Posted at 8:16 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Interesting, I say go for it Elon!

The Battle of the Century: Here’s What Happens if Elon Musk Buys Twitter – Revolver

April 4, 2022

In 2021 Elon Musk created overnight millionaires by pushing the Dogecoin meme. In 2022, he may be gearing up for something far more dramatic. The world’s richest man might be on the cusp of launching a global crusade to restore freedom of speech.

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Bill Holter’s Commentary

Please note the first chart, amazing how credit always “knows” long before equities ever get their collective heads out of the sand …

‘Once weapons were manufactured to fight wars, now wars are manufactured to sell weapons.’ Suzanna Arundhati Roy. (1961-    ).

Posted at 8:09 AM (CST) by & filed under Bill Holter.

What a two weeks this has been!  First, Russia announced they would only accept rubles (or of course gold) for gas, then followed by a 5,000 ruble bid per gram through June 28 for any sellers of gold.  As mentioned in my article last week “Did you hear the shot” Did You Hear The Shot? (jsmineset.com) this was THE biggest (and most ingenious) news since 1973. 

Ingenious?  Absolutely!  I have been on record for many years that COMEX/LBMA/LME would eventually be broken and forced into a failure to deliver.  I stand by that, but I must admit that the method being used by Russia is not what I had envisioned.  I was wrong.  My thought process was that a cartel, or foreign sovereigns (or just one sovereign) would load up on contracts and demand delivery.  This type of action would certainly have elicited the response of the US military.  

Rather than a frontal assault on deliverable gold, Russia has chosen to let the world assault the exchanges via arbitrage, let me explain.  When Russia first announced their bid for gold grams, because the ruble had fallen so dramatically after their operations in Ukraine began, the math worked out to only about $1,450 per gold ounce.  Naturally the gold bugs panicked because the bid was so low.  What they missed was looking at the 30 days before the invasion.  If that average ruble price was used, then gold would have been bid near $2,000.  In the days that followed Russia’s bid, we have seen the ruble continue to strengthen where the 5,000 ruble bid is now just under $1,900.  In fact, early last week when gold (and silver) were attacked on the COMEX, price got to within about $20 of Russia’s bid and then immediately rallied back above $1,900.  I give you this background to see where this will lead… 

So here we are, Russia will only accept rubles (or gold) for their gas, it can only be a short time before rubles will be demanded for ALL Russian commodities.  They have created their own positively self-reenforcing loop!  Very few nations hold any rubles as part of their monetary reserves.  On average, global central banks hold roughly 60% of their reserves in dollars.  What this will do is force buyers of Russian goods to sell some of their monetary reserves (whether they be dollars, euros, yen, pounds, or what have you) to purchase rubles for payment.   

This is almost an exact mirror of Kissinger’s deal with the Saudis which created the petrodollar.  Without a doubt, the ruble will strengthen versus the dollar (and all the other fiats) because dollars etc. will necessarily be sold to purchase rubles for trade settlement.  The genius of this is that as the ruble strengthens, the bid for gold grams will go higher and higher and thus revaluing Russia’s gold reserves higher.  But this is only part of the genius …as the West is and has been massively “short” paper gold contracts used to suppress price.  Vladimir Putin well knows that the Achilles heel to the dollar and all other fiats is Gold, or better described, the PRICE of gold in those fiats.  As the gold price rises, confidence in those fiats wane. 

So rather than a frontal assault on exchanges which would be seen publicly as an attack, Mr. Putin decided to act in a manner that benefits Russia …without forcing an immediate and public attack.  Make no mistake, the outcome and consequences will be exactly the same, but no one can claim Russia is demanding anything other than to sell their resources in their own national currency AND accumulate more gold reserves along the way!  The “consequences” by the way are extremely ruble friendly and dollar negative. 

Another aspect that I must admit I missed is this; prior to Russia’s announcement, who in the world would have projected it would be the ruble that took down the dollar?  It was only 30 years ago that the ruble, and thus the Soviet Union collapsed as they ran out of hard currency (gold).  In all the 30 years since, I have never seen or heard of the scenario where the ruble takes down the dollar but here it is and in your face!  Year after year and bubble after burst bubble, the West has financially engineered themselves into a corner.  More and more debt was assumed and paper derivatives of all sorts were written at the expense of commodity pricing.  That has now changed and the massive commodity shorts will be burned in nickel fashion! 

The world has changed more dramatically in the last month than any time since 1971 when the US defaulted the gold standard and 1973 when the petrodollar was cooked up.  As a child of the 1960’s who practiced “duck and cover” in elementary school, I find it astonishing that it took Russia to start the world back on the road to REAL and FAIR settlement.  Oh the irony! 

Lastly, over the years, Wall St. has been fixated on many things from money supply, to unemployment, the 10 yr Treasury yield and even overnight repo loans.  Now, the only thing that matters for the foreseeable future will be the dollar/ruble cross exchange rate.  In essence, a financial war between Russia and the US via their currencies has begun.  I do not envision this to be a protracted “financial war” for the simple reason that the US and the rest of the West is so highly indebted and financially entangled via derivatives.  The nickel market implosion is the road map to financial and living standard hell for the West, other commodity markets will ultimately follow as sure as the Sun will rise tomorrow.  If you wondered what the reset will look like, just keep your eyes open and watch what unfolds over the next several months!  

Standing watch,  


Bill Holter


Posted at 7:57 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

50 years ago our Treasury Secretary John Connally said “it might be our dollar, but it’s your problem”.  Who could have imagined it would be the ruble that ignites the pile of paper dollars?!

EU Reveals Aim of New Russia Sanctions

April 3, 2022

The EU is working on a new package of sanctions on Russia over the crisis in Ukraine, European Commissioner for Economy Paolo Gentiloni said on the sidelines of the Ambrosetti Forum in Italy.

According to Gentiloni, the new measures will not affect Russia’s energy sector. He noted, however, that they are designed to be difficult to bypass.

We are working on additional packages of sanctions, but to clarify, they do not include the energy sector at the moment. First of all, we are trying to limit [Russia’s] ability to circumvent these sanctions,” he said, as cited by ANSA news agency.

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Bill Holter’s Commentary

“Two questions; do you know what an inverted yield curve ALWAYS leads to?  Is the Buffett indicator wrong this time?”

Full Speed Ahead, Starry Skies, Calm Seas, Excellent View, And This Is The Best Ship In The World, This Is… Whoa! What Was That? Captain Smith Of The Titanic.

Posted at 1:27 PM (CST) by & filed under In The News.

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.

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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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Posted at 1:19 PM (CST) by & filed under Jim's Mailbox.

Bill/Jim,

As Trump would say: “This is yuge….YUGE!

Easy to sanction other countries, but in a globalized system….not so smart.

Things are never as simple as they appear.  In a world where everyone is dependent on each other, globalization, cracks begin to appear in the system making for dangerous consequences.  Its what’s not seen or expected that can kill you. 

Russia has just responded with the latest salvo aimed at Europe…Dollars not accepted; Got Gold?  Small cracks have appeared,  but this could send the edge of the cliff slipping into the sea. 

Europe falls into the “dark” ages.  And with that, the rest of the world.

CIGA Wolfgang Rech

Gazprom Halts Gas Shipments To Europe Via Critical Pipeline
April 2, 2022

After European nations imported the most gas from Russian sources yesterday in months, scrambling to stock up on supplies as Russian President Vladimir Putin’s deadline to either pay for gas in rubles (or be cut off) came and went, Russian gas giant Gazprom has officially halted all deliveries to Europe via the Yamal-Europe pipeline, a critical artery for European energy supplies.

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Bill,

Who are they kidding? Themselves! All Russia needs to do is audit its true gold reserves. China will follow. Ruble will be strong as hell along with Yuan and gold and all commodities.

Pozsar – “Our commodity your problem”

CIGA Kevin

EU Reveals Aim Of New Russia Sanctions
April 2, 2022

The EU is working on a new package of sanctions on Russia over the crisis in Ukraine, European Commissioner for Economy Paolo Gentiloni said on the sidelines of the Ambrosetti Forum in Italy.

According to Gentiloni, the new measures will not affect Russia’s energy sector. He noted, however, that they are designed to be difficult to bypass.

“We are working on additional packages of sanctions, but to clarify, they do not include the energy sector at the moment. First of all, we are trying to limit [Russia’s] ability to circumvent these sanctions,” he said, as cited by ANSA news agency.

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Posted at 1:05 PM (CST) by & filed under Bill Holter.

Biden & Putin Just Killed The U.S. Dollar — Bill Holter
April 1, 2022

From SGT Report:

Bill Holter joins me to discuss what we believe to be the final nail in the US Dollar’s coffin – and it’s Joe Biden’s fault. Putin has called Biden’s bluff, and the death of the Dollar is now virtually guaranteed. Also, I explain how due to the paper manipulation of the silver market, YOUR labor is worth at least 36 TIMES more than a Roman soldier’s when priced in $25 silver.

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Posted at 12:48 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

Slowly but surely the world is moving away from the Dollar.

CIGA Wolfgang Rech

Not so “slowly” now Wolfgang!

Bill

Brazil Central Bank Quadruples Exposure To Chinese Yuan
March 31, 2022

Brazil’s central bank more than quadrupled its foreign reserves in Chinese yuan last year, policymakers reported on Thursday, as it trimmed holdings of U.S. dollars and euros and built Brazilian reserves of currency from its biggest trade partner.

The Chinese currency, which until 2018 was absent from the forex reserves of Latin America’s largest economy, rose to 4.99% of Brazilian central bank holdings at the end of last year, from 1.21% at the end of 2020.

That gave it the third largest share of the central bank’s reserves, slightly behind the euro, which fell to 5.04% last year from 7.85% in 2020. Dollar reserves fell to 80.34% of the total from 86.03% a year earlier.

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Posted at 12:42 PM (CST) by & filed under In The News.

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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