Thursday, March 19, 2015

What the weak euro and strong dollar mean for the global economy

Reuters / Leonhard Foeger
Reuters / Leonhard Foeger

 A weaker euro is engineered to get the European economy back on track. As with all monetary policy, this is good for some, bad for others. RT takes you through the winners and losers.
The euro has been sinking since the European Central Bank kicked off its €1.1 trillion asset buying program on March 9. The bank plans to print €60 billion per month to buy debt until inflation hits the target rate of 2 percent. The expected date for this is September 2016, but it could be prolonged.
READ MORE: Euro spirals toward 1:1 parity with USD

Such monetary policy, as employed in the US from 2008-2013, will significantly decrease the value of the currency. Goldman Sachs released a forecast which sees the euro falling to €0.80 per $1 by the end of 2017.
While the euro loses, the dollar continues picking up speed as the US economy improves on the back of higher employment, increased trade, and a relative recovery in stocks and equities.
The euro has already weakened 14 percent against the dollar in 2015, trading at $1.0627 at the time of publication. This is nearly 34 percent less than the all-time high of $1.59 per euro in April 2008. Some experts suggest the euro will reach parity with the dollar by the end of the year, if not sooner.
The last time the euro and dollar were equal was on January 26, 2002.

Winners

Big oil and gas companies: A lower euro helps balance lower crude oil prices.France’s Total, Italy’s Eni, and Spain’s Repsol stand to gain, as many of their operational and salary costs are in euros, but revenue in dollars, which crude oil is priced in.
European exports: A weaker euro makes exports more attractive, as most of the global trade is denominated in US dollars. The European Central Bank projects a 5 percent decline in the euro’s trade weighted exchange rate could boost eurozone GDP by 0.3 percent. Germany, an export-driven economy, will see a big bump in overseas sales on the weaker euro. Companies across different sectors are more impacted by the weak euro, depending on how much they base salaries and operation costs on the local currency.

Source: Moody's
Source: Moody's
Euro trippers: Time for that vacation you’ve always thought was too expensive! Croissants and foie gras in Paris just got about 15 percent cheaper, ditto for the hotels.

Reuters / Jacky Naegelen
Reuters / Jacky Naegelen
European stocks: The Euro Stoxx 50 Index of companies in the euro region has already soared 16 percent this year, compared to the S&P 500 which has fallen 0.3 percent. On Tuesday, Germany’s DAX passed 12,000 points for the first time.

Reuters / Remote / Pawel Kopczynski
Reuters / Remote / Pawel Kopczynski
Americans: Whether they know it or not, US consumers have gained significant buying power on the strong dollar. A strengthening currency means people in the US can now buy more with the same amount of US dollars in the global marketplace. The 14 percent markdown of the euro makes everything from BMW’s, airplane tickets, and wine from France lighter on your wallet.
Hedge funds: At this point, betting against the euro and pouring money into dollar assets seems like a safe bet- from real estate to stocks and equities. The biggest hedge fund by assets worldwide, Bridgewater Associates LP, has already earned 7 percent on its Pure Alpha fund in the first 2 months of 2015.
US debt: Investors shifting from Europe will likely turn to the US, and the interest rate hike expected in June will make investing in US bonds even more attractive.

Losers

American companies: Corporations with major foreign sales and revenues will take a hit from the sagging euro and strong dollar. Companies listed on the S&P 500 get about 35–40 percent of their profits from overseas in foreign currencies. Xerox, for example, generated about 20 percent of its $19.5 billion revenue in 2014 from Europe.
Airlines: Even though the price of crude is falling, airliners need to buy jet fuel in dollars. Any non-US based company will feel the heat or buying oil in any other currency than the dollar. Air-France KLM, for example, has 40 percent of its costs in dollars.

Reuters / Jacky Naegelen
Reuters / Jacky Naegelen
Europe: Since the easy-money policy was just announced, not every economist is certain it will deliver the results promised. Many still fear it could end like it did for Japan- decades of on-and-off deflation. The swinging currency can cause instability and uncertainty.
Banks in Europe: Which now have to lend at record-low rates, and will have to lend at a near-loss as institutions keep slashing lending rates across the continent.

Markets upset with Greece as Athens angers euro creditors with lack of info.

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Markets upset with as Athens angers euro creditors with lack of info. http://reut.rs/1ACbWaX 
 
(Reuters) – Greece frustrated its main creditors on Tuesday by refusing to update euro zone peers on its reform progress at a scheduled teleconference, insisting instead that the discussions should be escalated to Thursday’s European Union summit.
Describing the annoyance that has been building up among euro zone countries with the new Greek government’s approach, one euro zone official said: “For many people the teleconference this afternoon could be something of a last straw.”
Euro zone deputy finance ministers held a teleconference at 1530 GMT to get an “update on the state of play” on Greece, which is running out of cash and time to negotiate and implement reforms that would unblock loans to prevent it from defaulting.
http://www.reuters.com/article/2015/03/17/us-eurozone-greece-frustration-idUSKBN0MD2M520150317

 

Financial markets hang on wording of US Federal Reserve statement

By Nick Beams
In ancient times, the Greeks gathered to seek guidance from the oracle at Delphi, where the priestess muttered incomprehensible words that were then interpreted into common language by various scribes as prophecies.
Today, thousands of words will be written by journalists and financial analysts around the world as they seek to provide an interpretation of the statement to be issued by the Federal Open Market Committee of the US Federal Reserve and the pronouncements of its chairwoman, Janet Yellen, at her press conference. The interpretations of the utterings from the modern day financial oracle will centre on the presence or absence of one word–“patient.”
The Fed will leave its benchmark interest rate at the historically low level of 0.25 percent. The key question, pointing to its future actions, will be whether it chooses, in the accompanying statement, to retain the affirmation that it can be “patient in beginning to normalise the stance of monetary policy.”
Removal of the word “patient” will be seen as a signal that the Fed is likely to start gradually lifting interest rates as early as June, though, according to some interpretations, it will not necessarily mean that this will be the case.
Last month, in testimony before a US Senate committee, Yellen indicated, using carefully chosen words open to various interpretations, that any modification in the language “should be understood as reflecting the committee’s judgment that conditions have improved to the point where it will soon be the case that a change in the target range could be warranted at any meeting.”
The Fed is fearful, on the one hand, that any sudden move on interest rates will produce a violent reaction on financial markets, as their supply of cheap money begins to be restricted. On the other hand, there is concern that keeping interest rates at their present levels cannot continue indefinitely because it reduces the ability of the Fed to return to what was once considered to be “normal” policy, where changes in interest rate settings are used to regulate the business cycle.
However, the days of “normalcy” ended with the eruption of the global financial crisis in 2008. With the injection by central banks of more than $5 trillion, the financial markets have entered a kind of inverted world. Economic downturns are welcomed because they are interpreted as meaning interest rates will remain near zero and the flow of cheap money will continue, while ostensibly good news on the economy produces a negative reaction because it increases fears that interest rates will start to rise.
Profits are increasingly being made through parasitic speculation–buying and selling shares and government bonds, betting on commodity prices, and trading in currencies–rather than through investments in the real economy and the expansion of production.
Whatever decision the Fed makes, it is unlikely it will end global divergences in monetary policy, and may even increase them. Either as a result of so-called “quantitative easing,” in the case of the euro zone and Japan, or through cuts in official interest rates in other countries, the value of virtually all currencies around the world is depreciating against the US dollar.
According to calculations made on the basis of a trade-weighted index, the US currency rose by 7.7 percent in the third quarter of last year, 5 percent in the last quarter, and 10.5 percent thus far in the current quarter. Such divergences carry with them the potential for significant turmoil, if not another full-scale financial crisis.
Speaking in Mumbai, India on the eve of today’s Fed decision, International Monetary Fund Managing Director Christine Lagarde warned that so-called “emerging markets” faced a new period of turmoil if interest rates started to rise. She pointed to the “taper tantrum” of 2013, when money flooded out of these markets in response to indications by the Fed that it was going to start winding back its “quantitative easing” (i.e., money-printing) program.
She also warned of the impact of the rising US dollar on corporate balance sheets in emerging markets when major companies suddenly find that their interest and debt burdens have increased. In India alone, the dollar-denominated corporate debt had risen “very rapidly” in the past five years, nearly doubling to $120 billion.
“The appreciation of the US dollar is … putting pressure on balance sheets of banks, firms and households that borrow in dollars but have assets or earnings in other currencies,” she said.
In a comment published in the Financial Times last month, well known financial analyst Satyajit summed up the present situation as follows: “Mark Twain reputedly stated that history does not repeat but it rhymed. In an eerie parallel to 1997-98, falling commodity–especially oil–prices, a rising US dollar and potential increases in US interest rates may presage a new financial crisis.”
The 1997-98 financial crisis began with the collapse of the Thai baht and then swept across the Asian region, producing a downturn as significant as that resulting from the Great Depression in the advanced capitalist nations. While it was dismissed as merely a “blip” on the road to globalisation by US President Bill Clinton, the Asian crisis led to a debt default by Russia and the collapse of the hedge fund Long Term Capital Management in the US, requiring a major intervention by the New York Federal Reserve to stave off a wider crash.
Since then, Asian governments have sought to avoid the dollar-denominated loans that played a major part in spreading the financial contagion as investors pulled their money out. But it is a different story in corporate markets.
Already, the index of emerging market currencies compiled by JPMorgan Chase is at a record low, meaning the dollar-denominated debt burden for corporations has risen in real terms.
It has been estimated that foreign borrowings in US dollars have expanded to $9 trillion, compared to $2 trillion in 2000. The share of emerging markets, mostly in Asia, has doubled to $4.5 trillion since the eruption of the financial crisis in 2008.
Last December, the Bank for International Settlements (BIS), sometimes known as the central bankers’ bank, issued a warning about the growing volume of debt held in the American currency, noting that a rise in the dollar’s value could expose financial vulnerabilities.
Laying out what he called the increasing fragility beneath apparent market buoyancy, the head of the BIS monetary and economic department, Claudio Borio, said: “Should the US dollar, the dominant international currency, continue its ascent, this could expose currency and funding mismatches by raising debt burdens. The corresponding tightening of financial conditions could only worsen once interest rates in the US normalise.”
In the three months since these comments, the ascent of the dollar has accelerated. From July last year, the dollar index has risen by more than 23 percent, a steeper rise than that which took place in the mid-1990s, setting off the Asian financial crisis. Against the euro, the dollar has increased by 16 percent in the past three months, and by about 25 percent over the past year.
A continuation of this trend will not only hit emerging markets, but will start to have a significant effect in the US. While exports comprise about 13 percent of US gross domestic product, they are far more important for major corporations. It is estimated that foreign-generated revenues account for 46 percent of sales by S&P 500 companies, with information technology the most highly-dependent on foreign sales.

China plans record 20 space launches this year - including maiden flight of its own space shuttle

  • Chinese space authorities planning to send 40 different aircraft into orbit
  • One of the ships will be 'space bus' which can launch 10 satellites at once
  • Yuanzheng 1 - China's largest ever rocket - can restart its engine 20 times
  • It became third country to launch manned space mission in October 2003
  • In 2013, 'soft-landed' first object on the moon since Soviet mission in 1976

China's space authorities have announced plans to launch over 40 different spacecrafts into orbit in 20 separate launches this year.
One of the vessels to be launched is the ground-breaking Yuanzheng 1 - also known as the 'space bus' - which can launch 10 different satellites at once.
2013 was a massive year for China whose scientists launched 16 spacecraft to firmly establish their cosmic credentials.
In October 2003, it became only the third country in history to independently launch a manned mission into space on the Shenzhou 5.
Ground-breaking: One of the 40 aircraft China plans to put into orbit is the Yuanzheng 1 'space bus' which can carry 10 satellites into space and restart its engines over 20 times
Ground-breaking: One of the 40 aircraft China plans to put into orbit is the Yuanzheng 1 'space bus' which can carry 10 satellites into space and restart its engines over 20 times
Historic: In December 2013, China's Chang'e-3 lunar probe became the first object to soft-land on the moon since the Soviet Union's Luna 24 in 1976
Historic: In December 2013, China's Chang'e-3 lunar probe became the first object to soft-land on the moon since the Soviet Union's Luna 24 in 1976
A spokesman for the China Aerospace Science and Technology Corporation said the vessels going up this year will mostly be 'communication satellites' orbiting at around 36,000ft.
Director of its Space Department Zhao Xiaojin added: 'There will also be some remote sensing satellites sent up to observe the earth as well as navigation satellites.'
Chinese space authorities also said a number of 'cutting edge' technologies will be tested for the first time, including the highly anticipated 'space bus'.
The Yuanzheng 1 is China's largest ever rocket with a diameter of 5.2 meters. It needs to be assembled at the launch site because trains carrying it would not be able to pass through tunnels. 
Its engine can restart over 20 times when flying in orbit and it is thought to be 75 per cent more efficient than spacecraft of the same size.
It also has the capability to move old, scrapped satellites out of useful orbit and into so-called 'cemetery orbits' to prevent them from hindering other space-faring vehicles. 
In December 2013, the Chang'e 3 lander - named after the Chinese moon goddess - became the first object to soft-land on the moon since the Soviet Union's Luna 24 in 1976.
China's National Space Administration operated the mission which incorporated a robotic lander and the country's first ever lunar rover.
Exploration: In June 2012, the Shenzhou-9 carried China's first female astronaut Liu Yang into space
Exploration: In June 2012, the Shenzhou-9 carried China's first female astronaut Liu Yang into space
Cosmic: A spokesman for the China Aerospace Science and Technology Corporation said the vessels going up this year will mostly be 'communication satellites'
Cosmic: A spokesman for the China Aerospace Science and Technology Corporation said the vessels going up this year will mostly be 'communication satellites'
The county announced its aspiration to carry out deep space exploration in September 2010 and planned to send a man to the moon by 2025.
Mr Xiaojin says work is also continuing to extend China's lunar program, adding: 'We have made breakthroughs in most of the key technology needed for the Chang'e-5 mission [which is expected to land on the Moon by 2017].
'This year we will conduct more ground tests, particularly ones involving theconditions which will imitate the environment on the moon.'
Meanwhile, the Chinese government has already begun opening up its its lunar exploration program to private investment. 

Crash Landing: China Home Prices Plunge At Fastest Pace On Record, Surpass Post-Lehman Collapse

Less than three weeks ago, when the PBOC proceeded with its latest "surprise" rate cut, we showed a chart that should scare everyone who is hoping that China will avoid a hard-landing would prefer would never have been revealed: the annual collapse in Chinese home prices is now so sharp and so widespread, that it has surpassed the housing collapse in the aftermath of the Lehman collapse."

Overnight things went from bad to worse, when China's National Bureau of Statistics reported that contrary to hopes for a modest rebound, China's average new home prices fell at the fastest pace on record in February from a year earlier.
As Reuters reported earlier, average new home prices in China's 70 major cities dropped 5.7 percent last month from a year ago, the sixth consecutive fall, following January's 5.1 percent decline. It was the biggest annual decline in the nationwide survey since it began in 2011.

The monthly fall in February from January was 0.4 percent, the same as in the previous month, and pointing to sustained risks to the government's new 7 percent economic growth target for the year. The property sector accounts for some 15 percent of China's gross domestic product (GDP).
The economic slump continues to impact China's corporations, and the record fall coincided with news that Chinese banks have extended Evergrande Real Estate Group 100 billion yuan ($16 billion) in credit, as the real estate slump extends to one of the country's biggest and most indebted property developers. This leave many wondering how much more pain can China's housing industry take before a wholesale government bailout is inevitable.
Putting things in perspective, on Monday we showed just how massive the impact of China's housing bubble burst is on the economy, when we reported that government revenue from land sales dropped 36.2% to 455.3 billion yuan - far, far worse than the worst expectation.
Some more color from Goldman on the housing collapse in China:
On a sequential basis, housing prices in the primary market fell 0.4% mom (weighted by population, seasonally adjusted) in February, similar to the magnitude of decline in January. 67 out of 70 cities monitored by China’s National Bureau of Statistics (NBS) saw housing prices fall from the previous month (vs. 65 out of 70 cities in January). The largest month-over-month price fall came from Dandong (based on sequential price changes after adjusting for seasonality and the Chinese New Year holiday), a lower tier city in Liaoning Province.

On a year-over-year, population-weighted basis, housing prices were down -5.6% (vs. -5.0% yoy in January). Hangzhou continued to be the city with the largest price correction, with the yoy housing price down 10.4%, vs. 10.1% in January.
There is reality... and then there is hope:
Liu Jianwei, a senior statistician at the NBS, said in a statement on Wednesday that sales in March will show a significant seasonal rebound from February's Lunar New Year pause. "Although the overall market eased in the beginning of the year, as policies loosen further and new launches pick up in March, the property market is expected to see a recovery," said consultancy China Real Estate Index System (CREIS).
As for the market, stocks couldn't be happier by the devastating news. The reason - more PBOC intervention is assured (and, as we predicted, ultimately QE by the PBOC):
Chinese real estate stocks .CSI300REI jumped in response to the price news, with the Bank of Communications expecting the government will announce more measures to bolster the market, including lowering taxes and loosening requirements for mortgage lending.

"Over the weekend, Premier Li Keqiang vowed to support the economy if it continues to slide, so the worse the economic data, the sooner stimulus policies will be rolled out," said Luo Wenbo, analyst at Qilu Securities.

"Investors wouldn't have been so bold if the premier hadn't made that promise.
What investors? Just call them BTFD automatons for whom every incremental piece of horrible economic news is just what the central planner ordered. End result: the Shanghai Composite closed up 2.1% to the highest since 2008.
In other words, if and when China finally reveals that it is currently not in hard, but crash landing mode, with GDP as Cornerstone estimated at under 3%, the SHCOMP will simply find itself offerless and stop for trading as everyone puts all their remaining cash in the Chinese stock market, that one final bubble now that the housing bubble is a distant memory.

Oil prices not here to stay: Both Brent and WTI continue losing streak

The US benchmark, West Texas Intermediate crude fell 2.9 percent to $42.21 per barrel, making it the seventh consecutive day of loss. Inventories, especially in the US, are overstocked.
Brent oil futures for April were hit equally hard as WTI, losing 0.5 percent to $53.44 a barrel on Wednesday. Most analysts agree that low oil prices will persist through 2015, weighed down by oversupply, mostly from US shale.
US crude inventories probably expanded by 4.4 million barrels to 453.3 million last week, according to a Bloomberg News survey. Figures from the industry-funded American Petroleum Institute indicated supplies rose by 10.5 million barrels last week.

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U.S. oil-storage glut expands faster than expected http://bloom.bg/1EvN2O4 

On Tuesday, the American Petroleum Institute reported that US crude inventories stood at 450 million barrels in the week to March 13, a 10.5 million barrel increase. Official inventory will be reported by the US Energy Information Administration on Wednesday. A Bloomberg News survey forecasts that US crude inventories rose by 4.4 million barrels to 453.3 million last week.

Last week’s data showed that crude inventories reached 448.9m barrels, the biggest March supply levels since the 1930s.
Goldman Sachs first shocked markets early in January with a $40 a barrel oil forecast for WTI during the first six months of 2015, and only seeing a recovery to $65 in 2016. On the European side, the bank predicted Brent would slide to $42 per barrel, and only reach $70 in 2016.
Iran’s reemergence onto the market also poses a constant threat to oil prices. Long bogged down by sanctions, Iran hasn’t been able to develop or export its oil and gas. Reserves are estimated to be some of the largest in the world, and if a comprehensive nuclear deal is reached, that could all change, further pushing down the price of oil.
OPEC expects world oil demand to be 1.17 million barrels per day in 2015, according to its March report, unchanged from February.
READ MORE: Oil plummet: Crude dives below $45 for first time since 2009
Oil enjoyed a short rally in February after both Brent and WTI dropped below $45 per barrel in January, for the first time since 2009.
Since June, crude has lost 50 percent of its value.The price fell further when OPEC producers, led by Saudi Arabia, decided to keep production as is, whereas as cut would have provided relief for oil prices.
None of this is set to improve, as OPEC has signaled it won’t change its policy at its June meeting, and global demand hasn’t shifted, either.

China's Finance Ministry Welcomes New AIIB Members

EU parliament president Martin Schulz speaks at a news conference in Beijing on March 17, 2015. Schulz says he welcomes the four European nations joining the Asian Infrastructure Investment Bank (AIIB). [Photo: CFP]

A group of new European countries have decided to join the Chinese-backed Asian Infrastructure Investment Bank.
The decision by France, Italy and Germany to join the organization is being lauded by the Chinese Finance Ministry.
CRI's Qi Zhi has more.
The Ministry of Finance has issued a statement on its website, saying the three countries will be founding members in two weeks once other confirmed members of the AIIB approve the move.
The governments of France, Italy and Germany all say they will submit their confirmation letters as soon as possible.
German Finance Minister Wolfgang Schaeuble.
"We agree that infrastructure investments are of vital importance for Asia's further development. That's why we welcome the Chinese intention to found an infrastructure bank for Asia with additional partners which with its seat in Beijing will make an important contribution. Germany, together with our partners France and Italy, intends to become a founding member of the Asian Infrastructure Investment Bank."
The move by the three European heavy-weights follows on the heels of the British government applying to be part of the 50-billion US dollar bank last week.
At the same time, Australian politicians have also been voicing support for joining the bank over the past few days, marking a U-turn from the Australian cabinet's previous stance.
In addition, South Korea, Switzerland and Luxembourg are reportedly considering whether to join the bank.
The Chinese government says it will welcome any new membership to the AIIB, saying it is an open institution.
Chinese Foreign Ministry spokesperson Hong Lei.
"AIIB is an open and inclusive multilateral investment organization. The participation of countries outside the region shows that AIIB has broad representation. China is willing to work with any other parties to make the AIIB a professional and efficient investment platform for infrastructure construction."
Responding to concerns from the US government that the AIIB should adhere to the high standards of the World Bank, the Chinese government says it plans to draw experiences from other multilateral development banks.
In making the statement, the Chinese government also says it hopes to avoid the detours seen in similar organizations, while at the same time, be more cost-effective.
So far, around 30 countries have confirmed their participation in the AIIB.
When it comes to Japan, the Chinese government says the AIIB remains open for all Asian countries.
Japan is the biggest contributor to the Asian Development Bank, along with the U.S.
It's being reported the head of the ADB says the two institutions could cooperate.
Jean-Marc Blanchard is the director Multinational Corporation Studies at Jiaotong University in Shanghai.
He suggests the AIIB should be viewed as a supplement to institutions such as the Asian Development Bank and the World Bank.
"The infrastructure needs in Asia, they are in trillions. These entities, World Bank and Asian Development Bank, they just don't have the resources to fund this amount of infrastructure and what spending they are doing on infrastructure is relatively small. But whether they will be competitors, it's too soon to say. And they don't have to be. They can focus on different areas, countries and projects. There can be a lot of cooperative interactions."
The concept of the Asian Infrasturture Investment Bank was first put forward late last year as a way to help develop the Chinese government's vision of a 21st century Silk Road, focusing on transportation, energy, telecommunications and other infrastructure investment.
The AIIB is expected to be formally established by the end of the year.
March 31st has been set as the deadline for accepting founding-members into the organization.
For CRI, I'm Qi Zhi.

Pettifor: “They are currency wars”


The cord-cutter movement is on and Apple intends to be at the forefront! Apple is in talks to launch an internet TV service that would cost $30-40/month and launch with 25 channels that would deliver content from ABC, CBS, Fox, ESPN, and others. The new Apple TV would roll out in the fall and would not carry content from NBC after disputes with NBC Universal’s parent company Comcast ended poorly. Erin weighs in.
Then, Erin is joined by Ann Pettifor – director of PRIME Economics and author of “Just Money: How Society Can Break the Despotic Power of Finance.” Ann gives us her take on what we’ll hear at this week’s Federal Reserve meetings and tells us that the dollar and financial stability is outside of the US as a big concern at the Fed because the Fed is concerned with narrow US domestic interests, as this is its mandate. The juxtaposition sets the global economy up for volatility going forward due to “massive imbalances”. In the US, she believes there is justifiable anxiety about the robustness of the US economy. Ann continues the conversation with pointed words about the way the Greek situation has been handled, making recommendations of the right way to frame the situation.
After the break, Edward Harrison sits down with Tim Duy – professor of economics at the University of Oregon and senior director of the Oregon Economic Forum. Tim tells us the word “patient” is history in the Fed’s language about raising rates and that the market is waking up to an accelerated hike timetable but risks do remain.
And in The Big Deal, Erin and Edward continue the discussion on Apple and the Fed. Take a look!
Check us out on Facebook — and feel free to ask us questions:
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Money for Nothing Inside the Federal Reserve 2014 Movie


Published on Dec 1, 2014
Nearly 100 years after its creation, the power of the U.S. Federal Reserve has never been greater. Markets and governments around the world hold their breath in anticipation of the Fed Chairman’s every word. Yet the average person knows very little about the most powerful – and least understood – financial institution on earth. Narrated by Liev Schreiber, Money For Nothing is the first film to take viewers inside the Fed and reveal the impact of Fed policies – past, present, and future – on our lives. Join current and former Fed officials as they debate the critics, and each other, about the decisions that helped lead the global financial system to the brink of collapse in 2008. And why we might be headed there again…

 
 

U.S. oil-storage glut expands faster than expected

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U.S. oil-storage glut expands faster than expected http://bloom.bg/1EvN2O4 
 
America has raised the roof again.
That’s what the roofs of oil storage tanks do — they rise and fall depending on the volume of oil inside. And America’s oil in storage just hit a new record after surging for the 10th consecutive week.
Stockpiles rose 9.6 million barrels, or 2.1 percent, to 458.5 million barrels last week, the EIA reported today. Analysts had expected an increase of 4.4 million barrels. The amount of oil the U.S. is cranking out also rose, for the sixth consecutive week, to a rate of 9.42 million barrels a day.
Oil investors have been glued to the levels of storage tanks, which have been climbing steadily since the oil-price crash started last year. American stockpiles are more than 25 percent above their five-year average. Inventories aren’t likely to max out, but even the possibility of that happening is adding pressure to an oversupplied oil market.
http://www.bloomberg.com/news/articles/2015-03-18/u-s-oil-storage-glut-expands-faster-than-expected?hootPostID=51efc55bc2760097bd9cd44e64275e61

 

US Warns Allies Not to Join China-led Development Bank

Eric Blair
Activist Post

How do you know a dollar collapse is coming? Because the rest of the world is preparing for it.

Western allies are flocking to join the new China-led Asian Infrastructure Investment Bank (AIIB), while the United States and World Bank sit on the sidelines and lecture them about "appropriate" financial governance.

Reuters reports:

The United States has urged countries to think twice before signing up to a new China-led Asian development bank that Washington sees as a rival to the World Bank, after Germany, France and Italy followed Britain in saying they would join. 
The concerted move by U.S. allies to participate in Beijing's flagship economic outreach project is a diplomatic blow to the United States and its efforts to counter the fast-growing economic and diplomatic influence of China.

Europe's participation reflects the eagerness to partner with China's economy, the world's second largest, and comes amid prickly trade negotiations between Brussels and Washington.
"I hope before the final commitments are made anyone who lends their name to this organization will make sure that the governance is appropriate," Treasury Secretary Jack Lew told U.S. lawmakers.


It seems many countries are growing tired of the U.S.'s arbitrary economic sanctions, playing politics with the SWIFT system, dollar manipulation of commodities, strangling IMF and World Bank debt with unequal representation in those institutions. Not to mention the ruthless violence used to protect this racket.

China is tired of waiting to be granted more power in international banks so they're creating their own opportunities around the world. They're involved in creating the BRICS development bank, an alternative to SWIFT, building a canal in Nicaragua to rival the Panama Canal, and now this new Asian Infrastructure Investment Bank (AIIB). In other words, it's on.

"If you try to fight the rising power's peaceful ascent you sow big problems in the future," Fred Bergsten, a former official at the U.S. Treasury and currently a fellow at the Peterson Institute in Washington told Reuters.

Over the last few years US-imposed sanctions have had less and less effect as nations find ways around them. These new systems will make sanctions essentially worthless, and the biggest losers of sanctions may end up being US companies who're prohibited from trading in certain parts of the world.

Despite the corporate media's best efforts to drum up conflict with Russia, sanctions haven't worked, leading some Western hawks to promote cutting off Russian banks from SWIFT. This was met by Russia threatening retaliation which resulted in Russia being awarded a seat on SWIFT's board for the first time.

Can you smell the desperation? American dominance in the world economy is clearly waning. The US dollar is also slowly being diluted as the world reserve currency and all the key players know it. In fact, it's now happening by design.

The dollar is currently enjoying record spending strength in the global economy for no fundamental reason except that oil is measured in dollars. The oil price crash feels like a last-ditch effort to boost demand for dollars. Yet national debt levels, endless wars, and the fake paper economy ensures that this facade will eventually collapse, probably as fast as it was created.

This new alternative system may limit the contagion of a dollar collapse. It's basically a good thing that the world will have more choice in how it moves money. But, be warned, it is no different than the current fractional-reserve debt-based parasite that currently leeches off most of the planet, save for slightly different board members.

Nevertheless, I bet the establishment will hail them as saviors when the US economy can no longer bail itself out. Tick tock.

Eric Blair writes and curates news for Activist Post. This article is free to repost in full with attribution.

Germany riot targets new ECB headquarters in Frankfurt

Dozens of people have been hurt and some 350 people arrested as anti-austerity demonstrators clashed with police in the German city of Frankfurt.
Police cars were set alight and stones were thrown in a protest against the opening of a new base for the European Central Bank (ECB).
Violence broke out close to the city's Alte Oper concert hall hours before the ECB building's official opening.
"Blockupy" activists are expected to attend a rally later on Wednesday.
In earlier disturbances, police in riot gear used water cannon to clear hundreds of anti-capitalist protesters from the streets around the new ECB headquarters.
Riot police carry away an activist during a demonstration organized by the Blockupy movement to protest against the policies of the European Central Bank (18 March 2015)
An activist at a demonstration organized by the Blockupy movement to protest against the policies of the European Central Bank in Frankfurt (18 March 2015)
Organisers were bringing a left-wing alliance of protesters from across Germany and the rest of Europe to voice their anger at the ECB's role in austerity measures in EU member states, most recently Greece.
The bank, in charge of managing the euro, is also responsible for framing eurozone policy and, along with the IMF and European Commission is part of a troika which has set conditions for bailouts in Ireland, Greece, Portugal and Cyprus.
A spokesman for the Blockupy movement said the troika was responsible for austerity measures which have pushed many into poverty.
Police set up a cordon of barbed wire outside the bank's new 185m (600ft) double-tower skyscraper, next to the River Main.
But hopes of a peaceful rally were dashed as clashes began early on Wednesday.
Tyres and rubbish bins were set alight and police responded with water cannon as firefighters complained they were unable to get to the fires to put them out. One fire engine appeared to have had its windscreen broken.
Protester in Frankfurt (18 March) Rubbish bins were set alight some distance from the new ECB building (background)
German police cars set on fire by anti-capitalist protesters Among the first targets for protesters were police cars
Activists said many protesters had been hurt by police batons, water cannon and by pepper spray.
Police said as many as 80 of their officers had been affected by pepper spray or an acidic liquid. Eight suffered injuries from stone-throwing protesters.
Police spokeswoman Claudia Rogalski spoke of an "aggressive atmosphere" and the Frankfurt force tweeted images of a police van being attacked. They were braced for further violence as increasing numbers of activists arrived for the rally.
Blockupy accused police of using kettling tactics to cordon off hundreds of protesters and appealed for supporters to press for their release.
line
What is Blockupy?
  • Europe-wide alliance of left-wing parties, unions and movements
  • Vehemently against austerity polices of European Commission, ECB and IMF
  • First Frankfurt protest attracted thousands in 2012
  • Activists from Greece's radical left governing party Syriza and Spain's anti-corruption Podemos are joining the rally
  • Also includes Germany's Die Linke and Occupy Frankfurt
  • Rallying call: "They want capitalism without democracy, we want democracy without capitalism"
line
As the number of protesters grew in the streets away from the new ECB building, the bank's president, Mario Draghi, gave a speech marking its inauguration.
Mr Draghi said that the it "may not be a fair charge" to label the ECB as the main perpetrator of unpopular austerity in Europe.
"Our action has been aimed precisely at cushioning the shocks suffered by the economy," he said.
"But as the central bank of the whole euro area, we must listen very carefully to what all our citizens are saying."
The new headquarters, which had been due to open years earlier, cost an estimated €1.3bn (£930m; $1.4bn) to build and is the new home for thousands of central bankers.
Blockupy activists said on their website that there was nothing to celebrate about the politics of austerity and increasing poverty.
Frankfurt police tweet A police tweet reads: New attacks against the police in #Frankfurt
Activists in Frankfurt (18 March) Thousands of activists were gathering in Frankfurt for the rally
Mario Draghi (18 March) Inside the building, ECB President Mario Draghi gave a speech marking its inauguration


Dozens of people have been hurt and some 350 people arrested as anti-austerity demonstrators clashed with police in the German city of Frankfurt.
Police cars were set alight and stones were thrown in a protest against the opening of a new base for the European Central Bank (ECB).
Violence broke out close to the city's Alte Oper concert hall hours before the ECB building's official opening.
"Blockupy" activists are expected to attend a rally later on Wednesday.
In earlier disturbances, police in riot gear used water cannon to clear hundreds of anti-capitalist protesters from the streets around the new ECB headquarters.
Riot police carry away an activist during a demonstration organized by the Blockupy movement to protest against the policies of the European Central Bank (18 March 2015)
An activist at a demonstration organized by the Blockupy movement to protest against the policies of the European Central Bank in Frankfurt (18 March 2015)
Organisers were bringing a left-wing alliance of protesters from across Germany and the rest of Europe to voice their anger at the ECB's role in austerity measures in EU member states, most recently Greece.
The bank, in charge of managing the euro, is also responsible for framing eurozone policy and, along with the IMF and European Commission is part of a troika which has set conditions for bailouts in Ireland, Greece, Portugal and Cyprus.
A spokesman for the Blockupy movement said the troika was responsible for austerity measures which have pushed many into poverty.
Police set up a cordon of barbed wire outside the bank's new 185m (600ft) double-tower skyscraper, next to the River Main.
But hopes of a peaceful rally were dashed as clashes began early on Wednesday.
Tyres and rubbish bins were set alight and police responded with water cannon as firefighters complained they were unable to get to the fires to put them out. One fire engine appeared to have had its windscreen broken.
Protester in Frankfurt (18 March) Rubbish bins were set alight some distance from the new ECB building (background)
German police cars set on fire by anti-capitalist protesters Among the first targets for protesters were police cars
Activists said many protesters had been hurt by police batons, water cannon and by pepper spray.
Police said as many as 80 of their officers had been affected by pepper spray or an acidic liquid. Eight suffered injuries from stone-throwing protesters.
Police spokeswoman Claudia Rogalski spoke of an "aggressive atmosphere" and the Frankfurt force tweeted images of a police van being attacked. They were braced for further violence as increasing numbers of activists arrived for the rally.
Blockupy accused police of using kettling tactics to cordon off hundreds of protesters and appealed for supporters to press for their release.
line
What is Blockupy?
  • Europe-wide alliance of left-wing parties, unions and movements
  • Vehemently against austerity polices of European Commission, ECB and IMF
  • First Frankfurt protest attracted thousands in 2012
  • Activists from Greece's radical left governing party Syriza and Spain's anti-corruption Podemos are joining the rally
  • Also includes Germany's Die Linke and Occupy Frankfurt
  • Rallying call: "They want capitalism without democracy, we want democracy without capitalism"
line
As the number of protesters grew in the streets away from the new ECB building, the bank's president, Mario Draghi, gave a speech marking its inauguration.
Mr Draghi said that the it "may not be a fair charge" to label the ECB as the main perpetrator of unpopular austerity in Europe.
"Our action has been aimed precisely at cushioning the shocks suffered by the economy," he said.
"But as the central bank of the whole euro area, we must listen very carefully to what all our citizens are saying."
The new headquarters, which had been due to open years earlier, cost an estimated €1.3bn (£930m; $1.4bn) to build and is the new home for thousands of central bankers.
Blockupy activists said on their website that there was nothing to celebrate about the politics of austerity and increasing poverty.
Frankfurt police tweet A police tweet reads: New attacks against the police in #Frankfurt
Activists in Frankfurt (18 March) Thousands of activists were gathering in Frankfurt for the rally
Mario Draghi (18 March) Inside the building, ECB President Mario Draghi gave a speech marking its inauguration

2014 totals Wall Street bonuses $28.5 billion, All full-time minimum wage earnings $14 billion

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2014 totals Wall Street bonuses $28.5 billion All full-time minimum wage earnings $14 billion http://www.ips-dc.org/deep-end-wall-street/ 

THERE IS NO MONEY - "FREEDOM FROM FICTION"

             A4V 
                           
   
Accept For Value to Discharge Debt  _ A4V
For as long as we have been using FRN, there has been no real money to actually be able to pay for anything. All we can do is charge and discharge debt, and the books are balanced when an equivalent entry is recorded on both sides of the ledger.
Accepted for Value” (A4V) is a method that can be effectively used to discharge bills/presentments sent with a payment voucher attached. I know from personal experience the IRS for one will not refuse or return your payment made in this method. It actually helps them settle their books. Credit collectors will typically write the balance off because they can't do anything else, and it's a tax write-off for them. Credit card companies don't want to admit it, but they will also write off the payment (and close your account) and receive a tax credit to settle their books.
In red ink, at a forty-five degree angle (called “Bankers Script”) on the upper portion of the bill write: “Accepted for value – Returned for value. Exempt from levy. Offset this billing by routing through and ledgering against the Private Exemption account of John-Quincy:Doe (your name),Private offset account # 123456789 (your SSN without dashes) at the Department of Treasury for credit to: (whoever offers you the contract/presentment) – for further credit to the account of: JOHN Q DOE, account # 123-45-6789 (your SSN with dashes). By: (signature), Authorized Representative, Principal. Date:_________
USPS Certified Mail Receipt # _________________________________________”
On the lower portion of the bill, under the perforation is the payment coupon or voucher. We are going to turn this into a Money Order. It must contain all the basic elements of a typical bank draft/check. Complete in blue or black ink as follows:
Date” top right corner; “MONEY ORDER” top center; “Pay to the order of: (whoever offers you the contract/presentment): left center; “the amount written out in words”, second line, left center; “Amount in numbers”, right center; “By: (signature), Authorized Representative for JOHN Q DOE, EIN# 123-45-6789” lower right corner. Make sure to endorse it on the back like a check, with your signature and EIN#.
  

                      "FREEDOM FROM FICTION"

You Have An Exemption Account to Discharge Debt
House Joint Resolution 192, June 5, 1933 established a check and balance within Statutory jurisdiction under the new bankruptcy system. The American people were responsible for paying the Federal government's debts, in exchange for the Feds offsetting our personal debts “dollar for dollar” with a tax exemption account that operates as a trust.
Each birth certificate is connected to a trust and an exemption account, and was to be claimed by the individual at the age of majority and used to discharge their debts. There is a Public exemption account represented by your NAME in all capital letters and your Social Security Number with dashes: 123-45-6789. There is also your Private exemption account held by the US Treasury with your human name, not in all capital letters, and your Social Security Number without dashes.
The original intention was that we were to use the private account to charge, and the public account to discharge debt. Without the discharge process, the national debt is never actually paid down. Passing FRN around only delays payment, it doesn't effect it.

                                                Maxims of Law
A Maxim of Law is “an established principle of law universally admitted as being a correct statement, or as agreeable to reason.” Black's Law Dictionary.
Examples:
A workman is worthy of his hire. It is against equity for freemen not to have the free disposal of their own property.
All are equal under the law. No one is above the law.
In commerce truth is sovereign. To lie is to go against the mind.
Truth is expressed by means of an affidavit. Sworn truth.
An unrebutted affidavit stands as the truth in commerce. He who does not deny, admits.
An unrebutted affidavit becomes the judgment in commerce.
A matter must be expressed to be resolved. He who fails to assert his rights, has none.
He who leaves the battlefield first loses by default. He who does not repel a wrong when he can, occasions it.
Sacrifice is the measure of credibility. He who bears the burden ought also to derive the benefit.
A lien or claim can be satisfied only through rebuttal by Counter-affidavit point-for-point, resolution by jury, or payment. If the plaintiff does not prove his case, the defendant is absolved.
 

It is a maxim of American law that any statute contrary to the constitution, which is the supreme law of the land, is null and void and no citizen is bound to obey an unconstitutional law.
An affidavit is a written declaration made under oath before a notary public or other authorized officer giving the document legal status and force of law. 
    Quotes From the Front Line
Quoting Colonel Edward Mandel House, a legendary power broker, in a private meeting with Woodrow Wilson (US President 1913-1921):
"[Very] soon, every American will be required to register their biological property (that's us and our children) in a national system designed to keep track of the people and that will operate under the ancient system of pledging.
By such methodology, we can compel people to submit to our agenda, which will affect oursecurity as a charge back for our fiat paper currency. Every American will be forced to register or suffer being able to work and earn a living.
They will be our chattel, (property) and we will hold the security interest over them forever, by operation of the law merchant under the scheme of secured transactions. Americans, by unknowingly or unwittingly delivering the bills of lading to us will be rendered bankrupt and insolvent, secured by their pledges.
They will be stripped of their rights and given a commercial value designed to make us a profit and they will be none the wiser, for not one man in a million could ever figure our plans and, if by accident one or two should figure it out, we have in our arsenal plausible deniability. After all, this is the only logical way to fund government, by floating liens and debts to the registrants in the form of benefits and privileges.
This will inevitably reap us huge profits beyond our wildest expectations and leave every American a contributor to this fraud, which we will call “Social Insurance.” Without realizing it, every American will unknowingly be our servant, however begrudgingly. The people will become helpless and without any hope for their redemption and we will employ the high office of our dummy corporation to foment this plot against America.”
President Woodrow Wilson quoted after signing the Federal Reserve Bill in 1913:
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation iscontrolled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world — no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men."
On December 22, 1913, the day before President Woodrow Wilson signed the Federal Reserve Act, Congressman Charles A. Lindberg Sr. (father of the famous aviator) said to the House:
"When the President signs this bill, the invisible government by the Monetary Powers will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed… The worst legislative crime of the ages is perpetrated by this banking bill… The greatest crime of Congress is its currency system… The people must make a declaration of independence to relieve themselves from the Monetary Power. This they will be able to do by taking control of Congress."
Quote from the Rothschild Brothers:
"The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class. The great body of people, mentally incapable of comprehending the tremendous advantages, will bear its burden without complaint."

Sir Josiah Stamp, President of the Bank of England in the 1920's and the second richest man in Britain at the time said:
"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them but leave them in power to create deposits, and with the flick of the pen they create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create deposits."

Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta Georgia, said:
"This is a staggering thought. We are completely dependent on the commercial banks.Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defect remedied very soon."
Thomas Jefferson is quoted in 1791 as saying:
"If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied."
Congressman Louis T. McFadden's speech before Congress on June 10, 1932 explains the type of organization we are dealing with in the Federal Reserve:
"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve banks. The Federal Reserve Board, a government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal Reserve banks acting together have cost this country enough money to pay the national debt several times over. 
This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.
Some people think the Federal Reserve banks are United States Government institutions. They are not government institutions. They are private credit monopolies which prey upon the peopleof the United States for the benefit of themselves and their foreign swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislation; and there are those who maintain an international propaganda for the purpose of deceiving us and wheedling us into the granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime."
 The Real World Hierarchy of Power 
The source of all life, and therefore the pinnacle of our world hierarchy of power, is God. Let's agree that “God” is the Creator of Souls and Universes, and the source of Natural law. As our Creator, we can answer to no higher authority.
Human beings, as creative living souls, came together as communities and societies, then organized government, assigning “public servants” to facilitate a system that would uphold the rights of the individual and work for the greater good of the community. Since we humans created government, government answers to the people as its higher authority.
   
                         REAL MONEY
Banking Alchemy - Transforming Gold Into Paper
Throughout history, up to the 1700’s, all “real money” was either gold or silver. Gold was the money of the rich and silver the money of the poor.
Our present banking system finds its roots in the role played by goldsmiths in history. Mayer Amschel (Bauer) Rothschild (1744 -1812) was a German goldsmith turned banker who built a banking family dynasty that controls our economy to this day, by turning gold into paper.
Centuries ago, wealthy individuals who possessed quantities of precious metals would often store them with the local goldsmith for safe keeping. In exchange, the goldsmith would issue paper certificates as receipts that could be redeemed at a later date for various quantities of gold.
What the goldsmiths discovered was, very few gold owners would actually redeem their certificates for gold at any one time. This led some unscrupulous goldsmiths to issuing certificates to those who had no gold, but who were willing to pay back the loans with interest.
These conniving goldsmiths found they could issue many paper receipts and reap huge profits by collecting interest on made-up certificates when there was no actual gold backing them at all. With this began the acceptance of paper money and the beginning of the modern banking system of fractional reserve lending and compounding interest.

The American Coinage Act of 1792
Section 9 of the Coinage Act of 1792 states the following denominations and values:
Ten dollar “Eagles” - to contain two hundred and forty-seven and four eights (247 4/8) grains of pure gold, or two hundred and seventy (270) grains of standard gold.
(Today's gold price = $909.90)
Five dollar “Half Eagles” - to contain one hundred and twenty-three and six eights (123 6/8) grains of pure gold, or one hundred and thirty five (135) grains of standard gold.
(Today's gold price = $454.95)
Two dollar “Quarter Eagles” - to contain sixty-one and seven eights (61 7/8) grains of pure, or sixty seven and four eights (67 4/8) grains of standard gold.
(Today's gold price = $227.48)
One dollar - to contain three hundred and seventy one and four sixteenth (371 4/16) grains of pure silver, or four hundred and sixteen (416) grains of standard silver.
(Today's silver price = $24.96)
Half dollar - to contain one hundred and eighty-five and ten sixteenth (185 10/16) grains of pure silver, or two hundred and eight (208) grains of standard silver.
(Today's silver price = $12.48)
Quarter Dollar - to contain ninety-two grains and thirteen sixteenth (92 13/16) grains of pure silver, or one hundred and four (104) grains of standard silver.
(Today's silver price = $6.24)
Ten Cent Dimes - to contain thirty-seven grains and two sixteenth (37 2/16) grains pure silver, or forty-one and two sixteenth (42 2/16) grains of standard silver.
(Today's silver price = $2.53)
Five Cent Nickles or Half Dimes - to contain eighteen grains and nine sixteenth (18 9/16) grains of pure silver, or twenty and four fifth (20 4/5) grains of standard silver.
(Today's price = $1.25)
Historical Prices for One Troy Ounce of Gold
1792 $19.30
1834 = $20.67
1935 = $35.00
1973 = $120.00
1979 = $850.00
2012 = $1,617.10
 Gold Prices as of June 5, 2012
1 gram gold bar = $51.97
1 grain of gold = $3.37
Silver Prices as of June 5, 2012
1 gram silver bar = $0.91
1 grain of silver = $0.06
CURRENT PRICES ARE BEING MANIPULATED TO HOLD UP A SYSTEM DOOMED TO FALL HARD SOON