G. Edward Griffin, the author of the seminal book on the formation of the Federal Reserve, The Creature of Jekyll Island, joins the podcast this week to add his perspective to our ongoing critical examination of the Fed and the impact its actions are having on society.
Meeting Ed and getting to spend time with him was a real honor for Chris and me. His breadth of knowledge of the central banking system as well as his engaging manner of storytelling are masterful. Plus, he's simply a wonderfully kind person.
Ed's decades of research and critique of the Federal Reserve, sadly, have left him with conclusions that corroborate our own. Despite its carefully-crafted image as an essential public servant, Griffin concludes it is anything but. It is a private cartel that has connived its way to tremendous advantage and power, secretly (and not-so-secretly) plundering the American people of their treasure and freedoms.
Silver Prices Smashed While COMEX Open Interest Hits New Record. Just What’s Going On – Are the Bullion Banks On the Ropes? Expert Analyst Craig Hemke Joins the Show to Help Us Break Down All the Action:
The Capitulation Is NOW
Is Andrew Maguire Right? Are the Bullion Banks ON THE ROPES?
Craig Explains We’re Seeing the CAPITULATION in Gold & Silver Sentiment NOW
“It’s CRIMINAL” Hemke Is FIRED UP Over Silver Fraud
US Retail Gold & Silver Demand Gives Up the Ghost – US Mint Silver Eagle Sales Only 600k For Entire Month of April!
Audible.com just released a new show on Bernie Madoff (Ponzi Supernova, available for free to subscribers) that explains how the world’s biggest financial scam was enabled by banks and hedge funds who were making so much money that they chose to ignore obvious red flags.
Which sounds a lot like today’s China, Inc. Here, for instance, is a sequence of events involving China Huishan Dairy Holdings, an apparently too-big-to-fail chain of dairy farms:
March 21. Huishan Dairy misses payments on some of its loans. The wife of the chairman and largest shareholder (herself an executive in charge of relationships with the company’s bankers) goes missing.
March 23. The local provincial government holds a meeting with the company and its creditor banks to propose a plan to inject liquidity into the company. This is not announced publicly.
March 24. Huishan’s shares plunge 85% in an hour, wiping out more than $4 billion of market value and leading to an indefinite trading halt.
March 28. Huishan admits to missing loan payments and misplacing the Chairman’s wife, but denies reports of faked invoices and misappropriation of funds. The local government, it promises, will buy some of the company’s excess land to bolster its balance sheet and the Chairman will sell some of his shares and invest the proceeds in the company.
Somewhere along the way, the government “ordered financial institutions involved not to downgrade the company’s credit rating or file lawsuits against it.”
As Quartz.com noted at the time: The Chinese government can’t afford to let Huishan fail. Credit markets already deeply distrust the rust-belt Liaoning province. Authorities there were revealed to be faking economic numbers, including the province’s GDP growth, from 2011 to 2014. The province was the only province that fell into recession last year. Meanwhile local firms Dongbei Special Steel and Dalian Machine Tool went into default last year.
If Huishan does go bust, the fallout could also be disastrous for some Chinese banks. At least one of them has already felt the chill: Jiutai Bank, which is the dairy maker’s second-biggest creditor, saw the biggest one-day drop in its shares this week. According to Caixin, the small bank’s loan to Huishan currently stands at around $266 million, bigger than its estimate of impairment losses on bad loans for the whole of 2016.
The situation is not much easier for the midsize Ping An Bank, which lent nearly $300 million to Yang’s offshore entity Champ Harvest, with a 25% stake in Huishan as collateral.
And now this, from today’s Wall Street Journal:
Chinese Aluminum Giant Faces Credit Crunch The world’s biggest aluminum producer is in trouble, locked in a feud with its accountant over fraud allegations that have forced it to suspend trading of its shares and seek help from the central government in Beijing. China Hongqiao Group Ltd., has drawn the attention of the global aluminum market and U.S. trade officials as it soared to the pinnacle of the industry in the past few years, leapfrogging the production of giant competitors like Alcoa in the U.S. and United Co. Rusal in Russia.
Its rise coincided with American allegations that Chinese companies—helped by government subsidies—flooded the world with cheap aluminum, coal and steel, depressed prices and decimated U.S. industries.
U.S.-Chinese trade issues were a focus of a two-day summit last week between President Donald Trump and President Xi Jinping of China.
Now China Hongqiao, a Hong Kong-listed company that employs nearly 60,000 people, is facing fraud allegations from two short sellers that the firm says threaten its financial stability.
In a March 4 letter reviewed by The Wall Street Journal, China Hongqiao sought assistance from a trade group, the Chinese Non-Ferrous Metals Industry Association, or CNIA, saying the short sellers’ claims of inflated profits were forcing the company’s accountant, Ernst & Young, “to adopt an extremely conservative and careful attitude.”
Then, on March 6, Ernst & Young notified the company it had suspended its audit of its 2016 financial results, according to a March 31 statement by China Hongqiao. Ernst & Young asked the company to commission an independent investigation into the short sellers’ claims, delaying the release of the company’s annual financial results, China Hongqiao said.
Without audited results, China Hongqiao said in its letter to CNIA, the company risks an investigation from Hong Kong securities regulators and a credit crunch. The company has about $10 billion in debt, according to securities filings. It could be in default on a $700 million loan unless it gets waivers from creditors, says Standard & Poor’s Global Ratings.
S&P, citing the move by Ernst & Young, has downgraded China Hongqiao’s bonds a notch deeper into junk territory to B-plus.
China Hongqiao asked the CNIA and the Chinese government to come to its aid, warning in its March 4 letter of “serious effects” if nothing is done, including “regional systemic financial risks” and “dramatic social unrest.”
The U.S. government in January launched a formal complaint against the Chinese government with the World Trade Organization, accusing China of funneling artificially cheap loans from state-run banks to aluminum producers including China Hongqiao. China provides China Hongqiao with access to cheap coal, aluminum and electricity, according to the WTO complaint.
There’s a pattern here that isn’t confined to just these two companies: Cheap financing either subsidized or provided directly by government enables Chinese companies to expand beyond the limits of the global marketplace, producing a glut which makes the previously-mentioned loans unmanageable.
The companies hide their failure for a while but eventually are exposed, leading local governments to step in with new money and the central government to change the rules to prevent market participants from warning others and/or moving their capital out of the way.
As with Madoff’s Ponzi scheme, the game goes on as long as new money continues to flow in and the major players continue to pretend (or are forced to pretend) that things are okay. It ends when either of those conditions changes.
Such scams don’t tend to peter out over time. Usually – like the above dairy and aluminum companies – they seem fine until one day they’re not.
In the latest escalation over what may be an imminent preemptive airstrike on North Korea by US warships now located just 300 miles away from the North Korean nuclear test site, moments ago China's national airline, Air China, announced it was suspending flights from Beijing to the North Korean capital, Pyongyang, from late on Friday, Chinese state broadcaster CCTV said. It did not say why the flights, which operate on Monday, Wednesday and Friday, were being suspended.
In the report published on its website, CCTV did not cite a source while according to Reuters, Air China could not immediately be reached for comment after business hours. The last flight between the two cities took place on Friday, with the return flight to Beijing arriving in the early evening, the broadcaster said. Air China began regular flights between the two countries in 2008 but the flights were frequently cancelled because of unspecified problems, the broadcaster said. China is North Korea's sole major ally but it disapproves of the North's weapons programs, and its confrontations with the United States and its Asian allies, and it has supported U.N. sanctions against it.
Following repeated missile tests that drew international criticism, China banned all imports of North Korean coal on Feb. 26, cutting off the country's most important export product. North Korea's army vowed a 'merciless' response to any US provocation, the official news agency reported Friday, as tensions soar over Pyongyang's rogue nuclear program.
Meanwhile, after warning that it was ready to "go to war", on Friday North Korea's army vowed a "merciless" response to any US provocation, the official news agency reported Friday. A statement of KCNA, which cited Washington's recent missile strike on Syria, said the administration of President Donald Trump had "entered the path of open threat and blackmail against the DPRK". - Source, Zero Hedge
Readers of these commentaries may have wondered if they were receiving mixed messages over these past many months. On the one hand, they have been told that converting our paper wealth into gold and silver is one of our most important wealth management strategies. Indeed, this has even been described as “the secret of wealth preservation”.
The strategy is a simple one (as opposed to simplistic). The banking crime syndicate is continually diluting our paper currencies as a covert means of stealing the wealth contained in those currencies. We know this, because we have a confession from one of the ringleaders of these financial criminals, before he became one of the ringleaders of these financial criminals.
In the absence of the gold standard, there is no way to protect savings from confiscation via inflation.
– Alan Greenspan , 1966
The word “confiscation” is just a polite term for theft. The excessive greed of whatever bankers are in control of the printing press inevitably results in the exchange rate of the paper currency being driven to zero. We know this, because in the 1,000 years since humanity first began using these un-backed “fiat” currencies they have always gone to zero – or been removed from circulation before that could happen.
The same fate which befalls these paper currencies – worthlessness – also affects any paper instruments directly attached to those currencies, with bonds being the notable example. Of course in the case of Western bonds, the debt instruments of hopelessly insolvent governments, they could plunge to worthlessness even before the paper currencies themselves. Just ask some of the bond-holders of Greece's debt.
Precious metals protect our wealth from theft-by-inflation while the bankers are perpetrating their crime. Gold and silver are also the ultimate insurance from the final death-spiral of these paper currencies which this excessive dilution always causes.
At the same time, readers have been frequently warned for the past two years that the bankers' current bubble-and-crash cycle in our markets is now ripe for detonation. U.S. markets, the apex of this fraud, have been at all-time highs for more than two years.
When these bubbles are detonated (including our real estate bubbles) so that the bankers can also profit from the “crash”, readers were told that precious metals will not be spared. Indeed, this was the reason for the “fake rally” of 2016: to raise gold and silver prices off of multi-year lows so that they could be slammed lower along with virtually all other asset classes.
We know that the Next Crash is coming because there is little profit to be made by the banking crime syndicate in continuing to pump these bubbles higher. We merely await the bankers' timing.
If gold and silver will also see their nominal prices plummet in the Next Crash, where is the value/incentive for people to use these eternal metals to shield their own wealth? This is the crux of this article.
There are several reasons why people should be sheltering their wealth in gold and silver now, even knowing that the nominal price of those metals will drop over the short term.
1) When the paper goes to zero it never recovers.
This article will regularly refer to the “nominal price” for gold and silver. This is simply the number we attach to gold and silver, denominated in a particular form of the bankers' paper. Irrespective of how the bankers manipulate the paper price of gold and silver, that price can never and will never go to zero because gold and silver have intrinsic value.
These metals have aesthetic value, being greatly in demand as jewelry and in a near-infinite number of ornamental applications. Gold and silver are the world's best “money” – perfect instruments for that use. They are also incredibly useful in industrial applications.
Silver is the planet's most-versatile metal, incorporated into more new patents than any other metal. Gold is also extremely useful from a metallurgical standpoint, but it is deemed to be too important as a form of international money to be used in industrial applications.
The paper has no intrinsic value of any kind. When confidence fails in a paper currency it goes to zero. When a government reneges on its debts, its bonds go to zero.
When the bankers push gold or silver prices to particularly absurd lows, the price boomerangs higher because these are hard assets with real value. We saw this after the Crash of '08. We will see it again in the Crash of '17 ('18?).
The problem is that with these paper currencies already extremely debauched and with our governments already past the point of insolvency, the Next Crash could easily be the final death-spiral for all Western currencies and bonds .
The bankers have already hinted at this with respect to their paper currencies. For the past five years, these financial felons have been sounding a steadily louder drumbeat about “SDR's”. They want to use SDR's as our (next) currency.
What are SDR's? These are the Strategic Drawing Rights of the International Monetary Fund (IMF). They are nothing more than a line of credit. In no way at all does this line of credit resemble a currency.
Imagine going to the bank to make a “withdrawal” from your own account , and what the bank gives you is essentially a loan. Not only does it totally obscure the concept of “wealth”, it totally blurs the distinction of who owns that wealth.
You go to the bank to withdraw your SDR's, but your bank loans them to you? It's no more (or less) insane than so-called “negative interest rates”. You deposit your wealth into a bank, effectively loaning that wealth to the bank, and then the bank charges you interest?
This is the world of paper fraud in which the banking crime syndicate is immersing us. Perversity piled atop perversity. Crime piled atop crime.
Keeping one's wealth in paper because we are afraid that the (nominal) price of gold and silver will declinetemporarily keeps that wealth continually exposed to the ever-worsening frauds of the bankers, condoned by our puppet governments.
If your wealth is in paper, the bankers control it. This is the ever-louder message as the financial laws of these fascists grow ever more extreme. If your wealth is in gold and silver, you control it.
2) Gold and silver will recover stronger/faster than other asset classes
The Crash of '08 caught all precious metals investors by surprise. Not the Crash itself, most of us could see that coming. What surprised us was the plunge in gold and silver prices – knowing that these metals are humanity's oldest and surest Safe Havens. We were surprised that the bankers were capable of pushing price lower, while a financial panic was occurring.
What did not surprise us was what came after that Crash: the longest-and-strongest part of a ten-year bull run for gold and silver.
In 2009, 2010, and the first part of 2011, gold and silver led all asset classes – with silver leading gold by a healthy margin. The price of silver ran from $8/oz (USD) to $49/oz, a six-fold increase. The price of gold ran from below $700/oz to nearly $2,000/oz, close to tripling.
Even then, there was absolutely no fundamental reason for gold and silver prices to have reversed lower in 2011. Gold is a monetary metal. When B.S. Bernanke quintupled the U.S. monetary base after the Crash of '08, the price of gold had to perfectly reflect that quintupling.
The price of gold was at roughly $800/oz when Bernanke began the Bernanke Helicopter Drop. This meant that when Bernanke (officially) ended his money-printing binge in the end of 2013, the price of gold had to be at least $4,000/oz.
Silver, meanwhile, is grossly undervalued versus gold. For over 4,000 years; the gold/silver price ratio gravitated around 15:1. Over the past 100 years; silver has become more and more important in a wide array of industrial applications. In other words, it has gotten even more valuable. Yet instead of the price ratio shrinking below 15:1, it has expanded as high as 100:1.
Consequently, most of the world's stockpiles of silver have literally been consumed: strewn across landfills all over the world in tiny concentrations, in 10's of billions of consumer goods. Between 1990 and 2005 alone, global silver inventories plummeted by 90%.
The silver market has now been in a continuous supply deficit for at least 30 years. When default occurs in the silver market, the gold/silver price ratio will be restored.
The price of gold and silver was never allowed to come close to fair market value even by 2011. Since that time, prices have been pushed back down to utterly absurd levels – and will go lower still (for reasons already explained).
Only traders seek to profit on their buying and selling every week of every year, and most go broke in the attempt. Investors put their wealth into an asset class not based upon the short-term price of that asset tomorrow, but rather with their mind focused on the long-term value of that asset in the future.
We should be converting our paper wealth into gold and silver today because it provides us with the ultimate financial insurance:
1) before the Next Crash,
2) during the Next Crash,
3) and after the Next Crash.
Gold and silver protect us now by saving our wealth from the bankers' relentless theft-by-inflation (the same “inflation” that these lying criminals pretend does not exist).
Gold and silver will provide us with the ultimate financial insurance during the Next Crash. Precious metals do so by making all wealth sheltered in those metals immune to any calamities which occur to the bankers' paper (i.e. the inevitable death-spiral to zero).
Gold and silver will provide us with superior value after the Next Crash because (for many reasons) they will once again be the best-performing asset classes when we emerge from the financial rubble – in whatever troubled future the bankers have created for us.
Since her awkward March speech in which Hillary vowed she was "ready to come out of the woods," the world has been anxiously waiting for the two time failed presidential candidate to announce her next move. In the absence of facts, rumors have swirled that she might consider a run for Mayor of New York, start working on a 2020 presidential bid or just return to the Clinton Foundation.
Now, courtesy of The Hill, it seems we can at least knock a return to the Clinton Foundation off the list of possible future careers.
“She’s taking a look at her life and wants to try some different things,” said one ally who has spoken to Clinton in recent weeks. “She’s not tying herself to something that’s always been an option. She wants to figure out what she wants to do.”
Still, those familiar with Clinton’s immediate future say that just because she won’t take an active role in the organization doesn’t mean she won’t give occasional foundation-related speeches or participate in its programs.
“Everyone knows they’ll have access to her whenever they need her,” the confidant said. “This has really become President Clinton and Chelsea’s thing.”
Perhaps the true catalyst is that with prospects for a "Clinton" being the next president no longer imminent - unless of course Hillary or Chelsea confirm their plans to run again - former donors such as Norway and Australia have quietly stopped handing over their cash?
Of course, with the various pay-to-play allegations surrounding the Clinton Foundation during her last presidential campaign, including that time she was offered $12 million for a "meeting" in Morocco, it's not terribly surprising that Hillary would look to distance herself from the organization if she's considering a return to public life.
Clinton took an active role in the family’s foundation after leaving the State Department in 2013, working on early childhood development and other issues involving women and girls.
“I am thrilled to fully join this remarkable organization that [former President] Bill [Clinton] started a dozen years ago, and to call it my home for the work I will be doing,” she said in remarks at the Clinton Global Initiative in 2013.
At the same time, in 2013, the foundation changed its name to the Bill, -Hillary and Chelsea Clinton Foundation, though it changed back to the Clinton Foundation in 2015.
And while we still don't know Hillary's ultimate ambitions, The Hill notes that she's hard at work making more money and playing with her grandchildren.
For now, Hillary Clinton is focused on her upcoming book, which she is writing with two campaign speechwriters: Dan Schwerin — who also helped write the former secretary of State’s 2014 book, “Hard Choices” — and Megan Rooney.
She is also scheduled for several speeches, including a commencement speech in May at her alma mater, Wellesley College.
In an interview Tuesday on “CBS This Morning,” Chelsea Clinton was asked what her mother’s plans might look like in the coming months.
“She’s focused, thankfully, on her grandchildren,” the former first daughter said. “She’s focused on what she can do to help support work that she’s been engaged in for longer than I’ve been alive, around children, around women, around families.”
Have we seen the end of Hillary's campaigning days or does she have one more tour of duty in her? A 2020 rematch could be good fun.
