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The Currency Crisis In India Seeking Alpha Predicted Is Here

POSTED ON December 7, 2016  - POSTED IN Original Analysis

Shubhendu PathakThis article was submitted by Shubhendu Pathak, a finance professional working in the Bay Area. Past: Capital One Shubhendu earned his Bachelors (B.Tech) and Masters (M.Tech) from IIT Delhi, and MBA with a concentration in Finance from Emory University.

Seeking Alpha published my two articles Will India Be The First Domino To Fall? and You Can’t Just Invest On Hope in which I predicted a currency crisis in India. On November 08, 2016, Prime Minister Narendra Modi announced the demonetization of 500 ($7.5) and 1,000 ($15) rupee notes, which constitute more than 85% of the currency in circulation. These notes ceased to exist as legal tenders on the night of the announcement. People can deposit them in their bank accounts before December 30, but cannot withdraw more than $350 in a week.

view of a busy street in India

Investors Continue Misguided Selloff of Gold Despite Coming Inflation

POSTED ON December 6, 2016  - POSTED IN Key Gold Headlines

Monday saw a drop in gold prices as investors look to the Federal Reserve to raise interest rates next week. The misguided selloff comes despite almost certain future inflation levels, and many traders are likely to backtrack their bets in the coming months.

Higher interest rates will add to inflationary pressures. Leveraged businesses will find servicing their existing debt more expensive and will inevitably pass the cost on to consumers in the form of higher prices. Consumer price increases are detrimental to economic growth and job creation, which will put pressure on the Fed to keep rates low.

gold bars in a row

Gold Prices Expected to Move Up With Sharia Law Revisions

POSTED ON December 5, 2016  - POSTED IN Key Gold Headlines

Since it was first proposed last April, trading gold as a commodity within Islamic finance is now a reality. The pro-gold law was first adopted on November 19 by the Accounting and Auditing Organization for Islamic Financial Institutions, which sets Sharia Law standards for finance groups.

Historically, Islamic investments have been guided by Sharia Law, which prohibits financial practices like earning and paying interest on loans. It also outlines requirements for the exchange of commodities like gold and silver. Islamic law sees gold as a substance sold by its weight and measures; a commodity that must be immediately exchanged in equal amounts. These types of substances are called Ribawi, and traditionally include silver, dates, wheat, salt, and barley. Therefore, the idea of using precious metals as an investment vehicle or as wealth retention is new.

Fed Up Friday: Trump’s US Treasurer Pick Mnuchin Wants to Slash Taxes

POSTED ON December 2, 2016  - POSTED IN Key Gold Headlines

Trump has pegged the next US Treasurer, Steven Mnuchin, who’s already begun making bold statements about tax cuts and revamping Fannie Mae and Freddie Mac. Italy may hold the keys to a European market crisis and Bernanke tells the Fed to keep their economic predictions to themselves. This much and more in this week’s Fed Up Friday.

Mnuchin – Reaching Sustained Growth Makes Tax Reform “Priority No. 1”

Steven Mnuchin will be the Treasury Secretary, and in his first televised interview following the announcement, he dug in on many of the statements Trump has said in the past; the main issue being tax reform. In addition to cutting corporate taxes by 20%, Trump also looks to give middle-class Americans an income tax cut. But plans to cut to government revenue are hardly a panacea if it’s missing one important ingredient. Peter Schiff explains:

“People are talking about these tax cuts and saying maybe the consumer is going to have some extra money. It’s not going to offset these higher costs that are weighing down the economy … The only way you can have middle-class tax cuts lead to economic growth is if you also reduce the cost of government.”

Fed Up Friday

Trump’s Treasury Pick Looking to Privatize Fannie and Freddie

POSTED ON December 1, 2016  - POSTED IN Key Gold Headlines

Donald Trump’s US Treasury nominee Steven Mnuchin sent mortgage markets into a frenzy when he said privatization of Fannie Mae and Freddie Mac should begin and that the incoming administration would “get it done reasonably fast.” Comments about the two mortgage finance titans shot their stocks up over 30% according to Bloomberg.

Both financial institutions have worked as clearing houses for mortgages, buying them from private lenders, packing them into securities, and stamping them with a US government’s guarantee. Privatization means increasing risk to some, but Mnuchin was quick to dispel any worries. “We will make sure that when they are restructured, they are absolutely safe and don’t get taken over again. But we’ve got to get them out of government control,” he stated.

house sitting on a pile of money

Man Finds Gold Horde Worth $3.7 Million in Deceased Relative’s Home

POSTED ON December 1, 2016  - POSTED IN Key Gold Headlines

A man from the French region of Normandy recently inherited a house from a deceased relative, only to discover his newly acquired home was actually a secret gold depository. Throughout the house, the man found a total of 220 lbs (3208.33 Troy oz.) of gold coins and bars totaling $3.7 million.

The man’s identity has yet to be released, but reports indicate he was in the process of preparing furniture for sale when he stumbled upon part of the horde.

Local auctioneer, Nicolas Fierfort, who had visited the home in order to appraise the furniture confirmed “5,000 gold pieces, two bars of 12 kilos and 37 ingots of 1 kilo” were found in total.

gold bar on blue background

Zimbabwe’s New “Zombie Money” Bank Notes May Resurrect Hyperinflation

POSTED ON November 30, 2016  - POSTED IN Key Gold Headlines

The southern African Republic of Zimbabwe knows all about currency crisis. In 2009, the country was forced to stop printing its own currency because inflation levels had grown to astronomical proportions. At its highest levels during 2008 and 2009, Zimbabwe’s inflation rate was estimated to have reached 79.6 billion percent. Eventually, the struggling republic was forced to abandon its own currency and cease the runaway hyperinflation. In turn, it adopted others like the South African rand, the euro, and the pound just to keep the economy functioning, according to Bloomberg.

zimbabwe currency on graph

Peter Schiff: Look for Fed to Return to QE with Trump’s Economic Plans

POSTED ON November 28, 2016  - POSTED IN Videos

Peter Schiff recently appeared on CNBC’s “Future’s Now” program to discuss what the Federal Reserve will likely do during a Donald Trump presidency. Peter said he sees a rate hike in December as too little too late given the ineffectual level of interest the economy has seen over the last several years, and because of the accelerated rate of inflation that’s taking place.

dollar bill

Pilgrim Currencies: From Wampum to Gold Eagles

POSTED ON November 25, 2016  - POSTED IN Key Gold Headlines

The majority of Americans know the basics behind the story of the pilgrims’ 1620 journey on the Mayflower, their eventual landing at Plymouth Harbor, and the physical and mental hardships they faced helping form the first permanent settlement of Europeans in New England.

Native American tribes like the Pokanoket were instrumental in helping the Pilgrims survive harsh winters, showing them how to plant corn, the best places to fish, and where to catch beaver. Thanksgiving is the day we celebrate the harvest feast the Pilgrims shared with the Pokanokets as an expression of thanks and good will.

Trade with other cultures, like the Pokanokets, was as essential for the Pilgrims’ survival just as it is for Americans today. Unlike our nation’s early European ancestors, however, today we use some pretty sophisticated ways to exchange goods and services. Credit cards, electronic transfers, bank wires, and cryptocurrencies make the Pilgrim’s form of currency seem like an alien technology, but that doesn’t mean it didn’t (and still doesn’t) work just as effectively today.

group of pilgrims