Category: Book Quotes of the Day

When they have been living on credit beyond their means the debt overtakes them. If they tax themselves to pay it, that means going back a little. If they repudiate their debt, that is the end of their credit. In this dilemma the ideal solution, so recommended even to the creditor, is more credit, more debt.

It’s fascinating, isn’t it? China buys up more than 80 percent of the world’s gold supplies in the first quarter of 2017, gold prices barely rise, and Bloomberg, Reuters, and the Wall Street Journal don’t breathe a word of it. But China bids up the world’s avocado supplies and the Western mainstream financial press is all over it…. I smell a Pulitzer here for this groundbreaking work on Chinese avocado demand!

We are not months into this trend, Luke. China was admitted to the WTO fifteen years ago. The Euro began trading seventeen years ago. The US financial system was shown to be made of “balsa wood and baby tears” eight years ago. China and Iran began transacting oil in CNY four years ago. Global FX reserves peaked and began falling eighteen years ago. China and Russia began transacting oil in non-USD nearly two years ago.

Because Wall Street is generally a young man’s game, and as I said before, young men generally don’t learn anything from history until it happens to them.

To oversimplify, the petrodollar system meant that the Americans got 10-15 percent of the world’s oil for free, every single day, and in return, the Emerging Markets got US production capabilities, access to US consumer markets (into which EMs indirectly supplied the lending capital), and a great big pile of US Treasury bonds.

Look at this article: In 2015, the NY COMEX gold exchange settled less than fifty tons of physical gold all year. In contrast, on average the Shanghai Gold Exchange settled over fifty tons of physical gold every single week of 2015. If you want physical gold, which exchange is more credible?

Perhaps the most recent one came at the end of 2015, when your US Congress repealed the forty-year-old US crude oil export ban.

Tell me, why would the US ever export crude oil for dollars when from 1973-2014, the US could simply print dollars for ever-growing amounts of imported oil? That makes no sense using “the old lens.”

Somebody once said, “Events can go from impossible to inevitable without ever stopping at improbable.”

The nature of the game as it is played is such that the public should realise that the truth cannot be told by the few who know.

The speculator’s deadly enemies are: Ignorance, greed, fear and hope.