Bank Of England Warn Of "Challenging" Outlook For Britain's Financial System

Published here: http://www.zerohedge.com/news/2016-11-30/bank-england-warn-challenging-outlook-britains-financial-system

Ulster Bank Parent RBS Fails Bank of England Stress Test

"Royal Bank of Scotland (RBS)(RBS.L) will cut costs and sell assets to boost capital levels, it said on Wednesday after failing this year's Bank of England stress test, which warned of a "challenging" outlook for Britain's financial system.

The state-backed lender rushed out a statement following the announcement to say it would take a range of actions, including selling off bad loans and cutting costs to make up the capital shortfall identified by the tests of around 2 billion pounds.

The unexpected result underlines the litany of problems RBS is grappling with, which include a mounting legal bill for misconduct ahead of the 2008 financial crisis and difficulties selling off assets such as its Williams & Glyn banking business.

The lender said it had agreed a plan of action with the Prudential Regulation Authority, the Bank of England's enforcement arm, that should mean it does not have to tap markets to raise the money needed."
From Reuters

We warned of the RBS, Ulster Bank ‘£100 Billion Black Hole’ and the bail-in risk due to the ‘danger of failing' in June 2014 here

Bail-ins can now be used in the UK, EU, U.S. and G20 countries. Banks internationally and especially in Europe remain vulnerable.

After Cyprus, which country will be the next to suffer bail-ins? Will RBS and by extension Ulster Bank, be the first UK and Irish banks to be subject to bail-ins?

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Gold and Silver Bullion - News and Commentary

Gold prices firm as markets brace for OPEC meeting (Reuters.com)

Trump to tap ex-Goldman Sachs banker Steven Mnuchin as Treasury secretary (MarketWatch.com)

Trump to name Wilbur Ross as commerce secretary (MarketWatch.com)

Gold prices register third decline in 4 sessions (MarketWatch.com)

Trump is meeting with an ex-bank CEO who wants to abolish the Federal Reserve and return to the gold standard (BusinessInsider.com)

War on Cash and Gold In India to Benefit Silver? (TheConversation.com)

Trump Considers Strong Gold Standard Advocate for Treasury Secretary (AveryBGoodMan.com)

Italy Seen More Likely To Exit Eurozone Than Greece; Italian Bond Yields Surge (ZeroHedge.com)

What Investors Can Learn From Gold Priced In Yen? (Gold-Eagle.com)

Palladium: Signals of Market Supply Shortage (SafeHaven.com)

Gold Prices (LBMA AM)

30 Nov: USD 1,187.40, GBP 952.06 & EUR 1,115.44 per ounce
29 Nov: USD 1,187.30, GBP 952.45 & EUR 1,119.98 per ounce
28 Nov: USD 1,189.10, GBP 956.51 & EUR 1,117.99 per ounce
25 Nov: USD 1,187.50, GBP 953.30 & EUR 1,121.83 per ounce
24 Nov: USD 1,187.25, GBP 953.60 & EUR 1,125.04 per ounce
23 Nov: USD 1,213.25, GBP 980.00 & EUR 1,143.00 per ounce
22 Nov: USD 1,217.55, GBP 978.91 & EUR 1,144.98 per ounce

Silver Prices (LBMA)

30 Nov: USD 16.67, GBP 13.39 & EUR 15.66 per ounce
29 Nov: USD 16.54, GBP 13.26 & EUR 15.61 per ounce
28 Nov: USD 16.68, GBP 13.45 & EUR 15.73 per ounce
25 Nov: USD 16.47, GBP 13.21 & EUR 15.55 per ounce
24 Nov: USD 16.31, GBP 13.09 & EUR 15.43 per ounce
23 Nov: USD 16.56, GBP 13.36 & EUR 15.59 per ounce
22 Nov: USD 16.76, GBP 13.46 & EUR 15.77 per ounce

Recent Market Updates

- Peak Silver – Supply Deficits Mean Higher Prices
- Bail In Risk – €4 Trillion Banking System In Italy Poses Contagion Risk as Referendum Looms
- Gold Down 13.5% In 13 Days – Trump Bearish For Gold?
- War On Cash Just Got Real – India and Citibank In Australia
- Russia Gold Buying In October Is Biggest Monthly Allocation Since 1998
- Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards
- Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
- Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
- Islamic Gold – Vital New Dynamic In Physical Gold Market
- Peak Gold Globally – “Bullish For Gold”
- Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
- President Trump – Why Market Loves Him and Experts Wrong
- ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise

Read More

Abolish Corporations

Published here: http://www.zerohedge.com/news/2016-11-29/abolish-corporations

The Daily Bell 
Abolish Corporations  

Don’t Lower Corporate Taxes. Abolish Them … Lowering the corporate tax rate appears to be all the rage. Donald Trump has promised a cut to 15 percent from 35 percent in the U.S., and British Prime Minister Theresa May has pledged to make the U.K.’s corporate tax the lowest in the G-20, which would mean taking it lower than Trump intends to … Now that business-friendly governments appear to have some leeway, they should go back to the old idea of eliminating corporate levies and just taxing personal income and consumption. – Bloomberg

Bloomberg is suggesting in this article that corporate taxes should be abolished because corporations will make more money and that in turn will benefit their workers and society generally.

But what the West’s newly “populist” governments ought to do is abolish the regulatory and judicial decisions that create such gargantuan and abusive entities in the first place.

The efficacy and necessity of corporations is a fundamental elite meme. Capitalism naturally gives rise to corporate power, or so we are told. When corporations behave badly, that is a “market failure.” This is one reason we need equally big governents.

But even a cursory look at history – especially US history,  as the US began without corporate might – gives us a clear insight into how corporations evolved within the context of modern technocracy.

Without a series of judicially enforced decions, corporations likely would not exist, certainly not as they are.

Once jettisoned, true prosperity could begin to rise up and wealth would gradually be redistributed more equitably. Technological and medical breakthroughs would be available, not repressed. People’s lives would once more revolve around culture, family and real achievement instead of big government and even bigger businesses.

More:

“The corporate tax is justified as a means to control the excessive accumulation of power in the hands o corporate management, which is inconsistent with a properly functioning liberal democratic polity,” Reuven Avi-Yonah of the University of Michigan Law School wrote in a 2004 paper defending the tax.

“People understand that corporations are powerful and that the corporate tax is one way in which the state, as representative of the people, can limit their power.”

… There are other ways governments can keep corporations in check — for example, through environmental, safety and labor regulations, which U.S. Republicans and Brexiters dislike but which ultimately benefit consumers in a way the corporate tax doesn’t.

The above provides some fairly lamentable logic. Corporations don’t need to be taxed in order to be controlled. They don’t need to be restrained by environmental and safety regulations.

They need to be subject to marketplace competition. And they are not.

Shrink the power of corporations in three ways.

• Get rid of “corporate personhood."
• Get rid of intellectual property rights.
• Get rid of central banking.

Also, reduce ridiculous regulatory structures that further retard competition and entrepreneurship.

Strip away legal “decisions” that have built the West into a neo-fascist environment dominated by a handful of vast governments and even bigger businesses.

Why should Apple dominate the telephone market and ruin the lives of workers exploited amidst relentless working conditions in horrible Asian factories?

Why should Facebook and Google – both initially funded by the CIA and probably still controlled by American intel agencies – dominate the Internet?

Why should Facebook in particular somehow have grown into the world’s dominant, Western editorial force? Because Zuckerberg is a fabulously literate and accomplished writer?

No, these  corporations are representative of exactly what Thomas Jefferson and other American founders feared when they refused to give fedgov power over corporations and instead parceled out authority to the states.

Until the Civil War, corporations in the US were almost non-existent. Entrepreneurship was at a high, people worked individually or in partnerships (often in agriculture) and the competitive marketplace was a determinant factor in people’s lives rather than the current, monstrous federal government.

Jefferson and the others feared such entities as the British East India Tea Company that ripped apart India and grew so powerful it fielded its own army.

You can see some other articles on the corporate “meme” here, here and here.

It certainly is a meme, this idea that only a handful of individuals ought to manage the world’s industrial might. Additionally, we’re sure the bios of these individuals are exaggerated far beyond reality. Such technocrats are always geniuses, supposedly so …

The current corporate environment is not conducive to freedom but to the further growth of the fascist/technocratic model favored by a handful of banking families dedicated to building globalism.

Conclusion: Bloomberg gets some 0f it right: Corporations are indeed too powerful. But reducing their taxes isn’t the answer. Get rid of the judicial and government decisions that unfairly prop them up and allow a measure of real competition and entrepreneurship to return to Western markets.

Editor's Note: The Daily Bell is giving away a silver coin and a silver "white paper" to subscribers. If you enjoy DB's articles and want to stay up-to-date for free, please subscribe here. 

More from The Daily Bell: Rand Corp. Blasts ‘Truth Decay’ – Wants Facts Determined by Appropriate Leaders

From Populism to Fake News – The Psyop Continues 

Elites Plot to Replace Austrian Free-Market Economics?

 

 

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Published here: http://www.zerohedge.com/news/2016-11-29/usdjpy-and-price-gold

Hold your real assets outside of the banking system in one of many private international facilities  -->    https://www.sprottmoney.com/intlstorage 

 

 

 

 

The USDJPY and the "Price Of Gold"

Posted with permission and written by Turd Ferguson CLICK HERE FOR ORIGINAL)

 

 

 

Well, we've finally reached "contract expiration" day as the Dec16 Comex gold and silver contracts go off the board and into "delivery" at the close today. With total Comex open interest now back to the levels of last December, could price finally be near a bottom? As usual, we must look at the USDJPY for clues.

 

As of last evening, total Dec16 Comex gold open interest was down to just 30,773 contracts and about 50-60% of those will be liquidated and closed out today, leaving 10,000-15,000 "standing for delivery" when "delivery" notices begin being sent out this evening. Last December only saw a total of 2,073 gold "deliveries" so we'll likely be on pace again for something 5X or greater by the time "deliveries" wrap up at the end of the month.

 

Additionally, TOTAL Comex gold open interest fell again yesterday to a meager 410,824 contracts. Check this out:

 

DATE	PRICE	TOTAL OI
11/25/15	$1072	393,110
12/31/15	$1065	415,220
7/11/16	$1364	657,776
11/28/16	$1191	410,824

 

So, do you see how this works? Taking their cues from a few key inputs, the HFT Specs buy Comex paper gold exposure and price goes up. To limit the upside damage, The Banks issue new contracts in order to dilute the price impact of all this Spec buying. As the cues change and reverse, the HFT Specs liquidate their gold exposure and price declines. The Banks use this Spec selling to buy back their short positions and the open interest gets retired.

 

Have the supply/demand fundamentals of physical gold changed over the same time? Maybe just a little as sentiment and physical demand generally improve with a rising price. But by far the key determinant of "price" is the HFT Spec demand for the paper gold derivative, not the actual gold itself.

 

Some System Apologists will claim that this is efficient and smart...that the cost of acquiring, holding and storing real gold is too great and therefore these derivatives and synthetic forms of gold are preferable. NONSENSE! What I see instead is a Banker Profit Scheme and Confidence Game. The Banks create and manage nearly all of the forms of synthetic gold exposure available today, from futures contracts to unallocated accounts to the GLD, and because they have the power to create from thin air as much synthetic gold as "the market" demands, they also have the de facto power to control price. And they do.

 

So, OK then. It is what it is. As long as The Banks retain control, the only way you can get "the price of gold" to move higher is to move in your favor the key inputs which drive the buying decisions for synthetic or paper gold. And what are those key inputs?

 

• Forex...specifically the USDJPY
• In a larger sense, the US dollar as measured by the POSX
• And, as it's the US dollar gold price that we measure most, the general trend and level of US interest rates, particularly US interest rates adjusted for inflation or "real" rates

 

That's it. It's those three. Get all of those three working in your favor as we did in the first half of 2016 and you get a 30% rally. However, when all of these turn against you as they have since late September, WATCH OUT!

 

You've now seen these charts for what must seem like a million times. The inverted USDJPY is in candles and the "price of gold" is in bars. Again, do you see a fundamentally-derived "price of gold" in these charts or do you simply note two closely-correlated digital "assets", where HFTs "see" a move in the USDJPY and instantly buy or sell paper gold in response?

 

 

 

 

To that end, let's end this post on a positive note...

 

A week ago, some eco-quants at JPM issued a forecast for the USDJPY that projected a fall back to 100 or even lower. Well today, UBS came out with a nearly identical forecast. I would strongly suggest that you take the time to read this very closely: http://www.zerohedge.com/news/2016-11-29/usdjpy-could-plunge-low-98-after-trump-bubble-bursts-ubs-wealth-warns

 

Again, when the USDJPY was near 100 last summer (or 1.00 JPYUSD on the charts above), "gold" was primarily between $1330 and $1380. Why? The HFTs had observed the fall in the USDJPY from 120 to 100 and, in turn, purchased "gold exposure" at the Comex. Total Comex open interest surged by over 50% and the price of that gold exposure rallied by over 30%.

 

Could we be on the verge of another such rally? Well, I hope by now you've figured out that the USDJPY holds the key. If the quants at JPM and UBS are correct, prepare for upside in 2017 and not the doom-and-gloom downside that the usual permabears are attempting to convince you is coming.

 

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

 

The USDJPY and the "Price Of Gold"

Posted with permission and written by Turd Ferguson CLICK HERE FOR ORIGINAL)

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Is Gold About to Reverse the Trump Dump?

Published here: http://www.zerohedge.com/news/2016-11-29/gold-about-reverse-trump-dump

 

The Trump election win has resulted in four key items:

1)   US-stocks soaring.

2)   The $USD rallying above 100.

3)   US bonds collapsing.

4)   Gold and Silver collapsing.

Regarding #4, since the election was called for Trump, Gold has collapsed over 7%.

The move has been largely predicated on $USD strength and Yen weakness. Indeed, Gold is essentially the same trade as the Yen: $USD paid as the below chart shows.

But what if this whole move is just another BREXIT type situation?

After BREXIT occurred on June 23, the markets sold off for roughly one week. This massive sell-off then reversed and recovered ALL of those losses and then some.

What if the markets are doing precisely the opposite of this as a result of the Trump win? Once again we’ve had a sharp move (this time stocks went up and Gold went down). But what if this is about to reverse and undo the entire Trump win just as the markets did with the BREXIT loss?

For certain Gold is SEVERELY oversold at levels that usually result in sharp rallies.

Time stamp this, we’re predicting Gold will be reversing sharply here and beginning its next leg up with an ultimate target of $1600 or higher this time next year.

If you’re looking for a high-octane means of playing Gold’s next move higher, we offer a FREE investment report detailing an unique play on Gold that has the potential to rise 250% or more in the next 12 months.

To pick up a copy swing by:

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

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Published here: http://www.zerohedge.com/news/2016-11-29/black-friday-fake-news-and-gold

Hold your real assets outside of the banking system in one of many private international facilities  -->    https://www.sprottmoney.com/intlstorage 

 

 

 

 

Black Friday, Fake News and Gold

Posted with permission and written by Rory Hall & Dave Kranzler CLICK HERE FOR ORIGINAL)

 

 

 

 

Black Friday and “Black Friday” weekend have largely become irrelevant. Every retailer in the U.S., from auto dealers to furniture stores to online tennis apparel shops have been advertising “Black Friday” sales since November 1st.

 

We have no doubt that the Census Bureau will concoct phony holiday sales for November (reported December 14) and December (reported in January). But the truth – the non-Russian influenced truth – is that retail sales spending per capita this holiday on an inflation-adjusted basis is going to be less than in 2015.

 

Already the National Retail Federation has announced that spending per person over Thanksgiving weekend was $289.19, down 3.4% from $299.60 last year. Gallup released a survey of shoppers and determined that Americans intend to spend an average of $752 on holiday gifts this year, down from $830 in 2015. Gallup, looking for a “silver lining” in the survey, stated that this matches the average for the last seven years since 2010. Of course Gallup fails to note that on an inflation-adjusted basis, the number for 2016 would be significantly below the average.

 

Turning to the “fake news” witch hunt, Gallup blames the results above on unseasonably warm weather. This is a perfect example of propagandized fake news. The average household is spending less money this year because the real median household income is lower now than in 2007. Consumers faced higher gasoline prices in October and November which cut into disposable spending budgets, as well as facing the prospect of huge increases in their health insurance premiums.

 

The establishment has implemented a full-court press in the hunt for “fake news” purveyors. This is the clearest sign that the alternative media bloggers have touched the raw nerve of truth and the elitists do not like it. The latest attempt is from Jeff Bezos’ Washington Post, which featured an organization called PropOrNot, which purports to use “manual and automated” analysis to determine that several hundred Alternative Media websites were “Russian propaganda outlets.”

 

If the Washington Post is reporting it, it must be authentic, right? The truth is that this is nothing more than the rebirth of Joseph McCarthy’s 1950’s communist witch hunt – the Red Scare. “McCarthyism” is defined as, “the practice of making accusations of subversion or treason without proper regard for evidence.” It also means “the practice of making unfair allegations or using unfair investigative techniques, especially in order to restrict dissent or political criticism”

 

In truth, the U.S. Government is the biggest purveyor of fake news in an effort to control the flow of information made available to the masses and to coerce their perception of reality. It’s yet another form and implementation of insidious propaganda in a manner quite similar to the use of propaganda by the Nazi Party.

 

Finally, there are many indications that the systematic and methodical take-down of the precious metals sector since mid-August has reached its limits. Today, for example, the mining stocks experienced big rally on huge volume. The volume in many stocks was triple the 10 and 90-day average volumes.

 

In today’s episode of the Shadow of Truth, we dissect some of the important events as they unfolded over the long Thanksgiving weekend and explain why we think gold has bottomed:

 

 

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

 

Black Friday, Fake News and Gold

Posted with permission and written by Rory Hall & Dave Kranzler CLICK HERE FOR ORIGINAL)

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Peak Silver Cometh – Supply Deficits Continue Meaning Higher Prices

Published here: http://www.zerohedge.com/news/2016-11-29/peak-silver-cometh-%E2%80%93-supply-deficits-continue-meaning-higher-prices

• Peak Silver - Supply deficits continue meaning higher prices
• May have experienced a peak in world silver production
• Global silver market suffered another large net supply deficit in 2016
• Peak silver likely as global silver production will decline to 887 million oz (Moz), down from 893 Moz in 2015

"While forecasted global silver production for 2016 is down only slightly versus last year, GFMS also stated this in their report:

We estimate that mine supply peaked in 2015 and will trend lower in the foreseeable future.

Declining total supply is expected to be a key driver of annual deficits in the silver market going forward.

I will get to the annual silver deficits in a minute, but let’s look at their world silver mine supply by region:

"What is interesting here, is that GFMS forecasts the number one silver producer, Mexico, to be down in 2016 by more than 6 Moz.  Last year, I forecasted that global silver production would likely be lower in 2015.  I was going by data by the “World Metals Statistics.”  However, Mexico’s INEGI (government agency) considerably revised their figures higher for 2015.  While I have seen revisions take place, the revisions by Mexico’s INEGI for 2015 were quite substantial.

Regardless, GFMS does a pretty good job with the silver mine supply data.  The important take-away here is that the trend of global silver production will likely be lower going forward."

Read the full report on SRS Rocco here

 

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Gold and Silver Bullion - News and Commentary

Gold little changed as dollar holds losses (Reuters.com)

Gold Posts Biggest Advance in Four Weeks as Dollar Declines (Bloomberg.com)

Oil up ahead of OPEC meeting; dollar, stocks dip (Reuters.com)

London zinc charges to 9-yr high, lead hits 5-yr high (Reuters.com)

Islamic finance body approves standard for gold-based products (Reuters.com)

Bonds set to snap three-decade winning streak as Fed, Trump plot next moves (CNBC.com)

How Donald Trump's economic plans will lead the Fed to reverse course on policy: Schiff (CNBC.com)

Interventions in gold and currency markets by central banks (GoldSeek.com)

Here's what happened when ancient Romans tried to drain the swamp (SovereignMan.com)

The Hyperinflationary Endgame: Venezuela Currency Crashes 15% In One Day (ZeroHedge.com)

Gold Prices (LBMA AM)

29 Nov: USD 1,187.30, GBP 952.45 & EUR 1,119.98 per ounce
28 Nov: USD 1,189.10, GBP 956.51 & EUR 1,117.99 per ounce
25 Nov: USD 1,187.50, GBP 953.30 & EUR 1,121.83 per ounce
24 Nov: USD 1,187.25, GBP 953.60 & EUR 1,125.04 per ounce
23 Nov: USD 1,213.25, GBP 980.00 & EUR 1,143.00 per ounce
22 Nov: USD 1,217.55, GBP 978.91 & EUR 1,144.98 per ounce
21 Nov: USD 1,214.95, GBP 984.72 & EUR 1,143.39 per ounce

Silver Prices (LBMA)

29 Nov: USD 16.54, GBP 13.26 & EUR 15.61 per ounce
28 Nov: USD 16.68, GBP 13.45 & EUR 15.73 per ounce
25 Nov: USD 16.47, GBP 13.21 & EUR 15.55 per ounce
24 Nov: USD 16.31, GBP 13.09 & EUR 15.43 per ounce
23 Nov: USD 16.56, GBP 13.36 & EUR 15.59 per ounce
22 Nov: USD 16.76, GBP 13.46 & EUR 15.77 per ounce
21 Nov: USD 16.68, GBP 13.47 & EUR 15.69 per ounce

Recent Market Updates

- Bail In Risk – €4 Trillion Banking System In Italy Poses Contagion Risk as Referendum Looms
- Gold Down 13.5% In 13 Days – Trump Bearish For Gold?
- War On Cash Just Got Real – India and Citibank In Australia
- Russia Gold Buying In October Is Biggest Monthly Allocation Since 1998
- Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards
- Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
- Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
- Islamic Gold – Vital New Dynamic In Physical Gold Market
- Peak Gold Globally – “Bullish For Gold”
- Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
- President Trump – Why Market Loves Him and Experts Wrong
- ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise
- Central Bank Gold Demand continues in Q3

 

Read More

US Domestic Tumult – Orchestrated or Not?

Published here: http://www.zerohedge.com/news/2016-11-28/us-domestic-tumult-%E2%80%93-orchestrated-or-not

The Daily Bell 

US Domestic Tumult – Orchestrated or Not?

• No, Russian Agents Are Not Behind Every Piece of Fake News You See  … Making everyone who shares fake news part of a Russian conspiracy is not helpful. One of the themes that has emerged during the controversy over “fake news” and its role in the election of Donald Trump is the idea that Russian agents of various kinds helped hack the process by fueling this barrage of false news. But is that really true?  – Fortune

 

Fortune has written a somewhat skeptical article about fake news, but misses the point so far as we are concerned.

Fake news exists and has an impact: That’s the basic thrust of the Fortune article – and others like it. It constitutes a kind of propaganda. The idea here is to grant “fake news” existence while presenting a moderate perspective.

In fact, the fake news “debate” is entirely illegitimate. It is what we firmly believe is a “dominant social theme,” elite sponsored propaganda that began suddenly and for reasons that have little or nothing with alerting Americans to Russia’s supposed interference in US elections.

From what we can tell, the fake news debate is actually further debasing the credibility of mainstream media. As we’ve written before, it serves the same function in the US that Muslim immigration has in Europe.

It’s helping destroy people’s faith in their society. We could see the process taking place during the recent elections. The pro-Hillary coverage of the mainstream media was so excessive that it’s hard to reach another conclusion.

Already sinking under a tidal wave of skepticism, the mainstream media reported on the election in such a way as to further alienate tens of millions – perhaps half the adults in the country, or even more.

Was this an unintended consequence of supporting Hillary? Not in our view, especially with the destruction of society going on in Europe.

The idea on both sides of “the pond” is ultimately to destroy culture and make nation states further amenable to globalism.

More:

…  One group [of proponents] is associated with the Foreign Policy Research Institute, a conservative think tank funded and staffed by proponents of the Cold War between the U.S. and Russia, which says it has been researching Russian propaganda since 2014. 

The second group is something called PropOrNot, about which very little is known. Its website doesn’t name anyone who is associated with it, including the researchers who worked on the report. And the Post doesn’t name the group’s executive director, whom it quotes, because it says he is afraid of “being targeted by Russia’s legions of skilled hackers.”

The article goes on to point out that PropOrNot’s Twitter account “has only existed since August of this year. And an article announcing the launch of the group on its website is dated last month.”

The program is evidently being rushed out for some reason in stages, possibly to coincide with a challenge launched by Hillary Clinton that will result in recounting votes in three states to see if the US presidential election can be overturned.

Some other points from Fortune. In evaluating these points,. we can see that the Fortune article does  not discount “fake news.”It simply wants to re-position the argument, possibly to make it more believable:

• There were questions about the “allies” listed on the PropOrNot website. Now the “allies” have been downgraded to “related projects” – whatever that means.

• The Fortune article calls the thesis of orchestrated Russian intelligence effort aimed at the American election “flimsy.” It is evidently NOT a “nefarious scheme.”

• Russian content supposedly redistributed by “useful tools of Russian propaganda” was purposefully written to appeal to conspiracy theories and “buzzy content.” But “are millions of people part of the problem?” The article suggests this is a “stretch.”

• The idea of a network of 200 sites that “routine peddlers of Russian propaganda,” is proposed by PropOrNot. The idea is thus to “portray anyone who shared a salacious but untrue news story about Hillary Clinton as an agent of an orchestrated Russian intelligence campaign.”

Connecting hundreds of Twitter accounts into a dark web of Russian-controlled agents, along with any website that sits on some poorly thought-out blacklist, seems like the beginnings of a conspiracy theory, rather than a scientific analysis of the problem.

Again, if Fortune’s editors were really interested in debunking fake news, they could certainly present stronger arguments more forcefully.

We will  do it for them, Fake news is not just the beginnings of a conspiracy theory. It is part of a clear propaganda campaign aimed at degrading the alternative media including one of the largest quasi-libertarian news websites in the world, The Drudge Report.

It’s not yet clear who is behind these efforts but that will certainly emerge over time. As Ron Paul wrote recently, these attacks will doubtless continue.

It is also true that as we’ve already seen, there will be a good deal of push-back from the alternative media itself. And it will be hard to establish that 200-plus groups were in the knowing or unknowing control of Russia and Putin.

The connection currently is being “proven” via sleight-of-hand. There are similarities between alternative media websites when it comes to an editorial thrust because the people at the top of Western culture have a specific point of view and use specific tools, often violent, to stay in control. Thus criticisms tend to fall into specific patterns as well.

It is perfectly possible – in fact it is obvious – that some of these criticisms are similar to those launched by Russian writers and propaganda outlets. But that doesn’t mean there is any coordination.

Probably the same linkages could be observed between some other countries and the US alternative media as well. Iceland comes to mind, among others. It is easy to create a map of such linkages, but that doesn’t mean the conclusion is valid.

When it comes to the alternative media, it will be hard to establish the viability of what’s been claimed. On the other hand, such an establishment may not be necessary if authorities get involved on a formal basis.

Hillary’s current challenge of the presidential election, and its outcome, will doubtless have an impact on these accusations as well. It is hard to tell what the Trump campaign is doing to forestall the almost inevitable manipulation that will  occur in the states where she is challenging the vote count.

Conclusion: Whether Hillary is able to declare victory or not, the next four years will be tumultuous indeed. Most people will conclude that the tumult is the inevitable outcome of political and media events. They will not grant the feasibility of it being orchestrated. But that is how it seems to us.

Editor's Note: The Daily Bell is giving away a silver coin and a silver "white paper" to subscribers. If you enjoy DB's articles and want to stay up-to-date for free, please subscribe here. 

More from The Daily Bell: Rand Corp. Blasts ‘Truth Decay’ – Wants Facts Determined by Appropriate Leaders

 From Populism to Fake News – The Psyop Continues

 

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Banker Scaremongering In FT re €4 Trillion Italian Banking System as Referendum Looms

Published here: http://www.zerohedge.com/news/2016-11-28/banker-scaremongering-ft-re-%E2%82%AC4-trillion-italian-banking-system-referendum-looms

• Bail in risk - €4 Trillion Italian banking system at risk as referendum looms Sunday according to Financial Times

• Concerns of multiple bank failures - Eight banks at risk of failure and bail ins

• Monte dei Paschi di Siena, third largest by assets and mid-sized banks Popolare di Vicenza, Veneto Banca and Carige and four smaller banks

• Italy’s banks have €360 billion of problem loans

• Contagion poses risks to Unicredit, Italy’s largest bank by assets and only globally significant financial institution

• Bail in risks highlight importance of deposit diversification and gold

• Imprudent to have all 'savings eggs' in 'bankers basket'

(Copyright The Financial Times Limited 2016)

"Up to eight of Italy’s troubled banks risk failing if prime minister Matteo Renzi loses a constitutional referendum next weekend and ensuing market turbulence deters investors from recapitalising them, officials and senior bankers say.

Mr Renzi, who says he will quit if he loses the referendum, had championed a market solution to solve the problems of Italy’s €4 trillion banking system and avoid a vote-losing “resolution” of Italian banks under new EU rules."

Financial Times

The Italian banking system looks vulnerable to collapse whether the referendum is passed in Italy or not. Were the referendum passed, it may allow senior Italian and international bankers to further 'kick the can down the road' and delay the inevitable.

Financial and economic contagion in the EU is the likely outcome of the financial and political mess that both Italy and other EU states find themselves in. The question is increasingly not if, but when.

Bail-ins are "now the rule" and depositors need to begin preparing by diversifying and not have all their 'saving eggs' in the 'bankers basket'.

An important way to protect investments and savings is to be diversified and have a healthy allocation to physical gold – both in one’s possession and in secure storage, in the safest vaults in the world.

Read full Financial Times article on Irish Times here

Download Guide Here

 

Gold and Silver Bullion - News and Commentary

Gold rises from multi-month lows as dollar eases (Reuters.com)

Gold recovers in Asia as investors see buying opportunities (Investing.com)

No proposal to restrict gold holding by individuals in India (IndiaTimes.com)

Gold not safe enough, hoarders opt for silver bars (NewIndianExpress.com)

Trump Claims Millions Voted Illegally, Without Giving Proof (Bloomberg.com)

Italian Prime Minister Matteo Renzi addresses supporters ahead of the constitutional reform referendum this Sunday (AFP PHOTO/ANDREAS SOLARO)

This Week "Could Shake The World ..." (TheAustralian.com)

First Brexit then Trump. Is Italy next for the west’s populist wave? (TheGuardian.com)

Trump, Draghi May Bring A Return Of "European Solvency Crisis": Barclays (ZeroHedge.com)

Venezuela’s currency is so devalued it no longer fits in ordinary wallets (WashingtonPost.com)

Stocks In Greatest Suckers’ Rally Of All Time: Stockman (CNBC.com)

Gold Prices (LBMA AM)

28 Nov: USD 1,189.10, GBP 956.51 & EUR 1,117.99 per ounce
25 Nov: USD 1,187.50, GBP 953.30 & EUR 1,121.83 per ounce
24 Nov: USD 1,187.25, GBP 953.60 & EUR 1,125.04 per ounce
23 Nov: USD 1,213.25, GBP 980.00 & EUR 1,143.00 per ounce
22 Nov: USD 1,217.55, GBP 978.91 & EUR 1,144.98 per ounce
21 Nov: USD 1,214.95, GBP 984.72 & EUR 1,143.39 per ounce
18 Nov: USD 1,206.10, GBP 971.15 & EUR 1,135.54 per ounce

Silver Prices (LBMA)

28 Nov: USD 16.68, GBP 13.45 & EUR 15.73 per ounce
25 Nov: USD 16.47, GBP 13.21 & EUR 15.55 per ounce
24 Nov: USD 16.31, GBP 13.09 & EUR 15.43 per ounce
23 Nov: USD 16.56, GBP 13.36 & EUR 15.59 per ounce
22 Nov: USD 16.76, GBP 13.46 & EUR 15.77 per ounce
21 Nov: USD 16.68, GBP 13.47 & EUR 15.69 per ounce
18 Nov: USD 16.51, GBP 13.30 & EUR 15.54 per ounce

Recent Market Updates

- Gold Down 13.5% In 13 Days – Trump Bearish For Gold?
- War On Cash Just Got Real – India and Citibank In Australia
- Russia Gold Buying In October Is Biggest Monthly Allocation Since 1998
- Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards
- Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
- Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
- Islamic Gold – Vital New Dynamic In Physical Gold Market
- Peak Gold Globally – “Bullish For Gold”
- Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
- President Trump – Why Market Loves Him and Experts Wrong
- ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise
- Central Bank Gold Demand continues in Q3
- Trump Victory Sends Gold Surging 5%

Read More

The U.S. Silver Market Experienced Two Signficant Developments

Published here: http://www.zerohedge.com/news/2016-11-27/us-silver-market-experienced-two-signficant-developments

By the SRSrocco Report,

According to the USGS most recent report, the U.S. silver market experienced two significant developments in August.  From the data published in the USGS August Silver Mineral Industry Survey, U.S. silver production declined significantly while silver imports surged to near record highs.

First, U.S. silver production in August is down a stunning 14% compared to the same month last year and down 10% versus the previous month:

This is certainly a big decline compared to the trend earlier in the year where the average U.S. silver mine supply was approximately 95 metric tons a month.  What makes this quite surprising is that the price of silver hit a high of $20.7 in August, nearly $5 higher than during January-March.  So, why is U.S. silver production declining so much as the price continued higher??

I called up the USGS Silver Specialist and left a message on their answering service as to the details why silver production in the U.S. declined so much in August.  However, no reply was forthcoming in the following days.

Secondly, the U.S. silver imports hit a near record high of 581 metric tons (mt) in August versus 502 mt in July and 464 mt in June:

This large jump in U.S. silver imports is interesting as demand for the iShares Silver ETF was basically flat in August.  Even though the SLV ETF silver inventories surged during the first half of the year, it was relatively flat in July and August.

What I found also quite interesting is that the U.S. imported 55 mt of silver from Poland in August which was half of their total monthly mine supply.  Poland produces about 105 mt of silver a month.  Normally, Poland exports no more than 10-20 mt of silver a month to the United States.

For whatever reason, U.S. silver imports surged as the price hit a record high of $20.7 in August.  As I mentioned, this silver did not make its way into the iShares Silver SLV ETF as their inventories remained flat.  So, where did it go?

Well, according to the information from the COMEX, total inventories on the exchange increased from 153 million oz (Moz) at the beginning of August to 163 Moz by the end of the month.  Thus, the COMEX silver inventories increased 10 Moz or 311 metric tons in August.  Thus, some of the nearly 80 metric tons imported by the United States in August made its way into the COMEX silver inventories.

Of course, that is if the COMEX holds all the silver it states in its inventories or if each silver bar doesn't have several owners.

Regardless, to see such a large decline in U.S. silver production in August was quite surprising.  Furthermore, the Silver Institute just put out their 2016 Interim Silver Report which they state that world silver production is forecasted to decline in 2016.

Unfortunately, once U.S. and global oil production starts to head south in a big way, world silver production will most certainly follow suit.  More about this in future articles.

Lastly, I will begin posting articles by The Hills Group on the oil and energy market this weekend.  Bedford Hill of The Hills Group, has a wealth of knowledge on the oil industry, their ETP Oil Model as well as other aspects of the energy industry.  I posted The Hills Group short response to the USGS announcement of a new 20 billion barrel oil resource in the Wolfcamp Shale formation in Texas.

Lastly, if you haven't checked out our new PRECIOUS METALS INVESTING section or our new LOWEST COST PRECIOUS METALS STORAGE page, I highly recommend you do.

Check back for new articles and updates at the SRSrocco Report.

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How Will China’s Soft-Landing-Policy Suffer Under Trump?

Published here: http://www.zerohedge.com/news/2016-11-27/how-will-china%E2%80%99s-soft-landing-policy-suffer-under-trump

Source: iaffairscanada.com

When it became clear Trump was about to win the US presidential elections, the value of the Mexican Peso nosedived and lost in excess of 10% overnight. That wasn’t surprising, as Trump had made several anti-Mexico statements in its bid to become the next president of the USA, and the economic repercussions and impact from a ‘cold trade war’ between Mexico and the USA would have been huge.

But Mexico wasn’t the only country president-elect Trump has made comments about, as he was also particularly harsh on China. However, since he has effectively been elected to take office, Trump has been backtracking on some of his previous statements, which confirms the Dutch expression ‘the soup is never eaten as hot as it’s served’. It will be interesting to see how President Trump will engage in a long-term relationship with the Chinese, and it might not be as confrontational as one was previously expecting.

A more difficult and constraining relationship with the USA could be tough for China, as its central government is still trying to position its economy for a soft landing. The growth rate has been decreasing for several years now, and the main task is now to make sure the deceleration of this growth rate doesn’t cause any severe difficulties.

Source: tradingeconomics.com

This won’t be easy, as the country still has a severe overcapacity in the glass and steel  sectors, despite the fact the government has unveiled plans to reduce the steel output by 10-15%. Despite these aggressive plans, China is hopelessly behind with regards to the output reduction. A large part of the responsibility for this lies with the government, as the state-owned enterprises are still massively inefficient. According to Danske Bank, the SOE’s had a total share of 39% of the country’s industrial assets, but employ just 18%.

The focus seems to have shifted from a market-based intervention (using the state-owned enterprises to steer the economy) to a fiscal policy-based attempt to let the economy make a soft landing. However, this could also backfire, as the current plan mainly consists of a substantial monetary expansion, and an increased access to credit, and the 2008 global financial crisis has taught us that’s perhaps not always the best way to create growth as this growth rate might be out of touch with how the ‘real’ economy is trending.

Indeed, let’s have a look at a chart which shows the growth rate in the private consumption:

Source: Danske Bank

It’s very clear the consumption growth rate is slowing down. Perhaps this isn’t a surprise, but it’s practically the start of a vicious circle of lower growth. The consumption expenditures are slowing down, causing the economy to contract (as a lower demand for products reduces the supply-side as well), and the GDP to grow at a continuously slower rate.

Source: Danske Bank

And yes, China is willing to do a lot to protect its economy. Surprisingly, the forex reserves have hit a 5 year low, and have fallen by approximately 25% since the peak of 2014.

Source: ABN AMRO

But at the same time China has been reducing its forex reserves, its gold purchasing pace remains remarkably consistent. The country added 170,000 ounces in July, 160,000 ounces  in August and again 160,000 ounces in September. That’s remarkable (and suspiciously) consistent, and it will be interesting to see if the country is buying more gold now it’s on sale again.

>>> The current gold price correction might be an opportunity. Read our guide to gold NOW!

Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report.

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Elites Plot to Replace Austrian Free-Market Economics?

Published here: http://www.zerohedge.com/news/2016-11-26/elites-plot-replace-austrian-free-market-economics

Via The Daily Bell

Elites Plot to Replace Austrian Free-Market Economics?

Don’t Entrust Economics to the Experts … Why has so much of the world succumbed to populist demagoguery and xenophobic nationalism? To a non-trivial extent, economists may be responsible.  This idea finds some support in a new book, “The Econocracy,” written by three U.K. economics students — Joe Earle, Cahal Moran and Zach Ward-Perkins. – Bloomberg

Austrian economics has been driving banking elites mad for over a century and now apparently they are trying to replace it with what can be called “Econocratics” – our elaboration of the term.

In fact, a new book “Econocracy” encapsulating the movement seems to regurgitate every criticism of modern economics made by Austrian critics and free-market groups.

More, according to the Bloomberg editorial (above):

They argue that popular dissatisfaction with government has a lot to do with its over-reliance on concepts and ways of thinking supplied by economists, who have been much more influential than their expertise justifies.

In the authors’ usage, an econocracy is a society where — though it looks like a democracy — goals get expressed in economic terms and policy making has become a purely technical activity.

Objectives such as faster growth, increased competitiveness and access to more and cheaper consumer goods are taken as inherently desirable, with little consideration of differing values or visions of the future.

Specialists handle the execution, because involving the people can only mess things up.  The econocracy inevitably breeds a sense of disenfranchisement.

This is terrific stuff, but when we look through the website here, we can’t find a single mention of Austrian economics nor the role its leading proponents have played in creating the dissatisfaction that this “rethinking” supposedly addresses. (Maybe we’re not looking hard enough?)

If one is going to broadly “rethink” economics, shouldn’t one begin by incorporating trenchant free-market criticisms of modern economics? These criticisms are certainly within the ambit of what the Bloomberg article relates – and also what we could see on the group’s website.

But not a word about Austrian – free-market – economics.

Too bad.

Led by Mises.org in the US, criticisms of modern economics are directly buttressed by the 150-year-old concepts of Austrian economics.

Lew Rockwell and his eponymous website have just been attacked in an article in the Washington Post. Lew Rockwell (by writing non-traditional articles based on economic history) stands accused of doing the bidding of Russia – of the Russian state – in order to undermine the West and specifically the US.

It can certainly thus be speculated that the idea is to denigrate Rockwell and his Mises society while adopting its critiques but not its solutions.

The problem with Austrian free-market economics is that it leaves little room for government itself, nor for the mathematical-based econometrics that most economists are trained in. We previously mentioned this issue here, regarding a new libertarian center.

We wrote:

This [editorial announces] a new libertarian think-tank, the Niskanen Center. The basic thrust … is that to remain relevant in the 21st century, libertarians will need to be more pragmatic and less idealistic. Stop talking about eliminating government and concentrate on making “government spend more wisely.”

… Rather than promote “theories of unfettered markets,” economists and other serious observers of the market should be “guided by pragmatism.” Libertarians “should be diving into the gritty details of the regulatory state, or gathering evidence on how best to curb government’s excesses.”

And now a new group has emerged to reconfigure economics itself. But as with the Niskanen Center critiques, the solutions will doubtless be a good deal less clear than the problems.

The problem with adopting and disseminating Austrian economics is that it shows clearly that government does not work. Its seminal, founding concept of “marginal utility” is widely accepted around the world as the dividing line between classical and neo-classical economics.

In practice Austrian economics is ignored by governments and in the corporate and even academic worlds. But it certainly explained why classical economics didn’t work.

Classical economics was static. It allowed the misguided Malthus to project starvation in England at the end of the 1700s. His charts showed that the population would exceed the food supply.

But nobody starved. Instead, people created gardens and planted more food.

Austrian economics calls this “human action.”

The great Austrian economist Ludwig von Mises built his career by showing that human action was unpredictable and thus economic forecasting was fairly impractical.

Thanks to Malthus’s malfunctions, English economists were well aware of the problems Austrian economics posed. They came up with the idea of mathematically-based econometrics.

The idea was that if enough mathematics were applied to a prognostication it might somehow overcome human action.

Of course this never happened. What did happen though was that econometrics became so complicated that few have had the time or patience to understand what’s really going on.

Econometric economics doesn’t work but most people can’t quite tell you why. And thus they basically “tune it out.” Which is probably the reason why modern economics is held in such low repute.

Econometrics – the mathematical forecasting of human behavior – is a solution in search of a practical problem. Even worse, the economics of legendary economist John Maynard Keynes, which yet undergird economics, don’t work either.

Keynes’ starts his masterwork, General Theory, after an economic crisis has already occurred. He never explains that monopoly central banking is responsible for the crisis to begin with. And thus his main solution – government spending to counteract economic failure – is dysfunctional.

Mises had no such problem. He showed clearly how central banking crushed prosperity and created ruin. His analysis was built on the conclusions of marginal utility that showed clearly how prices must be developed by marketplace competition and nothing else.

Central bankers attempt to “fix” the value and volume of money via interest rate manipulation. As a result, the world is on the cusp of the greatest depression it has ever faced. People know this of course. Millions – billions – are aware that the modern precepts of governance and economics are illegitimate.

In fact, more and more are waking up to the idea that it is on purpose. Elite controllers surely need ruin in order to advance to a new stage of control via increased globalism. Thus the entire theoretical underpinnings of government and finance are likely – purposefully – distorted to ensure that this ruin occurs.

The trouble happens when people start to understand. When they do, you need to acknowledge the problems in order to anticipate solutions. That’s probably just what it is going on now.

New libertarian facilities are suddenly rising up with solutions recognizing that real freedom is “impractical. And now in England, somehow, a young group of economists have decided to “rethink” their profession, though goodness knows enough rethinking has taken place.

All they really need to do is read Von Mises and educate themselves generally about free-market Austrian economics. It’s not that difficult to understand the basic concepts.

Then they could begin to properly proselytize. Instead, they intend to state and restate the problems of modern economics without ever suggesting a solution has already been developed and has several centuries of antecedent analysis.

Conclusion: Of course the above is our speculation about what’s going on – including potential elite involvement. There’s no way we know about the underlying motivations and funding involved in offering libertarian and economic rethinking. But the patterns look clear enough, at least to us.

Editor's Note: The Daily Bell is giving away a silver coin and a silver "white paper" to subscribers. If you enjoy DB's articles and want to stay up-to-date for free, please subscribe here. 

More from The Daily Bell: Rand Corp. Blasts ‘Truth Decay’ – Wants Facts Determined by Appropriate Leaders

 From Populism to Fake News – The Psyop Continues

 

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The Jill Stein Recount Ploy is a Scam Worthy of the CNBC Show American Greed

Published here: http://www.zerohedge.com/news/2016-11-25/jill-stein-recount-ploy-scam-worthy-cnbc-show-american-greed

Hillary Clinton already conceded the election and isn't interested in dividing the country via a ridiculous recount. After all, she was the one holding Trump's feet to the fire in accepting the outcome of the elections and not challenging its efficacy. Enter Shill Stein and her money grabbing schemes -- playing off the butthurt feelings of the millions of people crying into their dinner jackets over the Clinton loss -- raising enormous amounts of funds from them since Wednesday.

Let me rephrase that so it can sink in. Jill Stein is brazenly taking advantage of people by hanging hope of their heads, saying send me your money and I will ensure Trump isn't the next President of the United States. Essentially, that's what this is about, no? Since Wednesday, Stein's money raising schemes have topped $5 million. Her original goal was $2.5m, but rose, dramatically, after the money started to roll in. Her new goal is $7 million. Recounts will begin in Wisconsin soon. She's hoping to do recounts in PA and MI too, for the sake of the people, of course. Via her own website:

"We cannot guarantee a recount will happen in any of these states we are targeting. We can only pledge we will demand recounts in those states."

If the recounts don't happen, what will become of all that money? Stein's website says any "surplus will also go toward election integrity efforts and to promote voting system reform."

Interestingly, as her money raising schemes proved successful, the alleged costs associated with the recount rose dramatically -- including millions to be paid out to lawyers.

It appears that as more money came in, Jill Stein's estimated recount costs rose dramatically. https://t.co/aoOqH0VVkP pic.twitter.com/kcoYTrSUm3

— Yashar (@yashar) November 24, 2016

READ THE FINE PRINT: There probably won't be a recount and Jill Stein will line her pockets with the money for "integrity efforts" #NoRefund pic.twitter.com/a3fF5JOpGP

— Tim Young (@TimRunsHisMouth) November 24, 2016

Nate Silver isn't a fan.

Not saying this Jill Stein thing is a scam, but if it were a scam, it would probably look a lot like this. https://t.co/pg4eAuFQ4h

— Nate Silver (@NateSilver538) November 25, 2016

Jonah sums it up perfectly.

Jill Stein's racket is incredible:

Step 1: Cost the Dem the Election
Step 2: wait for Trump panic
Step 3: Bilk millions for recount.

— Jonah Goldberg (@JonahNRO) November 25, 2016

Here's Stein's conference, discussing her absurd contest.

;

The neverending election continues.

Content originally generated at iBankCoin.com

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Gold Down 13.5% In 13 Days – Trump Bearish For Gold?

Published here: http://www.zerohedge.com/news/2016-11-25/gold-down-135-13-days-%E2%80%93-trump-bearish-gold

• Gold down 13% in 13 trading days since Trump election
• Factors that have led to lower gold prices
• Trump bearish for gold in coming four years?
• 'Trumpflation' cometh
• Sharia gold - vaulted gold accessible to 110 million new investors
• What to do? Diversify and geometric price cost average

Donald Trump was elected President and the gold price surged 5%, over $60, from $1,271/oz to $1,336/oz. As many of us had suggested it would. And then something strange happened, something not expected by the majority of market participants - it started to fall, the dollar strengthened.

We now have a gold price that is down 13% since the US election result - from a high of $1,336/oz to a low of $1,177/oz this morning. This is a drop of 13% in just 13 trading days since the election.

Does this mean that Trump and his Presidency isn’t going to be very bullish for gold prices as so many of us predicted? Does this mean that gold is going to underperform  or worse, enter a bear market in the next four years?

We don’t think so. Indeed, we see this as extremely unlikely. We outline below just some of the factors that have lead to the recent declines in the gold price, and outline why we don’t think this is a sign of things to come.

US dollar strengthens as Federal rate hike looms

For many in the gold space the miserable gold price is thanks to the expectations that Janet Yellen and co. will decide to hike rates thanks to some mixed data that suggestes a strengthening US jobs market. These were the noises emanating from the recent Federal Reserve Open Markets Committee meeting press release.

The US Dollar has rallied to its highest level since 2005 this week, largely on the back of these Fed expectations. Higher borrowing costs can hurt gold bullion as strategic buyers look at gold in the context of yields and interest payments. Although this is less the case now given ultra loose zero percent and negative interest rate monetary policies.

ETF support gone ... for now

In 2016 gold demand has been supported by stellar ETF demand as, according to the World Gold Council, the high gold price in Q3 had a negative impact on gold demand, elsewhere.

For the SPDR Gold Trust and the iShares Gold Trust combined inflows are worth around $13.6 billion for this year (a record).

Both jewellery and gold bars and coin sales have reached levels this year not seen since 2009. But physical demand has not reflected such levels in Q3. After very significant demand and the price surge in Q1 and Q2, Q3 saw a reduction in demand for jewellery and coins and bars.

Whilst central banks, which have been huge buyers (and therefore supporters) in the physical gold market, have reduced gold reserve diversification to 33% of that in 2015.

“ETPs were the only bright spot during the quarter, with 146t of inflows helping to counterbalance weak demand elsewhere, notably in jewellery (-21%), bars and coins (-36%) and purchases by central banks (-51%).”

But that bright spot has started to dim since the Trump’s victory:

According to ETF.com “in the week since the election, outflows from the SPDR Gold Trust and the iShares Gold Trust totalled $1.7 billion…the aftermath of the elections has clearly dampened enthusiasm for gold among ETF investors.”

Therefore it is unsurprising that a market that has been significantly supported by one investment product is now struggling as the outflows add up.

But the ETF argument raises an interesting point

As the World Gold Council stated in their recent report, much of the activity surrounding gold purchases this year (especially in the area of ETFs) shows strategic buying rather than investment buying.

This was no more clear than on the early hours of the election night on November 9th, as Jim Rickards recently outlined,

“Gold prices surged late on Nov. 8 and into the early morning hours of Nov. 9 as a Trump victory became clear. This was exactly in line with my expectations. Based on sentiment and momentum, gold should have held those gains.

Instead, one of the largest and most visible individual gold investors, Stan Druckenmiller, decided to liquidate his entire gold position in the middle of the night. Druckenmiller told CNBC: “I sold all my gold on the night of the election… All the reasons I have owned it for the last couple of years, it seems to me they may be ending. And by the way, they’re ending globally.”

The move by Druckenmiller saw gold continue to decline in the following days thanks to a change in sentiment. Many sheep like traders adopted a ‘me too’ attitude. Momentum is a powerful thing in markets.

Do the reasons to own gold no longer exist?

In short, no.

In lengthier words, still no. One of the main reasons for the dollar strength and uptick in industrial metals is because Trump is expected to spend, spend, spend his way back to making ‘America Great Again.’ The Donald in the White House means reduced regulation, a fall in corporate taxes and trillions of dollars of fiscal stimulus.

'Trumpflation' cometh.

All of this without any thought to the inflationary effects.

Jim Rickards, explains:

“If the Fed accommodates the deficit with “helicopter money,” inflation will surge. If the Fed leans against the big deficits with rate hikes, this will cause a stronger dollar and lead to a global liquidity crisis in emerging markets.

If bank regulation is eased, banks can be relied upon to leverage up with risky derivatives, which will make the next financial crisis more, not less, likely. Druckenmiller’s stated reasons for selling gold are equivalent to saying, 'I cancelled my fire insurance because now that Trump is president, we won’t have any more fires.' Don’t count on it.”

Druckenmiller is a great investor but like the majority of investors simply does not understand gold's role as a hedging instrument and financial insurance - either through choosing not to or through lack of knowledge.

Both Brexit and the Trump victory have wrong footed the financial markets and we are heading into unchartered territory both politically and economically. Unchartered territory means complex decisions are needed to be made by both governments and investors in order to navigate their way through over the coming years.

Uncertainty will lead to bargain hunting

A lot of uncertainty remains in both the geopolitical and economic arenas.

Conventional wisdom told us that gold would benefit from a Trump win, and in truth we haven’t seen the results of Trump win. This will play out over the next four years, and this is where we expect the precious metal to benefit.

Aside from Trump’s disastrous spending policies and strategic gold buyers dumping the metal for equities, there are some highlights to consider in the next few months.

With each Republican nomination contest we see at least one candidate mention the role of gold in the monetary system. In this recent one, we had a couple and one of them was Donald Trump.

It’s highly unlikely Trump is going to be forcing Janet Yellen to announce a return to the gold standard, but we may well see more discussion about gold’s monetary role.

In addition to Trump taking a shine to gold, the gold market is soon to see a significant increase in investors when vaulted gold coins and bars become accessible to over 110 million Muslim investors in Turkey, Pakistan,  Malaysia, Indonesia, Bahrain, Qatar, Saudi Arabia and the United Arab Emirates

As we outlined last week, the Sharia Gold Standard or Islamic Gold Standard is set to be announced, this will allow Muslims around the world to invest in physical gold.

The reasons to own gold have not disappeared in the dawn-of Trump. As Rickards says:

“The reasons to own gold are insurance against extreme risk, as a hedge against inflation, and as a sound form of money in a world where central banks are losing control. All of those reasons still apply”

There are also the not inconsiderable risks posed by the Italian referendum on Sunday week, December 4th, and the French general election on April 23, 2017. Both of which have the potential to plunge the Eurozone into a new crisis - a potentially existential one.

Medium and Long Term (2017-2025) 'MSGM' Fundamentals

The long term case for having an allocation to precious metals is due to the still positive fundamentals:

• Macroeconomic risk is high as there is a serious risk of recessions in major industrial nations with negative data emanating from the debt laden Eurozone, Japan and China. Even the recoveries in the UK and the U.S. are tentative at best. Issues with banks, a la Lehman or Deutsche, or a major terrorist incident or another war could badly impact fragile consumer and investor sentiment.

• Systemic risk remains high as little of the problems in the banking system have been addressed. There remains the risk of another ‘Lehman Brothers’ moment or a new ‘Grexit’ moment and seizing up of the global financial system. The massive risk from the unregulated “shadow banking system” continues to be significantly underappreciated. There are many potential Lehman Brothers out there both in the Eurozone with Deutsche Bank looking very vulnerable.

• Geopolitical risk  remains elevated – and Trump's election seems likely to exacerbate these risks. This is seen in the continuing significant tensions in Lebanon, Syria etc and between Iran and Israel. There is the real risk of conflict and the consequent effect on oil prices and the global economy. While tensions with Russia may subside with the Trump election, tensions with Iran and other Muslim nations look set to worsen.Indeed Trump's trade and economic policies have the potential to create significant tensions even with major trading partners in the EU and with China.

• Monetary risk is high as the policy response of the Federal Reserve, the ECB, the Bank of England, the BOJ and the majority of central banks to the risks mentioned above continues to be ultra-loose monetary policies, zero interest rate policies (ZIRP), negative interest rate policies (NIRP), the printing and electronic creation of a tsunami of currency and the debasement of paper and electronic currencies.Should the macroeconomic, systemic and geopolitical risks increase even further in the coming months, then the central banks’ response will likely again be more cheap money policies. This will lead to further currency debasement and there is a risk of currency wars deepening.

Given these real risks, investors should use this latest correction to diversify into physical gold.

There is a strong case for having higher allocations to physical gold today, of as much as 25% of a portfolio, given the risks above.  We advise owning physical gold as gold ETFs have significant levels of legal indemnifications and various forms of force majeures that exposes investors to unnecessary risks with little recourse.

Hence the importance of physical, allocated and segregated gold “outside the banking system.”

Those seeking to allocate funds to precious metals should geometrically price cost average into position by front loading their initial allocation and allocating as much of 50% of their allocation to gold on the first transaction.

This latest bout of weakness will allow value buyers to accumulate physical on the dip.

Gold and Silver Bullion - News and Commentary

Gold hits 9-1/2-month low on firm dollar; set for third weekly loss (Reuters.com)

Gold futures fall further below $1,200 mark (MarketWatch.com)

Gold edges lower on dollar and U.S. rate prospects (Reuters.com)

Potential gold-import ban by India could be biggest bombshell since Nixon (MarketWatch.com)

Mastercard, Visa Set to Reap Spoils of India’s War on Cash (Bloomberg.com)

$6 billion 'puke' sends gold plunging below $1200. Source Zero Hedge

Trump's Victory: What Does it Mean for Gold? (TocqueVille.com)

ECB Warns There Is "Significant Risk Of Abrupt Market Reversal" (ZeroHedge.com)

$6 Billion Puke Sends Gold Plunging Below $1200 As Dollar Index, Bond Yields Spike (ZeroHedge.com)

Chart of the week: “shrinkflation” hits the chocolate market (MoneyWeek.com)

Gold: valuable reserve amid unprecedented policy environment (Gold.org)

Gold Prices (LBMA AM)

25 Nov: USD 1,187.50, GBP 995.33 & EUR 1,121.83 per ounce
24 Nov: USD 1,187.25, GBP 995.36 & EUR 1,125.04 per ounce
23 Nov: USD 1,213.25, GBP 998.00 & EUR 1,143.00 per ounce
22 Nov: USD 1,217.55, GBP 997.89 & EUR 1,144.98 per ounce
21 Nov: USD 1,214.95, GBP 984.72 & EUR 1,143.39 per ounce
18 Nov: USD 1,206.10, GBP 971.15 & EUR 1,135.54 per ounce
17 Nov: USD 1,232.00, GBP 988.19 & EUR 1,148.10 per ounce

Silver Prices (LBMA)

25 Nov: USD 16.47, GBP 13.21 & EUR 15.55 per ounce
24 Nov: USD 16.31, GBP 13.09 & EUR 15.43 per ounce
23 Nov: USD 16.56, GBP 13.36 & EUR 15.59 per ounce
22 Nov: USD 16.76, GBP 13.46 & EUR 15.77 per ounce
21 Nov: USD 16.68, GBP 13.47 & EUR 15.69 per ounce
18 Nov: USD 16.51, GBP 13.30 & EUR 15.54 per ounce
17 Nov: USD 17.04, GBP 13.65 & EUR 15.87 per ounce

Recent Market Updates

- War On Cash Just Got Real – India and Citibank In Australia
- Russia Gold Buying In October Is Biggest Monthly Allocation Since 1998
- Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards
- Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
- Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
- Islamic Gold – Vital New Dynamic In Physical Gold Market
- Peak Gold Globally – “Bullish For Gold”
- Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
- President Trump – Why Market Loves Him and Experts Wrong
- ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise
- Central Bank Gold Demand continues in Q3
- Trump Victory Sends Gold Surging 5%
- An uncertain election outcome looks good for gold

Read More