Gang Related

For years now, the United States was eager to follow in the footsteps of Japan.  In the new-found sector Japan has come into, regarding inflation sheds light on the FEDs reality that Quantitative Easing (QE) may be here to stay.  The US is about to see inflation like never before.  News has come out stating that the raise in interest rates discussed by the FED is looking close to impossible to achieve.  Central banks create foreign capital that floods the US and pushes rates down.  The statements that have come out state that the FED has no idea how they will make it work without QE.  The focus and comments that Yellen has discussed about diversity within the FED would seem that she is more interested in women becoming executives than in finding a solution.  People may believe that the FED is controlled by Congress; truth is everyone is controlled by the FED, with an exception of banks holding mass amounts of precious metals they have more control than we could ever imagine. 

What will the solution be?  Can there even be one?  We are so in debt and printing money seems to be the only way the US will stay a global power.  Around the world, leaders are becoming more and more disappointed in the actions, as well as the lack of action, taken by the US.  This leads to uncertainty with the USD and has other world leaders looking at ways to prevent America and keep it from overpowering the decision making process for other countries that gain headway economically.

When you look closely at America, you can find some major flaws.  Yes, it is a land of freedom, and believe me when I say I am blessed to be in this country and to be a proud American.  The problem is Americans are such individualists.  The fact is we strive for individuality with ourselves, our families, especially when it comes to our money.  We are the prime example of low- and high-class categories.  When it comes to communities in the US, you see a strong bond in lower income communities, where reliance, family, and even gang affiliation...  If we look at this from a global military perspective, you see America as higher class, with other counties looking like those community driven neighborhoods.  So why wouldn’t they just team up with one another to create their own “gang?”  While Obama is looking at pipelines and immigration, he seems nearsighted to the fact that other countries are teaming up while America is warming the bench, unable to play at all.

America has not needed (so far) to team up or rely on anyone or anything but oil, keeping it in USD and keeping USD in global reserve currency.  Other countries are sick of us dominating the game.  America has the force and power to take over anything anywhere at anytime.  Just to put this in perspective, no mater how many weapons a country has, America reigns supreme.  Warfare is fought by the powers of finance more than weapons.  And we love to spend our QE on our military.

            Yet we see Putin making nineteen presidential trips this year alone, meeting up with many world leaders, most recently with Kim Jong-un.  That must have interested Hassan Rouhani, the leader of Iran, who has eagerly been waiting approval for “nuclear energy.”  The decision is supposed to happen Monday.  Is it so odd that we do not see this information on most news networks in the US?  This writer does not see approval going forward.  I doubt Rouhani will be surprised at the denial and why wouldn’t he just make Russia and North Korea his allies due to the fact they have the nuclear power Iran is in need of. 

Right now, other countries are feeling the wrath of treachery, power, and hypocrisy the US is ruled by.  No one seems to be feeling it more than Russia.  Globally we cannot survive without the oil from Russia, yet we keep pushing oil prices down, expecting them to fall.  We seem to forget that Russia has been living comfortably in a black market with hyperinflation since the 1990’s.  Us trying to destabilize them is close to impossible.  They are true survivalists and have the resources and global firepower to keep up with and surpass our already bankrupt US shale companies.  Putin knows Russia will be just fine when, in a few years, oil will be right back up and the US will be in yet more debt.  America is the most powerful when it comes to many things, the people are not survivalists by a long shot.  We are sheltered and blinded by media and comfort, but we mere sheep, with a government that is controlled by bankers not the democracy that so many would love to believe exists.

Putin is set on shifting the anti-corruption plan many countries set in place globally.  He has been preaching about the corruption of foreign leaders and it could be much closer to his home than we understand as regards the Ukrainian conflict.  The whole mess with Ukraine seems to be a conspiracy lover’s dream come true.  All we know is that the plane went down.  We have only a third party video and no black box to be found. Nor is there any solid information that Russia was the one to bring it down.  What is odd is that the Dutch have agreed to keep any information about MH17 a secret…and somehow they got 122 tonns of gold back from the NY FED.  We are trying to destroy the ruble by driving down oil prices, while in all reality it costs Russia only about $35 a barrel, unlike the US and its strict guidelines for oil manufacturing.  After the $35, the rest is all profit for the Russians.  Even with oil prices dropping gold keeps rising it seems to be all these newly formed teams are becoming more and more interested in.

Liquid Gold

     While on vacation in the middle of the eastern Oregon checking in now and then to see spot prices.  I was not too shocked to return to the same thing that took place last week.  Gold is moving quickly, oil is the main initiator here, as I wrote last week, that TPTB would not let it get lower than $75.  Thursday it was $74.42 if the prices remained low it could cause a major problem for the Keystone pipeline and make it financially undo-able, the break even price for the new Canadian oil production is around $85, already up and running producers can do it for much less but this affects all the new projects.
     Is it really a surprise when it came down to the release of this passing, that we see oil rising.  The Democrats are now standing behind the approval for the Keystone XL pipeline.  All we have to do is sit back and wait for the president to sign it, since he is in Asia he will get to it sometime in the next week.  Even though Congress might try to take the responsibility away from Obama, he is the only one who can approve it because it crosses international borders.  The question every broker and oil executive is wondering, will he pass it?  Legislation's like this in the past have been vetoed and frowned upon by the White house administration.  The pipeline is a major concern for the environmentalists that the Canadian extraction could worsen global climate changes and threaten the U.S. waterways.  On the other side, this is huge for the U.S. to become energy independent, creating mass amounts of job growth that can lead to a strong U.S. economy and we are in extremely different circumstances than when this bill was pushed in 2008.
      We know that gold tends to follow oil in the market and the indicators to make calls happen fast.  With the rise of the Euro and the dollar longer than it should have been we have to add in all the factors that sway PMs for instance we have the Swiss Gold Initiative coming and traders on high alert waiting the vote, but many already assume it will be a no.  The physical gold moves the market way less than the digital kind.  Let us add GOFO Gold Forward Offered Rate, kind of a way to swap gold in return for USD a lease to own dollar rate.  However, there is not an interest like on a lease with a borrower and lender where the lender gains it is more of a swap because the lender is the one paying a rate of interest.  It is not the spot price of gold; it is a subtraction of LIBOR corresponding values.  These swaps are made from one up to 12-month periods.  Shorting mass amounts of gold drives up the lease demand and that GOFO then is lower.  There are no supply problems for contract and the idea of leasing metals appeals to many especially when they see the contracts lower than spot price like we have.  A negative GOFO shows that demand for the swap is high; this could be for lack of inventory by COMEX or the futures offered by the SGE.  These indicators with the GOFO could be that big changes in the PMs could be on the horizon, even if the demand is just so traders can short gold the GOFO has shown the bottom price before could it again?

Bought Nov. 14
SLV April 17, 2015 calls strike $15.50
paid $1.23

The Lesser of Two Evils

As Americans today is a very important day, as midterm elections come to an end, so do many politicians dreams for change.  The social issues that most Americans vote on, or are concerned about are the least important to the masses.  I am not saying that gay rights and abortion are not worth campaigning and voting for.  This year you may want to hold back your own personal donkey vs. elephant emotions, because how the FED is run, is on our table for a vote, this could be the most important issue we face historically.  Could the FED and its interest rates be run by congress for the first time in history?

 This is what people should be worried about, if you have money in a bank, these issues should be what your main focus is on.  That the interest rate polices would no longer be controlled by the FED.  These issues are huge; in fact, this election is the first time we have seen members of the GOP issue bills like this.  Even when a bill to audit the FED was introduced 2012.  We saw what challenging the FED did to Ron Paul.  The FED is running our economy, so lets put aside our emotions about these social issues and understand what is really on the ballot here, the less active the FED is the much stronger the USD is.  We are seeing this now, the USD is on a four year high, this is because of many factors. A few of those factors are the announcements about what is happening with the FED and its decisions to end QE.  The negative interest in Europe and now this legislation challenging the FED, we see the USD rising with people’s new sense of security in the market and economy.

            The outcome of this election, which if the GOP takes the office, the FED will have to answer to someone, means its days of control will be limited.  The GOP has yet to control the senate since the 2008 crash.  That does not say too much, since the democrats have been in control we are also massively in debt, even though we also have not seen a crash like that since.  For any group to change the position of the fed, it could be a potentially suicidal situation.  If the FED raises the Federal funds rate this would destabilize the economy all the leverage and carry trades unwind, the stock marked sells off, because of leverage the prices would crash.  On the other hand, spending money is the power congress has.  Lowering interest expanse, congress is empowered to spend more created and taxed dollars by the trillions.  It is kind of a lose-lose situation.

Elections should be a way to win and make changes without a fight or war, yet who can win when our leaders are lawless and we can only choose between the lesser evil. If you look at past elections and the puppets that America has, all of our presidents since Kennedy have been CIA run.  Regan just read the teleprompter, Bush… need I even comment, even Obama who I was all for until I looked at the facts.  Throw an election where we have someone like Putin up on the stage, no writers or hands in his pockets, just someone fighting and believing in us, in our country, not for all the corrupt aspects of money.

As an American, I do pride myself on freedoms that we have, everything from choice to ability.  However, there is a major price in this delusion, because we are brainwashed daily, media forces our belief system and desensitizes our souls.  Hear no evil, see no evil is how we view the world.  Even though we think we are free and that our votes are worth something, it is all a dream in a very corrupt world. Once we all wake up and see what is really happening, I do not mean your status on face book, we may really make a change for ourselves and nation.