Democratization of Money vs. Economic Feudalism

Published here: http://www.zerohedge.com/news/2017-11-30/democratization-money-vs-economic-feudalism

The Fed is the Market, Until Someone Bigger Comes Along..

 UPDATE:This editorial was written  3 days ago in reaction to reading the Zerohedge post As Bitcoin Nears $10,000 "Central Banks Kept Up At Night"

by Vince Lanci

“Free markets for free men”- patch worn on the Nymex floor during Iraqi war. 

The reality: We were cheerleaders for Halliburton and naively thought we were on the same team. Money that can’t cross borders freely for its citizenry is not a free market. There was a time before each government sought to secure its tax base through FIAT that money was universal.

That time, when gold was money, is back. But gold isn’t currency. BTC is currency. And their combination, whether in a single  product, or on 2 different fronts, will take the fight  for economic freedom to the Fed doorstep.

Economic freedom is a right corporations enjoy but most citizens do not. And those that do, must pay a tax and withstand a full body cavity search to play. Meanwhile, the west’s corporate controlled government enables its own demise via these uneven playing fields.  No matter, the last US middle class people will pay a 300% income tax to cover government spending we bet.

The Fed Has Forgotten The Market’s Basic Rules 

The axiom “no one is bigger than the market” has held true forever. When the 2009 stock market reinflation began to be understood by professional traders as the Fed becoming the ultimate backstop to the market, that axiom was discarded by many. And that was wrong.

You see, the largest marketmaker, backstop, supporter, is always eventually supplanted by a successor. The king will die. Long live the next king. 

The thing that will eventually dethrone the US govt as market backstop may not come as many see it coming including myself : via a fundamental reckoning or a credit downgrade. No, those things may be resultant of an outside disruptive force on the very nature of centralized power. 

It may come like it does in most markets; when the big fish has a position that leaves it too little room to maneuver ( debt service etc) and then a bigger fish comes along that can take advantage of the next thing. That fish could be Russia, China, or a state controlled capitalist set up that can mandate controls more easily to what it wants. Meanwhile the west’s pesky democracy, or what’s left of it will need to be eradicated. Then they can put down any egalitarian  economic forces.

So in the west, with corporate controlled governments, the king will be dethroned only by true economic grass roots revolution. And that will only happen if they do not put us down before hand. 

Decentralization Kills Power Abuse

Either way the killer concept that will be used is the same thing that has disrupted how we communicate, fight wars, and handle work. That is decentralization as the ultimate disruptor ofcoalesced incumbent power. The playing field will be leveled.

 

That is what BTC and it’s ilk are. They represent the re- democratization of money. This will openup the markets to a bigger, dare we say it, more fair and definitely more like the real invisible hand that free economic markets aspire to. 

The question is how will the incumbent central bankers handle it. It certainly won’t be to our benefit. I write as if the success of a truly free economic society are a given. But they are not.

Control of money is being threatened by a grass roots movement. State Run capitalism will just ban or claim the new tool as its own. China and Russia are already doing oil for gold deals via Blockchain. And why not? They own their banks. The western governments will try to co-opt, restrict, demonize, and finally replace the money of choice with a castrated version that offers convenience at the price of losing that rediscovered financial freedom.

Those on power have no incentive to say “we are wrong, we accede to the public’s desire for an evolutionary government.” Lol.

This will end badly when the Fed gets its shit together. 

When that happens, expect a multi-year smack down attempt as they’ve seek to tame crypto currencies they can’t own. And  when you think it is over, that is when it is just beginning. The tech ain’t going away. 

But if there is one thing that will make enemy governments unite in defense, it will be the true democratic society that can happen. It won’t be martians that bring governments together. It will be it’s own citizens chafing at modern feudalism. 

Sincerely:

Vincent

vlanci@echobay.com

About the Author: Vince Lanci has 27 years’ experience trading Commodity Derivatives. Retired from active trading in 2008, Vince now manages personal investments through his Echobay entity. He advises natural resource firms on market risk. He pioneered and executed the Nat Gas EOO arbitrage trade of 2006 to 2008, netting over $90MM for a NYC hedge fund before retiring. Over the years, his expertise and testimony have been requested in energy, precious metals, and derivative fraud cases. Lanci is known for his passion in identifying unfairness in market structure and uneven playing fields. He is a frequent contributor to Zerohedge and Marketslant on such topics. Vince contributes to Bloomberg and Reuters finance articles as well. He continues to lead the Soren K. Group of writers on Marketslant.

 

 

***Dear Readers: "Day job" obligations are making it difficult to expend resources toward writing original pieces consistently. We do not have a Soren K. site but wish to continue writing. To do so we will need to incur expenses. Marketslant is kind to post our work and the work of others here. We hope to be setting up a Soren K. Group Patreon page in the next weeks to continue giving our original work, as well as proprietary research for Precious Metals traders. Anything offered will be greatly appreciated. We  also hope to do the following for readers here depending on interest soon thereafter

1. weekly settlement price competition for token prizes - Silver Eagles etc.
2. opportunity to guest post under SKG and on zerohedge where we write and  post under Vince Lanci's Blog
3. Ability to  place  your own editorials on Kitco if they accept as relevant to the market. 

Finally we are in the process of raising capital for a fund and are speaking to seeders in that pursuit. Between our SKG members we have 65 years trading experience in PM, Energy, and Equities. Among our group are algo writers, analysts, $BB Fund partners, lawyers, Wall Street bank executives, and other complementary minds. Patron readers would see trades we execute when up and running as investors permit.

If you have an opinion, interest or wish to write please contact us at Sorenk@marketslant.com***

 

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Carpetbagger Paradise - by James McShirley

Published here: http://www.zerohedge.com/news/2017-11-30/carpetbagger-paradise-james-mcshirley

The term carpetbagger originally referred to post-Civil War Northerners who moved to the South during reconstruction for either economic gain, political gain, or both. They frequently arrived with hastily sewn suitcases made of carpet remnants, hence the moniker “carpetbaggers.” Carpetbagging has subsequently also become a popular description for non-native politicians who for expediency and opportunity establish political roots in some newfound territory. (Think: The Bush family in Texas or Hillary Clinton in New York.) Carpetbagging has now evolved to describe virtually any unscrupulous, or opportunistic outsider seeking financial gain. In the context of this last definition there has never been a time when carpetbagging has experienced such a renaissance as it has in modern finance. It’s the golden era of carpetbagging. You could say, in fact, we are living in a veritable carpetbagger’s paradise.

They Should have called it “Carpetbanking”

Of course, by definition all bankers are in the business of carpetbagging. The very nature of owning the pieces of paper we exchange for real goods and services means there’s a constant source of outside profiteering, at the expense of local people in useful society. You can’t buy, sell, lease, or conduct a single transaction without a carpetbanker somewhere getting his cut. Maybe though in the case of bankers we need to update the term carpetbagger to “Guccibagger.” Unscrupulous outsiders plying their trade elsewhere has been a Fed tradition since 1913. We’re no longer in Bedford Falls, Mr. Bailey. Mr. Potter’s heirs are alive, and prospering all over the planet.

National Pastime

Carpetbagging has indeed become so fashionable as to be a National pastime. Fully aided and abetted by the (not) Federal (and not) Reserve, with full cooperation from the Federal government it has morphed to new dimensions. Things like ZIRP, stock market bubbles, housing bubbles, and everything bubblelicious in between are all fully sanctioned events. By “sanctioned” I mean, heavily subsidized; ultimately by YOU, dear taxpayer. Carpetbaggers thrive on OPM and implicit guarantees of success. Why reinvent the con when you can merely pack up your magic carpetbag and climb on the carpetbagging hypersonic loop? All aboard!

The (Dis)information Super Highway

The carpetbagging highway is in fact a 10-lane super interstate stretching all the way from Silicon Valley to Washington DC. Buy Tesla? Of course, that Musk chap is working on a hyper-speed of light gismo which will transport you to Mars in the morning and still have you back by 8 PM to watch American Idol. With that in mind how can TSLA stock not hit $5,000? Amazon? It’s a foregone conclusion that the Bezos machine will eventually sell everything to everybody. He’s not only going to sell everything to everybody, he’s going to be able to read your mind and deliver it while you are still thinking of it! Gone are the days of even having to bother with those pesky keystrokes. Yessirree, in the land of Amazon there will be no exertion, no jobs, and no profits, yet somehow, it’s all going to work out. Who cares about social chaos and starvation when you can load the boat on AMZN now and get rich! Living in a carpetbagger’s paradise is like watching perpetual Brady Bunch reruns. Everything works out, and it always ends with a happy song.

Vegas Hotel, or a Tree in Southern Greece?

Gold and silver owners know full well the carpetbagging nature of derivatives, and how they are used to suppress and manipulate the underlying product. You in fact don’t need to know a damn thing about mining, precious metals, or even what gold and silver are, to profit handsomely from them. Does gold come from the ground, or does it grow on trees in southern Greece and Italy? Isn’t a golden nugget some hotel in Vegas where Elvis hung out? Who cares, why bother, just know that you will make money playing the cartel game. Short gold on 1% rallies, NFP Fridays, option expirations, and other key no-no times and you will come out like a Northern carpetbagger in 1868 Biloxi. The name of the game is take what they give you, and it’s obvious TPTB are fully quiescent in facilitating paper profits derived from suppressing precious metals, and in doing so ruin an entire industry.

Hard Times (At least for Now)

These are no doubt hard times for precious metal investors. The discouragement is understandable, the unfairness of it all hard to swallow. The Bitcoin, Tesla, and FAANG carpetbaggers have been partying like it’s 1999, a most recent investing mania era, in addition to the Prince song. Carpetbaggers rarely see the violent upper cuts that hit them out of nowhere. Like a few Northerners who got tossed out on their ear into a muddy street in the South it wouldn’t take much to turn this carpetbagger’s paradise into a 1-way muddy street to hell. Tesla, Amazon, and other Uber-bubbly delights can become the latest incarnation of 1990’s dot.com stocks, which never made money and fell back their intrinsic values: zero, or near-zero. Pack your (non-carpet) bags, we’re traveling back to the world of real money; which is always gold and silver. It’s been a long journey from 2011. The return trip should be far more pleasant, even if it isn’t on a Mars hyper-light-speed gismo.

James McShirley
November 30, 2017

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'Gold is in a Bear Leg..with an $1800 Target'

Published here: http://www.zerohedge.com/news/2017-11-30/gold-bear-legwith-1800-target

originally posted by the Soren K. Group on marketslant.com

Moor Report Summary:

If the title confuses you, do not be fooled. There is a short term outlook, that can change from day to day, an intermediate outlook that can change week to week, and a long term one. This changes month to month And they are not contradictory.

• Short Term -  refers to daily outlooks here. It is choppy with repeated failures to pierce $1300. This calls for trading counter trend with a downward bias intraday Sell rallies, buy dips.... in that order.
• Intermediate Term- We do not like trading week to week and have no feel for this time frame. To us, if the short term makes money, then take it home and see if it continues intermediate term.
• Long Term- Buy it, buy it again, and keep buying it unleveraged with money you do not need for current cash flow or expenses; and hold it for 12 to 18 months with a target of $1700 plus. The only thing to  consider is if you buy more on any dip above $1245 (Fund  Finder level) then $1229 (Moor Level) and $1192, (from VBS). Then decide if you add on a break  above $1338. The macro is lined up. We seek the micro to start the ball rolling to add or pare positions.

Slow Rally Kills Shorts

We are in a limbo area right now, where a short term bull leg is triggered with a decisive penetration above $1294.50. And any settlement below $1292.20 is a short term bear leg. Accumulators buy while shorters seek weakness to push lower. Physical  accumulators  do not chase. It is the shorts who will ignite this if it is to accelerate  to the upside. We'd  prefer a slow melt up to $1338 so no hot money buys, and shorts can delude themselves

Michael's analysis echoes what we see longer  term. Specifically, in 9-12 months he sees an upward  move bringing us to $1400 minimum,  and over $1800 maximum. This all happens as long as the market withstands any pressure down to $1229.

Our own  analysis remains unviolated adn fully intact. Funds are buying dips above the  12 month moving average, Volatility in the short term is starting to percolate, and long term volatility is flatlining. The low long term volatility implies the next move in Gold is not to be faded if  accompanied by  newly expanding long term volatility.

Simply put:

1. SKG Fund Finder: Patient Long above the 12 month MA with a sell stop on a  monthly settlement below $1245
2. Moor Analytics: Traditional Analysis says a long bias is in order with the ability to swing trade in either direction as described in the levels below
3. Echobay's VBS Macro: Explosive volatility on a move above $1338 or below $1192 in either direction. implying a $200 move in either direction if triggered

SKG Fund Finder - the 12 month MA said to buy in July/August on a settlement above the yellow line. Our refinement says now is when to buy based on line slope and risk /reward

?

 

Moor Analytics Weekly

GC (G)

On a short-term basis:

I cautioned that an area of possible exhaustion for the move up from 12628 came in at 13077-81.
We rejected $43.9 from this, but this is now on hold. The trade above 12896 (-1 tic (10 cents) per/hour) put us above a small
formation that projects this upward $5.5 minimum, $14.5 (+) maximum. We have seen $9.4 of this so far. This will come in at
12881 (-1 tic (10 cents) per/hour starting at 6:00pm). If we break back below, look for profit taking to come in. The trade
above 12925 brought in $6.5 of the strength warned about above before rolling over. Decent trade below 12792 (+.3 of a tic
(3 cents) per/hour starting at 6:00pm) will project this downward $20 minimum, $24 (+) maximum; but if we break below here
decently and back above decently, look for decent short covering to come in. A maintained gap lower tomorrow will leave a
short term bearish reversal intact above that will warn of decent pressure, likely for days. Trade above 12990 is a sign of
renewed strength.

On a macro basis:

We broke above a well-formed macro line in the week of 8/7 that came in at 12629. The break above here
projects this upward $174 minimum, $493 (+) maximum—the maximum to be attained likely within 9-12 months. This line
comes in at 12294 this week, and rolls into (G). This is off hold, or you could wait for a decent break above the 12947-54 area
mentioned below for added confirmation. Within that we rallied up to a macro resistance line on 9/11 at 13522 that I said we
are looking for a multi-week smackdown from-- we were seeing some of this as we have come off $89.4, but this is on hold.
We left a medium term bearish reversal intact above on 9/18 that also warned of continued pressure in the days/weeks ahead.
We have seen $48 so far. This too is on hold. Within the bearishness I noted that a possible area of exhaustion for this move
down from 13624 comes in at 12732-644. We basically held this, but with a $1.6 violation, and rallied to 13084 before rolling
over and rejecting from it again. Decent trade below 12682 will project this downward $31 minimum, $97 (+) maximum based
off a well-formed formation. Decent trade above 12950 will project this upward $23 minimum, $47 (+) maximum based off an
‘ok formed’ formation; but if we break above here decently and back below decently, look for decent profit taking to come in.

Email Michael for subscription info : Michael Moor

VBS MACRO

Volatility Cycles more cleanly than price. it could stay low for months, but is far less likely to give false  signals. 

?

In Gold and Silver, we use 1.5 STD on BBands and relationships not shown here between historical and implied that corroborate or negate a signal- SK

Good Luck

Dear Readers:

"Day job" obligations are making it difficult to expend resources toward writing original pieces consistently. We do not have a Soren K. site but wish to continue writing. To do so we will need to incur expenses. Marketslant is kind to post our work and the work of others here. We hope to be setting up a Soren K. Group Patreon page in the next weeks to continue giving our original work, as well as proprietary research for Precious Metals traders. Anytng offered will be greatly appreciated. 

We  also hope to do the following for readers

1. weekly settlement price competition for token prizes - Silver Eagles etc.
2. opportunity to guest post under SKG and on zerohedge where we write and  post under Vince Lanci's Blog
3. Ability to  place  your own editorials on Kitco if they accept as relevant to the market. 

Finally we are in the process of raising capital for a fund and are speaking to seeders in that pursuit. Between our SKG members we have  65 years trading experience in PM, Energy, and Equities. Among our group are algo writers, analysts, $BB Fund partners, lawyers, Wall Street bank executives, and other complementary minds. Trade ideas we execute when up and running will be shared with site Patrons as investors permit. 

If you have an opinion, interest or wish to write please contact us at

Sorenk@marketslant.com

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Fear and Loathing in the Age Of QE, AI, Trump and War

Published here: http://www.zerohedge.com/news/2017-11-30/fear-and-loathing-age-qe-ai-trump-and-war

'Fear and Loathing In the Age of QE ... AI' is a presentation given at Mining Investment London earlier this week.

Stephen Flood, CEO of GoldCore presentation (28 minutes) was well received at the conference which is a strategic mining and investment conference for leaders in the mining and investment sectors, bringing together attendees from 20 countries.

 

Key topics in the video:

- A bullion dealers view on 'What will drive the markets in 2018?'
- QE, inflation, Fed rates, debt bomb, China, populism, EU cohesion, Brexit, digital disruption, cashless society, demographics, Trump (war), Artificial intelligence (AI)
- Solve global debt crisis with humongous amount of debt!?
- Inflation - U.S. health insurance has increased 13% per annum since
- How Artificial Intelligence (AI) is the "big one," likely be massively disruptive
- Trump: 'No respect, no capacity, no strategy'
- Brexit and EU - 'Poor outlook' for Europe and euro doomed?
- "We are getting older and getting fatter" ...  "less useful & less fair"
- "We live in uncertain times ... there is no map"
- Gold's excellent c.10% per annum performance over long term (see table)
- Low cost gold = Low "utility" gold
- Avoid "single point of failure"

 

'Fear and Loathing In the Age of QE ... AI' can be watched on Youtube here

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News and Commentary

Gold holds near one-week low as dollar firms (Reuters.com)

Tech Stock Slide Spreads to Asia; Korean Won Drops (Bloomberg.com)

U.S. Stocks Dragged Down by Tech Rout; Bonds Fall (Bloomberg.com)

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Fidelity restores online account access after resolving technical issue (CNBC.com)

Source: Bloomberg

Goldman Warns That Market Valuations Are at Their Highest Since 1900 (Bloomberg.com)

Bitcoin Tops $11,000 - Bundesbank Sees No Bubble, Stiglitz Says "Should Be Outlawed" (ZeroHedge.com)

Own Bitcoin - But Invest No More Than You Can Afford To Lose (StansBerryChurcHouse.com)

What to do if you’ve missed out on the bitcoin super-bubble (MoneyWeek.com)

Gold Slammed On Massive Volume To Key Technical Support On GDP Beat (ZeroHedge.com)

Gold Prices (LBMA AM)

30 Nov: USD 1,282.15, GBP 952.64 & EUR 1,084.06 per ounce
29 Nov: USD 1,294.85, GBP 965.70 & EUR 1,092.46 per ounce
28 Nov: USD 1,293.90, GBP 972.75 & EUR 1,088.95 per ounce
27 Nov: USD 1,294.70, GBP 969.73 & EUR 1,084.83 per ounce
24 Nov: USD 1,289.15, GBP 967.89 & EUR 1,086.37 per ounce
23 Nov: USD 1,290.15, GBP 969.93 & EUR 1,089.40 per ounce
22 Nov: USD 1,283.95, GBP 969.25 & EUR 1,092.51 per ounce

Silver Prices (LBMA)

30 Nov: USD 16.57, GBP 12.32 & EUR 14.00 per ounce
29 Nov: USD 16.90, GBP 12.60 & EUR 14.26 per ounce
28 Nov: USD 17.07, GBP 12.84 & EUR 14.36 per ounce
27 Nov: USD 17.10, GBP 12.81 & EUR 14.32 per ounce
24 Nov: USD 17.05, GBP 12.80 & EUR 14.38 per ounce
23 Nov: USD 17.10, GBP 12.84 & EUR 14.43 per ounce
22 Nov: USD 16.97, GBP 12.81 & EUR 14.44 per ounce

Recent Market Updates

- Own Gold Bullion To “Support National Security” – Russian Central Bank
- Bitcoin $10,000 – Huge Volatility of Cryptocurrencies and Risky Fiat Making Gold Attractive
- Financial Advice from Dr Wayne Dyer
- Buy Gold As Fed Shows Uncertainty And Concern Over Financial ‘Imbalances’
- Brexit Budget – Grim Outlook As UK Economy Downgraded
- Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
- Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
- Money and Markets Infographic Shows Silver Most Undervalued Asset
- Is New Fed Chief A “Swamp Critter Extraordinaire”?
- Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe
- UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off
- Protect Your Savings With Gold: ECB Propose End To Deposit Protection
- Internet Shutdowns Show Physical Gold Is Ultimate Protection

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

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Published here: http://www.zerohedge.com/news/2017-11-29/russia-china-use-logic-when-it-comes-gold

 

Russia & China Use Logic When it Comes to Gold

Posted with permission and written by Rory Hall, The Daily Coin

 

 

 

As we reported both here and here, gold is the answer going forward. How we the people will access physical gold or if we will be able to access physical gold is really the only remaining question. How high gold is going is the other important question. I hope it doesn’t get into the lofty heights that have been suggested in recent years - highs like $7,000, $9,000 and even $10,000 an ounce, as it would be much harder for people to use in everyday transactions. Unless, of course, it was on the blockchain or some other yet-to-be-developed type of fintech.

 

It is also no secret that Russia is looking for the exit door where the Federal Reserve Note (FRN), world reserve currency, US dollar is concerned. Russia has made it very clear they are making all the moves to stop using the FRN/US dollar as their primary currency to settle international trade. Gold will probably handle Russia’s trade settlement just fine.

 

Gold Is Russian Answer To U.S. Dollar Dominance – CPM Group

Russia’s increased purchases of gold is not a red flag, but a clear message of diversification away from the U.S. dollar and its “monetary hegemony,” according to Jeff Christian, the CPM Group managing director.

In October, Russia added another 21 metric tons of gold, which tripled the amount over the last decade and brought the overall total to 1,800 tons.

Russia has added, approximately 18 tons per month, every month, for the past 3 years. At their current pace Russia will move ahead of China into sixth largest gold hoard by late Q1 2018.

 

But, it’s “business as usual for Russia,” Christian told Kitco News at the Silver & Gold Summit in San Francisco. “[Russia is] finally able to execute on a long-term desire to rebuild their [gold] inventories and to diversify away from the dollar.”

Russia has witnessed most of its gold reserves sold off after the breakup of the Soviet Union, which it has been attempting to regain since about 1997, Christian pointed out.

“In 1997 to 2005 [Russia] didn’t have the foreign exchange and capital inflows needed to convert money to gold. But, as the oil, palladium, and nickel prices started rising in 2005, all of a sudden, Russia’s economy had a massive inflow of U.S. dollars.”

But, the Russian government quickly realized that it had a problem relying on the U.S. currency, said Christian.

“Russia had a massive inflow of U.S. dollars at a time when the U.S. government was increasingly hostile toward the Russian government,” he noted, adding that Russia decided to diversify away from the American currency.

Christian added that Russia is not alone in sending this kind of message of diversification, highlighting that China as well as many other countries are on the same page.

“China in Q1 2009 bought a lot of gold that was supposed to go to China Investment Corp, the sovereign wealth fund. And instead, the government decided to add it to monetary reserves to send a message to the U.S. Treasury that China can in fact diversify monetary reserves,” he said.

Change is in the air, according to Christian: “There is a great dissatisfaction with the monetary hegemony that the U.S. has exercised since WWII and [the world] will move towards some sort of post-Bretton Wood floating exchange rate program at some point in the future.”

You know there is a serious alliance between Russia and China when even Jeffrey Christian can’t discuss one without mentioning the other. These two countries are working hand-in-glove to displace the FRN from its world reserve currency status and move into a system that includes gold at the foundation. Neither country wishes to upset the warmongers in Washington DC as these two countries understand they are dealing with an unstable group who haven’t honored one treaty they have ever signed – not one treaty in all the history of Washington DC has ever been honored. Russia and China are just going about their business of conducting business and when all the major competent pieces are in place it will be too late for the US/Uk to retaliate.

 

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

 

Russia & China Use Logic When it Comes to Gold

Posted with permission and written by Rory Hall, The Daily Coin

 

 

Check out these other articles by our contributors:

Dave Kranzler -  Bitcoin’s Inconvenient Truths: The Silence Is Deafening

Craig Hemke - Banks Again Defending Silver's 200-Day Moving Average

Ask The Expert: Jim Willie

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Own Gold Bullion To “Support National Security” – Russian Central Bank

Published here: http://www.zerohedge.com/news/2017-11-29/own-gold-bullion-%E2%80%9Csupport-national-security%E2%80%9D-%E2%80%93-russian-central-bank

We own gold bullion to "support national security" - Russian Central Bank

 - Russia warns Washington: Confiscating fx reserves would be "declaration of financial war"
- Russia has quadrupled its gold bullion reserves in decade
- BRICs discussing 'the possibility of establishing a single (system of) gold trade'
- Russia, China & maybe Saudi Arabia form alliances to unseat petrodollar
- Putin warns state-owned and private companies: be ready for rapid transition to war-time operations
- Russia, China gold-buying, Saudi strategic shift signal petrodollar era ending

Last week Russia's Central Bank First Deputy Governor Sergei Shvetsov said Russians own gold bullion and their central bank is adding to its gold reserves in order to "beef up national security."

Yesterday, the Russian Finance Minister Anton Siluanov warned Washington yesterday: "If our gold and currency reserves can be arrested, even if such a thought exists, it would be financial terrorism."

Russia is prepared for the possible toughening of US sanctions. However, if they include the seizure of Russia's foreign exchange reserves, it would be regarded as a "declaration of a financial war," the Russian finance minister warned as reported by RT.

This is not the first time, senior Russian officials has declared the importance of Russia's gold and fx reserves and indeed the economic and political strategy behind the country's fx diversification and gold buying activities. Putin has frequently signaled his belief in gold including in symbolic photos, as has the head of the Central Bank.

Russian gold bullion reserves have increased in value to $73.7 billion as of Nov. 1 from $60.2 billion at the beginning of the year. In September 34 tons of gold was added to the country's reserves, pushing the country to sixth place in the global rankings of gold holdings. It now sits one place behind China.

 

Russia and China have taken a similar approach to reserve management. Both have been working hard to reduce their dependence on (and exposure to) the petrodollar system. Bilateral trade agreements between themselves and others have allowed participants to trade in gold and their own currencies rather than solely the US dollar.

When Shvetsov referred to gold as a strengthener to 'national security' he is not directly referring to the obvious - weapons and physical means of defence. He is referring to economic war and the currency wars that the U.S. has played for so long.

The time has come when major oil producing nations and global powerhouses have had enough of the ace card the United States has dangled above them for so long. Russia, China, Turkey, Iran and possibly Saudi Arabia are stepping out of the US dollar's shadow with little shame.

As unease grows across the Middle East, East Asia as well as between Russia and bordering EU nations, national security is of utmost importance to individual nations, as are economic alliances. When Putin and his banks' Deputy Governor refer to preparations of national security and war-time operations they mean financial as well as physical.

Russia, China and others are well aware of this and happy to diversify out of the US dollar and into more secure and trustworthy assets, reducing their exposure to greenback-supporting cronies at the same time.

Russia - leading the hunting pack

“I would like to note that the ability of any economy to rapidly increase the output of defense products and services when it is needed is one of the most important conditions of the nation’s military security. All strategic and… large enterprises must be ready for this.”

Putin, November 22, 2017.

It has been no secret over the last few years that Putin is pushing Russia's agenda on the international stage. He is demonstrating the country's lack of passion when it comes to towing the line of the Western agenda, keen to show that the players of the East are worthy competitors.

He is doing this in a multitude of ways whether through forming alliances, the supposed hacking of the US election, posturing during military exercises and particularly Russia's stocking up of gold reserves alongside allies.

According to the World Gold Council, since 2000, the combined national gold reserves of Turkey, Russia and China have more than quadrupled to more than 4,000 tonnes in 2017.

Whilst the gold bullion reserves of the US, the UK and the Eurozone member states are alleged to be 5 times as large, they have also shrunk in size by 10% since the start of 2000. We say alleged as the U.S. gold reserves have not been audited since the 1950s. So arrogant in the knowledge are the Western allies, that the US dollar and fiat reserves will stand them strong in the years to come.

With a desire to step away from U.S. dollar hegemony and Western kowtowing comes the need to set up new trading agreements and mechanisms.

Deputy Governor Shvestov did not only say that gold was a weapon of war but that the current gold trading system was archaic and irrelevant:

"The traditional system based in London and partially in Swiss cities is becoming less relevant as new trade hubs are emerging, first of all in India, China and South Africa."

The Deputy explained how Moscow and Beijing have signed a memorandum of intent regarding bilateral gold trading, no doubt this will lead to the launch of new pricing benchmarks.

"We are discussing the possibility to establish a single gold trade [system] both within the BRICS, and at the level of bilateral contacts."

The news of cooperation between Russia and China is not big news. The Central Bank of Russia now has plans to form a single bilateral gold trade system with the People’s Republic of China in 2018.

What would strengthen this move away from US dollar hegemony? The cooperation of one of the main parties participating in the petrodollar agreement - Saudi Arabia.

Saudi is no longer playing the American tune

 

One of the overriding reasons for the petrodollar's longevity is due to an agreement in 1974 between US President Nixon and Saudi King Faisal.

The two leaders agreed that the Arabian Kingdom would accept dollars as payment for its oil exports. At this point the petrodollar-era began.

Now we are on the cusp of something new. In the last six months the world has watched as Crown Prince Mohammed Bin Salman (MBS) has brought in a raft of new changes. Much of these have been introduced under his Vision for 2030 plan, a plan designed to reduce the country's reliance on oil revenues.

According to economist Brandon Smith, there is an underlying motive here - reduce steps away from the petrodollar.

“... I believe this plan is NOT about ending reliance on oil, but ending reliance on the US dollar. In fact, the plan indicates a move away from the dollar as the world's petrocurrency and a de-pegging of the riyal from the dollar.”

This plan has already involved strengthening ties to Russia and China, the two countries at the forefront of ending US dollar dominance.

Putin and King Salman - the petrodollar's worst enemies?

In October Saudi Arabia’s King Salman visited Moscow, something which would have been unimaginable two years ago when Russia intervened in the Syrian conflict.

Today the two countries have a pressing issue that brings them both together - the falling oil price and the need to reduce global dependance on the US dollar.

The upheaval in the US administration has opened a window for Russia to show itself as a global power in the Middle East. Meanwhile Saudi is disappointed with Trump's progress since his spring visit. There is little reason for the two to work separately towards the same goal.

Since 1960 Saudi Arabia has been able to move markets with a few select words. Not anymore, since last year Putin is now the world's 'energy czar'. Putin's influence has been no more apparent than in recent weeks when Bloomberg declared he had crowned himself 'OPEC King'.

Since engineering Russia’s pact with the Organization for Petroleum Exporting Countries to curb supplies a year ago, Putin has emerged as the group’s most influential player. As one senior OPEC official put it on condition of anonymity, the Russian leader is now “calling all the shots.”

The Kremlin’s growing sway within the cartel reflects a foreign policy that’s designed to counter U.S. influence across the globe through a wide mix of economic, diplomatic, military and intelligence measures. That strategy, which is undergirded by Russia’s vast natural-resource wealth, appears to be working.

China 'compels' Saudi Arabia to trade oil in yuan

China meanwhile is an economic and industrial powerhouse, with arguably as much power over the US dollar as those oil-producing nations. It recently usurped the US as the most oil-hungry nation on earth.

This gives it major bargaining power when it comes to paying for oil. Something with Saudi Arabia must be aware of. China has made its alliance with Russia, another major oil producer, on various fronts. It is now reportedly making its move with Saudi Arabia.

The economist Carl Weinberg says, Saudi Arabia has "to pay attention to this because even as much as one or two years from now, Chinese demand will dwarf U.S. demand...I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it — as the Chinese will compel them to do — then the rest of the oil market will move along with them."

In recent years China has bought less and less oil from Saudi Arabia, which sells a dollar-denominated product, so keen is the PRC to step away from the greenback. This will begin the hurt the nation that is already suffering at the hands of the oil price.

Should Saudi bow to pressure from the Chinese then this will have a major impact on the US dollar:

"Moving oil trade out of dollars into yuan will take right now between $600 billion and $800 billion worth of transactions out of the dollar… (That) means a stronger demand for things in China, whether it's securities or whether it's goods and services. It is a growth plus for China and that's why they want this to happen." Weinberg.

As already mentioned, China has multiple trade agreements with Russia especially for oil. It has also ensured oil-for-gold is a trade that can take place without the involvement of the greenback. To support this, both countries have been ramping up efforts to acquire and mine physical gold. An asset the Saudis certainly understand.

Prepare for a major change in the global order

Whether you're looking at North Korea's latest missile launch, NATO and some of the Baltics preparing for war with Russia or Saudi stirring up tension in the Middle East things are changing and power is shifting.

With this comes a shift in economic and financial power. Whether or not the Russians and Chinese are successful in their usurping of the US dollar one can be sure that there will be disharmony and uncertainty.

All that Putin and Xi are doing is seeking to diversify and reduce their exposure to the most devalued and manipulated fiat currency on the planet. This is no different to the behaviour one should expect from the sensible investor and saver seeking to protect their own assets.

Gold cannot be devalued as fiat currencies can. It cannot be used by governments as a weight on the shoulders of others as we see with the US dollar. Allocated and segregated gold bullion coins and bars cannot be confiscated thanks to the irresponsible actions of a counterparty. It is borderless money that acts as the ultimate reserve and safe haven in a diversified portfolio.

Russia and China have a plan to take charge of their national security and financial future. Diversification and gold are at the centre of these plans, as it should be for anyone seeking personal financial security and seeking to protect themselves from the coming global monetary crisis.

 

Related reading

Russia Buys 34 Tonnes Of Gold In September

Russia Gold Rush Sees Record Reserves For Putin Era

China, Russia Alliance Deepens Against American Overstretch

Russia and China continue to Buy Gold

 

News and Commentary

Gold holds steady after N.Korea missile test (Reuters.com)

Gold edges up, near six-week high after Fed chair confirmation (Reuters.com)

Bitcoin Blasts to Record $10,000 as Bubble Warnings Multiply (Bloomberg.com)

Goldman Sachs among bidders for Scotiabank's precious metals unit (Reuters.com)

London's house price to salary ratio has hit a record high (CityAM.com)

Source: Silver Seek

Banks Again Defending Silver's 200-Day Moving Average (SilverSeek.com)

India's Gold Imports To Be Over 700 tonnes This Year - Up 40% (FirstPost.com)

Gold Jewelry In Demand After Two-Year Slump In China (Gold-Eagle.com)

Gold’s 47-Year Bull Market (Gold-Eagle.com)

Bitcoin - Too Far, Too Fast? (ZeroHedge.com)

Gold Prices (LBMA AM)

29 Nov: USD 1,294.85, GBP 965.70 & EUR 1,092.46 per ounce
28 Nov: USD 1,293.90, GBP 972.75 & EUR 1,088.95 per ounce
27 Nov: USD 1,294.70, GBP 969.73 & EUR 1,084.83 per ounce
24 Nov: USD 1,289.15, GBP 967.89 & EUR 1,086.37 per ounce
23 Nov: USD 1,290.15, GBP 969.93 & EUR 1,089.40 per ounce
22 Nov: USD 1,283.95, GBP 969.25 & EUR 1,092.51 per ounce
21 Nov: USD 1,280.00, GBP 967.04 & EUR 1,090.69 per ounce

Silver Prices (LBMA)

29 Nov: USD 16.90, GBP 12.60 & EUR 14.26 per ounce
28 Nov: USD 17.07, GBP 12.84 & EUR 14.36 per ounce
27 Nov: USD 17.10, GBP 12.81 & EUR 14.32 per ounce
24 Nov: USD 17.05, GBP 12.80 & EUR 14.38 per ounce
23 Nov: USD 17.10, GBP 12.84 & EUR 14.43 per ounce
22 Nov: USD 16.97, GBP 12.81 & EUR 14.44 per ounce
21 Nov: USD 17.00, GBP 12.85 & EUR 14.50 per ounce

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Published here: http://www.zerohedge.com/news/2017-11-28/banks-again-defending-silvers-200-day-moving-average

 

 

Banks Again Defending Silver's 200-Day Moving Average

Written by Craig Hemke, Sprott Money News & TF Metals Report

 

 

 

The Bullion Bank trading desks, which are routinely short thousands of metric tonnes of digital silver, are once again attempting to keep price below the 200-day moving average.

 

And why is this so important to The Banks? For the most basic reasons of all...greed and profit.

 

The only data available to measure the size of the Bank net short position in Comex silver comes from the corrupt and compromised CFTC. Though it seems useless to use CFTC-generated data, unfortunately we have no other choice. To that end, as of the most recent reporting, we find Bank positions as follows:

 

• As measured by the latest Commitment of Traders Report, the NET position of the "commercials" in Comex silver is 80,436 contracts short. As measured by the latest Bank Participation Report, the NET position of the 24 Banks involved in Comex silver is 69,473 contracts short. For the sake of simplicity, let's just use the smaller BPR number and round it up t0 70,000 contracts NET SHORT for The Banks that trade on the Comex.

 

At 5,000 ounces of digital silver per Comex contract, 70,000 contracts is a net short position of 350,000,000 ounces or about 40% of total 2017 global mine supply. (It's also about 150% of the total amount of silver allegedly held in the Comex vaults but we'll save that topic for another day.)

 

For the purpose of this discussion, let's just look at that 350,000,000 ounce NET short position. Consider the size of that position and then do the simple math of realizing that a $1 move in either direction means a $350MM trading gain or trading loss for these Bank desks.

 

Now, getting back to the title of this post and The Banks' desire to keep price below the 200-day moving average. Why is this so important to them? Again, it's greed and profit.

As you can see below, on just three previous occasions in 2017, price has been able to briefly move above the critical 200-day MA. In February, the subsequent rally in price was about 60¢. In April, the move was nearly identical but in August, price moved over $1 in two weeks once the 200-day was breached.

 

 

So why defend the 200-day again now? First and foremost, The Banks (because of their massive NET short position) do NOT want a rally into year end that might prompt even more interest and speculator buying into 2018. More important though is the simple greed factor as another $1 move up in price would be a $350MM paper loss against their net short position!

 

Though the chart above clearly betrays The Banks' collusive and manipulative trading pattern for 2017, the chart below really brings it into focus in the present. Note the capping since price was broken below the 200-day on September 21. We've drawn ELEVEN arrows on this chart to point you to clear instances of Bank intervention to rig price back below the 200-day MA. Note, too, how frequently a one day close above the 200-day is met with a massive red candle the next.

 

 

So, for now, the point of this is simple. While we expect US dollar weakness to prompt a decent year for silver and all metals and commodities in 2018, until Comex silver can break free of the Bank shackles at the 200-day moving average, price will remain stuck in neutral. This will have an impact on mining share prices, too, so anyone interested in the sector should be sure to watch silver's 200-day moving average all through the month of December.

 

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

Banks Again Defending Silver's 200-Day Moving Average

Written by Craig Hemke, Sprott Money News & TF Metals Report

 

 

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