CASH IS KING - Economic Prospects and Tips for 2016 (March newsletter Part 1)
Find out what is happening around the globe economically and why cash may be banned!

The Navig8or Newsletter

March 2016 - 6252 (Kemetic Calendar)
'Because thinking isn't illegal...yet'

Cash is King

Economic prospects and Tips for 2016 (Part 1)


Greetings Readers/Listeners

Welcome to Part 1 of the March issue of the newsletter. You can listen to the podcast here: http://houseofknowledge.org.uk/newsite/ Part 2 will be up in about a week's time. The two parts are very much linked so please read/listen to part 1 before accessing  part 2.

In this issue:

1. Launch date for  my new e-learning platform
2. The Global Economic prospects for 2016 
3. Kemetic Yoga Certification Programme

1. Launch date for  my new e-learning platform

Well, we are almost there. Some of you may have seen my posting on Facebook informing people that the new e learning platform will go live on Thursday 14th April 2016  It's been a long haul and we are almost there. I will send out a 'go live'  notification on the 14th via the newsletter, Facebook Twitter etc. (remember to Friend me on Facebook - 'Ifayomi Grant' and follow me on Twitter -  'Ifayomi Grant' and '@BlackFinancialFit'). Remember you can help me to launch with a bang and reach the parts I could not normally reach by:

(i) Subscribe for free to the site
(ii) Sign up for a programme that interests you
(iii) Share the website via social media, email, your website etc.
(iv) Become an affiliate for free and earn 30% of the course fee for everyone who signs up for a corse via your unique link
(v) Provide me with a testimonial  (heartfelt thanks to those of you who have already) 


I hope and believe that what I have delivered in terms of books, newsletter, lectures, workshops, courses etc. has demonstrated the value of my work. If you agree; work with me so I can devote more time to giving our people the financial and economic information they need.  
 

2. Global Economic prospects 2016

Following the February issue a Sista, Louise, who is one of my most consistent feeder backers (I know it's not a real word) and loyal readers; asked if I would say a bit more about financial options people can consider during these troubled times. So in part 2 of this issue/podcast I am going to explain the implications of the macro-economic position for your personal investment decisions.

One point to make before getting into the global outlook. It is almost impossible to predict the top of the market, be it stock markets, house prices, gold prices etc. however it is possible to identify when a commodity or asset is significantly overpriced, which tells you that a correction will take place sooner or later. So I am going to tell you about things that are overpriced and underpriced and in part 2 how that should inform a reasonable person's decision making. In this part I will give you some global economic headlines and then go on to explain their implications.

(i) Exports sinking faster than a stone

The year on year export data for January for leading manufacturing economies was published in mid February and quite frankly they were disastrous. I have always told you to look for the hard data: Here is a brief synopsis:

Japan - exports fell by 12.9% to their lowest level since 2009 and yet the Nikkei (Japanese stock market) went up by 2% after the release of these figures. Corporate profits in Japan also fell by 10% in the last quarter of 2015

Singapore - An economic bellwether, saw its year on year exports fall by 9.9% to almost its lowest levels since the global economy began to unwind in 2007

South Korea - down 18.8%

India - down 13.6% (registering a fall for the 14th consecutive month)

Indonesia - down 20.7%

Meanwhile back in the US, Wallmart; which caters to the bottom 50% of earners, announced that they did not expect any increase in sales during 2016.

If the foregoing statistics do not convince you that we are in the midst of a global, deflationary, economic recession then nothing will and I can only suggest that you put down the crack pipe; because you must be narcotised or even worse Obamasised. Even the corporate media are reporting concerns at the U.S. Federal reserve at the worsening global economic outlook. The prospect of the U.S. Federal Reserve increasing interest rates again during 2016 are decreasing with the publication of every new piece of gloomy economic data.

However despite all of this, as mentioned earlier, the Japanese Stock market rose after the publication of that country's export data and news that Japanese corporate profits were down!

This should tell you that most stock markets are now totally disconnected from the real economy.

(ii) Negative interest rates introduced by the Bank of Japan

So Abenomics (the Japanese Prime Minister is named Shinzō  Abe) has plunged Japan headlong into complete economic madness. Nobody had even conceived of the incredibly low interest rates that have been in effect for the past seven or eight years in the rich world, let alone the descent into negative interest rates. Just to clarify, negative interest rates is where your bank charges you for depositing money with them i.e. You pay them for having money in the bank!

Japan has been stuck in an interminable recession since the 1990s and has tried everything to stimulate growth. They have mirrored so many of the failed US policies, as you might expect from a vassal state, but nothing works. They made a huge mistake by creating a huge asset price bubble in the 1990s just like Alan Greenspan (former head of the U.S. Federal reserve) did in the US and have carried out the most enormous bouts of quantitative easing (QE) in recent years. The more they use QE the less impact it has on their GDP, hence they have turned to negative interest rates.

The stated key aims of the Japanese government - as well as other rich nations -  is to use QE to stimulate growth and create inflation. The rationale is that inflation will help to erode the real value of the enormous debts they have built up in their economy. So called mainstream economists thought that QE would be inflationary, however it has actually turned out to be deflationary.

So now it is on to negative interest rates since very low interest rates did not solve the problem. What these economic geniuses don't seem to understand is that there is a lack of aggregate demand in the world economy and when demand is weak prices will tend to fall. Negative interest rates are designed to encourage people to spend their savings, thus boosting consumption and kickstarting the economy. However in Asia the savings habit is deeply ingrained so people do have savings to spend, however I am absolutely convinced that they are not going to go out and buy a new car with their savings just because the bank is charging them to hold their money. They are more likely to seek refuge in gold, put their money In a safety deposit box, transfer their cash abroad or just grin and bear the charges.

(iii) Implications for Western Europe and US

The central banks of the U.S. Japan and the European Central Bank (ECB) are as thick as thieves. They work in concert and the Japanese would not have taken this decision without consulting with the U.S. Fed. This means that the Fed is unlikely to increase interest rates in 2016, or at best there will be a single 25 basis points increase (0.25%) late in the year to help Janet Yellen hold on to what's left of her tattered credibility. I mentioned in the December 2015 newsletter that the Chair of the Bank of England, Mark Carney, had stated that the volatile world economy was lessening the prospect of a rate rise in the UK.

In the Eurozone negative interest rates have been introduced for some of their interest rates (see later) for commercial banks. Stocks have fallen significantly in at least 40 major stock markets around the world since the beginning of the year. The foregoing are all telltale signs that the current deflationary recession is gathering pace and we are heading for a crash.

The problem all these governments face is that you can't unwind a Ponzi scheme, it just collapses like a house of cards.

(iv) Currency Wars on the Horizon

The USA has just become Germany’s leading trade partner, taking over from France,  for the first time since 1961. This looks really bad for all those who claim that the European Union bestows magical trade advantages onto its member states. The prime reason for this is the devaluation of the Euro versus the US dollar. At one point in recent history the Euro was worth over $1.40 since when and it has fallen to as low as $1.05.It was at $1.10 at the time of writing this section. Parity may even be on the horizon. What we do know is that a falling Euro helps German exports, by making them cheaper. If Germany had retained the Marc as its currency it would be trading at a much higher level in today’s economy and this is one of the reasons Germany ensures that the Eurozone interest rates are set to support their economic needs and not that of other member states.

I predict that we are going to see a significant devaluation of the Chinese yuan in order to stave off domestic unrest and there will be a whole round of competitive devaluations around the world.   

Implications for the little people

In terms of me, you and everyday people, this all means that we need to be cautious and build a financial wall until the crash happens, after which there will actually be great opportunities for those with liquid assets. I will touch on this more later on.

(v) After Cyprus - Bank bail-ins and their implication

You may recall the bank bail ins that took place in Cyprus last year.

This was a portent of things to come. A bank bail in is basically where they legally steal depositors money e.g. Today you have £5,000 in the bank and tomorrow they take £1,000 from your account to help shore up the bank’s finances and there is nothing you can do about it!

In Cyprus the original plan was to steal money from all depositors, however such was the uproar that they restricted it to deposits above the deposit guarantee level i.e. €100,000. This hit businesses that keep significant amounts of money on deposit (e.g. for their payroll obligations), the rich and the affluent. A lot of rich Russians who had money on deposit in Cypriot banks were hit by this larceny. Once such a move has been piloted in one part of the world it won't be long before they use it elsewhere. In the UK the deposit guarantee level is £75k so if they have to resort to a bail in they will probably do it above this level.

(vi) Bond Markets

A lot of people have been saying that Bonds will default. I don't think they will. They are way overvalued and if you have to sell them at short notice to get cash you are in for a haircut as they say, but I don't see them defaulting. There are currently $6 trillion worth of government bonds with a negative yield! Ooops!

(vii) House prices

In the UK House prices have been driven up by incredibly low interest rates, access to easy credit, the laundering of the proceeds of crime by foreign nationals and government schemes to boost sales. The result is house prices that bear no relation to wages or wage rises (which I have covered in great detail before in relation to the UK housing market). This is unsustainable in the medium term. I would suggest that you should be very wary of entering local house markets where properties are significantly overvalued e.g. London and San Francisco.

House prices in London are probably overvalued by between 40- 60%. Even the Bank of International Settlement (BIS) and the Economist magazine are talking about how bad these asset price bubbles are for the economy as they distort money flows away from investment activity and into housing speculation. The BIS estimates that London house prices are overvalued by around 40%. People forget quickly, however some of you will remember the house price slump of the early 1990s around the time the UK exited the Exchange Rate Mechanism, despite pushing interest rates to double digits. As I said earlier it is very difficult to predict the top of market however it’s much easier to spot a massive overvaluation of a commodity or asset and house prices in London and most of the UK (as well as in many parts of the US) are artificially inflated.

(viii) Gold on the Rise

As I told you previously the gold Comex market is rigged and hence does not reflect the true demand for physical gold. When the stuff hits the fan gold will appreciate significantly and the price of gold and has been rising steadily and sometimes spectacularly since December of last year despite all of the chicanery in the Comex market. Demand for physical gold is rising strongly with countries like Russia, China and India buying a lot of gold month on month. Here are three headlines from the establishment British newspaper the Daily Telegraph that highlight what I am saying:

‘Investors ‘go bananas’ for gold bars as global stock markets tumble. Bullion dealers report record sales as buyers “queue round the block” to purchase the precious metal

BullionByPost, Britain’s biggest online gold dealer, said it has already taken record-day sales of £5.6m as traders pile into gold following fears the world is on the brink of another financial crisis.

Russia’s central bank stockpiled the most gold last quarter, adding an estimated 60 tonnes to its reserves. The country bought around 200 tonnes of gold last year, 141 tonnes of which is thought to have been snapped up over the summer.

www.telegraph.co.uk

 

(ix) German Banks being told to hoard Cash!

Simon Black Founder of  SovereignMan.com reports that:

The German newspaper Der Spiegel reported yesterday that the Bavarian Banking Association has recommended that its member banks start stockpiling PHYSICAL CASH.

Because of negative interest rates commercial banks are being charged interest for holding wholesale deposits at the European Central Bank (ECB).

The rationale behind negative interest rates for banks is that it will spur greater lending, which the ECB believes will create economic growth, even if the lending is rash and ill considered!.

As we have seen ultra low interest rates simply fuels property speculation and encourages people to borrow beyond their means. It culminated in the NINJA (No income no job) loans that were part of the US property bubble that preceded the crash of 2007/2008.

Traditionally a commercial bank in Europe would hold excess reserves on deposit with the European Central Bank and in the past, they might even have been paid interest on those excess reserves as an extra incentive to be conservative. However today they must now pay 0.4% interest to the ECB. 0.4% may not sound like a lot but when it is applied to tens of billions of euros it soon adds up.

On one hand, banks stand to lose a ton of money in negative interest. On the other hand, they put their customers’ deposits at risk if they don’t hold extra reserves. So the Bavarian Banking Association has recommended that all member banks should start keeping their excess reserves in physical cash, stored in their own bank vaults.

The big problem is that the vast majority of the money supply is electronic i.e. only about 2% of the money circulating is actually in cash. Therefore there simply is not enough physical cash in the entire financial system to support even a tiny fraction of the demand.

Notional total bank deposits exceed trillions of euros, however physical cash constitutes just a small percentage of that sum which means that if German banks do start hoarding physical currency, there won’t be any left in the financial system.

The implications of all this is that the ECB will have two options:

1) Authorise the issuance of more physical cash; or

2) Impose capital controls.

Given that just two weeks ago the President of the ECB spoke about the possibility of banning some higher denomination cash notes, and we have seen a similar idea mooted in the US it is highly likely that they will choose option 2.  

(x) Postcript to Podcast - The banning of Cash

This is a little bonus for you who read the newsletter. I thought it was important to highlight that one of the very serious possible implications of negative interest rates is the banning of cash. We have already seen the ECB moving to abolish 500 Euro notes (known as Bin Ladens!) and the arguments being made to support the elimination of cash include: 

a) It is used to support terrorism (hence the Bin Ladens nickname for 500 Euro notes)
b) It is unhygienic and spreads disease!
c) It leads to crimes of theft/robbery
d) It supports tax evasion and the 'Black economy'
e) It is inconvenient for (large) businesses

I kid you not about these arguments. Now, the way in which a banning of cash will happen is via the entrenchment of negative interest rates. Whenever there is a deep recession interest rates normally fall by 3-4%. However given that interest rates are already nearly 0%; if the economy experiences a further downturn this year or next year then the only logical implication is that interest rates will fall to significant negative levels i.e. minus 2-3%. If this were to be on the horizon people would start to remove their money from banks and hoard cash, which might then be used for buying gold etc. If you think about it you would be better off having your money under your bed than in a bank at these interest rate levels (apart from the security implications and sales of home safes are soaring). The governments of the rich world will not allow this type of mass withdrawal, partly because they would have to print lots of notes, as banks don't actually hold very much cash; and more importantly because negative interest rates are another way of expropriating money from the 99.9% to the 0.1% Plutocracy. I am absolutely serious about this. This is not some farfetched scenario. Keep an eye on interest rates and stories about the negative consequences associated with cash transactions and start protecting your money. I will cover this in Part 2.

3. Kemetic Yoga Certification Programme

Join Brother Neter Aunkh Aakhu and become a certified Kemetic Yoga Instructor with the power to use the slow medicine of yoga to heal yourself and others.

 Its called:

The 4th Annual Awaken The Maroon Within
13 Day Activate Your Natural Brilliance Kemetic Yoga Holistic Retreat and Certification

Oct 29- Nov 13th  2016

In Portland Jamaica(Home of Two Maroon Communities)

This is located in the Rio Grande Valley just south of the town of Port Antonio.
 
Along with exploring the history and legacy of the Maroons the retreat will feature:
 A Kemetic Yoga Certification
15 hours of training per day (200 total) including
 2 systems of Kemetic yoga
 Sexual alchemy training
 Kemetic Prosperity Meditation
 Other Kemetic Meditation Practices
 3 Live/Raw Vegan Meals per day

That’s 14 days in experiencing the real beauty and Heritage of Jamaica, the land that produced Marcus Garvey.

The event is scheduled for Oct 29- Nov 13th  2016


They are are planning a very special discounted offer if there is enough interest.
Does that sound like something worth looking into? 

There is a preview webinar on Thursday March 17th @ 8:00 pm that will give you more details about the trip(including early pricing). 

If you are interested sign up here.
 
http://www.anymeeting.com/PIID=EB59DC86854C3E


Okay, that's it for this issue. Keep spreading the word. link me on social media and look out for Part 2 in the next week or so.
The April issue will be on Donald Trump's Presidential candidacy and the lessons that Afrikans in the US should have learnt but have not! It's going to sting!!  


Remember, we need to Co-operate in order to Compete!

Stay Blessed

 

Ifayomi

‘It's time to win’

www.houseofknowledge.org.uk
Twitter handle - @BlackFinancialFit
Facebook name - Ifayomi Grant




 

 

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