Kazakhstan

It is possible that we might witness the formation of two blocks within OPEC during the next December 4 meet in Vienna. One, led by Venezuela, Ecuador, Libya and Algeria that would want to reduce production levels and the other led by Saudi Arabia, UAE and Kuwait that would stick to the current strategy of defending market shar. In the end, it will come down to survival of the fittest. Players who have higher breakeven costs will be the ones who will blink first and thereby reduce their production levels.

With Russia now in the driver's seat in terms of supplying crude to China, and with Iranian supply set to come back online with the lifting of economic sanctions, Saudi Arabia faces a serious threat to its dominance of the global oil market. Given the increased cooperation between Moscow and Tehran in Syria, it comes as no surprise that Ruusia and Iran are now in talks on some $40 billion in energy projects which the two countries say could lead to the formation of a new development bank.

"[Putin] hopes that when its ally Iran re-enters the global oil and gas market, Russia will somehow share in the profits, perhaps through new pipelines across Syria. He also wants to stop the Saudis from establishing export routes in Syria. Now that Russian energy supremacy in Europe also is at stake, Putin's determination to resolve the Syrian conflict on his terms can only grow."

There's one thing resource downturns are good for: seeing which projects and regions are the strongest in industry. And we got another big indication this week that there's one global leader when it comes to uranium mining...

Overnight we got confirmation that Glencore has indeed become a systemic risk from a regulatory standpoint after the FT reported that the Bank of England has asked British financial institutions to reveal their full exposure to commodity traders and falling prices of raw materials amid concerns over the impact of the oil and metals slump. Or, in other words, their exposure to Glencore, Trafigura, Vitol, Gunvor and Mecuria.

The global risk on mood (which is really anything but, and is merely an unprecedented short covering squeeze as we will report momentarily) launched by an abysmal jobs report one week ago and "validated" yesterday by the surprisingly dovish FOMC minutes, which said nothing new but merely confirmed what most knew, namely that a rate hike is almost certain to not occur until mid-2016 if ever, and accelerated by a Fed-driven collapse in the dollar which overnight has led to a historic 3.4% move in the Indonesian Rupiah the most since 2008, has pushed global stocks even higher in their biggest weekly rally since 2012, despite the start of an earnings season where virtually every single company reporting so far has stumbled on earnings reports that were far worse than even gloomy consensus had expected.

Whereas some central banks have become more forthcoming on where they claim their official gold reserves are stored, many of the world’s central banks remain secretive in this regard, with some central bank staff saying that they are not allowed to provide this information, and some central banks just ignoring the question when asked.

Neoliberal economics is blind to reality and serves to justify the destruction of the economic prospects of the Western World. It remains to be seen if Russia and China can develop a different economics or whether these rising superpowers will fall victim to the “junk economics” that has destroyed the West. With so many Chinese and Russian economists educated in the US tradition, the prospects of Russia and China might not be any better than ours. The entire world could go down the tubes together.

Fed credibility questioned and Yellen sick - Palladium surges 8% - Russia and central banks buy gold - Smart money rebalancing and selling overvalued assets to buy depressed assets especially silver

"Softer growth prospects for the People’s Republic of China (PRC) and India, and a slow recovery in the major industrial economies, will combine to push growth in developing Asia for 2015 and 2016 below previous projections."

Gold had a 3 percent weekly gain and silver had a 3.5% weekly gain. Gold ended with a gain of 0.73% on Friday while silver rose to as high as $15.43 before ending with a gain of 0.26%.

"A couple of days there is no currency. Only buy dollars and euros, in the tenge no changes, so there is no currency. People go, constantly ask dollars or euros."

The EM FX carnage continues unabated heading into the FOMC as the Kazakh tenge plunges for a seventh consecutive day and the beleaguered Turkish lira slides to a new low as an obstinate central bank and an extraordinarily unstable political situation conspire to undermine confidence ahead of elections scheduled for November 1.

While we await for thr Russian secret service to leak photos of Iran's Revolutionary Guard in Syria, thereby stirring the pot on the latest and greatest proxy war in the middle east, one which would promptly disintegrate any last remaining shred of "victory" from Obama's alleged coup in restoring relations with an Iran, which couldn't even wait for the signing of the "Nuclear" deal before turning its back on Obama and siding with Putin in Syria, we were particularly amused to learn that just yesterday Iran announced it has discovered an unexpectedly high reserve of uranium and will soon begin extracting the radioactive element at a new mine.