Market “Rigging” Accelerates “The Great Withdrawal”

Where Can Investors Turn If U.S. Stocks and Banks are Rigged?

4.7.14 – TWO shocking financial news stories hit the wires last week; First, evidence indicates the U.S. stock market may be rigged – front-run by high-speed traders who push stock prices up in a millisecond to skim profits. Second, the world’s 12 largest banks are being sued for rigging the foreign exchange markets over the last decade.

These revelations came as no surprise to those who’ve read, The Great Withdrawal by Craig R. Smith and Lowell Ponte, which details how and why financial market and interest rate manipulation have accelerated because of politicians and central bankers.

However, for nearly one-half of Americans, news of stock market “rigging” is irrelevant because they’ve bailed out of stock investing all together over the past five years.

Regarding banking risks, “Once upon a time – in Norman Rockwell’s ‘hand-shake-confidence’ America – it made good sense to put your money in a rewarding, low interest, near-zero risk bank account,” says Lowell Ponte, a former think-tank futurist.

“But today it no longer makes sense to keep all of your savings in a near-zero reward, high-risk bank account,” say authors Smith, a monetary expert frequently interviewed by Fox’s Neil Cavuto and other major business journalists, and Ponte in their just-released 32-page White Paper titled Don’t Bank On It!

Smith and Ponte clearly identify 19 major bank account risks on the rise today. For example: Did you know that your money deposited in most U.S. banks could be subject to withdrawal restrictions and even confiscation by existing Executive Orders and International Law? And those are just bank risks #1 and #2.

One-third of Americans ignore these risks because they have less than $1,000 in savings. Another one-third of our fellow citizens have less than $25,000 saved, with many assuming that our spendaholic politicians will bail them out.

Smith and Ponte see Progressive economic policies as the key reason most Americans today are living paycheck-to-paycheck, doing all they can just to survive in a world of stagnant wages and rising food, transportation, shelter, clothing and healthcare costs.

“Progressive politicians now feel their power slipping away as Americans are withdrawing from a century of hypnotic control. This is why a desperate Left is turning to naked force – ‘financial repression,’ rule by decree, ‘regulution’ [ideological revolution imposed via regulations], crony capitalism, seizures and wealth redistribution, and politicized government agencies including the IRS and NSA to keep their hold on government power,” write Smith and Ponte in The Great Withdrawal: How the Progressives’ 100-Year Debasement of America and the Dollar Ends (11/13 Idea Factory Press).

“These power grabs will fail,” predicts Craig Smith, “because Progressives are obsessed with obsolete centralization and expansion of government power. Progressives are doomed, even if they cling to power, to rule a nation that their policies have put into an economic death spiral towards a new Dark Age.”

In Don’t Bank On It! (distilled from their book by the same title, scheduled for publication early this summer) you’ll discover key factors that put all American bank accounts at risk. Among these are:

1. Computer Hackers, some of whom have foreign government backing.
2. Identity thieves’ access to accounts often surprisingly easy & unblockable.
3. The dawning age of cyber warfare in which banks will be prime targets.
4. The dawning age of cyber terrorism in which banks will be prime targets.
5. Politicians eager to take the wealth of both banks and depositors.
6. Legal changes that make government confiscation of bank accounts easy.
7. Banks that increasingly resist returning money to account holders.
8. The risk of banks suffering “flash crashes” and other such disruptions.
9. The risk of bank runs by depositors because of fractional-reserve banking.
10. “Financial Repression” practiced by the Federal Reserve.
11. Growing government regulation that makes banks afraid to lend, except to the government.
12. Artificially low interest rates benefiting government, but harming savers.
13. Growing government regulation used to redistribute bank assets.
14. Presidential bank regulation now beyond judicial or legislative restraint.
15. Banks rotting in a stagnant swamp of Federal Reserve excess liquidity.
16. Banks being turned into de facto utilities and ATMs for the government.
17. Politicalization of banks through government pressure.
18. The Federal Deposit Insurance Corporation ability to only replace $1 for every $14 it now claims to insure with its “fractional-reserve” insurance.
19. International Monetary Fund considering a global tax on savers.

This important White Paper, available free upon request, suggests safer, more rewarding alternatives to keeping money in a bank account.

“Some aspect of the financial markets has always been rigged,” admitted CNBC analyst Ron Insana on April 4, 2014. In 1792, Insana notes, a former U.S. Treasury official caused a panic by his attempt to manipulate the market.

“What is new and frightening is the magnitude of risk caused by high-speed computer trading, the sheer size and global machinations of banks, and the nearly limitless power new laws and Executive Orders have put in the hands of politicians,” says Ponte, who long ago was part of the salon of Richard Ney, who in bestsellers such as The Wall Street Jungle and The Wall Street Gang warned of similar dangers.

“Today we are suffering a growing deficit of trust in what we used to believe was reliable – banks, fiduciary institutions, government leaders, and the value of the dollar itself,” says Ponte.

“We need to wake up and smell the new reality – that stocks and savings accounts have become high-risk, low-reward investments. We urgently need to move a portion of our life savings to havens that are safer and more rewarding.”

But with the U.S. stock market and U.S. banks now potentially rigged and highly risky for small investors and bank depositors, how can people secure their life savings and other investments? Smith and Ponte have discovered a strategy to make sure your financial future is secure – no matter how rigged the markets and banks may be.

To schedule interviews with Smith or Ponte, contact Bronwin Barilla at 800-950-2428 or email at bkbarilla@greatwithdrawal.com.

Gold Jumps On U.S. Economy Weakness

Gold prices higher on short-covering and bargain-hunting. U.S. stocks higher on better-than-expected economic reports. Gold last traded at $1,290 an ounce. Silver at $20.05 an ounce.

Gold is on the rebound today due to yet another disappointing report on the US job market.

The U.S. economy created nearly 191,000 new private-sector jobs last month, below economists expectations, according to the ADP National Employment report, a widely-watched private sector employment report.

Weakness in the US economy encourages investors to avoid dollar assets, which is positive for gold.

Of even greater long-term significance to the financial markets is a story that emerged yesterday, but which has escaped the attention of most of the mainstream media. A dozen large investors have filed a joint lawsuit against 12 banks for allegedly conspiring to rig global foreign-exchange prices.

The class-action lawsuit, filed in U.S. District Court in the Southern District of New York late Monday, was from a group of investors across the U.S. and Caribbean, including city and state pension plans. The suit alleges the banks conspired with one another – including in chat rooms, via instant messages, and by emails – to rig foreign-exchange rates as far back as January 2003.

The banks named in the suit are Bank of America, Barclays, BNP, Citi, Credit Suisse, Deutsche, Goldman, HSBC, JPMorgan, Morgan Stanley, RBS and UBS. In other words, 12 of the biggest banks in the world.

The investors behind the consolidated lawsuit are: Aureus Currency Fund LP, a Santa Rosa, Calif., investment fund; the City of Philadelphia and its board of pensions and retirement; the Employees’ Retirement System for the Government of the Virgin Islands; the Employees’ Retirement System of Puerto Rico Electric Power Authority; Fresno County Employees’ Retirement Association; Haverhill Retirement System for the city of Haverhill, Mass.; Oklahoma Firefighters Pension and Retirement System; State-Boston Retirement System; Tiberius OC Fund, a Cayman Islands fund; Value Recovery Fund LLC, a Delaware fund with offices in Connecticut; Syena Global Emerging Markets Fund LP, a hedge fund in Connecticut; and the United Food and Commercial Workers Union.

In the complaint, the investors accused the banks of controlling foreign-exchange rates via a “small and close-knit group of traders.” They alleged it became possible for banks to rig the market because the traders “have strong ties formed by working with one another in prior trading positions” and by, in many cases, living “in the same neighborhoods in the Essex countryside just northeast of London’s financial district.”

“They belong to the same social clubs, golf together, dine together and sit on many of the same charity boards,” the complaint adds.

This is the kind of high stakes lawsuit that can truly impact the marketplace and can drag on for years in the legal process.

One of President Obama’s major speech topics so far in 2014 has been “income inequality,” which is curious because income inequality has set records thanks largely to the policies of his administration.

The top 10 percent of earners took more than half of the country’s overall income in 2012, the highest proportion recorded in a century of government record keeping.

In addition to “income” inequality setting records, “wealth” inequality is now at its highest point since the early 20th century.

The danger from this phenomenon is that such gaps contribute to the bursting of asset bubbles historically, something certainly be possible in the near-term.

Gold Presents Substantial Buying Opportunity!

Gold prices lower, but remains above $1,300, on a stronger dollar and technical selling pressure. U.S. stocks ended lower after President Obama called for further economic sanctions against Russia. Gold last traded at $1,303 an ounce. Silver at $19.78 an ounce.

Gold has hit a 5-week low, creating a substantial buying opportunity for investors.

Gold has corrected due to two few primary factors:

1. Fed Chair Janet Yellen signaled last week that the Fed would continue tapering its QE bond buying program over the next 6 months and could possibly even raise interest rates in 2015.

2. There has been a pause in the tensions between Russia and Ukraine over Russia’s annexation of the Ukrainian region of Crimea.

There is reason to believe both of these factors are fleeting. Evidence continues to mount that the US economy is not as robust as the Fed is saying and some analysts believe the Fed will have to go back on its plan to tighten monetary policy. With regard to Russia, there are indications that the conflict over Ukraine is just getting started. The US and EU are threatening escalating sanctions and Moscow has promised to respond in kind, meaning the conflict is widening geographically and also entering the economic arena. In addition, Putin and other officials in Russia keep saying things that indicate their desire to expand their empire are not over.

But even absent Ukraine and Fed policy, there are numerous factors supportive of higher gold prices, such as the climbing, unsustainable US national debt and the fact that the bull market in the US stock market is already well past its prime.

What could derail the US stock market?

One potential issue is the slowing US economy and the Fed’s obliviousness to it. Just this morning, a report on capital goods orders signaled a cooling US economy. American factories received fewer orders for machinery, communications gear and computers in February, signaling business investment is slowing – often a precursor to declining profits – which ultimately determine the direction of the US stock market.

Another issue involves China and its economic problems. A series of statistics show a slowdown in China’s economy and, most ominously of all, there have been a series of bank runs in rural China. Chinese government and banking officials (who are often one in the same) are dismissing the panic, basing it on rumors, but there is no denying the reality that China’s economy is in duress and its depositors are not confident.

Given these longer-term factors, it is not shocking that experts maintain the outlook for gold remains positive.

Juan Carlos Artigas, director of investment research at the World Gold Council, points out that emerging market volatility will be supportive of higher gold prices.

David Mazza, of State Street Bank agrees with this assessment, and says there will be 44 major political elections worldwide this year — many of them presidential or parliamentary and in countries prone to turmoil like Turkey, Afghanistan, Colombia. If investors want to safeguard their portfolios during this time, they will need to diversify and consider assets that may have been unloved in 2013.

“Think about positioning portfolios to have some stability as risk could emanate from a variety of places that we haven’t been focusing on in the past year or so,” Mazza says, noting that events like Scotland’s referendum in September could give the market jitters.

James Rickards, portfolio manager at West Shore Funds is perhaps the most bullish of all. He sees the price of gold rising to $7,000 to $9,000 an ounce in the next three to five years. He expects a bear market in stocks and a collapse in confidence in paper currencies, both of which are highly bullish for gold.

Gold Continues To Outperform Other Investments

Gold prices end higher on a weaker U.S. dollar and bargain hunting. U.S. stocks retreated from daily highs, still set for weekly gains. Gold last traded at $1,336 an ounce. Silver at $20.31 an ounce.

Times have been good for holders of gold so far in 2014 despite predictions of lackluster performance from big financial institutions. Analysts weren’t expecting much from gold this year. Many big banks were forecasting average 2014 prices below $1,300 an ounce, down from last year’s average of $1,413. But the precious metal has already managed to outperform U.S. stocks, bonds, emerging markets and the dollar.

One factor that has prompted investors to turn to gold is concerns over the future prospects for the Chinese economy, the 2nd largest economy in the world after the USA. Data indicate that the Chinese economy is losing momentum. CBB International’s China Beige Book survey, published this week, showed China’s economy slowed this quarter, with industries including retail and mining showing weaker revenue growth while loans through non-traditional channels became more expensive.

“The pace of Chinese economic expansion has plainly slowed,” Leland Miller, president of survey publisher CBB International, said.

A future factor for which gold could be called on to provide shelter might be trouble in the US banking sector.

In the event of a deep recession in the United States, steep declines in home prices, and recessions in the euro area as well as Japan; 30 major banks in the U.S. would lose a total of $501 billion over nine quarters, according to the latest round of stress testing from the Federal Reserve.

One bank, Salt Lake City-based Zions Bancorp, wouldn’t meet the Fed’s minimum standards for capital in a worst-case scenario. However, there is another bank that private sector analysts have concerns about and it isn’t a small bank. It’s Bank of America. Goldman Sachs believes that most U.S. banks came out of the recent stress tests looking pretty good, with one notable exception: Bank of America.

The second-largest bank in terms of deposits passed the test but left some analysts wondering just how strong its cash position is. Goldman Sachs expressed its concerns in a note today.

When the one bank that is causing private analysts to be concerned is the 2nd largest bank in the country, that isn’t very comforting, no matter what the Federal Reserve may say about its “stress” testing overall.

On a final note for the week, in case anyone still clings to the illusion we can trust the so-called “mainstream” financial media, Bloomberg’s CEO stated this week that the news agency should have suppressed negative stories about China in the interests of promoting its own business enterprises there …a rather bald-faced admission that manipulation is alive and well.

RUSSIA’S SUCCESSFUL “RUN” ON AMERICA’S CENTRAL BANK

MOSCOW WITHDREW MORE THAN $105 BILLION FROM U.S.,
AND MAY SEIZE AMERICAN COMPANIES IN RUSSIA, WARN EXPERTS

NEW OBAMA ORDER CAN CONFISCATE YOUR ASSETS

ECHOES OF CYPRUS BANK DEPOSIT SEIZURES A YEAR AGO

3.17.14 – Tremors from the earthshaking Russian-U.S. Confrontation over Crimea are now revealing just how vulnerable our banking system and economy are to collapse….and how this far-away crisis has greatly increased the threat to ordinary savers in the United States and worldwide.

“While President Barack Obama was threatening to seize Russia’s assets in the U.S., Russian President Vladimir Putin in the past few days apparently successfully withdrew $105.1 Billion in U.S. Treasury Notes that Russia had deposited with the U.S. Federal Reserve,” says monetary expert Craig R. Smith.

“This may be the biggest ‘bank run’ ever on America’s Central bank, and it signals that many more bank runs are soon to come,” says Smith, who is frequently interviewed by Fox’s Neil Cavuto and other prominent business journalists.

“Russia has taken these Treasury Notes – the bulk of its U.S. holdings – out of the country, and beyond President Obama’s power to seize or freeze them as a bargaining chip with Russia,” says Smith, whose latest book is The Great Withdrawal: How the Progressives’ 100-Year Debasement of America and the Dollar Ends.

“This is more than a tenth of a Trillion Dollars – at least three times more than had ever been withdrawn from the Fed in such a short time,” says Smith.

Russia thus far has not sold its Treasury Notes, which could send their value down sharply and cause a global shockwave undermining American credit. Putin advisor Sergei Glazyev has warned that Russia might do this.

Russian billionaires and companies such as the giant Russian state-controlled banks Sherbank and VTB, and giant energy group Lukoil, reportedly have also gotten many billions of their dollars out of the U.S. and other Western nations while President Obama was threatening to freeze Russian assets.

“In March 2013, exactly a year ago, this is what happened in the Mediterranean island nation Cyprus,” says Lowell Ponte, a think tank futurist who with Smith has co-authored four books as well as a major White Paper to be published this month titled Don’t Bank On It!

“Cypriots awoke last March to discover their banks were locked and their ATM access was shut down. The government had confiscated, and was taking a hefty part of, their bank accounts,” says Ponte, an investigative reporter whose articles have appeared in the The Wall Street Journal, The New York Times and many other publications.

“This was a shocking legal precedent called a ‘bail in,’ approved by the United States and many other Western nations. It assumes that when you open a bank account, that money becomes the bank’s property and can be taxed or taken if the government wishes,” says Ponte. “A high European official reportedly said Cyprus would be the ‘template’ for future government bank confiscations.”

“President Putin now warns that any government expropriation or freezing of Russian assets will trigger seizure of American or other Western assets in Russia. And in Russia are factories by Ford and General Motors, 7 percent of the worldwide revenue of PepsiCo, Exxon Mobil Corp, large investments by CitiGroup and JPMorgan Chase and other companies, and much more,” says Ponte.

The author of the Russian legislation authorizing such confiscations is Andrei Klishas, who told the wire service RIA Novosti: “The recent events in Cyprus spring to mind, where the confiscation of assets was the main demand made by the European Union in return for economic aid.”

While Russia uses the Cyprus precedent to justify seizing bank and other assets, President Obama has gone farther to authorize his confiscation of Russian and other assets.

“President Obama on March 6 issued a new Executive Order that authorizes the President, with the approval only of his appointed ‘Secretary of the Treasury, in consultation with the Secretary of State,’ to engage in ‘Blocking Property of Certain Persons Contributing to the Situation in Ukraine,” says Ponte.

“This incredibly vague Executive Order gives sweeping new powers to the President, including new powers to seize your assets if you in public question Mr. Obama’s policies in Ukrainian Crimea,” says Ponte.

This Executive Order could be used against many people, notes Daniel McAdams of the Ron Paul Institute: “[W]hat are ‘direct or indirect…actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine?”

“Could that be someone writing an article that takes issue with the US policy that the Crimea referendum is illegal and illegitimate?”

“Could it be standing up in a public meeting and expressing the view that Ukraine would be better off with nationwide referenda to determine whether other regions should become autonomous or joined to neighboring countries?” asks McAdams.

“What if a Polish-American appears on a radio or television program suggesting that parts of Poland incorporated into Ukraine after WWII should be returned to Polish authority?”

“Probably the president will not seize the assets of Americans in the scenarios above,” writes McAdams. “But he says he can…. Careful what you say.”

Russia is now invoking Cyprus to justify its right to confiscate property. The irony is that the wealthiest Russian Oligarchs got their fortunes out of Cyprus’ tiny banks, branches of which remained open in London and Moscow while those on Cyprus itself were closed. Craig R. Smith and Lowell Ponte document this in their latest book The Great Withdrawal [pp. 166-167].

“And now Russians have gotten the bulk of their wealth out of the United States just ahead of threatened asset freezes, confiscations and sanctions,” says Ponte.

“U.S. corporations such as Apple, Microsoft and IBM also keep altogether at least $1.95 Trillion abroad to avoid U.S. Government confiscation via the heaviest business taxes of all major nations.”

“And The New York Times in February reported that Russians are returning to Cyprus, ‘a favorite tax haven,’ just as its financial controls are supposedly about to be lifted,” says Ponte.

“Your bank now pays you almost zero interest. You lose value in your savings every day. And with the precedents of the Cyprus bank confiscations, the vast money-grabbing power of President Obama’s latest Executive Order and other plans to take control of your bank account, and world-shaking events that threaten the value of the U.S. Dollar, it’s time to find a lower risk, higher reward way to protect your life savings nest egg and investments,” says Ponte.

To schedule an interview Craig R. Smith or Lowell Ponte, contact Bronwin Barilla at (800) 950-2428 or email bkbarilla@greatwithdrawal.com

SOURCES:

Min Zeng, “Did Russia Just Move Its Treasury Holdings Offshore?” Wall Street Journal, March 14, 2014. URL: http://blogs.wsj.com/moneybeat/2014/03/14/did-russia-just-dump-its-treasury-holdings/?mod=ST1

Michael Mackenzie, “Plunge in Treasury Holdings at Fed Triggers Speculation of Russia Switch,” Financial Times, March 14, 2014. URL: http://www.ft.com/intl/cms/s/0/51c55c1a-ab8c-11e3-aad9-00144feab7de.html#axzz2w4lhZOPr

Richard Leong, “Eyes Turn to Russia on Record Drop in U.S. Bond Holdings,” Reuters, March 14, 2014. URL: http://www.reuters.com/article/2014/03/14/us-usa-fed-russia-idUSBREA2D1JW20140314

Susanne Walker, “Fed Custody Holdings Record Decline Fuels Russia Speculation,” Bloomberg, March 14, 2014. URL: http://www.bloomberg.com/news/2014-03-14/fed-custody-holdings-record-decline-fuels-russia-speculation.html

Patti Domm, “Was that Russia Transferring Dollar Holdings Offshore?” CNBC, March 14, 2014. URL: http://www.cnbc.com/id/101495837

Peter Coy, “Is Russia Pulling Money Out of U.S. for Safekeeping?” Businessweek/Bloomberg, March 14, 2014. URL: http://www.businessweek.com/articles/2014-03-14/is-russia-pulling-money-out-of-u-dot-s-dot-for-safekeeping

Patrick Jenkins and Daniel Schafer, “Russian Companies Withdraw Billions from West, Say Moscow Bankers,” Financial Times, March 14, 2014. URL: http://www.ft.com/intl/cms/s/0/ffea2660-ab9e-11e3-aad9-00144feab7de.html#axzz2w4lhZOPr

Tyler Durden, “Russia Proposes Confiscating US, European Assets if Sanctions Adopted,” ZeroHedge, March 5, 2014. URL: http://www.zerohedge.com/news/2014-03-05/russia-proposes-confiscating-us-european-assets-if-sanctions-adopted

“Hit Us with Sanctions? We’ll Seize West’s Assets, Russia Warns,” CNBC/Reuters, March 5, 2014. URL: http://www.cnbc.com/id/101468195

Daniel McAdams, “Against Ukraine War? Obama May Seize Your Assets,” Infowars, March 14, 2014. URL: http://www.infowars.com/against-ukraine-war-obama-may-seize-your-assets/

“Executive Order – Blocking Property of Certain Persons Contributing to the Situation in Ukraine,” The White House, March 6, 2014. URL: http://www.whitehouse.gov/the-press-office/2014/03/06/executive-order-blocking-property-certain-persons-contributing-situation

Aaron Klein, “Obama Brings Ukraine War Home to U.S.,” WND.com, March 12, 2014. URL: http://www.wnd.com/2014/03/obama-brings-ukraine-war-home-to-u-s/

Richard Rubin, “Cash Abroad Rises $206 Billion as Apple to IBM Avoid Tax,” Bloomberg, March 12, 2014. URL: http://www.bloomberg.com/news/2014-03-12/cash-abroad-rises-206-billion-as-apple-to-ibm-avoid-tax.html

“Putin Adviser Urges Dumping US Bonds In Reaction to Sanction,” RIANovosti, March 4, 2014. URL: http://en.ria.ru/business/20140304/188081405/Putin-Adviser-Urges-Dumping-US-Bonds-In-Reaction-to-Sanctions.html

Liz Alderman, “Russians Return to Cyprus, a Favorite Tax Haven,” The New York Times, February 18, 2014. URL: http://www.cnbc.com/id/101421968/print

“Can Russia Take My Pepsi? Consumer Brands at Risk,” CNBC, March 5, 2014. URL: http://www.cnbc.com/id/101469148

“Which Major U.S. Firms Are at Risk With High Exposure to Russia?” MarketWatch/Wall Street Journal, March 3, 2014. URL: http://www.marketwatch.com/story/which-major-us-firms-are-at-risk-with-high-exposure-to-russia-2014-03-03

Ukraine Crisis Takes Another Twist

Gold prices closed higher, reaching the highest settlement in more than four months. U.S. stocks higher, S&P 500 hits record. Gold last traded at $1,351 an ounce. Silver at $21.57 an ounce.

The crisis in Ukraine has taken yet another twist.

Crimea’s parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum on the decision in a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.

The sudden move to bring Crimea – which has an ethnic Russian majority and has effectively been seized by Russian forces – formally under Moscow’s rule came as European Union leaders held an emergency summit groping for ways to pressure Russia to accept mediation.

The decision, which diplomats said could not have been made without Putin’s approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

Many in Ukraine fear the referendum move by Crimea is a pretext toward secession and the eventual annexation by the Russian Federation.

Crimea is home to both Russia and Ukraine’s Black Sea fleets which are locked in a standoff with Russian vessels blockading two Ukrainian warships in Sevastopol Bay.

President Barack Obama attempted to punish the Russians and Ukrainians involved in what he called, “threatening the sovereignty and territorial integrity of Ukraine” by ordering a freeze on their U.S. assets and a ban on travel to the United States.

The names on the blacklist were not immediately made public but a U.S. official said they did not include Russian President Vladimir Putin. Obama did state that the sanctions “do not preclude further steps should the situation deteriorate.”

Russian stocks fell and the ruble weakened further after the news. Moody’s ratings agency said the stand-off was negative for Russia’s sovereign creditworthiness.

Still, Obama seems to be having little success in getting other US allies to follow his lead in sanctioning Russia.

The European Commission has announced aid of up to 11 billion euros ($15 billion) for Ukraine over the next couple of years provided it reaches a deal with the International Monetary Fund, entailing painful reforms like ending gas subsidies.

Diplomats say the EU may condemn Russia’s so far bloodless seizure of Crimea and suspend talks with Moscow on visa liberalization and economic cooperation, while threatening further measures if Putin does not accept mediation efforts soon.

The EU must tread lightly on fears of a tit-for-tat trade war with Russia, a major economic partner of Europe. France has a deal to sell warships to Russia that it, so far, has not canceled, London’s banks have profited from facilitating Russian investment, and German companies have $22 billion invested in Russia.

The crisis in Ukraine began in November when Ukrainian President Viktor Yanukovich, under Russian pressure, turned his back on a trade deal with the EU and accepted a $15 billion bailout from Moscow. That prompted three months of street protests leading to the overthrow of Yanukovich on February 22.

Moscow denounced the events as an illegitimate coup and refused to recognize the new Ukrainian authorities.

Much of the financial world is still concerned about a real possibility of escalation and armed conflict in Ukraine. CNBC reports that hedge funds are making moves to provide a degree of insurance against a Russia-Ukraine conflict.

In February, the percentage of funds that purchased “deep downside” protection—a financial bet that would gain if there is a significant drop in global stocks—hit a two-year low of less than 13 percent. That spiked to more than 17 percent as of Monday, according to Credit Suisse data.

The real risk is from the likely global economic ripples in the event of more serious Russian military moves in Ukraine.

Ukraine itself is not the big issue for the financial markets, but if conflict breaks out, the whole region is plunged into a wider risk scenario. There would likely be a flight to safe haven investments, such as gold.

The crisis in Ukraine can still send the markets into a tailspin, despite Russia appearing to back away from all-out war.

The country is still on the verge of further violence. There is still unrest in plenty of Ukraine outside the Crimea, and potential for this to spread. International efforts to reach a solution so far have failed.

Even without immediate escalation, the events of this week will have countless reverberations.

Ukraine itself, while a much smaller economy than Russia, nonetheless has the potential to send prices for corn, wheat and gas rising.

Russia’s powerful economic and political position in its region means any crisis which potentially impacts growth will have a broader impact. Economists are already cutting their forecasts for Russian economic growth this year.

“The situation is still highly unpredictable,” economists at ratings agency Fitch warned on Thursday. They reaffirmed the country’s ‘BBB’ credit rating, arguing that events so far did not quite justify a downgrade, but cut forecasts for GDP growth this year from 2 percent to 1.5 percent.

“If Russia goes wrong here, it will have a global effect,” Richard Martin, managing director, IMA Asia, told CNBC.

In purely economic news, new orders for U.S. factory goods fell more than expected in January and shipments also slipped, adding to signs of a recent slowdown in manufacturing activity.

The Commerce Department said this morning that new orders for manufactured goods declined 0.7 percent. December’s orders were also revised downward to show a 2.0 percent drop instead of the previously reported 1.5 percent fall.

In a separate report, the U.S. government sharply revised down non-farm productivity for the fourth quarter, mirroring the economy’s slow growth pace in the same period.

Productivity rose at a 1.8 percent annual rate instead of the previously reported 3.2 percent pace, the Labor Department said. Productivity, which measures hourly output per worker increased at a 3.5 percent pace in the third quarter.

Economists polled by Reuters had expected fourth-quarter productivity would be revised down to a 2.5 percent rate.

Our Bank Accounts Are Not Safe!

Do you think your bank account deposits are safe? Don’t bank on it.

That’s according to Lowell Ponte, former editor of Readers Digest and think tank futurist.

According to Ponte, last month, Stephen Cotton walked into London-based giant HSBC to withdraw about $10,000 dollars. But the bank refused to let Mr. Cotton have money from his own account.

Why? Because they said Mr. Cotton couldn’t provide the bank with a satisfactory explanation for what the money was to be used for. Of course this enraged Mr. Cotton since he was asking for his own money.

But Lowell Ponte said Mr. Cotton was mistaken about just whose money it was. According to new banking laws, your deposits belong to the bank. All you ‘own’ is a deposit receipt, or an IOU.

Urgent Memo from Swiss America Chairman Craig R Smith

*URGENT MEMO TO CLIENTS OF SWISS AMERICA, THEIR FAMILY AND FRIENDS*

Your Bank Withdrawals are being Denied! Your Financial Freedom is Under Attack!

Imagine waking up one morning to find your bank locked and access to your money via ATM denied. Your ability to pay bills or buy food – and your boss’s ability to pay you – all gone in an instant, without warning. If your bank accounts and credit cards were suddenly out of reach for days, for months, or forever, what would you do?

Sound far-fetched? It’s already happening … NOW. What I mentioned above, capital controls, are starting. And it all begins with restricted access to your own money.

Just this month, Stephen Cotton walked into the British building where he had banked for 28 years, a branch of London-based giant HSBC. He filled out a withdrawal slip for £7,000 he owed to his mother. The bank refused to let Mr. Cotton have money from his account.

“When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved,” Cotton said.

The staff then refused to tell Mr. Cotton how much he could have.

“So I wrote out a few slips. I said, ‘Can I have £5,000?’ They said no. I said, ‘Can I have £4,000?’ They said no. And then I wrote one out for £3,000 and they said, ‘OK, we’ll give you that.’ ”

Mr. Cotton was understandably upset about the situation, “I’ve been banking in that bank for 28 years. They all know me in there. You shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

However according to new banking laws, he is mistaken. Your deposits belong to the bank. All you “own” is a deposit receipt, an IOU. And the banks have no responsibility to share this information with their customers.

According to a written response from HSBC, “As this was not a change to the Terms and Conditions of your bank account, we had no need to pre-notify customers of the change.”

Welcome to banking’s brave new rules, where the law now defines bank depositors as “unsecured creditors” whose accounts are owned not by them but by their bank … and your bank has become the property of highly-regulatory government.

Before you brush this off as something only happening in Europe, JPMorgan Chase Bank sent a letter informing many American business clients that, “ … starting November 17, 2013: You will no longer be able to send International wire transfers” AND “Your cash activity limit will be $50,000 per statement cycle, per account.”

These changes, the letter said, “will help us more effectively manage the risks involved with these types of transactions.”

But to what risks is Chase referring? While this is all under the guise of ‘protecting the customer’ we all know it is far more important to Chase to ‘protect the banker’. This letter is likely a tiny foretaste of the kind of contingency plans at JPMorgan Chase, and at the other handful of giant banks, that own more than half of all American bank deposits.

We have heard many stories from established Swiss America clients about their inability to touch the cash they have sitting in bank accounts with major banks. In fact, many of my friends and associates have been denied cash withdrawals in the last few months. All of them have been outraged and terrified as it has never been an issue in the past.

One incident happened very close to home. A well-respected Arizona businessman walked into a local, private bank to withdraw $17,000 in cash. A very regular occurrence for him. He was denied. When he asked why, the banker told him it would take two weeks to get enough cash. After threatening to remove all of his accounts from the bank, management agreed to have the money the next morning. Upon arrival, the money was not available. After a call to the president of the bank and yet another denial, the businessman demanded a cashier’s check for the balance of all of his accounts. Then, and only then, the money was released by the president.

Just yesterday (1/28), Bloomberg reported that My Bank, one of Russia’s top 200 lenders by asset, has implemented a complete ban on cash withdrawals until next week and the ban may be extended. A complete ban. Just let that sink in for a moment.

So why is this happening?

Take a look back at what happened last March to the people of the island of Cyprus. The government needed money and, with Europe’s approval, decided to confiscate a hefty piece of every private bank account, large or small.

What happened on Cyprus, said the head of the Eurogroup of 17 national Finance Ministers, Jeroen Dijsselbloem of the Netherlands, would henceforth be the “template” for future government actions elsewhere. The U.S. Federal Deposit Insurance Corporation (FDIC) and Bank of England had already jointly agreed to such new rules in December 2012.

In, 2014, Cypriots are still suffering from “capital controls” that limit how much money they can withdraw from their bank or take out of their country.

What happened to them is already being implemented at banks where we bank; despite the April 2013 disquieting reassurance by Federal Reserve Chairman Ben Bernanke that such seizure of American bank accounts is “extremely unlikely.”

Don’t just breeze past that. “Extremely unlikely?” That is terrifying. If that’s the best reassurance Bernanke could give, trouble for our bank accounts is ahead.

“All these regulations which have been imposed on banks allow enormous interpretation,” Member of Parliament Douglas Carswell told the BBC in a January 24, 2014 story. “It basically infantilises the customer. In a sense your money becomes pocket money and the bank becomes your parent.”

“We have an obligation to protect our customers, and to minimize the opportunity for financial crime,” an unapologetic HSBC spokesman told the BBC.

HSBC depositors can be required to “provide evidence” that they will spend it in an HSBC-approved way before they can withdraw their OWN money – or they may find it frozen. We warned readers to expect this in our latest book The Great Withdrawal.

Worse yet, evidence is mounting that the U.S. banks have plans to do the exact same thing in the name of “protecting” depositors from the rising threat of cyber attacks and identity theft, which would also lock you out from any transaction involving YOUR funds.

So what do you do?

I could go on and on with examples of why we are living in terrifying times, but I won’t belabor it. Please call your Swiss America representative today at 800-289-2646 to see how they can help before these restrictions rob you of YOUR money … the money you have earned and saved for so many years. You may feel you have plenty of time but once capital controls are implemented, there will be no warning. Just ask Mr. Cotton if he got a heads-up. Better to be months or years early, than seconds or minutes too late.

Protect yourself and your family while you still have the access to do so.

Sincerely,