Herewego: Hello, just went back to restudy Dr. Clarke's last posts. I'm assuming he's still in agreement with that info, otherwise, I'm sure he would have posted an update.
OK, he posted on March 29th (that is the one that got people bent out of shape), LINK
Then he posted again on March 30th to smooth everyone over and calm them down LINK
On that post, he said it won't rv for at least 3 weeks, which puts it for at least 4/20/16, the day after china is going to do their thing........interesting, isn't it?
And he also said there is a possibility of 4/29/16- 5/1/16, instead of waiting until June 6th.
So, recapping on recaps, lol, on Dr. Clarke's last posted thoughts.
Vedy interesting indeed (in my best Sherlock Holmes voice)
2562bce: INSTEAD OF A BUTTON I NOW LOOK AT IT MORE LIKE AN IRRESISTABLE FORCE (THE DESIRE TO GET THIS DONE) MEETING AN ALMOST IMMOVABLE OBJECT (ALL OF THE PROBLEMS THAT ARISE TRYING TO GET IT DONE) AND SO THE OBJECT MOVES VERY SLOWLY, BUT STILL MOVES.
Ole Sailor: I am giving Bruce the benefit of the doubt. He like most people at his level are getting intel and rumors from MANY SOURCES and it is very conceivable his comments on CL could have gotten misquouted as to source. I did notice that Robert did not make any comment on that and I think he would have corrected Bruce if it were not correct
Sallypuff: China is supposed to make a big announcement next Tuesday, the 19th. Either they will announced they have revalued their Yuan or that the Yuan is now gold back. When they do it will force the US to act or we will see super inflation hit.
One1Freedom: China’s Coming Gold Fix April 19th, 2016
Posted Apr 14, 2016 by Martin Armstrong
Next week, China will begin its competition with London & New York and attempt to create the equivalent of the London gold fix but in Chinese yuan on April 19th. Of course the gold bugs are misrepresenting this as some dollar killer.
Top Chinese banks, alongside Standard Chartered and ANZ, will be among 18 members to join a new yuan-denominated gold benchmark that signals China’s biggest step towards making the yuan convertible. By creating a yuan based gold fix, this is a back-door to floating the yuan itself.
It will allow for arbitrage in currency so you can go long or short gold in dollars and the opposite in yuan and you have then created a yuan contract.
For years, these people spinning stories such as how “paper gold” was evil, failed completely to comprehend how the market even functions. OPEC nations who could not earn interest religiously, bought gold and then sold it forward. They were not interested in gold, it was the means to earn interest without calling it interest.
This is what gave gold the liquidity that other commodities did not. It was an interest play for decades. Creating a yuan based gold fix is once again not about gold but about a test for floating the yuan. Sophisticated players will use this for the currency and China will monitor the trading as a test case for floating the currency. This is the small step forward. China has to float its currency or it will NEVER make it to the big leagues. Capital has to freely be able to move in and out without applying for permission to enter and leave.
So now these people spinning this story show their ignorance. They say no dollars allowed, as if this is some war that will destroy the dollar. China dollar reserves are over $3 trillion. Why would they try to make those reserves worthless?
If they wanted to hurt the dollar, then convert the $3 trillion into something else. But what? Rubles? Gold is not easily transportable for international settlements among nations and are such is such a tiny fraction of world capital flows (less than 1%), that converting it gold would isolate their economy. These claims only reveal their lack of comprehension of how the economy even functions.
Those who are screaming gold will now go to $64,000 an ounce for this is making the yuan a gold backed currency, only demonstrate how ignorant they are when it comes to international finance. It was during the 19th century when the Silver Democrats tried to fix the silver at 16:1 relative to gold seriously over pricing it relative to where it traded in Europe.
That resulted in silver being attracted to the USA and gold fleeing the country. This is why the USA entered a 26 year depression and ended up virtually bankrupt when J.P. Morgan had to arrange for a gold loan in 1896 to save the country.
Here is the English magazine Puck showing America drowning in silver by their stupid attempt to overvalue silver relative to gold because the miners paid off the Democrats just as the bankers do today.
If China even dared to attempt to make gold some absurd price well above the world price, they would be bankrupted in a matter of weeks. Everyone would sell their gold to China and return with dollars. You could then just wait for the collapse and buy back the gold at the world price. Any attempt by any government to FIX THE PRICE or gold far above the world price is precisely converting gold to FIAT defined as dictating the price disconnected from reality of the free market.
So anyone claiming gold will rise to some absurd number, just ask them will they buy it from you at 10% or 5% of that number now and ask them how much do they want? I could easily deliver any quantity at 10% or 5% of such a price of $30,000, $50,000, $64,000, or $100,000. I will be glad to sell them an option at those prices
As the TV show use to be say: Let’s Make a Deal. The question really is; Do they honestly believe this BS? Or are they paid by people to try to sell dreams like swamp land in Florida?
Journey: I guess its going to be another LONG weekend waiting till Tues for China's deal. Just wish this to be a surprise BE4!
JuJu50: i believe Bruce's words were " that you could construe from what CL was saying" not that she actually said it…..I just recall him saying "could be construed" and Robert saying "she is basically saying "
GJHHonor: China calls for new global currency By JOE MCDONALD
Emailed to Recaps:
Is the American debt-note Factory nearing its end?
By Preston James, Ph.D on April 14, 2016
It's becoming pretty obvious that the days of Federal Reserve System hegemony are now limited, in that much of the world is dumping the US Petro Dollar and plans to shift to direct trade and use of Gold, Silver and commodity-backed real currencies..........
Everyday more and more Americans that didn’t already know are now finding out that the Federal Reserve System is a private corporation, owned by foreign “Bloodline” families, and is neither Federal nor a Bank.
Walkingstick: Sources: important meetings in Washington between the Iraqi Finance International Monetary Fund
April 14, 2016
Hosts the US capital Washington, on Friday, important meetings to support Iraq economically, between a delegation from the Iraqi financial burdens and another representing the International Monetary Fund.
According to private sources of change, the Washington meetings aimed to help Iraq, including at least ten billion dollars, but it is these funds will be conditioned to go beyond Iraq's financial crisis.
The sources pointed out, to the political crisis experienced by Iraq during this week, prompted the donors of the International Monetary Fund for hesitation on support for Iraq, adding that Iraq is threatened today to lose the chance of financial support because of the big bad impression left by the Iraqi political crisis.
Walkingstick: Kuwaiti currency basket yield benefits
April 15, 2016
Decision to scrap dollar peg has cut exchange rate volatility, but failed to spur diversification
Kuwait’s abandonment of its strict dollar peg has reduced exchange rate volatility without pushing up inflation. However, it has failed to spur diversification of the Kuwaiti economy.
These mixed results are likely to feed into the thinking of governments across the Gulf region, given heightened expectations earlier this year that the likes of Saudi Arabia could scrap their longstanding dollar pegs.
The recent recovery in oil prices and partial unwinding of the dollar’s erstwhile strong bull run has once again damped down expectations of near-term currency reform in the six-nation Gulf Cooperation Council bloc.
However, many analysts believe if and when any of Saudi Arabia, the United Arab Emirates, Bahrain, Qatar or Oman do decide to abandon their dollar pegs, they are more likely to follow in the footsteps of Kuwait, which manages its dinar against a currency basket, rather than float their currencies freely.
Kuwait itself operated a strict dollar peg between January 2003 and May 2007, when it readopted the basket approach it had previously used between 1975 and 2003.
The move was triggered by a desire to combat the high inflation, which later peaked near 12 per cent, that resulted from the then steep depreciation of the dollar.
Analysis by Dima Jardaneh, head of economic research for the Middle East and north Africa at Standard Chartered Bank, sheds light on how successful, or otherwise, Kuwait’s move has been.
The good news is that “pegging to a currency basket has afforded Kuwait a higher degree of flexibility on exchange rate and monetary policy relative to the rest of the GCC economies,” says Ms Jardaneh.
Since the adoption of the basket, the dinar has ranged from a maximum of $3.78 in 2008 to a minimum of $3.29 in January of this year, while its fellow Gulf currencies have remained rigidly affixed to the greenback.
More importantly, though, measured in trade-weighted nominal terms, Kuwait’s exchange rate has been markedly less volatile than that of its dollar-pegged Emirati and Saudi peers, as the first chart shows. It weakened less in 2008, when the dollar was weak, and has risen less since 2014, when the dollar’s bull rally started.
The divergence is not huge, but this is obviously a result of Kuwait’s choice of basket constituents. The composition has never been revealed, and many observers believe it changes over time, but Ms Jardaneh estimates the current basket weightings at 70 per cent US dollar, 20 per cent euro and 10 per cent Japanese yen.
At first glance this may seem overly concentrated, given that the US, eurozone and Japan account for just 35.4 per cent of Kuwait’s imports. However, much of the remainder comes from elsewhere in the GCC (via dollar pegged currencies) or China, which until recently also had a currency closely tied to the dollar, although it too is now allowing more flexibility after introducing its own currency basket in December.
Moreover, Ms Jardaneh says the composition is designed to reflect capital flows in and out of Kuwait, as well as trade flows.
The impact on inflation also appears beneficial (although, of course, it is impossible to know how things would have differed had Kuwait retained its shortlived dollar peg).
After inflation peaked just below 12 per cent in 2008, it fell back rapidly, reaching 2 per cent in 2009, as the second chart shows. It is logical to think that the speed with which inflation was brought back under control was aided by the strengthening against the dollar that the basket allowed.
More recently, the dinar’s fall against the dollar since 2014 has not proved inflationary, although this may be primarily due to the slowdown in the Kuwaiti economy caused by the slump in oil prices, rather than a lack of pass-through from higher import prices.
Luis Costa, emerging market currency and credit strategist at Citi, who believes the basket has indubitably been beneficial for Kuwait, argues instead that the arrangement has allowed the country to import enough inflation through higher import prices to offset the deflationary effects of weaker domestic demand, keeping everything on an even keel.
Ms Jardaneh says the abandonment of its dollar peg has also given Kuwait a little more freedom to diverge from US monetary policy than its Gulf peers enjoy.
During 2007 and 2008, when the Federal Reserve was cutting interest rates aggressively, Kuwait typically followed suit with a lag of six months, Standard Chartered calculates.
“Given the decoupling between the US and the GCC business cycles at the time, the Kuwaiti government opted to delay the reduction in interest rates given that the economy was overheating and inflation high,” says Ms Jardaneh.
After the Fed raised rates in December 2015, Kuwait did opt to replicate the 25-basis point move, however, even though Qatar and Oman have yet to do so.
The bad news, though, is that Kuwait’s greater degree of exchange rate flexibility and lower volatility, vis-à-vis its GCC peers, does not appear to have boosted the country’s competitiveness.
As Ms Jardaneh points out, the economy remains the least diverse in the Gulf, with oil revenues accounting for about 90 per cent of government revenues and 94 per cent of goods exports.
“Non-oil economic growth in Kuwait has lagged behind its regional peers in recent years,” she says.
This makes Ms Jardaneh think that Saudi Arabia, whose non-oil exports are typically still in oil-related sectors such as petrochemicals, would also struggle to see any great diversification benefit from switching to a basket.
As such the UAE, with its greater economic mix, might be the only Gulf state that would derive any meaningful diversification gains from a basket.
Mr Costa is not betting on any short-term change, but does believe Saudi Arabia could follow Kuwait’s lead if the fiscal pressures that have pushed its budget deficit to 15-20 per cent of gross domestic product become worse still.
“When you are dealing with a basket, and people don’t understand how it works, it’s a nice way to let your currency go without telling the market what your rules are,” he says.
As for generating any serious economic diversification, though, he argues that Kuwait’s gradualist approach has simply been far too timid.