Archive - Mar 29, 2014 - Story

Diplomatic relations can be roughly categorized into realism (utilitarianism) and idealism (led by ideology and philosophy). Although realism has been dominant in modern times, idealism has seemingly been everywhere and nowhere - U.S. is a realist with ideals, while China is a realistic idealist. The “realism” of each country is more or less the same, but the ideals are not. The U.S. adores liberty and democracy while China worships the idea of a socialist democracy with Chinese characteristics. It’s because of such compromises and concessions by the U.S. and China that “new type great power relations” becomes possible. Russia, however, is a realist through and through. Of course, you can’t blame Russia for this…

With gold's last few days of weakness being extrapolated to the end of the precious metal once again, we thought a look back at 220 years of military spending, economic growth, presidents, and inflation may be a useful comparison to the 'real' price of gold...

"The idea that stimulation, even if only in form but not reality, can be withdrawn without draconian economic results is simply false. Chair Yellen is truly dedicated to full employment and is going to go into shock over the next few short months at the divergence between her economic modeling, the behavioral economic projections and the degree of economic contraction in the US." The US (and world) economy are not growing. Ben Bernanke and his counterparts in other countries pumped like mad to hide the dysfunction. Flooding with liquidity did nothing to heal the distortions and made them worse.

On Thursday, according to the Russian daily Nezavisimaya Gazeta, 10,000 Russian troops began a drill simulating the massive use of nuclear missiles. Shortly before reassuming the Russian presidency for a third term, Putin reaffirmed the importance he placed on Russia’s nuclear forces in a number of articles and speeches. Thus, this week’s massive offensive nuclear drill is in line with the goals that Russia and Putin have been articulating for well over a decade. Still, the timing of the drill is likely to cause great concern in Western capitals, particularly in Washington.

Contrary to most consensus views (including Citi's FX technical group) EURUSD has failed to move lower in 2014. Why?

A week ago, the official truth about QE finally emerged when the Fed's Fisher admitted that "QE was a massive gift intended to boost wealth." Fisher did not need to clarify just who the gift was aimed at - it was clear . But just in case there is any confusion, here is a chart confirming that all the events of the past 5 years have done, courtesy of the Fed's manipulation of the stock market to all time artificial highs, is to push the ratio of the average income of the "Top 10%" to the "Bottom 10%" to a previously unseen level, wildly surpassing the previous record inequailty highs that culminated in the Great Depression, and which were subsequently rapidly "equalized" by WWII.

Does Obama realize that he is leading the US and its puppet states to war with Russia and China, or is Obama being manipulated into this disaster by his neoconservative speech writers and government officials? World War 1 (and World War 2) was the result of the ambitions and mistakes of a very small number of people. We are again on the road to World War. One hundred years ago the creation of a world war by a few had to be done under the cover of deception. Germany had to be caught off guard. The British had to be manipulated and, of course, people in all the countries involved had to be propagandized and brainwashed. Today the drive to war is blatantly obvious. The lies are obvious, and the entire West is participating, both media and governments.

Just a few short weeks ago we reported on the unusual suicide, due to self-inflicted nail-gun wounds, of Richard Talley, CEO of Denver-based American Title Services. The death of the 57-year-old banker was accompanied by the fact that his firm was under investigation by the insurance regulators, and now, as The Denver Post reports, state prosecutors launched a criminal investigation and a grand jury over more than $2 million missing from escrow accounts. As part of that inquiry, investigators have seized about 100 boxes of documents and about 60 computers as records suggest the seemingly successful title business had serious financial problems. Talley's wife, Cheryl, who owns the other 60% of the firm has not commented.

With Russia continuing to diplomatically assure the world that no invasion is pending, and rather comically asking for President Obama's benevolent aid in policing the treatment of Russians in non-Crimean Ukraine; it seems from all actions (as opposed to words) that Putin is pressing ahead with building his forces (up to 60,000) around the divided nation and as Dmitry Tymchuk notes, planning for invasion from Chernihiv to Donetsk. Internal politics continue to roil as Klitschko pulls out of the Presidential election (just as the US wanted) but we suspect the Ukrainians will be confused to discover their USA saviors have been spying on the future Premier Tymoshenko for years. The people of Ukraine are likely a little upset at We are sure Kerry and Lavrov will have plenty to discuss tomorrow in Paris and perhaps the following map will be a good starting point.

The rising price of gold is a huge embarrassment to the US government not because it devalues the dollar (it does not do this) but because it provokes a loss of confidence in the dollar. When the dollar is seen as falling in value against gold, its fall causes investors to exchange dollars and other currencies for gold as a means of protecting wealth. The rising price of gold is a blot on the prestige of the US dollar and the prestige of the US itself. The price of gold in dollars is therefore under strict government control. This fact, once derided as ridiculous, is increasingly accepted as truth by those interested in monetary matters around the world. The means for controlling the price of gold lies in the massive sales of “paper gold” which take place to suppress its price, as so many investigators have amply documented. US monetary policy considers that the dollar is here to stay forever, and that gold is no longer – and never again will be – the world’s ultimate money. The governments of several nations around the world do not share the same conviction with regard to the permanence of the dollar.

With friends like these, who needs Russians.

File this one in the "you can't make it up" category. Over two years after the MF Global collapse, in which the primary dealer headed by Jon "I don't recall" Corzine all but admitted it had engaged in the cardinal sin of any financial intermediary, i.e., commingling money, to cover up a trade gone horribly bad and which resulted in the disappearance of some $1 billion in client funds until such time as the bankruptcy process managed to "liberate" funds from other part of the company, MF Global has suddenly figured who is at fault: not the CEO, not his brown-nosing lackey, not some janitor meant to be scapegoated precisely in a situation such as this, not even the infamous "glitch" - no, the party that is accountable for the firm's theft of client funds, and horrible investing decisions that led to its bankruptcy, are the accountants.