Posts Categorized: In The News

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Bill Holter’s Commentary

It’s called “shooting oneself in their own foot”!

IMF Warns That Sanctions Against Russia Threaten to Weaken the Dominance of the Dollar
March 31, 2022

The recent financial sanctions imposed on Russia for its invasion of Ukraine are threatening to weaken the dominance of the U.S. petrodollar as the world currency, said First Deputy Managing Director Gita Gopinath of the International Monetary Fund (IMF) to The Financial Times.

The sanctions may result in a more fragmented international monetary system, warned Gopinath.

She had previously said that the sanctions against Russia would not foreshadow the demise of the dollar as the world’s reserve currency and that the Ukraine crisis would slow growth, but not cause a global recession.

The United States, the EU, and the Group of Seven nations have hit Russia with a bundle of heavy sanctions and blocked the country from using SWIFT, the global communications service that clears international financial transactions, virtually cutting it off from the global financial markets and international trade.

The United States also froze $630 billion in assets held in international reserves by the Russian Central Bank.


Bill Holter’s Commentary

Zoltan Pozar on the rise of commodity backed currency versus the failure of fiat.

Commodities And The New World Order: What You Need To Know From Zoltan Pozsar’s Bretton Woods III
April 1, 2022

If you would ask Credit Suisse contributor Zoltan Pozsar, the world is heading into a new monetary order – what he calls the Bretton Woods III. In a nutshell, we are bound to see the rise of commodities as a primary monetary influence that might see the fall of the dollar and the rise of currencies in the East.

“When this crisis (and war) is over, the U.S. dollar should be much weaker and, on the flipside, the renminbi much stronger, backed by a basket of commodities,” said Pozsar in his dispatch on March 7.

He expounded on this in his latest article published on Thursday, detailing the framework for the so-called commodity-driven monetary world order Bretton Woods III.

“If we are right, our framework will be the right framework to think about how to trade interest rates in coming years,” Pozsar started. He theorizes that:

inflation will be higher

the level of rates will be higher

demand for commodity reserves will be higher, which will naturally replace the demand for foreign currency reserves

demand for dollars will be lower as more trade will be done in other currencies; and

the negative cross-currency basis (the dollar premium) will naturally fade away and potentially become a positive cross-currency basis.


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Bill Holter’s Commentary

Wall Street on Parade pulls the curtain back to get a glimpse of The Fed’s secret repo loans.

The Fed’s Secret Repo Loans, Another News Blackout, And A French Bank Scandal
March 31, 2022

As thousands of businesses were forced to close in the U.S. as a result of the coronavirus outbreak in March of 2020, and millions of Americans were financially struggling, the Federal Reserve was pumping what would become a cumulative $3.84 trillion in secret repo loans into the U.S. trading unit of the giant French global bank, BNP Paribas, in the first quarter of 2020.

The repo loan market is where banks, brokerage firms, mutual funds and others make loans to each other against safe collateral, typically Treasury securities. Repo stands for “repurchase agreement.” The Fed only comes to the rescue of this market when there is a liquidity crisis and Wall Street firms are backing away from lending to each other. September 17, 2019 was the first time the Fed had to intervene in the repo market since the financial crisis of 2008 and it was months before the first case of COVID-19 was discovered anywhere in the world.

BNP Paribas is not just any ole global bank. It’s the bank that the U.S. Department of Justice fined $8.8 billion in 2015 for flouting U.S. sanctions, covering its tracks, and pleading guilty to a criminal charge.

What may have led to the scramble for money by BNP Paribas Securities is – wait for it – risky derivatives, the same financial weapons of mass destruction that blew up the U.S. financial system and economy in 2008 and led to the biggest bailout of Wall Street in history by the Fed.


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 Bill Holter’s Commentary

“For profit” 

Without Registering as Stock Exchanges, Citadel Securities and Virtu Financial Account for More Stock Trading than the New York Stock Exchange
March 29, 2022

The above headline regarding Citadel Securities and Virtu Financial comes from a report authored by John Detrixhe that was published at Quartz in February of last year. The report found that as of December 2020 the New York Stock Exchange (NYSE) had a 19.9 percent share of stock market trading versus 13.4 for Citadel Securities and 9.4 percent for Virtu Financial. This gave Citadel Securities and Virtu a combined stock market trading share of 22.8 percent versus 19.9 for the NYSE.

The big problem with this picture is that neither Citadel Securities or Virtu Financial are registered as stock exchanges and neither are regulated by the SEC as stock exchanges. Citadel Securities is a broker-dealer that pays for order flow from at least nine online brokerage firms and has a dubious history of regulatory fines and abusive behavior. Virtu Financial is a market maker and high frequency trading firm that bragged in its IPO prospectus that it had only one losing day in 1,238 days of trading.

Tomorrow at 2 p.m., a Subcommittee of the House Financial Services Committee will hold a hearing on “Oversight of America’s Stock Exchanges: Examining Their Role in Our Economy.” The Subcommittee has released a revealing Memorandum that looks at the myriad problems afflicting stock trading in the U.S. and undermining trust in U.S. markets as the standard for markets around the world. Consider the following paragraph from the Memorandum which focuses on market concentration:

“There are a total of 24 stock exchanges in the U.S. registered with the Securities and Exchange Commission (SEC) as NSEs [National Stock Exchanges] under section 6(a) of the Securities Exchange Act of 1933. Among these 24 exchanges, 17 are owned by three companies: the Intercontinental Exchange (ICE), Nasdaq,Inc.; and CBOE Global Markets, Inc.”


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Bill Holter’s Commentary

Whatever you believe Vladimir Putin to be, he is no dummy…

Gold Not Cash Is Putin’s Haven
March 24, 2022

Gold is often criticized by Wall Street as kind of a useless investment.

Institutional investors prefer assets thought to contain the potential for growth, or “sprouts”. An investment has to produce a growing revenue stream – if it doesn’t grow it doesn’t compound. Gold is rejected as an investment because it doesn’t produce sprouts, meaning without a dividend or yield, the steady income and systematic growth sought after by institutional investors isn’t there.

But gold performs two jobs that fiat currencies, or any other financial innovation, cannot do; first, it acts as a safe haven in times of turmoil, second, as a store of value.

Nowadays the only people and institutions who own physical gold (bars and coins, not jewelry) are central banks and those who distrust the monetary system – people who see gold as a hedge against inflation, and/or want to own it as insurance against some calamity (e.g. banking system collapse), when getting access to cash is difficult or impossible, and paper currencies plummet in value.


Bill Holter’s Commentary

Pretty much on target.

The Newest Case for Gold
March 23, 2022

The stars are aligning for gold. A combination of geopolitical tumult, supply chain problems and inflation all point to much higher gold prices. Today, I’ll break it all down.

If you believe that the war in Ukraine will end soon, that global supply chains will heal quickly and that inflation is transitory, then you’re probably in for a rude awakening. In fact, none of those things is likely.

Even if the shooting stops in Ukraine soon, something that is not at all assured, the geopolitical consequences will dominate events for years or decades.

Putin will have asserted Russian de facto control over eastern Ukraine, if not outright annexation. Ukraine’s hope of NATO and EU membership will be permanently denied.

And the divisions in the West between the U.S. and the U.K. on the one hand and France and Germany on the other with respect to energy and trade with Russia will be on full display.

The Western alliance will lie in ruins. But Ukraine isn’t the only international security crisis underway.


Now here’s a warning for you!

IMF Warns Countries May Cut Dollar Reserves In Response To US Sanctions Against Russia

March 24, 2022

Did the IMF just parrot one of Russian President Vladimir Putin’s favorite criticisms of Western sanctions?

During an interview with Foreign Policy, the IMF’s first deputy managing director, Gita Gopinath, warned that Western sanctions on Russia, and more specifically, the confiscation of dollar- and euro-denominated reserves held by the Russian Central Bank, could backfire by making other foreign central banks more reluctant to hold such a large amount of their own foreign reserves in dollars and euros.

For decades now, the international dollar-based financial system has been underpinned by free market principles. Unfortunately, when western institutions effectively confiscate reserves belonging to an independent central bank, they cut against this notion, and prompt other nations to ponder the possibility – however remote – that they could be next.

Ultimately, it’s likely that some countries will “reconsider” the wisdom of so heavily relying on Washington.

“We are likely to see some countries reconsidering how much they hold of certain currencies in their reserves,” she told Foreign Policy.

While Russia accuses the West of trying to engineer a default on Russia’s foreign-currency bonds by restricting its access to euros and dollars, Gopinath pointed out that the sanctions imposed over the past month have effectively cut Russia’s ties to the global financial system, and a default (however technical in nature) would likely lock Russia out of said system for years.


Bill Holter’s Commentary

Alasdair Macleod lays out what last week means.

ALERT: Major Developments In The Gold Market
March 25, 2022

There are major developments in the gold market.

Major Developments In Gold

March 25 (King World News) – Alasdair Macleod:  Following the recent sell-off gold and silver rallied this week, with gold trading at $1957 in European trade…up $36 since last Friday, and silver was at $25.67, up 75 cents on the same timescale.

Trading on Comex was subdued in both metals, picking up somewhat yesterday.

There are significant developments in markets generally. US Treasury bond yields have begun to soar, as our next chart shows.


Bill Holter’s Commentary

No problem, the banks already stressed tested for this…right?

Mortgage Rate Soars Closer To 5% In Its Second Huge Jump This Week
March 25, 2022

The rate for the most common kind of mortgage just surged again.

The average rate on the 30-year fixed mortgage shot significantly higher Friday, rising 24 basis points to 4.95%, according to Mortgage News Daily. It is now 164 basis points higher than it was one year ago.

“That’s the second time this week, and it puts this week on par with the worst week from the 2013 taper tantrum — a record we didn’t see being legitimately challenged a few days ago,” said Matthew Graham, COO of Mortgage News Daily.

On Tuesday, the rate had hit 4.72%, a 26-basis-point jump from March 18. The quicker-than-expected rise in rates has weighed on demand for mortgages and refinancing loans.

The rate surged as the yield on the U.S. 10-year Treasury also took off. Mortgage rates follow that yield loosely, but not entirely. Mortgage rates are also influenced by demand for mortgage-backed bonds. The Federal Reserve is scaling back its holdings of these assets and is also hiking interest rates.


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Bill Holter’s Commentary

Ketanji Brown Jackson is certainly not qualified to be a Ukrainian border guard as she apparently cannot tell the difference or define “woman” for that matter?

Sorry, I just couldn’t resist… 

Biden’s Supreme Court Nominee Ketanji Brown Jackson Refuses To Define The Word ‘Woman’ Because She’s ‘Not A Biologist’ As She Is Grilled On Day Two Of Her Confirmation Hearing
March 23, 2022

Supreme Court nominee Ketanji Brown Jackson refused to define the word ‘woman’ during the fiery second day of her confirmation hearing conducted by the Senate’s Judiciary Committee. 

The moment came during a tense exchange with Senator Marsha Blackburn (R-Tenn.) who pressed Jackson on sex and gender issues amid the fallout of biological male swimmer Lia Thomas storming to victory in the NCAA championships against female competitors.

Quoting late Supreme Court judge Ruth Bader Ginsburg, Blackburn said: ‘Physical differences between men and women are enduring. The two sexes are not fungible. A community made up exclusively of one sex is different from a community composed of both.’

‘Do you agree with Justice Ginsburg that there are physical differences between men and women that are enduring?’ the senator asked.

When Jackson claimed she had never heard the quote, Blackburn asked directly: ‘Can you define the word ”woman”?’


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Bill Holter’s Commentary

Selling dollars, euros and pounds to buy rubles for the purchase of Russian oil and gas…do you see the supply and demand equation here?

Putin Wants Rubles For Russian Gas
March 23, 2022

Russia will now accept payment for gas exports to “unfriendly countries” in rubles only, President Vladimir Putin said at a meeting with the government on Wednesday.

The president explained that Russia plans to abandon all “compromised” currencies in payment settlements. He added that illegitimate decisions by a number of Western countries to freeze Russia’s assets destroyed all confidence in their currencies.

“I have decided to implement in the shortest possible time a set of measures to change the payments for – yes let’s start with this – for our natural gas supplied to the so-called unfriendly countries in Russian rubles, that is to stop using all compromised currencies for transactions,” the Russian president said.

“It doesn’t make sense to deliver our goods to the EU and the US and get paid in dollars and euros,” he added.

Putin gave the Central Bank and the government a week to determine the procedure for operations for buying rubles on the domestic market for importers of Russian gas.


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Bill Holter’s Commentary

I guess the Fed did not print enough?

Manhattan’s Third-Largest Hotel To Sell At Staggering Loss
March 21, 2022

By Ciara Long of,

One of the largest hotels in New York City will trade at a massive loss, an ominous sign for the owners of Manhattan’s big hospitality properties.

Sheraton New York Times Square Hotel

Host Hotels & Resorts has agreed to sell its Sheraton New York Times Square hotel for $365M, Real Estate Alert reported, less than half the $738M it paid for the 1,780-room property in 2006.

Host, the largest U.S. hotel real estate investment trust, is under contract to sell the property to MCR Hotels, one of the most active buyers of New York City hotel properties since the onset of the pandemic. The sale is the city’s largest hospitality trade in over two years. The 51-story hotel is New York City’s third-largest by room count.

Host was struggling to sell the property at the price it purchased the hotel for long before the pandemic, asking for $550M in 2018, according to REA. In 2020, Host admitted that the Times Square Sheraton’s value had sunk even lower, to $495M.

The Times Square Sheraton sale adds Host to the list of several NYC hotel owners to sell their properties at a discount. Hotels in the city have yet to return to their pre-coronavirus occupancy rates, and the omicron wave in December and January suppressed tourism’s nascent return to NYC.


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Bill Holter’s Commentary

WOW, what a shock!

Now That Joe Biden’s President, The Times Finally Admits: Hunter’s Laptop Is Real
March 17, 2022

Forgive the profanity, but you have got to be s–tting us.

First, the New York Times decides more than a year later that Hunter Biden’s business woes are worthy of a story. Then, deep in the piece, in passing, it notes that Hunter’s laptop is legitimate.

“People familiar with the investigation said prosecutors had examined emails between Mr. Biden, Mr. Archer and others about Burisma and other foreign business activity,” the Times writes. “Those emails were obtained by The New York Times from a cache of files that appears to have come from a laptop abandoned by Mr. Biden in a Delaware repair shop. The email and others in the cache were authenticated by people familiar with them and with the investigation.”

Authenticated!!! You don’t say. You mean, when a newspaper actually does reporting on a topic and doesn’t just try to whitewash coverage for Joe Biden, it discovers it’s actually true?

But wait, it doesn’t end there. In October 2020, the Times cast doubt that there was a meeting between Joe Biden and an official from Burisma, the Ukrainian gas company for which Hunter was a board member.  “A Biden campaign spokesman said Mr. Biden’s official schedules did not show a meeting between the two men,” the Times wrote, acting as a perfect stenographer.