The Machine

One can only try.

He he he..... I thought that title would grab some attention. We're not quite there yet but if it drops much further today the next resistance line is below $1,000 keep your eyes peeled people, optimum buying time coming soon

There were once 14 million people in Ireland ..... after the English caused the famine killing 7 million within 8 years through starvation and genocide and others leaving for countries all over the world there are only 4.5 million left in Ireland today ....... do you think I have something to be angry about ...... I think I might, but am I ..... no, what difference would it make, you cant change the past but you can help create a better future where the mistakes of the past are not repeated. I live and work in the UK ..... I work along side British people, I'm married to a British woman, a lot of my friends are British ..... although the atrocities of the past only happened 150 years ago It has no bearing on my life, I dont consider myself to be hard done by because all of my ancestors were tortured with back breaking labor and starvation, just like black people today should not consider themselves to be some kind of victims because of something that didnt even happen to them.

what are they? none of these people or any black person alive today was a slave just like there are no Irish slaves alive any more.......... how is something that happened so long ago which by the way was initially perpetrated by Africans in the first instance against their own people still affecting others that are nowhere near old enough to have experienced slavery. how come we dont see weekly riots by jews about the Holocaust ........ they were subjected to something far far worse than slavery yet there are 250,000 jews living peacefully in germany toady along side germans. I'm sick of this rhetoric that all white people should be ashamed for slavery, I do agree it was shameful but there is nobody alive today that was responsible for it and I am certainly not going to shoulder someone elses shame for a crime that was committed long before I was born just because of the color of my skin . All this does is create more tension, more segregation and more violence ....... if this keeps going we will be back where we started with one ethnic group thinking they are better than the other. What is shameful today is the fact that this is still an issue, stop all the race baiting people !! The media has a lot to answer for too they they hype up every story and emphasize the fact when it is a white person in the wrong or a white cop doing something to a black person and they do it even when the cop was right just to stir the pot ........... where are they when it's a black person committing the offence ......... guess that doesnt help ratings does it, it happens too often. I'm not racist, I think everyone is born into this world as an equal ........ it's what you do with yourself after that that makes the man/woman. I keep hearing the story that black kids don't have a chance as they are born into hardship with broken homes etc etc ........ obviously all white people are born into perfect millionaire families ....... No..... everyone has problems to overcome in their lives, some greater than others but we all must strive to persevere. The Idea that slavery is still affecting people to this day is just an excuse, slavery only existed in america for 245 years ..... like I said earlier my ancestors went through 700 years of slavery, only ending in 1916 ..... and we were all white, wait whats that white slavery ..... dont tell BLM about the Irish they will think we made it up to steel their headlines.

yep I agree with you, like you say you dont hear other groups like Irish of Indians whining ......... I'm Irish and from what I can remember about our history we had 700 years of English occupation, basically slaves and 3rd class citizens in our own country. you dont hear us whining because life's too short for that rubbish, you cant change the past, its called history for a reason, it never affected me if my grand father was still alive he would remember it vaguely as he would have been 10years old when we gained independence. Since slavery was abolished in the US in 1865 none of these idiots are old enough to actually claim to be affected by slavery so why use it as an excuse all the time, its idiotic. All they are doing is wallowing in the past using it as an excuse for their own laziness in not progressing themselves.

GOLD PRICES held flat in quiet London bullion trade Thursday, lagging a 2% rise from new multi-year lows in copper and platinum as European stock markets gained over 1%. With US markets shut and US economic data suspended for Thanksgiving, "This isn't like watching paint dry," said one London bullion trader. "It's like watching dry paint." Gold moved in a tight $5 range around $1070, but silver was stronger, spiking 1.3% at lunchtime to hit a 1-week high of $14.39 before easing back to trade 8 cents higher for the week so far at $14.27 per ounce. Major European bond prices rose, edging yields lower. Following the downing of a Russian fighter jet near the Turkish-Syria border on Tuesday, Moscow meantime tightened controls on imports of food from Turkey, citing regulatory data. Interest in the LBMA Gold Price auction – the twice-daily benchmarking process now regulated by UK authorities and administered by trading-exchange providers ICE – fell once more, dropping to one-fifth of the Q3 average as the afternoon run found a clearing price at $1071 per ounce. "We remain mildly bullish on gold prices," Canada's Financial Post quotes bullion-bank and market-maker HSBC's analyst James Steel, "but the bounce has taken longer than we had anticipated. "We believe that 2016 could see a more decisive recovery. Emerging market demand has already set a floor for gold prices, and we think buying from India and China is likely to increase." Gold's price drop below $1080 saw "physical buying pick up notably," says Chinese-owned investment and bullion bank ICBC Standard Bank, as "Indian wholesalers started restocking and...Chinese importers saw the Shanghai-London arbitrage widen out to more than $5 per ounce for the first time since the summer. "However, there are already signs that some of that opportunistic, price sensitive demand for bullion is easing off." "The physical market is unlikely to offer sentiment support," adds HSBC's fellow bullion market maker Barclays, saying that "Chinese demand has been mediocre, while in India the government is actively reining in gold imports via policies such as the Gold Monetization Scheme." India's key Q4 gold demand – capturing the peak Diwalia and wedding season – could hit the lowest level in 8 years, says a Reuters report, citing an estimate of 150-175 tonnes from , All India Gems & Jewellery Trade Federation director Bachhraj Bamalwa. That would mark perhaps a drop of one-third from the half-decade average. Following the poor launch of India's bid to "monetize" existing private gold holdings and use them to meet future demand, the sub-continent's wealthiest Hindu temple – Tirumala Tirupati Deveasthanams – said today its investment panel "will meet soon to take [a] decision" on joining the new scheme. TTD said in August it already held 4.5 tonnes of gold on deposit with commercial banks, and was adding another tonne. To date, the Gold Monetization Scheme has gathered less than half-a-kilo from the sub-continent's estimated 20,000 tonne private holdings. Gold imports to China meantime retreated in October from a 10-month high, latest data show, dropping below 76 tonnes. That still held year-to-date gold imports to China through Hong Kong at 99% of January-to-October 2014, recovering from spring 2015's earlier 25% year-on-year drop. Separate customs data from Switzerland – the world's No.1 gold bar refining center – already show October was the strongest month in 7 for gold exports direct to the Chinese mainland, where gold is now being landed in Beijing and Shanghai.

'Bargains' are cheap for a reason. Bad reasons with stocks... BUY what's "on sale". That's what they say, writes Steve Sjuggerud in his Daily Wealth email. Too bad it doesn't work. Or at least, it doesn't work like you think. You don't want to buy stocks like you buy clothes... When clothes are marked down, they are usually a good deal. It's probably a good time to buy them. The same is not true for stocks...based on history. When stocks are marked down, day after day, it turns out, they are not a good buy over the long run. Let me show you an example of what I mean today...And then I'll share with you when it actually IS a good time to buy stocks that are "marked down." What has happened in Canada this month gives us a perfect example... Canada's benchmark stock index (the S&P/TSX Composite Index) fell for eight straight days from November 4 to November 13. This is a rare extreme. Canadian stocks were "marked down" for eight straight days. Should you buy Canada now based on this? No, actually... Let me show you why... Based on history, eight days of "markdowns" actually points to underperformance over the coming months... Specifically, looking back over the past 25 years, the S&P/TSX Composite Index has only experienced eight or more consecutive down days on five other occasions. The last one was back in June 2002. Whenever this has happened, Canadian stocks continued to drop in the near term, on average. Take a look at the table below. It highlights the forward returns after each of these five occurrences... Canadian stocks fell roughly 6% in the three months after these markdowns, on average. Six months later, the average loss was 2%. The numbers get "less bad" further out, with an average 2% gain a year later...But that's still a large underperformance compared with the typical 6% annualized gains Canadian stocks have produced over the past 25 years. The point is, just because a market is "marked down" for eight consecutive days doesn't mean it's a good time to buy. History tells a different story. So when do you want to buy "the losers"? How do you successfully pick winners out of historic losers? The secret is your TIME FRAME. In short, you need a loser to be a loser for a long time before it will become an outperformer. Three years is about right... If you'd simply bought Canada's stock market after it fell for three straight years, you'd massively outperform over the next few years. Take a look... Canada's stock market tends to SOAR after falling for three straight years. But the "markdown" needs to happen over a long period of time before it's a buying opportunity. The two basic lessons here are: After short-run underperformance (one year or less), DON'T bet on a reversal. After long-run underperformance of a group of stocks (like three years), it's OK to bet on a long-term reversal of that group. Picking market bottoms is all about your time frame...Remember this, and you won't get caught trying to get cute calling the bottom when it's not really there...

It says they are out of stock ....... more likely they never had the stock as the notes havent even been issued for iraqis to use yet

well it was just a thought, if they are not discontinuing any of the existing denominations apart from destroying the torn /ripped notes as they would be anyway then this new denomination is an introduction of new dinar into existence ........ new dinar = higher note count

GOLD PRICES retreated towards last week's near-6 year lows in London trade Wednesday, unmoved by worsening tensions between Turkey and Russia over Syria as bond prices slipped ahead of next month's interest-rate decision from the US Federal Reserve. Global trade body the London Bullion Market Association today reported a "strong, positive response" on Wednesday to its request for proposals from trading exchanges, technology firms, brokers and data vendors aimed at aiding growth, lower costs and boosting liquidity in the wholesale gold business. Wednesday afternoon's run of the LBMA Gold Price auction – the 100-year old benchmarking process now formally regulated by UK authorities and administered by exchange-providers ICE – saw demand and supply volumes of just over half the third-quarter average. Formerly known as the "Fix", the process cleared at a price of $1068 per ounce – only 25 cents above last Wednesday's new 69-month low. With the Kremlin meantime confirming the death of one pilot but the safe return of the other from Tuesday's downing of a Russian fighter jet by Turkey, Moscow todaydeployed "one of its largest air defense ships at the foot of Turkish territorial waters in the Mediterranean," Turkey's Hurriyet newspaper reported online. France's Institute of Statistics & Economic Studies said today that consumer confidence had held stable ahead of the Paris terror attacks this month. "Following the headlines that Turkey had shot down a Russian jet," notes Swiss refining and finance group MKS, "gold finished higher for only the second time this month. Trading volumes are now "likely to reduce significantly," it adds, because of Thursday's US Thanksgiving holiday. "A more pronounced price rise," says German investment, retail and bullion-dealing bank Commerzbank, "is being blocked by the growing expectation of a December rate hike by the US Federal Reserve." Interest-rates betting in the futures market now puts the likelihood of a Fed rate rise next in December – the first move from 0-0.25% in 7 years – at 75%. The European Central Bank, in contrast, will expand its QE bond buying and cut its Euro deposit rate further below zero when it meets next month, according to a poll of more than 50 economists by Reuters. "Any interest rate move [by the Fed] has been so effectively telegraphed that itshould already be priced into the gold market," says George Milling-Stanley, gold investment strategist at State Street Global Advisors, the marketing agents for thegiant SPDR Gold Trust (NYSEArca:GLD). "The internal market fundamentals...have begun to reassert themselves [after] the bubble that developed in gold prices in 2011 and [its] subsequent bursting in 2012 and early 2013. "There is good support at the bottom end of the trading range [at $1050]." Once the world's largest exchange-traded trust fund at its peak in 2011, the GLD ETF ended Tuesday with the number of shares outstanding at a 7-year low, needing 655 tonnes of gold bullion in backing – the smallest quantity since Lehman Brothers collapsed in September 2008.

If value investing looks tough, you're looking in the wrong places... SO, FAREWELL then Jim Slater, who died earlier this month, writes director of investment at PFP Wealth Management Tim Price on his ThePriceOfEverything blog. We met Mr.Slater only once, at an investment conference at the height of the financial crisis in 2008. Just before going on stage we asked him what he was doing with his own money. He replied: We doubt if he was joking."I own index-linked Gilts in bearer form and I am holding them in a fire-proof safety deposit box." Seven years on from the collapse of Lehman Brothers, everything has changed, and yet nothing has changed. There is no longer a perception of panic. $14 trillion of central bank stimulus has seen to that. But at the same time, a predicament brought to crisis by too much borrowed money has been exacerbated by much more borrowed money: $57 trillion of it, according to the McKinsey Global Institute. Perhaps the most prescient commentator before the fall of Lehman Brothers was Tim Lee of pi Economics, who wrote the following back in November 2007, fully 10 months before the failure of a second-rate investment bank triggered a global credit crisis: For seven years and counting, only one question has really mattered to investors: inflation, or deflation?"There is little doubt, to my mind, that we are now at a defining moment in financial history, a time that, once it has passed will be referred by economic and market historians in much the same way as the Wall Street Crash of 1929 or the credit and banking crisis of 1973-4 are now. "Unfortunately, as is becoming increasingly clear, this crisis is not really just about subprime mortgages. It is much more serious than that. It is the beginning of an inevitable realignment of credit and wealth with incomes and accumulated savings...subprime is merely the first part of the credit edifice to give way, rather than the whole story..." Thus far, the answer seems to have been: inflation in financial assets, deflation or stagflation in pretty much everything else. It's been difficult to get the macro right because central bankers have morphed from being referees in the game to being the key players, and with the ability to rewrite the rules, and continually move the goalposts, as the game plays out. The apparent dominance of central bankers over the free market should be of concern to anyone who expects the free market, at some point, to return with a vengeance. Meanwhile, as Mark Dampier suggests in his new book Effective Investing, just published by Harriman House: This week's Economist magazine ('Many unhappy returns: investing in a world of low yields') points out that their answer should be 'No'; the average American state or local government pension fund assumes it will earn a nominal annual return of 7.7% in future, according to NASRA, the National Association of State Retirement Administrators."The question I like to ask fund managers is not what they think about the general economic climate but: 'Are you still finding opportunities in the stock market today?'..." Good luck to them. According to AQR, projected nominal returns on a typical American portfolio, given prevailing valuations in the stock and bond markets, are closer to 2%. "The good news is that this is a long-term problem. Low returns are like a car with a fuel leak; it can still be driven for a while before it grinds to a halt. The bad news is that, precisely because this is a long-term problem, investors (particularly the politicians responsible for public pension funds) will be tempted to leave it to their successors. That will only make the eventual funding crisis even bigger." If the answer to Mark Dampier's question is, truthfully, 'No', then the next question should logically be: 'Are you sure you're looking in the right market?' Investors, whether professional or private, have a tendency to succumb to home country bias. This problem will likely come back to haunt American investors because their home market is one of the more glaringly expensive. Robert Shiller's cyclically adjusted p/e ratio for the US market stands at 26.4. Given that its long term mean stands at 16.6, that would tend to suggest that US stocks are trading at a roughly 60% premium to fair value. Two more reasons to be cautious on US stocks. US interest rates are widely expected to rise next month. Not by much, but any kind of rise may mark the end of a three-decade secular bull market in rates. That has implications for all financial assets. And sceptics will have noticed two recent trends: a growing number of profits warnings on the part of large cap businesses internationally; and a growing tendency for US companies to 'engineer' better returns for their senior executives shareholders simply by buying back their stock at egregiously expensive levels. Stock buybacks conducted at a discount to book are value-enhancing. Buybacks conducted at whopping premiums to book, on the other hand, destroy shareholder value. If the US stock market looks dangerously overpriced, where should equity investors be looking? We think the answer is: in Asia, and more specifically in the likes of Japan, Korea and Vietnam. The shareholder return ratio in Japan, for example, stands at 36.6% – a derisory level compared either to Europe (71.4%) or to the US (82.9%). Japanese shareholders historically have been given a meagre slice of the pie. The good news is that their share of the pie is likely to go up. Both dividend payments and share buybacks as a percentage of profits in Japan are already on the rise, and we think they have plenty of room to catch up towards other 'Western' levels. The managers we invest with in Japan report that the change in Japanese corporate behaviour, especially amongst mid-cap businesses, is real. Since Japan also offers us highly profitable companies on p/e ratios of around 10x and price/book ratios of around 1, we simply don't need to overpay to own the US market like the rest of the herd. (The prospect of more QE in Japan doesn't exactly hurt – though we clearly prefer to have our currency exposure hedged, especially if US rates do rise.) The Korean market is inexpensive too, trading on a p/e of roughly 10 and a price / book of around 1x. Vietnam is admittedly more of a 'frontier' animal, albeit one that's widely expected to be recategorised as 'emerging' by the leading index provider in the fullness of time. As to valuation, Vietnam has the lowest ratio of market cap to GDP in Asia, at just 30%. So our answer to Mark Dampier's question is: at a time when many investments are looking desperately mispriced, yes, we truthfully are finding attractive opportunities in the stock markets. We're just looking at different stock markets compared to everybody else.

Gold to rise on zero rates, base metals to rise on QE... AFTER five trying years, RAB Capital founder and president Philip Richards sees the light at the end of the tunnel. In this interview with The Gold Report, he argues that a continued zero-interest-rate policy from the Fed will be good for gold and silver, while continued quantitative easing will be good for base metals. The Gold Report: For five years experts have confidently yet incorrectly predicted higher interest rates and an end to the Federal Reserve's zero-interest-rate policy (ZIRP). Janet Yellen announced Oct. 28 that the Fed would not raise rates now, but might do so in December. Even so, some analysts believe the Fed might follow Europe into negative interest rate territory. What do you think? Philip Richards: The US economy has maintained a reasonable rate of growth. Globally, however, growth has been disappointing, with the emerging markets being particular stragglers. One reason for this is the tapering of quantitative easing (QE) that the Fed announced three years ago. The US Dollar has gotten stronger ever since. This has undermined commodity markets and also created something of a debt crisis in the emerging markets, a crisis that has not yet come home to roost. Many emerging market companies have debt in US Dollars, and their local currencies have crashed, so servicing those Dollar debts has become rather difficult. Despite this sluggish global growth, total global debt is now higher than it was in the 2008 crisis. Given the fragile state of the world economy, I believe the Fed simply cannot afford to raise rates. I don't believe that negative rates will be necessary; an announcement by the Fed that ZIRP will continue for the foreseeable future should suffice to retain market confidence. TGR: There's a school of thought that holds that higher interest rates are impossible, not only because they would kill the recovery, but also because they would cause US deficits to balloon due to skyrocketing interest rate payments on the debt. What's your opinion? Philip Richards: The International Monetary Fund (IMF) has considerable influence on this question. I've been told that IMF Managing Director Christine Lagarde has asked the US not to raise rates for fear this would trigger a global debt default crisis that would devastate Europe and then reverberate back to the US TGR: Should American economic growth remain nominal, is another round of QE possible? Philip Richards: Yes. Given the aggressive QE pursued by both Europe and Japan, the Fed could argue that US QE worked in the past, and now that the Dollar is too strong, it's time for the US to jump back in. TGR: QE served initially as a catalyst for a big upswing in the price of gold. Subsequent rounds from the Fed and from Europe and Japan have not had the same effect. Why not? Philip Richards: One reason could be the increase in primary gold production, up to 95 million ounces in 2015. Another reason could be that China and India are not buying as much gold as they have in the recent past. Technically, it looks to me as if gold has found a bit of a base. The continuation of ZIRP should allow gold to make progress. TGR: What effect will the ongoing currency wars have on the prices of metals? Philip Richards: The currency wars have essentially followed QE. The Fed began QE in 2008, which led to a weaker US Dollar and a stronger Euro and Yen. When the Fed began tapering, the Dollar recovered, and the Euro and Yen got weaker. Printing money should be good for precious metals. Greater economic activity is good for non-precious metals and all commodities really, but of course that's on the demand side. On the supply side, many big iron ore and copper projects have come on line since 2008 and driven prices down. In addition, the financial crisis in China has flushed out hidden stocks of metals, so it appears demand was probably weaker than supposed. TGR: Some pundits predict that rising all-in sustaining costs (AISC) will mean a decline in gold production. Do you agree? Philip Richards: I think 2015 will be a peak year for gold production, and, as you know, it takes a long time to ramp up production. As for AISC, this is hard to calculate when so much gold production is in countries outside the US: Canada, Australia, Brazil, Africa. TGR: What are your metals price forecasts? Philip Richards: I expect gold and silver to be higher in a year's time. Zinc will be moving into supply deficit. But I don't know whether there will be a zinc squeeze sufficient to raise the price of zinc to its old high of $2 per pound ($2 per pound). I expect a new high closer to $1.20-1.30 per pound. I'm cautiously optimistic on commodities. We could see higher copper and nickel prices in the next year or so. Regardless of whether the US restarts QE, Europe will continue to print money, and that will be reasonably supportive of commodity prices. TGR: You said in March that you were "very disappointed in nickel." Are you more bullish now? Philip Richards: Not yet, but I am hopeful for a recovery in 2016. Nickel is another metal affected negatively by the financial crisis in China, which revealed previously unknown stocks that were flushed out, bringing the price down. I think the additional supply has been nearly exhausted, and we are seeing the beginning of the establishment of a technical base. This could bring the price back up to $6.50 per pound or so in the next year. TGR: How is the export ban from Indonesia playing out? Philip Richards: It's still holding firm at the moment. The Philippines has stepped in and exported some nickel pig iron, but that production appears to have plateaued. Indonesia is not likely to become a major world supplier for another two to three years. TGR: We are now close to five years of a bear market in precious metals and mining stocks. Is there an end in sight? Philip Richards: I'm fairly bullish across most metals. Gold should lead silver higher. What we're heading into might not feel like a bull market because prices will still not be very high, nor will mining companies be particularly profitable. Nevertheless, every bull market starts from the bottom of a bear market. The past five years have been painful for many, including us. In any event, I believe that a slow and steady buildup will be much better than something more dramatic. TGR: During the previous bull market in precious metals, gold and silver miners performed poorly compared to the rise in the price of bullion. How well will the miners do this time around? Philip Richards: The erosion of the traditional premium was brought about partly by the arrival of the gold ETFs, which obviated the need of investors to buy miners in order to leverage higher prices. As a result, mining companies have gone down and down and down. Investors can now buy good-quality companies at prices quite low relative to their net present values. Those are the ones that we would like to buy. There are quite a few names out there that can be bought pretty cheaply relative to the price of gold. That's a big turnaround. The short answer is that the overvaluation of gold companies relative to gold was destroyed over the last few years. This time around it will be different. TGR: Philip, thank you for your time and your insights.

hmmm so they're increasing the note count, increasing the amount of dinar in existence ......... and no mention of the rate changing against the dollar. if any other country did this it wold result in a decrease in the value of the currency. I'm still at a loss how others see this as a good thing for us, agreed it is good that they are not getting rid of other currency classes but it opens up even more important questions like the rate and the real reason why they need this substantially larger currency class...... are they expecting inflation to hit in a big way ??

November 24, 2015 Santiago, Chile It started in 1921. World War I was over. The Treaty of Versailles had been signed two years before. And Germany, the biggest loser from the war, had been stuck with both the blame and the bill. Germany’s war debt-- which it owed not only for its own war-related expenses, but also for reparations to the victors-- was devastating. They didn’t have the money, so they started printing it. Not surprisingly, the German mark began to sink. It started slowly at first, but by 1921 hyperinflation had taken hold until prices soared by thousands of percent. One of my favorite stories from this period, was of the elderly man who went to the police to report a robbery. Thieves had stolen a wheelbarrow of money. It was common at the time to use wheelbarrows to transport the huge sums of cash that were required to buy even the most simple things like bread and milk. When the police asked him how much was in the wheelbarrow, the man corrected them saying that the thieves had only stolen the wheelbarrow, and had left the cash behind. Undoubtedly the entire society was upturned by this hyperinflation. But as history shows, in any situation, there are always winners and losers. Pensioners and people who responsibly saved their money were wiped out; whereas people who had borrowed to invest in real assets did extremely well. Owners of residential real estate suffered under government imposed rent controls, whereas owners of farmland thrived. For people who saw the decline of the mark coming and bet against it, generational fortunes were made in a matter of years. In the case of Germany in the 1920s, few people probably expected that hyperinflation would ensue. Even the president of their central bank, Dr. Rudolf Havenstein, firmly believed that there was zero connection between price levels and the amount of money he printed. Yet it happened, and those who saw the warning signs and took steps to reduce their risk did very well. Today there is no shortage of risk in the financial system either. Negative interest rates are becoming more and more common in developed nations and they’re on their way to America as well. Every time there’s a recession, the government cuts interest rates by easily half a percent to a percent. So with interest rates already at zero, when the next recession comes (and it absolutely will), you can expect interest rates to go negative. Meanwhile, Western banking systems are highly illiquid, meaning that they have very low cash equivalents as a percentage of customer deposits. This isn’t some wild conspiracy theory. You can see it for yourself in the financial statements banks publish every quarter. Solvency in many Western banking systems is also highly questionable, with many loaded up on the debts of their bankrupt governments. Banks also play clever accounting games to hide the true nature of their capital inadequacy. We live in a world where questionably solvent, highly illiquid banks are backed by under capitalized insurance funds like the FDIC, which in turn are backed by insolvent governments and borderline insolvent central banks. This is hardly a risk-free proposition. Yet your reward for taking the risk of holding your money in a precarious banking system is a rate of return that is substantially lower than the official rate of inflation. And in many cases, it’s even negative. Rates are already negative in Europe, and again, it’s coming to the US. Either way, you’re guaranteed to lose money. Risk is a funny thing. The reason why it’s so frequently misdiagnosed is because there’s often a huge discrepancy between the actual risk and the perceived risk. You can see that very clearly with banking. People perceive the risk in their banking system to be zero. And while I’m not suggesting that there is some imminent collapse, the data clearly indicate that the actual risk is significant. Given the meager and even negative interest rates, the risk-reward ratio just doesn’t add up. To address different types of risk in the system, I see four main solutions: One is to hold physical cash, enabling you to effectively be your own private banker and giving you an excellent short-term hedge against risks in your domestic banking system. However, this comes with additional physical security risks and potential political risks such as civil asset forfeiture or cash bans. Another option is to establish a foreign bank account in a jurisdiction where banks are liquid, well-capitalized, and backed by a government with minimal debt. It’s hard to imagine you’d be worse off for having a portion of your savings in a safe, stable, debt-free jurisdiction. Then there’s gold and silver, which are excellent long-term hedges, not only against risks in the banking system, but the monetary system at large. Last but not least, it is 2015, and I would be negligent if I didn’t mention cryptocurrency as a viable option to hedge risk in both the banking and financial system. Today’s podcast goes into comprehensive detail about these risks and their solutions. I invite you to listen in here. https://www.sovereignman.com/podcast/negative-interest-rates-to-hit-the-us-18275/ Until tomorrow, Simon Black Founder, SovereignMan.com

GOLD BULLION rose 1.3% in London on Tuesday from overnight lows in China and Asian trade, touching $1080 per ounce – and setting a new all-time premium over platinum prices – after Turkey confirmed shooting down a Russian fighter jet near the Syrian border. Western equity markets fell badly, and US Treasury bond prices rose, until revised US data then showed the world's largest economy growing faster than first estimated in the third quarter, up by 2.1% per year. With a smaller trade deficit in goods, the US data also showed higher personal consumption expenditure prices – the preferred inflation measure for central bank the Federal Reserve, set to vote on raising interest rates from 0% next month for the first time in 7 years. Bullion retreated to $1075 per ounce – back below last week's closing level – as New York's stock market recovered. Silver held firmer, trading above $14.20, as copper rallied from new 7-year lows and nickel bounced from its lowest price since 2003. Gold prices are making "random fluctuations for no apparent reason," says a note on Monday's action from David Govett at London brokers Marex Spectron, "with the price generally ending up back where it started." "On the daily chart," adds London bullion market makers Scotia Mocatta's technical analysis, the new 5.5-year low of $1066 "held twice [last] week. "Support below $1066 is seen at $1045, the low from 2010...A close above $1095 is now needed to bring in fresh buying" by speculative traders in futures and options contracts, it adds. "Physical demand in China is strong," says a note from investment, retail and bullion bank HSBC, noting the China Gold Association's estimated 8% growth in the country's end-user demand in Q3 against the same period last year. That "more than offset weak first-half consumption," says HSBC, with the rise in China's gold demand attributed "to the drop in domestic equity markets earlier in the year and a sluggish property market. "Low prices also acted as an incentive for consumers." Half-year revenues at Chow Tai Fook – the world's largest jewelry retailer – fell 4.1% versus March to September 2014 in Hong Kong Dollar terms the company said today, slipping to the equivalent of US$3.6 billion. But while sales of gem-set, watches and platinum jewelry all fell, its same-store sales of lower-margin gold products – as Chow Tai Fook warned last month – rose 10% after plunging more than 35% year-on-year in 2014. That helped gross profits decline almost 16% year-on-year to the equivalent of US$1.01bn. "Revenue from non-gold products recorded a year-on-year decrease, signaling a continual weak consumer sentiment," the company said. With gold priced in HK Dollars dropping 9% over the last year, Chow Tai Fook's total inventory of all raw materials and unsold products also fell 9% by value to the equivalent of US$3.7bn. "Disappointing quarterly earnings and falling share prices," said Japanese news-group Nikkei's Asian Review last week, "reflect just how severely the slowdown in China is affecting companies across the region." Even within $10 of last week's near 6-year low, gold bullion today hit a record high over and above platinum prices – now down 15% since the VW diesel emissions scandal broke in September. "Platinum was at a discount to gold in 2011 and 2012 at the height of the gold bull run," notes specialist news and data providers Platts, "but it never exceeded $200 per ounce." Gold's premium to platinum today hit $240 per ounce as the white metal hit new 7-year lows. "The discount is so wide – it's crazy," Platts quotes one Hong Kong dealer. "It could take the appeal off of platinum being a luxury metal for jewelry manufacturers in Asia."

Which is lucky. As miners are NOT discovering much gold anymore... RECENTLY I was in Louisiana, where the mighty Mississippi River meets the tide,writes Byron King in Addison Wiggin's Daily Reckoning. There, I attended the New Orleans Investment Conference, the granddaddy of all hard asset get-togethers, founded by the late Jim Blanchard. The long-running focus of the New Orleans conference is precious metals and energy. It was a great conference, and there's much to tell you. I listened to many excellent talks, spoke with reps from exhibiting companies and picked up plenty of insight on what's happening in the world of gold, silver, oil, natural gas, uranium and more. Overall, New Orleans topics ranged from macro issues like Federal Reserve interest rate policy to specific up-and-coming gold mining investment ideas. First, allow me to pay a compliment to the New Orleans conference. It has long been one of the great ones in a world of "too many" conferences. The New Orleans fest was founded by the late Jim Blanchard, whose Herculean efforts back in the 1970s led to Congress passing a law that allows individual Americans to own physical gold. Think about that. In 1933, newly-elected President Franklin Roosevelt issued Executive Order 6102, commanding that Americans turn in gold coins and bullion to banks in exchange for paper cash. Then banks transferred the gold to the US Treasury. In 1934, FDR rammed the Gold Reserve Act through Congress, which outlawed almost all private holding of gold in the US It was not until 1974 – about 40 years later – that Americans were again allowed to own gold. It's a long story (not here), but the short version is that Jim Blanchard was a key player in changing US law in 1973 to allow for private holdings of gold. Talk about fighting city hall! Blanchard took on the legacy of FDR, Congress, the US Treasury and a tidal wave of know-it-all anti-gold opinion. If you own gold as an American citizen – and I sure hope you do! – then thank the memory of Jim Blanchard. Any way you look at it, the long-term forecast for gold is up. Yes, we see day-to-day swings in price, up and down. We see broader trends too, over medium-term time frames – meaning price moves in which gold drifts upward and then pulls back. But over time, physical gold is a rock-solid investment that tends at least to track inflation, and even well outpace inflation during times of monetary crisis. In other words, gold is "generational" wealth preservation. Look at gold from the supply side. Several New Orleans speakers made the obvious point that you can't mine what you don't discover, and gold discoveries have all but fallen off a cliff in recent years. The last of the world's great, massive gold discoveries were in the 1980s, with some "not bad" years in the mid-2000s. Yet it takes about 20 years to go from discovery to actual production – just check out the chart below. Right now we're in the midst of a production bloom, which is nice, but it's based on past discovery. Looking ahead, it's possible to forecast lower global output in years to come, based on cumulative industry knowledge of output targets, mine openings/closures, capital investment and more. Indeed, per the chart, it's fair to say that gold output has peaked and we're now on a downward production slope. Sad to say, you can't frack for gold. It's not just a question of the proverbial "do more investment," either. I can't stress enough that first, you need to find ore in the ground. And that has NOT been happening – well, not "enough" ore, and that's been the case for many years. Thus, the resource base – and mineable reserve base – is simply not there, no matter how much money anybody throws at the problem. You can't solve this mining/production problem with more mere money, in other words. You need gold, and people haven't been finding any big new discoveries. Now for some worse news. That is, gold price gyrations of recent years have "destroyed" many previously established gold resources. That is, gold atoms are still gold atoms, and they're not destroyed. But those gold atoms are emplaced within a rock somewhere. The idea of supply is to mine that rock – we call it ore – and process it to recover gold. Yet this also has to happen in an economical, "engineering" sort of way. For example, suppose you have an ore body with high grades of gold in some areas and lower gold concentrations in other areas – pretty typical, actually. Good practice is to mine high-grade material and mix it at the crusher and smelter with lower-grade material. That way, the average cost to recover gold makes it worthwhile to go after the lower-grade material. Now suppose that gold prices drift down – well, you don't need to suppose it, because that's the case of late. Mine operators everywhere have been using more and more high-grade ore to recover gold and pay their costs. This means that more and more low-grade material remains in the ground – where now it may NEVER pay to mine it out and recover it. Thus, many miners are writing down company resource estimates, due to "high grading" that essentially "chokes" an ore body. In a sense, it's discovery in reverse. Another major source of "missing" world gold supply is China. Jim Rickards gave an excellent talk in New Orleans and hit on this exact point. In essence, China does not export gold, and also imports plenty. China has gold mines, of course; it's a big country with natural resources. Chinese miners mine gold, to be sure. But at the end of the day, Chinese net gold exports are zero. (OK, you can go to China, buy some gold jewelry or a souvenir Panda coin and fly home with it. In large-scale terms, however, China's net gold exports are zero.) Meanwhile, Chinese gold imports are large and widespread. The Chinese government buys gold, as does Chinese industry. Chinese consumers buy gold too, at the retail level. Gold imports flow to China from the US, Europe, Australia, Africa and more – to include China's Hong Kong portal. When you add it all up, China likely has in the range of 5,000 tonnes (or more) of gold within its borders, yet the "official" reported reserves are but a fraction of that. Point is that China is accumulating gold without fanfare. It makes sense, because China would be foolish to warn gold markets that it's buying big-time and thus run up the price. But the fact is that China is buying gold, which is likely intended for some downstream time when the next currency crisis hits. China will be prepared. Are you? As an investor, you want to understand what's going on in gold markets and be ahead of the curves – less gold supply, more looming demand and – eventually – higher prices. Yet you also need to understand that many other things are going on in investment-land, and there's no one-size-fits-all solution to success in preserving wealth and growing your nest egg. Pretty much every speaker at New Orleans (not all, though) believes you ought to own physical gold – it's a basic part of any balanced portfolio. And it IS basic – no fancy numismatics and collectibles and such. These latter items are a completely different level. How much gold should you own? I heard numbers like 5-10% of your portfolio. Right now there's no need to go out and buy a whole whack all at once. Accumulate over time. Buy the dips, of course. But over time, buy and build your stash. Keep it quiet. Next come gold mining shares. If you don't own any gold miners – and after the recent terrible share price performance of the sector, that's understandable – one good way to get back into the sector is with an exchange-traded fund (ETF). It's been a long and dreary ride, but there is hope on the horizon, so keep yourself ahead of the rest and be ready for what the future has in store.

Nailing today's #1 Gold Standard fallacy... AMONG the various things you hear about gold standard monetary systems – the monetary approach that the United States embraced for nearly two centuries – is the notion that it causes "inflation and deflation", writes Nathan Lewis at New World Economics, in this article first published at Forbes. The Cato Institute's George Selgin had a recent discussion on this topic at Alt-M.org. It is a bit of an odd assertion, because the primary purpose of a gold standard system is to prevent monetary distortion that comes about by variance in currency value. This monetary distortion is sometimes labeled "inflation" and "deflation," but those terms are so vague, and used for so many different economic situations, that they are somewhat useless for precise discussion. If people thought gold wasn't doing its job properly, as a stable measure of value, they could have found some other solution during the many centuries it was in use. They never did. The first error that is made (often on purpose, for rhetorical effect) by many economists is to claim that the "consumer price index" went up or down or whatever during the 19th century. But, there was no CPI in the 19th century. Most economic statistics date from after the Great Depression. Governments decided that they wanted to "manage" the economy, and to do so they generated a lot of new statistics. The Consumer Price Index, as we know it, began to be compiled by the Bureau of Labor Statistics in 1940. Prior to that, beginning in 1919, the BLS compiled a wholesale price index, with backdating to 1914. Before 1914, the most common price index referred to today is the Warren Pearson Index, which is an index of raw commodity prices in New York City (not nationwide), going back to 1750. Sixty-two per cent of the Warren Pearson Index consisted of food and farm prices. Building materials (mostly lumber), fuel and metals added another 18%. The remainder was a smattering of textiles, hides and leather, spirits and other minor items. This was nothing at all like today's CPI, which is dominated by things like rent, healthcare, and education. Indeed, most of what the Warren Pearson Index is composed of is expressly excluded from the "ex-food and fuel" versions of the CPI today. The Warren Pearson Index most resembles today's CRB Commodity Index, which is highly volatile. The second fallacy is to ascribe all changes in the Warren Pearson commodity index (WPCI) to changes in the value of money (gold), rather than changes in the value of commodities, as measured in a currency of stable value. First of all, we should probably ignore the wartime periods, notably the First World War and the Napoleonic Wars period (1795-1820). You would expect that to affect commodity prices. During times of peace, if the WPCI falls 20%, perhaps due to a large crop of wheat and corn, we are told to assume that this means that gold's value increased by 20%, resulting in a monetary "deflation." This makes no sense at all. Maybe it was just a decline in the value of corn, as measured in a currency of stable value. We are also led to assume that this 20% decline in commodity prices is supposed to be equivalent to the kind of economic event that might cause a 20% decline in today's CPI, which would be very dramatic. But, that wasn't the case at all. In this discussion, the time period that tends to come under greatest scrutiny is the period from around 1880 to 1910. Commodity prices did indeed fall by a significant amount in the 1880-1895 period, such that many farmers were struggling. In the presidential election of 1896, the Democratic Party wanted to devalue the Dollar by about 50% via "free coinage of silver," which would raise nominal commodity prices and allow farmers to repay their debts more easily. The Republican Party promised to keep the Dollar's gold basis. The Republicans won. Thus, even in this time that people might heap the most blame upon gold – as a standard of monetary value – Americans voted to keep the gold standard, and discarded the arguments of the inflationists. To put some numbers on it: In 1896, US commodity prices (in terms of gold) hit a low that was 33% below the average for the 1820-1880 period. (This avoids the Revolutionary War and the Napoleonic Wars period 1775-1815.) That decline took place over sixteen years, averaging a little more than 2% per year. That might be a little troublesome. But, I would note that the CRB commodities index just fell from a high of 313 in June 2014 to a recent low of 183.60 – a decline of 41% – in just seventeen months. Oops. We are accustomed to this. The kind of volatility that we see all the time, in our floating-fiat world, was once-a-century stuff in the gold standard era. Statistically, the standard deviation in commodity prices over a one-year period was 16.17% during the floating-currency era from 1971-2012, and 8.59% during the gold era from 1750 to 1970. On an apples-to-apples comparison, the floating fiat era has much more price volatility. The 1880s and 1890s were a time of huge expansion in commodity production worldwide. Vast expanses of the United States and elsewhere were opened up with railways, which allowed shipping of farm products outside the immediate local area. In the US, acres under production soared. Between 1870 and 1895, total US acreage under production for the ten major crops rose from 109.6 million acres to 242 million acres – a rise of 121%. In just one generation, the amount of land under cultivation more than doubled. (That is why there were so many farmers with mortgages in 1896.) However, growth soon slowed and then flattened. In 1915, 298 million acres were under cultivation, an increase of just 23% over twenty years. In 1940, it had actually fallen back to 280 million acres. Much the same thing was happening throughout the world, as new railways and steamships allowed the expansion of commercial agriculture, mining and forestry across vast swathes of Argentina, Brazil, southern Africa, and Australia. So, maybe it was just a case of capitalist overinvestment. Overproduction and low prices resulted, investment and expansion waned, and prices thus returned to their long-term averages. Maybe there wasn't any monetary element at all. Since we are asked to imagine that these declines in 19th century commodity prices are equivalent to the kind of economic event that might make today's CPI fall by 30% or more – a catastrophe! – let's see if there was any evidence of catastrophe. During the 1880-1912 period, US industrial production increased at a compounded rate of 5.37% per year. Pretty good! This includes the "deflationary" 1880-1896 period, when industrial production rose by 5.35% per year. It was actually a bit better than the prosperous 1950s and 1960s, when industrial production rose by 5.20% per year. And the floating fiat era? From 1971-2012, industrial production rose by 2.30% per year, with most of that during the "Great Moderation" period of the 1980s and 1990s, when the Dollar's value was stable vs. gold – arguably, a crude sort of gold standard system. (I address many of these topics in my book Gold: the Monetary Polaris.) And what of the "one Fed-induced asset bubble after another" period of 2000 to the present? Over those fifteen years, US industrial production rose a grand total of 13%. Under 1% per year. Less than population growth. It appears that the difficulties of farmers in the 1890s were not shared by the economy as a whole – which suggests that it wasn't really a monetary event, but rather something related to commodity production. Yes, it's true that there was a major expansion in gold production following some major finds after 1895. However, there was an even-larger expansion in gold production after 1850, which didn't influence commodity prices very much. Even at its height, the post-1895 gold boom did not raise mining production to more than 3.5% of existing aboveground stocks per year, compared to a long-term average around 2%. Maybe it wasn't important. I am not the only one who has come to these kinds of conclusions. Michael Bordo, John Landon Lane and Angela Redish, in a 2004 paper prepared for the Federal Reserve Bank of Cleveland, found that: "Our results show that the deflation in the late nineteenth century gold standard era in three key countries reflected both positive aggregate supply [commodity glut] and negative money supply shocks [monetary factors]. Yet the negative money shock had only a minor effect on output...Thus our empirical evidence suggests that deflation in the late nineteenth century was primarily good. [The monetary factors, if they existed, didn't matter.]" Maybe the changes in commodity prices during the 19th century were just...changes in commodity prices, measured in a stable unit of account. And if gold, perchance, did not quite achieve this ideal of a "stable unit of account," maybe its deviation from that state of perfection was minor enough that it didn't really matter much. The "worst case scenario" from the 19th century was actually pretty darn good – better than anything that has been achieved with floating fiat money since 1971. Maybe that's why people used gold as the basis for their money for the past five thousand years.

Meet the new CMD of TEM. Still, WFD of course... On a HERETOFORE misplaced piece of paper that was quickly forgotten until a "Hmmm! Look what I found!" moment, some recent noteworthy news is that the federal government took in $3.2 trillion in taxes on 2015, but spent $3.6 trillion, for a paper deficit-spending balance of $400 billion, writes the Mogambo Guru. Wiping away the coffee stains and (sniff, sniff) what seems to be faint remnants of a chili dog, it appears, as calculated by someone who is more deft with a calculator than I, that this tax haul is more than $21,000 for every one of the country's 148 million workers who either works full time or part time, which I think is a VERY generous estimate of how many workers there are. 148 million workers? Almost half the population is employed? Surely you jest, sir! As Leslie Neilson would have replied, ala the movie Airplane!, "No, I am not jesting, and stop calling me Shirley!" Of course, being a cynical and paranoid old man who is sure everyone is lying to him, out to get him and steal his money, and who is also willing to stoop to stealing the classic comedy of Leslie Neilson, I don't count as "employed" anybody that does not have an employer who pays taxes on profits derived from their labor. It's that simple. This includes, obviously, the millions and millions of local, state or federal government workers, employees of the public school systems, employees of government-outsourced businesses, employees of government-sponsored non-profit organizations, or any of the millions of other people whose income depends on governments providing (gratuitously waxing vaguely Shakespearean) the fat teat at which they so greedily suckle. If you will please stop thinking about suckling teats long enough to subtract these not-profitable workers from the labor pool, then the number of "employed" people drops bigtime. As proof, I present disturbing facts and figures about the spending side of the federal ledger, which I have freshly pulled out of the air when vague memory fails, but cleverly presented in authentic government format, which is to use dazzling three-decimal precision. Thus, you can believe me and scoff at rude naysayers when I tell you that the cost of $3.687 trillion of federal spending divided by precisely 90,582,992.882 workers is exactly $40,703.004 of government spending per real, profit-making worker in America today! The federal government spends as much, per profitable worker, as each worker makes. I deliberately left off the exclamation points after that last sensational, stupefying sentence as an example of my hitherto unheralded Cool Mogambo Demeanor (CMD), designed to let future historians know that there are more sides to The Essential Mogambo (TEM) than are taught in their schools. As an aside, I agree with educators everywhere that all the distracting pornography, senseless gluttony and vague death threats comprising the bulk of the corpus of The Essential Mogambo (TEM) is stealing the educational limelight from pure cosmic truth, which is that the Austrian school of economics is the only true theory of economics, and that anybody who disagrees is a big, fat idiot. And, lest I waste an opportunity to heap cruel scorn upon Keynesian economists, let me hasten to say that this particularly includes the laughable Keynesians, busily diddling with their precious little computer models to justify the mind-blowing insanity of replacing lagging consumer spending (thanks to all income being consumed in servicing bankrupting debt) with increased government spending of an increase in the fiat-money supply, and devising new "hedonic adjustments" to disguise the resultant inflation in prices ("You paid twice as much for the car as last year, but with snazzy hubcaps included at no extra charge, there is no inflation in the price of cars!") The fact is, there should be at least – AT LEAST!!! Like that!!! – three exclamation points to provide the necessary head-exploding, screaming, hysterical outrage emphasis that this kind of monstrously insane fiscal stimulus, using money-out-of-thin-air created by the evil Federal Reserve, so richly, richly deserves. Again, please note my calm demeanor, as evidenced by my repeated complete lack of extraordinary punctuation to denote "We're Freaking Doomed (WFD)" emphasis, as would be expected because the situation is so disastrous that I'm actually gagging up blood here! Blood! Well, maybe not blood per se. Could be pizza. But something! Anyway, add in another $2 trillion or so in state and local taxation/spending per year, and pretty soon you've got an economic system that reflects the disastrous results of the horrid, treacherous Supreme Court infamously ruling, over and over again, that money did not have to be gold and silver (which would keep the money supply stable, and thus keep prices from rising and keep government from supporting, at this point, half the population), as so clearly and expressly stipulated in the Constitution of the United States! Exclamation point and all! But make no mistake: From here on out, the Federal Reserve and the federal government are going to commit every economic sin imaginable in a suicidal frenzy to make sure that this whole ugly, bloated, malignant economic system of an expanding money supply and accompanying debt, an expanding size and reach of government, and an expanding population of people suckling at the aforementioned fat teat of government continues as long as possible. Now look what you've done! I can't stop thinking about fat teats, either! And such a distraction is such a shame, since my next topic was about the importance of owing precious metals, yet cautiously weighed against the ability of a desperate government to spend borrowed money, and willing banking co-conspirators to keep creating money, to keep the bond, equity and housing markets afloat and, hopefully, rising, for a long, long time. So, one certainly needs one's wits about oneself to play such a game of brinkmanship! Alas, being a particularly gutless guy who knows with absolute certainty that this idiotic Keynesian economic experiment will end in complete disaster, and one who sees a Gigantic Screaming Bargain (GSB) in the market prices of gold and silver thanks to the despicable market manipulations, I'm reminded of the old adage "The race is not always won by the swiftest, nor the battle always won by the strongest, but that's the way to bet." And, since the odds are in your favor, in a long series of bets, you will win! You will always win over the long run! Just like the "house" in Las Vegas! Put it all together, and "Whee! This investing stuff is easy!"

War in France? The Paris stock market just enjoyed its best week in a month... "YOU can't eat gold," is one of the idiot arguments you'll hear against buying the metal from time to time, writes Adrian Ash at BullionVault. "That's right," you could reply. "Whereas you can eat white truffles...shaved onto your Michelin-starred dinner and charged to your bill by the gram. "That must be why white truffles just keep getting more and more expensive...while gold struggles." Even the idiot will look at you blankly. You can't be serious. Surely something else is behind the 70% rise in wholesale white truffle prices this year... ...and maybe simply being edible isn't the best measure of where an asset's price might head. Perhaps investment flows and credit count for more. US analyst Robert Prechter likes to tell a nice parable on a similar point. Imagine the devil offers you a bargain. He will tell you tomorrow's headlines today. You must then choose to buy...or sell...the stock market. Long or short, you simply have to hold your bet for a couple of trading days. Let's say 1 week. Or a month if you think the news deserves it. Ready? Here goes... Tomorrow in Dallas, Texas the wildly popular US president will be shot dead. How should you bet? Will you buy or sell the US stock market? Well, if you chose to sell the Dow Jones Industrial Average after it slipped 1.3% on Thursday, 21 November 1963...the day before JFK was assassinated...you would have made money by the market's close on that dreadful Friday. The Dow dropped almost 2.9%. But the next trading day...and the week after that? The Dow rose 4.5% on the Monday, slipped on the Tuesday, but added another 1.3% on Wednesday. Overall, within a week of JFK's murder, the Dow traded 2.4% higher. And inside 3 weeks it was marking new all-time highs. In fact, that drop on 22 November 1963 proved only a blip in the Dow's strong bull run from spring 1962 to autumn 1966. And Prechter's point is that news headlines really don't drive financial markets. Just like edibility doesn't. You can't eat gold, Dollars, or share certificates. (Although yield-hungry fund managers buying bonds with negative yields might yet get their own heads handed to them on a plate.) Fast forward to the awful events in Paris ten days ago, and the CAC40 index of France's major stocks has since enjoyed its strongest week-on-week gains in a month, reports Bloomberg. "Fewer than 10 stocks have fallen, among them Accor, Europe's biggest hotel operator, which dropped 4.7% on Monday...[but] clawed back more than half of those losses." Is this patriotism? Defiance? Or have investors no shame? Well, "the CAC40 index," replies Bloomberg, "remains one of Western Europe's best performing equity indexes [all of] this year." And as Time magazine notes, "More likely, it's a sign of investor faith that central banks will do everything in their power to prevent a recession in the immediate aftermath of a terrorist attack." Mario Draghi, head of the European Central Bank, didn't mention the Paris attacks in his speech Friday morning. But he fired up the money-copter regardless, fretting that inflation is too low and vowing to do "what we must" to fix that little crisis for consumers, savers and pensioners on fixed incomes. As for Robert Prechter's parable, he believes it shows how financial markets don't watch the evening news or read the papers. Instead, they do what they do thanks to deep, near-mystical forces of human nature revealed to technical analysts by price charts. Prechter's particular thing is Elliott Wave counting. And as it happens, one technical analysis from a bullion bank last week said gold prices are marking a "terminal" Elliott wave in this bear market starting back in 2011. If a true low does strike soon...or is now passing...Draghi's December dash to the money-copter might coincide. The Fed's much-delayed rate rise from 0% could then prove a news headline to ignore next month. If it actually happens.

I used to race the super 600 series and clubman 600 series with my brother in Ireland.......... there is nothing like racing a motorcycle.

GOLD PRICES edged back after recovering last week's finish late Friday in London, trading 1.3% above Tuesday's near 6-year low at $1065 per ounce as Western stock markets rose with the Dollar following fresh hints from US Fed policy-makers that a December interest-rate rise is a foregone conclusion. "We have done everything we can to avoid surprising the markets...when we move," said the US central bank's vice-chair Stanley Fischer at a conference in San Francisco, while Atlanta Fed president Dennis Lockhart said he's now "comfortable with moving off zero soon," but the path of further hikes will likely prove "slow [and] halting." In contrast the Fed, Eurozone monetary policy will become easier still said ECB president Mario Draghi in a speech Friday, vowing to do "what we must" to raise the near-zero rate of inflation. Bullion flipped back below $1080 – a key technical gold price level according to some analysts – while silver headed for a 0.5% weekly drop at $14.18 per ounce. "Finding support from a somewhat weaker US Dollar [overnight] precious metal prices have been recovering since yesterday," notes German bank Commerzbank. "Candle charts suggest...we have entered [a] corrective cycle after our long $1090 to $1066 down move," said a technical analysis from bullion bank Scotia Mocatta overnight, pointing to $1095 and $1114 as near-term targets. "As the market moves into a corrective phase," agreed the Asian dealing desk at Swiss refiner and finance group MKS this morning, "it's likely gold will test top-side targets of $1095-1100 [but] further resistance sits around $1110." Chinese gold prices rose again Friday on the Shanghai Gold Exchange, adding another 0.8% to a 3-day high and holding a firm $3.60 per ounce premium above London quotes. China state broadcaster CCTV today reported the release of new gold barsmarking 2016 as the Year of the Monkey on the Chinese zodiac. New customs data from Switzerland – the world's No.1 gold bar refining center – show October was the strongest month in 7 for gold exports direct to China, notes Commerzbank, while shipments to Hong Kong slipped but held "solid". "By contrast," the bank's commodities team go on, "exports to India totalled a mere 21.5 tons...a surprisingly low figure given the high religious festivals of Dhanteras and Diwali in November, which are generally accompanied by high gold demand." With the Diwali festival now being followed by India's key wedding season for gold gifting, the BJP government of Narendra Modi's new scheme to "unlock" some of the sub-continent's estimated 20,000 tonnes of existing private gold holdings – and use them to meet future demand, reducing the need for imports – has so fargathered less than half-a-kilo according to Finance Ministry sources speaking to the Wall Street Journal. New Delhi's other gold initiative – a Sovereign Bond paying 2.75% annual interest while tracking the Rupee gold price – meantime closed its first offering today with some INR145 crore raised from private savers ($22 million) according to Financial Express. At current rates, that means the scheme launched two weeks ago has deterred some 633 kilograms of gold investment. India's gold bar and coin demand last year totaled 207 tonnes according to datacompiled by specialist analysts Metals Focus for market-development organization the World Gold Council – an average fortnightly pace of almost 8 tonnes.

Price-fixing is illegal everywhere outside government and central banks... LÉON WALRAS is the patron saint of modern economics, writes Tim Price on his blog, ThePriceOfEverything. In other words, he was a clueless failure who hijacked immutable principles from the world of physics and misapplied them to the economic realm. The result, predictably enough, is that modern economics doesn't work. It doesn't work because it masquerades as a science when it is really just a combination of dogma and very crude modelling. The modelling doesn't work because garbage in equals garbage out. Sadly, this doesn't stop the Financial Times' chief economics correspondent, or the governor of the Bank of England, advocating overly simplistic policies in a highly complex world. There is something to behavioural economics however. The economy is not a model, it is us. But don't expect that to get taught seriously on university campuses any time soon. The conventional narrative has it that the financial crisis was caused by commercial bankers. This is not precisely true. Central bankers also played their part. What is alarming today is that almost nobody dares challenge the mandate or even ongoing existence of central banks as prime fixers of prices in the financial markets. (Spoiler warning: price fixing doesn't work.) "Attempts to control and fix prices and wages span most of recorded history," writes David Meiselman in the foreword to the definitive history of economic hubris, 'Forty centuries of wage and price controls' (Robert Schuettinger and Eamonn Butler). "Price and wage controls cover the times from Hammurabi and ancient Egypt 4,000 years ago to this morning...The experience under price controls is as vast as essentially all of recorded history, which gives us an unparalleled opportunity to explore what price controls do and do not accomplish. I know of no other economic and public policy measure whose effects have been tested over such diverse historical experience in different times, places, peoples, modes of government and systems of economic organization.. "The results of this investigation would merit attention for the light it sheds on economic and political phenomena even if wage and price controls were no longer seriously considered as tools of economic policy. The fact that wage and price controls exist in many countries and markets and are being seriously considered by others, including the United States, compels attention to the historical record of wage and price controls this book presents. "What, then, have price controls achieved in the recurrent struggle to restrain inflation and overcome shortages? The historical record is a grimly uniform sequence of repeated failure. Indeed, there is not a single episode where price controls have worked to stop inflation or cure shortages. Instead of curbing inflation, price controls add other complications to the inflation disease, such as black markets and shortages that reflect the waste and misallocation of resources caused by the price controls themselves. Instead of eliminating shortages, price controls cause or worsen shortages." Interest rates across the developed markets have been kept at emergency levels (and all time historical lows) for seven years. Do we think that allowing banks to access essentially free money is more or less likely to give rise to the sort of malinvestments that caused the financial crisis in the first place? If you believe that the answer is 'less likely', there is a job at the Bank of England's Financial Policy Committee with your name on it. (It will help secure the position if you have previously worked at Goldman Sachs, like our current central bank supremo, Mark Carney. Or the head of the ECB, Mario Draghi. Time was when unaccountable private banking cartels made some attempt to hide their origins. Now they flaunt them in plain sight. That's how much they respect taxpayers.) "Despite the clear lessons of history, many governments and public officials still hold the erroneous belief that price controls can and do control inflation. They thereby pursue monetary and fiscal policies that cause inflation, convinced that the inevitable cannot happen. When the inevitable does happen, public policy fails and hopes are dashed. Blunders mount, and faith in governments and government officials whose policies caused the mess declines. Political and economic freedoms are impaired and general civility suffers." Another question. Does central bank interference in the price mechanism make financial markets more or less volatile? We think the answer is less volatile in the short term, and hugely more volatile in the longer run. Benoit Mandelbrot reminded us that markets are volatile. Or at least they should be. If they actually reflect a price graph that rises serenely from the bottom left to the top right of the page, they are either frauds, or they are about to blow up. Markets are also risky. (Note that we distinguish between volatility and risk. Unlike the regulator.) Mandelbrot and Hudson: "According to the standard model of finance, in which prices vary according to the bell curve, the odds of ruin are about one chance in ten billion billion. With odds like that, you are more likely to get vaporized by a meteorite landing on your house than you are to go bankrupt in a financial market. But if prices vary wildly, as [we] showed in the cotton market, the odds of ruin soar: They are on the order of one in ten or one in thirty. Considering the disastrous fortunes of many cotton farmers, which estimate of ruin seems most reasonable?" Market timing also plays a role. Big gains and losses concentrate into small packages of time. This "clustering" effect of outbreaks of volatility is well known. The scale of such clustering sometimes beggars belief. Mandelbrot cites the exchange rate of the US Dollar against the Japanese Yen between 1986 and 2003 – a period of steady decline for the Dollar. "But nearly half that decline occurred on just ten out of those 4,695 trading days. Put another way, 46% of the damage to Dollar investors happened on 0.21% of the days. Similar statistics apply in other markets. In the 1980s, fully 40% of the positive returns from the Standard & Poor's 500 index came during ten days – about 0.5% of the time." Conventional wisdom has it that "time in the market" is more important than "timing the market". For investors with long enough time horizons, that may be broadly true. But if one senses, for whatever one believes to be sufficiently robust reasons, that significant downside volatility is a realistic near-term outcome, it is surely only sensible to take some form of ameliorative action. Prices often leap, not glide – that adds to the risk. Mandelbrot forcefully suggests that the mathematics of Bachelier, Markowitz, Sharpe and Black-Scholes, inasmuch as they assume continuous changes from one price to the next, are flawed. Markets are wilder than much conventional economics theory indicates (surprise!). In markets, time is flexible. "Time deformation is a mathematical convenience," says Mandelbrot, "handy for analyzing the market; and it also happens to fit our subjective experience. Time does not run in a straight line, like the markings on a wooden ruler. It stretches and shrinks, as if the ruler were made of balloon rubber. This is true in daily life: We perk up during high drama, nod off when bored. Markets do the same." Markets are inherently uncertain, and bubbles are inevitable. Again, notwithstanding the self-serving pronouncements of former Fed chairmen, not only are bubbles in financial markets inevitable, but identifying them may be down to simple pragmatism. This argument gets confused by the noise created by the investment media when any dramatically rising market gets tarred by the bubble brush. Because of the scaling characteristics of financial markets widely discussed throughout the book, making investment decisions is difficult. Making sensible predictions about financial markets is difficult. Bubbles are an inevitability. The financial markets today resemble some kind of unwieldy Heath Robinson contraption, contrived, wobbling unnervingly, and held together by spit, sawdust and the prayers of the central bankers whose hands are on the levers. We elect out. So we're not macro tourists in the bond market. We're not blithely tracking stock indices or surfing overpriced mega-cap consumer brands that, one by one, are being taken to the woodshed and shot, courtesy of some rather painful Chinese-led deflationary pressure. Since our central banker friends are working hard to discredit cash, we see unusual merit in only the highest quality, most inexpensive listed businesses (Japan and Vietnam being among the cheapest sources of such companies), and in healthy amounts of portfolio protection (systematic trend-followers in terms of uncorrelated insurance, and precious metals in terms of systemic and inflation insurance and, yes, we know where their prices in money terms currently are). It would make sense for investors today to reduce their exposure to speculative investments. Unhappily, dogmatic central bankers with too much misplaced confidence in flawed economic theories have made virtually all investments speculative. David Meiselman again: "First-hand experience of most of us with wage and price controls in our own lifetimes in addition to the lessons of history and of validated propositions in economics so skilfully catalogued in this book would seem to be more than sufficient to convince the public and government officials that price and wage controls simply do not work. "However, the unpleasant reality is that, despite all the evidence and analyses, many of us still look to price controls to solve or to temper the problem of inflation. Repeated public opinion polls show that a majority of US citizens would prefer to have mandatory controls. If the polls are correct, and I have no reason to doubt them, it must mean that many of us have not yet found out what forty centuries of history tell us about wage and price controls. Alternatively, it raises the unpleasant question, not why price controls do not work, but why, in spite of repeated failures, governments, with the apparent support of many of their citizens, keep trying." In the aftermath of this weekend's horrible events in Paris, religious dogmatism is rightly condemned. If only dangerous economic dogmatism could be similarly repudiated.

GOLD PRICES rose 1.6% in 3 hours Thursday afternoon in London, recovering all the week's previous losses to new 6-year lows to trade at $1083 per ounce as Western stock markets erased earlier gains and global shipping rates hit new all-time lows on the Baltic Dry index. The US Dollar retreated towards its weakest level in a week versus the Euro despite Wednesday's minutes from the Federal Reserve's latest policy meeting showing what Reuters calls a "solid core of officials [backing] a possible December rate hike." US Treasury bond prices rose again, pushing 10-year yields lower for the 7th session in 8 from last week's four-month high of 2.36%. "After facing stiff resistance near a descending trend drawn since 2012," says a note from technical analysts at French investment and bullion bank Societe Generale, "gold is probing the lows formed in July at $1080. "More importantly this is the upper part of the massive upward channel stretching back from the 1980s and [also] the 50% retracement of the 2000 to 2011 uptrend." Saying that gold is "developing the fifth and terminal" move under Elliot Wave theory "of the down cycle that started in 2011," SocGen sees support at $1045 and then $1030 – gold's 2010 and then 2008 high points respectively. Developed by US accountant Ralph Elliott in the 1930s to map the "rhyhmical procedure" in financial markets, Elliott Wave theory posits a predictable cycle of waves in prices. "On weekly closing basis," SocGen adds, "a move below $1080 will be needed to further accelerate the downtrend." With the Reuters/Jefferies CRB index of 19 key commodity prices losing 20% this year – "far exceed[ing] our expectations," according to bearish Goldman Sachs analysts – the Baltic Dry Index of shipping rates meantime hit a new all-time low today on its 30-year series, down by more than one-third so far in 2015. "The main issue is the lack of demand for iron ore from China," says one shipping analyst. "[This is] the most challenging market I have encountered in my 37 years in dry bulk shipping," said Petros Pappas, CEO of carrier Star Bulk (Nasdaq:SBLK) on an earnings call yesterday, which saw the stock drop 20%. "What's happening is that in 2012 to 2014 the number of ships ordered overwhelmed the market," says CEO Peter Georgiopoulos of ship-owner Gener8 (NYSE:GNRT) "The fleet is four times the size that it should be." Overnight in China on Thursday, a 0.3% rise in Yuan gold prices saw trading volume in the Shanghai Gold Exchange's main contract drop to 1-week lows, but premiums above the global benchmark of London settlement held firm. Equal to $3.50 per ounce, today's Shanghai premium offered a good incentive to importers over the last 12 months' average of $2.50. "Investors still prefer gold as they don't have many alternatives," Bloomberg quotes Haywood Cheung, chairman of the Chinese Gold & Silver Exchange Society in Hong Kong. "We expect [China's] gold demand to continue strengthening through the year-end...and [February's] Lunar New Year," says Industrial Futures Co. analyst Long Ling in Shanghai. Silver tracked and extended the move in gold prices on Thursday in London, rallying almost 2% to near 1-week highs at $14.42 per ounce before easing back.

Lately when I talk to my friends around the world, I get the distinct sense that there’s a dark cloud hanging in the air. I feel it particularly from those in North America and Europe. Terrorism is on everyone’s mind. All the headlines have to do with ISIS, who’s been killed in police raids, new threats to cities like Washington D.C. and New York, etc. It goes without saying that this has led to a pretty serious level anxiety. And with good reason. There’s a laundry list of major problems in the world. Terrorism is an unfortunate reality. So are bankrupt governments, insolvent financial systems, underfunded pension programs, and giant police and surveillance states. But it’s become easy to forget that there’s actually a lot of great news in the world, and plenty of reasons to be excited. Here in Chile they have a program called Startup Chile, where entrepreneurs from all over the world receive funding for their businesses and a community of other entrepreneurs to learn from. There have been some very successful companies to come out of it. Candidly I’m not wild about any government taxing the income and property of its citizens for any reason. However, since I don’t get to live in my fantasy world where there’s no tax anywhere, I will happily acknowledge that funding game-changing businesses adds more value to the world than dropping bombs and going to war. We attended a “demo day” a few days ago where several of the Startup Chile participants presented their businesses. Much of what we saw was incredibly inspiring. One project addressed the issue of Styrofoam waste, which can’t easily be recycled and just builds up in landfills, by coming up with an innovative way to turn it into something commercially useful. Meanwhile, a group from Bulgaria is tackling a dangerous epidemic that is wiping out the bee population worldwide by introducing smart beehives that can be tracked, managed, and controlled through the cloud. Then there was one that really hit home for a number of my team members—one that uses predictive text and machine learning software to enable stroke victims and others with speech disorders to communicate effectively and with dignity. This sort of thing is happening on a daily basis, and entrepreneurs worldwide are coming up with game-changing ideas, many of which can revolutionize staid industries. Through our private investment service, we funded one company last year that is already making a dent in the financial system. The company has launched a new digital currency system that is now being used officially across an entire nation. My sense of optimism extends far beyond entrepreneurship and startups. Colombia is a great example. It used to be synonymous with violence, civil war, and chaos. Now Colombia is peaceful, blossoming, and prospering. There’s so much opportunity, I find it one of the most exciting places in the world. There are so many other bright spots, and so many amazing things that are being created on a daily basis. Yes, there are some serious risks out there, and the system is absolutely rigged against you. But there are solutions. If your banking system is in poor condition, move some funds outside of it. If your government is completely bankrupt, don’t keep 100% of your assets under their control. And if terrorism is that much of a scare, consider making some adjustments in your personal life, including even moving to a place that makes you feel safer and more free. Don’t be dominated by fear and anxiety. Have a rational view of the risks, and take sensible steps to reduce them-- freeing you up to concentrate on all the amazing opportunities in the world. Until tomorrow, Simon Black Founder, SovereignMan.com

This little article has been doing the rounds on social media lately, a woman in Australia found this folded up in her late fathers wallet.