Posts Categorized: Bill Holter
I have been asked my opinion regarding cryptocurrencies. Let’s start by saying I have no doubt within only a short time, “crypto currencies” will be issued and embraced by central banks. This is not to say I am endorsing Bitcoin, Ethereum or any other digital currency. It is even possible that not a single existing crypto will exist when central banks finally make their leap.
issuing and embracing cryptos make total sense from the standpoint of central banks for several reasons. First, what crypto bulls consider as “privacy” today, central banks will see as “total knowledge” if they are the issuer. This will mean total knowledge of all transactions which also means a near impossibility of any tax evasion even down to the lemonade stand (assuming you have your lemonade permit!). Also, if central banks issue the crypto currency…you can pretty well bet they will also have a back door …that allows them to either freeze or even empty “your vault” of digital coins…whenever or for whatever they choose.
Whether we are headed toward a one world currency or several currency blocks (this is more likely), digital money is coming if the central banks have anything to say about it. As I mentioned above, I highly doubt central banks will want “competition” to their currencies so some sort of legislation (either by individual sovereigns or collectively on a global basis) can be expected as an attack on existing “private” cryptos. In my mind, there does exist the possibility that an existing currency (or a very small handful of current cryptos) is used as the “platform” for central banks but I would not place my hope on this. I also would not want to bet “which one” or ones will be chosen if this is the case?
In my opinion, the volatility of digital currencies while wicked and speculative (upward so far?) is not the real danger, and the ride is not for the faint of heart. The real dangers are several and basically involve a “poof” moment that does not exist with gold or silver. When I say “poof”, I am talking about “poof, it’s gone!”. Do not say this is impossible because it is not.
I would ask, what if we experience an EMP and the grid goes down? No electricity, no computer. Yes you can go to another area or country but good luck getting there. Another argument you hear for digital currencies is “they are not hackable”…to which I must call utter bullshit because EVERYTHING including the NSA is hackable! Even the modern car you drive is hackable and can be overridden with a joystick today. We see it all the time, this entity or that entity gets hacked. We have even heard of people’s cell phones being hacked and digital currencies stolen that way. One must also worry about the exchange(s) being hacked, we have already seen this where coins just disappeared. I just recently read this article for more potential pitfalls or arguments. Suffice it to say, in the case of Bitcoin, no one even knows who its creator Satoshi is, how does anyone know he did not install a backdoor when he launched it? It does make sense that the programmer has a back door doesn’t it? Maybe he was an “honorable” programmer? Are all the others the same? We do not exactly live in an “honorable world” no matter how badly you’d like to believe it…
To finish, maybe I am old school but I see a vast difference between digital currencies and precious metals. Most important of all, precious metals cannot “disappear” overnight if you have them stored properly. Can they be made “illegal”. Yes governments can try this but how do you make silver illegal with all of its medicinal, solar, industrial and technological uses? Can jewelry be made illegal? An EMP will not destroy the value of metal. Neither will a fire or flood. They can be taken from you at gunpoint which is why you should have metal stored in several places. Metal will work for barter in the situation of a full out meltdown of financial markets. Will your local farmer trade his eggs, beef, extra tools or diesel fuel for Bitcoin? Probably not. Will he trade for metal? I think so. Then I would ask, if you want to “trade” your digital currency when financial institutions are closed …”how do you get paid” if financial transaction are frozen? The same can be said of metals but I am pretty sure a guy with two motorcycles might trade one for 100 ounces of silver …(or less?) …I’m not so sure he’d accept a digital currency?
I could go on and on with examples but I am of the school that “possession is 9/10ths of the law”. In the case of outright anarchy, (which we very well may be facing) “possession” itself may become the law? If you take nothing away from this article other than just one concept, please understand that metals cannot experience a “poof” moment where you go from wealth to nothing in an instant. We face a credit meltdown dead ahead where return “OF YOUR CAPITAL” will trump return ON your capital. Gold and silver are money, not credit, they may very well be your ONLY capital before this “credit episode” is all over?
The entire world faces a “poof moment” because nearly everything either is itself credit or relies on freely flowing credit for its value. Gold and silver rely on nothing because they “are” money. They do not rely on credit nor are they the liability of anyone or any nation. They do not rely on an internet (which governments do have the ability to shut down) or computers. They do not rely on a user name or password either. Nor do they rely on the simple and basic technology of electricity. They can’t even be hacked (unless you use a hatchet to make change?). Call me old fashioned but subjecting yourself to a poof moment makes no sense at all when it is the coming poof moment you see coming …and are trying to protect yourself from!
I had not planned on penning a public article today but my plans were changed by Martin Armstrong as he again is busy attempting to rewrite history. He is again trying to scare people away from their only financial hurricane insurance, gold …why? Any thinking person knows a credit disaster is coming. Heck, even he has called for a pending financial disaster himself…but gold is not a safe harbor “this time”?
As a reminder of past fallacy, Mr. Armstrong wrote back in September 2015 “…”You are doomed if you cling to the idea that gold will rise simply because stocks decline. Gold was DEVALUED in 1934 since gold was MONEY. What it could purchase for $20.67 then cost $35. (this line has since been deleted from his original article) The government confiscated gold and moved to a TWO-TIER monetary system with gold used exclusively for international settlements, not domestic.” …Martin Armstrong
The fact is, gold was REVALUED 70% higher versus the dollar (and much more versus other assets) as what previously required $20.67 to purchase one ounce of gold moved to $35. I said at the time, what he wrote could not have been a typo or a mistake, his logic was in reverse and he was trying to rewrite history.
Fast forward to present, he is at it again. He recently posted “Am I certain about the strong dollar?” Let’s take a look at a few glaring “alterations” of history and poor logic according to Martin Armstrong.
His article starts out with “You can denominate oil to peanuts in some other currency but that still will never put a dent in the dollar. Why? It is capital flows than count and trade is minimal”.
Um not quite right Martin, and we will save this for the end as it’s the main broken bone to the writing.
He then attacks the Euro. While I do not disagree with his premise that the Euro is flawed because it is a common currency but consists of members with different credit ratings and different interest rates. I do disagree with his historical recollection. Martin tells us “In general, Europeans are still trapped in World War II thinking that a stronger currency means economic boom.” This is absolutely not so (please read “The rotten heart of Europe” by Bernard Connolly). For years prior to the Euro commencing, nation after nation DEVALUED their currency in order to receive cost benefit for their produced and traded goods. And besides, hasn’t Mario Draghi continually tried to talk the Euro down and devalue versus other world currencies? World currencies have been in a race to the bottom, I am not sure what Armstrong is looking at here.
Then he goes on to say “the Chinese yuan will not replace the dollar until AFTER 2032”. Has he not seen China for at least the last five years or more readying itself to do its business without using dollars? Trade deals, credit facilities, bourses and clearing facilities all being erected to the EXCLUSION of dollars? Does he not see the rest of the world distancing themselves from the U.S. and following very closely along with China? Plus, with history as a guide, the $20 trillion current US debt will double twice to $80 trillion by 2032, will the U.S. even be financially viable by then (is it even viable now)?
He went full circle to what he started with and the most flawed of all; “Denominating oil in yuan or euro means nothing. Where will you park your cash?”.
And then claims; “The ONLY time we get monetary reform is when the dollar RISES, not declines. Hey, if the dollar declines, then interest rates will continue to travel negative, gold will collapse, the stock market will implode, and Trump will emerge as the best president in history creating massive new American jobs exporting everything not just blue jeans, rock & roll, and US corrupt law. Emerging markets can keep borrowing dollars with no end, dumping commodities that are at excess supply, and everyone will be perpetually happy – the euro will be strong at last and magically the ECB can just keep European governments on life support without end.”
First, he is basically saying we will have economic nirvana with a weaker dollar and only at the expense of the stock market (and gold bulls of course). A weak dollar sounds wonderful according to him, maybe even “the answer” to a failed system? Unfortunately there is a thing called “history” which shows when a currency weakens or even collapses, stock markets, (gold), and assets in general skyrocket in that currency …just look at the results of Weimar, Zimbabwe or even Venezuela, their stock markets WENT UP in their own local currencies… not down. If weak currencies (inflation) were such a good thing, why haven’t we already figured this one out and EVERYONE just print and devalue? This has been tried over and over again throughout time and always ended up with the fiat currency being busted through over issuance. “Printing” currency to devalue does not produce prosperity… if it did there would be no poverty anywhere on the planet. This is historical fact, not opinion.
As for saying denominating oil in yuan, “means nothing”, can he really believe this? According to Armstrong, “flow” is what is all important (I must agree), … and “trade is minimal”. I beg to differ, TRADE is ALL IMPORTANT in today’s world and certainly affects capital flow very significantly “at the margin”. If trade and settlement did not matter to the dollar, then why has the U.S. used its military for so long to enforce the petrodollar? For that matter, why was the petrodollar scheme set up in the first place? (It’s OK Martin, you know what happened on Aug. 15, 1971). I bet Saddam and Mohamar might disagree with Armstrong’s take here if they were still living, what you actually settle oil (and other commodities) DOES MATTER because it affects “flow”, (and ultimately lives!).
I have a couple last questions. How is it Martin that a weaker dollar will not bring forth “monetary reform”? I understand your stronger dollar thesis where foreigners are financially blown up for borrowing in dollars that increase the difficulty in payoff and service of their debt. But why would there need to be monetary reform if the reserve currency was acting like the reserve currency and remained a strong standard to be compared to and saved in?
How is it, a weaker (or significantly weaker) dollar cannot bring forth monetary reform? What if the dollar is weaker because less people are using it …as they already are today? What if the dollar is weaker because the Treasury/Federal Reserve balance sheets look like they are approaching junk bond status …and foreigners bail out of dollars …as they already are? In reality, isn’t it the weak dollar itself (and poor financials of the issuer) that has prompted the rest of the world to seek a new reserve currency in the first place? They are tired of seeing their “savings” in dollars depreciate AND don’t fancy playing the game of “never getting paid” …!
You see Martin, dollars only promise to pay more dollars and “settlement” is never really made. With gold, because it is no one else’s liability, IS final settlement… (but you already know this of course). This is just one more difference between a “currency” and “money” that you seem not to want the public to understand? I am not sure why this is? You used to be such a beacon of logic, what happened to it? Where did it go?
One last question, what would John Edelson or Fred Manko say about your history?
CIGA Wolfgang’s response:
A few points:
-Quite simply, people FLEE a weakening currency (as you stated). Just look at Venezuela today.
What if the dollar is weaker because less people are using it …as they already are today? What if the dollar is weaker because the Treasury/Federal Reserve balance sheets look like they are approaching junk bond status …and foreigners bail out of dollars …as they already are?
-China does not want to be a reserve currency. They simply want a new basket to replace the current Dollar hegemony. Think Distributed Ledger.
‘Yes, a brave new world where the dollar is no longer the world reserve currency.
Barbara C. Matthews, a former US Treasury Department attaché to the European Union, has reached the same conclusion.
She said the link between the globalists’ currency and Distributed Ledgers “is impossible to avoid.”
And that “the IMF seems to be exploring the possibility of permitting a broader use of [their globalist currency] beyond internal transactions among member central banks.”
Make no mistake, if the IMF is planning to use Distributed Ledgers to replace the U.S. dollar with SDRs. And just to be clear, when SDRs take over, the American people will be left with devalued dollars.
On August 7, 2017, China announced they will begin using Distributed Ledger technology to collect taxes and issue “electronic invoices” to citizens there.’
-Reserve currency status is a license for monetary abuse.
“This creates a virtually unlimited demand for U.S. dollars, which allows us to print trillions of dollars each year to pay for wars, debt and anything we want. It keeps our country operating.”
-Tell the following to Germany and their “Economic Miracle” of the 1950″s (as it’s currency slowly climbed to new heights). Or to the Japanese in the 1970’s as they branded their product, raised prices, and assumed high quality production. It was literally quality product recognition that made them great.
“Hey, if the dollar declines, then interest rates will continue to travel negative, gold will collapse, the stock market will implode, and Trump will emerge as the best president in history creating massive new American jobs exporting everything not just blue jeans, rock & roll, and US corrupt law. Emerging markets can keep borrowing dollars with no end, dumping commodities that are at excess supply, and everyone will be perpetually happy – the euro will be strong at last and magically the ECB can just keep European governments on life support without end.” ….Martin
-Lastly, in regards to flow, see the chart and its importance!
As for saying denominating oil in yuan, “means nothing”, can he really believe this? According to Armstrong, “flow” is what is all important (I must agree), … and “trade is minimal”. I beg to differ….Bill.
Great article Bill.
CIGA Wolfgang Rech
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I thank so many for writing in and asking how I am doing after hip replacement. Rather than continuing to respond to individual questions I figure much easier to post for all. I had surgery 3 weeks ago yesterday and was able to walk (gingerly) the following day. I walked the treadmill 1/2 mile on my 4th day and it felt like a marathon. Yesterday walked 2.5 miles, biked 4 miles, did 50 squats with 100lbs along with multiple other upper body weightlifting. I am a little sore today but I feel great and will not push my body more than it tells me is OK. I have slept better in the last three weeks than any time in the last 5 years. Great to have my wheels back! Again, thank you everyone for your notes of care and encouragement!
P.S. I now am up to 20 pieces of metal and three plastic parts holding me together. If I ever split open there will be springs, screws and other weird looking parts strewn about!
Dr. Dave Janda of Operation freedom interviews 5 separate guests. Bill is interviewed from 1:34:00 to 1:55:00. Please listen to them all as Dr. Dave has very good questions and knowledgeable guests. It is always an honor to speak with him!
China recently announced they will trade oil for yuan “backed” by gold. The story has gotten some press (none of it mainstream mind you), and many have questions as to what it really means. While quite complicated as a whole, when you break this down into pieces I believe it is a quite simple and logical end to Bretton Woods.
For a background, China has had an exchange open for about a year where gold can be purchased with yuan, though the volumes so far have been miniscule to this point. China has also been all over the world inking trade deals (in yuan) and investing in all sorts of resources from oil to gold to grains, they have made no secret about this. With the most recent example here. They have trade arrangements and treaties with Russia, Iran and many other non Western nations. They have also “courted” many Western nations privately (remember their meeting with the King of Saudi Arabia?) and actually lured many with their “Silk Road” plans via the AIIB which was huge news last year (but nearly forgotten by Americans at this point?). We also know China has been a huge importer of gold for the last 4-5 years and done so publicly via Shanghai receipts and deliveries.
So what exactly does “oil for yuan” mean? In my opinion, China is basically leading a “mutiny FOR the bounty” (we’ll explain this shortly). The only things holding the dollar up from outright death for many years has been the oil trade (and other trade commerce) between nations and settled in dollars. Anyone wanting to buy oil had to first buy dollars in order to pay for the trade. Anyone getting out of step and suggesting they would accept currency other than dollars was dealt with swiftly and harshly (think Saddam and Mohamar). In other words, the U.S. military “enforced” the deal Henry Kissinger made with the Middle East (lead by Saudi Arabia) where ALL oil was settled in dollars. International trade settlement alone supported the dollar after the Nixon administration defaulted on its promise to exchange one ounce of gold for $35.
China is now suggesting THEY will be the ones to trade oil and not use the dollar for settlement. Instead, settlement will be in yuan. But why now? I believe for one of two reasons or more likely both. First, and as we have recently spoken about, it very well may be that the US. military technology has been cracked or leap frogged. It is looking like a distinct possibility and if so, China/Russia now have less fear of U.S. military “retribution”.
The other possibility pertains to gold. We have no way of knowing whether or not the “bottom of the barrel” as far as gold reserves is in sight but we can have a pretty good idea. Physical demand for gold has exceeded mine supply by some 1,500 tons for the last 20 years, “Scrap” supply can not have made up the shortfall. The only place the gold to supply for delivery can have come from are Western (think Ft. Knox) vaults. If the Chinese know their “supplier” of gold is at or near zero, this could also explain “why now”. My bet is both, military technology AND lack of gold supply are at work here.
The next question is this, does China want to become the world’s reserve currency? I do no think so as they have seen economies of the issuers of the reserve currency destroyed time after time throughout history. Rather, China wants to lead the parade away from the dollar or at least steer it. Whether via a larger slice of the SDR pie, or another as yet to be introduced currency I do not know.
What we do know: the U.S. is broke and very likely nearly out of gold. The U.S. has “led” the world with an iron fist and trampled many in its wake …pissing off nations all the while over the last 20+ years in particular. China knows this and also knows the rest of the world will follow them just as school kids will follow the one who stands up to the school bully. Besides, on the surface it certainly looks like better (more fair) trade and settlement terms for anyone who goes along.
Wrapping this up, we need to know “what” all this means? Most importantly it means the world will have an alternative to settling in dollars …which means less overall demand for dollars. This alone will weaken the dollar much further than the huge move we have already seen. A weaker dollar will mean much higher prices (inflation) for the imported goods we no longer manufacture at home. There is a bigger problem here that few are thinking of yet. How will the U.S. settle trade if the dollar becomes so weak it becomes shunned …AND we have no gold for international settlement left? This is a very serious question and one pertaining directly to the standard of living for Americans.
Answering the question as to the meaning of “mutiny for the bounty”, this is simple. You can think of “bounty” as “prosperity” if you will. Prosperity in today’s world means you produce goods and trade, trade, trade! By and large I believe the world wants peace and prosperity …which go hand in hand and are not mutually exclusive. If the world is offered a “more fair” way to settle trade, will they go for it? You bet! Especially if they are offered “cover” or protection from the U.S. military …for trading in a currency they deem more fair than dollars!
So it seems to me, China is leading a world that is ready to follow in a direction away from dollars. As for gold, it will explode in price in terms of a weakening dollar but there is potentially more. China without ANY DOUBT is THE largest holder of gold on the planet. It is for this reason China now has the ability to “price” gold wherever they want to. In other words, China can mark the price of gold to the moon which will do several things. It will make them the wealthiest nation on the planet while at the same time making it extremely expensive and difficult for anyone to catch up by amassing their own gold horde.
As to the yuan becoming gold backed, I doubt it in reality. I highly doubt they will ever “exchange” their current gold horde. It is more likely they will only exchange further gold accumulated from this point forward but that is a story for another day.
We have speculated for several years that China might try to supplant the dollar. It now makes sense and one would have to wonder why they wouldn’t lead the mutiny if they were to become the new captain?
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