China Takes Another Stab At The Dollar, Launches Currency Swap Line With France

One more domino in the dollar reserve supremacy regime falls. Following the announcement two weeks ago that “Australia And China will Enable Direct Currency Convertibility“, which in turn was the culmination of two years of Yuan internationalization efforts as summarized by the following: “World’s Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade“, “China, Russia Drop Dollar In Bilateral Trade“, “China And Iran To Bypass Dollar, Plan Oil Barter System“, “India and Japan sign new $15bn currency swap agreement“, “Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says“, “India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees“, and “The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap“, China has now launched yet another feeler to see what the apetite toward its currency is, this time in the heart of the Eurozone: Paris. According to China Daily, as reported by Reuters, “France intends to set up a currency swap line with China to make Paris a major offshore yuan trading hub in Europe, competing against London.” As a reminder the BOE and the PBOC announced a currency swap line back in February, in effect linking up the CNY to the GBP. Now it is the EUR’s turn.

http://www.zerohedge.com/news/2013-04-13/china-takes-another-stab-dollar-launches-currency-swap-line-france
Yuan Replaces the Dollar in China’s Dealings With France, Britain, Australia, as the War-Debt Continues to Destroy US Currency
http://www.aljazeerah.info/News/2013/May/5%20n/Yuan%20Replaces%20the%20Dollar%20in%20China’s%20Dealings%20With%20France,%20Britain,%20Australia,%20as%20the%20War-Debt%20Continues%20to%20Destroy%20the%20US%20Currency.htm

Japan Just Gave Us a Warning of What’s Coming Our Way

by Phoenix Capital Research

Anyone looking for clues as to what’s coming our way in the markets need only look to Japan where the QE forever policy has finally hit the wall.

Prior to the Prime Minister elections in September 2012, the Bank of Japan had already launched EIGHT QE efforts equal to over 20% of Japan’s GDP.

Throughout this period of money printing, Japan’s rate of GDP growth fell while its unemployment rate barely budged. There was little if any evidence that QE had accomplished anything.

However, this didn’t deter Prime Minister candidate Shinzo Abe from believing that QE was the answer to Japan’s woes. Abe ran on a platform of aggressive monetary expansion. As soon as he was elected he began promising to get the Bank of Japan’s money printers to work. The Japanese stock market, the Nikkei, took the hint and erupted higher, rallying over 70% in less than six months.

Sure enough, in April 2013, the Bank of Japan announced a massive $1.4 trillion QE program (equal to another 24% of Japan’s GDP). And the Nikkei experienced one last blow off top before collapsing:




In a matter of weeks, the Nikkei erased all of its post-QE gains, taking out its critical trendline and entering a bear market.

This is how market bubbles burst: the market enters a blow off top and then implodes violently, taking out all of its gains in a fraction of the time it took to create them.

This is coming our way, whether investors like it or not. The signs are all in place with the economy weakening, corporate profits set to fall, multiple Hindenberg omens and more.
For more market insights, visit us at:
http://gainspainscapital.com/the-inflation-secrets-your-broker-wont-tell…
Best Regards
Graham Summers

Everything Created Digitally Is Nearly Free–Including Money

by Charles Hugh-Smith
It is immeasurably easier to digitally create claims on real-world assets than it is to create real-world assets.
We all understand that the cost of everything that can be created digitally is near-zero.This is why music, videos, text-based knowledge and telephone calls (Skype) are now basically free.
Since money is now created digitally, it too is basically free. We can see how easy it is to digitally create trillions of dollars in this chart of the U.S. monetary base. Roughly $1.2 trillion was created out of thin air essentially overnight back in the good old days of global financial meltdown:

For another look at the wonders of the digital credit creation machine (a.k.a. digital printing press), here are the assets of the Federal Reserve banks: there’s the $1.2+ trillion again–hum, Baby! Hit me with another trillion….

Here’s a detailed look at the assets the Fed bought with its digitally created money–mostly Treasury bonds and real estate mortgages:

The key feature of digitally creating credit/money is this: it is immeasurably easier to digitally create claims on real-world assets than it is to create real-world assets.
This is why the digital creation of trillions of dollars in credit/money is distorting and disrupting the real economy of real-world assets: the claims on those assets keep expanding while the actual assets remain stubbornly tied to the real world.
This widening disconnect between rapidly multiplying digitally created claims on real assets and the actual assets has spawned a multitude of pernicious consequences, a few of which I have recently addressed:
How Cheap Credit Fuels Income/Wealth Inequality (May 30, 2013)
Why Serial Asset Bubbles Are Now The New Normal (June 6, 2013)
$179,000 Each–In Debt (June 5, 2013)
The Fleeting Beauty of Bubbles and Bonds (June 3, 2013)
Since money can be created for free, how does it retain its value? The answer is artificial scarcity. The example of a college diploma is instructive.
Digitally created massively open online courses (MOOCs) have now made instruction as free as text-based knowledge. This means that offering a college-level series of courses is now nearly free–a topic I have discussed in some depth: The Nearly-Free University (November 15, 2012)

Recent studies have found that students who watch MOOCs learn more and test higher than students attending live lectures: Professors Are About to Get an Online Education Georgia Tech’s new Internet master’s degree in computer science is the future
So how can colleges extract $100,000+ for something that is basically free? By monopolizing the issuance of diplomas. You can get the education for nearly free, but since the colleges own the right to print diplomas (for free), you have to pay them $100,000 for the piece of paper accrediting your free education.
This is a classic cartel structure: artificially limit the supply of what is in demand.
So how does the Fed artificially create scarcity-value for its freely created trillions of dollars? It restricts access to all that beautiful free money. Wouldn’t it be nice if you and I could reach in and grab a couple of million bucks from the overflowing till?
Or almost as good, how about borrowing a couple million at nearly zero interest rates? At .5%, the annual interest payment on $2,000,000 is a measly $10,000.
Alas, access to the nearly free money is restricted to a small financial Elite, the Aristocracy in our neofeudal debtocracy. This tiny Elite can borrow the money for nearly nothing and then go out and buy real-world assets with the digitally created credit.
Debt-serfs have access to limited sums of this free money, but at much higher rates of interest: for example, student loans cost between 6% and 9%.
When debt-serf purchases of assets serve the agenda of the political/financial Elites, for example buying an auto or home, then the free money is doled out to secure the key feature of debt-serfdom–serfs must service all the debt they take on, thereby enriching the financial system that loaned them the money.
And where did the financial sector get the money? From the Federal Reserve.
How about just giving me $500,000 at .5% interest direct from the Federal Reserve, instead of a mortgage at 3.5%? Sorry, it doesn’t work that way: the free money must be restricted to the financial Elite so it can profit mightily from its restricted access to all the free money.
Creating nearly free money and restricting it to benefit a tiny Elite certainly enables debt-serfdom, but it doesn’t do much for the real economy. Exhibit 1, fulltime employment:

The Fed can digitally print a trillion dollars at no cost, but that doesn’t mean the money flows into the real economy.
Once again we are compelled to ask: cui bono, to whose benefit?
America No Longer Innovative Driven: This is one of the most important video programs I’ve done with Gordon Long, as we discuss our obsolete education system, the knowledge economy, risk-taking and the bread-and-circuses mindset that dominates our society:

Peter Schiff: The Recovery Is Not Real, Positive Talk And Negative Numbers

Mysterious Early Gold Trade Friday June 7

Apparently someone jumped the gun on the BLS guesstimate on jobs this morning - by 62 milliseconds - and in a material way.  Was someone executing a very large and very lucky hunch, or was it something else entirely?
These things have a way of turning out to be contrary indicators.  Let's see if this one is no exception by sometime next week.   (Video from CNBC).


Source:  CNBC
http://video.cnbc.com/gallery/?video=3000174208

Financial Insider: “We Are Moving Into the Last Stages Before An All Out Collapse”

With the United States having reached unprecedented levels of debt and no end in sight, Europe close to widespread destabilization, and Japan now having lost control of their bond market, it should be quite apparent that there is no turning back.
Governments around the world are doing everything in their power to maintain the perception that all is well. Despite their best efforts, however, the coming catastrophe cannot be stopped.
The following video and accompanying excerpt recorded on the Hagmann and Hagmann Report Nightly Radio Show features Steve Quayle and financial insider “V,” also known as the Guerrilla economist.
This is critical knowledge and foresight into what is happening, what the triggers for the next collapse will be, and how the world’s elite plan on making their exits.
You will never hear information like this from mainstream media sources until after the fact, if ever.

Be forearmed and forewarned, because as “V” notes, what’s coming will leave no one on this planet untouched.
Video excerpt produced by The Daily Sheeple with permission from The Hagmann and Hagmann Report

The collapse that’s going to occur here is going to be a trifecta of bonds, stocks and real estate combined.
…
The Fed over here has ordered – and I want everybody to listen because this is insider information – the Fed has ordered the U.S. pension funds to begin to acquire U.S. debt. That is coming down the pike, it’s going to start happening, the states are going to start carrying it in order to fatten up their books… So, we are moving into the last stages before an all out collapse.
That’s exactly where we’re headed.
Now the Rubicon has been crossed… the armies are surrounding the Capital itself.

Excerpt continued…
We’re at a very critical juncture, and that’s what’s got me freaked out the most. The Japanese have lost control and they don’t know what to do at this point. .. They’re telling the public “don’t worry, everything’s ok.”
That is a signs, folks, that they are panicking. That is a sign that everything is not OK… that there is a great fear and trepidation that has begun.
And when this thing goes bust, this is the trigger that’s going to bring this whole thing down.
…
We’re on the last leg for this whole storybook. Unfortunately, it’s not going to be a storybook ending. So we’re in the last few pages of a chapter that’s been written about a hundred years ago, and it’s soon coming to an end.
…
 Now the question becomes, what exactly are they going to do?
They’re going to bring this thing to a halt. They’re going to create economic turmoil and a crash. And then they’re going to sell the population on some sort of armed conflagration, some sort of a massive global war. 
That is typically the playbook of the globalists. That is typically what we see, a pattern that is repeated often.
…
A small scale controlled regional war is not going to fix the $1.5 Quadrillion derivative debt globally.
A small scale regional war is not going to fix the massive levels of unemployment in America, in Europe, in Japan…
It’s not going to fix the economic problems that have festered in much of the western world and parts of the world that utilize a western style of banking.
It’s not going to fix it this time.
…
This time they’re going to drag everybody in. This time there’s not going to be anybody who’s going to be unaffected.
…
Let me tell you right now. It is mathematically impossible to pull this back. It’s mathematically impossible.
You cannot recall this. 
Recorded May 24, 2013 (full interview here)

Video excerpt courtesy The Hagmann and Hagmann Report, Steve Quayle and The Guerrilla Economist
Delivered by The Daily Sheeple
This article originally appeared on: SHTF Plan

Olli Rehn should resign for crimes against Greece and against economics

The consequences of Greek austerity (Photo: Getty)

Nobody has taken responsibility for the disastrous errors made by the EU-IMF Troika in Greece, where youth unemployment has just reached 58.3pc.
Nobody has resigned, or missed a day’s pay, or faced any kind of censure from an elected body, despite the withering indictment just issued by the IMF.
Worse yet, the basic conceptual policy errors that led to this tragic episode have not been fully corrected.
With a little trimming here and there, the eurozone is sticking to the same mix of self-defeating contractionary policies that have tipped the region back into a double-dip recession, with seven quarters in a row of falling GDP, soaring unemployment, and an ever starker divergence with the United States.
Just to recap what our man Bruno Waterfield reported from Brussels, the IMF’s mea culpa admits that the Troika sacrificed Greece to save the euro.
It completely misjudged the ferocity of the downward spiral caused by austerity a l’outrance, and then blamed the victim by pretending that Greece was failing to comply with the terms.
The Troika recoiled from the standard IMF policy of debt restructuring for Greece in 2010 because it was “politically difficult” for countries (France? Germany?) whose banks held Greek bonds.
The report said the terms of the rescue violated three of the IMF’s four key rules for lending to insolvent countries, no small matter given that it was the biggest loan the Fund has ever made in proportion to a member’s quota, and given that staff were “unable to vouch that public debt was sustainable”.
It admitted that the 2010 package was a “holding operation” that “gave the euro area time to build a firewall to protect other vulnerable members and averted potentially severe effects on the global economy”.
The European Commission defended itself yesterday, saying a debt restructuring in 2010 would have caused havoc in the bond markets and virulent contagion. This is true, but what kind of a defence is that?
Yes, everybody feared a chain-reaction of sovereign defaults reaching Italy and Spain, but this was entirely because the ECB was recklessly refusing to carry out its responsibility as a lender of last resort, the ultimate purpose of any central bank. In doing so, it was endangering the entire global financial system.
You can trace this paralysis to Maastricht and the nature of the ECB mandate, but as the Draghi (OMT) backstop for Italy and Spain has since demonstrated, what it really showed was that a lot of ECB governors were out of their depth, or pursuing naked national agendas, or both, and hiding behind what are in reality very elastic treaty clauses)
The IMF makes it crystal clear that the EU institutions and the leaders of EMU countries (still refusing to face up to the implications of EMU, or admit to their own voters that monetary union costs real money) were the chief villains in this saga.
What we see is a near perfect exhibit of what is wrong with the European Project. There is no mechanism of accountability. The buck stops nowhere.
I don’t wish to pick on Economics Commissioner Olli Rehn, although one’s patience runs out after listening to the Commission’s retort that the IMF is “plainly wrong”.
Mr Rehn is a decent man, with an impossible task, carrying responsibility without power. The politicians of the northern EMU states and the ECB are chiefly to blame.
I wrote at the time that Germany’s Wolfgang Schauble crossed a line by threatening to eject Greece from the euro and persistently vilifying the Greeks for failure to comply, when the essential failure was the policy itself. Greece kept missing deficit targets because the economy was collapsing, causing tax revenues to shrink.
Yet Mr Rehn is the titular official in charge. The Troika is “his” baby. If he were the finance minister of a democratic state he would surely have to resign after such blistering demolition of his tenure.
The fact that nobody ever resigns for botched policies in the EU system (Pace, the Santer Commission: the exception that proves the rule) should not deter Mr Rehn from falling on his sword from a high sense of honour. Such a gesture would clear the air, and mark a recognition that the policy formulae of EMU must be swept away to allow for recovery.
His director-general of economic and monetary affairs, Marco Butti, has admitted that the fiscal multiplier is higher than normal in a countries during a region-wide slump where the financial system has partially broken down and interest rates are near zero, and therefore that fiscal tightening does more economic damage.
But he admits it only in hindsight. The Commission now argues that the return to calm after the Draghi `Put’ has lowered the multiplier again, so there is no real need to change policy (other than letting the fiscal stabilizers do their work, avoiding the mistake of yet further tightening to chase missed deficit targets)
If no such resignation comes from Commissioner Rehn, we know the Rehn of Terror will go on. The regime will persist in destructive folly, adding 100,000 people to the jobless rolls each month.
Just a reminder of the scale of error, which I wrote about in this blog last year.
The Troika originally said that Greece’ economy would contract by 2.6pc in 2010 under the austerity regime, before recovering with growth of 1.1pc in 2011, and 2.1pc in 2012.
In fact, Greek GDP remained in an unbroken free-fall. It did not grow in either year. It contracted a further 7.1pc in 2011, 6.4pc in 2012.
Roughly speaking, the Troika misjudged the scale of economic decline over three years by 12pc of GDP. The total decline will be around 25pc, surely a Great Depression.
Don’t tell it was hard to foresee. The Greek Labour Institute and the think tank IOVE produced very accurate forecasts. The truth is that the Troika’s ideology of “expansionary fiscal contraction” is bunk, and doubly dangerous when compounded by tight money.
Like the Spartans, Thebans, and Thespians at the Pass of Thermopylae, the Greeks were sacrificed to buy time for the alliance.
Instead of applause, they were then vilified for their heroic efforts by ill-informed and self-interested Dutch, Finnish, Austrian, and German politicians. A squalid episode.

Why Serial Asset Bubbles Are Now The New Normal

by Charles Hugh-Smith
The problem is central banks have created a vast pool of credit-money that is far larger than the pool of sound investment opportunities.
Why are asset bubbles constantly popping up around the globe? The answer is actually quite simple. Asset bubbles are now so ubiquitous that we’ve habituated to extraordinary excesses as the New Normal; the stock market of the world’s third largest economy (Japan) can rise by 60% in a matter of months and this is met with enthusiasm rather than horror: oh goody, another bubblicious rise to catch on the way up and then dump before it pops.
Have you seen the futures for ‘roo bellies and bat guano? To the moon, Baby! The key feature of the New Normal bubbles is that they are finance-driven: the secular market demand for housing (new homes and rental housing) in post-bubble markets such as Phoenix has not skyrocketed; the huge leaps in housing valuations are driven by finance, i.e. huge pools of cheap credit seeking a yield somewhere, anywhere:

Asset bubbles are inevitable when the pool of good investment oppportunities is much smaller than the pool of credit-money sloshing around seeking a higher yield. It really is that simple. It’s astonishingly easy to create hot money: just create the money in a central bank and then make it available to financiers, investment banks, global corporations and other Financial Elites at near-zero real rates of interest.
It’s considerably more difficult to create a good investment opportunity: an investment that is worthy of the risk must have a sound base in fundamentals such as cash flow, return on investment, etc.
With so much hot money sloshing around, the only investments left are either highly risky (just ask the oil companies whose rigs were nationalized by Gabon) or plays on retaining purchasing power, for example, real estate in central London, where roughly half the buyers of tony townhouses are foreigners who don’t even occupy their luxe digs: the last thing they need is another mansion in a global money center, but they’re so desperate to park their capital somewhere low-risk that overpaying for a London manse makes excellent sense.

The problem is central banks have created a vast pool of credit-money seeking a return that is far larger than the pool of sound investment opportunities. In a world burdened by over-capacity in almost every sector, hot money is driven to seek the next emerging asset bubble as the only place to skim a yield. Empty flats in London, Manhattan or Shanghai, oil leases in Gabon, 10,000 sun-baked rental homes in Arizona, The Nikkei stock market, shares in U.S. utilities, bat guano futures–none of these asset bubbles make any sense in a world where credit is costly and scarce.
There are two other characteristics of this New Normal Bubble Economy:
1. Everyone who doesn’t have privileged access to vast sums of money at near-zero real interest rates is left out; no bubble gravy for the debt-serfs, except for those who qualify for socialized mortgages from FHA or other federal agencies. (And the idea behind these government-backed mortgages isn’t to enable serfs to gamble and win in the latest housing bubble, it’s to lock them into debt-serfdom where they’re making mortgage payments forever on a depreciating asset.)
2. All asset bubbles pop, destroying the phantom wealth of those holding claims on the underlying assets.
Is this a healthy economic system? No. Is it sustainable? No. Is it even capitalism? No. It’s a Neofeudal Debtocracy of rentiers and debt-serfs and hot-money driven asset bubbles that are passed off as “investments” to the credulous and unwary.
One question distills the dynamics down to their essence: cui bono, to whose benefit?
America No Longer Innovative Driven: This is one of the most important video programs I’ve done with Gordon Long, as we discuss our obsolete education system, the knowledge economy, risk-taking and the bread-and-circuses mindset that dominates our society:

Where The (Low-Paying) Jobs Were Are

The time has come to look at the quality component of the 175K jobs added in May, so without further ado, let's drill down at where the growth was. Without much surprise, we find that as in months past, the bulk of the job growth continues to be concentrated in the lowest wage jobs:

• Leisure and Hospitality added the most jobs in May, 43K
• Retail Trade jobs rose by 28K
• Education and health added another 26K
• Temp jobs: the lowest of all paying jobs added another 26K

In summary - of the 175K jobs, 122K was to low wage occupations.
How about higher paying jobs?  Professional and Business Services (ex. Temp) rose by 31K in May, less than the 34K in April, Financial Activities posted a tiny 4K increase compared to 9K in April, Wholesale Trade was up a whopping 8K (compared to 4K in April), and finally Manufacturing jobs declined for the second consecutive month in a row, dropping first 9K in April and now 8K in May.

German Police Officers Take Off Helmets & Marched With German Citizens Against Rothschild European Central Bank!

The German police took off their helmets and marched with the protesters- clearing the way for them.

Who Owns The European Central Bank?

The same people who own the Federal Reserve and who owned the first national bank of America, The Second national bank of America, The Bank of England. The same people who have been responsible for almost every war on e...

The Rothschild A.K.A. The Illuminati who are satanist. No they are not Jewish but they pretend to be. They want us to hate everyone else, so while we are fighting each other, they can own us all and laugh in the background.

Of What Was And To Come!

 

These Are The Same Cronies That Usurped The United States Central Bank _ The Federal Reserve And Turned Healthy Capitalism Into Cronie Capitalism By Derivative Fraud!

Here is a picture of Rothschild’s European Central Bank, which is located in Frankfurt, Germany!

Rothschild’s Handbook For Banker’s World Control.

German police officers escort an anti- cronie capitalism protest march with some 20,000 people in Frankfurt, Germany, Saturday, May 19, 2012. Protesters peacefully filled the city center of continental Europe’s biggest financial hub in their protest against the dominance of banks and what they perceive to be untamed cronie capitalism, Frankfurt police spokesman Ruediger Regis said.

Its Happening In Greece Too! Greece Military High Fives Fellow Citizen Fighting Banker’s Crime Of Austerity.

Greece Military Stands Down In Support Of Their Fellow Citizen: Mil...

Nice to see the police give protesters a hand. Let's hope this spreads a BIG ripple! (MHG).

David Morgan and Ellis Martin Report – A Currency Showdown-East VS West

In this interview with Ellis Martin, David Morgan ofhttp://www.themorganreport.com for the first time alludes publicly to economic and military polarization between the new Eastern Bloc and the Anglo-American consort having an affect on global currency trends. There is a distinct possibility that with the Fed and Central Banks’ help in gold and silver suppression, the Chinese and Russians can control world currency reserves with currency truly backed by gold. Why does June 2013 look like August and Sept 2001? Listen to this in-depth review of the current state of economic, geopolitical and military affairs.

Greenspan: Taper Now, Even If Economy Isn’t Ready; Marc Faber: Even QE99 won’t help US

Former Federal Reserve Chairman Alan Greenspan told CNBC on Friday that the central bank should taper its $85 billion a month bond buying even if the U.S. economy is not ready for it.
“The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve—that everybody agrees is excessive—the better,” he said in a “Squawk Box” interview. “There is a general presumption that we can wait indefinitely and make judgments on when we’re going to move. I’m not sure the market will allow us to do that.”
But if the Fed moves too quickly in reining in its accommodative policies, he added, it could shock the market, which is already dealing with a very large element of uncertainty.
Greenspan said he’s not sure the markets will allow an easy exit. “Gradual is adequate, but we’ve got to get moving.”
http://www.cnbc.com/id/100798203

http://video.cnbc.com/gallery/?play=1&video=3000174195

Marc Faber – Even QE99 won’t help US
Marc Faber believes that even though the quantitative easing (QE) by the US Federal Reserve does not benefit the common man, yet it is likely to continue. He also cautions of high market volatility in H2FY14
http://www.moneycontrol.com/news/international-markets/even-qe99-won39t-help-us-india-bestasia_892138.html
Markets Might Have Gone Too Far on Taper Talk: Fed’s Plosser
http://www.cnbc.com/id/100798320

Incentives encourage us to rip off customers, admit bankers as three quarters say excessive pay can encourage them to break the law

• More than 1,000 finance workers were surveyed about pay in the industry
• 75% said some bankers are  'still paid excessively'
• Two-thirds say they 'inappropriate behaviour' is encouraged

Cash: Five years after the financial crash banks admit they are still being paid excessively

Three quarters of bankers say some colleagues are paid an excessive amount that can encourage them to break the law, a damning study revealed yesterday.
Nearly five years after the financial crisis began in 2008, the report interviewed bankers themselves to highlight how little discredited working practices had changed.
It follows a devastating few years for an industry that the taxpayer was forced to bail out, only to see banks hit by a series of self-inflicted scandals including manipulating interest rates, ripping off vulnerable investors and mis-selling loans to small firms.
The report, from the Chartered Institute of Personnel and Development, suggested some of this unethical or illegal behaviour was a direct result of profligate salaries that ‘incentivise inappropriate behaviour’.
Despite such high-profile failures, the report says 75 per cent of bankers agreed some colleagues were ‘still paid excessively’.
According to the Office for National Statistics, the average salary of a man working full-time in the City of London is nearly £100,000, compared to the £36,000 average for men in full-time work across the whole of Britain.
The CIPD, which quizzed more than 1,000 finance workers, including nearly 500 bankers, said: ‘Almost two-thirds [65 per cent] of employees agree that some people in their organisations are still rewarded in a way that incentivises inappropriate behaviour.’

 

One in five bankers said they had ‘felt bullied or put under excessive pressure to behave in ways that are counter to their personal ethics or the interests of customers within the last two years’.
But it is the money, more than anything else, that made so many bankers chose to work in the industry in the first place.

Survey: More than 1,000 finance workers were quizzed about their work, and two-thirds said pay deals caused people to behave inappropriately

When asked why they went into banking, the most popular answer – given by a third of respondents – was the high salary and bonus.
Peter Cheese, chief executive of the CIPD, said: ‘For too long, many of our financial institutions had been built on cultures that encouraged and rewarded excessive risk-taking and singular focus on short-term financial gain.’
But nearly half of bankers said there had not been ‘any initiative’ over the last year to change the culture.

Former Barclays Chief Executive Bob Diamond (left) claimed two years ago that the time for 'remorse and apology' was over while Sir James Crosby, the former chief executive of Halifax, is one of the few senior bankers to apologise

Few top bankers have apologised, with former Barclays boss Bob Diamond criticised for claiming in 2011 that the time for remorse was over.
A spokesman for the British Bankers’ Association said: ‘Pay practices have been completely transformed. Since 2007, the total bonus pool has dropped by 55 per cent and bankers in London are now paid less than they are in rival financial centres such as New York, Singapore or Hong Kong.
‘Banks are rewarding staff for high levels of customer service and not sales volumes.’

EU put eurozone safety before Greece during bailout, IMF report claims

The bailout of Greece was bungled because it was an attempt to save the single currency rather than the debt-stricken country, according to a highly critical IMF report.

 
The IMF also admits that the impact of austerity policies in Greece was badly underestimated

The internal report on the handling of the Greek crisis has detailed a catalogue of errors, which led to the IMF breaking three out of four of its own rules relating to lending money to bankrupt countries.

It also admits that the impact of austerity policies in Greece was badly underestimated as EU institutions and leaders tried to save their political skins at the expense of the Greek economy.

The report, first leaked to the Wall Street Journal, explained that in 2010 the IMF lent €36bn (£30.5bn) to Greece despite a risk “so significant that staff were unable to vouch that public debt was sustainable”.

While the IMF scaled back its contribution to a second Greek bailout in 2012, amid growing concerns over whether debt could be paid back without devastating economic consequences, its loan to Greece is the largest ever in the fund’s history, relative to the size of the recipient country’s economy.

Most damaging of all is the IMF admission that the Greek bailout was not drawn up to help Greece but was a “holding operation” that “gave the euro area time to build a firewall to protect other vulnerable members and averted potentially severe effects on the global economy”.

The fund criticises the delay in restructuring Greece’s massive debt load, which eventually came in May 2012, two years after Greece’s original bailout deal.
The IMF document reveals that a decision write off the country’s debt, making it more sustainable and reducing the economic impact of austerity, was delayed because it was too “politically difficult” for countries whose banks held Greek bonds.
"Not tackling the public debt problem decisively at the outset or early in the program created uncertainty about the euro area's capacity to resolve the crisis and likely aggravated the contraction in output," said the report.
"An upfront debt restructuring would have been better for Greece although this was not acceptable to the euro partners. A delayed debt restructuring also provided a window for private creditors to reduce exposures and shift debt into official hands."
The prevarication also cost eurozone taxpayers dearly because during the two-year period between May 2010 and the summer of 2012, when a “haircut” was finally agreed, the debt burden had shifted from private banks to EU governments and the IMF.
The failure to write down Greek debt while it was privately owned increased the amount of money that Greece would have to pay back and led to a second €130bn bailout that was larger than the first, in 2012.
However, the report fails to explain why, notwithstanding the problems, the IMF agreed twice to bail out Greece, except to say that staff from the fund “explicitly flagged” risks and were concerned about global financial stability.
The IMF report is scathing about the so-called “troika”, a body that was created when the fund joined forces with the European Commission and the European Central Bank to run the first €110bn Greek bailout in 2010.
The EU side of the "troika" is crticised by the IMF, with the implication that it put secretive internal procedures and massaged figures to help meet fiscal targets set out in the Maastricht euro treaty before the economics of solving the Greek debt crisis.
"The Fund's program experience and ability to move rapidly in formulating policy recommendations were skills that the European institutions lacked," the report said.
"There were occasionally marked differences of view within the troika, particularly with regard to the growth projections."
The indictment of the “troika” will have wider resonance because as well as administering Greece it oversees the economies of the other bailed eurozone countries - Ireland, Portugal and Cyprus.
For 18 months, until December 2011, the troika failed to revise Greek austerity targets, effectively making them impossible to achieve as the economy in Greece worsened much more than the official forecasts suggested, including those by the IMF.
“The fiscal targets became even more ambitious once the downturn exceeded expectations,” the report said.
"The preceding discussion has raised questions about whether the fiscal targets should have been less stringent and whether less optimistic projections should have been made about growth, deflation, privatisation receipts, and regaining market access. Varying these assumptions would have materially affected the outlook for debt sustainability."
The IMF report additionally criticises the commission at a time when the Brussels-based EU executive has been given a beefed up role in managing eurozone economies in the wake of the debt crisis.
"The European institutions brought an integrated view to studying the Greek economy and emphasised the extent of possible spillover effects within Europe. At least initially, this was not the perspective taken by the Fund which was more accustomed to analysing issues with a specific country focus," said the report.
"However, the EC tended to draw up policy positions by consensus, had enjoyed limited success and had no experience with crisis management."

IRS Workers Say Supervisors Directed Targeting

WASHINGTON (CBSDC/AP) — Two Internal Revenue Service agents working in the agency’s Cincinnati office say higher-ups in Washington directed the targeting of conservative political groups when they applied for tax-exempt status, a contention that directly contradicts claims made by the agency since the scandal erupted last month.
The Cincinnati agents didn’t provide proof that senior IRS officials in Washington ordered the targeting. But one of the agents said her work processing the applications was closely supervised by a Washington lawyer in the IRS division that handles applications for tax-exempt status, according to a transcript of her interview with congressional investigators.
Her interview suggests a long trail of emails that could support her claim.
The revelation could prove to be significant if investigators are able to show that Washington officials were involved in singling out tea party and other conservative groups for extra scrutiny. IRS officials have said repeatedly that the targeting was initiated by front-line agents in the Cincinnati office and was stopped once senior officials in Washington found out.
A yearlong audit by the agency’s inspector general found no evidence that Washington officials ordered or authorized the targeting. However, the inspector general blamed ineffective management by senior IRS officials for allowing the targeting to continue for nearly two years during the 2010 and 2012 elections.
Since the revelations were made public last month, much of the agency’s top leadership has been replaced. President Barack Obama forced acting IRS Commissioner Steven Miller to resign, replacing him with Danny Werfel, a former White House budget official who is conducting a review of the agency’s operations.
Three congressional committees and the Justice Department are also investigating. Investigators for the House Oversight and Government Reform Committee and the House Ways and Means Committee have interviewed at least four IRS workers as part of their probe.
Obama National Security Record Similar To George W. Bush
The Associated Press viewed transcripts of interviews with two IRS agents working in the Cincinnati office.
Gary Muthert, an IRS agent there, said his local supervisor told him in March 2010 to check the applications for tax-exempt status to see how many were from groups with “tea party” in their names. The supervisor’s name was blacked out in the transcript.
“He told me that Washington, D.C., wanted some cases,” Muthert said of his supervisor.
Muthert said he came up with fewer than 10 applications. But after checking some of the group’s websites, he noticed similar groups with “patriots’ or “9-12 project” in their names, so he started looking for applications that mentioned those terms too.
This Week In News
Over a two-month period, Muthert said he found about 40 applications that mentioned tea party, patriots or 9-12 project — the latter being groups which aspire to reinstill a post-9/11 spirit of unity in the country.
“I used ‘patriots’ because some of the tea partiers wouldn’t, they would shorten their name to TP Patriots,” Muthert said. “I thought, OK, I will use ‘patriot.’”
Muthert said his supervisor told him that someone in Washington wanted to see seven of the applications, so Muthert prepared the files.
Whom did you send them to? An investigator asked.
“I don’t know,” Muthert answered.
Muthert did not respond to requests by the AP for comment.
Conflicting Laws, Ambiguous Language Help Fuel IRS Confusion
The IRS was screening the groups’ applications because agents were trying to determine their level of political activity. IRS regulations say tax-exempt social welfare organizations may engage in some political activity but the activity may not be their primary mission. It is up to the IRS to make that determination.
Elizabeth Hofacre, also an agent in the Cincinnati office, told investigators she was in charge of processing applications from tea party groups — once they were selected by other agents — from April 2010 to October 2010. Hofacre said her supervisor in Cincinnati, whose name was blacked out in the transcript, told her to handle the applications.
But, she said, an IRS lawyer in Washington, Carter Hull, micromanaged her work and ultimately delayed the processing of applications by tea party groups.
Hull is a lawyer in the division that handles applications for tax-exempt status. But, Hofacre said, his interest in the cases was highly unusual.
“It was demeaning,” she said. “One of the criteria is to work independently and do research and make decisions based on your experience and education, whereas on this case, I had no autonomy at all through the process.”
Hofacre said Hull signed off on letters she sent to the groups asking them for additional information and then reviewed their responses. Hofacre complained that Hull was slow to sign off on the letters.
This Week In Sports
“All I remember saying and thinking is, ‘This is ridiculous.’ Because at the same time, you are getting calls from irate taxpayers. And I see their point,” Hofacre said.
Hofacre said she became so frustrated with the delays that she applied for a different job within the agency and transferred in October 2010.
Neither Hofacre nor Hull responded to requests for comment.
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(TM and Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

20 Year Metals Trader: Every Metals Transfer Request From Major Broker is Being Rejected Multiple Times!

I have been a broker for 20 years. Recently the major broker dealer I work for asked me and my clients to leave due to too high of a concentration in physical metals.
I am now in the process of moving my clients and metals to a new custodian. Here is where things get interesting: Every transfer is being rejected multiple times for the any reason the old major broker dealer can come up with.
More interesting is all, when the old broker dealer finally does transfer the metals to the new custodian, NONE of the bars are the same in weight or serial number as my clients’ statements!
The old broker dealer is having to come to me and my clients with bars of different serial numbers and weight than the one listed on the statements or from old trade confirms.
This mis-match on transfers proves to me that the old broker deal NEVER had the metals and are now having to go acquire them to make good on client transfers.
I am 100% certain that the most of the metals have been removed from the United States, and when the stock market and bond market crashes this fall, all metals in private accounts will either not be there, or confiscated.
Heed this warning people, then end is HERE.

From Steve Quayle:
I have been a broker for 20 years. Recently the major broker dealer I work for asked me and my clients to leave due to too high of a concentration in physical metals. After 4 months of trying to find a new home for my business, and being denied by every major broker dealer in the US, I had no choice but to become an RIA.
After three months of complete BS getting my RIA approved I am now in the process of moving my clients and metals to the new custodian.
Here is where things get interesting. Every transfer is being rejected multiple times for the any reason the old major broker dealer can come up with.
More interesting is all of the metals which have variable weights like 1,000 Silver, 100 oz gold and 50oz platinum, when the old broker dealer finally does transfer the metals to the new custodian, NONE of the bars are the same in weight or serial number as my clients statements. The old broker dealer is having to come to me and my clients with bars of different serial numbers and weight than the one listed on the statements or from old trade confirms.
This mis-match on transfers proves to me that the old broker deal NEVER had the metals and are now having to go acquire them to make good on client transfers. Coincidentally, I was also a broker at Morgan Stanley in 2006 when MS got busted for excessive storage fees and it turned out MS never owned the metals that were printed on client statements either.
Moral to the story, if you own metals at a major broker dealer, just because they are printed on your statement, does not mean they exist. I highly recommend shipping them home, even if they are in a qualified account. If there too much to take out of a qualified account, transfer them to a new custodian, for the new custodian will not accept the transfer without video taping and verifying the move of metals from the storage depository to the new storage depository.
Last thing, I am 100% for sure that the most of the metals have been removed from the United States, and when the stock market and bond market crashes this fall, all metals in private accounts will either not be there, or confiscated.
Heed this warning people, then end is HERE.
Stephen (20 year financial advisor from four of the largest broker dealers)

THE ‘BEARMAGEDDON’ SCENARIO: 163,000 to 175,000 MORE Jobs…Yet UNEMPLOYMENT Rate RISES TO 7.6%… THE SCARIEST JOBS CHART EVER!!! YEN Is Soaring!!

7.6 Percent
Total nonfarm payroll employment increased by 175,000 in May, and the unemployment rate was essentially unchanged at 7.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, food services and drinking places, and retail trade.
http://www.weeklystandard.com/blogs/76-percent_733971.html
Jobs Report: May Unemployment Rate Rises to 7.6 Percent as 175,000 Jobs Are Added
Unemployment in May ticked up to 7.6 percent as employers added 175,000 jobs, a tepid report that may cheer investors hoping for interest rates to stay low, boosting stocks.
Economists including JJ Kinahan, chief derivatives strategist of TDAmeritrade, had expected the addition of 167,000 jobs with the unemployment rate unchanged at 7.5 percent.
http://abcnews.go.com/Business/unemployment-rate-rises-76-percent-175000-jobs-added/story?id=19342614#.UbHhE7XVCSo
GOLDILOCKS: This Was The Perfect Jobs Report For The Market 
The jobs report for May just came out. Job creation was solid at 175K. That’s ahead of the 163K that we got last month. And yet the unemployment rate rose to 7.6%. The previous month was 7.5%. That’s partially because the labor force participation rate actually increased.
http://www.businessinsider.com/goldilocks-this-was-the-perfect-jobs-report-for-the-market-2013-6
Stocks Open Higher After Jobs Report
Stocks opened higher Friday as the government’s monthly employment report was tepid enough for the Federal Reserve to maintain its bond-buying program in the coming months.
http://www.cnbc.com/id/100798036

THE ‘BEARMAGEDDON’ SCENARIO: Mike O’Rourke describes the possible nightmare facing the stock market and the Fed
He writes:
The Bearmageddon Scenario is one where the economic data rolls over and turns negative.  The reason we are mentioning it today is that this week we have received a sub-50 ISM Manufacturing report.  The last two major bear markets coincided with consecutive monthly sub-50 ISM prints.  That has yet to occur, but it is something to be cognizant of.  Although we don’t have confidence in ADP, if it is signaling weakness in tomorrow’s report, it would be a problem.  A Non-Farm Payrolls print around that 100,000 or less level about which investors are concerned would be a real problem.  After 18 months of multiple expansion, modest earnings growth driven by buybacks and full throttle monetary policy, a substantive weakening of economic data would be disconcerting to investors.  With zero interest rates and $85 billion a month in QE, how would the Fed respond to new weakness in the data?  More QE?  New weakness would just expose QE3 as a failure.  It would also confirm the Fed has wasted the past couple of years relying on QE.  We do not doubt Chairman Bernanke’s ability and creativity to devise a strategy to tackle weakness, but it would take some time as it did in 2008.  In the interim, markets would re-price significantly.  In an environment being driven by Central Banks, finding out they have no clothes would be a scary proposition.  The 14% year to date gain for the S&P 500 is supposed to be discounting economic improvement.  If that improvement turns out to be weakness, it means many market participants are off sides.

Read more: http://www.businessinsider.com/the-bearmageddon-scenario-2013-6#ixzz2VXRqTsZL

Japan’s yen is making some huge moves
http://www.businessinsider.com/yen-fluctuating-widely-2013-6

THE SCARIEST JOBS CHART EVER

Calculated Risk
http://www.businessinsider.com/the-scariest-jobs-chart-ever-2013-6
zerohedge‏@zerohedge2 min 
Overhead on CNBC: “No one believes the economy is getting better”
More Adult Swim Fireworks Out Of Japan Ahead Of “Most Important Ever” Non-Farm Payrolls
http://www.zerohedge.com/news/2013-06-07/more-adult-swim-fireworks-out-japan-ahead-most-important-ever-non-farm-payrolls
A 2 Day Yen Chart That’s Burying Traders And Crushing The Dreams Of Abenomics
Via FinViz here’s how the dollar has fallen from around 100 against the yen to below 96 in about 2 days.

FinViz

Read more: http://www.businessinsider.com/a-2-day-yen-chart-thats-burying-traders-and-crushing-the-dreams-of-abenomics-2013-6#ixzz2VXSxzFlV
Dollar-Yen Shake-Out Could Just Be the Start
A day after the U.S. dollar suffered its largest one-day fall in three years against the yen, strategists say the wild currency moves may be far from over and much is dependent on Friday’s key U.S. jobs report.
Japan’s yen, which has gone from steep decline to sharp gains in a matter of weeks, hit its highest level in almost two months against the dollar on Thursday. The euro jumped more than 1 percent against the greenback and the battered Australian dollar won a reprieve, bouncing off Thursday’s 20-month low. …
Read more:
http://www.cnbc.com/id/100797325

Schools or prisons? Cities choose incarceration over eduction during budget cuts

(RT)   Cities across the country are shutting down schools as way to deal with budget deficits. In cities like Chicago and Philadelphia, government officials say the closures are a last resort. Meanwhile, millions of dollars are being directed toward building a new prison and basketball arena, among other things.

France Prohibits Sending Currency, “Coins And Precious Metals” By Mail

Today’s AM fix was USD 1,410.00, EUR 1,065.12 and GBP 905.53 per ounce.
Yesterday’s AM fix was USD 1,399.50, EUR 1,066.69 and GBP 906.12 per ounce.
Gold climbed $9.90 or 0.71% yesterday to $1,412.00/oz and silver’s gained 0.71%.

Cross Currency Table – (Bloomberg)
Gold is mixed today after two consecutive daily rises. Gold futures in Shanghai jumped 1.5% at the open rising to 283.09 yuan per gramme prior to determined selling that capped the rise.
Gold looks set to have a third week of higher closes and is heading for the longest run of weekly advances since March. Gold is up 1.6% in U.S. dollars and 2.3% in Australian dollars due to concerns about the outlook for both the U.S. and Australian economies.
Markets await the U.S. nonfarm payroll data at 1330 GMT which will help inform as to whether the U.S. is heading into another recession which seems likely and whether the Federal Reserve would wind down its market supporting monetary stimulus.

Gold $/oz, 5 Days, 5 minutes – (Bloomberg)
There has been a decline in the volume of selling in gold ETF’s which suggests that the worst may be over in terms of liquidations.
However, further weakness in the gold price could result in another bout of liquidations from gold ETFs. This is, in and of itself, is a negative for the gold price. However, ETF sales are just one facet of the supply demand equation and coin and bar demand from Asian and international store of wealth buyers is a positive factor which is being overlooked given the focus on ETF liquidations.
There is also the important matter of central bank demand and this combined with international coin and bar demand may be enough to stabilize prices at these levels and contribute to gold's recovery.
Significant technical damage has been done to gold in recent months and momentum players and more speculative minded players are still the dominant force in the market.
However, as has been seen in the course of the bull market, in the long term gold's price will be decided not by speculators but rather by broad based global physical demand which remains quite robust despite the decline in ETF holdings.

Gold $/oz, Daily, 4 Year – (Bloomberg)
Gold has been hovering like a magnet at the $1,400/oz level since mid-May. It will need a convincing weekly close above $1,400/oz resistance level in order to embolden bulls and this should then lead to gold challenging the next level of resistance which is at $1,500/oz.
A failure to close above $1,400/oz on a weekly basis may embolden the shorts and could see gold pushed back down to test support between $1,320/oz and $1,340/oz. A close below these levels could see further stop loss selling and gold testing long term support at $1,200/oz.
$1,200/oz was the resistance level between November 2009 and August 2010 and this should provide long term support, especially given robust physical demand.
France Prohibits Sending Currency, “Coins And Precious Metals” By Mail
France has prohibited the sending of currency, “coins and precious metals” by mail.
In new legislation which was enacted May 23rd, the French government decreed that it is forbidden to send all forms of currency - coins and cash and all forms of precious metals – coins, bars and jewellery by mail.
The legislation was published on Legifrance, the French government entity responsible for publishing legal texts online and can be seen here.
It was not announced by the government and not covered in the media.  There were no communications and nobody in the government justified or explained this decision.
The legislation says that “the insertion of banknotes, coins and precious metals is prohibited in mailings, including the insured items, registered items and items subject to formalities certifying deposition and distribution. "
Some have suggested that the decree is to limit what is known in France as “the anonymous market”, the market in which no taxes are paid and people are free to trade without the supervision of banks and government.
However, euro coins and notes and gold bullion coins and bars attract no tax in France and therefore this is more likely to be an attempt to discourage the ownership of gold bullion and cash outside of the banking system and is a form of capital control.
It may also be an attempt to restrict the growing private market in France of people buying bullion online through Ebay which is increasingly popular.
The freedom of people to trade amongst themselves is a form of civil liberty as is the right to privacy.
The selling and the buying of precious metals in France are already subject to strict regulations.
Until September 2011, citizens could easily buy and sell gold coins and bars with cash but this was forbidden then when French citizens were forbidden to buy with cash in person and had to buy precious metals by trade mail, crossed cheque and by wire transfer or be “punished by a fine of fifth grade” which is a fine of some €1,500/oz.
The government decree does not specify that other independent companies cannot send gold and or silver coins or bars by mail. Indeed, it is only the French public company or national post company, La Poste that is forbidden in the decree.

Gold in Euros, 5 Year – (Bloomberg)
However, 3 months ago in March, Fedex began stopping French people from taking delivery of precious metals.
At the start of the year, UPS began stopping French people from taking delivery of precious metals.
Perhaps not coincidentally, in recent days Fedex have stopped allowing companies and individuals to send or receive gold and other precious metal bullion coins and bars by insured mail in Germany and the UK.
This is an important story that bears watching as it appears that governments internationally, from India to France are attempting to control, restrict and make it difficult for their citizens to own bullion.

US Jobs Data Whip Bullion Prices as Hedge Funds Stay Bearish, Indian Jewelers Decry Import Curbs

London Gold Market Report
from Adrian Ash, BullionVault
Fri 7 June, 08:50 EST

US Jobs Data Whip Bullion Prices as Hedge Funds Stay Bearish, Indian Jewelers Decry Import Curbs

GOLD and silver prices whipped sharply Friday lunchtime in London, as new US jobs data matched analyst forecasts with a 175,000 rise in Non-Farm Payrolls for May and a slight rise in the jobless rate to 7.6%.

Having touched 1-week highs above $1419 per ounce on Thursday, gold fell back through $1400 Friday as European stock markets erased earlier losses.

Silver lost and then regained 30¢ per ounce before falling again through $22.40, also near this week’s lowest level.

“The market [had] the feeling that it wants to go higher,” said one broker earlier Friday.

“While the technical downtrend is still in place,” says bullion market-maker Scotia Mocatta in a technical note, “the trend is weakening as gold slowly grinds higher.”

With gold still headed for a slight weekly gain, the 33 analysts, traders and retailers surveyed each week by Bloomberg’s commodities team are “more bullish” than any time since March 22 – three weeks before the worst crash in gold prices in 30 years – the newswire reports.

Nineteen respondents expect gold prices to rise next week, against 8 bears and 6 neutral.

In the market, however, the number of hedge funds worldwide investing in gold fell from 310 to 290 between December and May, reckons EurekaHedge Pte Ltd., a Singapore-based consultancy, quoted by Bloomberg.

Latest data from US regulator the CFTC said speculative traders held the greatest number of bearish contracts on gold futures on record last week. Accounting for bullish bets, that move cut their net position as a group to a 5-year low equal to 171 tonnes.

Data for the week-ending Tuesday 4 June will be released after US markets close today.

Ahead of Friday’s jobs report, a new research paper from the Chicago Fed said Thursday that the US economy needs to add 80,000 new jobs per month to keep the unemployment rate steady.

“It’s time that we begin to gradually unwind [QE and zero rates],” said Philadelphia Federal Reserve president Charles Plosser – a voting member of the Fed’s policy committee at alternate meetings in this year – on Thursday.

But markets have “over-reacted” to talk of tapering the Fed’s $85 billion in monthly QE, he said.

“The markets seem to take this very seriously at some level, which I think is probably a mistake.”

The Federal Reserve has said it will only consider raising interest rates when the jobless rate falls below 6.5%.

After the European Central Bank left its policy unchanged yesterday, France’s trade deficit and government deficit both showed a rise for May in new data Friday morning.

German industrial output surprised analysts by growing 1.8% month on month, but the Bundesbank today cut its forecasts for economic growth from 0.4% to 0.3% for 2013, and from 1.9% to 1.5% for 2014.

“Weak credit trends in the Eurozone,” says Standard Bank’s currency strategist Steve Barrow, “reflect themselves in continued recession and low inflation.

“[So] we expect the ECB to cut rates further, possibly as soon as next month.”

“The European banks had no choice but to shrink their balance sheets and sell assets,” Reuters quotes a “senior source” commenting on the dramatic fall in lending to commodity traders since 2011.

With Europe’s share of global commodity lending now down on one estimate from 75% before the Eurozone crisis to 50%, “I can’t see them becoming dominant again,” the newswire quotes Jean-Francois Lambert, head of commodity trade finance at HSBC.

Meantime in India – the world’s heaviest gold-buying nation – the government’s new campaign against household gold demand was challenged today by the jewelry industry, as well as market analysts.

“We are with the government on the need to reduce the current account deficit,” the Wall Street Journal quotes but not at the cost of damaging the industry,” chairman of the All India Gems & Jewellery Trade Federation, Haresh Soni.

“The recent round of initiatives to put a check on imports,” says Pankaj Parekh, vice chairman of the Gem & Jewellery Export Promotion Council, “will make lives of small and medium jewellers difficult in the coming days.”

Some 3.5 million people work in India’s gold and jewelry sector, says theEconomic Times, with 80% of them living in Bengal province.

But “The [government] knows they can’t control jewellery demand,” says Motilal Oswal analyst Kishore Narne to the Financial Times.
“They probably just think they might as well make some money off it.”

Adrian Ash

Don’t Dismiss the Possibility of Gold Confiscation

If you hold precious metals in your portfolio, there is a good chance you fear hyperinflation and the crash of fiat currencies.
You probably distrust governments in general and believe they are self-serving and have no interest in your economic well-being. It is likely that your holdings in gold are your lifeline – your hope to get you through these times while holding on to your wealth.
But have you ever given any thought to the possibility of having this lifeline confiscated by the authorities?
In my conversations with friends and associates, I have often raised this question. The typical responses:

"They'd never do that."

"I'll deal with that if and when it happens."

"I just wouldn't give it to them."

I consider these "wishful thinking" responses.
It's an interesting thought that the greatest threat to gold and silver investment might not be the possibility of losing on the speculation, but the government taking it away from you. It's a thought that I've found few want to even think about, let alone discuss.
If you fall into this camp, you're in good company. Some of the forecasters whom I respect most highly also treat it either as unlikely or at best, "something we may need to look at in the future." To date, in conversing with top advisors worldwide, the two primary reasons they believe gold will not be confiscated are:

1. "Confiscation would mean the government acknowledges the reality of the value of gold."

Yes, this is quite so. They would be changing their official view… which, of course, they do all the time. But I submit that all that they need to do is put the proper spin on it.

2. "They would meet greater resistance than they did back in '33."

I expect that this is also true, but that a plan will be put in place to deal with that resistance.

We'll address both of these assertions in more detail shortly, but first, a bit of history.
In 1933, Franklin Roosevelt came into office and immediately created the Emergency Banking Act, which demanded that all those who held gold (other than personal jewelry) turn it in to approved banks. Holders were given less than a month to do this. The government then paid them $20.67 per ounce – the going rate at the time. Following confiscation, the government declared that the new value of gold was $35.00. In essence, they arbitrarily increased the value of their newly purchased asset by 69%. (This alone is reason enough to confiscate.)
Today, the US government is in much worse shape than it was in 1933, and it has much more to lose. The US dollar is the default currency of the world, but it's on the ropes, which means the US economic power over the rest of the world is on the ropes.
I think that readers will agree that they will do anything to keep from losing this all-important power.
The US government has essentially run out of options. At some point, the fiat currencies of the First World will collapse, and some other form of payment will be necessary. Yes, the IMF is hoping to create a new default currency, but that, too, is to be a fiat currency. If any country were to produce a gold-backed currency in sufficient supply, that currency would likely become the desired currency worldwide. Fractional backing would be expected.
As most readers will know, the Chinese, Indians, Russians, and others see the opportunity and are building up their gold reserves quickly and substantially. If these countries were to agree to introduce a new gold-backed currency, there can be little doubt that they would succeed in changing the balance of world trade.
That said, the US government is watching these countries just as we are, and they are aware of the threat of gold to them.
The US government ostensibly has approximately 8,200 tonnes of gold in Fort Knox, although this may well be partially or completely missing. Additionally, it ostensibly holds a further 5,000 tonnes of gold in the cellar of the New York Federal Reserve building. Again, there is no certainty that it is there. In general, the authorities don't seem to like independent audits.
In fact, there are rumors that the above vaults are nearly or completely empty and that the above quoted figures exist only on paper rather than in physical form. While there is no way to know this for sure, it's not out of the question.
Either way, if the US and the EU could come up with a large volume of gold quickly, they could issue a gold-backed currency themselves. It's a simple equation: The more gold they have = the more backed notes they can produce = the more power they continue to hold. By seizing upon the private supply of their citizens, they would increase their holdings substantially in short order.
Either that or they could just give up their dominance of world trade and power… What would you guess their choice would be?
It is entirely possible that the US government (and very likely the EU) has already made a decision to confiscate. They may have carefully laid out the plan and have set implementation to coincide with a specific gold price.
So how would this unfold? Let's imagine a fairly extreme scenario and ask ourselves if it could be pulled off effectively:

• The evening news programs announce that the economic recovery is being hampered by wealthy private investors who, by hoarding gold, are skewing the value of the dollar and threatening the middle and poorer classes. The little man is being made to suffer while the rich get richer. A press campaign to equate gold ownership with greed ensues.

• The government announces the Second Emergency Banking Act, advising the public that "the first EBA was instituted by FDR to solve this same problem during the Great Depression. This act was instrumental in helping the little man 'recover.'" (As the average man on the street doesn't know his history nor how wrong this statement is, he'll believe it. Besides, the announcement has a "feel-good" message, and that's all that matters.)

• Possessors of gold, who make up a small minority of the population, would become pariahs. It won't matter that the guy who owns two gold Maple Leafs is not exactly a greedy, rich man. No one will wish to be seen as resisting confiscation. Neither will they wish to go to prison for resisting, no matter how remote the possibility.

• The US pays for the gold in US dollars, which are rapidly headed south. Yes, the Fed will need to print more fiat dollars in order to pay them off, but this suits their purpose, as it inflates the dollar even more. Those who have turned in their gold will do whatever they can to unload the US dollars as quickly as possible and will need to find another investment at a time when there are very few trustworthy investments other than gold. The stock market would likely rise, showing the public how the gold confiscation program is "working."

• One last scary possibility: The government demands that gold is turned in immediately and that settlement will occur following confiscation. After confiscation, it announces that, as there has been such a large number of cases of rich people ripping off the little man, processing them all could take months, possibly even a year or more. A further announcement states that some investors have made an unreasonable profit on the backs of the poor and that they should not be granted this profit. This profit must be returned to the people. (You can almost hear the cheers of the people.) Then it sets about making assessments. The bureaucrats find that most investors do not have formal, acceptable receipts for every coin in their possession. So if you paid $1,200 for a Krugerrand a couple of years ago, you get paid $1,200. If you bought it at $250 in 1999, you get paid $250. But if you have no receipt in an acceptable form, you get a "fair," median payment, say, $500, regardless of when you bought it.

• Appeals: Each investor will be allowed up to one year to appeal the decision of the Treasury as to what is owed him. Of course, the investor knows that the dollar is sinking rapidly and that he would be wise to shut up and take what he is being offered.

Again, this hypothetical scenario is an extreme one. The reader is left to consider just how likely or unlikely this scenario is and what that would mean to his wealth.
But bear this in mind: If the above scenario were to take place soon, the average citizen would have mixed feelings. They would be glad that the "evil rich" had been taken down a peg, but they would worry about the idea of the government taking things by force, because they might be next. It would therefore be in the government's interests to implement confiscation only after the coming panic sets in – after the next crash in the market, after it becomes plain to the average citizen that this really is a depression and he really is in big trouble. Then he will be only too glad to see the "greedy rich" go down, and he won't care about the details.
As terrible as the thought is, it seems unlikely to me that the government will not confiscate gold, as they have little to lose and so much to gain.
Those who own gold would prefer to think that this cannot happen, but they have quite a lot riding on that hope and precious little evidence to support it.
It is entirely possible that this scenario will not take place, just as it is possible that confiscation will not take place. The purpose of this article is to spark some serious discussion – both for and against the possibility.
Investors are, by their very nature, planners. It may take a community of investors to develop a legal plan to deal with the above eventuality. Time to get started.
The government can't easily confiscate what's outside its own borders, which is why it's working night and day to make it as difficult as possible for you to protect your assets abroad. This sad reality means that you need to take action before it's too late. Your first step? Learn how to start internationally diversifying your wealth – and your life. From investing in international markets and opening offshore bank accounts to setting up an offshore LLC or annuity, Going Global 2013 will tell you how and where to expatriate your wealth. It also presents solid, up-to-date information on internationalizing your life, from getting a second passport to choosing a good place to live.
Don't allow yourself to be milked by your home government any more. Get started on internationalizing your life today... while it's still possible.