QUESTION: Marty; You have been emphasizing not to buy gold bullion but US gold coins such as the $20. You have said that the last time they confiscated gold coin collections were exempt. With the drastic action in India, and the war on currency in Turkey, is this why you have said stocks and collectibles are a safer bet?

ANSWER:There are no safe bets. However, we are in the collapse of socialism. The left is always the most dangerous because they see themselves as victims. Narendra Damodardas Modi is proving to be a very dangerous radical who is extremely misguided. His demonetization of the currency was carried out without even asking the Reserve Bank. His BJP party advocates social conservatism and a foreign policy centered on nationalist principles. Generally, Modi has focused on a largely neoliberal economic policy prioritizing globalization and economic growth over social welfare. In sum, he is subjugating the people to his goal of globalization.

China and Russia saw their revolutions from the left led by the youth. India is trying to eradicate the underground economy. They first eliminated cash, which is preventing small businesses from paying employees. Unemployment will now soar. They are now attacking gold and this is all about creating a forced above ground economy so it can be regulated and taxed. People are reduced to using rice for money.

Turkey is doing the same thing. Recep Tayyip Erdoğan has begun his war on foreign currency because the Turkish lira is being devastated in international markets. His dream of recreating the Ottoman Empire will fail. He has lost the confidence of the people as well as the world. He is saying anyone who has $1 bills is a traitor. He is telling the population to convert their foreign currency to Turkish lira out of patriotism.

The lobbying is off and running is super-high gear to stop the Fed from raising rates once again. Governments all over the world have a very myopic view and focused only on the next quarter, or the next election. The Reserve Bank of India also fears that the US Fed’s impending interest rise would affect the external value of the rupee. Again the IMF behind the curtain is on its needs. Any depreciation of the rupee as a result of capital outflows would only worsen the balance of payments for India and expose the insane policies of Modi who did not even consult the RBI before demonetizing the currency.

Anyone with half a brain in economics knows that the worst thin you can do to create a depression is cause the velocity of money to decline. If people hoard and do not spend, the economy implodes. Modi is trying to end the cash economy, but he has ensured unemployment will now soar because small businesses cannot pay their people.Expect at least another 400,000 people to lose their jobs and people are forced to use rice as money.

Additionally, a rate hike in USA will send the rupee down and that will be feeding inflation due to rise in prices of imported commodities. Inflationary expectations are real keeping food prices high posing a threat to domestic price stability and external value of rupee. The RBI declined to lower rates looking at the prospects that the USA may raise rates so high rates are necessary to try to stem the outflow of capital.

Today, any information ahead of something like a rate hike is seen as insider trading. But back during the 1970s going into 1981, things were different. The banks were not big proprietary traders. I would routinely get a call that the Fed would raise rates in 15 minutes. It was not that someone was trying to front-run in those days. They did not want to see anybody get hurt and lose a boat-load for clients.

Back in December 2015, the Fed raised interest rates for the first time since 2006. Nobody was really surprised for instead of giving phone calls, the Fed publicly tries to telegraph its intentions for the same reason we use to get phone calls decades ago. The Fed has been trying to keep telling people it will raise rates and the general expectation is that they will do so on December 14th—almost exactly a year later—with a rate target range of 0.5-0.75%.

Janet Yellen, has confounded predictions including her own. A year ago, the Fed said it foresaw four rate rises in 2016. None has taken place yet. This might seem like deliberate confusion, but the Fed has been lobbied by the IMF and other countries, including Europe, pleading with it not to raise rates when they are trying to still punish people with negative rates. The IMF and emerging markets plead not to raise rates because they borrowed dollars.

However, the start of the year, stock markets were not booming, but dropped into January on worries about Chinese growth, which everyone has forgotten about as we head into January 2017. Then, in June, Britain voted to leave the European Union, sending markets spinning again for a while and the IMF pleaded for mercy. In September people again expected rate hikes, and again the IMF pleaded. Since June, Yellen has correctly been telling everyone that low rates at best have a modest impact upon the economy.

The Federal Reserve prepares to raise interest rates again, but this time people will be calling this the Trump Rally. However, beside the stock market booming on the expectation of lower corporate rates and deregulation, a year ago unemployment was already low at 5% and the economy has created an average of 188,000 jobs per month throughout the year.This has helped the labor-force participation of prime-age workers to return with jobs. It has been job creation that is pushing unemployment down in the USA, which fell to 4.6%, the lowest rate recorded since August 2007. This gives the needed confidence to raise rates.

Inflation is not yet back at the Fed’s 2% target. However, the surging bond yields, stock market, and a stronger dollar are all combining to put pressure on the Fed to raise rates. Yellen carefully suggests that a rate hike would not alter those trends.

Mario Draghi, extended the European Central Bank (ECB) $ 1.74 trillion bond purchase program to support the economy by nine months to at least the end of December 2017. This is far longer than most economists had expected. However, the monthly volume of currently €80 billion euros will drop to €60 billion euros from April 2017 onwards. In total, a further €540 billion euros will be pumped into the market. However, there is still no indication that thie will have any inflationary influence. All its appears to be doing is slowing the collapse buying bonds the private sector does not want.

According to German newspaper the Frankfurter Allgemeine Zeitung (FAZ), the decision of the ECB to expand its bond purchases was objected to by the Bundesbank President Jens Weidmann. The newspaper reported that Weidmann had expressed objections and not voted. The Bundesbank did not wish to comment on the report, reported Reuters.