Category Archives: Finance

Is The U.S. Going To Transition From Stagflation Directly Into A Full-Blown Economic Depression?

By Michael Snyder

Should the fact that the U.S. economy actually contracted during the first quarter actually surprise any of us?  Since the start of 2022, there has been crisis after crisis, and now the war in Ukraine is depressing economic activity all over the planet.  What we are facing could most definitely be described as a “perfect storm”, and the truth is that this storm isn’t going to go away anytime soon.  But where do we go from here?  Will the U.S. economy bounce back, or will this new economic downturn soon become even worse?  Most economic optimists are assuming that the former will be true, while many economic realists are issuing dire warnings about what is ahead.

I was actually thinking of writing about something else today, but I knew that my regular readers would want me to talk about this

Gross domestic product unexpectedly declined at a 1.4% annualized pace in the first quarter, marking an abrupt reversal for an economy coming off its best performance since 1984, the Commerce Department reported Thursday.

The negative growth rate missed even the subdued Dow Jones estimate of a 1% gain for the quarter, but the initial estimate for Q1 was the worst since the pandemic-induced recession in 2020.

We already knew that inflation had started to spiral out of control in the United States, and now the “stag” part of “stagflation” has arrived.

So what caused this “sudden” downturn?  According to CNN, there are quite a few factors that can be blamed…

A push by the Federal Reserve to raise interest rates and combat high inflation. Supply chain shortages. An ongoing global health crisis. And of course, the geopolitical earthquake caused by Russia’s invasion of Ukraine, which is also threatening to create a world food crisis.

If the U.S. economy shrinks again in the second quarter, that will officially meet the definition of a “recession”.

But as John Williams of shadowstats.com has pointed out, if honest numbers were being used the U.S. economy would still be in a recession that started all the way back at the beginning of the COVID pandemic.

Everybody pretty much realizes that economic conditions are not great right now.

So are brighter days just around the corner?  That is what some pundits seem to think

The US economy will return to growth during the second quarter, according to RSM chief economist Joe Brusuelas. “Without a doubt,” he said.

“This is noise; not signal,” Pantheon Macroeconomics chief economist Ian Shepherdson wrote in a report. “The economy is not falling into recession.”

Maybe they will be right.

But if the economy is so strong, then why are foreclosure filings absolutely soaring?

Last month, 33,333 properties across the U.S. faced foreclosure, a 181 percent jump from March 2021 and 29 percent pop from February, according to a report by foreclosure tracker Attom. The first quarter saw 78,271 properties with a foreclosure filing, a 39 percent from the previous quarter and 132 percent from last year.

Needless to say, there are other experts that have a much more negative view on what is ahead.

For example, Nancy Lazar is warning of a “synchronized” global recession…

Piper Sandler chief global economist Nancy Lazar warned on Monday that the world is in the early stages of a “very significant” and “synchronized” recession.

In an appearance on “Mornings with Maria” Monday, Lazar noted that a recession is expected outside of the United States.

“It’s going to be a global recession pulling down [the] Euro zone in particular,” she told host Maria Bartiromo. “It looks like China GDP [Gross domestic product] in the second quarter could also be negative.”

Actually, if all we suffer is a significant global recession that will be really good news.

Because right at this moment inflation is dramatically spiking all over the globe, we are witnessing the largest land war in Europe since World War II, and the UN is telling us that we are heading into a horrific worldwide food crisis.

An increasing number of Americans are starting to realize that things are moving in the wrong direction.  In Gallup’s April survey, only 18 percent of Americans rated economic conditions as “good”, and only 2 percent rated them as “excellent”…

The GDP news comes on the heels of newly released polling data from Gallup that suggested that economy confidence is extremely low among the American public.

More than four in ten (42%) of Americans said that economic conditions in America were “poor,” while another 38% said that they were only “fair” in Gallup’s April survey. Just 2% said economic conditions were “excellent,” while 18% said they were “good.”

Those are terrible numbers, and they have very serious implications for the Democrats in the fall.

But instead of focusing on fixing the economy, Joe Biden wants Congress to give him another 33 billion dollars for the war in Ukraine…

President Joe Biden is asking Congress for another $33 billion to help Ukraine resist Russia’s invasion and provide humanitarian aid to the Ukrainian people.

The proposal, which the White House will send to lawmakers on Thursday, includes $20 billion in additional security and military assistance for Ukraine, another $8 billion for economic assistance and $3 billion in humanitarian aid.

This is complete and utter madness.

To put this in perspective, the military budget for Ukraine is normally about 6 billion dollars for an entire year.

And much of the equipment that the U.S. is sending to Ukraine is being blown up by the Russians before it can even get to the fighters on the frontlines.

With each passing day it is becoming clearer to everyone that this conflict is really a proxy war between the United States and Russia.

And nuclear war is increasingly becoming one of the hottest topics on Russian television.  For example, the following is a recent exchange between two Russian television personalities that is making headlines all over the globe…

“Everything will end with a nuclear strike is more probable than the other outcome,” she continued. “This is to my horror, on one hand, but on the other hand, with the understanding that it is what it is.”

It was at that point Solovyov chimed in, “But we will go to heaven, while they will simply croak.”

“We’re all going to die someday,” Simonyan agreed.

“We’re all going to die someday”?

I certainly don’t like the sound of that.

Unfortunately, many Russians are now entirely convinced that nuclear war is coming.

But instead of pushing for peace, Joe Biden and his minions just keep escalating the conflict.

If we continue to go down this path, it will end in a nightmare.

Our current economic problems pale in comparison to the possibility of a nuclear conflict, but most Americans still don’t understand the implications of the decisions that our leaders are making.

Because if they did understand, there would be giant protests in the streets of every single major U.S. city right now.

Musk In Talks With Investors To Join His Bid To Take Over Twitter: Report

Martin Walsh
April 18, 2022

OPINION: This article may contain commentary which reflects the author’s opinion.

Elon Musk is reportedly speaking with other investors about joining his bid to purchase Twitter.

Sources told the New York Post that a partnership could be announced within days after Musk formally offered last week to completely buy Twitter for just over $40 billion.

The Post went on to allege that Musk could possibly work with Silver Lake Partners, a company the Tesla CEO has worked with in the past.

“One possibility, the sources said: teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private. Silver Lake’s Co-CEO Egon Durban is a Twitter board member and led Musk’s deal team during the 2018 failed effort to take Tesla private, sources said. Silver Lake declined to comment,” the Post reported.

“For its part, Twitter on Friday adopted a so-called poison pill — a corporate move that prevents Musk from acquiring more than 15% of the company. But that pill may not stop other entities or people from acquiring their own shares of up to 15% of the company. Those owners could partner with Musk to force a sale, make changes in the executive ranks or push for other overhauls of the company,” the report added.

“This is not over,” a source told the New York Post.

The saga between Musk and Twitter has changed by the day.

During a TED talk last week, host Chris Anderson asked Musk if there was a “Plan B” if his current offer to buy Twitter in an all-cash deal were rejected.

“There is,” Musk said.

WATCH:

Musk announced that he had hired Morgan Stanley as an advisor to help with the takeover of the social media giant.

Prior to that, it was speculated that his decision not to take the job means he is now free to improve his position within the company, as in, buy more stock.

Musk signed an agreement with Twitter for the following terms as long as he serves on the board: “Mr. Musk agrees that, for so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps or hedging transactions.”

But since Musk declined to join Twitter’s board, he is no longer bound by that stipulation, journalist Yashar Ali noted.

Twitter CEO Parag Agrawal said in a statement that it was Musk’s decision to not join the company’s board after he was offered a seat.

“Elon Musk has decided not to join our board,” Agrawal said. “The Board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward. The board offered him a seat.”

“We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance,” Agrawal continued. “Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best.

“We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input,” Agrawal added.

“There will be distractions ahead, but our goals and priorities remain unchanged,” the statement added. “The decisions we make and how we execute are in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”

Room Erupts When Elon Musk Gives 2-Word Answer About His Next Move

Martin Walsh
April 15, 2022

Tesla CEO Elon Musk gave a simple response when asked about whether he has a “plan B” option for Twitter.

During a TED talk, host Chris Anderson asked Musk if there was a “Plan B” if his current offer to buy Twitter in an all-cash deal were rejected.

“There is,” Musk said.

“Well, I think we would want to err on — if in doubt, let the speech — let it exist. If it’s a gray area, I would say let the tweet exist. But obviously, in a case where there’s perhaps a lot of controversies that you would not want to necessarily promote that tweet, you know. So, I’m not — I’m not saying that I have all the answers here, but I do think that we want to be just very reluctant to delete things and have — just be very cautious with permanent bans. You know, timeouts, I think, are better than sort of permanent bans,” he continued.

“But just in general, like it said, it won’t be perfect, but I think we wanted to really have like the perception and reality that speech is as free and reasonably possible, and a good sign as to whether there is free speech is, is someone you don’t like allowed to say something you don’t like? And if that is the case, then we have free speech. And it’s damn annoying when someone you don’t like says something you don’t like. That is a sign of a healthy, functioning free speech situation,” he added.

WATCH:

On Wednesday, Musk announced that he had formally offered to buy Twitter outright.

Musk offered to buy the company for $54.20 a share, which he said was his “best and final offer,” representing a 54 percent premium over the day before he began investing in the company in late January. It would value the company at about $43 billion.

Musk said “I don’t have confidence in management” and that he couldn’t make the changes he wanted in the public market.

In a letter to Twitter, Musk said that he believes the company “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company.”

“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” he said.

Musk has hired Morgan Stanley as an advisor to help with the takeover of the social media giant.

Days ago, it was speculated that his decision not to take the job means he is now free to improve his position within the company, as in, buy more stock.

Musk signed an agreement with Twitter for the following terms as long as he serves on the board: “Mr. Musk agrees that, for so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps or hedging transactions.”

But since Musk declined to join Twitter’s board, he is no longer bound by that stipulation, journalist Yashar Ali noted.

Twitter CEO Parag Agrawal said in a statement released Sunday night that it was Musk’s decision to not join the company’s board after he was offered a seat.

“Elon Musk has decided not to join our board,” Agrawal said. “The Board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward. The board offered him a seat.”

“We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance,” Agrawal continued. “Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best.

“We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input,” Agrawal added.

“There will be distractions ahead, but our goals and priorities remain unchanged,” the statement added. “The decisions we make and how we execute are in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”

Musk Offers to Buy Twitter, Social Media Platform Valued at $43 Billion

Sophie Mann
April 14, 2022

Billionaire entrepreneur Elon Musk has offered to buy all of Twitter at a price that values the social media platform at more than $43 billion. Musk called the offer his “best and final,” and said if it was not accepted he would have to “reconsider my position as a shareholder.”

He made the offer in a regulatory filing Thursday.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” wrote the Tesla CEO in a letter to the company’s board chair.

Last week, he bought a 9% stake in Twitter, making him the platform’s largest shareholder. 

His filing Thursday continued: “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”

“As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.”

Musk is the CEO of the pioneering electric vehicle company Tesla. His personal worth is valued at about $259 billion. 

“Twitter has extraordinary potential,” he also wrote. “I will unlock it.”

Oops: WaPo Tries to Start War with Musk, But Everything Goes Bad When People Notice What Got Printed

Mike Landry, The Western Journal
April 12, 2022

“Democracy Dies in Darkness,” says the mast of The Washington Post.

And the Posties say it with a straight face, despite the publication’s ownership by one of the czars of knowledge, commerce and all other things extant and of importance, Jeff Bezos, CEO of Amazon.

The Post pages recently dripped with irony as an op-ed contributor called for regulation “to prevent rich people from controlling our channels of communication.”

That’s what the Post said, or at least that’s what Ellen K. Pao wrote in Friday’s edition of a newspaper owned by one of the wealthiest human beings on the planet.

Ah, you can’t make this stuff up.

Pao, a tech investor, was addressing the big purchase of Twitter stock by Tesla’s Elon Musk and Musk’s critical view of Twitter’s practices of censorship — censorship that has included booting a then-sitting president of the United States, Donald Trump, off the platform in January 2021.

Pao is not amused.

“For those of us who care about equity and accountability, Musk’s appointment to such a prominent role at a platform that serves hundreds of millions of users daily is highly disconcerting — a slap in the face, even,” she wrote.

Pao has her equity bona fides. She and six other women founded Project Include, aimed at diversity and inclusion in the high-tech industry.

And she has the scars from her battles in Silicon Valley. In 2012 she filed a discrimination suit against her employer Kleiner Perkins after its top executives, including a man who mentored her, deemed her unqualified for promotion.

She sued, claiming retaliation from a junior partner with whom she was romantically involved.

And she’s alarmed that Musk believes Twitter should be less restrictive on “speech that many see as hateful, abusive or dangerous.”

She gave examples — Musk shows “very little empathy” in his tweets, is insulting, and posted, then deleted, a tweet comparing Justin Trudeau, Canada’s prime minister, to Adolph Hitler.

Critical of Musk’s claim to be “a free-speech absolutist,” Pao said private platforms should not allow everything to be published.

Teenage girls have been harmed by postings on Facebook, she wrote, and former CEOs of Twitter have expressed regret for what they have allowed to be posted on their platforms.

Of course, because Pao’s argument is ultimately against the peskiness of free speech and its attendant First Amendment, to bolster her position she must provide some direct and indirect ad hominem attacks against Musk.

There is rampant sexism and racism at Tesla, she said, citing some court cases against the company.

That’s proof, according to Pao, that Musk should be nowhere near social media.

“There are clearly dangers to creating workplaces in which people feel free to say and do things that demean their co-workers,” she said. “There are dangers to abetting such abuse on social media platforms, too.”

In addition, Pao wrote “Musk’s appointment to Twitter’s board shows that we need regulation of social-media platforms to prevent rich people from controlling our channels of communication.

“For starters, we need consistent definitions of harassment and of content that violates personal privacy.”

On Sunday night, Twitter CEO Parag Agrawal announced Musk would not be joining the Twitter board after all.

Pao said that without regulation of social media, people will continue to be harmed, especially “those who have been harmed for centuries — women and members of marginalized racial and ethnic groups.

“The people who benefit from unrestricted amplification of their views will also be the same people who have benefited from that privilege for centuries,” she concluded.

So is that the real gripe of Pao, daughter of Taiwanese immigrants — Musk is a white man; guys like that must be censored?

No one advocates absolute freedom in media.

U.S. laws have done a good job of providing limits regarding libel, slander, calls for violence and pornography.

Pao can be commended for when, as a temporary CEO of Reddit, she banned revenge porn from that platform, prompting other platforms to follow her lead.

But traditions following court cases surrounding the First Amendment have provided adequate protections against media abuse while recognizing the importance of the free exchange of ideas.

That free exchange remains something that individuals like Ellen Pao — and all of Silicon Valley — must be kept from limiting or destroying.

This article appeared originally on The Western Journal.

‘Hostile Takeover Inbound’: World Reacts To Musk Not Joining Twitter’s Board As He Posts Cryptic Tweet

Ryan Saavedra
Apr 11, 2022

Entrepreneur Elon Musk set the internet ablaze on Sunday night after Twitter, which he recently became the largest shareholder of, announced that he had declined their offer to join the company’s board.

“Elon Musk has decided not to join our board,” Twitter CEO Parag Agrawal said in a statement. “We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board.”

“There will be distractions ahead, but our goals and priorities remain unchanged,” Agrawal later added. “The decisions we make and how we execute is in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”

Shortly after the announcement was made, Musk tweeted out an emoji of a face with a hand over its mouth, which usually means “to cover your mouth, not to speak, to mute” and is typically used to “express emotions of rapture, smirk, shy smile, or happiness.”

However, Musk later deleted the tweet.

After becoming their top shareholder with control of more than 9% of the company, Musk signed an agreement with Twitter for the following terms as long as he served on their board: “Mr. Musk agrees that, for so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps or hedging transactions.”

Since Musk declined to join the board, he is not bound by any restrictions on how much of the company he can buy, journalist Yashar Ali noted.

“Hostile takeover inbound,” Austen Allred, CEO Bloom Institute of Technology, tweeted. “My read of this: (I’m guessing). 1. Twitter board wakes up to realize Elon owns 9% of the company. There’s a path to him taking over. 2. Offers a board seat contingent upon him not buying too many shares. Try to contain. 3. Negotiations break down on term details. 4. ???”

Matt Bilinsky, a business attorney, suggested that the reason Musk did not join Twitter’s board was because he would not have been able to say much about the company publicly. “Since the Board announcement he’s been crowdsourcing ideas and chatting via Twitter,” he tweeted. “He quickly realized that’s all over as soon as he actually joins the Board and tapped out.”

Continue reading @ The Daily Wire

Musk Goes Viral For Tweeting 3 Hilarious Words After Becoming Twitter’s Largest Shareholder

Martin Walsh
April 4, 2022

OPINION: This article may contain commentary which reflects the author’s opinion.

Tesla CEO Elon Musk is having some fun after he bought a 9.2% stake in Twitter, making him the largest shareholder of the left-leaning social media platform.

“Musk owns 73.5 million Twitter shares, valuing his passive stake in the company at up to $2.9 billion based on the stock’s Friday close. The shares are held by the Elon Musk Revocable Trust,” Newsmax reported.

“Musk, a prolific user of Twitter, has over 80 million followers on the site since joining in 2009 and has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in regulatory scrutiny. He, however, has been critical of the social media platform and its policies of late and has said the company is undermining democracy by failing to adhere to free speech principles,” the report added.

Soon after the news on Monday went viral on social media, Musk tweeted: “oh hi lol.”

Many social media users reacted to the news, with Republicans supporting the move and others not too happy about it.

The move comes after Musk put up a poll asking his followers if they believed that Twitter did a good job of adhering to free speech principles.

“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” the 50-year-old asked. “The consequences of this poll will be important. Please vote carefully.”

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” he asked, following up, “Is a new platform needed?”

Over 2 million people voted in Musk’s poll, which found that 70% of users said they did not think Twitter was protecting free speech principles and rights.

The Ruble, The Dollar, and The Price Of Gold – Who Is Really Winning The Economic Chess Game?

By Michael Snyder

Russia has just made some moves that are going to change the global financial system forever.  When the conflict in Ukraine originally erupted, the U.S. immediately attempted to crash the value of Russia’s currency.  Those attempts were successful for a few days, but now the value of the ruble relative to the U.S. dollar is almost all the way back to where it was before the start of the war.  This has absolutely stunned many of the experts, because they thought that U.S. sanctions would absolutely cripple Russia.  So what happened?  Well, it turns out that the Russians have made some very savvy moves that have turned the tables on the Biden administration.

For one thing, Russia has started to demand payment in rubles when it sells natural gas to non-friendly nations.  A lot of countries in western Europe are quite upset about this, but they really have no choice, because they are exceedingly dependent on Russian gas.  So from this point forward, Western powers are actually going to be forced to help prop up the value of the ruble

Russia wants “unfriendly countries” to pay for Russian natural gas in rubles. That’s a new directive from President Vladimir Putin as he attempts to leverage his country’s in-demand resources to counter a barrage of Western sanctions.

“I have decided to implement … a series of measures to switch payments — we’ll start with that — for our natural gas supplies to so-called unfriendly countries into Russian rubles,” Putin said in a televised government meeting, adding that trust in the dollar and euro had been “compromised” by the West’s seizure of Russian assets.

Secondly, the Russians have decided that U.S. dollars will no longer be accepted as payment for anything that they sell to other nations.  Pavel Zavalny, the head of the Russian parliament, says that U.S. currency “has lost all interest for us”

Much more interesting was Zavalny’s main point, even though it has been mostly overlooked. If other countries want to buy oil, gas, other resources or anything else from Russia, he said, “let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency.”

In other words, Russia is happy to accept your national currency — yuan, lira, ringgits or whatever — or rubles, or “hard currency,” and for them that no longer means U.S. dollars, it means gold.

“The dollar ceases to be a means of payment for us, it has lost all interest for us,” Zavalny added, calling the greenback no better than “candy wrappers.”

This is huge, but it isn’t being discussed much by the corporate media in the United States.

The Russians aren’t just saying that they do not recognize U.S. dollars as the reserve currency of the world any longer.

That would be bad enough.

At this point, they are actually saying that they will no longer accept U.S. dollars as a form of payment at all.

Wow.

Thirdly, the central bank in Russia has fixed the value of the ruble to the price of gold for at least the next three months

The Russian central bank will restart buying gold from banks and will pay a fixed price of 5000 roubles ($52) per gramme between March 28 and June 30, the bank said on Friday.

But you won’t hear about this on CNN or MSNBC.

This is a move that could potentially change everything.

Once upon a time, the value of the U.S. dollar was tied to gold, and that helped the U.S. dollar become the dominant currency on the entire planet.

But then Nixon took us off the gold standard in the early 1970s, and things have gone haywire ever since.

Now Russia has linked the value of the ruble to the price of gold, and many believe that this is really going to shake things up

“I am reminded of what the U.S. did in the middle of the Great Depression. For the next 40 years, gold’s price was pegged to the U.S. dollar at $35. There is a precedent for this. It leads me to believe that Russia’s intention would be for the value of the ruble to be linked directly to the value of gold,” Gainesville Coins precious metals expert Everett Millman told Kitco News. “Setting a fixed price for rubles per gram of gold seems to be the intention. That’s pretty important when it comes to how Russia could seek funding and manage its central bank financing outside of the U.S. dollar system.”

Others believe that this move will create great instability in the global financial system.

For example, Tom Luongo is warning that the following could soon happen

  • 1: At $1550 per ounce the first order effect here is that is implies a RUB/USD rate of around 75. Incentivizing those holding RUB to continue and those needing them to bid up the price from current levels.
  • 2: This creates a positive incentive loop to bring the ruble back to pre-war levels.  Then after that market effects take over as ruble demand becomes structural, based on Russia’s trade balance.
  • 3: Once that happens and the RUB/USD falls below 75, then the USD price of gold rises, structurally draining the paper gold markets and collapsing the financial system based on leveraged/hypothecated gold.  Now we’re into the arb. phase @Lukegromen postulated w/ 1000bbls/oz.

Time will tell if Luongo is right or if he is wrong.

But without a doubt, things have not played out the way that Biden administration officials were hoping.

They had hoped that U.S. sanctions would crush the ruble, the Russian financial system and the entire Russian economy.

Instead, the Russians have been able to successfully prop up the value of the ruble and have made moves that directly threaten the dominance of the U.S. dollar.

No matter what happens with the ceasefire talks, I expect the United States and Russia to continue this economic conflict for the foreseeable future.

Ultimately, that will be bad for both of our nations.

And as history has shown, economic conflicts have a way of becoming shooting wars way too often.  Needless to say, we definitely do not want a shooting war with Russia.

Leaders on both sides should be attempting to find ways to achieve peace and to fix the tremendous damage that has already been done.

Unfortunately, everyone seems to want to continue to escalate matters, and that should deeply alarm all of us.

Canadian Authorities Find They Are Unable to Seize Bitcoin Donations Made to Freedom Convoy Protesters

Arsenio Toledo
March 25th, 2022

The Canadian government is attempting to seize all of the funds raised by the anti-Wuhan coronavirus (COVID-19) lockdown and vaccine mandate Freedom Convoy protesters. Unfortunately for them, they are having a hard time retrieving donations made through cryptocurrencies like Bitcoin.

The measures taken by Canada to suppress the Freedom Convoy protests are considered unprecedented for a supposedly democratic nation. This included the freezing of bank accounts of organizers and individual protesters and the seizing of donations made through crowdfunding websites like GoFundMe. (Related: Canadian government freezes single mom’s bank account after she donated $50 to the Freedom Convoy.)

This is why many organizers and supporters of the Freedom Convoy increasingly turned to cryptocurrencies like Bitcoin, believing that their detachment from fiat money and Big Tech platforms made them more difficult, if not impossible, to seize by authorities.

According to the Royal Canadian Mounted Police (RCMP) and other police services in the province of Ontario, the Freedom Convoy received 20.7 bitcoins ($915,050).

Around 14.6 bitcoins are already considered irretrievable, as they have already been distributed to 101 individual wallets through an intermediary.

According to cryptocurrency transaction trackers, 101 individual wallets received 0.144 bitcoins ($6,360) each, transferred through an intermediary. The roughly 5.964 bitcoins ($263,400) that remained were seized by Canadian authorities and confiscated.

Cryptocurrencies more resilient against government seizure attempts

Back in February, a Canadian judge ordered all digital wallets that held cryptocurrency donations meant for Freedom Convoy organizers to be frozen. Only one wallet provider, Nunchuk, refused the order.

According to Nunchuk, the company designed its systems to make it impossible to freeze users or prevent their assets from being moved or accessed.

“We do not hold any keys,” wrote the company. “Therefore, we cannot freeze our users’ assets. We cannot prevent them from being moved. We do not have knowledge of the existence, nature, value and location of our users’ assets. This is by design.”

Monique Jilesen, a lawyer involved in a class-action lawsuit against the Freedom Convoy organizers, said the government is still able to trace which wallets are receiving the donations. But she lamented the fact that as the bitcoins move from wallet to wallet, it gets harder to seize the funds.

“I presume, although I don’t know, in part, that was done in order to distribute the wallets,” she said. “They’ve taken one big wallet, moved it into hundreds of smaller wallets and then they hand the passwords to that smaller wallet to the ultimate recipient.”

The RCMP refused to comment on the case, but it said in a statement to CBC News that it still has the power to seize digital currency assets.

“As part of its capabilities and plans to tackle crypto crime and track crime-related transactions, the RCMP generally uses a variety of police procedures, as well as collaborating with applicable law enforcement partners,” read the RCMP’s statement.

But Mathew Burgoyne, a Canadian digital currency law expert, claimed that it will be much more complicated for the government to freeze and confiscate bitcoin wallets belonging to unknown holders.

“The limitation is that the crypto can simply be transferred to another wallet address that’s not frozen,” said Burgoyne. “And then another address that’s not frozen, and it can continue to be transferred in an effort to obscure the original source, or in an effort to remove the funds as much as possible from the wallet that was frozen.”

Watch this video as “Vaccine Choice Canada” hosts a panel of experts who attempt to answer the question: Is cryptocurrency the answer to the Canadian government’s penchant for freezing the bank accounts of COVID-19 lockdown and mandate protesters?

A Paradigm Shift in Global Finance, Gold, Silver, Uranium, and Grains Is Now Underway

By David Smith

The biggest financial paradigm shift in our lives is underway, and there’s no turning back. No one knows exactly what it’s going to look like going forward nor how we’ll be able to get there.

A working definition of “paradigm” taken from dictionary.com is that it is “a framework containing the basic assumptions, ways of thinking and methodology that are commonly accepted by members of “an operating system.” Think global to local and buy/ sell/exchange finance.

When a new paradigm starts being formed, an original set of rules has to be put together in order to operate successfully within it. Most of the rules that worked in the old paradigm(s) no longer apply. (An example would be trying to communicate with business associates and family by sending letters instead of email via the internet.)

During the new system’s “early days,” everyone using it is pretty much in the same boat as we all attempt to figure out what the rules are, how to best apply them, and what the results might be. Getting it right will hopefully enable us to be safer and more successful in our personal and professional lives.

The national and global financial systems were already under great stress due to mismanagement, indebtedness, the Covid response, and rising socio-political unrest.

To cite just two examples, the Canadian government’s response to the truckers’ drive to Ottawa, and the invasion of Ukraine by Russia and the West’s response to it have inflicted structural damage that could destroy the whole house of cards.

At minimum it is sweeping away operative assumptions most of us have followed in order to provide predictability, safety and financial growth.

This is not the place to argue the merits for or against one side or the other, but to state that the world is changing, and in many ways will never be the same.

Europe cannot survive without gas

Consider these data points:

  • The West’s freezing of Russian Central Bank’s $600B in assets is a first.
  • Exclusion of Russia from the SWIFT payment system of international trade.
  • Breakdown of the petrodollar system for oil purchases to allow yuan and gold.
  • Europe’s largest grain exporter, Hungary, ceasing all exports effective immediately.
  • Critical metals sources (REEs, copper, uranium, nickel, etc.) in limbo.
  • Cancellation of many billions, if not trillions of dollars in international contracts.
  • Canada freezing accounts of anyone contributing even $40 to an unapproved cause.
  • A gas supply cutoff from Nordstream 1 could bring German industry to a standstill.
  • The U.S. facing its highest inflation rates in 40 years.
  • The inevitable global drive toward “paperless” digital money and total privacy loss.
  • Gold and silver retail supply sources and premiums stressed as never before.
  • Most uranium and its processing coming from Kazakhstan and Russia respectively.

Anyone reading the above can list an additional dozen. The point being that the few remaining assumptions of our money being safe, accessible, and utilizable as we see fit have been shattered.

Neither the (hopefully) inevitable end of the war in Ukraine, nor effects of the Canadian truckers’ strike will restore the attributes most rational folks have held onto throughout what Germans refer to as Sturm und Drang (“storm and stress”) — trust in others, and confidence in the accessibility and value of our money.

Doug Casey, an investment and privacy doyen since the 1970s says,

“The only practical defense for the average guy is to accumulate gold and silver in personal possession… That’s because the only financial asset that’s not simultaneously somebody else’s liability is gold. Unfortunately, the average American neither understands gold (or silver) nor has any. Will that change in the future?”

Answer: See Mark Dice, in October 2021, offering passersby either a 100z silver bar (then worth around $2,000 but now closer to $3,000) or a candy bar.

The Message? The financial markets, including precious metals, are in sea change mode. Looking to the past is not going to enable you to thrive and survive facing tomorrow’s challenges. A glimpse of what to expect taken intraday from the Energies and Metals market action can be seen nearby:

Energies and metals market

Using 1979 as a guide to today’s more serious systemic risk profile suggests that we’ll soon see multiple dollar intraday silver swings; three-digit gold swings, and copper-now trading like a semi-precious metal, moving 20-40 cents/pound intraday.

Expect persistent two-way volatility in the entire commodities sector, along with ongoing inflation.

A few days ago, a two-day rise of 250% in the price of nickel shut down its trading on the LME. Wheat futures rose for several consecutive days at the expanded .85 cent/day limit. In a month, check your grocery store for the price and availability of grains.

Last week, crude oil futures touched $130/bbl. Care to bet against the possibility of $150 or even $200 this year?

Care to guess what this will do to today’s “officially-stated” 9.5% inflation rate (actually closer to 15-20%)? We’ve been seeing almost everything we use this year rise at least 15%, with +25% by no means an outlier.

Energies and metals market

The real danger going forward? An evolving built-in expectation by people that across-the-board inflation is here to stay…and it’s going to get worse. This will lead to a self-fulfilling prophecy as everyone “buys ahead” on anything they might need (think toilet paper buying on steroids), leading to hoarding for the sake of asset value protection and barter.

If folks are waiting for today’s “party carriage” — fiat — what David Morgan has long called “paper promises” to turn into a pumpkin of worth-less value, then be prepared to join the ranks of others in Lebanon, Turkey, Argentina, Mexico, Venezuela — and, yes, Russia, as you watch the nominal value of your greenbacks shrivel.

And if you’re not sure you “have enough”? Well, then don’t just stand there. Do something productive!

David H. Smith is Senior Analyst for TheMorganReport.com, a regular contributor to  MoneyMetals.com as well as the LODE digital Gold and Silver Project. He has investigated precious metals’ mines and exploration sites in Argentina, Chile, Peru, Mexico, Bolivia, China, Canada and the U.S. He shares resource sector observations with readers, the media, and North American investment conference attendees.