Via Casey Research
Currencies die more often than most people realize. There have been more than 20 hyperinflations in the last hundred years.
It shouldn’t surprise anyone that bad things happen when politicians have the power to create infinite money. What’s amazing is that many still trust them to create just enough money for the good of the people, but not a penny more.
Jeff Thomas points out that some countries are finally realizing that it’s just a matter of time until all fiat currencies die. They’re quietly buying gold, so they’ll own something of real value when the world realizes that paper is worthless.
One problem: no one knows who has all the gold. The answer is critical, because it could tell us which countries will recover first when the present system crashes. Jeff says:
Whoever holds the most gold will hold the most real wealth and, by extension, gain the most prominent seat at the bargaining table for decades to come.
China Continues to Add to Its Massive Gold Reserves
China has an insatiable appetite for gold. That’s nothing new. Analyst Laurynas Vegas has been watching gold flow steadily from Western countries to Eastern countries for years now.
No one knows for sure how much gold the Chinese government has stockpiled. But Laurynas suspects it’s a lot more than they’ve been letting on. Shanghai Gold Exchange physical delivery figures are rising… fast.
There’s good reason for the secrecy. China has been working to position its currency, the renminbi, as a competitor to the US dollar. A gold-backed renminbi would gain immediate credibility as a potential reserve currency… maybe even more credibility than the backed-by-nothing US dollar.
You Can Now Pay Your Bills in Gold with Bitgold
Almost everyone agrees that gold is valuable. Yet few have access to it, or can use it as money.
Bitgold, a new gold storage and transfer service, wants to change that. It’s a secure mobile payment service that enables users to pay their bills in gold.
It’s too early to say whether it will be a game-changer. But Louis James applauds their ambition.
Blips & Bogeys
- The endgame for Greece may be near. This weekend, news broke that IMF officials are working with governments in southeastern Europe to prepare for a Greek default. Meanwhile, the Troika is preparing for the worst. It has planned four scenarios, and only one of them assumes that there will be a successful deal with Greece.
- In Germany, Chancellor Angela Merkel’s own party is pressuring her to let Greece quit the euro.
Of course, if Greece is planning to leave the euro, it would keep it a secret as long as possible. As soon as Greek citizens realized what was happening, they’d move their savings outside the country.
The Greek government would likely make the announcement during a weekend, when banks are closed. Just like Cyprus did with its “bail-in” in 2013.
- A Wall Street fund manager said this week that “the market was hoping for growth but not (so strong) that the Fed needs to hike”.
It’s more of the “good news is bad news”, upside-down thinking that we told you about on Friday.
- The “official” US unemployment rate has fallen to 5.4%. But that stat ignores the record number of Americans who aren’t in the labor force. If you factor them in, the true unemployment rate is closer to 11%.
Chuck Butler adds that businesses are dying in the US faster than they’re being created.
- It’s time to be cautious on the oil and gas sector. Even big names like SM Energy, Apache, and Hess are struggling. Not to mention Chesapeake Energy, which just posted a $4.8 billion quarterly loss.
Meanwhile, even OPEC is admitting that it’s lost control of oil prices. Its most optimistic projection is for $76 a barrel… in 2025.
- Star hedge-fund manager David Einhorn has harsh words for shale oil producers. He said that a business that burns cash and doesn’t grow isn’t worth anything.
Einhorn called out Texas-based Pioneer Natural Resources, specifically. He said that these “motherfrackers” won’t generate positive cash flow until 2038. Ouch.
- Seymour Hersh won the Pulitzer Prize for exposing the My Lai massacre in Vietnam, and broke the Abu Ghraib story. He just broke what looks like an even bigger story.
Hersh says that the Obama administration lied about Osama Bin Laden’s death. He claims that Pakistan had been holding Bin Laden as a prisoner since 2006, and that the Pakistani government choreographed Bin Laden’s killing. NBC News reports they’ve been pursuing similar leads.
Hersh concludes: “High-level lying nevertheless remains the modus operandi of US policy, along with secret prisons, drone attacks, Special Forces night raids, bypassing the chain of command, and cutting out those who might say no.”