Monday, July 30, 2018

James Turk: This Dire Warning Is Now Unfolding Before Our Eyes

“The next collapse is going to make 2008 look like a walk in the park. The problems that we have today are so much greater than they were back then. And the abuse of the market process itself is so much greater than it was back then. I always like to paraphrase Ludwig von Mises, who in my mind was the greatest economist of the 20th century. 

He basically said, ‘Governments will destroy markets long before they ever understand how they work.’ And with their constant interventions trying to do things to the market process, we’re destroying markets. And that’s very, very worrying because when you destroy markets you end up with Venezuela, and nobody wants to be in that kind of situation…"

- Source, James Turk via King World News

Thursday, July 26, 2018

James Turk: Silver, Gold and De-Dollarization Update


In your recent KWN interview you reiterated that central banks would either be forced back onto a gold standard or the system would, in essence, change so much that central banks would willingly move back to a gold standard. 

Peter Boehringer – the architect of the German repatriation movement stated there were close to 21 countries that were either discussing gold as money, gold repatriation or some form of very high level discussions of gold. 

Gold has been repatriated by several countries now from U.S. vaults returning to Venezuela, the Netherlands, Germany and most recently Turkey. Is this, in your opinion, countries preparing for a change in the monetary system or is something else at play with these moves?


With Russia recently dumping 50% of their U.S. treasuries – and for the record it wasn’t a real significant volume, however, the gesture was huge – Russia also recently ask their Russian companies to move out of the SWIFT system and into their alternative payment system that is tied directly to the Chinese alternative to the SWIFT system. 

Would you say Russia is really the canary in the coal mine for some type of change in the global monetary system and is this part of the overall nonstop attacks by western corporate media against Russia?


Friday, July 20, 2018

The Dollar is Oversupplied

In order to assess the effect of a credit crisis on the dollar, we must therefore gauge how extended the dollar appears to be in terms of its international circulation. The most recent numbers from the US Treasury TIC data is for the position in June last year for foreign ownership of US securities, and for end of year 2016 for US ownership of foreign securities. Putting to one side these timing differences, since 2006, dollar-denominated investments owned by foreigners totalled $8.52 trillion more than US ownership of non-dollar foreign investments, up 275% since 2008. This is illustrated in the following chart.


We cannot say for sure this represents something close to Triffin’s tipping point, where the quantity of dollars in foreign hands will undermine the currency. But according to the World Bank, global GDP has only increased by about 20% since 2008, suggesting that there are, indeed, far too many dollars in foreign hands relative to economic activity, compared with ten years ago.

This being the case, the dollar could be set to fall on the foreign exchanges during a credit crisis, when investment liquidation pressures increase, and currency hedges are initiated. Importantly, it could also be the desired outcome for the Fed, which is firmly wedded to the idea that falling prices at the retail level must be avoided at all costs, and a lower currency could be used with zero, or even negative interest rates to help support domestic prices. In these circumstances, gold, and perhaps even cryptocurrencies, will be seen by investors as safe-havens from inflationary monetary policies, whose primary purpose will be to contain debt liquidation and protect the commercial banks.

However, this is not the whole picture with respect to exchange rates.

It is the nature of fiat currencies that their individual values are inherently uncertain, each one reflecting purely subjective values in the foreign exchanges. There can be little doubt that the current equilibrium between, say, the Argentinian peso and the US dollar would be disturbed in a global credit crisis by undermining the peso. We cannot be so certain of the exchange rates between, say, the euro and the dollar. Nor can we be so certain how official Chinese policy towards dollar investments may change, or indeed the position of other sovereign wealth funds. All we can say is the foreign world outside America is overexposed to dollars, just as it was in the late 1960s, when the remedy was to sell them for gold.

- Source, James Turk's Goldmoney



Tuesday, July 17, 2018

Irrational Beliefs Are Ruling Markets

To understand the consequences of the credit cycle, we must dismiss pure opinion, and examine the evidence rationally. This article assesses the fate of the dollar on the next credit crisis, a subject of increasing topicality. It concludes that the late stage of the credit cycle has important similarities with 1927, when the Fed eased monetary policy, following evidence of a mild recession.

Contemporary financial markets are inherently emotional, mainly because they are awash with government-issued currencies. Investors and speculators would never be as careless with sound money as they are with infinitely-elastic fiat. Instead, they are ready to gamble with it, partly because they know that standing still guarantees a loss of purchasing power and partly because rising asset prices, which is actually the reflection of a falling currency, makes selling currency for assets an appealing proposition. Furthermore, credit for speculation is freely available through futures and options.

Financial markets are also irrational due to modern economics, the explanation for it all, having become a belief system. If all central banks pursue economic beliefs, as an investor you will probably do so as well, otherwise you are out of step in a world that follows trends. That works until it doesn’t. Central bankers pursue policies which are a mishmash of neo-Keynesianism and monetarism, the balance between the two setting the fashion of the day, with an overriding assumption that unregulated markets are the source of all our economic and systemic troubles. But there is one element of monetary policy that does not change, and that is a conviction that everything can be cured by monetary inflation.

Is this condemnation of monetary policy over the top? Well, only last week Mark Carney, Governor of the Bank of England, was authorised by the UK Treasury to issue a further £1.2bn of capital, which according to press reports will allow the Bank of England to create further loans totalling more than £750bn.[i] Nice work if you can get it: create some sterling by a few strokes on a keyboard and gear up on it by issuing a further 625 times as much, only backed by the myth that the central bank’s capital is real. What is the purpose? To banish all risk emanating from the private sector, of course.

You can only justify monetary policies of this sort by supposing they are the right thing to do. But it tells us something important: deflation, however you define it, is not the problem.

- Source, James Turk's Goldmoney



Saturday, July 14, 2018

The Goldmoney Story


Goldmoney is the easiest way to invest in physical gold and silver bullion, as well as crypto assets online. We safeguard nearly $2 billion of assets for more than 1.5 million clients in 150 countries.

- Source, Goldmoney



Friday, July 6, 2018

A Massive Trend Change, Russia is Dumping US Treasuries

James say that we’re very, very close to the metals moving higher, silver especially, and with it comes a dropping gold to silver ratio. Here’s why…

In your recent KWN interview you reiterated that central banks would either be forced back onto a gold standard or the system would, in essence, change so much that central banks would willingly move back to a gold standard. Peter Boehringer – the architect of the German repatriation movement stated there were close to 21 countries that were either discussing gold as money, gold repatriation or some form of very high level discussions of gold. Gold has been repatriated by several countries now from U.S. vaults returning to Venezuela, the Netherlands, Germany and most recently Turkey. Is this, in your opinion, countries preparing for a change in the monetary system or is something else at play with these moves?

With Russia recently dumping 50% of their U.S. treasuries – and for the record it wasn’t a real significant volume, however, the gesture was huge – Russia also recently ask their Russian companies to move out of the SWIFT system and into their alternative payment system that is tied directly to the Chinese alternative to the SWIFT system. Would you say Russia is really the canary in the coal mine for some type of change in the global monetary system and is this part of the overall nonstop attacks by western corporate media against Russia?



Tuesday, July 3, 2018

James Turk: I’m Expecting A 30 To 1 Gold To Silver Ratio Down The Road


With Russia recently dumping 50% of their U.S. treasuries - and for the record it wasn't a real significant volume, however, the gesture was huge - Russia also recently ask their Russian companies to move out of the SWIFT system and into their alternative payment system that is tied directly to the Chinese alternative to the SWIFT system. 

Would you say Russia is really the canary in the coal mine for some type of change in the global monetary system and is this part of the overall nonstop attacks by western corporate media against Russia?