Canada’s last commodity exchange is closing. The Winnipeg Grain Exchange, which was established in 1887, will shut down for good after its owner transfers the bourse’s only remaining futures contract to New York. It is ironic that when a decision like this is made, it is often a sign of a major change in trend. Wheat peaked during the first quarter of 2008. We are just now starting to play with the Downtrend Line in preparation for a commodity boom into the 2024 time period.

I have been focusing on the energy output of the Sun declining and how we are headed back toward the climate getting much colder. People like Al Gore are politicians. He has no expertise in climate whatsoever. Nevertheless, he runs around the world arguing for global warming, preaching something that to him has become just a religion. He is THE person who made global warming a presidential issue that has stigmatized the entire world and prevented people from actually just looking at how everything works.

The markets are lining up and what they are showing is that we are in store for climate change, but it’s getting much colder and that is far worse than global warming. Civilization expands when the climate warms, and it contracts when it gets cold. This is also why Kim Jong-Un of North Korea used missiles to force the West to accept his country back into the world fold. Why? North Korea lost more than 2 million people when the crops failed in 1995/1996. The summer of 2017 saw a dramatic decline in crop production in North Korea, down by some 30%. They are headed to another cycle of cold and starvation. His father’s policies of feeding the army first has created a 1 million man army with nothing to do. People joined the army just to eat.

Everything we see in the computer’s projections WARNS that we are indeed in for climate change, but it is a natural cycle not caused by humankind. We are looking at a sharp rise in food prices in the years ahead. The closing of the Winnipeg Grain Exchange is strangely the way the commodity industry always works. You see mining companies close at the lows and expand at the highs. They can never see the future even when it punches them in the face. So stockpile food as we enter this period of rising prices. There will be shortages in the years ahead.

QUESTION: Why is the Fed moving to relax the Volcker Rule and allow banks to once again engage in proprietary trading?

I figure if anyone knew the truth, it would be you

Thank you in advance

PH

ANSWER: Yes, the Federal Reserve Board wants to roll back the Volcker Rule, which was imposed to make banks safer after the 2008 meltdown. The Fed is moving to begin the administrative process aimed at significantly reducing compliance costs for financial firms but ALSO the problem behind the curtain has been that the LIQUIDITY in the markets has collapsed. Since remaining participation in the markets is still about 50% of 2007 levels, removing the banks from proprietary trading has contributed to a completely new risk – the flash crash.

The rule was intended to bar banks with federally-backed deposit insurance from suffering counter-leveraged losses by restricting their ability to bet with their own capital. Financial firms have been arguing that the rule is unnecessarily complex and almost impossible to adhere to. This is partially true. However, prosecutors who do not know how the financial markets truly function have been bringing criminal actions and demanding huge fines for basic things that have always existed and are part of any poker game. They have turned “spoofing” into a crime when in fact if you have a large position, you cannot let the other side know what you intend to do or they will front-run you every day of the week. So if you pretend you will be a buyer so you can sell, that is the nature of the game. Even the Libor Scandal was not “manipulation” of the trend in interest rates. That’s is what central banks do. They were playing within the “noise” of any market gunning for stops as the floor brokers have done since the birth of trading. They by no means altered the trend of interest rates – that is the privilege of central bankers.

Revising the Volcker rule is now something quietly supported by five agencies and among policymakers behind the curtain and it is all being driven by the lack of LIQUIDITY. Even the high-frequency trading systems shut down in the middle of high volatility. With retail participation minimal, banks out of the game, turn up the volatility and the high-frequency traders abandon ship rapidly. This allows for wide gaps in trading that are a concern for the future.

The proposed changes will be opened up for public comment for 60 days. But do not expect any serious discussions with respect to the crisis building in the decline in LIQUIDITY.

The proposal calls for the removal of an assumption included in the original rule that positions lenders hold for fewer than 60 days are proprietary. Meanwhile, the plan would scrap a component of the test for determining whether a trade is for a bank’s account. It would be replaced with new criteria based on how the bank accounts for the trades, according to the summary. They want to provide banks with more flexibility to execute trades that serve as hedges against potential losses. Banks now have to submit continuous and precise documentation to prove they are hedging. This is really onerous and in a crisis, it will magnify the events if banks cannot hedge. Nonetheless, the central purpose of the regulation of the regulation to prohibit banks from speculative trading will be maintained, but there will be a wide lateral movement to really allow them back at the speculative table. They can alter regulations but they CANNOT repeal the Volcker Rule for that would require an act of Congress.