Russia Threatens US with Nuclear War
Russia has continually sent signals to these Western leaders that it can wage nuclear war. Russia keeps sending bombers into strategic places that can take out key cities in the USA and Europe. Even during the last NATO summit/Golf resort trip, two aircraft took off from an air base in western Russia, just east of the Russian city of Saratov. The aircraft, Tu-95 strategic bombers code-named Bear by NATO, flew northwest, skirting Iceland, Greenland, and Canada. They then turned on a heading straight toward the United States. This was what was called a “launch box” maneuver where just off the coast of the USA they would fire nuclear-tipped cruise missiles towards American cities and military bases.
These provocative flights were timed to a NATO summit that was attended by President Obama in Wales. I have warned from the outset that Ukraine should have been divided and the Russian ethic regions should be surrendered to Russia. I restated this position just last August. I recommended that position since the start of the year because this was the ONLY way to defuse the crisis that would get worse and has. Let the people return as part of Russia. In Ukraine, they have always looked down on the East as sort of the uneducated hicks anyway. Why endanger the entire world over such a stupid issue?
Had the agreement been reached to simply split the nation, then there would not have been the killings and death toll we see now. Instead of paying for bailouts, simply afford the means to relocate people from the East who wanted to remain outside of Russia. This conflict is stupid. The is like waging nuclear war because Key West, Florida calls itself the Conch Republic that wants to secede from the USA.
What difference does it make is the rural backward region of Ukraine prefers Russia since they speak Russian. Let the people decide their own fate. Haven’t political leaders caused more wars, pain, and bloodshed trying to carve up the world into territorial fiefdoms?
I Welcome Our New CEO – Ashley Warren
I am pleased to introduce Ashley Warren who has taken up the position of CEO of Princeton Economics International, Ltd. Ashley has the TRADING experience globally and has been on the institutional side of our client base attending our conferences from Tokyo to Berlin and everywhere in between. Ashley will also contribute to the Institutional Blog. Those working for institutions know how frustrating it can be unable to speak as part of your employment contract. Ashley is excited for the first time to be able to speak out given the stark differences in perceptions between the trading side and board management in banks. Ashley is joining the team at a critical moment when the world is going to need people withREAL experience – not theory and sophistry
I hereby proud introduce – Ashley Warren
Ashley Warren – CEO of Princeton Economics International
I had always thought that volatility was chasing me around the globe but after reading Martin’s articles for over twenty years, I have come to realize it was just the natural flow of money. As a trader I have never been one for blindly following the herd and have always looked for the facts. Now, with the imminent launch of Socrates, the facts will be presented to me!
My trading career started back in 1979 when I joined C Czarnikow in Mincing Lane in the City of London. As a trainee Futures Trader looking at Soya, Grains and the soon to be most volatile market in the world, “Potatoes”! I cut my teeth on volatility when the Potato market traded from £22 per ton up to £179 per ton because of something called the Colorado Beatle. It was certainly a case of in at the deep end for me but I say even now, “a fantastic apprenticeship”. After two years I was approached by Cargill to lead Potatoes, Grains and the BIFFEX (Baltic International Freight Futures Exchange) trading. After a short spell in Sydney, Australia having been trading everything from Wheat, Gold, BAB’s and Australian All Ordinaries I was ready for my next market.
Volatility continued to follow me as I joined Nomura in early 1987 to trade US$ Fixed-Income Bonds. My first experience trading bonds but again, there’s nothing like being thrown in at the deep end! Things went very well and I was promoted to Associate Director to manage the prestigious Yen Bond desk, in 1990, just when things were getting interesting.
After six years with Nomura I was recruited by (the then) Paribas to create a team and build a Yen desk in London. Known as the ECU house of its day, Yen for them was non-existent but I have never been one to decline a challenge.
Despite living in Tokyo but with Japanese 10yr yields trading down to just 77 basis points the volatility had returned to Europe and it was time for me to return home. Upon my return to London I rejoined Paribas and was asked to develop the Jumbo Pfandbrief desk (German Mortgages) working between Germany and London. By then, knowing credit markets well, put me in a good position for when the Russian default hit in 1998. As I was, by then, an avid reader and investor of Marty’s work the Russian default was no surprise to me. The success of that summer led me to manage the long end of the European government bond market, where I stayed to eventually complete 11yrs with BNP Paribas on and off.
Between 2003 and 2010 I moved into Emerging Markets still trading but also managing everything from Credits, Government Bonds, CDS, Swaps and FX. Again, volatility followed me around whilst running the Emerging Markets desk over the Lehman crisis. It was exposure to Emerging Markets that eventually led me to the Middle East as Head of Trading for ADCB in 2010.
I am not so sure I could have survived the past thirty-five years trading the financial markets had I not been supported for the last thirty by my wife, Maureen. They say traders are arrogant, self-opinionated, impatient and generally have an overly self-righteous opinion – I must be an awesome husband!
I have now just accepted my biggest challenge yet but with thirty-five years of managing risk, people and businesses I know I am definitely ready. Princeton Economics International Ltd, as the financial arm of Armstrong Economics, has much to offer both in terms of support and leadership. It is my privilege to take the helm as CEO and I intend to lead this company forward to a bright and healthy future with hopefully not too much volatility.
Polish Pension Funds Seized by Government – Who is Next?
Poland seized private pension funds and have mandated those money to be invested in government bonds last February. Beware – this is coming to a theater near you. The Polish government seized $51bn of privately run pension funds and transferred them back into “state control” in a dramatic reversal of a reform that central and eastern European countries had once embraced to help develop capital markets after the fall of communism.
Warsaw shifted the assets, which are made up of Polish government bonds accounting for more than half the amount under private fund management and the benefit obligations back into the state-run pay-as-you-go component of the scheme. Polish pension funds OFEs transferred PLN 3.3 bln to social security ZUS in preretirement asset shift. Sources say they have some up $1 billion short of expectations. Guess people withdrew?
ZUS has now received its first money from OFE in pre-retirement asset shift. Based upon
preliminary calculations, the value of transferred funds last week measured PLN 3.3 bln. More precise data will eventually come out. Nevertheless, according to the changes to the pension system introduced last year, each OFE member will have their assets transferred
from a pension fund to ZUS gradually over the 10 year pre-retirement period. Government claimed that such gradual mechanism would largely protect pension savers against
fluctuations on the capital markets.
preliminary calculations, the value of transferred funds last week measured PLN 3.3 bln. More precise data will eventually come out. Nevertheless, according to the changes to the pension system introduced last year, each OFE member will have their assets transferred
from a pension fund to ZUS gradually over the 10 year pre-retirement period. Government claimed that such gradual mechanism would largely protect pension savers against
fluctuations on the capital markets.
This is another strategy we have warned is on the drawing boards. One way even the USA can break its dependence on foreign capital is to stuff the private pension funds by law with government bonds. That would remove dollars from China’s hands. However, there is a huge global problem that emerges. The world NEEDS the dollar as its reserve currency. There is nothing else to replace it. Central banks have been trying to diversify buying equities for the first time in history. This is why I warn that eventually we could see the Dow go exponential reaching 40,000 as the alternative to dollar denominated debt, but the world will then be forced to create a new one world reserve currency.
Until then – beware. Poland and Argentina has gotten away with the seizure of pension funds. All nations are eyeing up this potential.
Political Upheaval is Worldwide – Poland Next
In Poland, here too we see a political upset in the wind. The opposite party of Jaroslaw Kaczynski is in a position to overthrow the Prime Minister. Around the world, we are witnessing the same trend. Whoever is in power is being tossed out.
US Congress 1929
The Democrats lost huge this time. The Republicans control the house now with its largest majority since 1928. This is not so much a confidence vote in Republican virtues, but a negative vote against the Democrats and Obama. This is the same trend we are seeing worldwide. Whoever is in power is on their way out. Shame the people are not allowed to vote for those on the EU Commission for they would be thrown out if not tarred and feathered.
Of course the Democrats are preaching doom and gloom. They argue that the last time Congress owned Capitol Hill was 1928 and look what happened after that. Of course, this is again sophistry. The Great Depression began with a banking crisis in Austria and spread as a contagion around Europe. Look to the world – sophistry blames domestic events for everything as if the world did not exist.
Gold & Future – Looking Brighter?
The emails now favor those who are reformed gold “investors” with still some diehard believers in fiat, manipulations, and paper gold. Futures have existed since Babylonian times and have had the exact opposite impact as claimed – they expand liquidity and thus make that market more suitable for trading be it stocks, bonds, or commodities.Gold is NOT systemically manipulated for it was, there would be no point in even buying it. And as for fiat, all money has been fiat and that did nothing to prevent gold from declining for 19 years between 1980 and 1999. These claims have merely amounted to clever sophistry, which have cost the unsuspecting public untold amounts of losses since the recommendations are pour everything into gold and keep holding. You should NEVER put all your eggs in one basket.
That said, gold has its rightful place in every portfolio and it will come into its own in the due course of time. Gold is part of the global array of private assets v public. There is a difference between institutional and individual investment. Institutions cannot buy gold bullion for they need regular income. Those entities in the business or cannot lend money for interest based upon religion, lease gold to generate income of a fixed asset. This is not some sinister plot.
Buying gold coins and salting them away is possible only for an individual. So in this shift of assets from public to private, we will see the stock market eventually rally WITH gold. Then you will see this is a panic in public assets that we face going forward. So yes, buying COINS rather than buying bullion is a good strategy.TIMING is on your side and patience is a virtue.
Gold greatest deterrent has been the sophistry spun around it by the Gold Promoters that act more like use car salesmen. If you do NOT understand the nature and truth about any investment, you will not have the confidence to trade.EVERYTHING is a trade. There is a absolutely NOTHING that is ever a buy and hold forever – not even real estate.
Gold is NOT the hedge against inflation. Money Supply means NOTHING when the currency is the RESERVE currency for the demand for dollars is global beyond the territorial boundaries. Watching the fed expand money supply did nothing for gold because the dollar is the world’s currency no matter how many countries try to circumvent that with trade deals. Trade is less than 10% of capital flows – so big deal.
Blaming others for gold’s decline is just an excuse. You are wrong – not the world. Gold’s decline is perfectly on schedule with the world economy. Understand the trend and you do not need excuses. The future for gold looks very bright. If we just knock off all the BS that prevent intelligent people from considering gold who can see through the nonsense, then a viable market will emerge on the other side. Then and ONLY then will gold exceed the 1980 high in real terms proving it has not even been the hedge against inflation. Gold is the hedge against government and this is a Private Wave – its TIME will come. The only question is WHEN. That is outlined in the International Precious Metals Report.