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The ante was upped
Just like that: The US froze Russian bank accounts. It broke all the rules. In return, Russia is freezing gas deliveries unless people pay in roubles. The US played a very big wildcard, and Joe Biden and the USA may lose in a big way. The World’s Reserve currency is the US Dollar, and it’s a powerful tool for the US. But if the dollar were weakened, by say 50 years of inflation, and the trust it is based on was blown, the bluff may be up.
One thing leads to another. Who will blink first?
Does Russia need the money more than Europe needs the gas?
Europe Is Facing Supply Disruptions As Russia’s Gas-For-Rubles Deadline Looms
OilPrice:
Russia’s insistence that its “unfriendly” nations pay in rubles for Russian natural gas risks disrupting European supplies as soon as this week as the deadline set by Putin for moving to ruble payments is drawing closer.
Europe, which depends on Russian natural gas for more than one-third of its demand—with some countries, including the biggest economy Germany, depending on Russia for half of its consumption—has rejected the gas-for-rubles idea, saying it […]
Here’s a monster number lurking under an invisibility cloak. It’s the Quadrillion dollar bomb, and either the fuse has been lit, or it’s already going off in a slow motion big-bang. I first mentioned it way back when I talked about the danger of Carbon credits as another fiat Currency (my 12th post). Hang on for the ride.
The Repo action is now much worse than in the GFC (check out that graph below — the “GFC” was a speed bump). The volcano bubbling at the end suggests that the Derivatives Bomb probably started a slow motion explosion early last year. The US Federal Reserve are trying to contain it.
Derivatives* are often used for insurance or hedging, but are mainly highly leveraged bets.They are so much larger than the actual market, it’s better described as a global casino. World GDP is around US$60 trillion but there are at least US$600 trillion of derivative contracts, perhaps as much as US$1.5 quadrillion, as measured by face value, according to the Bank of International Settlements (the “central bank of central banks”). The problem is that all the bank debt or “all the money in the world” is less than US250 trillion.
On […]
How much is that company worth? You can look at its PE, debt, market spread, sovereign risk, and discounted cash flow, but in the end, it’s the Ben Factor (BF) which dominates all companies, metal prices, and sovereign currencies in the West.
The Ben hath spoken, and said that in future, if the economy is looking better, he might slow the printing of $85 billion US dollars a month, some indefinite non-specified day. All that was … obvious. But, world-wide investors and traders hang off the words, trying to second-guess what the BF banality implies. No one will say it, but everyone knows that it the rate of the flow of easy cash so much as slows, all hell will break loose. Balanced on this thin veneer of pretense, stocks, metals and whole national currencies change direction within minutes.
The Ben has spoken.
What hath changed since yesterday? Not much. But global paroxysm ensues.
Bernanke taper talk sends markets into a tailspin
Closing Bell: S&P 500 posts biggest fall since November 2011 on Fed’s stimulus plan
EMERGING MARKETS-Latin American stocks tumble to four-year low
China, Fed frenzy send Aust […]
Maybe you are already au fait with the deep flaws in our financial system, or maybe you are like I was ten years ago, too bored to read “economics”–knowing it was all human vagaries and surrounded with jargon. If your eyes glaze at the thought of bonds, yields, debt and GOFO’s–bear with me, I understand. But history books will be written about this year. No one can afford to be not interested in the science of money.
Economics is known as The Dismal Science, and the reason it’s dismal is the same reason that official climate science is — too many dollars at stake. (If we can treat psychology scientifically, why not economics too?)
Those who want to falsely alarm us benefit from confounding issues, confusing statements, argument from authority and bureaucratese
But the unscientific nature of some subjects is no accident. Clear thinking, transparency, and rigorous logic benefit the majority, just as jargon, elitism, gatekeepers and censorship do not. Those who want to falsely alarm us benefit from confounding issues, confusing statements, argument from authority and bureaucratese, and so too do the people who control our money — central bankers, the banking aristocracy, and some politicians. (Though instead of […]
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JoNova A science presenter, writer, speaker & former TV host; author of The Skeptic's Handbook (over 200,000 copies distributed & available in 15 languages).
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Statistics
The nerds have the numbers on precious metals investments on the ASX
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