and to compete with Western countries for an equal voice.

The BRICS nations account for 29.6 percent of the world’s territory, and more than 42 percent of its population. Last year, the members’ combined GDP was 21 percent of the world’s total. Despite slowing growth, the members’ economies have expanded twice as fast as those of developed countries.

Understandably, after building strong economic bonds, the BRICS group wants to see a new international political architecture to serve their long-term strategic interests.

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BRICS bank to be headquartered in Shanghai

FORTALEZA, Brazil – The emerging-market bloc of BRICS on Tuesday announced plans to establish a development bank and a contingent reserve arrangement (CRA).

 The five members of the group – Brazil, Russia, India, China and South Africa – laid out the designs of the New Development Bank (NDB) and the CRA in a declaration released following their sixth summit in this Brazilian city.

 The NDB, to be headquartered in Shanghai, will have an initial authorized capital of 100 billion US dollars, and its initial subscribed capital of 50 billion dollars will be equally shared among founding members, according to the Fortaleza Declaration.

 The Africa Regional Center of the NDB will be established in South Africa concurrently with the headquarters, added the document.

 The CRA, with an initial size of 100 billion dollars, "will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements," said the declaration.

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Germany Said to Review ‘No-Spy’ Purchasing Rules Amid U.S. Row

By Cornelius Rahn and Amy Thomson Jul 11, 2014

Germany’s Interior Ministry is reviewing rules for awarding government contracts for computer and communications equipment and services as a political rift with the U.S. widens, people familiar with the matter said.

The ministry will probably issue new purchasing guidelines in the coming weeks to replace its “no-spy-order” dated April 30, said the people, who asked not to be named because the deliberations are private. Details are being worked out, and may require suppliers of components of a bidder’s goods or services to guarantee they don’t hand over confidential data.

Any tightening of procurement procedures could affect U.S. technology companies such as International Business Machines Corp. (IBM), Cisco Systems Inc. (CSCO) and Microsoft Corp. (MSFT) as they vie for government contracts. U.S.-German tensions escalated yesterday after Germany expelled a top intelligence officer from the U.S. embassy in Berlin.

“They’ll come under scrutiny, those contracts with U.S. suppliers, as they come up for renewal,” said Andrew Rose, a London-based security and risk analyst at Forrester Research. “There is a definite point here about privacy and respect that Germans are trying to draw a line under.”

German federal and local agencies spend $28 billion on technology and communications hardware and services annually, of which at least 1 billion euros ($1.4 billion) of contracts are handled by the Interior Ministry.

Pamela Mueller-Niese, a ministry spokeswoman, didn’t immediately answer phone calls and an e-mail seeking comment. Marie-Ann Maushart, an IBM spokeswoman, and Nadine Papenfuss, a Microsoft spokeswoman, declined to comment, as did Patrick Rothwell, a representative for Cisco.


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Most Americans Now Receive Government Benefits; We've Crossed The Tipping Point

Forbes

Obamacare has pushed us over the entitlements tipping point.  In 2011 some 49.2 percent of U.S. households received benefits from one or more government programs—about 151 million out of an estimated 306.8 million Americans—according to U.S. Census Bureau data released last October.

Currently, around 6 million to 7 million Americans who have signed up for Obamacare are receiving taxpayer-provided subsidies (though the administration’s numbers cannot be trusted, it’s all we have to work with).  There are another 3 million who have signed up for Medicaid.

That means some 10 million Americans—or a total of about 161 million—are now getting government subsidies (though the final number might be somewhat lower since some may have been receiving benefits already).

"52 percent of U.S. households—more than half—now receive benefits from the government"

Thus, perhaps 52 percent of U.S. households—more than half—now receive benefits from the government, thanks to President Obama.  And Mr. Entitlement is just getting started.  If Obamacare is not repealed millions more will join the swelling rolls of those dependent on government handouts.

“When the public discovers they can vote themselves money from the public treasury, the [American] experiment will be over”-Tocqueville 1838

Conservatives have long dreaded the day when the U.S. crossed the halfway mark because of all the implications for individual and fiscal responsibility. As Benjamin Franklin reportedly said, “When the people find that they can vote themselves money, that will herald the end of the republic.”  They learned that from the 2008 election and turned out in big numbers again in 2012.

It’s not that all of those Americans are “takers,” as former Republican presidential candidate Mitt Romney suggested.  Some 42 million are seniors receiving Social Security and Medicare.  They aren't getting something for free; they faithfully paid into the system for decades with the expectation that they would be getting it back at retirement. And they deserve every penny they get—or may not get if Social Security or Medicare has to cut benefits.

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One Of The World's Largest Energy Majors Sees No Reason For Petrodollar

Most of the world buys energy and commodities with the Dollar. This is considered the world reserve currency, basically the U.S. tends to protect the worlds largest oil producers in the world if they price there oil in U.S. dollars. This is considered the petrodollar system by evidence that countries such as Saudi Arabia and Kuwait receive protection and Iran and Syria who sell in other currencies don't. There is an ever increasing demand for the U.S. Dollar due to increasing demand for world energy. If that demand begins to decrease due to de-dollarization the effects of over printing the U.S. currency will begin to be felt just like a country who does not have world reserve currency status, inflation and hyperinflation could become a possibility. The petrodollar system replaced the gold convertibility of the dollar in the early seventies. The U.S. is really beginning to piss off the world as evidenced by more and more articles like the one below. 

The US dollar is still the world's most widely held reserve currency, accounting for nearly 33 per cent of global foreign exchange holdings at the end of last year, according to IMF data. That ratio has been declining since 2000, when 55 per cent of the world's reserves were denominated in US dollars. It does seem to be the goal of the U.S. to maintain the free flow of oil and energy at market prices and be priced in U.S. dollars.

Zerohedge.com

Submitted by Tyler Durden on 07/05/2014

The USA is fast running out of friends to support its 'exorbitant privilege'. Having alienated the Germans over NSA-eavesdropping, 'boomerang'd the Russians into de-dollarization, tariffed and quantitatively eased China into diversification, and finally 'punished' France into discussing the dollar's demise; it appears no lessor person than the CEO of Total (the world's 13th biggest oil producer and Europe's 2nd largest), believes "There is no reason to pay for oil in dollars." Clearly, based on Christophe de Margerie's comments, that we have passed peak Petrodollar.


As Reuters reports,

Oil major Total's chief executive said on Saturday the euro should have a bigger role in international trade although it was not possible to do without the U.S. dollar.

Christophe de Margerie was responding to questions about calls by French policymakers to find ways at EU level to bolster the use of the euro in international business following a record U.S. fine for BNP.

"There is no reason to pay for oil in dollars," he said. He said the fact that oil prices are quoted in dollars per barrel did not mean that payments actually had to be made in that currency.

French Finance Minister Michel Sapin said on Thursday that euro zone finance ministers would discuss ways of boosting use of the euro in international trade in their next monthly meeting on Monday.

"It would be a way to protect businesses when, outside of U.S. territory, they carry out transactions that are perfectly legal in the country they belong to," he said.
So even a major beneficiary of the status quo appears to see the end in sight for the Petrodollar.

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The Global Economic Crisis Is Accelerating As We Enter The Last Half Of 2014

This is an excellent article by Michael Snyder. Don't let the record stock prices dissuade you, there are some serious problems in the domestic U.S. and international economies. 

18 Signs That The Global Economic Crisis Is Accelerating As We Enter The Last Half Of 2014

Michael Snyder

Economic Collapse Blog

A lot of people that I talk to these days want to know “when things are going to start happening”.  Well, there are certainly some perilous times on the horizon, but all you have to do is open up your eyes and look to see the global economic crisis unfolding.  As you will see below, even central bankers are issuing frightening warnings about “dangerous new asset bubbles” and even the World Bank is declaring that “now is the time to prepare” for the next crisis.  Most Americans tend to only care about what is happening in the United States, but the truth is that serious economic trouble is erupting in South America, all across Europe and in Asian powerhouses such as China and Japan.  And the endless conflicts in the Middle East could erupt into a major regional war at just about any time.  We live in a world that is becoming increasingly unstable, and people need to understand that the period of relative stability that we are enjoying right now is extremely vulnerable and will not last long.  The following are 18 signs that the global economic crisis is accelerating as we enter the last half of 2014…

#1 The Bank for International Settlements has issued a new report which warns that “dangerous new asset bubbles” are forming which could potentially lead to another major financial crisis.  Do the central bankers know something that we don’t, or are they just trying to place the blame on someone else for the giant mess that they have created?

#2 Argentina has missed a $539 million debt payment and is on the verge of its second major debt default in 13 years.

#3 Bulgaria is desperately trying to calm down a massive run on the banks that threatens of spiral out of control.

#4 Last month, household loans in the eurozone declined at the fastest rate ever recorded.  Why are European banks holding on to their money so tightly right now?

#5 The number of unemployed jobseekers in France has just soared to another brand new record high.

#6 Economies all over Europe are either showing no growth or are shrinking.  Just check out what a recent Forbes article had to say about the matter…

Italy’s economy shrank by 0.1% in the first three months of 2014, matching the average of the three previous quarters. After expanding 0.6% in Q2 2013, France recorded zero growth. Portugal shrank 0.7%, following positive numbers in the preceding nine months. While figures weren’t available for Greece and Ireland in Q1, neither country is showing progress. Greek GDP dropped 2.5% in the final three months of last year, and Ireland limped ahead at 0.2%.

#7 A few days ago it was reported that consumer prices in Japan are rising at the fastest pace in 32 years.

#8 Household expenditures in Japan are down 8 percent compared to one year ago.

#9 U.S. companies are drowning in massive amounts of debt, but the corporate debt bubble in China is so bad that the amount of corporate debt in China has actually now surpassed the amount of corporate debt in the United States.

#10 One Chinese auditor is warning that up to 80 billion dollars worth of loans in China are backed by falsified gold transactions.  What will that do to the price of gold and the stability of Chinese financial markets as that mess unwinds?

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Bank of Thailand stresses growing role of yuan

China and Russia are really moving forward on dedollarization of the worlds currency, as evidenced in the following couple of articles, I would expect this pace to pick up in the near future.

Erich Parpart
The Nation

The Chinese yuan is becoming more and more important in world trade, so investors are well advised to use the currency in future trade and investment to lower the risk of fluctuations, the Bank of Thailand said yesterday.

Chantavarn Sucharitakul, assistant governor for the Financial Markets Operations Group, said the use of the yuan as a trade and investment currency was noticeably increasing because of the size and growth potential of the Chinese economy and Beijing's policy to encourage the use of the yuan in world trade.

"Investors have more interest in using the yuan to trade and invest, as seen by the move of the United Kingdom, which has offered itself as the centre for trade that uses the yuan, or the Russians, who have agreed to use domestic currencies for their bilateral trade," she said.

The use of a domestic currency for transactions between countries will provide more options in trading for other regions.

There are many factors that are needed for a currency to become a proper international currency, such as its flexibility, robust cash flow within the capital market and debt in the financial market in order to keep the cost of transactions as low as possible.

Britain's decision to become the centre for trade using the yuan as a settlement currency - the yuan will be directly quoted within the China Foreign Exchange Trade System - is similar to what Australia, Malaysia, Russia and Thailand have done before. 


It is also part of the Bank of Thailand's plan, since it realised the important of the yuan in the future.  More >>>