Swiss Gold Referendum in Perspective

A number of readers have asked me to comment on the Swiss Gold Referendum and what it may mean for the price of gold. Let’s start with a recap of the of the three primary points that citizens in Switzerland will vote on.
Switzerland Gold Initiative
Halt all gold sales Repatriate Swiss gold held in foreign vaults (UK and Canada) Establishes minimum 20% level of Swiss National Bank (SNB) Assets Of course, central bankers everywhere are horrified by the idea they should have to do anything, especially hold sound assets. In a flurry of fearmongering it appears the initiative is headed towards defeat.
What If?
Polls aside, let’s play a bit of “What If?”
Specifically, what will happen to the price of gold if the referendum passes?
Spanner in the Works
Variant Perception says Swiss Gold Referendum: A Spanner in the Works.
As polls continue to swing around ahead of the Swiss gold referendum on 30th November, we expect increased volatility in the FX and gold market.
After the implementation of the EURCHF floor, gold’s share of the SNB balance sheet has fallen to 7.5% from around 30% in 2007 (top chart) [SNB Balance Sheet]. The SNB has already pointed out the untenable nature of the peg should the referendum pass, but the impact on the gold market would also be significant.

This post was published at Global Economic Analysis on November 16, 2014.

We Are Never Going Back

It has always fascinated me to hear the mainstream’s interpretation of the gold standard. The great majority – including many who are part and parcel to the financial elite – elicit a knee-jerk response to its mere utterance.
Many see the return to the most recent Bretton-Woods-based “imposed standard”, not one based on market value. Furthermore, the knee-jerk is detached from the main reasons why they “should” oppose.
Mainstream financial awareness is fully clouded – even among its highest ranking practitioners. And they see its implementation akin to going to a world without anesthesia, antibiotics, child labor, slavery, and the like.
In our fully propagandized culture and society, precious metals are among the great “misunderstood”; a grotesque illustration of the century-old financial/political movement to “free” liquidity. It takes a pillage to get this far down the rabbit hole; a broken economy, old systems spiraling out of control.
We have massive misallocation of capital. Near total destruction of purchasing power. Emergency policies meant to prop up the banks are punishing savers. Justice is fully two tiered. Regulation is fully captured and revolving. The middle class is all but wiped out and on the verge of a yet another (this time abrupt) adjustment to the standard of living.
What is left of real capitalism is suffering from diminishing returns on the verge of no return. We are not returning to economic stability and growth any time soon.

This post was published at Silver-Coin-Investor on Nov 16, 2014.

America: “Land Of The Not-So-Free” If You’re A Woman

According to the International Centre for Prison Studies, nearly a third of all female prisoners worldwide are incarcerated in the United States of America. There are 201,200 women in US prisons, representing 8.8% of the total American prison population. As Forbes’ Niall McCarthy reports, China comes a very distant second to the US with 84,600 female prisoners in total or 5.1% of the overall Chinese prison population. Russia is in third position – 59,000 of its prisoners are women and this comes to 7.8% of the total. Either American women are the worst-behaved in the world, or the politically-expedient “prisons-first” culture has gone too far.
And here is Al-Jazeera’s Heather Schoenfeld explaining five things everyone should know about US incarceration:
Since the late 1980s, the US federal and state governments have sold imprisonment as the solution to myriad problems that have their roots in much more complex social and economic conditions.
The criminalisation tendency is politically expedient. This “prisons-first” political culture has one big downside: it has created mass incarceration.
Here are five things that everyone should know about mass incarceration in the United States.
1. The US incarcerates more people per capita than any other nation in the world: Approximately 1 in 100 adults or more than 2.2 million people are behind bars in the US, according to the Pew Center on the States. In addition, another 4.6 million (or a total of almost 7 million) people live under some form of correctional supervision.
Although the US is widely recognised as a “land of liberty”, it could also be described as a nation of prisons. It incarcerates more people per capita than any other nation. Its imprisonment rate (per capita) is almost 50 percent higher than Russia’s and 320 percent higher than China’s.

This post was published at Zero Hedge on 11/16/2014.

The Cruel Injustice of the Fed’s Bubbles in Housing

As the generational war heats up, we should all remember the source of all the bubbles and all the policies that could only result in generational poverty: the Federal Reserve.
Federal Reserve chair Janet Yellen recently treated the nation to an astonishing lecture on the solution to rising wealth inequality–according to Yellen, low-income households should save capital and buy assets such as stocks and housing.
It’s difficult to know which is more insulting: her oily sanctimony or her callous disregard for facts. What Yellen and the rest of the Fed Mafia have done is inflate bubbles in credit and assets that have made housing unaffordable to all but the wealthiest households.
Fed policy has been especially destructive to young households: not only is it difficult to save capital when you’re income is declining in real terms, housing has soared out of reach as the direct consequence of Fed policies.
Two charts reflect this reality. The first is of median household income, the second is the Case-Shiller Index of housing prices for the San Francisco Bay Area.

This post was published at Charles Hugh Smith on NOVEMBER 16, 2014.

Abenomics Officially Leads Japan Into A Triple-Dip Recession

Japanese GDP fell for the 2nd quarter in a row making it official – as we warned a month ago – that Japan has entered a triple-dip recession. Againstr hope-strewn expectations that the rebound from a sales-tax-driven slump would create a magical 2.2% (annualized) expansion, Japanese GDP slumped 1.6% in Q3 – missing by the most since March 2011. So no tax increase… and thus fiscal responsibility goes out the window. Abe dissolves government and bails on another failure? The initial kneejerk reaction sent USDJPY surgiung back over 117.00 (and NKY followed0 but that has quickly reversed and NKY futures are 200 off their highs (and S&P futures are back below Friday’s lows).

This post was published at Zero Hedge on 11/16/2014.

China’s Shadow Banking Grinds To A Halt As Bad Debt Surges Most In A Decade

It is probably not a coincidence that just as we learn that “China’s bad loans jumped by the most since 2005 in the third quarter, fueling concern that a cooling economy will be further weakened as banks limit lending to avoid credit risks” that we also learn that in the month of October, China once again slammed the brakes on credit creation, with total new loans dropping to RMB548 billion from RMB857 BN, below the RMB626 BN expected, the lowest monthly expansion in 2014…

This post was published at Zero Hedge on 11/16/2014.

Global Strategist: Judgment Day Is Coming: ‘This Will Be The Most Important Event Of Our Lives’

There are few events that could lead to a truly cataclysmic upheaval of the global order.
Right now, half a world away and out of the view of most Americans, exactly such developments have been set into motion. These events are so significant that they promise to shape the geopolitical landscape for decades to come. And, should the trend continue unabated it is only a matter of time before the American way of life as we have come to know it is no more. So says Casey Research Chief Global Strategist Marin Katusa in his latest interview with Future Money Trends:
Definitely it’s all about the Judgment Day for the petrodollar and the effect on the derivative market. I can sum it up in one sentence: If the petrodollar dies so does the American way of life.
I think people have taken for granted what the petrodollar means to the American way of life. So this is significant and it will be the most important event of our lives.

It’s unbelievable how things that are happening in Europe and Asia can specifically change the daily lives of Americans if America is not prepared for the colder war.
Katusa, who recently authored The Colder War, an extensive analysis of the paradigm shift in the global resource marketplace, shares some incredibly insightful thoughts on what is happening around the world today, how it will cause an unprecedented impact on Americans, and what you can do to position yourself for the events that threaten to shake the very foundations of the West’s global influence.
Watch: The world is at war- most people just don’t know it yet:

This post was published at shtfplan on November 16th, 2014.

In a deflationary world how likely is the US economy to strengthen, interest rates rise and gold prices fall?

The Goldman Sachs’ argument about further falls in the gold price does have a fundamental flaw. The economic scenario it proposes it not very likely to happen, ergo gold prices are on the floor now and set to rise substantially in the very near future.
What the bears at this house have argued about gold is quite simple, as they say: ‘We expect gold prices to come under significant downward pressure once the US economic recovery strengthens and the US Federal Reserve begins to raise interest rates.’
Deflationary world
OK but in a deflationary global economic environment how likely is it that the US will be able to keep its fragile economic recovery going let alone raise interest rates? This might have been a good story for 2014, if we forget the GDP slump of Q1 of course. But does it really stack up as a future scenario? Not if you think about it a bit.

This post was published at Arabian Money on 16 November 2014.

“ATM Jackpotting” Exposed – It’s Not Just The Fed That Spits Out Free Money

While the central banks of the world have yet to directly unleash the helicopter drop of free money to the end-consumer, preferring instead to seek financial asset inflation (and all its unintended consequences), it appears there is another way to get ‘free money’ direct to the average Joe… “ATM Jackpotting.”According to Wired, using a special button sequence and some insider knowledge, it is possible to reconfigure ATMs to believe they are dispensing one dollar bills, instead of the twenties actually loaded into the cash trays. Though industry sources claim this to be rare, they note that “independent operators and financial institutions are very tight lipped about this sort of thing.”
As Wired reports, “Two Dudes Prove How Easy It Is to Hack ATMs for Free Cash”
When a small-time Tennessee restaurateur named Khaled Abdel Fattah was running short of cash he went to an ATM machine. Actually, according to federal prosecutors, he went to a lot of them. Over 18 months, he visited a slew of small kiosk ATMs around Nashville and withdrew a total of more than $400,000 in 20-dollar bills. The only problem: It wasn’t his money.
Now Fattah and an associate named Chris Folad are facing 30 counts of computer fraud and conspiracy, after a Secret Service investigation uncovered evidence that the men had essentially robbed the cash machines using nothing more than the keypad. Using a special button sequence and some insider knowledge, they allegedly reconfigured the ATMs to believe they were dispensing one dollar bills, instead of the twenties actually loaded into the cash trays, according to a federal indictment issued in the case late last month. A withdrawal of $20 thus caused the machine to spit out $400 in cash, for a profit of a $380.

This post was published at Zero Hedge on 11/16/2014.

Moyers: Our Democracy Is Flatlined – Moneyed Interests and Politics

“There was a Princeton study by Martin Gilens and Ben Page. The largest empirical study of actual policy decisions by our government in the history of our government. And what they did is they related our actual decisions to what the economic elite care about, what the organized interest groups care about, and what the average voter cares about.
And when they look at the economic elite, you know, as the percentage of economic elite who support an idea goes up, the probability of it passing goes up. As the organized interests care about something more and more, the probability of it passing goes up. But as the average voter cares about something, it has no effect at all, statistically no effect at all on the probability of it passing.
If we can go from zero percent of the average voters caring about something to 100 percent and it doesn’t change the probability of it actually being enacted. And when you look at those numbers, that graph, this flat line, that flat line is a metaphor for our democracy.
Our democracy is flatlined. Because when you can show clearly there’s no relationship between what the average voter cares about, only if it happens to coincide with what the economic elite care about, you’ve shown that we don’t have a democracy anymore.”
Lawrence Lessig

This post was published at Jesses Crossroads Cafe on 16 NOVEMBER 2014.

Flashback: Three Videos That Exposed the Shadow Government

Despite the best attempts of the global elite, patriots worldwide have exposed some of their most hidden secrets. Incredibly, many of these exposed secrets have remained relatively, although hidden in plain view.
Here are three videos that exposed some of the shadow government’s biggest secrets.
U. S. Government’s Criminal Elements Running Sex Slavery Rings

This post was published at Investment WatchBlog on November 16th, 2014.

The Truth About G20 Banking Directive

Apparently my post is now being taken up and regurgitated by others rewriting what I have written that your bank account has been stolen, and somehow this is the end of money to just about aliens have landed. These exaggerations are obviously written by people lacking the legal understanding of this issue.
LEGALLY MONEY IN A BANK HAS NEVER BEEN YOUR’S – nothing has changed. What has changed is that government is reneging on the New Deal and Socialism. The entire reason for creating the FDIC was for the government to regulate banks and thus ensure them. The money is simply NOT yours and NEVER was once you deposit it into a bank. You become the same as a shareholder possessing merely a claim as anUNSECURED creditor in the case of a bankruptcy.
G20 is recognizing this LEGAL status and simply saying – HEY, there is NO obligation to bail anyone out. Remember I explained the Constitution is NEGATIVE not POSITIVE and that means there is NO legal obligation upon government to do anything for society but restrain its own actions. The is part of the DEFLATIONARY warning I have been saying all along and getting a ton of shit for. This is NOT going down the road ofHYPERINFLATION – this is DEFLATION. The destruction of capital not the expansion of it. I have warned this is the COLLAPSE of Socialism. That means government walks away from its promises – it will not print money into oblivion.

This post was published at Armstrong Economics on November 16, 2014.

State Department Hacked, Shuts Down Worldwide Email System

As the G-20 meeting comes to a ‘successful’ end with back-patting congratulations having agreed to create $2 trillion more GDP out of thin air (or maybe hookers and blow), it appears that someone – or more than one – among these nations was less than diplomatic towards every nations’ best friend – America. As AP reports, The State Department has taken the unprecedented step of shutting down its entire unclassified email system as technicians repair possible damage from a suspected hacker attack. Earlier attacks have been blamed on Russian or Chinese attackers, although their origin has never been publicly confirmed.
As AP reports,
The State Department has taken the unprecedented step of shutting down its entire unclassified email system as technicians repair possible damage from a suspected hacker attack. A senior department official said Sunday that “activity of concern” was detected in the system around the same time as a previously reported incident that targeted the White House computer network. That incident was made public in late October, but there was no indication then that the State Department had been affected. Since then, a number of agencies, including the U. S. Postal Service and the National Weather Service, have reported attacks.

This post was published at Zero Hedge on 11/16/2014.

16/11/2014: America’s Scariest Chart…

Yes, US unemployment is declining. Yes, US economy is adding jobs. Yes, the crisis is… almost over… Except…
Except that is:
Average duration of unemployment rose in October (the latest we have data for) and Average duration of unemployment remains totally out of touch with previous recessions.
Now, note the following regularity:
After 2001 recession, average duration of unemployment never returned to pre-recession levels; The same has happened in the recession of 1990-1991. In other words, so far in all three most recent recessions there was a permanent increase in unemployment duration over and above pre-recessionary average.

This post was published at True Economics on Sunday, November 16, 2014.

How Much Interest Has Your Food ‘Bank’ Earned This Year?

In these days of declining paychecks and rising prices, people are hard pressed to get the most for their money. With every new dollar that is printed the value of your hard earned savings decreases and much buying power is lost. The conventional way to offset this decrease is to invest your money where it can earn interest and increase your holdings in real terms or at least keep up with inflation.
If you put your savings in the bank you might get .25% these days if you are lucky. This is at a time when real inflation is running close to 9% annually. In order to earn a better return on your funds you must put them in increasingly risky investments that have counter party risk that many may not fully appreciate until something happens. Just ask those fleeced by the MF Global bankruptcy.
There are few things one can place their money in these days that will maintain value or even grow. The normal safe haven in times like this are usually precious metals or investment grade collectables but those things must be sold in the marketplace in order to utilize the value of those items. What the average person needs is a safe haven they can hold and use at will and still reap the full value of those items.

This post was published at Alt-Market on 16 November 2014.

Weekly View of Gold

Here is a quick look at the intermediate term chart of gold.
There are several things that stand out to me as I survey this chart.
Let’s start with the various phases. I have delineated these with the variously colored shaded rectangles for your convenience.
I think the chart speaks for itself. The peak above $1900 in September 2011, was the climax of the then bull market. Subsequent to that, the market entered what can now be clearly seen as a transition phase. However at that time, we as technicians were unclear as to whether the great bull was finished or was merely taking a rest, gathering itself for another rampage higher.
This transition phase, or consolidation, occurred over a period of 15 months in which the price was essentially range bound. The top of the range that formed was $1800 and the bottom was $1530-$1525.

This post was published at Trader Dan Norcini on November 15, 2014.

Holders Of US Treasury Debt

Using data from the US Treasury, updated through August of this year, let’s take a look at who is purchasing US Treasury bonds:
The countries in the table below don’t include all the countries listed in the US Treasury data; I only include those that have been continuously listed since May 2008. Countries not continuously listed excluded from the data, but these are small holdings with little overall impact of the table below.
The table is broken up as follows; under ‘Billions of Dollars’ I’ve listed the most recent data (August 2014), as well as the maximum and minimum holdings since May 2008. The ‘Percent From’ column shows the current percentage change from both the Maximum and Minimum holdings of the past six years. The table is sorted by Percent from Max Value (highlighted in bright red).
A 0.00% figure in the Max Val column signifies that the country’s holdings of US Treasury bonds is currently at a new all-time high; as we see below there are twelve countries whose holdings of US Treasury bonds made new all-time highs in August. The Min Val column indicates the percentage increase of the most recent data from the lowest holdings of US Treasury bonds since May 2008. The countries with the largest percentage increases were Norway (#26) and Belgium (#22). The Oil Exporters (#14) are interesting. Their major export, petroleum, is a huge market priced in dollars, but it seems that since May 2008 they’ve found investments other than US T-bonds to place the bulk of their profits. This of course assumes that these countries have realized more than $112 billion dollars in profit over the past six years, which I believe is a safe assumption.

This post was published at Gold-Eagle on November 16, 2014.

Eric Sprott: Global Gold Demand Is Overwhelming Supply

The following video was published by ChrisMartensondotcom on Nov 16, 2014
Precious metals have had an especially tough go of it over the past month. Both gold and silver are back in price territory last seen in 2010. Eric Sprott returns to the program to discuss the facts as we know them in this market, and what’s likely to happen from here. Specifically, he explains the tremendous imbalance currently seen between global supply and demand for precious metals. In his view, prices will have to correct upwards — prodigiously — to bring the two back in alignment.

The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed

Following the stunning announcement in January 2013 that the Bundesbank would repatriate 674 tons of gold from the NY Fed and the French Central Bank, a year later the Bundesbank followed up with a just as stunning revelation that of the 84 tons the bank was supposed to bring back home, it had managed to obtain just a paltry 37 tons, with only 5 tons originating from the NY Fed.
The reason given for this disappointing amount was as follows:
The Bundesbank explained [the low amount of US gold] by saying that the transports from Paris are simpler and therefore were able to start quickly.” Additionally, the Bundesbank had the “support” of the BIS “which has organized more gold shifts already for other central banks and has appropriate experience – only after months of preparation and safety could transports start with truck and plane.” That would be the same BIS that in 2011 lent out a record 632 tons of gold… Going back to the main explanation, we wonder: how exactly is a gold transport “simpler” because it originates in Paris and not in New York? Or does the NY Fed gold travel by car along the bottom of the Atlantic, and is French gold transported by a Vespa scooter out of the country?
Supposedly, there was another reason: “The bullion stored in Paris already has the elongated shape with beveled edges of the “London Good Delivery” standard. The bars in the basement of the Fed on the other hand have a previously common form. They will need to be remelted [to LGD standard]. And the capacity of smelters are just limited.”
Or, simply said, generic pretexts for a failure to follow through with the Bundesbank’s original intention of redomiciling physical gold, especially after Zero Hedge posted in November 2012 proof of collusion between the 1968 Bank of England and the Fed seeking to defraud Deutsche Bank: ‘Bank Of England To The Fed: “No Indication Should, Of Course, Be Given To The Bundesbank…”

This post was published at Zero Hedge on 11/16/2014.