How Bretton Woods Introduced a New World Order
.Bretton Woods System and 1944 Agreement
How Bretton Woods Introduced a New World Order
By Kimberly Amadeo Reviewed By Thomas J. Brock
Thomas Brock is a well-rounded financial professional, with over 20 years of experience in investments, corporate finance, and accounting.
Article Reviewed and Updated September 03, 2020
Read The Balance's Financial Review Board
The Bretton Woods agreement of 1944 established a new global monetary system. It replaced the gold standard with the U.S. dollar as the global currency. By so doing, it established America as the dominant power in the world economy. After the agreement was signed, America was the only country with the ability to print dollars.1
The agreement created the World Bank and the International Monetary Fund (IMF), U.S.-backed organizations that would monitor the new system.2
Bretton Woods System and 1944 Agreement
How Bretton Woods Introduced a New World Order
By Kimberly Amadeo Reviewed By Thomas J. Brock
Thomas Brock is a well-rounded financial professional, with over 20 years of experience in investments, corporate finance, and accounting.
Article Reviewed and Updated September 03, 2020
Read The Balance's Financial Review Board
The Bretton Woods agreement of 1944 established a new global monetary system. It replaced the gold standard with the U.S. dollar as the global currency. By so doing, it established America as the dominant power in the world economy. After the agreement was signed, America was the only country with the ability to print dollars.1
The agreement created the World Bank and the International Monetary Fund (IMF), U.S.-backed organizations that would monitor the new system.2
The Bretton Woods Agreement
The Bretton Woods agreement was created in a 1944 conference of all of the World War II Allied nations. It took place in Bretton Woods, New Hampshire.
Under the agreement, countries promised that their central banks would maintain fixed exchange rates between their currencies and the dollar.2 If a country's currency value became too weak relative to the dollar, the bank would buy up its currency in foreign exchange markets.3
Note: Purchasing currency would lower the supply of the currency and raise its price. If a currency's price became too high, the central bank would print more. This printing production would increase the supply and lower the currency's price. This method is a monetary policy often used by central banks to control inflation.
Members of the Bretton Woods system agreed to avoid trade wars.4 For example, they wouldn't lower their currencies strictly to increase trade. But they could regulate their currencies under certain conditions. For example, they could take action if foreign direct investment began to destabilize their economies. They could also adjust their currency values to rebuild after a war.
Replacing the Gold Standard
Before Bretton Woods, most countries followed the gold standard.5 That meant each country guaranteed that it would redeem its currency for its value in gold. After Bretton Woods, each member agreed to redeem its currency for U.S. dollars, not gold.
Why dollars? The United States held three-fourths of the world's supply of gold. No other currency had enough gold to back it as a replacement. The dollar's value was 1/35 of an ounce of gold. Bretton Woods allowed the world to slowly transition from a gold standard to a U.S. dollar standard.6
To continue reading, please go to the original article here:
https://www.thebalance.com/bretton-woods-system-and-1944-agreement-3306133
Billionaires Buying Precious Metals
.Billionaires Buying Precious Metals
October 10, 2020
Silver could reach $500 over the next ten to twenty years?
James Anderson interviewed on Palisade Radio
Tom welcomes a new guest James Anderson, from SD Bullion. James discusses what led him to discover silver as a child and how he was lucky to learn both the Austrian and Keynesian schools of economic thought in college.
Silver and gold have performed very well this year, but that is expected with the massive stimulus programs. Gold and silver are currently consolidating, but there have been massive inflows of metal into exchange-traded funds. There is room for doubt as to where these ETF’s have managed to source these metals. JP Morgan’s recent fine of one billion for rigging metal prices likely represents just one week of “profits” during their eight years of price rigging.
Billionaires Buying Precious Metals
October 10, 2020
Silver could reach $500 over the next ten to twenty years?
James Anderson interviewed on Palisade Radio
Tom welcomes a new guest James Anderson, from SD Bullion. James discusses what led him to discover silver as a child and how he was lucky to learn both the Austrian and Keynesian schools of economic thought in college.
Silver and gold have performed very well this year, but that is expected with the massive stimulus programs. Gold and silver are currently consolidating, but there have been massive inflows of metal into exchange-traded funds. There is room for doubt as to where these ETF’s have managed to source these metals. JP Morgan’s recent fine of one billion for rigging metal prices likely represents just one week of “profits” during their eight years of price rigging.
Warren Buffett is investing in gold and is going against his saying of “never bet against the United States.” Billionaire bond kings like Scott Minerd are becoming big silver bulls. Scott has stated publicly that silver could reach $500 over the next ten to twenty years, and early this year, he recommended silver as the “play of the year.”
James says the idea of having a gold-silver ratio in the hundreds makes absolutely no sense, and he outlines some future targets where one might want to take profits.
He discusses a document from the 1970s released by Wikileaks regarding the US Treasury’s concerns over gold competing with the dollar and how this resulted in creating the Comex.
Lastly, he discusses what a prudent position in the metals should be and why you want assets outside the banking system; when things reach panic levels, that may be an excellent opportunity to sell some physical.
https://www.youtube.com/watch?v=xqtr6spMCGs&feature=emb_logo
To continue reading, please go to the original article here:
https://www.silverdoctors.com/gold/gold-news/billionaires-buying-precious-metals/
The US Mint Is Hiking SILVER Prices
.The US Mint Is Hiking SILVER Prices
October 9, 2020 108 52734
Will Charge $67 For Each 1-Ounce Uncirculated American Silver Eagle Coin STARTING Tuesday, October 13!
“Prices for products containing silver will change EFFECTIVE October 13, 2020…re-setting silver prices is necessary”…
(by Half Dollar) No inflation, huh?
The US Mint even says below, to “cover rising costs”.
Regardless, here’s a little dandy that the US Mint would probably like to keep as much under wraps as possible.
From just today:
The US Mint Is Hiking SILVER Prices
October 9, 2020 108 52734
Will Charge $67 For Each 1-Ounce Uncirculated American Silver Eagle Coin STARTING Tuesday, October 13!
“Prices for products containing silver will change EFFECTIVE October 13, 2020…re-setting silver prices is necessary”…
(by Half Dollar) No inflation, huh?
The US Mint even says below, to “cover rising costs”.
Regardless, here’s a little dandy that the US Mint would probably like to keep as much under wraps as possible.
From just today:
![SMnt0011008[1].jpg](https://images.squarespace-cdn.com/content/v1/5d5222a44813620001d89582/1602347557969-VEWYPN77UJGRH2HCGM0F/SMnt0011008%5B1%5D.jpg)
Hmmm. From the Federal Register:
![FdrlRgst100820[1].jpg](https://images.squarespace-cdn.com/content/v1/5d5222a44813620001d89582/1602347528443-P78JTFVS79ROARRN7S7P/FdrlRgst100820%5B1%5D.jpg)
Here’s the PDF of the government’s entry in the register, and, specifically, the products that are affected.
And here’s the table from the PDF file:
![PrcHks[1].jpg](https://images.squarespace-cdn.com/content/v1/5d5222a44813620001d89582/1602347496646-EL88R1ILCIRZP7K7APNX/PrcHks%5B1%5D.jpg)
To continue reading, please go to the original article here:
Silver , Gold and Reset News Saturday 10-10-2020
.How the Fed and ECB will let banks go bust in a new monetary reset
Life Growth Academy: Oct 8, 2020
Today we consider how the next banking crisis could lead to a new monetary reset and how the ecb and the fed could let the banks go bust.
For many years now the banking sector has been in dire straits.
The decision of government’s globally to shutdown their economies will unquestionably increase defaults of household and corporate borrowers placing enormous stress upon highly leveraged banks.
Indeed, banking stocks have sold off heavily dramatically reducing the equity held on the companies balance sheets. Undoubtedly, a huge risk is apparent in Europe
How the Fed and ECB will let banks go bust in a new monetary reset
Life Growth Academy: Oct 8, 2020
Today we consider how the next banking crisis could lead to a new monetary reset and how the ecb and the fed could let the banks go bust.
For many years now the banking sector has been in dire straits.
The decision of government’s globally to shutdown their economies will unquestionably increase defaults of household and corporate borrowers placing enormous stress upon highly leveraged banks.
Indeed, banking stocks have sold off heavily dramatically reducing the equity held on the companies balance sheets. Undoubtedly, a huge risk is apparent in Europe
The US Mint Is Hiking SILVER Prices, Will Charge $67 For Each 1-Ounce Uncirculated American Silver Eagle Coin STARTING Tuesday, October 13!
“Prices for products containing silver will change EFFECTIVE October 13, 2020…re-setting silver prices is necessary”…
The US Mint even says below, to “cover rising costs”.
Regardless, here’s a little dandy that the US Mint would probably like to keep as much under wraps as possible.
***************
Expect a $2,500 Gold Price as Early as Christmas Says E.B. Tucker
Oct 6, 2020
.B. Tucker, author of "Why Gold, Why Now," is calling for a $2,500 an ounce gold price as early as December, after having called a $1,900 gold price by year-end back in March 2020. In August, the yellow metal broke through and made record highs of over $2,000 an ounce; it's currently trading around the $1,900 mark. In his interview with anchor Daniela Cambone, Tucker outlines “the domino” effect which will unfold to get gold to his new price target.
X22 Report Spotlight and SRU Thursday Afternoon 10-8-2020
.X22 Report Spotlight
[CB] Stimulus,Negative Rates Is A One Way Ticket To The Bottom, Gold Is The Insurance Policy: D Wilton
Oct 8, 2020
Dan talks about how gold is going to start to move up. As the [CB]s push stimulus and keep rates down in the negative territory it means only one thing, the race to the bottom.
he [CB] fiat currency will implode on itself and gold is the insurance policy to protect people from the fiat currency hitting rock bottom.
Gold is about to take off.
X22 Report Spotlight
[CB] Stimulus,Negative Rates Is A One Way Ticket To The Bottom, Gold Is The Insurance Policy: D Wilton
Oct 8, 2020
Dan talks about how gold is going to start to move up. As the [CB]s push stimulus and keep rates down in the negative territory it means only one thing, the race to the bottom.
he [CB] fiat currency will implode on itself and gold is the insurance policy to protect people from the fiat currency hitting rock bottom.
Gold is about to take off.
Inflation Is Already Here, The Reason The Fed Needs Inflation Means It's About To Get So Much Worse
Silver Report Uncut: Oct 7, 2020
The Fed is lying to everyone in regards to inflation, but we know that... For the items people want to buy inflation is already coming in hot yet the overall CPI doesn't seem to be capturing the full story and some categories are seeing major deflation due to changing consumer habits i.e. working from home.
Apparel is one of those categories that has plummeted nearly 15% as more people work from home they need less expensive dress clothes.
The reason the Fed needs inflation is just why it's about to get so much worse because the motivation behind the inflation mandate is to fund deficit spending and provide funding today at the cost of diminishing purchasing power.
The fact that deficit spending has accelerated at such a rapid pace and the money creation is reaching extremes means the Fed will require a considerable amount of inflation to be able to begin servicing these massive debts.
The inflation is a neccessary function to sustain the central banking fiat system as the money that is printed today is borrowed into existence and money supply will need to increase pushing prices up making interest payments on old loans a breeze.
Inflation does not help the economy or the US consumer the only reason for the feds mandate is to make the value of the money you work for and they borrow worth less and since there is way too much spending to "make up for lost inflation" further reducing Americans disposable income
Lynette Zang, Mike Maloney and Pimpy "Silver and Gold" 10-7-2020
.Lynette Zang
And The Next Gold Rush Coming...
Streamed live 17 hours ago
With society and the economy now as volatile as it's ever been, everyone's hearing talk about stimulus and bail-ins & bailouts, as if those are even remotely close to a solution.
In this video, Lynette exposes the truth about the 9 biggest banks (including yours), who have everyone's investments leveraged by THREE TIMES THE ENTIRE GLOBAL ECONOMY!
She shows you what to expect with your investments being held under these banks, and explains the reality of the Next Big Gold Rush...
Lynette Zang
And The Next Gold Rush Coming...
Streamed live 17 hours ago
With society and the economy now as volatile as it's ever been, everyone's hearing talk about stimulus and bail-ins & bailouts, as if those are even remotely close to a solution.
In this video, Lynette exposes the truth about the 9 biggest banks (including yours), who have everyone's investments leveraged by THREE TIMES THE ENTIRE GLOBAL ECONOMY!
She shows you what to expect with your investments being held under these banks, and explains the reality of the Next Big Gold Rush...
Mike Maloney
Amazing Gold Chart Signals $11,250 oz, But When?
Premiered 18 hours ago
This gold chart amazes Mike Maloney--and it'll amaze you, too.
His chart master created an interactive chart you haven't seen elsewhere and shows the incredibly strong correlation between the 1970s bull market and today, and actually hints at when gold will peak and at what price.
Tune in to see how gold is echoing the past and what it likely means for the near future.
Does Trump's next move involve Gold??
Pimpy’s Investment Chat: Oct 6, 2020
Panic because Trump walked away from the stimulus plans…….but is he wanting a better deal or does that have something to do with gold or the “gold standard” or the Global Currency Reset??
He must have a backup plan……we will see.
News, Rumors and Opinions Wednesday Morning 10-7-2020
.TNT:
Tishwash: Under Al-Kazemi's directives, the financial system releases the salaries of employees and finalizes the "white paper" for economic reform
Based on the directives of the Council of Ministers, Mustafa Al-Kazemi .. The Ministry of Finance announced the launch of employees ’salaries, starting Wednesday
Finance said in a statement that it looks forward to cooperating with the House of Representatives and the relevant authorities in order to develop quick solutions to address the current economic and financial crisis, noting at the same time that the financial pressure in the country will continue in the foreseeable future.
The statement indicated that Iraq is facing an economic emergency that will be bypassed by national unity and cooperation between all parties, indicating that the task force led by the ministry has completed the "white paper" for economic reform, and is about to finalize the balance of two thousand twenty-one thousand and twenty-three.
TNT:
Tishwash: Under Al-Kazemi's directives, the financial system releases the salaries of employees and finalizes the "white paper" for economic reform
Based on the directives of the Council of Ministers, Mustafa Al-Kazemi .. The Ministry of Finance announced the launch of employees ’salaries, starting Wednesday
Finance said in a statement that it looks forward to cooperating with the House of Representatives and the relevant authorities in order to develop quick solutions to address the current economic and financial crisis, noting at the same time that the financial pressure in the country will continue in the foreseeable future.
The statement indicated that Iraq is facing an economic emergency that will be bypassed by national unity and cooperation between all parties, indicating that the task force led by the ministry has completed the "white paper" for economic reform, and is about to finalize the balance of two thousand twenty-one thousand and twenty-three.
The statement added that the Ministry of Finance is confident that the process of reform and change will lead to a more robust economy and contribute to raising the people's living standards. link
Tishwash: Deputy calls for opening a "file" of private banks and revealing the names of politicians "plundering the wealth of Iraq
A member of the Parliamentary Economic and Investment Committee, Abdul Salam Al-Maliki, called, on Wednesday, for the Anti-Corruption Committee, which was recently formed by Prime Minister Mustafa Al-Kazemi, to open the file of private banks and the nature of their work, and to reveal the names of politicians, who said that they "plunder the wealth of Iraq in legitimate ways."
Al-Maliki said in a statement that Alsumaria News received a copy of, that "the banking business in Iraq
It is still stagnating in place compared to other banks in other countries of the world, and most of the private banks have turned to places to drain hard currency instead of preserving it or contribute to reconstruction and investment, not to mention that some of these banks are fronts for ISIS and terrorist forces deal with them in transferring money inside and outside Iraq", Indicating that" the financial crisis that the country is experiencing and what was accompanied by the delay in paying the salaries of the employees are all related, directly or indirectly, to the delay in banking work, which is the jurisdiction of the Central Bank of Iraq.
He added, "The Central Bank of Iraq has spoken on many occasions about procedures that will be followed to regulate the work of banks, but without any application on the ground until the moment," pointing out that "most of the private banks have become a burden on the financial sector .IraqBecause of the chaos in it, it has turned into one of the doors of currency depletion and corruption.
Al-Maliki called on the Anti-Corruption Committee to“ open the file of private banks and the nature of their work, reveal the political or partisan parties behind them and announce the names of politicians or bank owners who plunder their wealth.Iraq "Legitimate ways under different headings, in order to end the depletion of the currency and put in place plans and laws that regulate the work of private banks, away from the partisan moods of the mafias of corruption
Al-Maliki added that he had previously addressed a parliamentary question to the Central Bank regarding “its procedures in dealing with the state of confusion with the work of private banks. The bank has promised to take measures to address the matter, which has not been achieved. Involved in it. " link
************
Courtesy of Dinar Guru
Delta The banking reforms...We all know...you have to come up with a true rate before you take your banking international. Here's the important part here. For the Central Bank of Iraq to start launching and implementing that...that gives us the conclusion that we are really close to them showing us the new rate. Because the rate is very important. All the stuff that we're waiting for does require the rate, including the white papers. This is very huge. For the Central Bank of Iraq to start doing this, the rate is about to come out...we are on the verge of seeing something from the Central Bank of Iraq.
Pimpy ...The Finance Minister just said since 2003 $203 billion dollars have have been stolen from the Iraqi people. Not dinars - dollars. That's a lot of money. The Finance minister went on to say that could rebuild several countries at that amount of money and rightfully so. Al-Kazemi's government is a lot different it appears. They're doing everything possible to make sure that they wean away the corruption. All this is good because the stronger the economy becomes...the more trust they have in the banks, the more stable they become, the more outsider investors that come in provide an opportunity for the Iraqi dinar to strengthen.
A New Monetary System? Defeat the Fed with Gold!
Life Growth Acadamy: Sep 17, 2020
Derided by mainstream media economists as "a disaster for any large advanced economy” or representing “macroeconomic illiteracy” it seems Donald Trump remains fond of a gold standard.
Today, we explore whether his reelection could lead to a gold standard and in what format that could take and could Trump actually wish to use gold to defeat the Fed?
Dramatic Early Return to Gold Standard? How it could happen.
Life Growth Acadamy: Sep 17, 2020
On October 12th the IMF & world bank convene for an annual conference to address the impact of the pandemic on the global economic outlook, the pathway to recovery and developments in the international financial system.
The conference seems likely to increase the role of SDRs - The IMFs Special Drawing Rights. Today, we consider how this could lead to a dramatic early return of a dollar gold exchange standard.
Jim Rickards, Jim Willie and Mike Maloney "Silver and Gold" 10-4-2020
.Jim Rickards "Why Gold Will Hit $5,000 Soon"
Sep 27, 2020
Jim Rickards (sometimes referred to as James Rickards) is a popular financial commentator, often known for his interesting contrarian point of view on current market and global economic conditions.
Jim Rickards "Why Gold Will Hit $5,000 Soon"
Sep 27, 2020
Jim Rickards (sometimes referred to as James Rickards) is a popular financial commentator, often known for his interesting contrarian point of view on current market and global economic conditions.
Jim Willie: How High Will The Silver Price Go
Premiered 10 hours ago
We’ve talked plenty about the reasons why #silver is almost going to have to move higher at some point. But when silver moves, how high will the price actually go?
Mike Malney
Why I Own 500 Ounces of Silver For Every 1oz Gold
Premiered Sep 29, 2020
Why would I buy gold if I already own silver?" That's one of the most common questions we get at GoldSilver.com, tune in to today's video to hear Mike Maloney's answer.
Finally. Proof That Precious Metals Prices Have Been Manipulated
.Finally. Proof That Precious Metals Prices Have Been Manipulated…
Notes From The Field Simon Black, Sovereign Man
October 1, 2020 Bahia Beach, Puerto Rico
Some time in the mid 3rd century BC, King Hieron of the ancient Greek city-state of Syracuse (in modern day Sicily) ordered a local goldsmith to forge a new, beautiful, golden crown.
But when Hieron was presented with the crown, it didn’t feel quite right.
The King suspected that the smith had put some of the gold in his pocket, and instead fashioned most of the crown out of lesser metals. But this was just a suspicion. He needed proof.
So he approached the smartest scientist in his kingdom-- Archimedes-- and asked him to figure out whether or not the crown was actually made of pure gold.
Finally. Proof That Precious Metals Prices Have Been Manipulated…
Notes From The Field Simon Black, Sovereign Man
October 1, 2020 Bahia Beach, Puerto Rico
Some time in the mid 3rd century BC, King Hieron of the ancient Greek city-state of Syracuse (in modern day Sicily) ordered a local goldsmith to forge a new, beautiful, golden crown.
But when Hieron was presented with the crown, it didn’t feel quite right.
The King suspected that the smith had put some of the gold in his pocket, and instead fashioned most of the crown out of lesser metals. But this was just a suspicion. He needed proof.
So he approached the smartest scientist in his kingdom-- Archimedes-- and asked him to figure out whether or not the crown was actually made of pure gold.
Archimedes pondered the problem for weeks, frustrated that he couldn’t figure out a way to determine the crown’s purity.
And then one day, as the legend goes, Archimedes stepped into a public bath and noticed that the water level rose based on how much of his body was submerged in the tub.
He experimented over and over with this observation, plunging different substances and metals into the water to see how much the water level rose.
Eventually Archimedes was able to determine that different metals have different densities. Gold, for example, has a density of 19.3 grams per cubic centimeter. Copper’s density is less than half of that.
And because they have different densities, the same amount of submerged metals will cause the water levels to rise at different rates.
Based on this principle, Archimedes would be able to determine that the crown was NOT made of pure gold, and that the goldsmith had swindled the king.
According to the ancient Roman scholar Vitruvius, after making this discovery, Archimedes ran completely naked from the bath house out into the streets of Syracuse shouting, “Eureka! Eureaka!” (I have found it!)
History does not tell us what happened to the crooked goldsmith, but we can imagine the king was displeased.
And it certainly wouldn’t be the last time that anyone tried to swindle people when it came to precious metals.
Just a few days ago, in fact, the banking giant JP Morgan was fined nearly $1 billion for illegally manipulating precious metals prices.
It turns out that, for at least six years, several traders at JP Morgan were engaging in ‘spoof trades’ of precious metals. Essentially that means they were booking fake trades for the sole purpose of manipulating gold and silver prices to their advantage.
A lot of investors knew this was happening. As early as 2011, small traders began complaining about spoofing. I first heard about it in 2013 when Jim Rickards told me about it.
At the time, most mainstream media dismissed the notion as a wild conspiracy theory.
In 2016, the CEO of a major silver miner told me about it… that traders had been illegally holding silver prices down. He had a mountain of evidence to back up his claims, and he specifically mentioned JP Morgan as one of the culprits.
But he couldn’t get anyone to take him seriously.
I found this absurd. Is it really so hard to believe that a major financial institution would engage in illegal activity to make a profit?
Banks are in the news practically every month for some major scandal which usually involves defrauding and stealing from their customers. Why should this be any different?
Well, now it’s not some laughable conspiracy theory anymore.
It’s true. There’s proof. And it’s been made public: JP Morgan engaged in illegal price manipulation, and they’ve been hit with a stiff fine by the Department of Justice.
(I expect there will probably be more stories like this-- other banks that engaged in illegal activity to manipulate gold and silver prices.)
If these guys hadn’t been spoofing trades for so many years, it’s likely that gold and silver prices could have been a lot higher. And plenty of investors might have missed out on short-term gains as a result.
Longer-term, though, these banks don’t matter. JP Morgan can try to manipulate and suppress prices all they want.
But as long as central bankers continue conjuring trillions of dollars out of thin air;
as long as governments rack up trillions in debt and spend the next generation into bankruptcy;
as long as hapless politicians play whack-a-mole with a virus and keep shutting their economies down;
as long as there’s chaos and stupidity in the world . . .
gold will continue to hold its value, in the same way that it has for more than 5,000 years of human history.
To your freedom & prosperity Simon Black, Founder, SovereignMan.com
Silver’s Brilliant Year Validates Longtime Bugs’ Enthusiasm
.Silver’s Brilliant Year Validates Longtime Bugs’ Enthusiasm
Eddie Spence September 6, 2020
(Bloomberg) -- Ned Naylor-Leyland has been all-in on silver for 18 years, earning derision along the way from fellow investors favoring the more glamorous gold. Now, with silver’s price skyrocketing 51% this year, he’s got reason to feel vindicated.
The manager of the $1 billion Merian Gold and Silver Fund in London proudly calls himself a “silver bug,” a term describing an investor whose fervor for the precious metal is more extreme than the typical bullion enthusiast’s. The bugs foresee a crash of the fiat cash system in the aftermath of unprecedented monetary stimulus, putting silver back in play as a viable currency. Their core tenet is that gold’s cheaper, more volatile cousin will continue surging in value.
“I’ve been waiting since 2002 for the inevitable demise of this monetary system,” Naylor-Leyland said. “I’ve been standing there waving on the top of a hill for the last 20 years, and suddenly everyone’s pointing at me saying, ‘That man’s a genius.’”
Silver’s Brilliant Year Validates Longtime Bugs’ Enthusiasm
Eddie Spence September 6, 2020
(Bloomberg) -- Ned Naylor-Leyland has been all-in on silver for 18 years, earning derision along the way from fellow investors favoring the more glamorous gold. Now, with silver’s price skyrocketing 51% this year, he’s got reason to feel vindicated.
The manager of the $1 billion Merian Gold and Silver Fund in London proudly calls himself a “silver bug,” a term describing an investor whose fervor for the precious metal is more extreme than the typical bullion enthusiast’s. The bugs foresee a crash of the fiat cash system in the aftermath of unprecedented monetary stimulus, putting silver back in play as a viable currency. Their core tenet is that gold’s cheaper, more volatile cousin will continue surging in value.
“I’ve been waiting since 2002 for the inevitable demise of this monetary system,” Naylor-Leyland said. “I’ve been standing there waving on the top of a hill for the last 20 years, and suddenly everyone’s pointing at me saying, ‘That man’s a genius.’”
They have plenty of forebears. The Coinage Act of 1873 demonetized the metal in the U.S., sparking backlash against the government and allegations of corruption from the “Silverites.” The most notorious speculators were the Hunt brothers, three sons of a Texas oil billionaire whose fear of inflation and belief in the metal as a store of wealth prompted them to try corner the global market in 1980. They stockpiled more than 200 million ounces, driving the price to $49.45 before it crashed below $11.
Now, the bugs are having another moment. The metal has had an outstanding year, with its gain almost double gold’s. The rise has come off the back of a weakening dollar, plunging real rates and geopolitical tensions -- all of which give investors motivation to seek haven in precious metals.
But that gain is nothing to most silver bugs, who foresee even higher prices because they believe more people will lose faith in the value of government-issued currency. Just read their Reddit Inc. message board with 47,000 members or the online Silver Forum with almost 12,000.
“Silver’s got its animal instincts back,” Naylor-Leyland said. “People have spotted it, and they’re interested in it.”
To continue reading, please go to the original article here:
https://finance.yahoo.com/news/silver-brilliant-validates-longtime-bugs-060000834.html
Turkey Hit By Bank Runs, Currency Panic As Locals Sell Their Cars And Houses To Buy Gold
.Turkey Hit By Bank Runs, Currency Panic As Locals Sell Their Cars And Houses To Buy Gold While Lira Implodes
by Tyler Durden Sat, 08/15/2020 - 23:30
It has been an miserable five years for Turkish citizens who have seen their purchasing power slashed by more than half, and it's only getting worse.
The Turkish lira has cratered against the dollar and most developed currencies, plunging from 3 TRY per dollar, to a record low 7.37 last week after a brief and valiant attempt at imposing shadow capital control by Erdogan (who is now de facto head of the Turkish central bank) failed miserably at the end of July, and not even a draconian hike in overnight funding rates above 1000% last week (to crush the shorts) was able to prevent a plunge in the Lira to new all time lows.
As their currency implodes (in a nation that is becoming increasingly more "banana" with each passing day as Erdogan solidifies his takeover of every government institution, in the process turning off any potential foreign investors) Turks are discouraged from material purchases of dollars to hedge the collapse in their native currency due to some of the strictest capital controls on the planet, which has left them with just one option.
Turkey Hit By Bank Runs, Currency Panic As Locals Sell Their Cars And Houses To Buy Gold While Lira Implodes
by Tyler Durden Sat, 08/15/2020 - 23:30
It has been an miserable five years for Turkish citizens who have seen their purchasing power slashed by more than half, and it's only getting worse.
The Turkish lira has cratered against the dollar and most developed currencies, plunging from 3 TRY per dollar, to a record low 7.37 last week after a brief and valiant attempt at imposing shadow capital control by Erdogan (who is now de facto head of the Turkish central bank) failed miserably at the end of July, and not even a draconian hike in overnight funding rates above 1000% last week (to crush the shorts) was able to prevent a plunge in the Lira to new all time lows.
As their currency implodes (in a nation that is becoming increasingly more "banana" with each passing day as Erdogan solidifies his takeover of every government institution, in the process turning off any potential foreign investors) Turks are discouraged from material purchases of dollars to hedge the collapse in their native currency due to some of the strictest capital controls on the planet, which has left them with just one option.
As Reuters reports, Hasan Ayhan followed his wife’s instructions last week and took their savings to buy gold at Istanbul’s Grand Bazaar as Turks scooped up bullion worth $7 billion in a just a fortnight while their currency went up in flames.
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Goldsmith at the Grand Bazaar in Istanbul, Turkey. Photo: Reuters
The retired police officer, hit by vivid memories of the 2018 currency crisis which saw the Lira lose 30% of its value virtually overnight, was among those playing it safe as he queued in the city’s sprawling covered market, where a screen showed the gold price rise by one Turkish lira ($0.1366) in just 10 minutes.
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What's more, it now appears that locals are choosing gold over the dollar, perhaps because the dollar has also been tumbling against gold in recent weeks due to the Fed's overt attempts to debase the greenback.
"I think it is the best investment right now so I converted my dollars to buy gold," the 57-year-old said, adding: "I might withdraw my lira and buy gold with it too, but I am scared to go to the bank right now because of coronavirus."
Well, Hasan, for people in Turkey it is the best investment, but there is a rather high chance that Erdo pulls an FDR and makes it illegal for anyone in Turkey to own gold so you and your fellow countrymen may want to have a series of unfortunate boating accidents in the coming weeks.
In any case, the day after Ayhan bought his gold on Aug 6, the lira hit a historic low and has continued to slide, laying bare concerns that Turkey’s reserves have been depleted by market interventions, which are showing signs of fizzling out, even as the central bank and president flood the local airwaves with fake news about monetary stability and urge locals to keep their money in lira.
Only this time it's not working: turks have traditionally used gold as savings and there may be as much as 5,000 tonnes of it "under mattresses", with more added after the recent buying spree, Mehmet Ali Yildirimturk, deputy head of an Istanbul gold shops association, said.
And although gold has never been more expensive - in either lira or dollar terms - vendors at Istanbul's Grand Bazaar said almost no one is coming to sell their gold jewellery. There are only buyers.
"I’ve been chatting with hundreds of people who are thinking about selling their cars or houses to invest in gold," said Gunay Gunes, whose busy booth is near the market’s entrance.
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Gold dealer Gunay Gunes selling gold for Turkish lira: Photo: Reuters
Putting the recent gold-buying frenzy in context, in just the last three weeks, as selling gripped the lira local holdings of hard assets such as dollars and gold jumped $15 billion to a record of nearly $220 billion, making a mockery of the central bank's attempts to halt the currency slide.
The good news is that, according to Reuters, so far there is no evidence suggesting people are about to pull savings from banks, and this week the lira has hovered around 7.3 versus the dollar, although it remains among the worst emerging-market performers this year. Demand has eased since Turks withdrew some $2 billion in hard foreign cash from their banks during a March-May period in which a lockdown was imposed and the lira hit its last low, according to central bank banknote data.
But that will surely change should the freefalllin the lira accelerate. Indeed, analysts say that if Ankara cannot boost confidence in the currency, which has fallen almost 20% this year, import-heavy Turkey risks inflation and even a balance of payments crisis that will worsen fallout from the coronavirus crisis. It also guarantees even more weakness for the lira, and even more buying of gold.
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Gold dealer Gunay Gunes talks to Reuters during an interview at the Grand Bazaar in Istanbul. Photo: Reuters.
Meanwhile, with foreign investors now having only a small stake in Turkish assets after the government's authoritarian approach has spooked many of them away, it is critical for President Tayyip Erdogan to convince Turks and local businesses to stop turning to the perceived stability of dollars and gold. One look at the chart above suggest that's not working.
Meanwhile, Finance Minister Berat Albayrak - who just happens to be Erdogan’s son-in-law - said on Wednesday the lira’s competitiveness is more important than exchange rate volatility. The central bank has effectively borrowed on local dollar liquidity to fuel its foreign exchange market interventions, which are meant to stabilize the lira, according to data and the calculations of traders and economists.
Through Turkish state banks, which together are "short" foreign exchange by $12 billion, the central bank has sold more than $110 billion since last year, Reuters data show. In turn, the bank’s gross FX buffer has fallen by nearly half this year to below $47 billion, its lowest in 14 years.
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While the CBRT has downplayed the plunge in reserves, saying the "fluctuate" in stressful periods with the Treasury chiming in to say say the bank intervenes at times to stabilize the currency, ratings agencies and investors say Ankara should take decisive steps such as an interest rate hike to rebuild reserves and restore confidence. Otherwise, rising current account deficits and a possible debt default could tarnish the country's formerly solid reputation for meeting foreign obligations.
And, as Reuters notes, these debt repayments are set to rise in October, but the local aren't waiting the 2 months to see how the current crisis plays out.
"Locals don’t want to keep Turkish lira, they’ve been dollarizing and buying gold. Turks have hardly ever done that historically," said Shamaila Khan, New York-based head of EM debt strategy at AllianceBernstein. "That is why you need proactive policies because if you get to that stage where locals are unwilling to keep their money in the bank then you’re heading to a balance of payments crisis. That’s when the alarm bells will start ringing."
To halt the bank runs, some banks imposed fees on withdrawals this week, while the central bank has curbed cheap credit channels it had opened to ease the coronavirus fallout. Yet while lira deposits now earn more than the 8.25% policy rate their real return is negative with inflation at 11.8%.
Perhaps Erdoganomics, whereby the president mandated to "fight" high inflation with lower rates in contravention of all norms and rules of economics, will ultimately end up destroying Turkey just as so many expected.
Or maybe not: traders say backdoor tightening needs to reach 11.25% to stabilize the lira, which has nearly halved in value since early 2018, sowing anxiety over diminished living standards in a country accustomed to free trade and travel; still Erdogan is firmly against higher rates claiming they slow down the economy, so instead the result has been currency destruction, because at the end of the day one can't simply "order" economic prosperity.
Meanwhile, Erdogan shows no sign of budging, and on Monday he said he hoped market rates would fall further "god willing."
But firms such as System Denim, which imports some materials and makes clothes for foreign companies like Zara and Diesel, are feeling the pinch from rising investment costs. Owner Seref Fayat said he recently converted his 4% euro-denominated loans to lira at 10%.
"No need to take on additional FX risk," he said. "Now I pay a higher rate, but at least I can see ahead."