Thursday, 15 June 2017

Operation Goldfinger. The War on Real Money.

Baltic Dry Index. 870 unch.     Brent Crude 47.05

In a private 1962 conversation with the chairman of the Federal Reserve, Kennedy framed the shortage of monetary gold starkly: “My God, this is the time . . . if everyone wants gold, we’re all going to be ruined because there is not enough gold to go around.”

Today, why the Fed are forever making unrelenting war on gold. Since at least the late 1950s, America’s been a gigantic monetary fraud. It’s all been a criminal central bankster cover up. A rigged game in favour of the banksters and friends of the Fed.  But will deliberate or accidental hacking bring the whole shell game crashing down? How late the Great American Fiat Money Con are we? But first this.

“But it [the boom] could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system.”

Ludwig von Mises.

Dow closes at record, but S&P 500, Nasdaq finish lower after Fed meeting

Published: June 14, 2017 4:33 p.m. ET

Fed expects to start reducing balance sheet gradually this year

The Dow industrials closed Wednesday at a record for a second straight session but other benchmarks finished lower as the Federal Reserve hiked the fed-funds futures rate after its two-day policy meeting, as expected, and indicated that it would reduce its $4.5 trillion balance sheet “this year.”

The Dow Jones Industrial Average DJIA, +0.22% closed up 46.09 points, or 0.2%, at a record 21,374.56, after touching an intraday record at 21,391.97. Gains in shares of Home Depot Inc. HD, +1.80% Travelers Cos. TRV, +1.48% and General Electric Co. GE, +0.84%  led the average higher, with shares of Chevron Corp. CVX, -1.41% DuPont DD, -1.26%  and Exxon Mobil Corp. XOM, -1.07%  dragging.

The S&P 500 SPX, -0.10%  declined 2.43 points, or 0.1%, to 2,437.92, with five of the 11 main sectors finishing lower. Consumer-staples and utilities shares were leading gains, both up 0.6%, while materials declined 1.1% and the energy sector dropped 1.8%.

Meanwhile, the tech-heavy Nasdaq Composite Index COMP, -0.41% was the worst performer among the main U.S. equity gauges, finishing down 25.48 points, or 0.4%, at 6,194.89.

The Fed hiked the fed-funds rate by a quarter-point to between 1% and 1.25%.

“Many hoped the Fed would give details about the unwinding of the balance sheet, like how much and how soon and at what pace. But the Fed was vague, only saying it will start to ‘shrink gradually’ sometime this year. They gave themselves a lot of leverage to shrink the balance sheet as they see fit,” said JJ Kinahan, chief market strategist at TD Ameritrade.

----Fed Chairwoman Janet Yellen, in a news conference, said she still expects inflation to hit a 2% target next year, mentioning that recent declines are coming from such areas as telecom.

Earlier in the session, disappointing readings on inflation and retail sales for May sparked a so-called flight to safety, pushing bond yields and the dollar sharply lower. That, combined with a sharp drop in crude-oil
futures, helped to undercut the market’s early optimism.

Oil futures CLN7, -0.07%  fell 3.7% to settle at $44.73 a barrel following a report from the Energy Information Administration that showed a smaller-than-expected decline in crude supplies and an increase in gasoline supplies and crude production. That came after an American Petroleum Institute data on Tuesday that also showed a rise in U.S. oil and gasoline stockpiles.

On the economic data front, the consumer-price index, or cost of living, fell by a seasonally adjusted 0.1% in May, largely thanks to lower gasoline prices, which also depressed retails sales last month.

Thu Jun 15, 2017 | 3:40am BST

Global stocks pressured by report on Trump probe, Fed hike, soft U.S. data

U.S. stock futures and Asian shares slid on Thursday, hit by soft U.S. economic data, a relatively hawkish Fed and a media report that U.S. President Donald Trump is being investigated by a special counsel for possible obstruction of justice.

S&P mini futures dipped 0.3 percent. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7 percent while Japan's Nikkei fell 0.4 percent.

The Federal Reserve raised interest rates as expected on Wednesday and gave a first clear outline on its plan to reduce its $4.2-trillion portfolio of bonds.

Fed Chair Janet Yellen said the process could start "relatively soon", while projections of Federal Reserve Board members also showed they expect one more rate hike by the end of year.

A majority of Wall Street’s top banks now expect the Fed to start reducing re-investment in bonds in September, compared to their previous median forecast of such a move in December.

Yet the Fed's decision and confidence in continued U.S. economic growth was over-shadowed by surprisingly weak data released earlier in the day.

"The tone of the statement came across as relatively hawkish, despite the disappointing readings on core inflation, which the Fed contributed partly to transitory factors," Anna Stupnytska, global economist at Fidelity International, said in a note.

Consumer prices unexpectedly fell on month in May and the annual increase in core CPI slipped to 1.7 percent, the smallest rise since May 2015, after advancing 1.9 percent in April.

Investors' inflation expectations gauged by the spread between the 10-year inflation-linked bonds and conventional bonds fell to 1.726 percent, completely wiping out its rise since the U.S. presidential election.
Retail sales fell 0.3 percent last month -- the largest fall since January 2016 and way below economists' expectations for a 0.1 percent gain -- amid declining purchases of motor vehicles and discretionary spending.

Risk sentiment was also hit by fear of more U.S. political turmoil after Washington Post reported that Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.

Now back to Operation Goldfinger and the Great American Money Scam on the rest of the world.  Will the New Communist Labour Party coming to power in GB, be the catalyst that triggers the end of the game? Deutsche Bank’s derivatives gambling book blowing up? Italy’s banks in collapse? The end of the Great China Ponzi Scheme? The impeachment of President Trump? Artificial intelligence generating global mass unemployment? We’re not just drinking in the last chance saloon, when Greenspan and Bernanke arrived at the Fed they set fire to the saloon.

"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise. The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

The Strange Secret History of Operation Goldfinger

By James Ledbetter   June 10, 2017

In September of 1965, Joe Barr, a Treasury Department official with a long history in government, agreed to meet with a group of members of Congress from Western states. He knew what to expect. Earlier that year, he had met with the same group, and endured its ire over the Treasury’s reluctance to help the American gold industry. After the Second World War, world leaders had met at Bretton Woods, in New Hampshire, and, as part of an agreement on an international monetary system, had fixed the price of gold at thirty-five dollars an ounce. This had, predictably, depressed the U.S. mining industry, even as the demand for private gold shot up. The more easily obtained sources of gold had been depleted over the years, while harder-to-reach sources became more difficult to mine profitably, given the static price. Foreign competition—chiefly from Canada and South Africa, where mines were less depleted and labor costs were lower—was far more intense by 1960 than it had been after the war, when the price of gold was set. The United States was a distant third in gold production. Rather than attempt to compete, many mines simply shut down.

Politicians from Western states, where most gold was mined in the U.S., considered this an economic crisis, and by 1965 they had lost their patience. Nineteen Senators—including influential Democrats like Frank Church, Henry (Scoop) Jackson, Warren Magnuson, and George McGovern—signed a blunt letter to President Lyndon Johnson accusing him of letting America’s gold industry die. Gold, they said, “is the only commodity held down to a price established 31 years ago and compelled to sell only to the imposer of this strangling restriction—the Federal government.” (Since the nineteen-thirties, Treasury was the only domestic entity that could legally buy investment gold.) Badly needed reform, they added, was being blocked by Treasury’s “negative attitude.” These words were just short of a threat that the senators would take action on gold with or without the Administration’s support. It was in this atmosphere, which Barr described as “more heated than usual,” that he trekked to Capitol Hill that September day. Barr later said that at the meeting he had “a stroke of inspiration.” Instead of maintaining the government’s hard line, he suggested that “possibly the Government could assist in this area by some sort of an R&D approach in the discovery of deposits and in the extraction processes.” It wasn’t the price increase the Western senators hoped for, but it pleased them nonetheless.

Barr and a colleague then went to see Donald Hornig, who was Johnson’s science and technology adviser and one of the most accomplished American scientists ever to occupy a position of political power. Hornig had worked on the Manhattan Project. He also worked on the space program and was an expert in ocean-desalination technology. Responding to Treasury’s inquiry about gold research, Hornig asked the Geological Survey and the Bureau of Mines for a study, and word came back that, yes, “there is indeed an opportunity to secure significant quantities of additional gold production in the United States within the $35 an ounce price limitation.” The solution seemed simple enough: deploy state-of-the-art technology to detect gold and then extract it.

Thus began a strange, untold episode in modern American history. In the mid-to-late nineteen-sixties, as gold’s role in the international monetary system was about to implode, a handful of top Johnson Administration officials, a few sympathetic members of Congress, and hundreds of government-paid scientists set off on a nuclear-age alchemical quest. Barr gave it the code name Operation Goldfinger. The government would end up looking for gold in the oddest places: seawater, meteorites, plants, even deer antlers. In an era during which people wanted badly to believe in the peaceful use of subatomic energy, plans were drawn up to use nuclear explosives to extract gold from deep inside the Earth, and even to use particle accelerators to try to change base metals into gold.

Operation Goldfinger represented the logical culmination of a government obsession with not having enough gold. The post-war global economy was expanding much faster than the gold supply that propped it up. Dollars freely convertible to gold were the underpinning of the world’s monetary system, and President John F. Kennedy—and many others—feared that if holders of dollars and other U.S. securities were to cash in their paper for gold, there wouldn’t be enough gold to exchange, and a global crisis could ensue. In a private 1962 conversation with the chairman of the Federal Reserve, Kennedy framed the shortage of monetary gold starkly: “My God, this is the time . . . if everyone wants gold, we’re all going to be ruined because there is not enough gold to go around.”

Against such fears, which continued through the Johnson Administration, Goldfinger’s promise was irresistible. If the predictions made by Hornig and Treasury officials in early 1966 were to come true, the initial investment of a few million dollars would, in just a few years, look like the bargain of the century. A sunny Hornig wrote to President Johnson in February, 1966, “It appears by spending from $10 million to $20 million per year we stand a good chance of adding several billion dollars to our gold reserves at the present price. With luck it might be much more.” Treasury’s general counsel asserted that “the President’s scientific advisers are confident of the success of the program [and] estimate that new gold reserves valued at up to $10 billion could be expected within five years.” That amount—ten billion dollars—was more than five times the volume of gold then produced annually worldwide. Goldfinger, to its enthusiastic backers, wasn’t like discovering some new gold mine—it was like discovering a new planet.

“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?” 

Alan Greenspan. June 28, 2016.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, making China Great Again. More on the Giant Ponzi Scheme known as China. Below, in his blatant anti-Trumpism, Mr. Sham somewhat over eggs his China.

China Rethinks Its Global Role in the Age of Trump

Beijing is getting more involved as the U.S. turns inward. That's not quite the same as world leadership.
By David Shambaugh
13 June 2017, 22:16 GMT+1
In his short time in office, President Donald Trump has done a good job of making China great again. His isolationist rhetoric and unilateral actions -- such as pulling out of the Paris climate accord and the Trans-Pacific Partnership -- have made it much easier for China to advance its claim to global leadership, as dismayed U.S. allies and partners proclaim that the U.S. can no longer be “completely depended on,” as German Chancellor Angela Merkel put it. In stark contrast to Trump, China has reaffirmed its commitments to free trade, globalization and the battle against climate change.

China’s case is made more plausible by its markedly increased involvement in what is known as “global governance.” China is no longer the free-rider on the Western-built global system that it had long been. President Xi Jinping has received numerous expert briefings and has convened Politburo meetings on global governance. As a result, China has substantially increased involvement in areas such as climate change, global health, international peacekeeping, anti-piracy, anti-corruption, disaster relief, economic governance, development aid, energy security and multilateralism.

In part, this reflects Xi’s own “China Dream” for his nation’s place in the world. Xi expertly staked out China’s leadership potential at the World Economic Forum in Davos in February in a speech that attracted much international attention. China’s new activism is also due to its sensitivity to foreign criticism for not acting like a true great power (it has a psychological obsession with being seen as one), as well as China’s huge financial wherewithal and the increased professionalism of Chinese bureaucracies.

These actions do suggest that China may be ready to fill some of the void in global governance left by an increasingly isolationist America. But there are at least four reasons to question whether China can be an effective global leader.

First, while China has been an enormous beneficiary of the Western-dominated global system since the country began its economic reforms in 1978, its leaders have for six decades expressed discontent with the system’s inherent “inequality.” While not seeking to overthrow or replace the existing system, Chinese leaders do want to decrease the outsized role of the West and North, while increasing the representation and decision-making clout of the East and South. Where existing institutions cannot accommodate such changes, China has spearheaded a set of alternative ones such as the Asian Infrastructure Investment Bank.

China is thus a “revisionist” power: It seeks not to defend, but to revise the structures and procedures of global governance to reflect what it sees as the real distribution of power in today’s world, although still upholding the existing system in the main.
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

Ludwig von Mises.
Technology Update.
With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Batteries from scrap metal

Direct conversion of rusty stainless steel mesh into stable, low-cost electrodes for potassium-ion batteries

Date: June 9, 2017

Source: Wiley

Summary: Scientists have made good use of waste while finding an innovative solution to a technical problem by transforming rusty stainless steel mesh into electrodes with outstanding electrochemical properties that make them ideal for potassium-ion batteries.

Chinese scientists have made good use of waste while finding an innovative solution to a technical problem by transforming rusty stainless steel mesh into electrodes with outstanding electrochemical properties that make them ideal for potassium-ion batteries. As reported in the journal Angewandte Chemie, the rust is converted directly into a compact layer with a grid structure that can store potassium ions. A coating of reduced graphite oxide increases the conductivity and stability during charge/discharge cycles.

Increasing use of renewable energy requires effective energy storage within the grid. Lithium ion batteries, widely used in portable electronics, are promising candidates. Lithium ion batteries are based on the displacement of lithium ions. While charging, the ions move toward the graphite electrode, where they are stored between the layers of carbon. When discharging, they are released. However, lithium is expensive and reserves are limited. Sodium ion batteries have been explored as an alternative.

"Potassium ions are just as inexpensive and readily available as sodium, and potassium ion batteries would be superior from the electric aspect," reports Xin-Bo Zhang. "However, the significantly larger radius of the potassium ions has posed a problem. Repeated storage and release of these ions destabilizes the materials currently used in electrodes."

Zhang and a team from the Chinese Academy of sciences and Jilin University (Changchun, China) have now found an elegant solution in their use of a waste material to make novel electrodes: rejected stainless steel mesh from filters and sieves. Despite the excellent durability of these grids, harsh conditions do lead to some corrosion. The metal can be reclaimed in a furnace, but this process requires a great deal of money, time, and energy, as well as producing emissions. Says Zhang: "Conversion into electrodes could develop into a more ecologically and economically sensible form of recycling."

The corroded mesh is dipped into a solution of potassium ferrocyanide (yellow prussiate of potash, known as a fining agent for wine). This dissolves iron, chromium, and nickel ions out of the rust layer. These combine with ferricyanide ions into the complex salt known as Prussian blue, a dark blue pigment that is deposited onto the surface of the mesh as scaffold-like nanocubes. Potassium ions can easily and rapidly be stored in and released from these structures.

The researchers then use a dip-coating process to deposit a layer of graphene oxide (oxidized graphite layers). This layer nestles tightly onto the nanocubes. Subsequent reduction converts the graphene oxide to reduced graphene oxide (RGO), which consists of layers of graphite with isolated oxygen atoms. Zhang explains, "the RGO coating inhibits clumping and detachment of the active material. At the same time, it significantly increases the conductivity and opens ultrafast electron-transport pathways."

In tests, coin cells made with these new electrodes demonstrate excellent capacity, discharge voltages, rate capability, and outstanding cycle stability. Because the inexpensive, binder-free electrodes are very flexible, they are highly suitable for use in flexible electronic devices.

“The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost…We conclude that under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

Dr. Ben Bernanke. 2002

The monthly Coppock Indicators finished May

DJIA: 21,009 +157 Up. NASDAQ:  6,199 +219 Up. SP500: 2,412 +161 Up.

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