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Update: In a televised address to the nation, Greek PM Alexis Tsipras assured Greeks that their deposits are safe despite an upcoming bank holiday and despite the fact that Greek stocks will not open for trading on Monday. Tsipras also said Athens has re-applied for a bailout extension and urged Greeks to "remain calm" in the face of what is sure to be a turbulent week.
  • GREEK PRIME MINISTER SAYS GREEK PEOPLE SHOULD REMAIN CALM
  • GREEK PM: BANK OF GREECE PROPOSED BANK TRANSACTION RESTRICTIONS
  • GREEK PRIME SAID GREECE RE-APPLIED FOR BAILOUT EXTENSION
  • GREEK PRIME MINISTER SAYS DEPOSITS ARE COMPLETELY SAFE
Earlier:
Despite the reassurances from any and all elected (and unelected) officials, given the run on bank ATMs in Greece has turned into a stampede, it is not surprising that:
  • GREEK BANKS TO REMAIN CLOSED FROM MONDAY FOR A WEEK: PIRAEUS BANK CEO
  • PIRAEUS BANK CEO THOMOPOULOS SPEAKS TO REPORTERS IN ATHENS
The announcement was made when Piraeus Bank CEO Anthimos Thomopoulos told reporters after a meeting of the government’s financial-stability panel on Sunday. The launch of capital controls just as the Greek summer tourism season starts, is sure to be the final crushing blow to Greece, whose entire economy will now grind to a halt.
At the same time, Finance Minister Yanis Varoufakis said an announcement would be made after a Cabinet meeting due to start imminently in Athens. Which is ironic considering just earlier today Varoufakis said he is opposed to the "very concept" of capital controls:

Banks will remain shut until at least after a July 5 referendum called by Prime Minister Alexis Tsipras on whether to accept austerity in exchange for a European bailout, Kathemerini newspaper reported, citing unnamed sources.
Reuters is also reporting that the Greek stock market will not open on Monday (leaving us wondering just what that will do to the Greek ETFs liquidity in US markets) as hedgers scramble to protect un-closable losses wherever they can.
More from Reuters, which reports that "Greece's banks, kept afloat by emergency funding from the European Central Bank, are on the front line as Athens moves towards defaulting on a 1.6 billion euros payment due to the International Monetary Fund on Tuesday."
The ECB had made it difficult for the banks to open on Monday because it decided to freeze the level of funding support it gives the banking system, rather than increasing it to cover a rise in withdrawals from worried depositors.

Amid drama in Greece, where a clear majority of people want to remain inside the euro, the next few days present a major challenge to the integrity of the 16-year-old euro zone currency bloc. The consequences for markets and the wider financial system are unclear.

The head of Piraeus Bank, one of Greece's top four banks, speaking after a meeting of the country's financial stability council, said banks would be shut on Monday while a financial industry source told Reuters the Athens stock exchange would not open.

"It is a dark hour for Europe....nevertheless from where we're sitting we have a clear conscience," Greek Finance Minister Yanis Varoufakis said earlier in an interview with the BBC.

Greece's left-wing Syriza government had for months been negotiating a deal to release funding in time for its IMF payment. Then suddenly, in the early hours of Saturday, Tspiras asked for extra time to enable Greeks to vote in a referendum on the terms of the deal.

Creditors turned down this request, leaving little option for Greece but to default, piling further pressure on the country's banking system.

The creditors want Greece to cut pensions and raise taxes in ways that Tsipras has long argued would deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.

Pro-European Greek opposition parties have united in condemning the decision to call the referendum on the bailout terms, but people on the streets of Athens backed the decision.

"I want him (Tsipras) to knock his fist on the table and to say 'enough!'," said resident Evgenoula.

Many leading economists have voiced sympathy with the Greek government's argument that further cuts in spending risk choking off the growth which would give Greece some prospect of servicing debts worth nearly twice its annual national income.

The IMF has pressed European governments to ease Athens' debt burden, something most say they will only do when Greece first shows it is trimming its budget.

Long lines formed outside many ATMs on Sunday, including some of 40 to 50 people outside some in central Athens.

The Bank of Greece said it was making "huge efforts" to ensure the machines remained stocked.
The German foreign ministry said tourists heading to Greece should take plenty of cash to avoid possible problems with local banks and some tourists said they were joining the ATM queues.
"I am trying to go over to the bigger banks," said Cassandra Preston, a Canadian tourist. "I am here for another month and I would like to make sure I have some cash on me."
* * *
In other words, Greek speculators (and of course, those depositors who were dumb enough to still have money in local banks) just got CYNK'd - you can buy stocks all you want, but if the market is about to fall out of the bottom, you simply are not allowed to sell.
Which, incidentally, is coming to every centrally-planned, banana "market" near you...
Author: Elite E Services
Posted: June 28, 2015, 9:17 pm
Update: Greek PM Alexis Tsipras has announced a referendum in a televised speech to the nation after another day of fractious negotiations with creditors closed without a deal.
The dramatic move comes after Athens rejected a proposal from the troika aimed at delivering some €16 billion in aid to Greece as part of an extension of the country's second bailout program.
  • GREECE'S TSIPRAS SAYS CREDITORS POSED ULTIMATUM TO GOVT
  • GREECE'S TSIPRAS SAYS CREDITORS PROPOSALS ARE AGAINST EU RULES
  • TSIPRAS SAYS CREDITORS AIM TO HUMILIATE GREEK PEOPLE
  • TSIPRAS SAYS WILL CALL REFERENDUM ON GREEK DEAL WITH CREDITORS
  • TSIPRAS GREEK REFERENDUM WILL BE HELD ON JULY 5
  • TSIPRAS SAYS HE NOTIFIED MERKEL, DRAGHI ON REFERENDUM PLAN
  • TSIPRAS SAYS GREECE IS, AND WILL STAY PART OF EUROPE
  • TSIPRAS SAYS GREECE NEEDS TO SEND DEMOCRATIC RESPONSE TO EU
Protothema now says the Greek parliament will meet on Saturday and a referendum will be called as early as next week. Whether this is simply a last minute attempt to put pressure on EU finance ministers ahead of Saturday's Eurogroup meeting remains to be seen, but one thing is for sure: Tsipras is playing a dangerous game with the ECB ahead of a difficult week that could very well see the imposition of capital controls.

More from Kathimerini:
The government is considering a referendum on the substance of the agreement, according to recent reports, during the enlarged meeting taking place from Friday night at the Maximos Mansion. The referendum is expected to be held next Sunday, while the prime minister has already informed the political leaders. The prime minister after returning from Brussels convened the extraordinary Governing Council at the Maximos Mansion, which after 23:00 turned into cabinet by attendance of ministers and party executives to discuss the latest developments and next steps in view of tomorrow's Eurogroup.
Earlier:
Protothema is reporting that Tsipras has confided in a fellow EU official that if the country's creditors insist on sticking to pension and VAT red lines and if Friday's bailout extension proposal (which the Greek government apparently views as a patronizing stopgap) is the troika's final offer, he is prepared to call for snap elections.
Via Protothema (Google translated):
The dramatic developments of the last few hours, following the government's move to reject the proposal of the creditors may conceal preparation for use of the popular verdict, a decision which is expected to be finalized in the next few hours if the lenders do not move from its rigid positions. According secure information protothema.gr, a few hours ago he Prime Minister Alexis Tsipras European leader confided in Eurozone member country adjacent friendly in Greece that the data are up to this moment is ready even to call early elections. 

This revelation of thought by the Greek prime minister to the foreign leader can be interpreted in two ways: Either Mr. Tsipras is ready "plan B" if tomorrow the negotiation fails or leaked deliberately in order to exert indirect pressure on lenders to mitigate their requirements. Upon completion of the meeting Mr. Tsipras with Angela Merkel and Francois Hollande, the Greek side revealed that the Prime Minister pointed out to the leaders of Germany and France that does not understand why the institutions insist on so hard measures. The prime minister insisted his decision to reject the proposal of the creditors for a five-month extension of the existing agreement with a funding of 15.5 billion euros. "The proposal does not cover us, because the financial part of barely meets the needs for payment of installments to the lenders, not help anywhere else the economy," emphasized a close associate of Alexis Tsipras and adds: "We will not accept the proposal, as we said, we were waiting to bring us another proposal tomorrow."
Greece has rejected creditors' bailout extension proposal.
  • GREECE SAID TO REJECT EU15.5B BAILOUT EXTENSION PROPOSAL: ANA

*  *  *
On Friday, the German press reported (and Bloomberg later confirmed) that Greece’s creditors had presented PM Alexis Tsipras with a document (essentially an outlining the following available funds that could theoretically be part of either an extension of the country’s second bailout or a third program (with the latter having been previously ruled out by the IMF and German lawmakers). The details are as follows:
  • EU creditor proposal foresees EU8.7b in EFSF funds: official
  • Creditor proposal foresees EU3.3b in SMP profits: EU official 
  • Creditor proposal foresees EU3.5b in IMF funds: EU official
As noted, if Greece receives €3.3 billion from SMP profits it will mean that the ECB has forfeited the money it made on the Greek bonds it purchased in the past, effectively allowing Athens to repay the central bank with its own money. Here's DB with some color:
There may be a more rapid disbursement option. EUR1.9bn of the EUR7.2bn stalled tranche is SMP profits. Releasing these funds might only involve a decision by finance ministers without necessarily consulting parliaments. Disbursing EFSF funds, on the other hand, requires the national approval process (e.g., the joint decision by the German Finance Minister and the Budget Committee, if not a full plenary vote). In other words, SMP profits could be disbursed at short notice. These would be sufficient to pay the EUR1.6bn owed to the IMF on Tuesday.
As for the EFSF funds, it's long been suggested that bank recap funds could be chanelled to Athens under the 'right' circumstances and apparently imminent default is as good an excuse as any. Citi has more on the EFSF funds:
The interim proposal would likely allow Greece to use part of the €10.9bn from the original Hellenic Financial Stability Fund (HFSF) designated for Greek bank recapitalization, and later transferred back to the EFSF/ESM. Various media outlets have reported on the possibility that around €9bn could be used for current expenditure, in line with our estimates of the financing needs of the Greek sovereign for 3Q. Although a unanimous agreement will be required at the ESM board level to redirect the resources away from its banking recapitalization objective, we believe that a deal is likely to be found. The release of such funds would allow an extension of the current programme for several months, while giving more time for creditors and the Greek authorities to complete the negotiations for a third aid programme. It could also convince the ECB to increase the T-bill ceiling and the SSM to raise the ceiling on the exposure of Greek banks’ to their sovereign. All this however remains conditional on the approval of the ‘interim’ package by the Greek Parliament as well as by various national parliaments (in Germany, the Netherlands and Finland among others).
German Chancellor Angela Merkel implored Tsipras to accept what she calls a “generous” offer and has been adamant that a deal must be struck by the time the market opens on Monday which effectively means that EU finance ministers will need to strike an agreement at tomorrow’s Eurogroup meeting which starts at 2 pm local time. “I spoke today about a very generous offer because we simply have moved a step toward Greece, also with respect to the February agreement,” Merkel said.
In the wake of this morning’s news, the rhetoric from Tsipras has only hardened with the Greek PM pledging to uphold the democratic values upon which the euro was founded and to not accept “blackmail” (which of course is rather ironic, considering Merkel said precisely the same thing with regard to the Greek on Thursday):
Document of proposals presented to the Greek side by the institutions is “worse than a memorandum,” ANA reports, citing Greek govt officials in Brussels.

Greek Prime Minister Alexis Tsipras says he will defend the European Union’s founding principles of “democracy, solidarity, equality, mutual respect” as he seeks an agreement with international creditors to unlock aid for the country.

“These principles were not based on blackmails and ultimatum, and especially in these crucial times no one has the right to put in danger these principles,” Tsipras tells reporters in Brussels after an EU summit

“The Greek government will continue decisively to give the fight in favor of these principles, to continue to give the fight on behalf of the European people and of course on behalf of the Greek people,” he says. 

For reference, here's a breakdown of what Greece's fiscal situation (i.e. budget deficit) looks like going forward:

*  *  *
Author: Elite E Services
Posted: June 27, 2015, 3:59 pm
Scared by the recent surprise CHF event that caused many Forex brokers to completely collapse, brokers are taking no chances as Greece sits on the brink.  From one broker:
Dear Trader,
Due to uncertainty in the markets brought about by the current situation with
Greece, margin requirements for all EUR pairs will be increased from 1% to 2%
as of 20:00 server time TODAY (June 26th) and will revert to 1% at 22:00 server
time on Sunday (June 28th).
Please monitor your account prior to 20:00 today and adjust your positions (if
required) to avoid potential margin call / stop-out.
As ever, if you have questions or need some assistance, our friendly live-chat
team are standing by.
Regards,
Customer Services
From another:
Due to the current
speculations and the ongoing Greece debt negotiations, there is potential that
an announcement over the weekend will have a significant impact on the market
open on Sunday, June 28th.  
With this in mind, we will require at least double the usual margin you
currently have in your account for all EUR currency pairs and for the GER30,
valid from tomorrow Friday, 26.06.2015 15:00 German time. I.e. You currently
have a leverage of 1:200 (0.5% margin requirement) for EUR currency pairs, this
will be changed to leverage 1:100 (1% margin requirement). You currently have a
leverage of 1:100 (1% margin requirement) for the GER30, this will be changed
to leverage 1:50 (2% margin requirement).
For the avoidance of doubt, please ensure that you are comfortable with any
positions you hold and margins required.
If you have any questions, please do not hesitate to contact your Client
Relationship Manager...
Is this another part of the plan to consolidate the market into a single one world currency (ha.. ha), or just another example of broker stupidity?  How many more dead bodies will rise to the surface in this next battle in the Currency Wars?  
Don't let it be you!  Turn off your systems this weekend, monitor the news, and wait for opportunity! 
On the other hand, many of these 'last minute' situations turn out to be nothing more than a tool for politicians to gain favor with their constituents, as if they are 'doing something about the problem' thus justifying their huge salaries and lavish accomodations.  Is this situation really about testing Tsipras (will he 'buy in' to the global agenda or stand up for his principles and turn Greece into a rogue state) or again a test of the "Northern Europeans" who are financially responsible and the "Southern Europeans" who are lazy and always in debt?  Or again is it about cultural differences, that Greeks have another financial view of how life should be lived, compared to the Germans and the Swiss?  What does history tell us about the financial overtones of Greek culture?
In 1929 the Harvard economist Charles Bullock published a magnificent essay on a monetary experiment conducted by Dionysius the Elder, ruler of the Greek city state of Syracuse from 407 BC until his death in 367. After running up vast debts to pay for his military campaigns, his lavish court and spectacles for the common people he found himself painfully short of ready cash. No one wanted to lend him any more money and taxes were drying up. So Dionysius came up with a great wheeze. On pain of death he forced his citizens to hand in all their cash. Once all the drachmas were collected he simply re-stamped each one drachma coin as two drachmas. Simple. Problem solved. Syracuse was rich again.  Except, of course, it wasn’t. Bullock used it as an early example of why just minting more money out of thin air was seldom a reliable way of creating more wealth. There was, however, another lesson to be learned. When it comes to making a mess of the economy and fiddling the figures the Greeks have been at the top of their game for a very, very long time. 
After the formation of the modern Greek state in 1829 the country went on to default on its debts in 1843, 1860 and 1893. According to calculations by the economists Carmen M. Reinhart and Kenneth S. Rogoff Greece has spent more time in default to its creditors than any other European country. It has been skipping its repayments for 50 per cent of the years since 1800, compared with a mere 39 per cent of the time for the next worst offender, Russia. Indeed, even if you moved it across to Latin America – generally regarded among bond traders as default central – it would still be among the worst offenders. Only Ecuador and Honduras have a worse record of meeting their debts. 
For Forex Traders
If you have existing positions which are unhedged, especially in Euro region currencies, it would be advisable to scale back your positions or protect them with options.  
If you have no positions and want to capitalize on the event risk, try a Euro straddle deep out of the money.  
Call your broker to discuss their plan and how they are mitigating the potential risks (if at all).
Good Luck!

http://www.zerohedge.com/news/2015-06-26/forex-brokers-again-brace-impact
Author: Elite E Services
Posted: June 26, 2015, 8:51 pm
Two weeks ago, courtesy of the investigative work of Nafeez Ahmed whose deep dig through a recently declassified and formertly Pentagon documents released earlier by Judicial Watch FOIA, we learned that Western governments deliberately allied with al-Qaeda and other Islamist extremist groups to topple Syrian dictator Bashir al-Assad. In his words: "According to the newly declassified US document, the Pentagon foresaw the likely rise of the ‘Islamic State’ as a direct consequence of the strategy, but described this outcome as a strategic opportunity to “isolate the Syrian regime.
Now, in a follow up piece to his stunning original investigative report titled "Secret Pentagon report reveals West saw ISIS as strategic asset Anti-ISIS coalition knowingly sponsored violent extremists to ‘isolate’ Assad, rollback ‘Shia expansion", Nafeez Ahmed reveals that according to leading American and British intelligence experts, the previously declassified Pentagon report confirms that the West accelerated support to extremist rebels in Syria, despite knowing full well the strategy would pave the way for the emergence of the ‘Islamic State’ (ISIS).
The experts who have spoken out include renowned government whistleblowers such as the Pentagon’s Daniel Ellsberg, the NSA’s Thomas Drake, and the FBI’s Coleen Rowley, among others.
Their remarks demonstrate the fraudulent nature of claims by two other former officials, the CIA’s Michael Morell and the NSA’s John Schindler, both of whom attempt to absolve the Obama administration of responsibility for the policy failures exposed by the DIA documents. 
This is Nafeez Ahmed's follow up story, originally posted in Medium
Ex-intel officials: Pentagon report proves US complicity in ISIS
Renowned government whistleblowers weigh in on debate over controversial declassified documen

Foreseeing ISIS

As I reported on May 22nd, the US Defense Intelligence Agency (DIA) document obtained by Judicial Watch under Freedom of Information confirms that the US intelligence community foresaw the rise of ISIS three years ago, as a direct consequence of the support to extremist rebels in Syria.
The August 2012 ‘Information Intelligence Report’ (IIR) reveals that the overwhelming core of the Syrian insurgency at that time was dominated by a range of Islamist militant groups, including al-Qaeda in Iraq (AQI). It warned that the “supporting powers” to the insurgency?—?identified in the document as the West, Gulf states, and Turkey —?wanted to see the emergence of a “Salafist Principality” in eastern Syria to “isolate” the Assad regime.
The document also provided an extraordinarily prescient prediction that such an Islamist quasi-statelet, backed by the region’s Sunni states, would amplify the risk of the declaration of an “Islamic State” across Iraq and Syria. The DIA report even anticipated the fall of Mosul and Ramadi.

Divide and rule

Last week, legendary whistleblower Daniel Ellsberg, the former career Pentagon officer and US military analyst who leaked Pentagon papers exposing White House lies about the Vietnam War, described my Insurge report on the DIA document as “a very important story.”
In an extensive podcast interview, he said that the DIA document provided compelling evidence that the West’s Syria strategy created ISIS. The DIA, he said, “in 2012, was asserting that Western powers were supporting extremist Islamic groups in Syria that were opposing Assad…
“They were not only as they claimed supporting moderate groups, who were losing members to the more extremist groups, but that they were directly supporting the extremist groups. And they were predicting that this support would result in an Islamic State organization, an ISIS or ISIL… They were encouraging it, regarding it as a positive development, because it was anti-Assad, Assad being supported by Russia, but also interestingly China… and Iran… So we have China, Russia and Iran backing Assad, and the US, starting out saying Assad must go… What he [Nafeez Ahmed] is talking about, the DIA report, is extremely significant. It fits into a general framework that I’m aware of, and sounds plausible to me.”
Ellsberg also noted that “it’s pretty well known” in the intelligence community that Saudi Arabia sponsors Islamist terrorists to this day:
“It’s kind of a deal that the Saudis will support various Islamic extremists, all around the world, and the deal is that they [extremists] will not try to overthrow the corrupt, alcohol-drinking clique in Saudi Arabia.”
Ellsberg, who was a former senior analyst at RAND Corp, also agreed with the relevance of a 2008 US Army-commissioned RAND report, quoted in my Insurge story, and also examined in-depth for Middle East Eye.
The US Army-funded RAND report advocated a range of policy scenarios for the Middle East, including a “divide and rule” strategy to play off Sunni and Shi’a factions against each other, which Ellsberg describes as “standard imperial policy” for the US.
The RAND report even confirmed (p. 113) that its “divide and rule” strategy was already being executed in Iraq at the time:
“Today in Iraq such a strategy is being used a tactical level, as the United States now forms temporary alliances with nationalist insurgent groups that it had been fighting for four years… providing carrots in the form of weapons and cash. In the past, these nationalists have cooperated with al-Qaeda against US forces.”
The confirmed activation of this divide-and-rule strategy perhaps explains why the self-defeating US approach in Syria is fanning the flames of both sides: simultaneously allying with states like Turkey who have continued to covertly sponsor ISIS, while working with Assad through the Russians to fight ISIS. Ellsberg added:
“As Assad is the main opponent of ISIS, we are covertly coordinating our airstrikes against ISIS with Assad. So are we against Assad, or not? It’s ambivalent… I think that Obama and everybody around him is clear that they do not any longer as they’ve been saying want Assad to leave power. I don’t believe that that is their intention anymore, as they believe anyone who succeeds Assad would be far worse.”
If true, Ellsberg’s analysis exposes the deep-rooted hypocrisy of the previous campaign against Assad, the current campaign against ISIS, and why both appear destined for failure.

Frankenstein script

Coleen Rowley, retired FBI Special Agent described my report on the DIA document as “excellent.”
Rowley, who was selected as TIME ‘Person of the Year’ in 2002 after revealing how pre-9/11 intelligence was ignored by superiors at the FBI, said of the document:
“It’s like the mad power-hungry doctor who created Frankenstein, only to have his monster turn against him. It’s hard to feel sorry when the insane doctor gets his due. But in our case, that script is constantly repeating. The quest for ‘full spectrum dominance’ and blindness of exceptionalism seems to mean we are doomed to keep repeating the ‘Charlie Wilson’s Frankenstein War’ script… The various neocon warmongers and military industrial complex, most of them inept Peter Principles, just don’t care.”
Also commenting on the declassified Pentagon report, former NSA senior executive Thomas Drake?—?the whistleblower who inspired Edward Snowden?—?condemned “the West’s role in ISIS and threat of ‘violent extremists’, justifying surveillance and libercide at home.”

Wedge strategy

Alastair Crooke, a former senior MI6 officer who spent three decades at the agency, said yesterday that the DIA document provides clear corroboration that the US was covertly pursuing a strategy to drive an extremist Salafi “wedge” between Iran and its Arab allies.
The strategy was, Crooke confirms, standard thinking in the Western intelligence establishment for about a decade.
“The idea of breaking up the large Arab states into ethnic or sectarian enclaves is an old Ben Gurion ‘canard,’ and splitting Iraq along sectarian lines has been Vice President Biden’s recipe since the Iraq war,” wrote Crooke, who had coordinated British assistance to the Afghan mujahideen in the 1980s. After his long MI6 stint, he became Middle East advisor to the European Union’s foreign policy chief (1997–2003).
“But the idea of driving a Sunni ‘wedge’ into the landline linking Iran to Syria and to Hezbollah in Lebanon became established Western group think in the wake of the 2006 war, in which Israel failed to de-fang Hezbollah,” continued Crooke. “The response to 2006, it seemed to Western powers, was to cut off Hezbollah from its sources of weapons supply from Iran…
“… In short, the DIA assessment indicates that the ‘wedge’ concept was being given new life by the desire to pressure Assad in the wake of the 2011 insurgency launched against the Syrian state. ‘Supporting powers’ effectively wanted to inject hydraulic fracturing fluid into eastern Syria (radical Salafists) in order to fracture the bridge between Iran and its Arab allies, even at the cost of this ‘fracking’ opening fissures right down inside Iraq to Ramadi. (Intelligence assessments purpose is to provide ‘a view’?—?not to describe or prescribe policy. But it is clear that the DIA reports’ ‘warnings’ were widely circulated and would have been meshed into the policy consideration.)
“But this ‘view’ has exactly come about. It is fact. One might conclude then that in the policy debate, the notion of isolating Hezbollah from Iran, and of weakening and pressurizing President Assad, simply trumped the common sense judgment that when you pump highly toxic and dangerous fracturing substances into geological formations, you can never entirely know or control the consequences… So, when the GCC demanded a ‘price’ for any Iran deal (i.e. massing ‘fracking’ forces close to Aleppo), the pass had been already partially been sold by the US by 2012, when it did not object to what the ‘supporting powers’ wanted.”

Intel shills

Crooke’s analysis of the DIA report shows that it is irrelevant whether or not “the West” should be included in the “supporting powers” described by the report as specifically wanting a “Salafist Principality” in eastern Syria. Either way, the report groups “the West, Gulf countries and Turkey” as supporting the Syrian insurgency together?—?highlighting that the Gulf states and Turkey operated in alliance with the US, Britain, and other Western powers.
The observations of intelligence experts Ellsberg, Rowley, and Drake add further weight to Crooke’s analysis. They come in addition to comments I had previously received on the DIA document from former MI5 counter-terrorism officer, Annie Machon, and former counter-terrorism intelligence officer, Charles Shoebridge.
The comments undermine the recent claims of disgraced US national security commentator, John Schindler, a retired NSA intelligence officer, to the effect that the August 2012 DIA report is “almost incomprehensible,” “so heavily redacted that its difficult to say much meaningful about it,” “Nothing special here, not one bit,” “routine,” “a single data point,” and so on.
Schindler cites the DIA’s use of ‘Curveball’?—?the Iraqi informant who fabricated claims about Saddam Hussein’s weapons of mass destruction (WMD)?—?as evidence of the agency’s “less than stellar reputation.” But this misrepresents the fact noted by the CIA’s Valerie Plame Wilson that “it was widely known [in the intelligence community] that CURVEBALL was not a credible source and that there were serious problems with his reporting.”
As I’ve documented elsewhere, the WMD threat mythology was not the outcome of an ‘intelligence failure’, as Schindler and his ilk like to claim, but a consequence of the corruption and politicization of intelligence under the influence of dubious vested interests.
Also contrary to Schindler’s misinformation, an IIR provides raw intelligence data from human sources (HUMINT), not simply rumour, gossip or opinion. Before wider distribution, the IIR is vetted to determine whether it is worthy of dissemination to the intelligence community. IIRs then provide a source basis for evaluation, interpretation, analysis and integration with other information.
Far from justifying the dismissal of the relevance of the declassified DIA documents, this shows that urgent questions must be asked:
What happened to this raw intelligence data, described by six US UK intelligence experts as providing damning confirmation of how Western strategy led to the rise of ISIS?
And why did it not lead to a change in policy, despite DIA analysts’ clear warning of the outgrowth of an ISIS-entity from Western allies’ desire to see a ‘Salafist Principality’ in the region?—?a warning which was, in hindsight, quite accurate?

Are intel critics traitors?

Schindler previously characterized NSA whistleblower Edward Snowden as a traitor and “pawn… of America’s adversaries.”
He now declares that those who cite the DIA report as proof the intelligence community “knew more about the rise of the Islamic State than they let on” are at best “fools; at worst, they’re deceivers who have lied to the American people.”
On the contrary, six decorated former senior US and British intelligence officials, many with direct experience of IIRs and their function, agree that the DIA report provides significant insight into the kind of intelligence available to the US intelligence community at the time.
Yet for Schindler, it seems, Ellsberg, Drake, Rowley, Crooke, Machon and Shoebridge are all, effectively, traitors simply for lending their expertise to public understanding of the newly declassified documents.
As Marcy Wheeler points out in Salon, the large corpus of secret DIA documents obtained by Judicial Watch demonstrates, at the least, that:
“The Intelligence Community (IC) knew that AQI had ties to the rebels in Syria; they knew our Gulf and Turkish allies were happy to strengthen Islamic extremists in a bid to oust Assad; and CIA officers in Benghazi (at a minimum) watched as our allies armed rebels using weapons from Libya. And the IC knew that a surging AQI might lead to the collapse of Iraq. That’s not the same thing as creating ISIS. But it does amount to doing little or nothing while our allies had a hand in creating ISIS. All of which ought to raise real questions about why we’re still allied with countries willfully empowering terrorist groups then, and how seriously they plan to fight those terrorist groups now. Because while the CIA may not have deliberately created ISIS, it sure seems to have watched impassively as our allies helped to do so.”
However, Wheeler overlooks that the reliance on foreign allies is a standard proxy war strategy?—?as Ellsberg explained in his interview?—?used by the covert operations arm of the US government to guarantee ‘plausible deniability.’
As I noted in my Middle East Eye analysis of the DIA document, there is extensive evidence against which to contextualize the DIA report’s assertions. This evidence shows that the CIA did not merely watch “impassively” as the Gulf states and Turkey supported violent extremists in Syria, but actively supervised, facilitated and accelerated this policy.
The August 2012 DIA document further corroborates this by repeatedly pointing out that the support to the Syrian insurgency from its allies was itself backed by “the West”?—?despite awareness of their intent to establish an extremist Salafi political entity.
While the DIA document was, indeed, just one data-point, analyzing it in context with the other DIA reports along with incontrovertible facts in the public record, establishes that the Pentagon was complicit in its allies’ support of Islamist terrorists, despite recognizing this could create an “Islamic State” in Iraq and Syria.
These revelations show that the real traitors are not the courageous whistleblowers who sacrifice everything to speak out on behalf of the public interest, but shameless shills like Schindler and Morell who willfully sanitize a dysfunctional and dangerous ‘national security’ system from legitimate public scrutiny.



Dr Nafeez Ahmed is an investigative journalist, bestselling author and international security scholar. A former Guardian writer, he writes the ‘System Shift’ column for VICE’s Motherboard, and is also a columnist for Middle East Eye. He is the winner of a 2015 Project Censored Award, known as the ‘Alternative Pulitzer Prize’, for Outstanding Investigative Journalism for his Guardian work, and was selected in the Evening Standard’s ‘Power 1,000’ most globally influential Londoners.

Nafeez has also written for The Independent, Sydney Morning Herald, The Age, The Scotsman, Foreign Policy, The Atlantic, Quartz, Prospect, New Statesman, Le Monde diplomatique, New Internationalist, Counterpunch, Truthout, among others. He is the author of A User’s Guide to the Crisis of Civilization: And How to Save It (2010), and the scifi thriller novel ZERO POINT, among other books. His work on the root causes and covert operations linked to international terrorism officially contributed to the 9/11 Commission and the 7/7 Coroner’s Inquest.
Author: Elite Forex Blog - Market Research & Analysis
Posted: June 20, 2015, 5:37 pm

It may be time to money under the mattress. High profile fund managers explain how to prepare for a 'systemic event'

The manager of one of Britain’s biggest bond funds has urged investors to keep cash under the mattress.
Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.
“Systemic risk is in the system and as an investor you have to be aware of that,” he told Telegraph Money.
The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash”, an unusual suggestion from a mainstream fund manager.
His concern is that global debt – particularly mortgage debt – has been pumped up to record levels, made possible by exceptionally low interest rates that could soon end, and he is unsure how well banks could cope with the shocks that may await.
He pointed out that a saver was covered only up to £85,000 per bank under the Financial Services Compensation Scheme – which is effectively unfunded – and that the Government has said it will not rescue banks in future, hence his suggestion that some money should be held in physical cash.
He declined to predict the exact trigger but said it was more likely to happen in the next five years rather than 10. The current woes of Greece, which may crash out of the euro, already has many market watchers concerned.
Mr Spreadbury's views are timely, aside from Greece. A growing number of professional investors (see comment, right) and commentators are expressing unease about what happens next.
The prices of nearly all assets – property, shares, bonds – have been rising for years.
House prices have risen by 26pc since the start of 2009, and by 68pc in London. The FTSE 100 is up by 75pc.
Although it feels counter-intuitive, this trend of rising prices should continue if economies remain weak, because it gives central banks licence to keep rates low and to carry on with their “quantitative easing” programmes.
Conversely, if the economy does pick up and interest rates need to rise, the act of doing so is likely to stall the economy and force them to be reduced again. Once more, demand for those mainstream assets would be rekindled and the asset boom continues.
But then there is the shock event. Daily Telegraph columnist Jeremy Warner also captured some of the concerns this week when he wrote that the trigger for an “inevitable correction” could come from “a clear blue sky – a completely unanticipated event”.
How are fund managers preparing for this gloomy possibility?
Mr Spreadbury sticks to bonds because of the remit of his funds. Within that world, he said a shock to the system would cause a flight to safety and the price of British government bonds, or gilts, would rise sharply. He also holds bonds of companies that would be most protected in times of turmoil – water companies, power network operators – and those where the bonds are secured on a solid asset, such as land or buildings.
Examples include Center Parcs and Intu, which owns shopping centres.
Marcus Brookes, another well regarded fund manager who looks after billions of pounds worth of investments, is less constrained in where he invests, because of the different remit of his funds. Schroder Multi-Manager Diversity, for example, can pick and choose between assets.
Mr Brookes said the probability of a major shock event was small but even he holds 29pc of the Diversity portfolio in cash, a huge proportion compared with most funds. This decision is due to his concern that bonds are overvalued and may fall. He aims to deliver returns of 4pc above inflation so can’t afford to put too much in assets that he believes will lose money.
“The problem is that people are struggling to work out how to diversify if QE programmes stop,” he said.
Mr Spreadbury added: “We have rock-bottom rates and QE is still going on – this is all experimental policy and means we are in uncharted territory.
“The message is diversification. Think about holding other assets. That could mean precious metals, it could mean physical currencies.”
• Put a question to the experts: moneyexpet@telegraph.co.uk
Author: Elite Forex Blog - Market Research & Analysis
Posted: June 20, 2015, 4:15 pm
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Author: Elite Forex Blog - Market Research & Analysis
Posted: June 18, 2015, 5:10 pm
Another day, another flash crash in the USD Index. As the Sept 2015 USD Index Futures contract suddenly crashed instantly, so EURUSD surged (and TSY yields tumbled)... something broke...Something Broke...http://www.zerohedge.com/news/2015-06-12/usd-ind...
Author: Elite Forex Blog - Market Research & Analysis
Posted: June 12, 2015, 6:27 pm
Looking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened.  In hindsight there were a few early-warning signs,  but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.
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First, for purposes of drawing a parallel, let’s re-cap the events of 2007-2008:
There were few early indicators of Lehman’s plight.   Insiders however, were well aware:   In late 2007, Goldman Sachs placed a massive proprietary bet against Lehman which would be known internally as the “Big Short”.  (It’s a bet that would later profit from during the crisis).
In the summer 2007 subprime loans were beginning to perform poorly in the marketplace.  By August of 2007, the commercial paper market saw liquidity evaporating quickly and funding for all types of asset-backed security was drying up.
But still — even in late 2007,  there was little public indication that Lehman was circling the drain.
Probably the first public indication that things were heading downhill for Lehman wasn’t until June 9th, 2008,  when Fitch Ratings cut Lehman’s rating to AA-minus, outlook negative.   (ironically, 7 years to the day before S&P would cut DB)
The “negative outlook” indicates that another further downgrade is likely.   In this particular case, it was the understatement of all time.
A mere 3 months later, in the course of just one week,  Lehman would announce a major loss and file for bankruptcy.
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And the rest is history.

Could this happen to Deutsche Bank?

First, we must state the obvious:  If Deutsche Bank is the next Lehman, we will not know until events are moving at an uncontrollable and accelerating speed.   The nature of all fractional-reserve banks — who are by definition bankrupt at all times – is to project an aura of stability until that illusion has already begun to implode.
By the time we are aware of a crisis – if one is in the offing — it will already be a roaring blaze by the time it is known publicly.   It is by now well-established that truth is the first casualty of all banking crises.  There will be little in the way of early warnings.   To that end, we begin connecting the dots:
Here’s a re-cap of what’s happened at Deutsche Bank over the past 15 months:
  • In April of 2014,  Deutsche Bank was forced to raise an additional 1.5 Billion of Tier 1 capital to support it’s capital structure.  Why?
  • 1 month later in May of 2014, the scramble for liquidity continued as DB announced the selling of 8 billion euros worth of stock – at up to a 30% discount.   Why again?  It was a move which raised eyebrows across the financial media.  The calm outward image of Deutsche Bank did not seem to reflect their rushed efforts to raise liquidity.  Something was decidedly rotten behind the curtain.
  • Fast forwarding to March of this year:   Deutsche Bank fails the banking industry’s “stress tests” and is given a stern warning to shore up it’s capital structure.
  • In April,  Deutsche Bank confirms it’s agreement to a joint settlement with the US and UK regarding the manipulation of LIBOR.   The bank is saddled with a massive $2.1 billion payment to the DOJ.  (Still, a small fraction of their winnings from the crime). 
  • In May,  one of Deutsche Bank’s CEOs, Anshu Jain is given an enormous amount of new authority by the board of directors.  We guess that this is a “crisis move”.  In times of crisis the power of the executive is often increased.
  • June 5:  Greece misses it’s payment to the IMF.   The risk of default across all of it’s debt is now considered acute.   This has massive implications for Deutsche Bank.
  • June 6/7:  (A Saturday/Sunday, and immediately following Greece’s missed payment to the IMF) Deutsche Bank’s two CEO’s announce their surprise departure from the company.  (Just one month after Jain is given his new expanded powers).   Anshu Jain will step down first at the end of June.  Jürgen Fitschen will step down next May.
  • June 9: S&P lowers the rating of Deutsche Bank to BBB+  Just three notches above “junk”.  (Incidentally,  BBB+ is even lower than Lehman’s downgrade – which preceded it’s collapse by just 3 months)
And that’s where we are now.  How bad is it?  We don’t know because we won’t be permitted to know.  But these are not the moves of a healthy company.
deutsche_ceos2
Jürgen Fitschen will step down May 2016. Jain will step down at the end of this month.

How exposed is Deutsche Bank?

The trouble for Deutsche Bank is that it’s conventional retail banking operations are not a significant profit center.  To maintain margins, Deutsche Bank has been forced into riskier asset classes than it’s peers.
Deutsche Bank is sitting on more than $75 Trillion in derivatives bets — an amount that is twenty times greater than German GDP.    Their derivatives exposure dwarfs even JP Morgan’s exposure – by a staggering $5 trillion.
With that kind of exposure, relatively small moves can precipitate catastrophic losses.   Again, we must note that Greece just missed it’s payment to the IMF – and further defaults are most certainly not beyond the realm of possibility.

Not good.
Not good.
And if the dominos were not adequately stacked already, there is one final domino which perfects the setup.
Meet Tom Humphrey.  He heads up Deutsche Bank’s Investment Banking operations on Wall Street.
He was also head of fixed income at Lehman.
Prior history.
Prior history.
History never repeats.   But it does rhyme.    In market terms, it tends to rhyme just about every 7 years.
* * *

http://www.zerohedge.com/news/2015-06-12/deutsche-bank-next-lehman 
Author: Elite Forex Blog - Market Research & Analysis
Posted: June 12, 2015, 6:12 pm
One of the reasons we don't mind (and often enjoy) being labeled "conspiracy theorists" is that as consistently happens, the theory becomes fact,usually with a delay of anywhere between 6 months and 6 years.
A great example is one of our very first posts from January 2009: "This Makes No Sense: LIBOR By Bank" in which we first alleged Libor manipulation.
An even better example comes courtesy of the WSJ which reveals that one of the biggest perpetrators of Libor rigging, the same bank that was raided earlier today for reasons still unknown, namely Deutsche Bank had a quick and easy response to allegations of interest rate rigging: call it "conspiracy theory" and promptly sweep it under the rug.
A Deutsche Bank AG executive whose employees have been accused of rigging interest rates told a British trade group that such manipulation was nothing more than a “conspiracy theory,” a London court heard on Tuesday.

David Nicholls, who oversaw a group of employees that included some who have been fired for trying to manipulate the London interbank offered rate, or Libor, had a 2008 phone call with a British Bankers’ Association official to discuss mounting concerns about the integrity of Libor.

In the recorded call, which was played to a London jury on Tuesday, Mr. Nicholls repeatedly dismissed concerns that Libor could be manipulated. “Banks do not collude to try to set a Libor rating,” he told John Ewan, the BBA official in charge of running Libor.

“I think I am just hearing a lot of hysteria about Libor that is just misinformed,” Mr. Nicholls added.

When the Deutsche Bank official argued that an individual bank wouldn’t be able to improperly influence Libor, which at the time was set by a group of 16 banks, Mr. Ewan responded: “A cabal of them could.”

“What’s a cabal?” Mr. Nicholls asked.

“A group together could,” Mr. Ewan said.

That’s an interesting conspiracy theory,” Mr. Nicholls responded.
It was also the truth.
David Nicholls left Deutsche Bank two and a half years ago. According to WSJ's David Enrich, he couldn’t be immediately reached for comment, even though it is quite clear what he would have said: continue denying that anything like a massive, coordinated, market0rigging cabal could ever take place.
And yet, nobody has learned anything.
Just like the first big post-crisis settlement involving Goldman Sachs was blamed entirely on one then-28 year old employee and nobody else, so in the case of the massive Libor/FX settlements, not a single senior banker was implicated.
Which is beyond ridiculous. It is also ironic: as the first man charged with Libor rigging, one who was instrumental in turning and handing the case to the prosecution on a silver platter, UBS' Tom Hayes previously told The Wall Street Journal in a text message “this goes much much higher than me.
But if Nicholls couldn't see the open fraud taking place literally in front of him simply because he couldn't possibly imagine of such a "conspiracy theory", how are regulators and prosecutors to possibly conceive that the very people who keep the bribe machine well greased, could be guilty of the same.
So to answer our own question: why has nobody "higher" than Hayes been investigated yet? Because the mere suggestion that executives at UBS, and all the other market manipulating banks, are outright criminals themselves would be, you guessed it, just another "conspiracy theory."
Author: Elite Forex Blog - Market Research & Analysis
Posted: June 10, 2015, 1:43 pm
Two topics we’ve deemed critically important to a thorough understanding of both global finance and the shifting geopolitical landscape are the death of the petrodollar and the idea of yuan hegemony. 
Last November, in “How The Petrodollar Quietly Died And No One Noticed,” we said the following about the slow motion demise of the system that has served to perpetuate decades of dollar dominance:
Two years ago, in hushed tones at first, then ever louder, the financial world began discussing that which shall never be discussed in polite company - the end of the system that according to many has framed and facilitated the US Dollar's reserve currency status: the Petrodollar, or the world in which oil export countries would recycle the dollars they received in exchange for their oil exports, by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one held US-denominated assets and printed US currency) loop.


The main thrust for this shift away from the USD, if primarily in the non-mainstream media, was that with Russia and China, as well as the rest of the BRIC nations, increasingly seeking to distance themselves from the US-led, "developed world" status quo spearheaded by the IMF, global trade would increasingly take place through bilateral arrangements which bypass the (Petro)dollar entirely. And sure enough, this has certainly been taking place, as first Russia and China, together with Iran, and ever more developing nations, have transacted among each other, bypassing the USD entirely, instead engaging in bilateral trade arrangements.
Falling crude prices served to accelerate the petrodollar’s demise and in 2014, OPEC nations drained liquidity from financial markets for the first time in nearly two decades:
By Goldman’s estimates, a new oil price “equilibrium” (i.e. a sustained downturn) could result in a net petrodollar drain of $24 billion per month on the way to nearly $900 billion in total by 2018. The implications, BofAML notes, are far reaching: "...the end of the Petrodollar recycling chain is said to impact everything from Russian geopolitics, to global capital market liquidity, to safe-haven demand for Treasurys, to social tensions in developing nations, to the Fed's exit strategy.”
Shifting to the idea of yuan hegemony, China is aggressively pushing its Silk Road Fund and Asian Infrastructure Investment Bank.
The $40 billion Silk Road Fund is backed by China’s FX reserves, the Export-Import Bank of China, and China Development Bank and seeks to increase ROIC for Chinese SOEs by investing in infrastructure projects across the developing world, while the $50 billion AIIB is funded by 57 founding member countries (the US and Japan have not joined) and will serve to upend traditionally dominant multilateral institutions which have failed to respond to the rising influence and economic clout of their EM membership. China will push for the yuan to play a prominent role in the settlement of AIIB transactions and may look to establish special reserves in both the AIIB and Silk Road fund to issue yuan-denominated loans.
Back in early November, SWIFT data showed that 15 new countries had joined a list of nations settling more than 10% of their trade deals with China in yuan. "This is a good sign for [yuan] adoption rates and internationalisation. In particular, Canada's [yuan] usage for payments, which has increased greatly over this period, is very interesting since we have not seen strong adoption of the [yuan] from North America to date,” Astrid Thorsen, Swift's head of business intelligence said.
Earlier that month, China and Russia indicated that going forward, more trade between the two countries would be settled in yuan. From Reuters, last November:
Russia and China intend to increase the amount of trade settled in the yuan, President Vladimir Putin said in remarks that would be welcomed by Chinese authorities who want the currency to be used more widely around the world.

Spurred on by their often testy relations with the United States, Russia and China have long advocated reducing the role of the dollar in international trade.

Curtailing the dollar's influence fits well with China's ambitions to increase the influence of the yuan and eventually turn it into a global reserve currency. With 32 percent of its $4 trillion foreign exchange reserves invested in U.S. government debt, China wants to curb investment risks in dollar.

The quest to limit the dollar’s dominance became more urgent for Moscow this year when U.S. and European governments imposed sanctions on Russia over its support for separatist rebels in Ukraine.
"As part of our cooperation with this country (China), we intend to use national currencies in mutual transactions.The initial deals for rouble and yuan are taking place. I want to note that we are ready to expand these opportunities in (our) energy resources trade," Putin said at the time, suggesting that going forward, Russia may look to settle sales of oil in yuan. 
Sure enough, Gazprom has confirmed that since the beginning of the year, all oil sales to China have been settled in renminbi. From FT:
Russia’s third-largest oil producer, is now settling all of its crude sales to China in renminbi, in the most clear sign yet that western sanctions have driven an increase in the use of the Chinese currency by Russian companies.

Russian executives have talked up the possibility of a shift from the US dollar to renminbi as the Kremlin launched a “pivot to Asia” foreign policy partly in response to the western sanctions against Moscow over its intervention in Ukraine, but until now there has been little clarity over how much trade is being settled in the Chinese currency.

Gazprom Neft, the oil arm of state gas giant Gazprom, said on Friday that since the start of 2015 it had been selling in renminbi all of its oil for export down the East Siberia Pacific Ocean pipeline to China.

Russian companies’ crude exports were largely settled in dollars until the summer of last year, when the US and Europe imposed sanctions on the Russian energy sector over the Ukraine crisis...

Gazprom Neft responded more rapidly than most, with Alexander Dyukov, chief executive, announcing in April last year that the company had secured agreement from 95 per cent of its customers to settle transactions in euros rather than dollars, should the need to do so arise.

Mr Dyukov later said the company had started selling oil for export in roubles and renminbi, but he did not specify whether the sales were significant in scale.

According to Gazprom Neft’s first-quarter results issued last month, the East Siberian Pacific Ocean pipeline accounted for 37.2 per cent of the company’s crude oil exports of 1.6m tonnes in the three months to March 31.
With that, the "PetroYuan" has officially been born and while FT notes that "other Russian energy groups have been more reluctant to drop the dollar for settlement of oil sales," the fact that Russian producers are now openly considering a shift at the same time that officials in the US and Europe are openly discussing stepped up economic sanctions suggests renminbi settlements may become more commonplace going forward.
To understand why and to what extent this is significant in the current environment, consider the following from WSJ:
Officials of the Organization of the Petroleum Exporting Countries, which declined to cut oil production last year, reasoned that maintaining high production levels would protect market share in crucial importing nations.;

But Chinese customs data released Friday show that China’s crude imports from some big OPEC nations have plummeted, while imports from Russia surged 36% in 2014. Meanwhile, imports from Saudi Arabia fell 8% and those from Venezuela dropped 11%.


To summarize: Western economic sanctions on Russia have pushed domestic oil producers to settle crude exports to China in yuan just as Russian oil is rising as a percentage of total Chinese crude imports. Meanwhile, the collapse in crude prices led to the first net outflow of petrodollars from financial markets in 18 years, and if Goldman's projections prove correct, the net supply of petrodollars could fall by nearly $900 billion over the next three years. All of this comes as China is making a concerted push to settle loans from its newly-created infrastructure funds in renminbi.
Putting it all together, the PetroYuan represents the intersection of a dying petrodollar and an ascendant renminbi.
Author: Elite Forex Blog - Market Research & Analysis
Posted: June 10, 2015, 1:33 pm