Monday, November 29, 2010

News of Russia and China Dumping Dollar in Favor of Own Currencies Ignored

I just wanted to write a quick blurb to put the issue of China and Russia trading in their own currencies back on the radar (a news story which broke on November 24, 2010 the day before Thanksgiving). This story has been drowned out by the North Korea versus South Korea conflict and Irish debt crisis, which have dominated the mainstream financial news. There definitely is a trend developing where the US dollar is being dumped in favor of other means of exchange, such as Brazil and China slowly eliminating the US dollar in favor of the Real and Yuan (announced back in June 2009). [1]  As Marek Kuchta of Gold in Mind points out in his recent article China and Russia Dump Dollar in Mutual Trade - No Big Deal in the Short Run, it is news in itself that Russia and China dumping the dollar in favor of their own currencies for bilateral trade did not get more attention in the western mainstream media:
"At the time of this writing [November 25, 2010], it has been about 8 hours since the announcement which was extensively covered in the Chinese and the Russian media as well as the financial blogosphere. The author of this article has even managed to make a YouTube video about it. Yet, there is no mention of it on any of the top financial media outlets, despite this being probably among the top 3 news for the dollar this year in terms of importance. All you hear about are the great Thanksgiving sales numbers, the "soaring stock market" and the PIIGS. All is good in America." [2]

The YouTube video mentioned in the above quote has been embedded here for your convenience:

The implication of the US dollar falling away as the world's reserve currency is pretty grim.  Since the dollar is the primary currency used to trade such valuable commodities such as oil, this creates a certain level of demand (for dollars) and prevents the dollar from becoming completely worthless.  Quoting myself from the article EUR/USD is 7% Backed by Gold What Backs the US Dollar?:
"The phenomenon by which oil dollars are repatriated to the US in the form of investment (often US Treasury Bills) or purchase of goods and services is called petrodollar recycling, which does lend intrinsic value to the dollar."
"2. If OPEC as a whole, or more and more countries start to trade oil or other commodities in other currencies other than the US dollar, the dollar will sell off." [3]

This of course means we in the US will be able to buy and afford less as the demand for dollars wanes.

1. Brazil-China bilateral trade in Real and Yuan instead of US dollar MercoPress
2. China and Russia Dump Dollar in Mutual Trade - No Big Deal in the Short Run Marek Kuchta, SeekingAlpha
3. EUR/USD is 7% Backed by Gold What Backs the US Dollar? bearishtrader, Bearishtrader's Trading Blog

Sunday, November 14, 2010

JP Morgan on the Ropes?

Recently there have been lawsuits filed concerning illegal silver manipulation by JP Morgan and HSBC, which do seem to have quite a bit of merit. [1]  CFTC Commissioner Bart Chilton bravely admits that silver manipulation exists and transgressions should indeed be prosecuted as per his quoted statement:

"There have been fraudulent efforts to persuade and deviously control that price. Any such violation of the law in this regard should be prosecuted." [2]

There is also a grassroots movement recently started by Max Keiser, former Wall Street broker, now media presenter encouraging everyone to buy an ounce of silver to bankrupt JP Morgan, which is suspected to have a large short position on the precious metal in the form of paper derivatives. [3,4]  Jason Hommel of the Silver Stock Report estimates the short position to be 25%-50% of the $200 billion total bank short position based on the price of silver when it was $15/ounce. [5]  JP Morgan is the steward of the popular silver bullion ETF SLV.  Considering the bank's high ethical standards, the soundness of the ETF is in question and there is high default risk in terms of the bank not being able to provide delivery of all physical silver to investors as required, which amounts to an equivalent additional short position. [6]  Other downside risks are that JP Morgan is also embroiled in the foreclosuregate scandal (fraudulent affidavits presented in court for foreclosures based on robosigning and the inability by banks to present the actual investment note/holder for properties during foreclosure proceedings) along with the other major banks and has by far the largest credit derivatives exposure of them all. [7]  Obviously all of these factors combined are a ticking timebomb ready to explode and present a compelling short opportunity against JPM.

[1] J.P. Morgan, HSBC sued for silver manipulation David Benoit, MarketWatch
[2] CFTC Chairman Bart Chilton: Silver has been subject to attempted manipulation
[3] Crash JP Morgan Buy Silver! Max Keiser
[4] The Max Keiser Takedown of JP Morgan Saman Mohammadi,
[5] To the Top Shareholders of JP Morgan (Your company is bankrupt in terms of silver!) Jason Hommel, Silver Stock Report
[6] Silver bullion-ETF close to DEFAULT?
[7] Janet Tavakoli Interview on ETF Digest on Bank Foreclosure Fraud

Janet Tavakoli on Bank Foreclosure Fraud from David Fry on Vimeo.

Friday, November 5, 2010

Lindsey Williams reveals globalist elite identity who warned us oil will hit $150-$200 per barrel within 6-8 months

Alex Jones interviewed Pastor Lindsey Williams (chaplain to the Alaska pipeline project) today and revealed one of the sources of information (one of the Mr. X's) warning the public of the globalist elites' plan to cause oil to shoot up to $150 - $200 a barrel per the previous interview from October, 2010.  Ken Fromm is the name of the former high ranking executive from Atlantic Richfield (ARCO) who is terminally ill with cancer and is on his deathbed. This brave man has given Pastor Williams information in the past for his book "The Energy Non-Crisis". Here is a quote from the World Affairs Brief article by Joel Skousen dated May 18, 2008 which reveals the previous information concerning a major oil find at Gull Island which was suppressed thus artificially keeping oil prices high:
"A few days later, the chief operating officer of Atlantic Richfield for Alaska, Ken Fromm, who had invited Williams to the meeting, called him and told him he must never mention this new discovery--that the US government had classified it and was ordering it capped. It is still being held off the market and is not part of the environmental lock-down of oil in the Arctic National Wilderness. Williams was given a British Petroleum memoranda [probably by Fromm] which related the statements of upper echelon oil officials from Arco which said that Gull Island would be kept under wraps, limiting domestic supplies so Americans would someday see prices hit up to $10 a gallon at the pump."
Read full article here

Please do your own due diligence traders, the release of Ken Fromm's name should facilitate this.  Personally I think the scenario for $150 - $200 per barrel oil within 8 months is likely given the Federal Reserve's QE2 (and likely QE3, QE4, QE5...) and evidence of commodity inflation already in agricultural products and the huge move up in precious metals.