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Bitcoin Soars Above $9K, And This Time Is Different: “It’s Mostly Institutions Now
Corporations motivated by insatiable greed endanger us all and must be stopped before it’s too late, veteran journalist Chris Hedges told RT, warning that future generations will suffer immeasurably unless action is taken now.
Appearing on George Galloway’s political talk show ‘Sputnik’, Hedges decried how the “psychopaths” who run the world’s largest multinational corporations are “hurling us all over a cliff” in the pursuit of “short-term profit.”
We’re going to talk about the destruction of the ecosystem that sustains life. And [that’s] what is happening in the hands of the oligarchic elites in the fossil fuel industry – and let’s not forget the defense industry, the largest emitter of greenhouse gasses is the US military.
Asked by Galloway if their grandchildren will “have a world to live in,” Hedges offered a grim assessment:
“Not unless we – and I don’t use this word lightly – overthrow corporate power. Otherwise it’s very clear that these people will kill us.”
Russia and China took another step away from the US dollar after the two countries agreed to develop bilateral trade using the ruble and the yuan.
It was just one of the major deals reached after the presidents of the two countries, Vladimir Putin and Xi Jinping, held talks in Moscow on Wednesday.
“Russia and China intend to develop the practice of settlements in national currencies,” Putin told journalists at the news conference following the talks. He added that the states have signed intergovernmental agreements on expanding the use of the yuan and the ruble in bilateral financial operations.
A draft government decree on the national currencies trade was released earlier during the day. The document stipulates that Moscow and Beijing will cooperate on development of national payment systems, as well as facilitate cross-border payments in national and other currencies.
It was earlier reported that the deal is worth $1.7 billion and construction is scheduled to begin in October 2021 and August 2022.
In another major deal, inked following the high-level talks, the Russian Direct Investment Fund (RDIF), China’s Alibaba, and Russia’s Mail.Ru Group agreed to invest a total of $382 million into an e-commerce joint venture. Alibaba Group is to provide some $100 million, while the rest will be funded by the Russian side.
“We expect that its activities will make a significant contribution to the development and implementation of the most advanced technologies and solutions for the development of the economies of our countries and the further strengthening of our partnership,” RDIF CEO Kirill Dmitriev said.
After the Moscow talks, presidents Putin and Xi Jinping will depart for St Petersburg to take part in Russia’s key annual business event. Dozens of multi-billion dollar deals related to energy, industry, and finance, are expected to be signed during the St. Petersburg Economic Forum, which runs from June 6 to June 8.
Venezuela Defaults On $750 Million Gold-Backed Swap With Deutsche Bank
Somewhere Hugo Chavez, who several years ago successfully repatriated much of Venezuela’s gold, is spinning in his grave.
It started in March, when Venezuela’s embattled leader Nicolas Maduro defaulted on a $1.1 billion gold-backed loan with Citi, in the process losing several tons of gold placed as collateral by Venezuela’s central bank after the deadline for repurchasing them expired. Now, Bloomberg reports that Venezuela has also defaulted on a gold swap agreement valued at $750 million with Deutsche Bank, prompting the German bank to seize the precious metal which was used as collateral, and close out the contract.
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As part of a financing agreement signed in 2016 which we profiled here, Venezuela received a cash loan from Deutsche Bank and put up 20 tons of gold as collateral. The agreement, which was set to expire in 2021, was settled early due to missed interest payments as Venezuela has now effectively run out of foreign reserves.
It was the second time this year that the Maduro’s regime has failed to make good on financing agreements which have resulted in losses at a time when gold reserves are already at a record low. As we have noted previously, for example in “Venezuela Prepares To Liquidate Its Remaining Gold Holdings To Pay Coming Debt Maturities” Venezuela’s dwindling gold holdings had become one of Maduro’s last remaining sources of cash keeping his regime afloat and his military forces loyal. Before the central bank missed the abovementioned March deadline to buy back gold from Citigroup for nearly $1.1 billion, the Bank of England refused to give back $1.2 billion worth of Venezuelan gold.
Meanwhile, as Bloomberg reports, opposition leader Juan Guaido’s parallelgovernment has asked the bank to deposit $120 million into an account outside President Nicolas Maduro’s reach, which is the difference in price from when the gold was acquired to current levels.
“We’re in touch with Deutsche Bank to negotiate the terms under which the difference owed to the central bank will be paid to the legitimate government of Venezuela,” said Jose Ignacio Hernandez, Guaido’s U.S.-based attorney general. “Deutsche Bank can’t risk negotiating with the central bank’s illegitimate authorities,” particularly after it was sanctioned by the U.S. government, Hernandez said, even though the military has stubbornly refused to go along with the US attempted government coup, leaving the seized gold in limbo.
While insolvent Venezuela, which defaulted on its dollar-denominated bonds in 2017, is becoming increasingly cut off from the global financial network due to sanctions, it still managed to sell $570 million in gold last month, prompting total foreign reserves to tumble to a 29-year low of $7.9 billion.
Meanwhile, Venezuela has not only become a symbol of the destructive influence of socialism and associated hyperinflation, but a case study of how to obliterate the only real hard currency left when everything else is gone: the government managed to blow through more than 40% of Venezuela’s gold reserves last year, selling to firms in the United Arab Emirates and Turkey in a desperate bid to fund government programs and pay creditors.
This Cycle’s Most Dangerous Bubble, In Three Charts
One of the lessons of the past few decades’ boom/bust cycles is that each financial bubble emerges in a different asset class. In the 1970s it was precious metals, in the 1980s junk bonds, in the 1990s tech stocks and in the 2000s mortgage-backed bonds.
Today the only one of these with a reasonable chance of blowing up the economy is Big Tech, which is wildly overvalued by any historical measure.
But a better candidate for the title of most dangerous bubble is emerging: Corporate debt, specifically the “almost junk” portion of that market.
Let’s start with the ongoing surge in overall corporate borrowing, which as a percentage of GDP is now back to the high achieved during the Great Recession, and higher than before the previous two recessions:
But not all corporations are misbehaving. The clear and present danger is coming from BBB rated debt, which means low-rated borrowers that aren’t quite as dicey as actual junk borrowers. This category was less than $1 trillion in the 2000s housing bubble and has since about tripled.
Meanwhile, the terms of these loans are increasingly of the “covenant-lite” variety that don’t require companies to keep their finances within reasonable boundaries. This kind of bond is now 80% of the speculative-grade, or leveraged, loan market, up from just 6% in 2006.
American Soil Is Being Globalized: Nearly 30 Million Acres Of US Farmland Now Owned By Foreigners
All across America, U.S. farmland is being gobbled up by foreign interests. So when we refer to “the heartland of America”, the truth is that vast stretches of that “heartland” is now owned by foreigners, and most Americans have no idea that this is happening. These days, a lot of people are warning about the “globalization” of the world economy, but in reality our own soil is rapidly being “globalized”. When farms are locally owned, the revenue that those farms take in tends to stay in local communities. But with foreign-owned farms there is no guarantee that will happen. And while there is plenty of food to go around this is not a major concern, but what happens when a food crisis erupts and these foreign-owned farms just keep sending their produce out of the country? There are some very serious national security concerns here, and they really aren’t being addressed. Instead, the amount of farmland owned by foreigners just continues to increase with each passing year.
Exclusive: Purging Brazil of Socialism, an Ongoing Battle—Eduardo Bolsonaro
March 2019 Updated: May 16,
The Epoch Times had the opportunity recently to sit down with Eduardo Bolsonaro, a congressman in Brazil and the son of Brazil’s president, Jair Bolsonaro, to discuss the situation in Brazil, on the occasion of his father’s state visit to the White House on March 19.
The Epoch Times: You have served two terms in Congress in Brazil, and in this last election, I understand you won in a huge landslide—you had more votes than any Brazilian congressperson has ever won?
Eduardo Bolsonaro: Yes. It was a surprise for us. We weren’t expecting that much, but it was historic. It says a lot about the moment that we are living in and not only in Brazil. If you look around in the whole region, you have other people with the same thinking, the same way as President Jair Bolsonaro, and as Trump, too. You look to Chile, you have [President] Sebastian Pinera; Colombia, [President] Ivan Duque [Márquez]; Paraguay, [President] Mario Abdo Benítez; [President Mauricio] Macri in Argentina.
So it’s not a movement about the extreme right, as the press usually sees that we are. It’s something that is natural and is a huge message that we don’t want socialism anymore
Global Investors Flee Chinese Stocks at Fastest Pace Since 2015
FRANKFURT, May 8 (Reuters) – Deutsche Bank faces a possible public rebuke from shareholders after two influential investor advisory groups urged them to issue a vote of no confidence in the lender’s management.
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The best performing metal this week was palladium, up 3.52 percent as CPM Group noted that the price could climb to $1,800 on supply constraints. Gold traders and analysts switched from bullish to mostly neutral or bearish on the yellow metal this week, according to the weekly Bloomberg survey.
Turkey’s gold reserves reversed this week by rising $227 million from the previous week. The central bank’s holdings are now worth $20.9 billion as of April 12, according to official figures. Kazakhstan also increased its gold holdings to 11.63 million ounces in March, up from 11.46 million in February. Mexico, too, raised gold reserves by 3.86 million ounces last month.
Bloomberg’s Cormac Mullen writes that currency traders should get ready for a big move in the dollar, if past periods of low volatility are a guide. Over the last 25 years, there have been three previous troughs in the JPMorgan Global FX Volatility Index, and each time the U.S. Dollar Index has moved around 10 percent over the subsequent six months, according to Bloomberg data. A weaker U.S. dollar has historically been positive for the gold price as the two trade inversely.
The world’s most powerful banker has attacked socialism, saying it produces “stagnation, corruption and often worse”.
JP Morgan’s chief executive, Jamie Dimon, took aim at socialism in his annual letter to shareholders, and warned it would be “a disaster for our country”.
Dimon, who was paid $31m last year as the head of America’s largest bank and who is estimated by Forbes to be worth $1.3bn, took his swipe as a new wave of left politics has emerged in the US.
Democratic socialism has been embraced by a new generation of politicians, including New York congresswoman Alexandria Ocasio-Cortez, and supporters of Bernie Sanders, a longtime socialist now making a second bid for the presidency.
Dimon’s attack also comes as many leftwing Democrats, including Sanders and Senator Elizabeth Warren, have called for the breakup of big businesses and greater regulation of banking in particular.
In his letter, Dimon wrote: “When governments control companies, economic assets (companies, lenders and so on) over time are used to further political interests – leading to inefficient companies and markets, enormous favoritism and corruption.”
He went on: “Socialism inevitably produces stagnation, corruption and often worse – such as authoritarian government officials who often have an increasing ability to interfere with both the economy and individual lives – which they frequently do to maintain power. This would be as much a disaster for our country as it has been in the other places it’s been tried.”
Socialism is set to be one of the key issues of the 2020 election cycle. Donald Trump has already begun campaigning against socialism and used his State of the Union address to declare that “America will never be a socialist country.”
“It is absolutely obvious that a big chunk of [people] have been left behind,” Dimon said last month. “Forty percent of Americans make less than $15 an hour. Forty percent of Americans can’t afford a $400 bill, whether it’s medical or fixing their car. Fifteen percent of Americans make minimum wages, 70,000 die from opioids [annually].”
In his letter, Dimon acknowledged capitalism’s “flaws” but praised it as “the most successful economic system the world has ever seen”.
He wrote: “This is not to say that capitalism does not have flaws, that it isn’t leaving people behind and that it shouldn’t be improved. It’s essential to have a strong social safety net – and all countries should be striving for continuous improvement in regulations as well as social and welfare conditions.”
Hundreds of police swarmed the streets of Beijing’s financial district on August 6 as Chinese authorities aggressively quashed a planned protest against losses sustained by peer-to-peer (P2P) lending platforms. (GREG BAKER/AFP/Getty Images)
Another P2P Lending Crisis in China, 220,000 Investors Losing 14.5 Billion Yuan
One of China’s top peer-to-peer (P2P) lending platforms, tuandai.com, collapsed last week, resulting in financial losses for scores of Chinese investors. The platform owners Tang Jun and Zhang Lin surrendered themselves to police on March 27.
“Never say never, but it would take a massive shift in the appetite for risk assets globally for us to go retest the lows or make new lows for the crypto market now.”
April Gold’s tortuous slog toward an ‘easy’ rally target at 1332.00 warrants a closer look at the bearish case. For if the futures were to fall just $9 to the green line shown in the chart (click on inset), that would trip a theoretical sell signal to as low as 1255.90 — a 4.5% plunge from current levels. Although the bull trend begun last August from 1182 still dominates the daily chart, the A-B countertrend shown in the chart is sufficiently compelling to imply that a sharp correction may be imminent. The danger would be averted by a rally exceeding 1356. 80, where a small but technically significant peak was notched on the way down from 1400 last spring.
“The extraordinary stress currently seen in Turkey’s lira funding market may appear to be a niche issue, but the repercussions will be far-reaching…”
North Korea’s military has stolen more than half a billion dollars in cryptocurrency
A panel of experts has told the United Nations Security Council that North Korea stole more than half a billion dollars’ worth of cryptocurrency from online trading platforms during 2017 and 2018, and used blockchain technology to cover its tracks. The… Read more
QuadrigaCX, which had been Canada’s largest cryptocurrency exchange prior to its sudden collapse, was seemingly a trustworthy storehouse of its customers’ crypto wallets – its CEO, Gerry Cotten, also a seeming humanitarian who, prior to his alleged “passing away,” was supposedly traveling in India where he was “opening an orphanage to provide a home and safe refuge for children in need.”
But many are asking serious and pertinent questions following the news that Cotten was allegedly the only person at QuadrigaCX who possessed the “keys” to the company’s crypto wallets, and that he somehow failed to share these keys with anyone else – even though he knew he was sick.
The official story is that Cotten let out his final breath after suffering “complications” associated with his “Crohn’s disease,” and that remaining employees at QuadrigaCX have had “no luck” gaining access to the hundreds of millions of dollars’ worth of crypto coins that are now supposedly inaccessible by anyone.
“Since his death, 115,000 customers of the exchange have been struggling with Mt. Gox-style ‘liquidity issues’ as those trying to withdraw their funds have suddenly found it extremely difficult – if not impossible – to do so successfully,” explains ZeroHedge.com.
Crypto General News
Binance has partnered with Israel-based payments processing firm Simplex to allow purchases with Visa and MasterCard. At launch, credit card purchases will be enabled for BTC, ETH, LTC and XRP – tradable against the 151 other tokens Binance offers.
Boerse Stuttgart Group, Germany’s second-largest stock exchange, has launched a mobile app for crypto trading after a year of development. The Bison app is available on iOS 9+ and Android 4.4+ devices in Germany, and allows users to trade in BTC, ETH, LTC and XRP and fund their accounts with euros – along with zero trading fees and a built-in wallet.
B2C2, an electronic OTC trading firm and crypto liquidity provider, has received the green light to offer crypto derivatives in the U.K. The FCA regulated firm will offer crypto contracts for difference (CFDs) for BTC, BCH, ETH, LTC and XRP.
Cboe has resubmitted its joint proposal with VanEck and SolidX after being withdrawn earlier this month due to the U.S. government shutdown.
Cottonwood Vending LLC is the latest company to receive New York’s coveted BitLicense and is now the third Bitcoin ATM operator to do so.
Fidelityannounced its crypto trading and custody platform is in its “final testing” phase. The release noted the company has on-boarded “a select set of eligible clients” already.
IBM has completed a trial of blockchain technology to track a shipment of 28 tons of mandarin oranges from China to Singapore. IBM created an electronic bill of lading, or e-BL, which sped up administrative processes “to just one second” along with reducing costs.
Prime Trust, the Nevada trust company, announced it has removed all fees for storing cryptocurrencies – in line with what it charges to custody stocks and bonds.
QuadrigaCX, the Canadian crypto exchange, is filing for protection from creditors, a step taken to avoid bankruptcy. QuadrigaCX has asked the Nova Scotia Supreme Court to appoint Ernst & Young (EY) to act as independent third party to oversee its proceedings.
Staked, a startup that provides institutional investors with the infrastructure for non-custodial staking, has received $4.5 million in a seed round led by Pantera Capital. Notably, a Bloomberg article published today suggests proof-of-stake (PoS) token investors have a unique option to survive the protracted crypto market slump: staking their holdings.
Ethereum$107.72 USD (0.17 percent) anticipated test net solution, Görli blockchain, launched today. Görli will function as the test network to initiate new validators, as part of “phase zero” – Prysmatic Labs test for Ethereum’s shift towards proof-of-stake (PoS).
Stellar’s$0.083537 USD (0.32 percent) micropayments startup SatoshiPay is partneringwith Axel Springer, a publishing house owning some of Europe’s largest newspapers.
Ripple$0.309756 USD (0.49 percent): SBI CEO Yoshitaka Kitao just gave a speech on the impact Ripple and R3 will have on international payments: “Swift have run out of options, Swift have given up on what they can do internally.”
America’s growing budget deficit, and surging debt issuance, has so far not been a major issue allowing the US to fund itself with relative ease. However, one look at the CBO’s long-term debt forecast, and the skies may turn cloudy fast.
Bitcoin is NOT decentralized: Just 1,000 accounts control 85% of all Bitcoins in the world… and they easily rig market swings to skim profits from the masses
A sizable number of formerly dormant Bitcoin wallets are mysteriously coming alive, new reports indicate – including the relatively small handful of Bitcoin wallets that collectively hold upwards of 85 percent of the world’s total Bitcoin supply.
Following the recent mega-decline in Bitcoin’s value, where the popular cryptocurrency dropped in value from around $20,000 per coin last year to around $3,500 per coin at present, many Bitcoin wallets that have been inactive for anywhere between six months to two-and-a-half years are suddenly “waking up” – which has investors projecting more wild price swings for Bitcoin in the near future.
It would appear as though Bitcoin’s earliest adopters, many of whom have been sitting on somewhat large amounts of the cryptocurrency and doing nothing with it, are suddenly getting in on the action. According to Flipside Crypto, the number of inactive Bitcoin accounts has plummeted from nearly four million back in September to well under three million as of this writing.
“The owners of some of bitcoin’s oldest accounts — many of which have long been dormant — have shown signs of life starting in October,” explains Zero Hedge, citing data recently published by Bloomberg about where Bitcoin could be headed now that the old dogs are starting to play the game.
“The actively-traded supply of bitcoins has risen 40% since last summer … This is important because a similar pattern preceded large price swings in 2015 and 2017, most recently foreshadowing the frenzy of (manipulation aided) buying that sent the price of a bitcoin to $20,000 briefly before prices cratered the following year.”
As rumors about a possible Deutsche Bank merger with rival troubled German lender Commerzbank continue to swirl despite the seemingly never-ending investigations into a suite of alleged misdeeds by the bank, Bloomberg has given would be merger arbs weighing whether to buy the German lender’s battered shares one more reason to hold off.
Despite cost controls, increased efficiency, and higher activity offshore Norway, oil production at Western Europe’s largest oil producer fell in 2018 compared to 2017 and is further expected to drop this year to its lowest level since 1988.