1. New Cold War With China Possible

    On Saturday, Dec. 1, at the end of the G-20 meeting in Buenos Aires, President Trump and his team of trade and finance advisers had dinner with President Xi Jinping of China and his team.

    The purpose was to discuss the ongoing trade war between China and the U.S. Trump’s team had presented the Chinese team with 142 specific trade demands.

    The two sides went over the demands one by one during the course of their two-hour dinner. When they were done, both sides announced a 90-day “truce” in the trade wars. China agreed to negotiate in good faith on the demands and the U.S. agreed to delay the imposition of tariffs scheduled to go into effect Jan. 1, 2019, until March 1, 2019, to give the negotiations time to proceed.

    For the rest of this article, click here.

  2. When It Seems There Are No More Bitcoin Frauds to Find We Find a New One

     

    All financial markets experience some kind of fraud and manipulation, but bitcoin trading seems to have a special knack for it.

    First came the “wash trades,” where miners traded the same coin back and forth at progressively higher prices to create the appearance of a rising market. Then came “painting the tape,” where a single trade at an inflated price created mark-to-market profits for every bitcoin holder in the world.

    Then there was the classic “pump and dump,” where a gang of miners would raise prices with small trades and then dump their inventory on unsuspecting newbies who bought in just before the crash. Wash, rinse and repeat.

    Some scams were more sophisticated, including the sale of cryptocurrency tether, which promised a “stable coin” always worth the same amount in dollars. The problem was the tether sales proceeds were not held in dollars but were used to buy bitcoin to pump up that market.

    The assumption was that the transaction could always be unwound (with profits for the scam sponsor), but the collapse of bitcoin prices revealed that tether was just a Ponzi scheme. There are many more frauds.

    Just when you think you’ve see it all, a new scam emerges. This article describes the fact that cryptocurrency sponsors can get positive ratings and reviews on crypto platforms, including celebrity endorsements, just by paying for them, regardless of the actual merit of a coin.

    When it comes to cryptos, caveat emptor – and don’t believe the hype.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  3. The Huawei Arrest Is Not a Sideshow. It’s the Shape of Things to Come

     

    In the midst of stock market gyrations, revelations about Trump by Robert Mueller and former FBI Director James Comey testifying before Congress came a story that received far less attention but may be far more important in the end.

    This article reports that the CFO of Huawei was arrested in Vancouver, Canada, on a warrant issued by the United States. The CFO, Meng Wanzhou, happens to be the daughter of Huawei founder Ren Zhengfei and is one of the most powerful business leaders in China. Huawei is the largest mobile phone manufacturer in the world and a leader in the new 5G phone technology that is just being rolled out globally.

    Huawei is suspected of being controlled by the Chinese government and the People’s Liberation Army. Huawei has a long history of intellectual property theft and of building trapdoors and other devices into its equipment to spy on users and steal data. The specific charges related to Meng involve money laundering, fraud and selling telecommunications gear to Iran in violation of U.S. sanctions.

    The arrest has thrown U.S.–China relations into turmoil just as a 90-day “truce” in the trade wars begins. Hearings on a possible extradition of Meng to the U.S. for trial on the charges have now begun.

    This arrest should not be taken lightly and the struggle between the U.S. and Huawei will not be over soon. The U.S. is acting aggressively to uphold its national security and intellectual property interests.

    There will be more actions against Huawei and other Chinese tech giants. The intellectual property part of the trade war is just getting underway and has a long way to run.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  4. Putin Speaks on the Dollar Again. You Can’t Say You Weren’t Warned

    Russia’s President Vladimir Putin has expressed his disdain for the global U.S. dollar- based payments system so many times that few are still paying attention. The problem is that every time Putin speaks, his position grows stronger from the time before.

    Russia is buying about 30 tons of gold per month and has increased its gold reserves from 600 tons to 2,000 tons over the past 10 years. Russia is also working with some of the world’s most sophisticated software developers to build a heavily encrypted state-of-the-art digital distributed ledger that can support a Russian-backed cryptocurrency possibly backed by gold.

    These efforts are done in conjunction with similar efforts by the Chinese. As this article reports, the endgame is an alternative global payments system that will substitute for SWIFT and be controlled by Russia and China with participation by countries including Turkey, Iran, North Korea and possibly many others.

    This alternative system will exclude the U.S. and U.S. dollars, finally creating a way for nations to trade and settle balance of payments without using dollars and without relying on portals such as SWIFT and Fedwire that are controlled by the U.S. In turn, this means that U.S. economic sanctions will no longer be effective because countries will have an easy way around them using this new nondollar system.

    Putin is insistent on this new system and is close to achieving it. When the new system is rolled out, you won’t be able to say you weren’t warned.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  5. What Do Elites Get Wrong? Just About Everything

    I usually don’t circulate articles in which almost everything the author says is way off base, but sometimes it’s instructive to see just how wrong our most famous commentators can be.

    This article is written by Anatole Kaletsky, a prominent financial analyst and globalist. It was written in advance of the G-20 meeting in Buenos Aires and high-profile dinner between President Trump and President Xi Jinping on Dec. 1, so we have the benefit of hindsight in assessing Kaletsky’s forecast. Kaletsky says Trump’s motto is “shout loudly and carry a white flag.”

    In effect, Trump is belligerent and threatening in the early stages of a negotiation, but he settles for little and walks away declaring “victory.” Based on this, Kaletsky expects an early end to the trade war with China with little more than superficial gains for the U.S. That’s completely wrong.

    Trump may have agreed to a 90-day timeout as negotiations continue, but he’s no less determined to press ahead in the negotiations. Trump will not settle for cheap concessions, so investors should expect the trade wars to escalate and continue perhaps for years.

    Like most pro-China globalists, Kaletsky touts the fact that China has already agreed to 40% of the U.S. demands. Big deal. Does this mean that China has a free hand to violate the other 60%? Not according to Trump and his chief negotiator, Robert Lighthizer.

    By the way, I debated Brexit with Kaletsky in Switzerland in March 2016, when he predicted the U.K. would vote to “remain” and I predicted the U.K. would vote to “leave.” He was wrong about Brexit and he’s more wrong about the trade wars.

    Nothing is more important to Trump and he will see this through. That means a rocky ride for investors despite the elite happy talk from Kaletsky and his ilk.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  6. How Can the Fed Be “Transparent” When They Don’t Know What They’re Doing?

    When I started in the U.S. government bond market in the 1980s, the Fed was about as transparent as a rock. They held no press conferences. They did not release their minutes or summaries.

    Official announcements about change in the fed funds target rate came after the fact and had no details. The Fed operated exclusively through a small club of “primary dealers” (my firm was one of them).

    There was no official license given to be a primary dealer. It was a business relationship that the Fed could take away (but rarely did). It just meant you were on an approved list for dealing with the open market desk at the Fed. Even within that small approved list, the Fed had a few “favorites” to whom they leaked their intentions.

    When the Fed wanted to change course, they would conduct systemwide repos (or reverse repos), or they would switch from general collateral to “specials.” Only by being on the other side of the trade would a primary dealer know what the Fed was up to. Then we could share this information with our top customers (or not). The rest of the market had to tease out the policy based on market reaction, rumors and leaks to the press.

    How times have changed! Now the Fed holds press conferences, releases detailed statements of policy announcements and promptly publishes minutes of their meetings. The Fed also offers economic forecasts of Fed governors (the “dots”) and governors give speeches about every other day. But is this more transparent?

    In form it is, but in substance maybe not. The reason is the Fed doesn’t really know what it’s doing. Their beloved Phillips curve has broken down, inflation is nowhere to be found (after printing $3.5 trillion in new money) and the Fed is on a destructive path of raising rates and burning money in the face of a weakening economy.

    This article is just the latest evidence that the Fed is winging it. A few weeks ago, Fed Chair Jay Powell said the Fed was a “long way” from its “neutral” rate, and then he said last week the Fed was “just below” its neutral rate and then he suggested the Fed might “wait and see” on rate hikes after earlier implying it was on a steady course to raise rates.

    The market has swung wildly in response to each utterance, even when they contradict each other. Get ready for more of the same. The Fed doesn’t know what it’s doing. That’s transparent.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  7. The Makings of a Global Debt Crisis Are in Place

    In 2017, the financial world was filled with talk of synchronized sustainable growth in major economies for the first time since before the 2008 global financial crisis. This was being proclaimed by global financial elites including Christine Lagarde, head of the IMF.

    Now that vision is in ashes. Synchronized global growth has turned into a synchronized global slowdown. Growth has already turned negative in two of the world’s largest economies, Japan and Germany, and is slowing rapidly in the world’s biggest economies, China and the U.S.

    To read the rest of this article, click here.

  8. People Are Getting Chip Implants to Buy Coffee. Now They’re Owned

    We’ve written many articles on the move toward a “cashless society.” These articles describe how liberal academics such as Ken Rogoff and Larry Summers have campaigned for the elimination of cash and its replacement by 100% digital payments systems.

    This is part of a thinly veiled agenda to monitor all financial transactions, impose negative interest rates and readily freeze bank accounts in the next financial crisis. A lot of the focus has been on Sweden because it has gone further than any other country in the direction of a cashless economy.

    The alternative to cash has included credit cards, debit cards, Apple Pay, Venmo and other all-digital payments systems. Even the most advanced of these systems requires some kind of device such as a smartphone or chipped card to pay for items. As shown in this article, Sweden has now gone the last mile by allowing citizens to have microchips implanted in their bodies.

    These microchips have what’s called near-field radio identification that links to a bank account or other payment sources and also links to the vendor’s payment system. When you want to buy a cup of coffee, you simply wave your hand near the coffee shop scanner and your coffee is paid for. This sounds convenient, but is actually nefarious.

    If an implanted chip can pay for your coffee, it can also be used to track your whereabouts 24/7 and create a complete log of all transactions at all times. In a more extreme crisis, the government will be able to locate you and round you up easily.

    The same is true if you’re carrying an iPhone, but you can always throw your iPhone into a river and keep moving, free of surveillance. That’s not so easy when the “iPhone” is implanted in your body. When people trade freedom for convenience, freedom is always the loser.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  9. Just When You Think You’ve Seen Every Crypto Scam… A New One Emerges

    Side by side with the bitcoin price bubble have been a series of scams designed to pump up the price to encourage unsuspecting victims to buy more crypto from unscrupulous miners.

    These scams include trading the same crypto back and forth at progressively higher prices to create the false impression of a price rally (known as “painting the tape”), bidding up prices to create a rally before dumping miner inventory (known as “pump and dump”), stealing cryptos through hacking, propping up crypto prices by selling other coins and using the proceeds to buy cryptos (most famously the Tether “stablecoin”) and many more scams.

    I’ve chronicled as many of these scams as I can as part of an effort to steer investors away from the crypto mania. Every time I think I’ve seen it all, a new scam emerges.

    As described in this article, a crypto miner can pay a celebrity to endorse a cryptocurrency or give it a good review in a tech publication, even if the endorser knows nothing about cryptos. A good example is John McAfee, a well-known pioneer in online security.

    McAfee revealed that he received $105,000 per tweet to endorse various cryptos on twitter. It’s a simple case of trading your reputation to lure the naïve into the greatest financial bubble in history.

    You get to keep the money, but you won’t get your good reputation back.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  10. Can the Market for Bitcoin Get Any Worse? The Answer Is “Yes”

    I did a television interview in December 2017 at a time when the price of bitcoin was going up $1,000 per week. The interview went viral and had over 1 million likes on Facebook.

    On the exact day of the interview, bitcoin was around $8,000 per coin. My forecast was that bitcoin would go to $20,000 and then crash on its way to $200 as a criminal token. So far, that’s exactly what has happened.

    You can see the interview here. Today, bitcoin has crashed to about $4,000 per coin, down 80% from its top and well on its way to my $200 per coin forecast.

    Lately, the drop has accelerated in percentage terms even beyond the January–February crash earlier this year. This recent crash within a crash is detailed in this article.

    The problem with a crash of this kind is that confidence is destroyed, liquidity dries up and momentum gathers, setting the stage for further losses. Bubbles are not symmetric in their price patterns. The rising part of the bubble is characterized by slow price gains that accelerate and then quickly go hyperbolic. This is the classic “hockey stick” chart.

    Once the bubble bursts, the initial drop is steep, but this is followed by a series of rallies that fade followed by another rally in a pattern called “lower highs.” It can take a few years for a hockey stick bubble to reach its destination low. This is due to denial, wishful thinking and groupthink among the late buyers who have suffered the greatest losses during the bubble stage.

    Meanwhile, the early buyers took the money and ran for the hills. There’s nothing left of bitcoin except disappointment and the occasional pump-and-dump by the miners. Good luck with that.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.