2014 may go down as the year when gold and silver conspiracy “theories” became conspiracy “facts” as banks globally were found to have conspired to rig the prices of gold, silver, currency and many other markets.
Hugh Hendry's Eclectica Fund has had a great Q4 (up 3.3%, 4.0%, and 5.0% in the last 3 months) despite portfolio risk being quadruple his 'old normal'. How did he achieve this? He begins... "There are times when an investor has no choice but to behave as though he believes in things that don't necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully. The good news is that mankind clearly has the ability to suspend rational judgment long and often... He who hangs on to truth has lost. The economic truth of today no longer offers me much solace; I am taking the blue pills now."
Belarus In Full-Blown Hyperinflation Panic: Blocks News, Online Stores; Bans All FX Trading For 2 YearsSubmitted by Tyler Durden on 12/22/2014 15:33 -0500
Say what you want about the gold price languishing below $1200 (or not, as the case may be, after this week), and say what you want about the technical picture or the “6,000-year bubble,” as Citi’s Willem Buiter recently termed it; but know this: gold is an insurance policy — not a trading vehicle — and the time to assess gold is when people have a sudden need for insurance. When that day comes - and believe me, it’s coming - the price will be the very last thing that matters. It will be purely and simply a matter of securing possession - bubble or not - and at any price. That price will NOT be $1200. A “run” on the gold “bank” would undoubtedly lead to one of those Warren Buffett moments when a bunch of people are left standing naked on the shore. It is also a phenomenon which will begin quietly before suddenly exploding into life. If you listen very carefully, you can hear something happening...
Just because Russia has managed to stabilize its currency, that certainly does not mean the soaring dollar tantrum-cum-crude crash episode is anywhere near over, nor that stability has returned to the rest of the oil-exporting countries. Case in point, crude-exporting powerhouse Nigeria, where things are going from worse to #REF! Bid and ask prices for the naira were quoted from 162 to 190 per dollar with only 16 trades by 1 p.m. in Lagos [yesterday], compared with more than 170 by the same time yesterday, according to data compiled by Bloomberg. The naira fell 12 percent against the dollar this quarter, the worst among 24 African currencies tracked by Bloomberg after Malawi’s kwacha. Investors dropped Nigerian assets as the outlook for Africa’s biggest oil producer worsened with Brent crude prices almost halving since late June. “The banks can’t stop trading because of the circular,” the Deputy Central Bank of Nigeria Governor Sarah Alade said. “It is not supposed to close the market. We have told them we’ll continue intervening in the market, so there is no need to panic.”
The ruble is dying, and fast. Ill prepared to wait it out, the central bank is clearly a step behind the game and perhaps even out of its league. But Black Monday suggested other powers might be at play.
Monday was incidentally the day of an interesting 700 billion ruble liquidity auction. Prior to the auction, Rosneft raised 625 billion rubles (almost $11 billion) in a bond issue backed by the central bank...
Just four charts to consider now that The Fed has stepped away, the Shale Oil miracle has been exposed for the debt-fueled mal-investment boom that it is, cold-weather is coming, and stock market bulls are forced to face some awkward truths...
Most readers are familiar with the fable of “The Goose That Laid The Golden Eggs”, or at very least, are familiar with the metaphor which was the moral of that fable: one should never kill a goose that lays golden eggs. Such advice seems obvious to the point of being simplistic, and yet it is wisdom which has not merely survived, but has been enshrined in the form of a fable.
It wasn't just China's long overdue crash last night. In addition to the Shanghai Composite suffering its biggest plunge since August 2009, there has been a sharp slide in the USDJPY which has broken its uptrend to +∞ (and hyperinflation), and around the time Chinese gamblers were panicking, the FX pair tumbled under 120, although since then the 120 tractor beam has been activated. Elsewhere, the Athens stock exchange is also crashing by over 10% this morning on the heels of news that the Greek government has accelerated the process to elect the next president and possibly, a rerun of the drama from the summer of 2012 when the Eurozone was hanging by a thread when Tsipras almost won the presidential vote and killed the world's most artificial and insolvent monetary union. And finally, the crude plunge appears to have finally caught up with ground zero, with ADX General Index in Abu Dhabi plunging 3.5%, also poised for the biggest drop since 2009. In fact the only thing that isn't crashing (at least not this moment), is Brent, which did drop to new 5 year lows earlier under $66, but has since staged a feeble rebound.
As investors we are all trapped within a horrifying bubble. We must play the hand we’ve been dealt, however bad it is. But there are now growing signs of end-of-bubble instability. The system does not appear remotely sound. You can be for gold, or you can be for paper, but you cannot possibly be for both. It may soon be time to take a stand. Beware appearances in an unhinged financial system, because they can be dangerously deceptive.
"My Helicopters Are Ready. You Will All Be Trillionaires." Must see chart of gold in German marks from 1918 to 1923. The Fed - "Silently robbing your purchasing power since 1913 ... "
History may not repeat but it sure does rhyme. Mike Maloney has studied monetary and financial breakdowns throughout history and concludes that there's nothing new or different happening this time, except its global and far more massive than any other time in history. Worse, there are echoes of 1911 where a series of diplomatic blunders and national pride and intransigence combined to create the still largely inexplicable start to WW I.
"... we seem to have miscalculated..."
The Federal Reserve and its owners print and party, while the rest of us work and weep..................
Things for Ukraine are going from bad to worse. As the central bank reported overnight, the country's foreign-currency (and gold reserves) dropped by over 21% in one month, to under $10 billion in November for the first time in nearly a decade due to large payments for debt and gas, from $12.6 billion to $9.966 billion.