Big Thrust into Precious Metals in Trump’s First Term

Will the Trump Administration have an economic calamity in the bond market because of the heavy global debt load? Precious metals expert David Morgan says, “Yes, something will take place before the four years is over. I can almost guarantee that. The math is just too simple to see, and you are already seeing it in the bond market. I am very confident because how the bond market is reacting and the amount of paper that has been pushed upon the system that cannot tolerate any more. Things will unravel in some way, shape or form. . . . I think before that four year time frame (Trump’s first term) is over, we are going to see that big thrust into the precious metals.”

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Ukraine to Become Next Country to Go Cashless; Plans National Digital Currency

725_ly9jb2ludgvszwdyyxbolmnvbs9zdg9yywdll3vwbg9hzhmvdmlldy81ytjmotnjogmymzuxytu1zwrlmtu5nmu0ngzkmgniyy5qcgc2016 has been the ‘Year of the Blockchain,’ with corporation after corporation, even nations, touting their interest and ability to use Bitcoin’s underlying advancement in their future business models. Will 2017 be the ‘Year of the National Digital Currency?’ Ukraine looks to enter the cashless society with a plan on creating their own national digital currency based on the Blockchain technology, according to Ukrainian news site Ukrinform.

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Blockchain, the trend in 2016

Major corporations like IBM, and even nations, embracing the Blockchain technology is what’s happening right now, and it takes courage to be on the cutting edge. China recently announced that they would put their entire social security system on a Blockchain. Yet, creating a new national digital currency on its own Blockchain is a house of cards from Futurama. The goal here is abundantly clear, as this comes out of the nation’s Cashless Economy project, tying in with their current national payment service known as the “Ukrainian Payment Space.”

“The NBU, like other world central banks, is considering an opportunity of introducing a digital form of national currency using Blockchain technologies,” reads the report from the National Bank of Ukraine.

Don’t let the qualifier fool you. A central bank doesn’t make an announcement of this nature if the national digital currency isn’t well on its way to seeding their “Cashless Economy.” Late last year, the African country of Tunisia put their national currency on a Blockchain, the first of its kind. Bitcoin and its innovative Blockchain technology are changing the world as we speak, and that may not be a good thing in all circumstances.

When a nation moves to a cashless society, it sounds great, until you realize that no cash means no privacy and no accountability to the nation’s banks or governments. The ability to obtain and transact in cash is important for citizens because it gives them the ability to divest themselves from the banking institution if their policies, rates, service or fees are no longer competitive. The ability to move to a bank of their choice could be gone forever.

How will you hold a national currency accountable when all of your funds are in their matrix. Will you have to leave the country to avoid direct taxation or mass economic surveillance? A “run on the banks,” when depositors remove their funds all together from a bank in trouble, is the ultimate balance of economic power. Banks and governments remove this power from the people with a closed-loop, fully digital system they control. Plus, this nationwide system can easily be used to monitor and record every financial transaction for ultimate control of the populace. So cash bans are bad news because cash is one of the last bastions of privacy, liberty and personal financial control left.

If you are one who trusts all governments and central banks implicitly to do what is best for all of its citizens economically, then this should be of no concern to you. However, people who use Bitcoin and other decentralized digital currencies rarely fall into that category. How many Bitcoin owners will say “Guess I don’t need Bitcoins anymore, now that my country has gone digital,” my guess is not many.

How many in the mainstream will say that? Too many. Maybe is that the point?

Singapore firms face $16.7b debt scramble


Fears of more corporate defaults as bonds fall due and banks pull back from bad sectors

Singapore companies, highly exposed to slowing global trade and a lacklustre commodity market, face a financing scramble next year as more than US$12 billion (S$16.7 billion) of their bonds fall due and banks grow wary of lending to the resources sector.

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That could trigger more blood-letting in a market that has already seen some high-profile corporate defaults, such as oil services firm Swiber Holdings, which hit the skids in July and went into judicial management last month.

Between now and the end of next year, according to Reuters data, US$12.4 billion of bonds fall due, but corporate balance sheets in the city state are looking strained.

A Reuters study of 228 non-financial companies’ half-year earnings shows that 74 had net debt more than five times their core profit, and more than a third of that group were at least twice that level. “We had not seen Singapore-dollar corporate defaults since 2009, but suddenly we see a pickup in defaults in 2015-2016. This is a warning sign about a refinancing confidence crisis across many sectors, not just commodity-related ones,” said Mr Raymond Chia, head of credit research for Asia ex-Japan at Schroders Investment Management.

The structure of Singapore’s capital markets has left them particularly vulnerable as global trade cools and Chinese growth slows.

In 2014, private banks accounted for almost half of investments in Singapore-dollar corporate debt, a central bank report said last year. Their participation has helped encourage smaller issues that are not assessed by credit rating agencies and yet are targeted at private wealth investors, analysts say.

“Their bond issues are also mostly unrated, so the layer of scrutiny provided by rating agencies is missing. Many of these deals were mispriced: They priced like investment grade even though they had high-yield profiles,” said Mr Harsh Agarwal, the head of Asia credit research at Deutsche Bank.

That is now changing – at considerable cost for firms.

And banks, under pressure to increase provisions for bad loans, are pulling back from indebted sectors like real estate, commodities and oil and gas, which dominate Singapore’s outstanding $53 billion of local-currency corporate bonds.

Non-performing loans have risen at all Singapore’s three banks in the latest quarterly results. “In the absence of further bank support, refinancing this debt may prove difficult, potentially leading to more defaults over the next year,” said Mr Devinda Paranathanthri at UBS Wealth Management, which estimates that $18 billion of local currency-denominated bonds are coming due over the next 18 months.

There has also been an increase in borrowers asking bond holders to cut them slack. “It will continue to be busy, but the question is whether loosening covenants will be adequate to give these companies the lifeline that they need,” said Mr Kevin Wong, Singapore-based partner with law firm Linklaters.

“There is a risk these consent solicitations may lead to full-blown debt restructurings.”

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