Global Currency Reset: Will Illinois be the epicenter of the upheaval?

With a majority of global stock market indices closing the last week of July at record highs, the bull run seems to have entered its final phase. While NSE Nifty index reached a historic landmark of 10000 during the week, Dow Jones Index inched closer to the 22000 mark. The stock market rally in the US has now run for over 7 years on the back of Quantitative Easing (QE) support from the FED. Finally, the bulls are now showing signs of fatigue indicating that the final top for this bull run is near, although the indices have already run up far ahead of economic fundamentals.

The unprecedented rally has been supported by an orchestrated liquidity push by major Central banks led by the US FED and supported by Bank of England, European Central Bank and the Bank of Japan. In a clear departure from the past, most of these Central banks today hold a major share of the Govt debt and the equity stocks in their respective countries, which is the primary reason for the non-stop bull run in world markets. It is not surprising that these Central banks are outside the control of the respective Governments. and are controlled by Jewish Community. In addition to the Central banks, top investment banks in USA and Europe also hold a substantial chunk of equity assets and have over leveraged positions in the F&O segment of equities as well as commodities. I was surprised to learn that one of the large US banks enjoys a leverage of 349:1 in the markets. One can well imagine what would be the plight of these banks if there was a sudden fall in the markets.

Now let us come to the issue of 'Global Currency Reset'. It would be interesting to understand the history of the 'Reserve Currency'. A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves. The dominant reserve currency has been changing over the past years. The Dutch Guilder emerged as a de-facto reserve currency in the 18th century due to dominance of trade by the Dutch East India company. By 1860, followed by the industrialization in UK, majority of the trade took place in British Pounds which became the Reserve currency during that period and it was based on the Gold standard. The Gold standard fell after the great depression of 1929. After WW II a formal currency system based on the Bretton Woods accord was put in place and US Govt. guaranteed a fixed rate of gold in lieu of US$, thus making US Dollar as the Reserve Currency. However, the Gold backed currency system was discontinued in 1971, but US Dollar continued as reserved currency in its new avatar as 'Fiat Currency' not backed by gold. In order to continue its status as the Reserve currency US Government made it mandatory for nations to do oil trade in US Dollars only.This led to the emergence of the term 'Petro Dollar', which continues till date. But there have been chinks in the armour of US as many countries have now decided to trade in their own currencies, the biggest such block being led by Russia and China, which includes India (BRICS). This is the reason why the search for an alternate global currency is on.

London based 'Economist' magazine came out with an interesting cover story 30 years ago, in its issue dated 1st September 1988, titled 'Get ready for a World Currency by 2018', they named this currency 'Phoenix'. And it is not a mere coincidence that Economist is owned by the Rothschild group which also have a substantial stake in major central banks world over. Does this mean that they had envisaged the end of the 'Fiat Currency regime' 30 years later, and will they slowly bring down the US economy to usher in the new era. This seems to be the most logical explanation of the impending crash of the debt ridden US economy and with it the 'Petro Dollar'.as a reserve currency.

Now another important issue: About the timing of the currency reset and how Illinois could be at the epicenter of this reset? Illinois is the 5th most populous and 25th largest state in USA. Chicago is a famous city in this state. Illinois has been in the news for quite some time due to its financial woes, and is on the verge of bankruptcy. It has not presented a budget for the past 2 years, and has a huge accumulated debt and $15 billion unpaid bills. The plight of at least dozen other states in USA is also far from good. How Illinois could trigger the great collapse? The answer to that lies in a celestial phenomenon that is going to happen in US on 21st August 2017, when a total solar eclipse will occur and the path of the eclipse would divide the USA into two parts. Many astrologers believe that the planetary configurations are not favourable for the USA and its President during this period. Some of the vulnerable spots on the path of the eclipse are the West coast of US, the Yellowstone national park, and of course South Illinois, all of which fall on the path of the eclipse. Interestingly USA came into existence after a total solar eclipse was seen in USA in 1776. Interestingly another total solar eclipse will be seen over USA on 8th April 2024, and the paths of the 2 eclipses will overlap each other at Carbondale (also known as Little Egypt) in South Illinois. This makes for a deadly combination: Natural calamity may strike US in the form of Tsunami on the west coast or Volcanic eruption at Yellowstone, combined with economic collapse of 'Illinois'. The effects of the Eclipse are normally felt for several weeks after the event.

A global Currency reset is now inevitable. Can the BRICS nations play an important role in providing an alternative global currency? The BRICS summit at Xiamen, China from 3-5 September could play an important role. We can only pray that the transition to a new World Economic order is peaceful and without much destruction. 

Markets hit new highs: 'Make hay while the sun shines'

On Thursday 13th July 2017 BSE Sensex scaled a new landmark: Mount 32000. Entire media went Gaga over the event, every newspaper carried the news as their headline. Maybe the media will have another event to celebrate soon: NIFTY hitting 10,000: it is only 100 odd points shy of the coveted mark. Now a flashback: NDA Govt. under PM Modi presented its first budget on 28th February 2015 and the Nifty touched 9129 that day, which became a headline the next day. We all know what happened thereafter. Again when NDA presented its 2nd budget on 29th February 2016, Nifty did a U-turn and touched 6826 three days later. The newspapers carried this as their headline on 4th April 2016. Rest is history: Nifty in July 2017 is at 9900 grabbing another headline. I need not tell you what is going to happen next: because history repeats itself.

That is why the title of this post is 'Make hay why the sun shines'. I had heard stock markets being labelled as 'Satta Bazar' or 'Casino' but never believed that stuff. But the way stock markets are being manipulated around the world today, we need to rethink. The major Central Banks around the world (US FED, ECB, BOJ etc) have colluded with one another to create a slush of liquidity to lift stock markets to unsustainable levels, having total dis-regard to the principles of economics. The artificial money created by Central banks has not helped the poor sections of society, instead they have created a greater rich-poor divide. They have also helped their respective Governments to pile up excessive debts which they are unable to service. Their game plan is now about to end, which will lead to the greatest asset bubble burst in history and the ensuing stock market collapse world over.

A global currency reset is inevitable: US Dollar will cease to be a global currency. We all know that the US economy is in a massive debt trap, so what will cause the bubble to burst. Today US is passing through one of the greatest political crisis in its history. The divide between the Democrats and Republicans has reached dangerous proportions. Democrats who thought that the post of President of USA was their right have not been able to accept Trump at the helm of affairs. Several stories are being cooked to implicate Trump and his family, and they might even try to get him impeached. On the other hand Trump is also collecting evidence against Obama and Hillary, and may open criminal investigations against them. All this does not auger well for an economy that is under serious threat of exploding. As I have mentioned in my previous post several US states are on the verge of Bankruptcy. US Dollar is fast losing its grip as a 'Reserve currency' with as many as 23 countries bypassing US Dollar as a medium of payment for international transactions. The fall of the Dollar, and along with it the Equity markets is a foregone conclusion.

What could be the alternative to the US Dollar? The Euro zone has its own share of problems, so Euro may not be looked upon as a viable alternative. A viable alternative can be provided by the BRICS (Brazil, Russia, India, China, South Africa) nations. Together these nations account for 43% of the world population and about 25% of the world GDP, which is equal to the GDP of USA. They have already launched their own alternative to the IMF called the New Development Bank (BRICS Bank). It would be in the interest of India & China to strengthen the BRICS agenda rather than fight over petty issues. The 9th summit of the BRICS nations is scheduled to be held at Xiamen, China in September 2017. This would be an opportunity for this group to provide global leadership in the aftermath of the US Dollar collapse.

Now coming to the markets and the behaviour of various asset classes in the aftermath of the global crisis. This is the last opportunity for the investors to book profits in the equity markets, as the markets may start correcting within the next couple of days. We are looking at a 40-50% erosion in US stock prices, which will lead to a correction of up to 20% in Indian markets as well. The crisis may also lead to softer energy prices, which will be good for countries like India. That is why we shall fall much less as compared to western markets. The best investment bet in these troubled times would be precious metals (Gold & Silver). The prices of Gold & Silver have been artificially suppressed by big US banks operating in the derivatives segment, whereas the physical demand for these metals continues to be high. Gold and Silver touched record highs of $1900/ ounce and $34/ ounce in 2011, and since then they have corrected substantially. They are likely to regain these levels, and even beyond, within the next one year. This translates into a return of 55% and 110% respectively from the current levels. Investors are advised to switch a part of their investments into Gold ETFs or Silver futures to make a killing in the emerging scenario. Please enjoy the last leg of the global rally in equity markets and await for the turn of the cycle, which may kick in sooner than most people expect.