Posted at 9:04 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Is this a variation of the US’s strategy of “economic hitman”?

Angola’s Chinese Oil Debt-Trap
May 13, 2018

Angola repays its $25 billion debt to Beijing with crude oil, creating a host of problems for its economy, reports Yinka Adegoke, Quartz’s Africa editor, in his weekly brief.

Why it matters: That means Angola’s ability to repay debt is dependent on the price of oil. And it leaves the country with lower volumes of oil to sell to other trading partners.

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The bigger picture: Angola is an example of the debt-trap in Chinese diplomacy, through which small countries accrue massive debts by accepting Beijing’s offer to build much-needed infrastructure. Then China has leverage to set the terms of future engagement, whether that’s determining the mode of repayment or demanding rights to use the infrastructure.

The backdrop…

Angola is Africa’s second-biggest oil producer, and 99% of Angolan exports to Beijing are petroleum products, per the Washington Post.

Since establishing diplomatic ties with Angola in 1983, China has lent $60 billion to the small nation through direct investments and infrastructure projects.

“Every Angolan owes $754 to China,” as the local newspaper Expansão put it.

As China keeps growing, its demand for crude does too. It’s also the largest consumer of Iranian oil.

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Bill Holter’s Commentary

I guess we now need to expand “the three greatest lies” to four?

I Asked Siri, Alexa And Google Assistant If They’re Spying On Me — Here’s What They Said
May 13, 2018

A lot of people are worried that voice assistants like Amazon (AMZN)’s Alexa, Apple (AAPL)’s Siri or the Google (GOOGL) Assistant are spying on us at home.

All three companies have said the assistants are not listening all the time, but only listen for a wake word — or perhaps hidden commands humans can’t hear.

So I asked all three voice assistants if they’re spying on us, just for kicks. Here’s what each one said.

“Hey Alexa, are you spying on me?”

Here’s what Amazon Alexa said:

“I only send audio back to Amazon when you activate me. For more information, and to view Amazon’s privacy notice, visit the help section of your Alexa app or alexa.amazon.com.”

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Bill Holter’s Commentary

Name names, please!!!

 

Posted at 10:36 AM (CST) by & filed under Jim's Mailbox.

CIGA Tom with an important heads up from Luke Gromen.  As I wrote last week, the leverage in gold and silver is on the short side.  Once credit begins to dry up, the caps will lift.  Only God knows what the true clearing prices of gold and silver are!

Bill

Posted at 10:30 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

A replay of 2008, only much bigger!

Subprime Mortgages: The Dog Returns To Its Vomit
May 11, 2018

Other people’s money is always more fun to play with recklessly than your own. As such there’s been a quiet escalation in number of private capital pools offering mortgage (and auto) financing to subprime quality borrowers. “Special Circumstance Lending” is one such lender in Denver. It constantly runs ads on Denver radio.

The proprietor of Special Circumstance Lending was an aggressive participant in the junk mortgage underwriting business and dumped more than his fair share of subprime crap into the Wall Street mortgage securitization scheme that led to “The Big Short.” SCL doesn’t need to see your tax returns. It will give you a mortgage based on bank account statements.

The big Wall Street banks appear to have retreated from risky mortgage lending. But have they? Though new regulations are intended to limit the amount risk the big banks take underwriting mortgages , the banks instead extend large lines of credit to private “non-bank” mortgage lenders, like Exeter Finance. The average credit score of Exeter underwritten paper is 570. If Exeter doesn’t get repaid, the big banks extending the funds to underwrite that garbage won’t get repaid.

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Posted at 11:08 AM (CST) by & filed under Jim's Mailbox.

JB,

Is 2018 the year that truth will finally matter?

Bill

…Maybe the government should look at the investing world’s thousands of Algo’s and ask the same damn question…Investors and Brokers have been saying this for years.

JB

News Corp. Calls For Algorithm Review Board To Monitor For Potential Abuse
May 10, 2018

News Corp. used its third quarter investor call as a platform to continue its attack on the two dominant tech platforms whose outsized influence and practices are having a “deleterious effect” on journalism.

Chief Executive Robert Thomson expressed concern about the opaque role of algorithms, the secret, behind-the-scenes calculations that determine what information consumers see. He called for the creation of an Algorithm Review Board to monitor for abuse.

“These algorithms are already potent, but they are destined to be much more formidable, and their abundant potential to skew news and skewer customers needs to be better understood and monitored,” Thomson said. “And an Algorithm Review Board, or ARB, would be particularly useful in the oversight of companies, which have horizontal dominance, and use that leverage to dominate a vertical, such as Amazon with audiobooks and, potentially, Facebook with dating.”

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Kevin,

It just might be that China is preparing for the re monetization of both gold and silver?

Best,

Bill

Bill,

Perhaps the information below is worthy of your read and also worthy of some of your best contacts. On February 8, PBOC posted a reaffirmation of 61 1983-1984 rules and regulations on gold and silver. These rules are striking. They relate to restrictions on gold and silver export, pricing and many other items that throw back to reigning in non monetary gold.  Kevin

  1. Sixty-one rules and regulations, including Rules for implementing the Regulations of the People’s Republic of China on Administration of Gold and Silver (Yin Fa Zi No. 381 [1983]) (see Appendix 2) shall remain valid.

Governor Zhou Xiaochuan

February 8, 2018
http://www.pbc.gov.cn/english/130721/3494672/index.html
http://www.pbc.gov.cn/english/130721/3494672/2018030717411844854.doc
Appendix 2

Catalogue of Currently Effective Rules and Regulations Made by the the People’s Bank of China

(61 Items)

  1. Rules for Implementing the Regulations of the People’s Republic of China on Administration of Gold and Silver (Yin Fa Zi No. 381 [1983])
  2. Administrative Rules on Taking Gold and Silver Into or Out of the People’s Republic of China (Yin Fa Zi No. 13 [1984])

Links to 1983 & 1984 laws

http://www.asianlii.org/cgi-bin/sinosrch.cgi?method=any&query=gold+and+silver+&meta=%2Fasianlii&mask_path=
1983 law-

http://www.asianlii.org/cgi-bin/disp.pl/cn/legis/cen/laws/rotcogas425/rotcogas425.html?stem=0;synonyms=0;query=gold%20and%20silver#disp5
1984 law-

http://www.asianlii.org/cgi-bin/disp.pl/cn/legis/cen/laws/drftiotrotcogasotproc1071/drftiotrotcogasotproc1071.html?stem=0&synonyms=0&query=gold%20and%20silver

Posted at 9:33 PM (CST) by & filed under Bill Holter.

Because we have received a dozen or more questions on the same topic, I thought it might be a good idea to discuss. Michael Pento was recently interviewed by Greg Hunter They spoke about many topics including the silver/gold ratio. The questions we received were panicky in nature from holders of silver. Paraphrasing, “do you agree with Michael Pento that silver will not do anything on the upside if we enter a depression”?

I had not listened to the interview when the questions (mostly all the same) came rolling in. As a side note, rarely do I watch interviews or read opinion pieces from other authors. Not because I think I know it all, but because of the way I am wired. Explaining this, I am voracious for data and facts that I can use with past data and facts to form my own opinion(s). What good would it do if I simply parroted what others “believe”? While I am always open to other opinions or why my own may be wrong, it is important to me to be original and authentic in thought rather than repeat what others believe.

After watching Michael’s interview, I agree with most all of what was said. He did not pan or badmouth silver. All he said was he believes the 80-1 ratio between silver and gold will probably remain during an economic depression and that he prefers gold. He talked about precious metals going ballistic, that physical metal is the way to own it and paper holders (he was not talking about mining equities) will discover they own nothing. All good stuff and he very well may be correct but claiming the 80-1 ratio will hold is not telling you silver will underperform gold from current levels so please relax.

My personal opinion on silver (and Jim coined the phrase) is it will be “gold on steroids” for several reasons. First, silver is mined at a ratio of just under 10-1 versus gold and this is also about the same ratio as it is believed to exist in the Earth’s crust. I call it “God’s ratio”. Secondly, silver has traditionally been “used” for the last 100 years. Yes it is still stacked but much of the demand comes from industrial, military, technological, medical and solar uses. And yes there is scrap recovery but much silver is basically lost forever once used. There are no huge known stockpiles other than the 500 million+ ounce supposed hoard by JP Morgan and this is important.

{A couple other thoughts, under chaos conditions gold is portable and silver not so much whereas silver will be spendable and gold not so much. These differences are due to weight/value and transaction/the ability make change (as in change back for your gold coin). Also, when the masses do finally stampede into metals, silver is/will be more affordable to the average man on the street. This alone argues for higher demand for silver than gold under financially stressed conditions}.

If you understand that EVERYTHING is manipulated and rigged in price, and if you understand this has and is done using leverage (borrowed money and derivatives), then you should ask “why”. This is simple, it is ALL about the dollar and the ability of the US Treasury to borrow literally unlimited amounts of capital. It is all about control and the ability to pay for and continue control. Gold and silver are direct enemies of fiat dollars or fiat anything. They have been suppressed in price in an effort to support the value of paper currencies.

The important thing to understand is this, because the world has reached “debt saturation”…credit markets will seize up and the funding for manipulation will begin to wane and ultimately cease. Gold and silver will explode in price because they are not only the reverse of paper currencies but the “leverage” applied in these markets are positioned short in the effort to suppress pricing versus positioned long in paper assets in an effort to support prices.

What I am getting at is whether you call it a re set or any other name, markets will eventually “clear”. By clearing, I mean markets and asset’s pricing will find their own natural levels where buyers and sellers decide they should be rather than pricing manufactured at artificial levels decided by the operators. This is why I believe the silver/gold ratio will drop decidedly and approach the 10-1 level. 10-1 pricing is the “natural” level because it is the ratio silver and gold occur in nature versus each other. If this ratio does occur, silver will outperform gold by eight times.

To finish, as a precious metals broker, the vast majority of my business has been silver rather than gold (probably 80% or more). I have even actively swapped gold into silver and continue to recommend this. If Michael Pento is correct and the 80-1 ratio holds, owners of silver will have equal performance with owners of gold. If I am correct and the ratio does shrink, then silver will outperform. This is why I have personally stacked almost exclusively silver for the past several years. In fact, I use silver stored in a non bank vault as my personal bank account.  In my opinion it is usually wise to look at downside versus upside and in this case it strongly favors silver!

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Posted at 9:29 PM (CST) by & filed under Jim's Mailbox.

Our job is to present information to readers so they can make their own educated decisions.

Dave

 

CIGA Werner sends us a little reminder of where we were and where we are!

Posted at 11:27 AM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

Of course we understand.

The great unwind creates higher rates (back to normalization), which in turn, creates unprecedented interest funding costs, which in turn, creates more debt leading to still higher rates.

But more to the point, no one is in sync:  The Fed is unwinding while the government is increasing spending.

Crazy huh?

“With the Fed paring back its balance sheet and the federal government increasing its borrowing, the U.S. will have to finance by the end of the year “$400 billion a quarter — that’s a lot, that’s a huge shift from the past,” Dimon also said.”

Of course we understand the impact.  We simply won’t come right out and admit it.

CIGA Wolfgang Rech

“Perfect Storm” Hits Yields; Dimon Warns “We Don’t Fully Understand” Impact Of Unprecedented QE Unwind
May 8, 2018

Jamie Dimon is worried. Between rising inflation and tax-cut-driven growth printing better-than-expected, the JPMorgan CEO told Bloomberg TV this morning that The Fed may raise interest rates more than many anticipate, and it would be wise to prepare for benchmark yields to climb to 4 percent.

And Dimon is confident that ‘Murica can handle 4%…

“It might force the 10-year up [if the Fed boosts short-term rates more than expected]…

You can easily deal with 4 percent bonds and I think people should be prepared for that.”

More…

 

Courtesy of JB.

Jim

Eric Schneiderman Has Always Been A Con Man
May 8, 2018

In November 2010, the Roosevelt Institute hosted an event in Washington taking a hard look at a strange phenomenon in U.S. housing. Banks, it appeared, were fabricating documents to pursue foreclosures under outrageous, chaotic circumstances ― not accepting mortgage payments, miscalculating debts, rewriting loan terms without consulting homeowners and trying to evict people who hadn’t missed payments. The event wasn’t a glitzy Washington spectacle. The guests of honor were stressed-out homeowners who showed up to detail their financial nightmares for a handful of journalists.

Sitting in the back and nodding along calmly was Eric Schneiderman, a promising young politician who had just been elected attorney general of New York. Afterward, he made the rounds shaking hands. This was an important issue, he told the reporters. He wasn’t a housing expert, but he didn’t trust the banks. Something had to be done.

It would soon become clear that his masterly performance was a total con. There is perhaps no reputation in American politics over the past generation more undeserved than the acclaim that has surrounded Schneiderman as a principled, tough-on-white-collar-crime Democrat.

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Posted at 11:22 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

…so much for deleveraging!

Bill Holter’s Commentary

Last week Denver, this week Baltimore…the list is beginning to grow?

Baltimore restaurant closures continue as suburbanites dine elsewhere
May 7, 2018

Baltimore has seen another spate of restaurant closures — as consumer habits change and suburbanites find less incentive to dine in the city, according to experts, restaurateurs and consumers.

At least 24 restaurants have closed since January, including Federal Hill stalwart Regi’s American Bistro, Hampden’s popular Corner Restaurant and Charcuterie Bar and Canton’s Fork and Wrench.

Increased vacancy rates for small commercial real estate spaces reflect those closures. Chris LeBarton, a market economist for CoStar Market Analytics, said vacancy rates for spaces up to 3,000 square feet — often home to independent restaurants — rose to 8.1 percent at the end of March, up from 6.8 percent at the end of September, when the city underwent a previous wave of closures. That rate is at its highest since 2010.

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Bill Holter’s Commentary

Oops! And with interest rates rising to boot!

Australians Face Huge Spike in Repayments as Interest-Only Home Loans Expire
May 7, 2018

Day of Reckoning: Hundreds of thousands of interest-only loan terms expire each year for the next few years.

The Reserve Bank of Australia (RBA), Australia’s central bank, warns of a $7000 Spike in Loan Repayments as interest-only term periods expire.

    “Every year for the next three years, up to an estimated 200,000 home loans will be moved from low repayments to higher repayments as their interest-only loans expire. The median increase in payments is around $7000 a year, according to the RBA.

    What happens if people can’t afford the big hike in loan repayments? They may have to sell up, which could see a wave of houses being sold into a falling market. The RBA has been paying careful attention to this because the scale of the issue is potentially enough to send shockwaves through the whole economy.

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