Thursday, May 22, 2014

The US Shale Oil Miracle Disappears

"Submitted by Chris Martenson via Peak Prosperity,
The US shale oil "miracle" has about as much believability left as Jimmy Swaggart. Just today, we learned that the EIA has placed a hefty downward revision on its estimate of the amount of recoverable oil in the #1 shale reserve in the US, the Monterey in California.
As recently as yesterday, the much-publicized Monterey formation accounted for nearly two-thirds of all technically-recoverable US shale oil resources.
But by this morning? The EIA now estimates these reserves to be 96% lower than it previously claimed.
Yes, you read that right: 96% lower. As in only 4% of the original estimate is now thought to be technically-recoverable at today's prices:
EIA Cuts Monterey Shale Estimates on Extraction Challenges
May 21, 2014

The Energy Information Administration slashed its estimate of recoverable reserves from California’s Monterey Shale by 96 percent, saying oil from the largest U.S. formation will be harder to extract than previously anticipated.

“Not all reserves are created equal,” EIA Administrator Adam Sieminski told reporters at the Financial Times and Energy Intelligence Oil & Gas Summit in New York today. “It just turned out it’s harder to frack that reserve and get it out of the ground.”

The Monterey Shale is now estimated to hold 600 million barrels of recoverable oil, down from a 2012 projection of 13.7 billion barrels, John Staub, a liquid fuels analyst for the EIA, said in a phone interview. A 2013 study by the University of Southern California’s Global Energy Network, funded in part by industry group Western States Petroleum Association, found that developing the state’s oil resources may add as many as 2.8 million jobs and as much as $24.6 billion in tax revenues.


Hot On The Heels Of Its China Breakthrough, Russia Set To Build Eight Nuclear Power Plants In Iran

"Before anyone suggests that all Russia is focusing on is China at any and all costs, consider that as we have been saying since 2012, perhaps just as important to Russia (and China) strategically is Iran which has already lashed out against the Petrodollar on numerous occasions in the past, not only for its vast oil reserves, but for its even more strategic location in the heart of the Persian Gulf.
To be sure, the Eurasian crescent of Russia and China would be made all that much stronger if the two nations had a toehold on the Straits of Hormuz, and were able to shut traffic - either tanker or military, with the US Fifth Fleet located in Bahrain - into the Gulf at their bidding. Which is why it was not surprising that not even 24 hours after Russia and China announced the "holy grail" energy deal, that RIA reported Russia is already preparing to lock in the Tehran regime with a deal to build not one but 8 (!) more nuclear power plants in the country.
Moscow may sign an intergovernmental agreement with Teheran this year to build eight new reactors for nuclear power plants in Iran, a source close to the negotiations told journalists Thursday.

Two reactors could be built at the Bushehr Power Plant and six reactors at other sites, the source said, adding that the talks were in their final stage.

Russian President Vladimir Putin said earlier this week that Russian-Iranian cooperation will continue despite international turbulence around Tehran. Putin said that Russia and Iran are not only neighbors, but also long-standing reliable partners.

Iran’s only nuclear power plant near Bushehr came online September 2011 and began operating at full capacity a year after. Moscow handed over operational control of the Russian-made plant to Iran in September last year.
A deal, it goes without saying, that would have China's explicit and implicit blessing.
And cue the US foreign department collapsing in an apopleptic fit of sheer powerlessness, if many, many "costs" for all those involved..."


Gold Price Manipulation Goes Mainstream On German TV - See more at:


Historic Agreement Signals Massive Shift In The World

"On the heels of China and Russia signing a historic $400 billion agreement, today an acclaimed money manager spoke with King World News about how this agreement signals a massive shift in the world.  Interestingly, Leeb also predicted gold would trade ten times the price we see it quoted at today.

Leeb:  “The big news today is obviously the signing of the $400 billion deal between Russia and China.  $400 billion is a big number, and this is probably the first of many deals that China and Russia will sign..."


Ex-White House Official On China/Russia Alliance & Gold

"Today King World News interviewed the former White House official who was Special Assistant to the President of the United States for Economic Policy and a former member of the U.S. President’s Working Group on Financial Markets, also known as the Plunge Protection Team, or PPT.  While in the White House, Dr. Philippa Malmgren served as financial market advisor in the White House and functioned as the direct liaison between the White House and the Federal Reserve.

Dr. Malmgren formerly headed the Global Asset Management business for Bankers Trust in Asia, out of Hong Kong, and was also Chief Currency Strategist for Bankers Trust Company, and former Head of Global Investment Strategy at UBS.  Dr. Malmgren was also a senior consultant to Deutsche Bank, and currently advises the largest sovereign wealth funds, hedge funds, and pension funds in the world.

Eric King:  “Dr. Malmgren, what about this historic deal that was signed today between Russia and China?”

Dr. Malmgren:  “For a long time Russia and China have wanted to displace the U.S. dollar as the main medium of exchange in the world, and to convert that exchange to renminbi and rubles instead.  So this is one more step along that path...."


Former White House Official On Spying, Inflation & Belgium

"...Eric King:  “Is there an alliance between Russia and Germany?”

Dr. Malmgren:  “I will say that because of the events in Ukraine, it’s changed the definition of who is your ally, and who is potentially your opponent?  In the old days we had the CIA and the NSA facing off against the Russian intelligence agencies.  They (the Russians) were the ‘opponent’ during the Cold War, but now there has been a breakdown of the relationship between the U.S. intelligence services and the German intelligence services.

Even further, there has been a breakdown between the U.S. intelligence services and the EU.  The EU has this new thing called ‘The Situation Center,’ or SITCEN.  And because of the realization that Germany is more aligned with Russia than not, there are now fears that EU intelligence services are more aligned with Russia than the West.  So that shift seems to have occurred.  It’s very subtle and I don’t think there will be a lot of talk about it, but it’s a real phenomena.”

Eric King:  “Does that present a danger for the West?”

Dr. Malmgren:  “There is nothing to stop two countries from both cooperating and spying on each other at the same time.  That can happen and often does.  (Laugher ensues).  But, yes, it’s going to make it a whole lot harder to come to a common consensus.  

For example, if Germany, which is the biggest economy in Europe other than the U.K., is increasingly aligned with Russia, and this is the country that the U.S. is finding it increasingly difficult to get along with, this could create serious tension.  Does this mean that Germany will sell U.S. Treasuries?  No.  But I think it’s interesting that Belgium has now emerged as the number one holder of U.S. Treasuries because they have such serious debt problems.  So the question becomes, who is behind the Belgian purchases of U.S. debt?”


Tuesday, May 20, 2014

China Signs Non-Dollar Settlement Deal With Russia's Largest Bank

"Slowly - but surely - the USD's hegemony is being chipped away whether by foreign policy faux pas, crossed red-lines, or economic fragility. However, on Day 1 of Vladimir Putin's trip to China it is clear that the two nations are as close as ever. VTB - among Russia's largest banks - has signed a deal with Bank of China to pay each other in domestic currencies, bypassing the need for US Dollars for "investment banking, inter-bank lending, trade finance and capital-markets transactions." Kirill Dmitriyev the head of Russia’s Direct Investment Fund notes, "together it’ll be possible to discuss investment in various projects much more efficiently and clearly," as Russia's pivot to Asia continues to gather steam.

As RT reports, Day 1 for Putin is going well...
VTB, Russia’s second biggest lender, has signed a deal with Bank of China, which includes an agreement to pay each other in domestic currencies.

“Under the agreement, the banks plan to develop their partnership in a number of areas, including cooperation on ruble and renminbi settlements, investment banking, inter-bank lending, trade finance and capital-markets transactions,” says the official VTB statement.

The deal underlines VTB Group’s growing interest in Asian markets and will help grow trade between Russia and China that are already close trading partners, said VTB Bank Management Board Vasily Titov.
But it's not just the banking relationships...
In the first day of a two-day trip to China Russia’s President Vladimir Putin said the two countries will be increasing their bilateral trade to reach a new level.

Our countries have done a huge job to reach a new historic landmark…. China has firmly settled in a position of our key trade partner,” Putin said.

Putin also said that trade turnover between Russia and China grew almost 2 percent during 2013 to reach about $90 billion.

“If we sustain this pace the level of bilateral trade of $100 billion will be reached by 2015and we’ll confidently move on,” Putin said.

Increasing investment cooperation is crucial, Putin added.


“Together it’ll be possible to discuss investment in various projects much more efficiently and clearly,” as Interfax quotes Kirill Dmitriyev the head of Russia’s Direct Investment Fund.
Nothing lasts forever... remember...

From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold

"Earlier today many were stunned when the historic, 117-year old, London Silver Fix announced that in three months it would no longer exist. However, silver is only one half of the world's two best known precious metals. Which is why we decided to take a long, hard look at that other fix: gold.
The reason for this particular inquiry is because in the aftermath of the rapid and dramatic departure of the world's largest bank by outstanding notional derivatives, and Europe's biggest bank by any metric, Deutsche Bank, from the precious metal fix, something felt out of place: almost as if the participants of the "fixing" process which for so many years took place in the office of none other than Rothschild on St. Swithin's Lane in London, were suddenly scrambling to disappear without a trace.
In conducting our research we hope to not only memorialize just who are these particular individuals who "fix" gold using nothing but publicly available information of course - because after all it is not as if they have anything to hide or fear - but to connect some of the very peculiar dots behind the scenes of what to some, is the original, and most manipulated market in history - that of gold.
* * *
First, as has been reported previously, when Deutsche departs, this will leave only four gold fix members, namely, Barclays, HSBC, Société Générale (SocGen) and Scotiabank, and since only two silver fixing entities remained, HSBC and Scotiabank, the traditional silver price discovery mechanism was shuttered. The Fixings are conducted twice daily at 10:30 am and 3 pm London time and are used widely by all participants in the precious metals industry for benchmarking prices and valuations and also as trading price reference points.
The gold and silver fixings are organised through UK limited liability companies of which the member investment bank traders are directors. Before the resignation of Deutsche Bank, there were five directors and five alternate directors of "The London Gold Market Fixing Limited" and three directors and three alternate directors of "The London Silver Market Fixing Limited."
Earlier this year on 16th January, German financial regulator BaFin stated that possible manipulation of currency and precious metals markets could be more serious than the manipulation that has already been proven in the Libor rigging scandal. On the very next day, January 17th, Deutsche Bank announced that it was withdrawing from both the gold and silver fixings in what it called "a scaling back of its commodities business."
Needless to say, in aftermath of the termination of the silver fix, and now that there are significant regulatory and litigation spotlights on the Fixings, and one major member exiting, some are wondering: will the demise of the Silver Fixing undermine the rationale for retaining the Gold Fixing? And what will replace it.
* * *
We don't have the answer. What we do know is that using public records such as the British Companies House database and other public databases, one can find not only all the available information on the London Gold Market Fixing Limited company before it too disappears into thin air, but to get a sense of the kind of people it employs.
Below is the full list of 10 most recent directors and backups of the Gold Fixing:..."


De-Dollarization: Russia Is On The Verge Of Dealing A Massive Blow To The Petrodollar

"Is the petrodollar monopoly about to be shattered?  When U.S. politicians started slapping economic sanctions on Russia, they probably never even imagined that there might be serious consequences for the United States.  But now the Russian media is reporting that the Russian Ministry of Finance is getting ready to pull the trigger on a "de-dollarization" plan.  For decades, virtually all oil and natural gas around the world has been bought and sold for U.S. dollars.  As I will explain below, this has been a massive advantage for the U.S. economy.  In recent years, there have been rumblings by nations such as Russia and China about the need to change to a new system, but nobody has really had a big reason to upset the status quo.  However, that has now changed.  The struggle over Ukraine has caused Russia to completely reevaluate the financial relationship that it has with the United States.  If it starts trading a lot of oil and natural gas for currencies other than the U.S. dollar, that will be a massive blow for the petrodollar, and it could end up dramatically changing the global economic landscape..."


Roubini : We Are in the beginning of Credit Bubble

"“All the risky things that were happening back in ’06 and ’07 are back again to the same level, if not more,” Roubini told Fox Business Network (FBN). “So we are in the beginning of a credit bubble, but just the beginning. A year or two from now, with the policy rate still barely above zero, the risk is that it becomes a full-fledged bubble.”
Roubini warned that if the Fed ends its easing initiatives then a bond market crash could occur and eventually destroy the economy: “If you exit too late, you create a financial bubble. That’s the biggest challenge for the Fed in the next three to four years.”


ECB - "Gold remains an important element of global monetary reserves"


19 May 2014

ECB and other central banks announce the fourth Central Bank Gold Agreement

The European Central Bank, the Nationale Bank van België/Banque Nationale de Belgique, the Deutsche Bundesbank, Eesti Pank, the Central Bank of Ireland, the Bank of Greece, the Banco de España, the Banque de France, the Banca d’Italia, the Central Bank of Cyprus, Latvijas Banka, the Banque centrale du Luxembourg, the Central Bank of Malta, De Nederlandsche Bank, the Oesterreichische Nationalbank, the Banco de Portugal, Banka Slovenije, Národná banka Slovenska, Suomen Pankki – Finlands Bank, Sveriges Riksbank and the Swiss National Bank today announce the fourth Central Bank Gold Agreement (CBGA).

In the interest of clarifying their intentions with respect to their gold holdings, the signatories of the fourth CBGA issue the following statement:
Gold remains an important element of global monetary reserves;
The signatories will continue to coordinate their gold transactions so as to avoid market disturbances;
The signatories note that, currently, they do not have any plans to sell significant amounts of gold;
This agreement, which applies as of 27 September 2014, following the expiry of the current agreement, will be reviewed after five years.

Media enquiries should be addressed to Wiktor Krzyżanowski on +49 69 1344 5755.

European Central Bank
Directorate General Communications and Language Services
Kaiserstrasse 29, D-60311 Frankfurt am Main
Tel.: +49 69 1344 7455
email: | website: | Media contacts

Reproduction is permitted provided that the source is acknowledged."


It’s Far Worse Today Than At The Beginning Of 2008 Collapse

"With a non-stop flow of propaganda from Western mainstream media outlets, today Michael Pento warned King World News that despite the propaganda the situation in the world is actually  far worse today than it was at the beginning of the 2008 collapse.  Pento also includes an ominous warning at the end of his piece.

May 17 (King World News) - It’s Far Worse Today Than At The Beginning Of 2008 Collapse

Each year since the recession officially ended in the summer of 2009, Wall Street and Washington have tried to dupe investors into believing that a second half recovery was in store for the stock market and economy. But this promise has failed to be fulfilled each year, as annual GDP growth has not reached north of trend growth (3 percent) since 2005. But with the hope that investors have a perennial case of amnesia, these cheerleaders are yet again trumpeting the illusion that economic growth is about to surge.

The year 2014 didn’t start off so well for those who desperately want investors to be convinced that the economy has healed from the Great Recession...."


The Seeds For A Much Bigger Crisis Have Now Been Sown

"As the world seems to hurtle from one crisis to another, today a man out of Europe who has been extremely accurate with his calls on the gold market sent King World News a fantastic piece which warns that the seeds for a much bigger global crisis have now been sown.  Below is the exclusive KWN piece by Ronald-Peter Stoferle of Incrementum AG out of Liechtenstein.

May 18 (King World News) - The Seeds For A Much Bigger Crisis Have Now Been Sown

Taking out new debt seems to have an increasingly counterproductive effect. It seems as if the marginal return on GDP per additional unit of debt is gradually declining. This means that economic output cannot any longer be stimulated by taking out additional debt. As soon as the dose of debt cannot be stepped up anymore or as if this course of treatment has to be discontinued altogether, the withdrawal effects will be painful. Gold should come out of this situation on the winning side....

Excessive debt causes the room available to the government to shrink, because debt service eats up a growing portion of public spending. David Hume described this scenario in his 1752 essay “Public Credit.” Excessive debt leads governments to pawn their future revenues and to lapse into faintness and incapacitation. A number of concrete examples substantiate this notion: In Germany, the three cost segments of social benefits, public sector pay, and interest and redemption of debt account for almost 75 percent of the federal budget. This means that only a quarter of tax revenues provide room to maneuver.

“The greatest shortcoming of the human race is our inability to understand the exponential function” Albert Bartlett

The following chart shows the increase in dynamics. Public debt today is more than 5,000 times that of 1913, when the Federal Reserve was established. On the following chart we can see that “total credit market debt owed” would double every decade. We have recently seen some sideways consolidation, but if this pattern continued, the United States would be faced with a total credit market debt of $107 billion in 2012.

“Problems cannot be solved by the same rationale that created them.” Albert Einstein..."