India

• "The hate us for our..." Americans’ Cellphones Targeted in Secret U.S. Spy Program (WSJ)
• Ukraine and Russia take center stage as leaders gather for G20 (Reuters)
• Moscow and Kiev trade accusations; U.S. warns Russia against escalation (Reuters)
• Heartland Central Banker Calls Asset Bubbles Top Concern (BBG)
• U.S. Said to Give Banks December Deadline in FX Probe (BBG)
• Series of Failures Enabled White House Breach, Report Finds (WSJ)
• Yen plumbs seven-year trough on likely Japan sales tax delay (Reuters)
• JPMorgan Chase Bankers Said to Lead Moscow Departure (BBG)

Gold dropped to new lows of $1,130 per ounce last week. This is surprising because it doesn’t square with the fundamentals. China and India continue to exert strong demand on gold, and interest in bullion coins remains high. In other words, it doesn’t add up.

Caution should be advised next week.

• Banks to Pay $3.3 Billion in FX-Manipulation Probe (BBG)
• Symbolic being the key word: U.S., China sign symbolic emissions plan, play down rivalry (Reuters)
• Europe (so really Russian sanctions) is the new "snow in the winter" - Carney Sees Europe Stagnation Impact as Growth Outlook Cut (BBG)
• Eurozone Industrial Output Points to Weak Third Quarter Growth (WSJ)
• Not everyone around Abe is insane: Kuroda Ally Flags Warning on Delaying Sales-Tax Increase (BBG)
• Hong Kong to scrap daily yuan conversion limit to boost stock investment (Reuters)
• Barclays Falls After FX Settlement Delay Reduces Discount (BBG)
• Some unhappy Yahoo investors asking AOL for rescue (Reuters)

China May Be Closing the Gap on U.S. Military Superiority

There are things in this world which simply look plain stupid, and then there are those that at closer examination prove to be way beyond stupid...

Chris Martenson is an economic researcher and futurist, specializing in energy and resource depletion, and co-founder of PeakProsperity.com. As one of the early econobloggers who forecasted the housing market collapse and stock market correction years in advance, Chris rose to prominence with the launch of his seminal video seminar, The Crash Course, that interconnected forces in the economy, energy, and the environment that are shaping the future, one that will be defined by increasing challenges as we have known it. Chris’s insights are in high demand by the media as well as academic, civic, and private organizations around the world, including institutions such as the U.N., the U.K. House of Commons, and the U.S. State Legislatures. So with that we’d like to welcome Mr. Chris

There are a number of cause-and-effect mechanisms that are creating a "dangerous spiral" in various emerging markets. As Natixis explains, this five-step vicious circle is currently affecting Russia, Brazil, Argentina and South Africa; and some of the components are now manifesting in Turkey and India.

In 2013; a chain of events led to what was (at the time) the greatest stampede into gold in human history. It began with the Cyprus Steal, the West’s first “bail-in”. This led to the realization (by the Smart Money) that no paper assets were safe any longer, within any Western financial institution or market.

When the wrecking ball hits, the IMF stands at the ready with the SDR composite to pick up the structural pieces......... 

Back in September, there was a summit meeting in a city that involved an organization that most Americans have never heard of. Mainstream media coverage was all but nonexistent. The place was Dushanbe, the capital of Tajikistan, a country few Westerners could correctly place on a map. But you can bet your last ruble that Vladimir Putin knows exactly where Tajikistan is. Because the group that met there is the Russian president’s baby. It’s the Shanghai Cooperation Organization (SCO), consisting of six member states: Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. We should care what’s going on inside the SCO. Once India and Pakistan get in (and they will) and Iran follows shortly thereafter, it’ll be a geopolitical game changer.

There’s an odd-looking building in South Mumbai in India that looks like it’s under construction, only that it’s finished and furnished. And by how much. Called the Antilia, after mythical island in the Atlantic, the building is famous not for its odd structures of extra high ceilings and protruding floors; it’s the second most expensive house today at $1 billion. Barring the Buckingham Palace, which is valued at $1.55 billion, it would have been our most expensive house in our list, as Forbes.com has named it in 2014. In fact, Forbes cited that it’s the first house (other than palaces) to breach the $1 billion range.

We've written a lot about Japan lately as what happens today under the no longer rising sun is going to have such repercussions worldwide that it would be foolish not to pay attention. Moreover, there’s something about what Bank of Japan Governor Haruhiko Kuroda said this morning that both perfectly and painfully illustrates to what depths, economically as well as morally, the country has sunk.

• From Yes We Can to Probably Not (BBG)
• How Mitch McConnell did it (Politico)
• Tough road ahead for Obama after Republicans seize Senate (Reuters)
• Election 2014: Who were the big winners and losers? (USA Today)
• GOP Senate Takeover Puts Fed on Hot Seat (WSJ), and other fables
• GOP Won by Recruiting the Right Candidates (WSJ)
• McCain could shake up U.S. defense in powerful new Senate role (Reuters)
• Investors Pulled Record Amount From Pimco’s Flagship Fund in October (WSJ)
• Taliban group threatens to attack India following border blast (Reuters)
• Oil Import Decline to U.S. Revealed by Louisiana as Truth (BBG)

There is a very strong correlation between the GDP and the demand for gold, even in mature markets!