The Next Systemic Lehman Event
The
entire Western financial systemic, complete with USDollar-based
foundation platforms, is breaking down. The breakdown is in full view,
very noticeable, in almost every arena. What happened in 2008 with the
Lehman Brothers failure event is currently underway with almost every
single financial platform, structural entity, financial market, banking
structure, and arena. In response to the Lehman kill-job event, where
JPMorgan and Goldman Sachs strangled the victim firm (by denying Lehman
proceeds on countless asset sales), the entire Western financial system
has been lashed together, tied together, and connected among its many
member parts. The main parts are the big banks, which use derivative
contracts to lash themselves together. They believe there is strength in
numbers, which is true to some extent. But
the consequence turns out to be that all will fail at the same time in a
cascade of insolvency marred by illiquidity while steeped in corruption
and market rigging. The breakdown could be described as having
begun in full force, in earnest power, at the start of this 2016 year.
This is the year of systemic failure, or financial breakdown, and of
revelations of important crimes for the last generation or more. The
revelations are against the Western power centers for their grand
criminal activities. The East, by favoring a Gold Standard, has put the
West on notice for exposure, if not prosecution. The gold weapon has
power in its arbiter role in commerce, banking, and economies. No nation
will be spared from the urgent nasty effects of being forced to achieve
trade balance.
Bill Holter issued red alert warning: this is your last chance! Extreme distress and disruption is coming
to the united states economy, businesses, politics, society, and
community affairs. Bill Holter is associated with JSMineset, alongside
Jim Sinclair. He is formerly from Miles Franklin, where he might have
become too controversial in his very appropriate but unconventional
views. Holter offers an extreme warning for people of the United States,
that a series of nasty events is coming. Holter
warns that the events will be so disruptive and historical without
precedent, that recovery will be extremely difficult without proper
preparation. This
warning is the latest in a long string of such detailed specific
warnings, as a result of the systemic breakdown and urgent official
actions to come. The Jackass agrees with 97% of his message, a true red
alert warning.
The Big Systemic Bust
A
shocking $100 billion in Glencore debt has emerged, linked to commodity
derivatives. The next Lehman has been spotted in the commodity trading
arena, if not the gold mining sector. Similar exposure is cited for
other large players, to reveal a potential half $trillion hole in energy
finance. The global financial crisis is set to endure a redux of Lehman
in a systemic event, as commodity derivatives reveal a major hole in
the financial picture. The huge gaps of insolvency have nothing to do
with mining project shutdowns, except perhaps indirectly. They are more
directly related to lower commodity prices, in an immediate effect.
Bank
of America has done an extensive analysis to break down Glencore's true
gross exposure. Glencore PLC is an Anglo–Swiss multinational commodity
trading and mining company headquartered in Baar Switzerland, with its
registered office in Saint Helier Jersey Isle. Here is their
conclusion. "We
consider different approaches to Glencore's debt. Credit agencies such
as Standard & Poors start with normal net debt, i.e. gross debt less
cash and then deduct some share (80% in the case of S&P of RMIs,
the Readily Marketable Inventories). These are considered to be
cash-like inventories (working capital) in the marketing business. At
the last results, RMIs were about US$17.7 billion. Giving
full credit for RMIs plus a pro-forma for the equity raise and interim
dividend, we derive a Glencore Adjusted Net Debt of about US$28 billion. On
the other hand, from discussions with our banks team, we believe the
banks industry (and ultimately regulators) may look at the number, i.e.
gross lines available (even if undrawn) plus letters of credit with no
credit for inventories held. On this basis, we estimate gross exposure
(bonds, revolver, secured lending, letters of credit) at around $100bn.
With bonds at around $36bn, this would still leave $64bn to the banks
account (assuming they don't own bonds). Over
US$100bn in estimated gross exposures to Glencore. We estimate the
financial system's exposure to Glencore at over US$100bn, and believe a
significant majority is unsecured. The group's strong
reputation meant that the buildup of these exposures went largely
without comment. However, the recent widening in GLEN debt spreads
indicates the exposure is now coming into investor focus." Debt default comes very soon, complete with huge fallout effects and contagion within the energy sector.
In
other words, counting all exposure beyond ordinary debt, like
derivative exposure, Glencore is mired in a $100bn hole. The Zero Hedge
group of analysts is on the job, as always. They reported recently a
change in the finance winds, making it more difficult to support the
debt and other related exposure. Bond market spreads imply a
non-investment grade rating. ZH reported the following. The group's bond
spreads imply a rating in the single-B range and a rollover cost of
funding over 200 basis points (bps) above the cost of debt outstanding.
We believe banks have gross margins on their exposures that are below
the Glencore group's average funding cost, with drawn financing
at spreads around 50bps and undrawn lines materially below this. The
cost of hedging exposure is currently over 600bps. Thus, the profit
& loss (P&L) dynamics for banks are difficult. This implies that
banks may increase the challenge for the business model of commodity
traders. This implies that banks may increase the cost of and reduce the
availability of credit to commodity traders, thus challenging their
business model. TCK refers to Teck Resources, in deep shiitte. Ooops, errr,
deep sneakers! Glencore is in red, in severe trouble also. One must
recall that Glencore is a major commodity trading house, and not an
active business withtangible product in its activity. The chart given has a mix of trading firms and mining firms. All are at tremendous risk of failure.
Not
only Glencore is cause for deep concern in bank exposure. Very likely
the rest of the commodity trading space is in the same vulnerable
position. Their combined gross exposure blows up to a simply stunning
number. Among
these unique firms, Glencore might not be the only exposure in the
commodity trading space. Other entities such as Trafigura, Vitol, and
Gunvor could become a new perceived risky feature on bank balance sheets
as well. Think $100bn exposure, times four. A
ripe half $trillion in very highly levered exposure to commodities is a
very real prospect. The oil & gas price declines triggered this
sector crisis. Bear
in mind, the energy asset class has been crushed in the past year.
According to the derivative desks, the Glencore 5-year Credit Default
Swap tightened by 85 bps in a recent single day to around 640 bps.
Bank of America does some solid analysis. Here is their conclusion in summary.
1) Comparisons are being made with some financially leveraged companies
during the 2008 Global Financial Crisis. 2) If credit is downgraded,
banks could lower their exposure to Glencore. 3) The high yield market
is small and therefore expect to see temporary dislocations in a
scenario in which GLEN is downgraded to junk. 4) Bank stress tests could
start to include commodity trader distress. This could lead to less
credit availability and more expensive bank funding of traders. Credit
to Zero Hedge for excellent analysis on an ongoing basis.
One
can combine the energy sector debt distress with the commodity
derivative exposure, to see a systemic Lehman event on the near horizon.
The many factors are lining up to force a systemic failure event, a
massive financial crisis globally with numerous sectors in failure mode.
The energy sector has been well detailed for its debt risk to the big
banks. The legal prosecution with heavy fines and penalties remains a
big risk in the mortgage sector. The Emerging Market debt exposure,
triggered by both currency risk and economic decline, has also been well
detailed. The market rigging cases grow by the month. Finally, with
cases like Glencore, the commodity derivative risk has entered the
picture. The Jackass has been recounting the risk and building the case
for a major systemic Lehman type of event in the very near future.
Motive For Ukraine & Syrian War
The
destruction of the European Union is a project well along. It began
with the Russian sanctions after the US & Israel worked their magic
in orchestrating and engineering a coup d'etat in Kiev Ukraine.
Thousands of amphetamine vials helped the event along, as did hired
rooftop snipers, all funded by the US and EU darlings. The Western
propaganda machinery immediately fulfilled their role in painting the
Russians as villains, even though the Western Fascist Axis was
responsible. The Kremlin was quick to rush in and to secure their naval
port in the Crimea, a valuable Russian Naval facility. The
local population voted over 95% in favor of being annexed by Russia, a
major point omitted in the Western dutiful dog-like press. In
recent months, it has been clear that the Kiev crew, led by Washington,
have violated the Minsk Agreements, not the Russians. In recent months,
some sordid human organ trafficking, complete with vast fields of
organ-less cadavers, has been exposed for the Kiev Regime. For the
USGovt to be closely associated with war criminals, human rights
violaters, and perpetrators of mini-nuclear bomb events in the Western
Ukraine region is abominable. Yet many mindless observers in the West
continue to view Russia as the villain. They read the New York Times and
watch CNN far too much, like robots with a sub-Bush IQ.
The motive has been to cut off Russia from Western Europe with respect to energy supply, in particular with natural gas supply. The
Washingon Neocon Neo-Nazis would prefer that Western Europe purchase
more expensive natgas from the Gulf Region and Arab friends. The entire Syrian War is another blockade or cheaper natgas supply for the Western European Economy and its market. The Iranian Gas Pipeline would provide natgas even
cheaper than Russian Gazprom, and the USGovt does not want that!! The
USGovt, led by fascists and advocates of endless war, are working
feverishly with war and sanctions and bank pressures and undermined
coalitions and and contract bribery
and heavy propaganda to prevent the unification via trade between
Europe and Russia, and between Europe and Iran. They will fail on all
fronts. The Eurasian Trade Zone, its economic union plus Silk Road, will
continue to enjoy buildout and infra-structure projects
on a vast scale. It will construct the Gold Standard in trade, banking,
and currencies. Commerce will trump war. Gold will win.
Social Network Garbage Dumping
The
saturation of Western Europe with Arab and Moslem refugees will be told
as the most unique contamination event of the modern era. It matches
the destruction of the Gulf of Mexico by Halliburton and the spread of
Corexit chemicals. It matches the attack and ruin of Fukushima by the
Bush Crime Family, after Japan began work with China on a regional
currency. The radioactive contamination has reached the West Coast of
the United States. It matches the widespread water table contamination
by fracking projects, under the ruse of energy production. Gold Ole
Halliburton got away with over one billion gallons of contaminated water
dumping from fracking operations into the California water table, with
the USGovt EPA nowhere to be seen. The refugees from North Africa and
Syria are invited by the Western Govts. The first indication of foul
play and vile motive was detected by the Jackass when questions arose on
how the passage across the Mediterranean Sea was being paid. Poor
people cannot pay for food, especially for ship passage. The Austrian Govt security agency confirmed it was largely via the Soros NGO groups. The
stench of planned contamination at the social level was clear. The
crime level, the fear level, and disorder level, have all increased. The
effect on the Western European Economy has been clear, powerful, and
devastating. Few people think in similar wavelengths.
The
dilution of their society, the rise in their crime level, the
dissolution of their borders, and the ratcheting down of their economy,
these are all critical elements toward establishment of the European Union fascist state. Lord Rothschild is pleased, enjoying the destruction in typical Satanist manner. In
keeping with the dumping program on many fronts, Turkish leaders have
been bribed into cooperating with the contamination. The $3 billion
bribe paid to Erdogan was not to offset the costs incurred for accepting
Moslem refugees. It
was to send them to Europe, where EU member nations would be forced to
absorb them without proper channels followed. Erdogan will enjoy his
retirement soon, but it might be in a pine box. The likelihood of a
Turkish Military coup rises with every passing week.
Turkey
plans to lift visa requirements for travel to the European Union,
including Cyprus. Erdogan has provided a jet assist to the Moslem
dumping into Europe. The plan is disruption and further economic
degradation, along with a dilution of their society. Turkey has decided
to lift visa requirements for all EU citizens, including Greek Cypriots.
The move comes following a report stating that the European Commission
will propose the easing of visa requirements for Turkey. Visa
free travel for 28 EU member states was adopted by the Turkish cabinet
recently, a decision published in the country's Official Gazette. Although
visa requirement will be lifted for all Greeks in Cyprus, a Turkish
official told Reuters that Ankara does not recognize Cyprus, a certain
odd source of confusion. The gesture does mean the recognition of
Cyprus. On the current status, Greek Cypriots can already travel to
Turkey.
Reuters had earlier reported, quoting sources close to the Brussels-Ankara negotiations, that the European Commission will propose easing visa requirements for Turkey.
The reports come after Turkey threatened to back out of the landmark
migrant deal. Reuters cited a diplomatic source as stating that
Turkey's visa free demands
will be met when the European Union's top executive body announces its
proposal to ease visa requirements for Turkish citizens during an
upcoming meeting (maybe past by now). Another source said that the
committee's preparatory meeting already expressed support for the
proposal. The European Commission is scheduled to issue an official
report as to Turkey has met the benchmarks for visa free travel. An
EU official speaking to Reuters claimed that Turkey has fulfilled as
many as 65 requirements, meaning it doubled the number of satisfied
conditions in less than two weeks. As of the end of April, the Turkish Govt had reportedly met less than half of the conditions required.
In
April, Ankara threatened to back out of the migration agreement with
the EU, unless travel rules were relaxed for Turkish citizens when
entering the 28-nation union. According to the deal, Ankara has
promised to accept repatriated refugees from Greece with no EU entry
permits, in exchange for sending the same number of vetted Syrian
refugees. In return, Turkey would be given up to EUR 6 billion in
European funding over the next five years.
Furthermore, as a diplomatic reward, Turkey
has brought to the table its desire for the EU to fast track its
application to be included in the visa free Schengen zone travel as
early as June.
The EU has provisionally agreed to consider Turkey's bid, putting up a
list of 72 conditions it must fulfill, including the use of
sophisticated biometric passports and stricter border controls. The
migration deal between Ankara and the EU went into effect on March 21st.
Even though the EU seems eager to keep the deal with Turkey, the
agreement has been highly criticized by human rights groups, who
question whether Turkey is a safe place for migrants. Moreover, the
human rights concerns have increased after Amnesty International
revealed that Turkey has returned thousands of Syrian refugees to the
war-torn country since mid-January. Also, Turkey has been accused of
murdering numerous refugees at its borders.
New Scheiss Dollar & Gold Trade Standard
In
time, expect an eventual refusal by Eastern producing nations to accept
USTreasury Bills in payment for trade. The IMF reversal decision
assures this USTBill blockade in time, and might accelerate the
timetable. The United States Govt cannot continue on five glaring fronts
of gross negligence and major violations. These violations have
prompted the BRICS & Alliance nations to hasten their development of
diverse non-USD platforms toward the goal of displacing the USDollar
while at the same time take steps toward the return of the Gold
Standard. The violations are:
- to import finished goods and crude commodities, paying with IOU coupons
- to commit multi-$trillion bond fraud in its big banks, done without legal prosecution
- to do QE bond purchases in applied hyper monetary inflation, monetizing debt
- to rig all major financial markets in favor of the primal USDollar
- to engage in numerous regional wars to support the USDollar.
The
New Scheiss Dollar will arrive in order to assure continued import
supply to the USEconomy. It will be given a 30% devaluation out of the
gate, then many more devaluations of similar variety. The New Dollar
will fail all foreign and Eastern scrutiny. The USGovt will be forced to
react to USTBill rejection at the ports. The
US must accommodate with the New Scheiss Dollar in order to assure
import supply, and to alleviate the many stalemates to come. The United
States finds itself on the slippery slope that leads to the Third World,
a Jackass forecast that has been presented since Lehman fell (better
described as killed by JPM and GSax). The only apparent alternative is
for the United States Govt to lease a large amount of gold bullion (like
10,000 tons) from China in order to properly launch a gold-backed
currency. Doing so would open the gates for a generation of commercial
colonization, but actual progress in returning capitalism to the United
States. The cost would be supply shortages to the USEconomy, a result of
enormous export increases to China.
The
colonization has already begun, with secret deals galore. It is very
unclear what deals are being struck in order to arrange for the USGovt
to have a proper gold reserve hoard, for backing a new legitimate
USDollar. Meetings at very high level are in progress, with little if any popular representation, only elite members present. Failure
to produce a legitimate bonafide gold-backed currency would mean the
United States must proceed with the New Scheiss Dollar, an illegitimate
fake phony farce of a currency. It
would be subjected to a series of devaluations. The result would be
heavy powerful painful price inflation from the import front. The effect
would be to reverse a generation of exported inflation by the United
States. The entire USEconomy would go into a downward spiral with higher
prices, supply shortages, and social disorder. However, the rising
prices would come from the currency crisis, and not so much from the
hyper monetary inflation. That flood of $trillions has been effectively
firewalled off.
As
Ron Paul has stated, one cannot blame capitalism for the current
failure, since we have had almost none! He can take credit for the
independent audit conducted on the US Federal Reserve itself in 2009.
From the audit, it was learned that $23 trillion in near zero cost loans
were granted to the USFed owners, by the banker cabal to itself. The US
population remains largely asleep and steeped in ignorance on the
entire financial crime scenes. They must prepare with reduced paper
wealth held as assets, and more Gold & Silver bars & coins held
instead as assets. The reckoning has begun.
The
Gold price will find its true value and price over $10,000 per ounce.
The Silver price will find its true value and price over $300 per ounce.
In reaching these levels, the ratio will return to the 30-1 range.
Several steps have been laid out by the Hat Trick Letter toward the
return of proper price to precious metals. The major upcoming events
will be exciting to watch unfold, one after the other, in an inevitable
sequence away from fascism and concentrated uni-polar power,
with a strong movement toward freedom and equitable systems with
distributed power. The steps will each involve a quantum jump in the
Gold & Silver prices. The process will take a few years, but might
be breath-taking in speed once the process is begun. The steps involve:
- the critical mass of rejected USTBills in trade settlement, citing its corrupt roots and illicit monetary policy as foundation
- the return to the Gold Trade Standard and introduction of Gold Trade Notes as letters of credit, in replacement for a fair tangible payment system (no more IOU coupons)
- the recapitalization of the global banking system with Gold as primary reserve asset, so as to relieve the grotesque stagnation, insolvency, and dysfunction
- the seeking of equilibrium in Supply vs Demand in the new fair uninhibited market, with exclusive control removed from London and New York, and placed elsewhere like in Shanghai, Hong Kong, Dubai, and Singapore.
- the seeding of BRICS gold and silver backed currencies from participating nations within the Alliance (likely several with slight variation in features)
- the re-opening of the gold mine industry with some blue sky, and relief from the Evergreen element at Barrick
- the remedy toward owners of over 40,000 tons of rehypothecated and stolen gold in bullion banks across the world (primarily in Switzerland).
Related Research
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