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Islamic Gold – Game Changer In Gold Market

Editors Note: This story came to my attention last week. It is rather long but very informative. I was very surprised that a new Sharia gold standard even existed.

Islamic Gold – Game Changer In Gold Market

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Islamic Gold – Game Changer In Gold Market

  • Next month, 1.6 billion people will have a new ‘gold investment standard’
  • Gold bullion investments to become accessible to 25% of planet
  • Islamic finance market expected to grow to US$5 trillion by 2020
  • Islamic asset classes have all under performed compared to gold
  • Gold has risen over 367% in US dollar terms and by more in currencies used in Islamic countries
  • Gold bullion products may be additionally appealing to Islamic banks due to Basel III rules
  • New Sharia Gold Standard will impact gold price

islamic-gold

By the end of 2016, 1.6 billion people will likely have a new gold investment standard for the first time in modern history. These 1.6 billion people are the Muslims of the world who constitute nearly 25% of the 6.9 billion people on the planet. This new ‘gold standard’ is the Sharia gold standard developed as part of a three-party collaboration between AAOIFI, the World Gold Council (WGC) and Amanie Advisors.

The new Sharia or Islamic gold standard, ‘will provide guidance from a Sharia perspective on the usage of gold in financial and investment transactions for Islamic financial institutions and participants,’ the WGC states on its website as we reported back in May . ‘The Standard also aims to increase transparency and harmonisation regarding the use of gold in various market practices.’

The new standard is expected to act as an internationally recognised consensus on regular gold savings plans (gold accumulation plans), allocated and segregated gold bullion storage, gold certificates, physically-backed gold ETFs, certain gold futures and gold mining equities.

Gold investment is currently allowed under Sharia law, given certain conditions are met. In the physical gold market today, there are a very few gold investment products or services, such as those offered by Goldcore, which are Sharia-compliant. We will explore what sharia-compliancy means in more detail but suffice to say that the lack of guidelines means there are few eligible gold investment products out their to meet Islamic investors’ requirements.


Islamic Finance and gold investment

Many non-Muslims will be familiar with the phrase ‘Sharia Law’. It has come under some attention in recent years throughout the world as people seek to understand Islam, how it is practised and what it means in the modern world.

Whilst Sharia Law is based on the Quran and other sacred texts, it has been adapted in order to keep up with changing times, through the guidance of Islamic scholars.

Many non-Muslims understand Sharia Law to be a set of laws that guide or govern how a Muslim lives their personal life. Few realise that it also guides the financial decisions of Muslims.

Islamic Finance, the financial services industry that operates under Shariah Law, is rapidly growing in size and therefore importance. At present the Islamic Finance market is a small part of the global financial market, at just $2 trillion. But this is expected to grow. Standard and Poor’s believe it could reach US$5 trillion by 2020 as reported by Truewealth Publishing, Business Insider and MSN.

Currently money managers within Islamic financial markets find themselves limited to Sharia-compliant assets such as equities, real estate an Islamic bonds (sukuk). There are virtually no official sharia-compliant gold products on the market.

“As the Islamic financial services market grows in size and importance, so does the need for a greater understanding of the application of Shariah guidance on the use of gold,” stated  Aram Shishmanian, CEO of the WGC. “While there is some guidance for gold coins and bars, there is virtually no guidance on gold elsewhere in the financial sector.”

Whilst there are some gold-products available within Islamic finance the market is fragmented and there is no guidance for Islamic investors. “…there is a lack of Islamic gold-based products globally,” explained Maya Marissa Malek, the managing director of Amanie Advisors, “We conducted comprehensive research of the available gold-based products conventionally, with [the] WGC instrumental in providing this information. Based on that, we tried to envisage a Shariah equivalent so that the standard will be robust enough to cover both existing and future possible gold-based products.”

Muslims and the gold market

There has been awareness that change is afoot in the gold market, by gold commentators for the last eighteen months or so. For many the passing of Sharia-compliant guidelines means a huge surge in gold demand and therefore the gold price. But can we really expect this from a diverse group of people who happen to share a religion?

Yusuf DeLorenzo, an AAOIFI member, stated “…gold has historically been the choice of individual Muslims desirous of preserving wealth and value.” The AAIOFI expands on this further, “Historically, gold has always been a fascinating and charming choice of investment for humans in all societies and cultures. From the perspective of Islamic Fiqh and the Islamic economic system, gold has its specific significance. This significance arises from the specific principles provided for gold and silver as Thaman in Shari’ah.”

There is certainly a desire for Muslims to invest in gold according to Dr. Mohammad Daud Bakar, Chairman of Amanie Advisors, a critical partner in the new Sharia gold standard who said:

“Gold has a unique status in Islam, but the existing Islamic standards for gold are fragmented, hampering product development and market demand. The Sharia Standard on Gold … will provide clear guidance on gold to individuals and institutions.”

For the AAIOFI the opportunity to create guidelines for Sharia-compliant gold investment products is giving Islamic investors the opportunity for further diversification, “Shari’ah compliant investment options in gold market (including physical as well as exchange based transactions) can provide Islamic Financial Institutions (IFIs) and their customers a great opportunity to diversify their investments.”

However, the AAOIFI reminds us that there is also a call in the Quran and other holy texts that call for the reader to exercise caution when investing in precious metals

“The original sources of Shari’ah i.e. the Holy Quran and Sunnah have numerous cautions on the use and hoarding of gold on the moral and ethical side. These include a few prohibitive uses, as well as, general guiding principles against hoarding of gold and silver.”

Gold and Sharia

When people talk about Sharia or Islamic gold, they are referring to gold or gold investment products that are Sharia compliant. However in Islam gold is a special case. “Gold is very much Shariah compliant in terms of using it as a commodity. But there are certain conditions from a Shariah point of view which are enforced on gold and not on other commodities,” Dr Mohamad Akram Laldin, the executive director of International Shariah Research Academy for Islamic Finance, explained to IFN.

In Islamic texts gold is a Ribawi item and investors need to practice caution when investing in it to ensure that it meets certain conditions. A Ribawi item in Sharia law is an item that must be sold on weight and measure. There are six Ribawi items: gold, silver, dates, wheat, salt and barely.

As a Ribawi item gold cannot be traded for future value or for speculation.

In most cases trading gold futures contracts is haram and forbidden or proscribed by Islamic law. It is speculation and not backed by physical gold, the price can be volatile and you can end up paying or receiving interest on your trading account.

This means that gold investment has been limited to its use as a currency and jewellery, as the earning of interest is forbidden. The immediate transfer requirement means that speculating on future values is not allowed. This makes it tricky in the area of gold futures and other paper gold products.

Dr Mohamad Akram Laldin, explained to IFN, “In other commodities the counter value can be deferred. But when it comes to gold, both counter values have to be spot. That is one of the biggest issues when it comes to the trading of gold. Under modern transactions we will have sophisticated platforms, and different ways and means to transact, but as long as these conditions are satisfied we can always trade.”

This might sound as though gold investment is near impossible in the Islamic world today. In reality it is not, although there is some confusion. Yusuf DeLorenzo, an AAOIFI member, stated

“The hesitation about investing in gold when credible Shariah standards are unavailable is nearly universal in the Islamic world  …  There might be certain other issues, particularly when it comes to delivery,” stated Dr Mohamad Akram. “If I am buying gold from a vendor on a platform, can I take physical delivery of this gold? But as long as these conditions can be satisfied, there shouldn’t be any issue. As an underlying asset, gold is Shariah compliant and can be used.”

With gold investment platforms such as Goldcore able to offer segregated, allocated gold bullion accounts with the option of physical delivery Muslims are able to invest in gold bars and coins. However, there has been no consensus on the trading of gold as a commodity, owning companies that hold gold assets (e.g. an ETF), gold futures allowing delivery etc.

Why the need for a new gold standard?

WGC data shows that in the last eight years (when reliable data first became available) the major Islamic asset classes (including REITs, the Takaful index, the Dow Jones Islamic Equities Index and the Dow Jones Sukuk Index) have all underperformed compared to gold, as have the major currencies used in the Islamic world. Since 2000, gold has risen 367% in US dollar terms (Gulf Cooperation Council currencies are pegged to the US dollar), 393% in Malaysian Ringgit terms, and 762% in Indonesian rupiah terms.

Whilst Muslims are able to invest in gold there is clearly a lack of understanding and consensus for how Sharia law can be applied to today’s vast number of gold product offerings. Hence why the WGC and their partners, believe a gold standard will be beneficial to both Muslims and the gold market.

The World Gold Council stated in its October newsletter that they hoped the new standard will ‘bring all the strategic benefits of investing in gold to Islamic investors.’ The choice of assets that Muslims are currently able to invest in is considered to be ‘so limited’ by the WGC that they are expecting the benefits of a gold investment standard to be ‘even more pronounced.’

The new Sharia gold standard will set a future path in place for gold products and those who invest in Sharia-investible assets. Once the Standard is announced on December 6th, we are likely to see increased development of new products due to the increased customer base and some diversification amongst Shariah-compliant offerings which will likely offer options for savings, hedging and diversification. So far, none of these things have been available on a standard Sharia compliant basis.

Natalie Dempster has been quoted by Reuters stating that the new guidelines for holding gold-backed products may be additionally appealing to Islamic banks who are/will be required under Basel III rules to increase the amount of High Quality Liquid Assets (HQLAs):

“Gold for its nature could fit into HQLA buffers that Islamic banks could hold…Since the financial crisis, banks have been required to set aside pockets of so-called high-quality liquid assets to protect them against another systemic liquidity crisis…Basel gave national supervisors in Islamic jurisdictions the right to define high-quality liquid assets themselves. And I think gold will fit very well there. It is an extremely liquid market.”

New gold standard

The new Sharia Gold Standard is set to be announced on the 6th December at the World Islamic Banking Conference. “Shariah Standard on Gold” will provide “guidance from the Shariah perspective on the usage of gold in financial and investment transactions for Islamic financial institutions and participants,” according to Natalie Dempster of the World Gold Council.

It is believed that it will state that gold investments must be backed by physical gold. In truth, whilst there have been some draft rounds of the Standard and quite a bit of publicity, no one knows what is set to be revealed in the ‘guidance’.

It may still exclude gold futures contracts, a draft by the WGC states that whilst gold as a currency can be traded on a spot basis, however if it is seen as a commodity then it could be the subject of a future sale under the principle of salam, or deferred delivery sale.

The gold standard draft will likely approve holding gold in ETFs, derivative contracts, investment accounts and Islamic bonds.

What the standard will not include is guidance on the sourcing of gold, which is unsurprising in some respects as their is nothing directly about this in the Quran. However, it does require its followers to be ethical – something that is an important issue in the gold market these days. “It will provide clarity on gold’s use in financial services and harmonise the relevant rules across markets, thereby creating greater access to gold,” said Natalie Dempster, Managing Director, Central Banks and Public Policy, WGC.

Overall the Standard is expected to achieve the following:

  • Increase the amount of available liquid Shariah-compliant instruments
  • Increase the diversity of available liquid Shariah-compliant instruments including gold bullion and some other gold related investments
  • Facilitate greater consumer choice by expanding the range of Shariah-compliant financial solutions
  • Greater role for the Islamic finance industry in global gold price discovery

New dynamics in gold price discovery

The final point above, to achieve a ‘Greater role for the Islamic finance industry in global gold price discovery’ is one that is playing on current gold market participants’ minds.

There are estimated to be around 1.6 billion Muslims around the world. Given the extent to which the gold market looks to Chinese and Indian demand in terms of demand, supply and price changes this move will likely come to have a very significant impact on the dynamics of the gold market.

The role of price discovery has been, up until recently, shared between the London Gold Market and the LBMA and the COMEX. However there has been a new dawn and the new policies from China regarding all aspects of the gold market have put the wheels in motion. Earlier this year the Shanghai Gold Benchmark was launched by the Shanghai Gold Exchange, seen as China’s step to “increase its weight in the global pricing of gold,” according to the People’s Daily.

When the benchmark was announced Marwan Shakarchi, chairman of Swiss-based refining group MKS (a Shanghai gold Exchange member) was quoted as saying that China is “a market of 1.2 billion people and simply cannot be neglected.” This step was seen as the first of many toward internationalisation of the Chinese Gold market.

The Islamic world is obviously different to the Chinese and Indian gold markets – dispersed geographical location, different exchanges, different nationalities, regulations and customs. However, it is worth remembering that the majority of Muslims reside in countries where there is still a strong view that gold is money and a strong store of value. In countries such as Pakistan with tricky geopolitical status, or Malaysia and Indonesia with a fluctuating currencies, one can expect to see an increase in demand for Sharia compliant gold products. And, therefore, a change in dynamic in the gold market.

The places to watch are Bahrain, Qatar, Indonesia, Saudi Arabia, Malaysia, United Arab Emirates, Turkey, Kuwait, Oman and Pakistan which currently represent 93% of Islamic financial assets within their financial institutions.

Gold coins of Kushnan Empire centering on Afghanistan, northern India and western China. British Museum. Wikimedia

Whilst one of the bodies involved in setting the standard, the AAIOFI, is based in Bahrain, we expect to see Dubai gain some serious influence with these changes.

The Emirate plays a significant role in both the physical and paper gold markets. Over $75 billion worth of gold, or about 40 per cent of the world’s physical bullion exchange, was traded through Dubai in 2013, according to the Dubai Multi Commodities Centre (DMCC). This is a city with very strong vision over what it can achieve in the gold market.

“In 2003, Dubai traded US$ 6 billion in gold; in 2012, it was US$ 70 billion. Even taking into consideration gold’s phenomenal price rise over this period, Dubai has doubled the tonnage traded through the Emirate,” according to the Dubai Multi Commodities Centre (DMCC).

Currently the Dubai Gold and Commodities Exchange (majority owned by the DMCC) already has active gold futures trading and earlier this month it announced that it would become the first foreign exchange to list Shanghai gold futures. It is clear that it has set itself up to compete with the likes of Singapore as a gateway between the East and the West, and in the meantime will play an increasing role in this increasingly globalised financial and increasingly important physical gold market.

The launch of a Sharia Gold Standard, is also an opportunity for those in the West, who are determined to maintain some control over price discovery. In London, the London Metal Exchange (LME) is the central clearing hub for Shariah compliant commodity trades. Given their recent work on updating their role in the gold market it will come as no surprise that they are reportedly looking at a gold futures contract that could be settled based on the physical delivery of gold bars. This is what the Chinese have done with gold bars in a kilo format on the Shanghai Gold Exchange (SGE). Should this happen, the LME exchange likely already has the right relationships in place to leverage a new Sharia gold standard.

Is the physical gold market big enough

It is important to retain the important point that the new gold standard will stress the need for underlying physical gold, in whatever gold products are bought. Whilst the likes of the COMEX gold market are able to grow to multiple times the size of the underlying physical market, with little impact on physical demand, this will no longer be case. Especially with the likes of China enforcing similar rules.

The World Gold Council have stated that we can expect to see an additional demand of ‘hundreds of tonnes’ once the sharia gold standard has been approved. If just 2% of the assets currently managed by Islamic finance institutions are invested into sharia-compliant gold products then we can expect to see over 1,000 tonnes of additional gold demand.

Should these numbers come to fruition this will have a major impact on supply, as well as demand. Without the existence of a formal Sharia Gold Standard, total global gold demand was just under 1,000 metric tonnes in Q3, whilst total global gold supply was just over 1,000 metric tonnes leaving a surplus of 172 metric tonnes. Should Islamic Finance begin to create significant additional demand in the gold market, then we should see these demand and supply issues in the gold market leading to higher prices.

It is always important to remember the very small size and rarity of physical gold in the world. Physical gold is both finite and extremely rare and all the gold ever mined would fit into a giant gold bar the size of a four bedroom house. It is roughly 22 metres cubed and would fit on the center court of Wimbledon – see GoldNomics video.

Conclusion

While we do not know the details of what will be announced on the 6th December, we do know the most important aspects. Indeed, GoldCore have for a number of years been working on a Sharia compliant gold bullion solution for the institutional market and have strong partners who we are working with today.

The changes will affect the physical gold market globally, 1.6 billion people will be able for the first time to use gold bullion products and platforms that offer physical delivery, allocated and segregated gold ownership.

Silk Road – Wikimedia

As we reported on last month, the impact of religious festivals on the gold market is monitored all over the world. We can expect to see similar changes and dynamics come the arrival of the Sharia Gold Standard. However, this is an entire financial market that will coming into the physical gold market. Unlike with religious festivals etc, we will see an increase in the number of structured, well-marketed and regulated financial products that have been designed to offer physical gold to sophisticated investors including high net worth (HNW), ultra high net worth (UHNW) and indeed family offices.

This will not only impact the physical gold market, but it will impact the current roles in price discovery and how 1.6 billion people choose to invest in and hold gold coins and bars.

To us, this could not have come at a more pertinent time. The West is coming under increasing economic and political pressure as the ‘Silk Road’ nations of the Middle East and Far East, including Russia and China, continue their rise and become more powerful. It is without surprise that the Silk Road nations continue to assert their independence from western dominance and monopoly – including in financial markets. And it is with even less surprise that they are doing this through gold.

Gold and Silver Bullion – News and Commentary

Uncertain state of world—economically & geo-politically—bodes well for gold in 2017 said GoldCore (MarketWatch.com)

Gold prices firm as dollar retreats from 14-year high (Reuters.com)

Asian markets slip as oil prices fall (MarketWatch.com)

Gold price ‘will be just fine’, says fund manager (TheWeek.co.uk)

Much-feared pensions time bomb is now exploding for 600,000 workers (Independent.ie)

What’s Next for Gold? (GoldSeek.com)

Gold Price Skyrockets in India after Currency Ban – Part II (Acting-Man.com)

Gold Not Driven by Inflation But Real Rates – Audio (Bloomberg.com)

Trump & The Financial Markets The Next Four Years (MarketOracle.co.uk)

Why Italy is the next country to fall to Trumpism – McWilliams (DavidMCWilliamns.ie)

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Gold Prices (LBMA AM)

17 Nov: USD 1,232.00, GBP 9,988.19 & EUR 1,148.10 per ounce
16 Nov: USD 1,225.70, GBP 9,984.36 & EUR 1,144.68 per ounce
15 Nov: USD 1,228.90, GBP 998.86 & EUR 1,138.70 per ounce
14 Nov: USD 1,222.60, GBP 997.80 & EUR 1,136.53 per ounce
11 Nov: USD 1,255.65, GBP 999.19 & EUR 1,154.45 per ounce
10 Nov: USD 1,280.90, GBP 1,034.07 & EUR 1,175.48 per ounce
09 Nov: USD 1,304.55, GBP 1,050.42 & EUR 1,176.84 per ounce

Silver Prices (LBMA)

17 Nov: USD 17.04, GBP 13.65 & EUR 15.87 per ounce
16 Nov: USD 16.95, GBP 13.64 & EUR 15.85 per ounce
15 Nov: USD 17.00, GBP 13.68 & EUR 15.80 per ounce
14 Nov: USD 17.20, GBP 13.73 & EUR 15.95 per ounce
11 Nov: USD 18.59, GBP 14.73 & EUR 17.09 per ounce
10 Nov: USD 18.75, GBP 15.11 & EUR 17.20 per ounce
09 Nov: USD 18.81, GBP 15.12 & EUR 16.96 per ounce

Source: Will County News

Who’s behind the war on cash?

Who’s behind the war on cash?

It’s the usual suspects

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Cashless Credit Card Showing Point Of Sale And Point Of Sale 3d RenderingThere is little more destructive to the health, wealth, happiness, well-being and liberty of the populace than when the government makes policy to make its citizens’ lives better, protect them from crime, make their children safe or help them preserve their wealth.

Case in point: Last week, India’s Prime Minister Narendra Modi suddenly banned its largest bank notes —  500 and 1,000 rupee notes (500 rupees equals $7.50) — declaring that they would cease to be legal tender at year end and requiring them to be deposited in banks by that time. This has thrown the nation into turmoil.

To grasp how devastating this move is to the Indian people, one must understand how different India’s economy is from most of the rest of the world.

Half of India’s citizens don’t have a bank account and about 25 percent do not even have an identity card. Most of these have little or no education. Ninety-seven percent of India’s economy is cash-based, and Modi’s order made 88 percent of all outstanding currency unusable.

So, without a bank account and familiarity with the banking system, and lacking an education or even the ability to read and write, much of the country has no way of converting their money, and those that can figure it out are limited to exchanging no more than 4,000 rupees ($60) per day. And this only after standing in long lines.

According to Jayant Bhandari, exchanging the money for newly approved notes requires standing in three lines in the proper sequence. One must go to one line to get a form that calls for personal information and the serial number of all the bills to be exchanged. A second line is then called for where the completed form is presented along with a government-approved ID card. There the ID is checked against the information on the form and a photocopy of all the documents is made. From there, citizens are directed to a third line where the bank notes, form and photocopy of the ID are presented to be exchanged for new notes. The process takes hours and must be accomplished – 4,000 rupees at a time — until all old currency is exchanged for new.

Already in India inflation is running rampant, counterfeit currency is flooding the market, phony government officers are bilking the populace, people are unable to buy food and medicine, violence has increased, the price of gold has exploded, consumption in the cities has dropped dramatically, businesses are out of useable money and goods, a barter economy is expanding, and government agents are enriching themselves at the people’s expense. ATMs do not yet accept the new notes.

Modi moved to ban the large notes and institute a new currency under the guise of cracking down on black market transactions, eradicating corruption and fighting counterfeiting. But this just one more step in the globalist elite’s rush to ban cash.

The old saw says to “follow the money,” and when government policy of this sort is implicated it’s a good idea to follow the money and ask, “Que bono (who benefits)?”

In this case, one does not have to look far. Bill Gates, through the Bill and Melinda Gates Foundation (BMGF), has made strong inroads into the Indian government, primarily through his phony altruistic vaccine program and health spending toward HIV prevention, polio eradication, child health and nutrition and other programs (a story for another day). He also just happened to be in India on business within a few days of Modi’s decree and is known to have advised Modi, telling him, “The world will go cashless and India will move quite rapidly to a digital payments economy.”

Why would Gates care about a “digital payments economy?” He wants to work with the Indian government on various issues including “epayments, digital health, digital literacy and e-agriculture.”

In 2012, BMGF partnered with a number of governments, international banks, corporations and organizations to form the “Better Than Cash Alliance (BTCA),” whose mission it is to “accelerate the transition from cash to digital payments globally through excellence in advocacy, knowledge and services to members.” Among the member governments is India, and globalist corporations involved include Coca Cola, Visa, MasterCard, the Citi Foundation, the CIA front group U.S. Agency for International Development (USAID), the World Savings Bank Institute (representing 7,000 retail and savings banks worldwide), the Ford Foundation, the Clinton Development Initiative and a host of UN agencies and organizations.

All these organizations will profit off the move to cashless commerce in at least one of several ways. Some will directly profit from creating the digital networks in Third World countries like India. Some from the digital transactions themselves. Some from creating e-commerce stores. Some from the increased taxes by the elimination of off-book cash transactions, and by profiting from the electronic tax payments through government contracts. Some from the increased surveillance digital transactions make possible. And the people, as Gates points out, will be able to have better access to banks for borrowing.

Ah, the great American Dream — becoming a debt slave to the bankster class. It will soon be available in India and elsewhere. What’s a little poverty and hardship and death and destruction along the way to making a “better society” based on debt?

Days after India’s move, banking giant UBS proposed that Australia eliminate its $100 and $50 bills, claiming it would be “good for the economy and good for the banks.”

Make no mistake; there is a global war on cash as a medium of exchange. It is being waged by governments, banksters and global elites to create a cashless society where all financial transactions take place as transfers of electrons in a digital web.

Here is the pattern of evidence that should convince even the most ardent of skeptics that the war on cash is being prosecuted on all fronts around the world. In just the last few years, central planners have launched this series of multiple attacks on cash:

  • Italy made cash transactions over €1,000 illegal.
  • Switzerland proposed banning cash payments in excess of 100,000 francs.
  • Russia banned cash transactions over $10,000.
  • Spain banned cash transactions over €2,500.
  • Mexico made cash payments of more than 200,000 pesos illegal.
  • Uruguay banned cash transactions over $5,000.

France has been especially aggressive as French Finance Minister Michel Sapin openly declared it was necessary to “fight against the use of cash and anonymity in the French economy.” Recent French laws that have gone into effect:

  • Ban cash transactions of more than €1,000 (down from the previous limit of 3,000 euros).
  • Limit cash payments by foreign tourists to €10,000.
  • Lower the threshold below which a French resident is free to convert euros into other currencies without having to show an identity card from 8,000 euros to 1,000 euros.
  • Require any cash deposit or withdrawal of more than 10,000 euros during a single month to be reported to the French anti-fraud and money laundering agency Tracfin.
  • Require that French authorities be notified of any freight transfers within the EU exceeding €10,000, including checks, pre-paid cards or gold.

Many retailers around the world have stopped accepting cash to avoid being regarded with suspicion when they make large cash deposits at the bank, which in many countries – including the U.S. — have to be reported to the government.

Banksters don’t like cash for a host of reasons: Cash is dirty and cumbersome to handle and count, and it has to be stored in expensive vaults protected by expensive security measures. But the main reason the global powers hate it is that cash is anonymous.

The banks can’t harvest cash for valuable marketing information about your spending habits so they can target their own advertising to you and sell your personal information to other marketers.

Central bankers don’t like cash because it inhibits their ability to manipulate their monetary policy. Several European central banks have recently imposed negative interest rates, which means depositors have to pay the bank to store their money rather than the bank paying interest to the customer. The objective is to force the money out of the banks and into circulation to stimulate sagging economies. But what it has done so far is simply to drive money out of bank deposits and into cash. For the bankers, eliminating cash would remove this escape route.

Governments don’t like cash because cash transactions are untaxable and untraceable.

Are they winning the war on cash? Yep. Consider this: In the United States, most of the money in our financial system is in stocks, derivatives, bonds, mortgages and digital bank deposits. The real physical cash in circulation — that is, stuff you can actually hold in your hands — adds up in total to less than 1 percent of all the money in our financial system.

And this fact may surprise you, and it illustrates just how far the war on cash has encroached into our financial life. Once upon a time, the U.S. printed currency in denominations of $500, $1,000, $5,000 and even $10,000 notes. No more. Under the pretext of fighting the war on drugs, in 1969 the U.S. government eliminated all large denominations. The largest paper note now printed by the Treasury Department is the $100 bill!

Are you wondering what you can do to fight back in the war on cash. Truthfully, your weapons are limited and likely to have little if any impact to halt the advance of the financial imperialists. They are far bigger and have far bigger guns than you do.

Besides, most of the public is unwittingly on their side, seduced by the handy convenience of plastic and digital money and debt. Wolf Street’s Don Quijones wrote: “The biggest tragedy of all is that the government’s and banks’ strongest ally in their War on Cash is the general public itself. As long as people continue to abandon the use of cash, for the sake of a few minor gains in convenience, the war on cash is already won.”

But you can take personal measures to retain a certain level of privacy in your financial affairs by converting a portion of your wealth into non-digital assets like gold and silver bullion coins (I don’t recommend bars as they have to be assayed, or receive a certificate of authenticity and they are hard to barter with; and I recommend you avoid numismatics, the value of which is determined by their value to collectors), jewelry, precious gems (especially diamonds), art and antiques or other hard assets. Of these, gold and silver bullion requires the least amount of specialized knowledge.

Of course, you’ll have to provide storage and security for these hard-asset valuables. You may want to consider offshore non-bank storage to get your goods as far from U.S. government hands as is legally permissible, both to protect privacy and to protect against seizure or even confiscation.

And as always we recommend you have plenty of food, water and cash on hand in case of a bank holiday or significant event, and guns and ammo on hand to protect yourself, your family and your valuables.

Source: Will County News

AFSCME versus the taxpayer

Over the years, AFSCME – the state’s largest government-worker union – has amassed incredible benefits for state workers through contract negotiations with the state. When AFSCME comes to the bargaining table, it isn’t AFSCME versus the governor – it’s AFSCME versus the state taxpayer. And AFSCME holds extraordinarily more power in the process than the state taxpayers footing the bill.

Imagine an employer knowingly paying an employee to do work that will undermine the employer. What’s more, that employee is allowed to spend company time complaining publicly about the employer.

It sounds preposterous, but that is exactly what the state of Illinois’ contract with the American Federation of State, County and Municipal Employees – the largest government-worker union in Illinois – allows. Illinois state employees are actually allowed to take time off from work, with pay, to do union work.

And you can be sure that work benefits the union and not the taxpayers footing the bill.

Over the years, AFSCME has been able to amass other considerable benefits for itself as well. State workers are the highest-paid state workers in the nation when adjusted for cost of living. AFSCME employees receive platinum-level health insurance at little cost, and most get free health insurance at retirement.

And then there are other AFSCME perks – like lax disciplinary procedures that allow a worker to have 10 unauthorized absences without repercussions – that are unlike anything offered in the private sector.

Just how did AFSCME obtain all of these contract provisions?

Clearly, it isn’t because AFSCME is the underdog at the bargaining table when it comes to negotiations, as AFSCME leadership likes to claim. On the contrary, AFSCME is the 800-pound gorilla at the negotiating table.

At least three factors place AFSCME at a distinct advantage over state taxpayers when it comes to bargaining for a new contract.

The nature of collective bargaining favors unions over taxpayers

When AFSCME and the state negotiate, it isn’t AFSCME versus the governor at the bargaining table – it is AFSCME versus the taxpayers. And it is not a fair fight.

There are no natural checks on the demands of government-worker unions. The union can demand more because the state just passes the cost on to taxpayers, who have no choice but to pay.

What’s more, government-worker unions have a monopoly. There is one source for government services. And when a government-worker union threatens to strike, it is threatening to shut down government services, leaving residents with no competing provider of those services.

AFSCME’s political negotiations have warped the negotiating process

Political contributions mean power. And between 2002 and 2015, AFSCME gave more than $2.1 million to the election committees of current officeholders.

That includes the majority of current legislators: More than 66 percent of current representatives and more than 64 percent of current senators have received contributions from AFSCME.

AFSCME leverages these contributions to get its way. This means when negotiations or policy decisions are made, taxpayers aren’t represented by elected officials who have taxpayers’ interests in mind; they are “represented” by politicians who are beholden to AFSCME for their positions.

AFSCME negotiates contract provisions that give the union even more power

It isn’t enough that AFSCME has more power and political leverage than the state’s taxpayers. AFSCME then uses that position to secure even more power for itself in its contract with the state – like the contract provisions that force taxpayers to pay state employees to do union work.

In his offer to AFSCME, Gov. Bruce Rauner did not change the “release time” provisions, meaning that AFSCME employees are still entitled to the following:

  • Time off – with pay – to perform union work.
  • Time off – with pay – to learn how to become union stewards.
  • Time off – with pay – to attend union orientation.

On top of all that the state is required to provide rooms for union meetings, it must provide the use of state phones, and it must grant access to state email systems, as well as to information about employees who are not union members.

In other words, taxpayers are actually paying state employees to use state resources to advance union causes to the detriment of state taxpayers.

Any of these three factors taken alone – the nature of collective bargaining, AFSCME’s political power or AFSCME’s negotiated power – places AFSCME in a more powerful position than state taxpayers when it comes to negotiations. But taken together, they place AFSCME on a totally different level.

TAGS: AFSCME: American Federation of State County and Municipal Employees

Source: Will County News

Homer 33C Finance & Operations Committee Meeting November 30, 2016

Summary of the Homer School District 33C

Finance & Operations Committee Meeting

November 30, 2016

_____________________________________________________________________

            Barb Wilson, President      Angela Adolf, Vice President      Amy Blank, Secretary

    Deb Martin, Member    Ed Campins, Member    Elizabeth Hitzeman, Member    Russ Petrizzo, Member                                                                                       

 

 

At the November 30th Finance & Operations Committee meeting:

  • Randy Hoyle and Carolyn Quinn from Pike Systems provided an update on the District’s efforts to streamline its cleaning methods. The goal is to create efficiencies while maintaining hospital-grade cleanliness. So far, the District has:
    • Reduced the number of chemicals it uses each day from 12 to 4
    • Introduced green/bio-based products and eliminated harsh aerosols
    • Completed 131 hours of training, enabling District staff to become “specialists” in their areas
    • Trained staff members how to properly use cleaning equipment
    • Standardized cleaning methods and products across the District so that every building is cleaned the same way, enabling staff members to “float” between buildings and fill in for absent colleagues

 

  • Sharon Uslan from OpTerra Energy provided an overview of the company’s services and explained how it can help Homer 33C reduce operating costs by implementing customized energy programs that leverage sustainable energy technologies to modernize facilities.

 

  • Christi Tyler, Interim Assistant Superintendent for Business, discussed a bus leasing option that would enable the district to:
    • Avoid a large capital outlay
    • Refresh its entire fleet every 5 years
    • Reduce maintenance costs

The District currently owns its bus fleet and replaces each bus every 7 years on a rotating schedule. Ever since the District switched from a 5-year replacement schedule to a 7-year replacement schedule, it has seen its maintenance costs go up. This fiscal year, it has already spent 80 percent of its bus maintenance budget — and it still has half a year to go. Preliminary numbers show the District may be able to refresh its entire fleet for less dollars than it has currently budgeted for the purchase of 8 new buses. The Committee instructed Tyler to continue her research and present hard numbers to the Board with specific information about bus radios, cameras and GPS systems.

 

  • Tyler reported the District received three bids for two-way radios that would enable building administrators to communicate with the maintenance staff and District administrators throughout the school day and during crisis situations. The District is recommending the Board award the bid to A Beep, a telecommunications products provider headquartered in Joliet.

 

  • Tyler reported the District has a few outstanding Health Life Safety checklist items to complete at the buildings. It would like to use TRIA architects — the same firm used on the District’s bus barn project — to complete the checklist items.

 

 

 

 

The Next Regular School Board Meeting is December 20, 2016 at 7:30 p.m.

 

Source: Will County News

Will Italy be next to leave the EU?

What is Italexit? Will Italy be next to leave the EU?

AFTER the landmark Brexit victory, calls are mounting for Italy to hold its own EU referendum. Could Italy be next to leave?

PUBLISHED: 00:01, Fri, Sep 23, 2016 | UPDATED: 18:23, Fri, Sep 23, 2016
Italexit
Former Italian Prime Minister Enrico Letta has warned Europe is not safe following Brexit

What is Italexit?

Some anti-EU voices are campaigning for an Italian exit – or Italexit – as the country prepares for a historic referendum on constitutional reform.

The Prime Minister Matteo Renzi has promised to resign if the reforms do not go through, which could pave the way for the Eurosceptic Five Star Movement (M5S) to seize power.

Founded by radical comedian Beppe Grillo, the right-wing M5S party has rallied against the crumbling euro and has demanded a repeal of EU interference in Italy.

Beppe GrilloGETTY

M5S frontman Beppe Grillo has demanded a repeal of EU interference in Italy

But despite being a harsh critic of the bloc, the party is not currently backing calls for a referendum on EU membership.

Instead, it is campaigning for Brussels drop its federalist aspirations and return to its original vision of a European community.

After the Brexit vote, M5S said: “We want a Europe which is a ‘community’ and not a union of banks and lobbies.

“The Leave vote of the United Kingdom sets forth the failure of political communities facing austerity, and the egotism of the member states, incapable of being a community.”

The right-wing Northern League has pledged to take Italy out of the EU but it has little political power and is only supported by 12.4 per cent of voters.

“Thank you Great Britain, next it is our turn,” party leader Matteo Salvini said in the wake of the Brexit vote.

ANTI-EU PARTIES MAPPED

Luigi Di MaioPH

Mr Maio, an M5S politician, said: ‘The euro today does not work’

Will Italy leave the Euro?

The Eurosceptic MS5 has pledged to call a “consultative referendum” on Italy’s involvement in the euro if seizes power at the next election.

Luigi Di Maio, M5S politician and the deputy speaker of the Italian parliament, says the EU “has decided to abdicate from its role of protecting the internal market and protecting its citizens.”

The party has proposed either a return to the Italian lira or radical reform of the single currency. Mr Maio has said: “The euro as it is today does not work.”

WILL DENMARK LEAVE THE EU?

Would the Italians vote to leave the EU?

In an Ipsos Mori poll conducted after the UK’s referendum in June, 44 per cent of of Italians said they believe the Government should call a referendum on EU membership

In a European Commission poll in November 2015, just 40 per cent of Italians said that EU membership was good for their country.

The country is divided on EU membership: 48 per cent of those surveyed by Ipsos Mori said they would vote remain, 28 per cent would vote leave and 26 per cent were undecided or wouldn’t vote.

This is in contrast to a separate poll conducted by Ipsos before the Brexit result, which suggested that almost half of Italians were ready to leave the EU.

 

Source: Will County News