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viernes, 28 de marzo de 2014

JIM RICKARDS: CHINA IMPORTA ORO SECRETAMENTE USANDO CANALES MILITARES (ENTREVISTA EXCLUSIVA)




Jim Rickards
El blog de Inteligencia Financiera Global se complace en presentar la siguiente entrevista exclusiva con el experto mundial Jim Rickards. Jim es autor del best-seller "Guerra de Divisas” y de "La Muerte del Dinero”, que está por llegar.

Es también administrador de cartera de la firma West Shore Group y socio de Tangent Capital Partners, un banco comercial con sede en Nueva York. Es asesor en mercados de capital de la comunidad de Inteligencia de EE.UU. y de la Oficina del Secretario de Defensa.

Gracias por aceptar esta entrevista.

Jim, como bien sabes, China es actualmente el mayor consumidor mundial de oro, pero mientras que el Consejo Mundial del Oro (WGC por sus siglas en inglés) afirma que su demanda "record" en 2013 fue de sólo 1,065.8 toneladas, la Asociación del Oro de China estima que el “consumo” de oro fue de 1,176 toneladas. Por otro lado, varios expertos como Koos Jansen dicen que la demanda real de ese país fue mucho más de 2,000 toneladas el año pasado. ¿A quién debemos creerle?

- Hay muchas estimaciones oficiales y no oficiales de la acumulación de oro en China. La verdad es que nadie sabe el número exacto debido a que China no es transparente en cuanto a las cifras del total de oro que entra al país, ni las de su propia producción minera. Tampoco es transparente sobre cuánto de ese oro va para la adquisición personal y cuánto para las reservas del gobierno. Por lo tanto, todos los analistas, incluido yo, estamos trabajando con información imperfecta o incompleta.

Sabemos que un poco de oro entra a China usando canales militares y que no se reporta a ninguna autoridad. Como resultado, incluso las mejores estimaciones podrían ser demasiado bajas. La mejor guía es asumir que China tiene un objetivo en mente, probablemente 5,000 toneladas o más, y continuará acumulando a través de diversos canales hasta que se alcance ese objetivo. Mi estimación es que China va a anunciar que cuenta con más de 5,000 toneladas de oro a principios de 2015. Probablemente tiene al menos 3,000 toneladas en la actualidad.

¿Por qué China está comprando cantidades tan grandes de oro? ¿Se está preparando Beijing para el colapso del sistema de dinero fíat (de papel, irredimible)? ¿Querrán reemplazar al dólar con el yuan como moneda de reserva?

- China no prevé reemplazar al dólar con el yuan como moneda de reserva global. Esto requeriría que China abriera su cuenta de capital, lo que no quiere hacer. También se requiere un buen estado de derecho y un profundo mercado de bonos líquidos con instrumentos de financiamiento y cobertura, los cuales no tiene. Así, el yuan no será una divisa de reserva durante al menos diez años, posiblemente durante más tiempo  y los chinos lo saben.  

La razón por la que China está adquiriendo oro es para cubrir su exposición a los dólares. China en realidad quiere un dólar fuerte debido a que poseen más de $3 billones (millones de millones) de dólares en papel de deuda denominado en dólares que no pueden desechar. Si Estados Unidos infla y devalúa el dólar, el precio del oro subirá mucho. Cualquiera que sean las pérdidas de China en el papel a causa de la inflación del dólar, las compensará con sus ganancias en oro. Así que China está cubriendo sus dólares con oro. Otros inversionistas deberían hacer lo mismo.

El oro se está yendo de Occidente al lejano Oriente, eso es un hecho. Parece que las economías "desarrolladas" se están quedando sólo con "oro" papel. ¿Podría esto dar lugar a futuras tensiones de guerra entre China y Rusia por un lado, y los EE.UU., Europa y Japón por el otro?

- Ciertamente el oro se está moviendo rápidamente de bóvedas en los EE.UU. y Europa, como las del COMEX (Commodity Exchange) y el GLD (el más popular de los fondos cotizados en oro), hacia bóvedas en China, incluyendo las del gobierno. Gran parte de este oro pasa a través de las refinerías suizas, donde se funden barras de 400 onzas y 99.90% de pureza, para volverlas a refinar y convertirlas en barras de 1 kilo y 99.99 % de pureza.

Cuando el oro se mueve de Occidente a Oriente, no hay ningún cambio en las existencias totales de oro, pero hay una reducción en la oferta flotante debido a que el oro del COMEX y el GLD está disponible para el comercio y préstamos, mientras que el oro oficial de China no lo está. Esto implica una reducción gradual de posiciones cortas en oro papel, porque hay menos oro físico disponible para soportar el comercio de oro papel. A su vez, esto propicia un mayor precio para el oro físico. Un precio más alto del oro significa un valor bajo para el dólar medido en oro. Esto aumentará las tensiones entre China y los Estados Unidos, tensiones que ya son altas entre China y Japón por las islas del Mar del Sur, y entre los EE.UU. y Rusia por Ucrania. Con todo esto en combinación, el potencial de un error o escalada que pueda resultar en una guerra real provocada en parte por el aumento de los precios del oro, se vuelve más probable.

El precio del oro ha estado subiendo en lo que va del 2014 (al momento de la entrevista). ¿Pueden las actuales tensiones entre Ucrania y Rusia provocar una explosión en los precios del oro? ¿Qué tan alto podría subir el precio del oro en el largo plazo a pesar de la manipulación?

- Las tensiones entre los EE.UU. y Rusia relacionadas con Ucrania han ayudado ligeramente al precio del oro debido a los habituales flujos de inversión hacia “refugios seguros”. Es poco probable que escale la guerra económica entre Estados Unidos y Rusia por Ucrania porque los primeros tienen mucho más que perder que Rusia, y no quieren llevar la situación hasta ese nivel.

Los bancos centrales tienen todavía la capacidad de manipular los precios del oro, a través de préstamos de oro físico a bancos comerciales, que utilizan el metal que toman prestado para venderlo en cuentas “no asignadas” (en estas el propietario no posee lingotes específicos, sino que un solo inventario de existencias sirve para cubrir todas las solicitudes de retiro de un oro que ha sido vendido varias veces) a sus clientes, usando apalancamiento. Pero la demanda de oro físico por parte de China y otros está haciendo que los préstamos y transacciones de oro papel sean más difíciles, porque hay menos oro físico para soportar el intercambio y un mayor riesgo de impago por parte de algún participante en el mercado que súbitamente se descubra incapaz de obtener oro físico para cumplir con un contrato de papel.

Toda manipulación eventualmente se viene abajo porque los participantes del mercado comienzan a acumular del otro lado de la operación para poner a prueba la voluntad y los recursos de los manipuladores. Cuando la manipulación actual se venga abajo, probablemente en el próximo año o dos, el oro se disparará basado en los fundamentos de oferta y demanda. En ese escenario, precios de 3,000 dólares la onza no deberían sorprendernos, aunque el oro podría irse a 9,000 dólares la onza o más si es necesario para restaurar la confianza perdida en el sistema monetario internacional.

Jim, ¿está el mundo al borde de un colapso deflacionario o de uno inflacionario? En cualquier caso, ¿es una buena idea para la gente común e incluso países enteros el acumular reservas de oro físico?

- El mundo está al filo de la navaja de la inflación y la deflación. Hay una poderosa tendencia deflacionaria en el mundo a causa de la depresión de 2007 y de la necesidad de vender activos para liquidar deuda, lo que pone aún más presión a la baja en los precios de los activos, incrementando el estrés sobre otros, forzando la venta de activos adicionales, etc., una espiral descendente.

Hay una poderosa tendencia inflacionaria en el mundo a causa de la impresión masiva de dinero y de las tasas de interés en cero, las cuales permiten el uso del apalancamiento para inflar el precio de los activos.

La deflación y la inflación se están anulando entre sí en los índices de precios, pero ninguna se irá pronto. Las reservas de oro físico son la mejor clase de activo en esta situación. Si la inflación prevalece, los precios del oro subirán mucho a través de las fuerzas del mercado. Si prevalece la deflación, el gobierno podría forzar los precios del oro al alza con el fin de causar más inflación generalizada. Esto sucedió alrededor del mundo de 1931 hasta 1934, cuando el Reino Unido, EE.UU. y otros devaluaron sus monedas elevando el precio del oro. En las profundidades de la deflacionaria Gran Depresión, el precio del oro medido en dólares aumentó 75%. Esto ilustra por qué el oro está siendo acumulado por los bancos centrales, ya que preserva la riqueza tanto en inflación como en deflación.

¿Seguirá la plata el precio ascendente del oro? ¿Cuál tiene más potencial?

- La plata es más difícil de analizar que el oro porque juega un rol importante como insumo industrial y como materia prima además de ser un metal precioso, mientras que el oro tiene si acaso pocas aplicaciones comerciales o industriales y es realmente solo dinero puro. Como resultado, la plata podría subir sobre la base de expectativas inflacionarias y movimientos en el precio del oro, pero al mismo tiempo experimentar presiones bajistas si hay debilidad en la producción industrial. En el largo plazo, la plata seguirá los movimientos en el precio del oro con algunos rezagos y mayor volatilidad. Precios mucho más altos del oro sin duda implicarán precios mucho más altos de la plata independientemente de los usos industriales que la plata pueda tener.

Finalmente Jim, cuéntanos acerca de tu próximo libro "The Death of Money” (La Muerte del Dinero). ¿Se trata de una secuela de tu anterior obra "Guerras de Divisas"? ¿Cuándo sale a la venta y cómo podemos comprarlo?

- Gracias. La muerte del dinero es a la vez un antecedente y una secuela de Guerras de Divisas. Cubre mi carrera en asuntos de seguridad nacional de 2003 a 2008, que fue previo a mi participación en el juego de guerra financiera del Pentágono en 2009 descrito en los Capítulos 1 y 2 de Guerra de Divisas. Y es una secuela en la que se mira más profundamente en el futuro del sistema monetario internacional, y se expande a cosas que sólo se mencionan brevemente en el libro anterior, como el papel del FMI y su dinero mundial llamado Derechos Especiales de Giro o DEGs. El nuevo libro, The Death of Money, está disponible en Amazon aquí http://t.co/puuXy3qnQE y estará en librerías o en el propio Amazon en impreso o Kindle a partir del 3 de abril en su edición de exportación. Sale el 8 de abril en Estados Unidos y Canadá.


Muchas gracias por tu tiempo, Jim. Esperamos tenerte de nueva cuenta muy pronto en este blog.

miércoles, 26 de marzo de 2014

ANTAL FEKETE: THE US IS THE NEW FALLING ROMAN EMPIRE (EXCLUSIVE INTERVIEW)




Prof. Antal E. Fekete
The Inteligencia Financiera Global blog (Global Financial Intelligence Blog) is pleased to present this exclusive interview with Prof. Antal E. Fekete, founder of the New Austrian School of Economics, monetary scientist, proponent of the gold standard and a critic of the monetary system based on irredeemable currency (fiat money).

Thanks for accepting this interview.

- Prof. Fekete, why did you decide to found the “New” Austrian School of Economics (NASOE)? Did you find something wrong within the “old school”? What about Carl Menger and Mises?

- What I have found was that post-Mises Austrian economists, but already Ludwig von Mises himself, had substantially deviated from Carl Menger’s teachings for the worse. Thus in my view a rather large portion of the post-Mises Austrian economists’ research is in error. I took it upon myself to criticize the deviation from Menger and correct it. The list includes their dismissal of Adam Smith’s Gold Bills Doctrine, the theory of interest as distinct from the theory of discount, to name but a few. The New Austrian School of Economics (NASOE) was launched under the slogan: “Back to Menger!”

- We know you don’t support both the Keynesian and Monetarist theories. What’s wrong with them? What’s their biggest mistake, if any?

- The biggest mistake of Keynesianism and Friedman-style monetarism is that they favor the destabilization of the interest rate structure that was stable before, but had started gyrating and, more recently, plunging into the black hole of zero interest. All this was in consequence of Keynes’ and Friedman’ success in undermining and ultimately overthrowing the gold standard.

- If these two theories are wrong, why do you think they have become the mainstream all around the world? Were they imposed by somebody?

- They became mainstream for reasons of their demagoguery. They are designed to appeal to one’s sense of justice: antidote against misery amongst plenty. They take advantage of the appallingly low level of education based, as it is, on envy. It is characterized by an almost complete neglect of the aprioristic branches of science: logic, mathematics and economics. And I say this as a professional mathematician. Keynes ensnared F.D. Roosevelt; Friedman ensnared Nixon. These two presidents were happy to trample upon the United States Constitution at their bidding. As a consequence the gold standard was destroyed and irredeemable currency was foisted upon American citizens in 1933 and, on every inhabitant of the Earth in 1971. At the same time the gold of the people was looted by the government.

- Can authentic capitalism thrive under a fiat monetary system, which is based on exponentially growing debt?

- Obviously not. Signs that the grand experiment with global irredeemable currency is an unmitigated failure are all around us.

- Is the so called “Welfare State” legitimate under capitalism or is it a sort of socialism?

- The Welfare State is a shameless Ponzi scheme whereby costs are kicked upstairs and charged to future generations. It is a scheme to enslave the unborn. The fact that the electorate allowed itself to be conned into accepting it is indicative of the extremely low level of education in the world. It does not even deserve to be called “education”. A more accurate term would be “training future serfs”.

By contrast, socialism is not a con scheme. It has been embraced by some highly intelligent people who allowed their actions to be guided by their compassion and emotions rather than their intellect and cold reasoning. There was a saying in Germany during the last decades of the 19th century that went like this: “If you are in your twenties and not a socialist, then you have no heart. But if you are in your forties and still a socialist, then you have no brains.”

- If our fiat monetary system is doomed, should we return to sound money by using gold and silver coins once more? How could we have a practical and “renewed” gold standard?

- The transition is simpler than most people think. There is no need to challenge the authority of the Fed that would be futile anyhow, nor is there need to wave the red cloth of a gold standard in front of the paper bull. It would suffice if one jurisdiction, e.g., the UK with its gold sovereign, or Switzerland with its gold Vrenely (20 Chf. coin), or France with its gold Napoleon, or Hong Kong with its gold Panda opened its Mint to gold (and silver).

In more detail, if one jurisdiction guaranteed that the Mint would stay open for the unlimited coinage of gold and silver through thick and thin, in particular, if it would mint all the gold brought to it regardless of quantity, then the problem were largely solved. Gold mines from all over the world would flock to the Mint and deliver their output in exchange for gold bills payable in the standard coin in 91 days (the time it takes to refine the metal and strike the coins). The gold mines in turn would auction off their gold bills to the highest bidder (to the party offering the lowest discount from face value). In this way a credible gold discount rate would be established, that is not rigged by central banks and the banking establishment.

There is a huge latent demand for these gold bills since for the past four score of years the world has been forcibly deprived of the possibility of exchanging cash gold for gold income. The great insurance companies and pension funds would scramble to get these gold bills as they presently have no good assets to cover their mounting liabilities. But so would also the great trading houses financing world trade in food, fuel and fodder, because the petrodollar is showing fatigue at a highly dangerous level and could collapse under stress any time. The jockeying of other currencies to step into the shoes of the petrodollar is in vain. They cannot compete with the gold bill. They can only engage in petty currency wars.

Likewise, silver producers would draw silver bills on the Mint and auction them off at the silver discount rate, thus providing alternative financing for trade in other staple products. This would be tantamount to the remonetization of silver, that would recapitalize the world economy with its capital in a shambles. It would  be an incredible reversal of history.

The beauty of the plan is that there is no need to storm and invade the Fed headquarters on Constitution Avenue to throw the rascals out. The Fed can go on with its mindless inundation of the world with paper dollars. Once its monopoly is broken, the decision to choose the currency lies with the people. Let the people decide whether they want paper money, or whether they want gold coins in exchange for their goods and services! If Congress is unwilling or unable to restore the monetary clauses of the Constitution, and if the Executive and Judiciary Branches fail to do their duty in protecting the country from the ravages of currency debasement by the Fed usurping unlimited power, then the people should take the law into their hands. They can do it by coining their gold and silver at whichever Mint they can.

Imagen: Elimparcial.es
- How probable is that bills backed by gold will start circulating spontaneously as you suggest? Could it be just as soon as a Mint is  opened to gold somewhere in the world?

- Fairly high. If it hasn’t happened yet, it is because the countries unhappy with the petrodollar are jockeying for elevating their currency to the status a “world reserve currency” to replace it. That’s the plum. The euro was conceived in sin as it was envious and wanted to take over the turf of the petrodollar. It did not want genuine reform. Unknown to most observers, we are in the midst of petty currency wars to decide the issue of hegemony among the contenders. Whose defaulted promise will serve the world best? Sooner or later the warring parties will realize that their efforts are in vain. The gold bill is far superior to any irredeemable promise, however sugar-coated it may be.

- Silver was demonetized in the 19th Century and gold 100 years later. Do you think it was a premeditated attack? Could it be part of a “long term plan” to pave the way to fiat money?

- It took me a long time to find the answer to this question. The silver standard has fallen victim to a conspiracy of two upstart states: the Union victorious in the Civil War against the Confederacy, and the newborn German Reich victorious in the Franco-Prussian war against France. You just have to ask the question: cui bono? (in whose real interest were these wars waged?) Of course, conspiracy theories are notoriously hard to prove. But then, they are just as hard to disprove. The culprit was a secret consortium of 19th century multinational banking houses operating with the connivance of the victorious governments. The consortium accepted the discipline of a gold standard temporarily. Having successfully sabotaged the silver standard, it was more than confident that it would in due course be also successful in sabotaging the gold standard. Lo and behold, that’s exactly what they did during the intervening 100 years.

- What’s “Money” from a Mengerian point of view?

- Menger defined “money” as the standard coin struck from a monetary metal. The senior metal is more marketable than any other commodity. This means that its marginal utility declines at a lower rate than that of any other. In practical terms, the spread between the asked price and bid price of the most marketable commodity diminishes more slowly than that of any other commodity as ever greater quantities are offered for sale in the markets. Like it or hate it, the most marketable commodity is gold. The junior metal is more marketable than any other commodity save gold. Like it or hate it, the second most marketable commodity is silver, even after the unprecedented abuse it was put through during the 100-year period between 1873 and 1973.

- You know, many people follow only the price of gold and say: “gold is going up (or down)”. They forget about a more important concept: value. What’s the difference between “price” and “value”? Should people care more about the “price” or the “value” of monetary metals?

- That’s right, the term “price of gold” is just as meaningless as the “length of the yardstick”.  I am amused no end as gold bugs play into the hands of their water-torturers. They parrot the media that “the price of gold has gone up from $1000 to $1300 in no timed at all”, when they should really say that “the dollar has lost about 23%, or almost one quarter of its value in no time at all”. In the eyes of people the price of gold is the same thing as the value of gold (since for all other goods the two concepts coincide). That’s exactly what the managers of the irredeemable dollar want people to believe. This puts the catastrophic collapse of the dollar in the most favorable light. But as a matter of fact the price of gold and the value of gold are two different things. The value of gold is constant while its price gyrates, meaning that the value of the dollar gyrates. This fact must be stone-walled at all hazards. People must be kept in darkness concerning the danger that the value of the dollar, like the World Trade Center, threatens to collapse and bury them under the debris at a time when they least expect it.

- Many people including famous academics believe that the current monetary system with the USD as the “reserve” currency is sustainable, regardless of the fact that the Fed and all other central banks are busy printing unlimited amounts of fiat money. Do you agree?

- Of course I don’t. I am not going to question the intellectual honesty of these gentlemen. Instead I try to rationalize their thinking. They can only think in terms of linear models, thus completely ignoring the dynamics of the case. There is a critical point beyond which debasement becomes non-linear, read: uncontrollable. They deliberately ignore the consequences that follow with the inevitability of the laws of science.

- On the other hand, many analysts contend that QE eventually will lead to “hyperinflation”. Do you agree?

- I emphatically disagree. Quite to the contrary, QE (a stupid euphemism for what should simply be called the monetization of government debt) leads to deflation through the erosion of capital. The chain of causation is this: QE means bond purchases, or increasing bond price. But this is no good news to entrepreneurs. It is very bad news indeed. It means that their capital is being vaporized. Why? Well, their capital is akin to bonded debt. It must be carried in the liability column of the balance sheet, not in the asset column. Therefore increasing bond prices force a decrease of capital, not an increase as naïve people think. Erosion of capital across the board is deflation, not inflation. The deficit on capital account must be replaced through the injection of new capital, the same way as the physical capital of a firm must be replaced after an accidental fire destroyed it. If it isn’t, then the enterprise will collapse unexpectedly in due course. It is known as the “sudden death syndrome”.

The bitter end of QE is not hyperinflation. It is depression, decapitalization, the paralysis of the economy. That’s what was happening in the 1930’s, and that’s what is happening right now. In the early 1920’s the Fed, quite illegally, introduced the policy of open market purchases of bonds, as QE was then called. That was lethal to the struggling economy already softened up as rotting fruit on the tree, ready to drop off at any moment. I may be in the minority of one, but I shall doggedly maintain that the Great Depression was man-made: it was the result of the artificial undermining of the interest-rate structure through bond purchases of the Fed.

- Is the Quantity Theory of Money false?

- The Quantity Theory of Money is the most destructive pseudo-theory in the history of science, causing enormous mischief. It is hard to see how serious scientist could treat it with respect. It may be valid only under the most restrictive circumstances such as the complete absence of financial and real estate markets in the economy, when extra money cannot be used for anything but buying commodities.

- You have stated that gold does not obey the Law of Supply and Demand. Why?

- Gold is a monetary metal. Its marginal utility for all practical purposes is constant. When the pathology of the regime of irredeemable currency becomes manifest, the demand for gold is increasing but will not bring out an increase in supply. On the contrary, it will lead to a decrease. It’s vintage Gresham: bad money drives out good money. Gold is the best money we have.

Antal E. Fekete
- Could you explain the concepts of gold “basis” and “co-basis” and why NASOE studies their interplay?

- The concept of basis first emerged in the grain futures markets in Chicago in the 19th century. Of course, at that time  there was no gold futures trading, so there was no question of a gold basis. Gold futures trading started at the Winnipeg Commodity Exchange in Canada in 1972 (before 1975, when it was still illegal in the United States to own and trade monetary gold). I went to Winnipeg to study the gold basis first hand. I think I was the first to introduce the concept of gold basis in academic discourse.

It took several years before it became clear that the behavior of the gold basis is very different from that of the wheat basis, for example. It cost the job of the chief economist of COMEX who could not solve the puzzle. The wheat basis exhibits a cyclical pattern indicative of the crop year. The gold basis exhibits a vanishing pattern indicative of the flight of monetary gold going into hiding. Strictly on the basis of logic I predicted the coming of gold backwardation.

- What is gold “backwardation” and why is it important as an indicator of the current financial mess? Can that backwardation become permanent?

- Backwardation simply means that the basis goes negative. It is a regular feature of the futures markets in agricultural commodities. It occurs at the end of the crop year when grain is drawn down in the elevators which are getting ready to receive the new crop. At that time contango is restored. Contango is the opposite of backwardation; it means that the basis is positive.

Unlike backwardation in grains, backwardation in gold is highly anomalous. It is indicative of a great underlying disturbance. The normal state of the gold futures market is contango.

The definition of gold basis is the difference between the futures price of gold for nearby delivery and spot price of gold (the price of gold for delivery on the spot).

My student Sandeep Jaitly, following Menger’s thoughts, introduced a refinement that turned out to be pregnant and all-important for the theory of basis, contango and backwardation. In Menger’s world price is never monolithic; it splits into the higher asked price and the lower bid price. Actual transactions take place between the two, and the problem economics is called upon to solve is how the asked and the bid price are formed. Accordingly, Sandeep refined the definition of basis as the difference between the asked price for delivery in the nearby future and the bid price for delivery on the spot. At the same he introduced the companion concept of cobasis as the difference between the bid price for delivery in the nearby future and the asked price for delivery on the spot. The basis is the guiding star of the warehouseman when he decides to carry the physical good in preference to the futures contract (that is, he increases his inventory on a net basis); the cobasis is his guiding star when he decides to “decarry” the physical good in preference to the futures contract (that is, he decreases his inventory on a net basis). Thus the theory of futures market trading is seen as the theory of warehousing (as opposed to Keynes’ badly misconstrued theory of insurance).

The interplay between the gold basis and gold cobasis turns out to be all-important. The fact is that, although the gold basis at first is only nibbling at negative values, as the flight of monetary gold continues unabated the gold futures market will ultimately plunge into permanent backwardation from which there is no return (just as there is no return from a black hole in physics). NASOE does pioneering work in this area and we are very proud of that. Nobody can predict the actual day when the irredeemable dollar dies, nor can we at NASOE. But we, unlike others, can make qualitative statements about the circumstances under which such a scenario will unfold. There is no question that permanent gold backwardation, when it comes, will herald not just the death of the irredeemable dollar, but also the reduction of world trade from multilateral to bilateral, totally insufficient in a complex economy such as ours.

- Do you think from an academic perspective that the gold and silver markets are manipulated?

- I don’t think that they are any more manipulated than they have ever been. All governments in all history have engaged in it. They have always scrambled to amass as much gold as they possibly can, by hook or crook. Manipulation of gold even has a name: it is called mercantilism. It is not a very enlightened policy. A more enlightened policy would be to encourage gold on the go as opposed to gold arrested and incarcerated in central bank vaults.

People must feel secure in their possession of gold. This is a prerequisite of what came to be known as the “golden age” that refers to an epoch when people are willing and happy to spend the gold coin because they are confident that they can always get it back on the same terms. When this confidence is shaken, gold is goes into hiding. This is true not only under the gold standard, but also under the regime of irredeemable currency. When gold enjoys high visibility, it is indicative of good times. When gold takes flight into hoards, good times give way to hard times.

- Prof. Fekete, as you know, China is currently buying staggering amounts of gold. Are the Chinese preparing this way for the collapse of the global monetary system?

- I think it’s prudence. The Chinese civilization is much older than our own. One of its merits is the high regard it has for the virtue of saving. Our own civilization failed this test: it has fallen victim to the siren song of Keynesianism and, later, Friedman-style monetarism, preaching the song of consumerism at the expense of savings and providence.

It is possible, of course that China, in addition to simply being prudent and provident is also preparing for the Armageddon of the collapse of the international monetary system, the danger of which very few people in the West recognize. Certainly the United States made a colossal blunder in letting China to take the leadership in promoting gold as a monetary metal. It will pay a very high price for this stupidity. American universities are hardly equipped to deal with the coming monetary crisis. They have systematically eliminated studying gold money from the curriculum. Scribblings of academic sycophants representing pseudo-science designed to prove that irredeemable currency is the wave of the future have replaced impartial research. Keynesianism as a brainwashing scheme is eclipsed only by Lisenkoism in scope. It is not a merit that Keynesianism did not have to resort to the Gulag and the firing squad in arguing with its opponents. They knew what their duty was and yielded.

- So, is the U.S. the new falling Roman Empire? Is the American dollar the new Roman denarius that is being debased into worthlessness?

- It seems to be the case. The Roman Empire represented the height of scientific knowledge of its time, yet it succumbed to the temptation of monetary debasement that was the paramount cause of its downfall. Likewise, the U.S. represents the height of scientific knowledge of our age, but this did not protect it against the quackery of Keynesianism and Friedman-style monetarism. If we escape disaster this time, it will be by the skin  of our teeth.

- What can the average person do to protect himself from this catastrophe?
Fekete y Barba
- Have gold and a plot of land in the countryside to bury it at night and to grow food when it will no longer be available in the cities.

- You have repeatedly appealed to speculation, its causes and effects, in this interview as well as in your speeches and other writings. Could you say a few words about the economic role of speculation in general?

- Speculation is the Achillean heel of economics. Speculation is absent in Keynesian, Marxian, Walrasian and Austrian economic theory as observed by the Wikipedia article digesting my work. But as Mises said, there are only two ways human beings can deal with future uncertainty: engineering and speculation. If I may add, the first is widely recognized, the second is widely ignored. To make things worse still, speculation is often confused with gambling, although the difference between the two is quite clear. Speculation deals with risks created by nature; gambling deals with risks artificially created by man. In contrast with the former, the latter adds nothing to human welfare. Mainstream economics purposely obscures the issue in misrepresenting speculation in bonds and speculation in gold as dealing with risks inherent in nature. But this is a lie: risks in the gold market as well as risks in the bond market are man-made, more precisely, made by the government following thoroughly bad advice from Keynesians and from Friedman-style monetarists. By nature’s ordination gold is stable and so are interest rates under a gold standard. But by ordnance of governments gold and bonds have been destabilized, causing untold damage to the world economy.

-Any parting thoughts?

-          I would like to draw the attention of your readers to three recent publications of mine that you can find on my website www.professorfekete.com. They deal with the same questions that we dealt with in this interview.
   
Bonds may be defiying dire forecasts but they are not defying logic;  Parts I, II  (March 3, 2014)
   
Why gold standard?  (March 14, 2014)
   

-Thank you for your time, Prof. Fekete.


(Thanks to Victor Huerta for his support on preparing this interview)

lunes, 24 de marzo de 2014

JIM RICKARDS: CHINA IS IMPORTING GOLD SECRETLY USING MILITARY CHANNELS (EXCLUSIVE INTERVIEW!)




James Rickards
The Inteligencia Financiera Global blog (Global Financial Intelligence Blog) is honored to present an exclusive interview with economy world expert Jim Rickards.  Jim is the author of the bestseller “Currency Wars: The Making of the Next Global Crisis” and the forthcoming, “The Death of Money: The Coming Collapse of the International Monetary System”.

He is a portfolio manager at West Shore Group and a partner in Tangent Capital Partners, a merchant bank based in New York. He is an advisor on capital markets to the U.S. intelligence community and the Office of the Secretary of Defense.

Thanks for accepting this interview.

Jim, as you know, China is now the world’s largest consumer of gold. While the WGC states that its “record” demand in 2013 was only 1,065.8 tonnes, the China Gold Association estimates "gold consumption" was 1,176 tonnes. On the other hand, several pundits like Koos Jansen say that the real China gold demand was much more than 2,000 tonnes last year. Who should we believe?

- There are many estimates of official and non-official accumulation of gold in China. The truth is that no one knows the exact number because China is non-transparent about the total amount of gold coming into the country and its own mining output, and it is not-transparent about how much of that gold goes for personal acquisition and now much to government reserves. So, all analysts, myself included, are working with imperfect or incomplete information. We do know that some gold comes into China using military channels and is not reported to any authority. As a result, even the best estimates may be too low. The best guide is to assume China has some target in mind, probably 5,000 tonnes or higher, and will continue to accumulate through diverse channels until that target is reached. My estimate is that China will announce it has over 5,000 tonnes of gold in early 2015. It probably has at least 3,000 tonnes today.

Why is China buying such big quantities of gold? Is Beijing preparing for the collapse of the fiat monetary system? Do they want to replace the USD with yuan as a reserve currency?

- China has no prospect for replacing the USD with the yuan as a global reserve currency. This would require China to open its capital account, which it does not want to do. It also requires a good rule of law and a deep liquid bond market with financing and hedging instruments, which it does not have. So, the yuan will not be a reserve currency for at least ten years, possible longer and the Chinese know this. The reason China is acquiring gold is to hedge its exposure to dollars. China actually wants a strong dollar because they own over $3 trillion in dollar denominated paper they cannot dump. If the U.S. inflates and devalues the dollar, gold will go much higher in price. Whatever China loses on its paper due to dollar inflation, it will make up on its gold profits. So, China is hedging dollars with gold. Other investors should do likewise.

Gold is going from West to Far East, that’s a fact. It seems that the “developed” economies are being left only with paper “gold”. Could this lead to future war tensions between China and Russia on one hand, and the US, Europe and Japan on the other?

- Gold is certainly moving quickly from vaults in the U.S. and Europe to as those maintained by the COMEX and the GLD ETF, in the direction of vaults in China including those of the government. Much of this gold passes through Swiss refineries where it is melted down from 400-ounce bars of 99.90% purity and re-refined and recast into 1-kilo bars of 99.99% purity. When gold moves from west to east, there is no change in the total stock of gold, but there is a reduction in the floating supply since COMEX and GLD gold is available for trading and leasing whereas China’s official gold is not. This implies a gradual unwinding of paper short positions in gold, because there is less physical available to support the paper trading. In turn, this supports a higher price for physical gold. A higher price for gold means a low value for the dollar when measured in gold. This will increase tensions between China and the U.S. Tensions are already high between China and Japan over the South China Sea islands, and between the U.S. and Russia over Ukraine. Taken in combination, the potential for a mistake or escalation resulting in actual warfare prompted partly by increasing gold prices is growing more likely.

Jim Rickards
Gold has been rallying so far in 2014 (at the time of the interview). Can the current tensions between Ukraine and Russia pull the trigger for an explosion in gold prices? How high could gold go in the long run despite price manipulation?

- The tensions between the U.S. and Russia related to Ukraine have helped the price of gold slightly because of the usual “safe haven” investment flows. It is unlikely that economic warfare between the U.S. and Russia over Ukraine will escalate very far because the U.S. has far more to lose than Russia and will not want to push the situation to that level. Central banks still have the ability to manipulate gold prices through gold leasing to commercial banks, who then use the leased gold to sell unallocated gold to customers using leverage. But the demand for physical gold by China and others is making leasing and paper gold transactions more difficult because there is less physical to support the trading and greater risk of default by a market participant who suddenly finds itself unable to obtain physical gold to satisfy some paper contract. All manipulation breaks down eventually because market participants beging to pile-on the other side of the trade to test the will and resources of the manipulators. When the current manipulation breaks down, probably in the next year or two, gold will surge higher based on fundamental supply and demand. In that environment prices of $3,000 per ounce would not be surprising, although gold may eventually go to $9,000 per ounce or more if needed to restore lost confidence in the international monetary system.

Jim, is the world on the verge of a deflationary collapse or an inflationary one? In any case, is it a good idea for the common people and even entire countries to accumulate physical gold reserves?

- The world is on the knife-edge of inflation and deflation. There is a powerful deflationary trend in the world because of the depression of 2007 and the need to sell assets to liquidate debt, which puts further downward pressure on asset prices, increasing stress on others, forcing further asset sales, etc. in a downward spiral. There is a powerful inflationary trend in the world because of massive money printing and zero interest rates, which allows the use of leverage to pump up asset prices. The deflation and inflation are cancelling each other out in price indices but neither is going away soon. Physical gold reserves are the best asset class in this situation. If inflation prevails, gold prices will go much higher through market forces. If deflation prevails, the government may force gold prices to go higher in order to cause more generalized inflation. This happened around the world from 1931 to 1934 when the U.K., U.S. and others devaluated their currencies by raising the price of gold. In the depths of the deflationary Great Depression, the price of gold measured in dollars increased 75%. This illustrates why gold is being accumulated by central banks because it preserves wealth in inflation and deflation.

Will silver follow the rising price of gold? Which one has more potential?

- Silver is more difficult to analyze than gold because silver has an important role as an industrial input and a commodity in addition to being a precious metal, whereas gold has few if any commercial or industrial applications and is really just pure money. As a result, Silver could possible go higher on the basis of inflationary expectations and movement in the price of gold, but at the same time experience downward price pressure if there is weakness in industrial output. In the long run, silver will track the price movements of gold with some lags and higher volatility. Much higher gold prices certainly imply much higher silver prices regardless of the industrial uses to which silver can be put.

click to enlarge
Finally Jim, tell us about your forthcoming book “The Death of Money: The Coming Collapse of the International Monetary System”. Is it a sequel to “Currency Wars”? When is it coming out and how can we pre order it?


- Thank you. The Death of Money is both a prequel and a sequel to Currency Wars. It covers my career in national security matters from 2003 to 2008, which is a prequel to my involvement in the 2009 Pentagon financial war game described in Chapters 1 and 2 of Currency Wars. And it is a sequel in that it looks more deeply into the future of the international monetary system and expands on things that were only mentioned briefly in Currency Wars, such as the role of the IMF and its world money called special drawing rights or SDRs. The new book, The Death of Money, is available on Amazon here http://t.co/puuXy3qnQE and will be available in bookstores or from Amazon in paperback or Kindle on April 3 for the international language export edition. The new book comes out on April 8 in the U.S. and Canada.

Thank you very much for your time, Jim. We look forward to having you again soon on this blog.

Follow Jim Rickards on Twitter @JamesGRickards

(Thanks to Victor Huerta for his support on preparing this interview)

CONTRAATAQUES: RUSIA APUNTA AL PETRODÓLAR




Imagen: laborlist.org
En el “ajedrez” geoestratégico el presidente Vladimir Putin lleva la ventaja sobre el disminuido estadounidense Barack Obama. Después de la anexión de la península de Crimea a Rusia, Washington respondió con sanciones que fueron vistas como tenues por parte tanto de los propios rusos como de analistas internacionales.

Esa fue la causa de que el jueves pasado, Obama anunciara medidas adicionales contra una veintena de altos funcionarios rusos y de que amagara con ir por sectores estratégicos de la economía rusa, como el energético. Si hay movimientos rusos sobre las regiones sur y oriental de Ucrania, esos castigos entrarían en operación, aseguró el mandatario.

Pero el gobierno de Moscú ya tiene planteada la fase dos de su estrategia de contraataque –la primera terminó con éxito con la anexión de Crimea, y esta vez, tiene la mira puesta nada menos que en el petrodólar. Rusia está apuntando así nada menos que al corazón del sistema financiero global.

El esquema de contragolpe se ha dejado entrever por medio de declaraciones como las del ministro de Desarrollo Económico de Rusia, Alexei Ulyukayev, quien dijo que Rusia  trabajaría en incrementar el volumen de comercio internacional en divisas nacionales distintas al dólar –como el yuan y el rublo. “¿Por qué deberíamos tener contratos en dólares con China, India, Turquía?” cuestionó, agregando que esto aplicaría a “energía y otras esferas”. En el fondo, el objetivo es crear nuevas petro-divisas, que si bien no serían de “reserva”, sí serían divisas de comercio bilateral.

Estas declaraciones se dieron en el marco de un pre-ataque orquestado por Estados Unidos, y cuyo autor intelectual parece ser el famoso inversionista, George Soros, conocido por su simpatía y jugosas aportaciones financieras al Partido Demócrata, al cual pertenece Obama.  La semana pasada Soros hizo pública en Berlín su propuesta de castigar a Rusia por medio de la venta de parte de la reserva estratégica de petróleo, para manipular el precio a la baja. El “oro negro” es, por supuesto, una de las principales fuentes de financiamiento para el presupuesto federal ruso.

Según Soros, Rusia necesita el precio del barril a 100 dólares “para equilibrar su presupuesto”.

Estas revelaciones llegaron no por casualidad ocho días después de que el Departamento de Energía americano anunciara la primera “prueba de venta” desde 1990, por apenas cinco millones de barriles de su reserva. Los precios cayeron a su nivel más bajo en un mes después de esta noticia, una clara amonestación para Moscú.

Lo malo para Washington es que el propio Soros hizo una advertencia: "La tarea es ayudar a Ucrania en lugar de castigar a Rusia, porque solo castigarla acorralaría a Putin y como un animal herido, devolvería el golpe y sería una proposición perder-perder."

Es evidente que Soros también conoce los planes rusos de contraofensiva contra el dólar, que podrían llegar a la venta masiva de bonos del Tesoro, la suspensión de pagos de compañías rusas con deudas en el billete verde, entre muchas otras.

De hecho, entre el 5 y el 12 de marzo, según datos de la Fed ocurrió un gran desplome de 104.5 mil millones de dólares en los bonos del Tesoro que mantiene en custodia a favor de instituciones extranjeras y otros bancos centrales. Esta fue la mayor caída de que se tenga registro. Dado que no se trató de una venta sino de una salida de los valores guardados, se sospecha que Rusia habría cambiado la ubicación de sus “treasuries” fuera de Estados Unidos, para en caso necesario poder disponer de estos cuantiosos recursos, y quizá, usarlos como arma.

Cabe recordar que según cifras del Tesoro, al cierre de enero Rusia tenía 131.8 mil millones de dólares en bonos.

Imagen: bolsaclick.com
Asimismo, Putin contaría con un aliado estratégico en su ataque al petrodólar: China.

El mensaje fue enviado por al titular de la más grande compañía petrolera rusa, Rosneft, citado por Reuters: “si Europa y Estados Unidos aíslan a Rusia, Moscú mirará hacia Oriente para hacer nuevos negocios, tratos energéticos, contratos militares y alianzas políticas.” De hecho, se encuentran ya muy avanzadas las negociaciones para un acuerdo por el cual Rusia vendería a China 38 mil millones de metros cúbicos de gas natural hacia 2018, a través del primer gasoducto entre el mayor productor y el mayor consumidor mundiales. Putin podría formalizar el acuerdo en mayo en su visita a ese país.

Quizás lo que sigue haciendo falta a Moscú es una ampliación significativa de sus compras de oro para reservas. Podría incluso hacerlo en secreto, al estilo chino. Los manipuladores occidentales no podrán manejar a su antojo por siempre el precio del metal precioso, y cuando el dólar colapse –algo que no está en duda si sucederá o no sino sólo el cuándo, quien tenga el oro físico llevará mano en la conformación del nuevo sistema monetario internacional que nacerá sobre las cenizas de la divisa estadounidense.

Washington no solo no tiene una “reserva estratégica de oro”: no posee ni siquiera todo el oro que clama tener en el papel.


De modo que una espiral de sanciones económicas americanas sobre Rusia sería un disparo en el propio pie, y podrían poner pronto en peligro al sistema monetario global basado en el dólar. Estados Unidos la debe pensar muy bien. Ya no es la superpotencia que puede hacer lo que quiera, sino una decadente cuyos mejores tiempos han quedado muy atrás.

jueves, 20 de marzo de 2014

¿ADÓNDE VA AHORA EL PRECIO DEL ORO?




Imagen: Goldsilver.com
El oro es uno de los activos más importantes que existen y que no puede faltar en la cartera de los inversores en valor, aquellos que apuestan por el largo plazo. El metal precioso vivió un mercado alcista cuya extensión de 12 años, no tiene precedentes en el mundo de las commodities.
Esa racha terminó en 2013 al cerrar a la baja en alrededor de 1,200 dólares la onza troy. Sin embargo, para ser precisos, su corrección (descenso) comenzó en septiembre de 2011, tras tocar su máximo histórico de 1,923.70 dólares. En diciembre pasado pronosticamos que 2014 quedaría marcado como el año en que esa corrección del oro llegaría a su fin.

Los primeros meses parecieron confirmar nuestras proyecciones, que no obstante, recordemos que también estuvieron cargadas de una advertencia: la onza áurea podría descender de nueva cuenta a mínimos por debajo de 1,200 dólares, que deberían ser vistos como niveles atractivos.

El rebote observado durante enero, febrero y marzo hasta antes de la anexión formal de la península de Crimea a Rusia que ocurrió esta semana, impulsó las cotizaciones a casi 1,400 dólares la onza. Este rally (subida) parece haber perdido fuerza no solo por las relativamente disminuidas tensiones bélicas entre Occidente y la Federación Rusa, sino también por el reciente anuncio de la Reserva Federal (Fed) de Estados Unidos, respecto al retiro final de sus estímulos monetarios para el otoño, y una posible alza en las tasas de interés que podría ocurrir a mediados de 2015.

De modo que por ahora el optimismo de su presidenta, Janet Yellen, respecto a la aparente recuperación de la economía estadounidense, más la previsible caída de precio de los bonos del Tesoro y su consecuente subida en tasas de rendimiento, podrían afectar el apetito de los inversionistas por los activos refugio, como el oro, que sí ofrece una protección financiera real.

Esa inminente subida de tasas de interés en Estados Unidos, por cierto, debería ser tomada más en serio por el secretario de Hacienda Luis Videgaray y el gobernador del Banco de México Agustín Carstens, pues sin duda afectará las variables de inflación, tipo de cambio y crecimiento en México, por más que intenten desestimar el hecho calificándolo de mera “volatilidad”.

De confirmarse lo aquí expuesto, las presiones bajistas en el metal podrían continuar. Más allá de eso, mantenemos nuestra previsión de que su período correctivo terminará este año, para recuperar su fuerza alcista. 

El “bull market” mayor del metal precioso está muy lejos de terminar, sobre todo gracias a la permanente expansión de deuda, déficits gubernamentales y la intensiva impresión monetaria de los principales bancos centrales del orbe, todos, insostenibles. El “toro” de oro está más vivo que nunca, por lo que presentarse la oportunidad, no se debería dejar pasar.

martes, 18 de marzo de 2014

MARCADOR EN UCRANIA: PUTIN 3 – 0 OBAMA




Imagen: Ria Novosti. Serguei Yolkin
Ayer se materializó lo que el domingo decidieron por muy amplia mayoría los ciudadanos de la península de Crimea a través de un referéndum: adherirse a la Federación de Rusia. El presidente Vladimir Putin y los representantes de la otrora república ucraniana y de la ciudad federal de Sebastopol (que tiene un estatus especial), firmaron el acuerdo a pesar de las presiones de Estados Unidos y sus aliados, que ya habían adelantado que desconocerían dicha anexión.

El documento ahora será dirigido al Tribunal Constitucional para revisión y luego al Parlamento ruso y de Crimea para su ratificación, que podría consumarse esta misma semana.

Con este hecho, Putin anota su humillante tercer “gol” en el partido internacional que juega contra Barack Obama. Recordemos que los dos primeros fueron el asilo político al soplón Edward Snowden, ex contratista de la estadounidense Agencia Nacional de Seguridad, y más tarde, la suspensión de un ataque americano que lucía inminente contra Siria el año pasado, gracias a la intervención rusa.

En este espacio señalamos que Putin había cometido un error al no prevenir a tiempo que en su vecindario, intereses occidentales se movieran para apoyar tras bambalinas las revueltas ucranianas, que terminaron por defenestrar al presidente pro-ruso Víctor Yanukóvick, y por imponer como primer ministro al favorito de los norteamericanos: Arseny Yatseniuk.

Hoy sin embargo, Putin ha materializado su contraataque y ha salido victorioso, con la anexión de Crimea, que por sí misma, tiene poca importancia geoestratégica para los occidentales pero mucha para los rusos. Su tercer “gol” ha caído. Esto es muy significativo, sobre todo ahora que será cuestión de tiempo para que Ucrania se integre a la OTAN, y sus fuerzas internacionales se acerquen más a territorio ruso.

Quizá lo más relevante es que la anexión de la península se efectuó sin disparar un solo tiro, y que las tibias sanciones que hasta el momento se han impuesto por parte de Occidente y Japón, han hecho que la osadía de Putin haya valido la pena.

Aquí también comentamos en su oportunidad, que Estados Unidos mantiene una campaña permanente para acorralar y minar el poderío e influencia rusos y chinos, en el camino hacia consolidar su hegemonía mundial.

Putin lo entiende perfectamente así, y por eso declaró que “a Rusia le amenazan con sanciones, tratan de arrinconarla porque mantiene una postura autónoma”. Eso es algo que por supuesto, incomoda a los líderes occidentales, comenzando por Obama, que está muy acostumbrado a que gobiernos enteros se subordinen a sus opiniones.

En otras palabras, Rusia tiene intereses por defender y no dudará en hacerlo casi al costo que sea. Si las sanciones contra ella se endurecen, es un hecho que la respuesta de Putin será en la misma proporción. De todas maneras, el ministro del Exterior ruso, Serguéi Lavrov, dijo ya que las medidas contra su país eran inaceptables y que no quedarían sin respuesta.

Por ahora aunque la postura de China parece neutral, lo cierto es que no apoyó la resolución del Consejo de Seguridad de la ONU –vetada por Rusia el fin de semana, para desconocer los resultados del referéndum de Crimea. De modo que sus llamados para una solución política del conflicto, están más cerca de la posición rusa que de la occidental, como lo dejó entrever el ministro del Exterior chino, al declarar que dicha determinación hubiera terminado por “agravar” la crisis.

De manera que los lazos entre China y Rusia podrían salir favorecidos de esta situación. Citado por la agencia Ria Novosti, el periódico Nezavisimaya Gazeta publicó hace unos días un análisis de los expertos del Diario del Pueblo chino, que asegura que “Después de la retirada del capital extranjero de Rusia hay un vacío que debe ser rellenado. Rusia necesita inversiones foráneas. Todo eso abre oportunidades para inversores chinos” y para “la diversificación de las rutas energéticas de Moscú.”

El ajedrez político internacional sigue moviendo sus piezas. Tanto rusos como chinos deberán sacar todo el provecho posible de esta distracción. Los primeros, insistimos, harían bien en seguir el camino chino de llevarse tanto oro físico como les sea posible desde las tierras de sus rivales de Occidente, pues es una de las muy pocas maneras de hacerles frente de manera efectiva. El talón de Aquiles de aquellos está justo en la excesiva deuda que cargan en hombros, y en la impresión masiva de divisas de sus bancos centrales, para lo que el “escudo” de oro, es el arma perfecta de defensa y ataque.