Why are Russia and China Buying Gold, Tons of it? (Source New Eastern Outlook) In times of world financial crisis as in the 1930’s, gold is preferred by central banks and ordinary citizens as a store of value when paper money loses value. We are approaching another of those times when the accumulated paper debt of the dollar system is debasing the worth of paper dollars. What’s highly significant in this light is to see which central banks are buying all the gold they can get. After the oil shock of October, 1973 Secretary of State Henry Kissinger spoke of a “petrodollar.” The dollar value was backed not by gold but by oil, everyone’s oil. The price of oil had been manipulated by Kissinger and others in 1973, as I detail in my Gods of Money book, to increase by 400% in a matter of months, forcing Germany, France, Latin America and much of the world to buy dollars. Washington made certain as well in 1975, when Germany, Japan and other nations tried to buy OPEC oil in their own national currencies, that Saudi Arabia and OPEC countries would accept only dollars for their black gold, the oil. Since September, 2014 the world dollar price of oil has collapsed. It has gone from levels of $103 a barrel down to close to $30 today. That’s a collapse of 70% in demand for dollars for the world’s largest commodity measured in dollars. In this political and financial context, the central banks of Russia and China are buying gold for their central bank reserves at a fever pace. Not only that, the Peoples’ Bank of China recently announced it has abandoned its peg to the US dollar and diversify into a basket of currencies led by the Euro. However the moves of Russia and China central banks to gold are far more strategic. While all eyes are on the oil price and the ruble to dollar rate, the Central Bank of Russia has quietly been buying huge volumes of gold over the past year. In January, 2016, the latest data available, the Russian Central Bank again bought 22 tons of gold, around $800 million at current exchange rates, that, amidst US and EU financial sanctions and low oil prices. It was the eleventh month in a row they bought large gold volumes. For 2015 Russia added a record 208 tons of gold to her reserves compared with 172 tons for 2014.

ATTENTION PRESIDENT OBAMA: ONE THIRD OF U.S. HOUSEHOLDS CAN NO LONGER AFFORD FOOD, RENT AND TRANSPORTATION (Source Zero Hedge) While the Fed has long been focusing on the revenue part of the household income statement (which unfortunately has not been rising nearly fast enough to stimulate benign inflation in the form of nominal wages rising at the Fed’s preferred clip of 3.5% or higher), one largely ignored aspect of said balance sheet has been the expense side: after all, for any money to be left over and saved, expenses have to surpass income. However, according to a striking new Pew study while household spending has returned to pre-recession levels (the average household spent $36,800 in 2014) incomes have not. Specifically, while the median income had fallen by 13% from 2004 levels over the next decade, expenditures had increased by nearly 14%. But nobody was more impacted than the one-third of households which the study defines as “low-income.” Pew finds that while all households had less slack in their budgets in 2014 than in 2004, lower-income households went into the red by over $2,300. In other words, approximately one third of American households were no longer able to cover the core necessities – food, housing and transportation – with average income. According to Pew, households spent more in 2014 than they did in 1996, after adjusting for inflation; this holds whether the figures are based on averages (means) or medians. The typical household saw its expenditures grow by more than 25 percent, from $29,400 in 1996 to $36,800 in 2014. Mean expenditures grew 27 percent since 1996, rising from $43,200 to $54,800.

U.S. will send battle-ready troops and tanks to border with Russia (Source Mashable.com)

Battle-ready American soldiers will soon be permanently positioned along Russia’s western borders.

In a move not seen since the Cold War, the Pentagon plans to send U.S. troops with heavy artillery to Eastern Europe to bolster the defenses of its NATO allies and send a message to an increasingly aggressive Moscow: back off. General Philip Breedlove, the top U.S. commander in Europe, announced the move Wednesday, saying it demonstrates a “strong and balanced approach to reassuring our NATO Allies and partners in the wake of an aggressive Russia in Eastern Europe and elsewhere.” It means about 4,500 U.S. troops along with 250 tanks, Bradley Fighting Vehicles, Paladin self-propelled howitzers and more than 1,700 additional military vehicles would be on the ground in six countries by next February. The move marks an escalation of u.s. military-officials-aim-to-bolster-troop-presence-in-europe- proposal announced last year, when it said it was considering ways to increase America’s military present in Eastern Europe to deter Russia. The estimated 4,500 troops and military equipment are expected to be spread across Bulgaria, Estonia, Latvia, Lithuania, Poland and Romania. The materiel could also be moved around the region for training and military exercises. U.S. Army officials have said they would send additional communications equipment to Europe so that headquarters units could have the radios, computers and other equipment needed to work with the brigades, The Associated Press reported.

Momentum slows on Obama’s nuclear security agenda (Source Yahoo) Just as fears of nuclear terrorism are on the rise, President Barack Obama’s U.S.-led drive to lock down all vulnerable atomic materials worldwide risks losing momentum. Obama will convene a global summit in Washington this week in the aftermath of deadly militant attacks in Brussels that have fueled concern that Islamic State could eventually target nuclear plants and develop radioactive “dirty bombs.” But despite significant progress in persuading countries to protect or rid themselves of bomb-making materials, much of the world’s plutonium and enriched uranium remains poorly secured. At the same time, the effort has been complicated by fresh nuclear advances by North Korea and diplomatic tensions between the United States and Russia. All of this weighs on Obama’s agenda as he prepares to host world leaders for his fourth and final Nuclear Security Summit on Thursday and Friday. He inaugurated the event nearly six years ago, early in his tenure, after using his landmark 2009 Prague speech to lay out the goal of eventually ridding the world of nuclear weapons as a central theme of his presidency. While Obama’s hopes have bumped up against geopolitical reality, the White House is touting a list of nuclear security achievements as he heads into his final 10 months in office. Arms control advocates commend Obama for his efforts, but many see progress slowing. “The Nuclear Security Summits have had a positive effect, but the strategic goal of developing an effective global nuclear security system remains unachieved,” the Nuclear Threat Initiative, an anti-proliferation watchdog, said in a report.