en Gold Lower Before Trump Presidency – Strong Gains Akin To After Obama Inauguration? <p><span style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif;"><span style="font-size: 16px;"><a href="">Gold Lower Before Trump Presidency – Strong Gains Akin To After Obama Inauguration</a></span></span></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Gold prices have had a good start to 2017 and has made gains in&nbsp;the majority of currencies, building on the strong gains seen in 2016. So far in 2017, gold is 3.5% higher in dollars, 2.3% higher in euros and 4% higher in sterling.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><img src="" alt="gold-price-currencies" width="1024" height="31" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-8564" /></a><a href=""><img src="" alt="gold-annual-returns-obama" width="1024" height="132" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-8557" /></a><strong>Gold Annual Returns During First Four Years Of Obama Presidency&nbsp;-</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Increasing nerves regarding the Trump Presidency likely account for some of the gains. Although the fundamentals of the gold market remain strong even were Trump not becoming President of the United State of America.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">A backdrop of financial repression and global currency debasement involving ultra loose monetary policies and near negative interest rates, a push for&nbsp;<a href="">cashless society</a>, a still massively indebted U.S. and global economy and still very fragile banking systems all bodes well for gold prices in the coming years - not too mention positive supply demand fundamental that is&nbsp;<a href="">peak gold</a>.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Trump is icing on the cake in this regard. While it is always best to fade short term noise about breaking news and the latest market developments, ignoring Trump in the White House as an investor is very much a case of trying to ignore a giant white elephant in a very small room.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We should indeed ignore the short term noise of the Trump inauguration next week - although it is set to be compelling box office viewing! However, it would be imprudent to ignore the likely impact of four years of the Trump Presidency on markets and particularly the gold market. On Wednesday past,&nbsp;we had just a little taste of this when his press conference led to turmoil and massive volatility in markets and&nbsp;<a href="">gold rising on safe haven demand to over $1,200 per ounce.</a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><img src="" width="3500" height="2335" style="height: auto; max-width: 100%;" class="alignnone size-large" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Trump's extraordinary press conference this week highlighted the risks facing markets. Geo-political risk in terms of his ongoing war with U.S. intelligence agencies, increasing tensions with Russia, China, the EU, Mexico and other nations and the real risk of trade, currency and actual wars.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Warnings about the likely impact of the Trump Presidency&nbsp;on markets should be considered carefully - especially in the light of the "irrational exuberance" that continues to be seen on U.S. markets with 'Dow 20,000' a breadth away and valuations suggesting another massive bubble with all the risks that entails to pensions and investments.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Indeed, there is a strong argument for becoming more cautious and conservative and reducing allocations to risk assets such as stocks and bonds and increasing allocations to gold.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We believe that gold is likely to perform as well in the first four years of the Trump Presidency as it did in the first four years of the Obama Presidency. Past performance is no guarantee of future returns and all the usual caveats that apply in this regard. However, we believe that the over used "perfect storm" is brewing for gold and it will likely outperform risk assets in the coming years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>So how did gold prices perform during the first four years of Obama's Presidency?</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">It is hard to believe but President Obama took his oath of office and made his inauguration address&nbsp;8 years ago next week – on January 20th, 2009.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="" width="945" height="653" style="height: auto; max-width: 100%;" class="alignnone size-large" /></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Gold prices closed on Obama's inauguration day at $857.25 per ounce (and silver at $11.34 per ounce). Sentiment towards gold was poor as gold prices had "peaked" at near $1,000 per ounce in March 2008.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Subsequently gold had fallen as low as near $700 per ounce in late 2008, correcting lower after the very strong gains seen in the previous years and especially in 2007 &nbsp;and early 2008, at the outset of the global financial crisis.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">In dollar terms, gold had risen by 20%&nbsp;in 2005, by 23% in 2006 and by 31% in 2007. It began 2008 with further gains - rising from just below $900 per ounce to near $1,000 per ounce in early 2008, prior to the period of correction and consolidation in the rest of 2008.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">So gold&nbsp;had risen relentlessly and had more than doubled in value from near $450 per ounce at the start of 2005 to near $1,000 per ounce in March 2008. Most "experts" including Nouriel Roubini and Paul Krugman were out in force at this time, simplistically declaring gold a risky 'bubble' and discouraging investors from diversifying their portfolios and having an allocation to safe haven gold.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">There was also a consensus and great 'hope' that Obama would clean up Wall Street and put the heavily indebted U.S. economy on a more sustainable financial and economic path - something which never happened.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">It was against this backdrop that Obama came to power. Gold was unloved and derided by Wall Street and the financial pundits and languished at $857 per ounce (see chart).</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="" width="1027" height="423" style="height: auto; max-width: 100%;" class="alignnone size-large" /><em><strong>Gold in US Dollars – January 2009 to January 2010 (Bloomberg)</strong></em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">One month later, gold had risen to $992.90/oz and silver to $14.44/oz. Thus, in just the 30 days subsequent to Obama's inauguration, gold surged nearly 16% and silver surged by over 27%.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Exactly 12 months later on January 20th, 2010, gold had risen to $1,111.05/oz for a gain of nearly 30% in the first year after Obama’s inauguration. In the following 12 months, silver had risen to $17.88/oz for a gain of 57.6% in the first year after President Obama’s inauguration.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">A similar performance in the coming month would see gold rise from $1,200/oz to $1,392/oz.<br />A similar performance in the coming year would see gold rise from $1,200/oz to $1,555/oz.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We caution that these returns subsequent to Obama’s first inauguration are interesting statistics and should not be used as a trading tool. In and of themselves solely they are somewhat&nbsp;meaningless.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Conclusion</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Past performance is no guarantee of future returns - especially over short time horizons. However, over the long term, history including market history does tend to, to paraphrase Marc Twain, if not repeat then at least rhyme. This is the case with monetary history - every single fiat currency has ultimately collapsed as have the economies using those fiat currencies.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Given the fact that the U.S. monetary and fiscal position is much worse now than it was 8 years ago - the taboo (for now) U.S. national debt has grown massively -&nbsp;it seems very likely that we will see similar gains for gold in the coming months and years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">On January 20, 2009, when Obama was sworn in, the debt was $10.626 trillion. Today it's about to reach $20 trillion - at $19.957 trillion. Obama added an incredible $9 trillion to the national debt, more than any other President. Another inconvenient truth ignored by the same experts that continue to either ignore gold or not cover it in a balanced, fact, evidence based manner.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href=""><img src="" alt="gold-dollars-10-years" width="683" height="414" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-8555" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">We have long stated that we believe gold will reach a&nbsp;record inflation adjusted high over $2,500/oz and we see that as likely during the first four years of the Trump Presidency.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">However, gold's primary function is as a diversification, financial insurance and a hedge against geo-political, systemic and of course monetary risks - all of which abound as we head into the Trump years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>KNOWLEDGE IS POWER</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">For your perusal, below are in order of downloads our&nbsp;<span class="il">most</span>&nbsp;<span class="il">popular</span>&nbsp;<span class="il">guides</span>&nbsp;in 2016:</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="" target="_blank">10 Important Points To Consider Before You Buy Gold</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="" target="_blank">7 Real Risks To Your Gold Ownership</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; 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font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">European elections at risk to aggressive cyber attack threats: EU security commissioner (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">New 'Ring of Steel' planned for London Square Mile (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Italian banking crisis moves on to Unicredit’s €13bn cash call (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="" style="height: auto; max-width: 100%;" /></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Gold Only Safe Haven From Politicians Meddling and Bashing Central-Banks (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Stocks are getting crushed by gold in 2017 (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">You can get inflation anywhere if you try hard enough - Stepek (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href=";">US Will Devalue Debt and Devalue Dollar - Rick Rule (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">Gold swaps by BIS exploded in 2016 from nothing to record level (</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="" rel="attachment wp-att-5047"><img src="" alt="7RealRisksBlogBanner" width="822" height="430" style="height: auto; max-width: 100%;" class="alignnone wp-image-5047" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold Prices (LBMA AM)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">13 Jan: USD 1,196.35, GBP 978.85 &amp; EUR 1,123.25 per ounce<br />12 Jan: USD 1,206.65, GBP 984.39 &amp; EUR 1,135.82 per ounce<br />11 Jan: USD 1,187.55, GBP 979.25 &amp; EUR 1,128.41 per ounce<br />10 Jan: USD 1,183.20, GBP 974.60 &amp; EUR 1,118.12 per ounce<br />09 Jan: USD 1,176.10, GBP 968.75 &amp; EUR 1,118.59 per ounce<br />06 Jan: USD 1,178.00, GBP 951.35 &amp; EUR 1,112.27 per ounce<br />05 Jan: USD 1,173.05, GBP 953.55 &amp; EUR 1,116.16 per ounce<br />04 Jan: USD 1,165.90, GBP 949.98 &amp; EUR 1,117.40 per ounce<br />03 Jan: USD 1,148.65, GBP 935.12 &amp; EUR 1,103.28 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Silver Prices (LBMA)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">13 Jan: USD 16.76, GBP 13.76 &amp; EUR 15.74 per ounce<br />12 Jan: USD 16.91, GBP 13.77 &amp; EUR 15.87 per ounce<br />11 Jan: USD 16.79, GBP 13.84 &amp; EUR 15.96 per ounce<br />10 Jan: USD 16.66, GBP 13.73 &amp; EUR 15.76 per ounce<br />09 Jan: USD 16.52, GBP 13.57 &amp; EUR 15.69 per ounce<br />06 Jan: USD 16.45, GBP 13.30 &amp; EUR 15.54 per ounce<br />05 Jan: USD 16.59, GBP 13.47 &amp; EUR 15.80 per ounce<br />04 Jan: USD 16.42, GBP 13.36 &amp; EUR 15.74 per ounce<br />03 Jan: USD 15.95, GBP 12.97 &amp; EUR 15.34 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><br />Recent Market Updates</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="">-&nbsp;Gold Rallies To $1,207 After Trump Press Conference Shambles</a></strong><br /><strong><a href="">-&nbsp;Prince Owned Land and Gold Bars Worth $800,000</a></strong><br /><strong><a href="">-&nbsp;Gold Price In GBP Up 4% On Brexit and UK Risks</a></strong><br /><strong><a href="">-&nbsp;2016 Past is 2017 Prologue</a></strong><br /><strong><a href="">-&nbsp;Gold Gains In All Currencies In 2016 – 9% In USD, 13% In EUR and Surges 31.5% In GBP</a></strong><br /><strong><a href="">-&nbsp;Trump’s Twitter “140 Characters” To Push Gold To $1,600/oz in 2017?</a></strong><br /><strong><a href="">-&nbsp;2017 – The Year of Banana Skin</a></strong><br /><strong><a href="">-&nbsp;US: Five Must Gold See Charts – Gold Miners Are “Running Out” of Gold</a></strong><br /><strong><a href="">-&nbsp;Royal Mint And CME Make A Mint On The Blockchain?</a></strong><br /><strong><a href="">-&nbsp;China Gold and Precious Metals Summit 2016 – GoldCore Presentation</a></strong><br /><strong><a href="">-&nbsp;Trumpenstein ! Who Created Him and Why?</a></strong><br /><strong><a href="">-&nbsp;Bail-Ins Coming? World’s Oldest Bank “Survival Rests On Savers”</a></strong><br /><strong><a href="">-&nbsp;Fed’s “Fool Me…”, Silver Suppression, Euro Contagion In 2017?</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href=""></a></strong></p> BIS China Conservatism in the United States Donald Trump Dow 20 Economy European Union Finance Global Economy Gold Gold as an investment Hedge Investment Irrational Exuberance Krugman Mexico Money National Debt Nouriel Nouriel Roubini Paul Krugman Precious Metals Precious metals President Obama Reuters Silver Silver as an investment Sovereigns Switzerland Twitter Twitter U.S. intelligence US Federal Reserve Volatility White House White House Mon, 16 Jan 2017 12:44:08 +0000 GoldCore 585567 at Ray-Ban Maker Luxottica To Merge With French Esilor, Creating $49 Billion Eyewear Giant <p>The US may be closed, but nothing stands in the way of merger Monday, which today struck in Europe with the announcement that Italy's Ray-Ban maker, Luxottica, and France's lens company Essilor agreed to a €46 billion ($49 billion) merger to create a global eyewear giant with annual revenue of more than €15 billion. </p> <p>The deal, one of Europe's largest cross-border tie-ups, brings together Luxottica, the world's top spectacles maker with brands such as Oakley and Ray-Ban, with Essilor, the world's leading manufacturer of ophthalmic lenses. </p> <p><a href=""><img src="" width="500" height="334" /></a></p> <p>"Finally ... two products which are naturally complementary -- namely frames and lenses -- will be designed, manufactured and distributed under the same roof," Luxottica's 81-year-old founder Leonardo Del Vecchio said in a statement.</p> <p>Del Vecchio, who returned to the helm of Luxottica two years ago after taking a back seat for the previous decade, will be CEO and executive chairman of the merged EssilorLuxottica, which will be listed in Paris. Del Vecchio will take a stake of between 31% and 38% in the merged group through his family holding Delfin, becoming the biggest shareholder. Voting rights will be capped at 31 percent. Delfin will contribute its 62 percent stake in Luxottica at a ratio of 1 share in the Italian group for every 0.461 Essilor shares. The French lens maker, a long-time supplier to the Italian group, will launch a mandatory exchange offer on all remaining Luxottica shares at the same ratio, with the aim of delisting Luxottica's shares.</p> <p>Essilor Chairman and CEO Hubert Sagnieres will be executive vice-chairman and deputy CEO, with the same powers as the chairman and CEO.</p> <p>Following their merger the two companies will be better positioned to take advantage of strong demand in a $95 billion market expected to achieve continued growth because of an aging global population and increasing awareness about eye care in Asia and Latin America. The companies said the deal is expected to bring annual revenue benefits and cost savings in the range of 400 million euros to 600 million euros in the medium term.</p> <p>In a call with journalists on Monday, Sagnieres said the companies' combined operations will be able to offer a much faster service to their customers. </p> <p>Today's announcement was years in the making, as Luxottica and Essilor, which have a market value of about 24 billion euros and 22 billion euros respectively, had explored a possible tie-up a few years ago <a href="">according to Reuters</a>. Luxottica said in September 2014 that discussions had taken place in 2013 but were dropped for a number of reasons, including shareholding governance issues. The second attempt was luckier.</p> <p>Ultimately, the deal appears to have been the natural outcome of little organic growth, fast management turnover, and concerns about shareholder upside. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>A year ago Luxottica announced the departure of its third chief executive in 17 months when Adil Mehboob-Khan, a former Procter &amp; Gamble executive, stepped down and Del Vecchio tightened his grip on the group by taking on executive powers. Long-standing CEO Andrea Guerra quit in 2014 after a rift with Del Vecchio. His successor, Enrico Cavatorta, left only six weeks into the job, also because of differences with Del Vecchio. </p> <p>&nbsp;</p> <p>Since taking the lead, Del Vecchio has stepped up investments to boost Luxottica's retail network and expanded its lens manufacturing business. However, revenue and profit growth have slowed in a tough U.S. market that contributes 59 percent of Luxottica's revenue while Del Vecchio has sought to increase control over pricing by limiting online discounts.</p> </blockquote> <p>The companies expect rapid growth in the global eyewear market, saying that at least 2.5 billion people in the world still suffer from uncorrected vision problems. Luxottica has been dogged by management upheaval in recent years, raising questions over Del Vecchio's succession plans and strategy. Some insiders have said a merger could help settle such issues.</p> <p></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1280" height="701" alt="" src="" /> </div> </div> </div> Andrea Guerra Business Clothing Economy Essilor Essilor Eyewear Hubert Sagnières Latin America Leonardo Del Vecchio Luxottica Luxury brands Oakley, Inc. Ray-Ban Reuters Sunglasses Mon, 16 Jan 2017 12:21:18 +0000 Tyler Durden 585566 at Tumbling Pound Rattles Global Markets; Chinese Stock Slide Forces Government Intervention <p>While US markets take the day off for MLK holiday, the rest of the trading world has been busy, perhaps nowhere more so than the sterling which continued its volatile session in advance of May's pre-hard Brexit speech, falling below $1.20 for the first time since October after the Sunday Times said May is ready to withdraw from tariff-free trade with the region in return for the ability to curb immigration and strike commercial deals with other countries. As a result, overnight pound-dollar volatility surged the most since the summer, and breached just twice previously: ahead of the Brexit vote, and before the Bank of England’s July and August meetings.</p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>The dollar rose, in an apparent bid for safety, rebounding after suffering its worst week since November when it was hit by a lack of clarity over the policies of U.S. President-elect Donald Trump, whose inauguration is on Friday. </p> <p>"(The movement) shows that people are looking ahead this week with Trump's inauguration and discussions on Brexit. There is a lot of uncertainty moving forward," Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central, told <a href="">Reuters</a>.</p> <p>Yields on low-risk German government bonds fell but those on Italian equivalents edged up after rating agency DBRS cut Italy's credit rating after markets closed on Friday in a move that could raise borrowing costs for the country's banks. Italy's downgrade will mean Italian banks will have to pay more to borrow money from the European Central Bank when they use the country's sovereign bonds as collateral. It may also make Italian debt less attractive for foreign buyers. German 10-year bond yields fell 2 basis points to 0.32 percent. Italian 10-year yields rose marginally to 1.90%.</p> <p>Elsewhere, equities slid and gold climbed over the same Brexit concerns while Donald Trump suggested in an interview other countries could break from the EU block. </p> <p>Having traded quietly lower for the past few days, Chinese stocks tumbled in early trading on the mainland and in Hong Kong’s offshore mkt amid weakness in Asian equities. The Shanghai Composite Index dropped as much as 2.2% to head for its fifth loss in as many days, its longest losing streak since Aug. 2015.However a sudden bout of late afternoon buying sent the loss down to just -0.3%, on speculation China's national team was once again back in the markets.</p> <p><a href=""><img src="" width="500" height="396" /></a></p> <p>A similar fate befell stocks in China’s second-largest equity market, the Shenzhen Composite, <a href="">which plunged the most in 10 months</a>, underscoring the increasing fragility of the nation’s financial assets. The Shenzhen Composite Index sank as much as 6.1%, the biggest loss since Feb. 29. Traders pointed to concern that regulators will accelerate the pace of initial public offerings, already at a 19-year high, diverting liquidity from existing shares. The Shanghai Composite Index dropped as much as 2.2 percent in minutes before paring losses amid speculated buying by state-backed funds.</p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>About 60 stocks fell by the daily 10% limit on the Shenzhen Composite Index, with turnover totaling 259.2 billion yuan ($37.6 billion), the highest in more than a month. Nearly 100 stocks were halted limit down on China's Nasdaq-equivalent Chinext exchange. </p> <p>Meanwhile, in Europe banks led European stocks lower after Goldman Sachs Group Inc. downgraded Royal Bank of Scotland Group Plc, citing exposure to volatile politics. </p> <p>In reaction to concerns about the May and Trump statements, markets have seen a subdued risk off tone, with the EURUSD sliding, and USDJPY hitting 113.65 overnight before rebounding back over 114. Bloomberg notes that British government officials are trying to limit damage to the pound will speak to major banks in London before the U.K. leader sets out her vision for leaving the bloc in a speech on Tuesday, according to people familiar with the situation. Meanwhile Trump predicted that Britain’s exit will be a success that will encourage others to do the same. He also branded NATO obsolete.</p> <p>“Markets are trading in risk aversion mode,” said Neil Jones, the head of hedge-fund sales at Mizuho Bank Ltd. in London. “Investors and corporates around the world are concerned by the prospect of a hard Brexit. Pound rallies are limited and weak, while plunges are harsh and prolonged.”</p> <p>Among the key notable risk moves, the Stoxx Europe 600 Index dropped 0.5 percent after retreating as much as 0.8 percent. Banks and insurers led losses in Europe after Royal Bank of Scotland slid 2.8%. The U.K.’s FTSE 100 Index dropped less than 0.1 percent, poised to halt a record streak of daily gains and 10 consecutive all-time highs, despite the latest slump in sterling. </p> <p>S&amp;P 500 futures declined 0.2% to 2,267. US stock markets are closed on Monday. </p> <p><em>In currencies, </em>sterling traded 1.1% lower to $1.2052 at 10:49 a.m. in London after touching $1.1986, its weakest level since October. Overnight implied volatility in the pound against the dollar climbed to a five-month high before May’s speech. The measure exceed 30% a level only breached before three events in 2016 - Britain’s EU vote and the Bank of England’s July and August meetings. The euro dropped 0.5 percent to $1.0588. The yen rose 0.2 percent to 114.25 per dollar, extending gains for the longest winning streak since June. Turkey’s lira resumed its slide after it weakened 1.2%.The currency jumped 3.7 percent over Thursday and Friday after the central bank took steps to prop it up by tightening liquidity.</p> <p>In commodities, gold climbed 0.4 percent, extending last week’s surge to trade at $1,202.25 an ounce. Oil rose 0.3 percent to $52.51 a barrel. Iron ore futures jumped as much as 6.4% to $82.12 a metric ton, the highest level since October 2014.</p> <p>* * * </p> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>Martin Luther King Day means a quiet start to a busy week culminating in Donald Trump's inauguration on Friday. I say quiet but I'll be forever haunted by suggesting back in January 2008 that the MLK Day ahead was likely to be very quiet only for it to herald one of the worst days in stock market history after the rouge trader's positions were discovered at SocGen. The CAC and DAX were down -6.83% and -7.16% respectively that day and I've never taken public holidays lightly since.</p> <p>It's hard to see the inauguration being a market moving event (famous last words given what I've said above) but it will mark the point where we'll start the landmark first 100 days in office when the phoney war will end and action starts. Of more market interest will likely be the UK PM's speech tomorrow night where it was reported in the Sunday Times that Theresa May will signal plans for a “hard Brexit’’ by saying she’s willing to quit the single market in order to regain control of migration and law making. Sterling fell -1.83% and -0.85% against the Euro and Dollar last week as speculation mounted about this speech. In Asia it's down -1.34% as we go to print at $1.202 although it did temporarily test the waters below the $1.200 mark at one stage – a level not seen since the October flash crash. There’s some suggestion that comments from President-elect Trump, who said that the US is prepared to offer the UK a quick and fair trade deal, as well as a Bloomberg report suggesting that the UK Government is putting in place plans to speak to major Banks to calm any nerves in the event of another big selloff, is helping to at least put a bit of a floor in the price for now.</p> <p>On a related note, interestingly Mark Carney speaks tonight with no details on what he'll discuss while we’ve also got the Supreme Court appeal on the government’s Triggering of Article 50 around the corner (DB expects this to be on one of the forthcoming two Wednesday’s). So plenty to keep the market on its toes in the short term.</p> <p>The other main events of the week are discussed at the end but the highlights are the ECB lending survey tomorrow which was a bit soft last quarter but may be helped by a rebounding European banking sector. UK, US and Euro inflation numbers and a Yellen speech appear on Wednesday. We have what might be a lower profile ECB policy meeting on Thursday with Friday seeing the mass China monthly data dump. We also see a ramping up of US earnings and the annual Davos shindig which will guarantee plenty of headlines. I'll know I've made it in life if I ever get invited this event.</p> <p>In the meantime the moves for Sterling this morning appear to have sparked a bit of across the board risk aversion in Asia to begin the week. The Shanghai Comp is currently -1.40% and is on a run of 5 consecutive down days which is actually the longest since August 2015. The Hang Seng (-1.03%), Nikkei (-1.09%) and Kospi (-0.56%) are also in the red while the ASX (+0.50%) is the only index currently trading higher with materials leading the way. Currencies in Asia are also generally weaker while 10y JGB yields are little changed around 0.040%. Interestingly they’ve now held above that 0% band for over 2 months now. </p> <p>Moving on. As we highlighted above, with earnings likely to be one of the events to keep an eye on this week, the early signal from Friday’s releases were fairly encouraging after JPM, BofA and Wells Fargo all came in with Q4 reports that bettered market expectations. A combination of cost cuts and strong FICC revenues seemed to be the driving force for JPM and BofA in particular while the former encouragingly said on the conference call that they are starting to see better data at a US retail level too. The results helped the S&amp;P 500 Financials index to close +0.55% which compares to a +0.18% gain for the wider S&amp;P500. The Dow closed -0.03% and it does feel like there is some unwinding of the Trump trades passing through still. The European session had been a much better story though with the Stoxx 600 closing +0.95% to help the index nudge back into positive territory for the week. Financials also outperformed in credit, particularly so in Europe where Senior and Sub Fins closed 4bps and 10bps tighter respectively, compared to a 2bp tighter move for Main.</p> <p>Away from earnings, the US data was also in the spotlight on Friday. Most notable was the December retail sales numbers where headline sales (+0.6% mom vs. +0.7% expected) missed by a smallish margin. There was a much bigger miss for the ex auto and gas component though (0.0% vs. +0.4% expected) while the control group component (+0.2% mom vs. +0.4% expected) also disappointed. The rest of the data was a bit of a wash. Headline PPI (+0.3% mom) printed in line, as did the core ex food, energy and trade print (+0.1% mom). Business inventories rose a little bit more than expected in November (+0.7% mom vs. +0.6% expected) while the flash University of Michigan consumer sentiment reading for this month was a touch on the softer side (98.1 vs. 98.5 expected; from 98.2 in December). That said 1y inflation expectations were bumped up from 2.2% to 2.6% while 5-10y inflation expectations were nudged up to 2.5% from 2.3%. The Atlanta Fed revised their Q4 GDP forecast down one-tenth to 2.8% following the retail sales numbers, while the USD index (-0.17%) softened a touch to finish with a -1.02% weekly loss. 10y Treasury yields did nudge up 3.3bps to 2.397% but still finished the week a few basis points down from the prior week close.</p> <p>There wasn’t much of note in Europe although it’s worth highlighting that our economists reported that their SIREN momentum and surprise indicators are now in the top deciles of their respective readings over the past decade. It’s been almost six years since both indices were in their top deciles. Indeed, their combined message stands close to the top 1% of its historical readings. They also go on to note that the SIREN momentum per reference quarter points to annualised euro area growth in Q4 2016 close to, if not above 2%, which would be the strongest quarter since Q1 2015. So while we’re expecting no fireworks from the ECB this week, the recent data – should it continue – could force the outright tapering debate into a sooner than expected timeframe.</p> <p>Staying in Europe, it’s worth noting that Canadian rating agency DBRS downgraded Italy’s sovereign rating on Friday to BBB High from A Low, citing their ability to pass reforms and the weakness in the banking sector and fragile growth. The decision will add to banking pressures for Italy given that it’ll force an increase in haircuts on some Italian collateral posted at the ECB. The move has also stripped Italy of what was its final A rating amongst the big 4 rating agencies.</p> <p>Turning now to the week ahead and expanding on the brief highlights at the top. With markets closed in the US today for Martin Luther King Day it’s an unsurprisingly quiet start to the week with just the Euro area trade balance reading in November due. Tuesday kicks off in Japan where industrial production data is due. In Europe there will be plenty of focus on the ECB’s bank lending survey due early on, while the December inflation report in the UK will also be under the spotlight. The January ZEW survey for Germany is also due out. Over in the US tomorrow the only data due out is the January Empire manufacturing print. </p> <p>Turning to Wednesday, Germany and the Euro area will release the final revisions to December CPI reports while the UK will release the latest labour market data. Over in the US inflation data will also be the focus with the December report due out. Industrial and manufacturing production, as well as the NAHB housing market index will also be due. With little else of note on Thursday morning the main focus will be on the ECB policy meeting. In the US we’ll get housing starts and building permits data as well initial jobless claims and the Philly Fed business outlook print. It’s a blockbuster end to the week in China on Friday with the Q4 GDP print due along with December activity indicators including industrial production, retail sales and fixed asset investment. During the European session we’ll get PPI in Germany and retail sales in the UK. There’s nothing of note in the US on Friday.</p> <p>As well as the above, there’s also plenty of Fedspeak this week. Both Dudley and Williams are scheduled to speak tomorrow, before Kashkari and Yellen speak on Wednesday. The latter is taking part in a&nbsp;&nbsp; discussion at the Commonwealth Club in San Francisco however is also expected to give an economic assessment. The Fed Chair then speaks again on Friday, along with Harker and Williams. The ECB’s Villeroy and Praet also speak today along with the BoE’s Carney while we’ll also get the usual ECB press conference on Thursday. Earnings will also be in the spotlight with Morgan Stanley tomorrow, Goldman Sachs, Citigroup and Netflix on Wednesday, IBM on Thursday and Schlumberger and General Electric on Friday due. Away from that world leaders will also congregate in Davos this week for the World Economic Forum while UK PM Theresa May is due to outline Brexit plans on Tuesday. Clearly the other big focus this week is the inauguration of Donald Trump as US President on Friday.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1200" height="675" alt="" src="" /> </div> </div> </div> 2015–16 stock market selloff ASX Atlanta Fed Bank Lending Survey Bank of England Bond Borrowing Costs Brexit British government Business CAC 40 Central banks China Citigroup Commonwealth Club in San Francisco Consumer Sentiment CPI Davos DBRS Donald Trump Donald Trump Dow 30 Economy Economy of the European Union Euro Europe European Central Bank European Central Bank European Union European Union Eurozone fixed flash FTSE 100 General Electric German government Germany goldman sachs Goldman Sachs Hang Seng 40 headlines Housing Market Housing Starts Initial Jobless Claims Italy Japan Jim Reid Michigan More United Morgan Stanley NAHB NASDAQ 100 Nikkei North Atlantic Treaty Organization Philly Fed Rating Agencies Rating Agency Reuters Royal Bank of Scotland S&P 500 S&P 500 financials Shenzhen Shenzhen Composite SocGen SSE 50 Stoxx 600 Supreme Court Trade Balance UK Government United Kingdom European Union membership referendum University Of Michigan University of Michigan Volatility Wells Fargo World Economic Forum Yen Yuan Mon, 16 Jan 2017 12:08:34 +0000 Tyler Durden 585565 at Can Marine Le Pen Pull Off French Election Stunner? Germany Loses No Matter Who Wins <p><a href=""><em>Submitted by Mike Shedlock via,</em></a></p> <p>Conventional wisdom suggests National Front candidate Marine le Pen will make it to the second round in French elections, then lose in a landslide to whoever her opponent happens to be.</p> <p>I believe<strong> le Pen&rsquo;s odds of winning it outright are far better than most think.</strong></p> <p><u><strong>Current Polls</strong></u></p> <p><a href=""><img alt="french-election-2017-01-14" class="alignnone size-large wp-image-43450" height="395" src=";h=395" width="529" /></a></p> <p>Chart from <a href=",_2017" target="_blank">Wikipedia</a>, with image clips added.</p> <p><u><strong>Top Five candidates</strong></u></p> <ol> <li>Marine le Pen: National Front &ndash; Eurosceptic, Anti-Immigration &ndash; 25%</li> <li>François Fillon: Republicans &ndash; Center Right &ndash; 24%</li> <li>Emmanuel Macron: En Marche! &ndash; Socialist &ndash; 17%</li> <li>Manuel Valls: Socialist &ndash; 11%</li> <li>Jean-Luc Mélenchon: Left Front &ndash; Socialist &ndash; 13%</li> </ol> <p>In France, the winners of each party square off in around one of national elections. If no one gets 50% of the vote, the top two square off in round two.</p> <p>With about 25% or so solid votes, le Pen is likely to make it to the second round. The others battle to see who comes up against le Pen.</p> <p><u><strong>Eurointelligence Reports</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>January 13: Yesterday night the seven candidates for the left primaries had their first debate. It was sometimes painful to watch and it is not clear how much the audience took home from the long catalogue of measures the candidates were quizzed about. All tried to differentiate themselves from François Hollande, and lashed out against the common enemy François Fillon. All were eager to show how presidential they are and how well they represent the real socialist heart. Though it did not look like they succeeded. One blogger wrote that there was one irreconcilable division, that is between the candidates and their audience.</p> <p>&nbsp;</p> <p>François Fillon, meanwhile, has his own rebellion to deal with. Laurent Wauquiez, Christian Estrosi, and other ex-Sarkozists, insist on making their own mark and call for changes to Fillon&rsquo;s programme. When Fillon made his big appearance in Nice, Estrosi told everyone in front of the presidential candidate that he is not a &ldquo;Filloniste&rdquo;. Laurent Wauquiez, who was fired by Fillon, is leading this mini-revolt. He recently called for a de-taxation of supplementary working hours, one of Sarkozy&rsquo;s key measures, which is absolutely not in the Fillon&rsquo;s programme, writes Marianne. Brice Hortefeux, another Sarkozy ally, said they want to enrich the programme. Fillon, however, remains firm and will not give in to those demands. His campaign chief dismissed those efforts as coming from bad losers or small players. The risk is that he may alienate the Sarkozy wing, though.</p> <p>&nbsp;</p> <p>January 12: For Macron, no politics goes without narrative and no narrative without ideal. So, what is his ideal? Some friends call him a real libertarian, others a real democrat, who has yet to find a socially empathetic narrative. In 2015 he outlined his three dreams &ndash; equality, Europe and industry. When it comes to Europe, he may well compare with Jacques Delors, who like him was not loved by the Socialist party and made his way. But this comparison only holds on Europe. Macron&rsquo;s economic ideal is inspired by new-Keynesian thinking, and the idea that social improvement is achieved by eliminating unjust rents that keep up barriers in society.</p> <p>&nbsp;</p> <p>January 11: Emmanuel Macron is the most pro-European among the presidential candidates, though will he really be ready to confront the Germans and change the course of the eurozone? We have our doubts, but he is the only candidate with at least an explicit eurozone agenda. In his speech at Humboldt University in Berlin yesterday he promised that, if elected, he would propose a common eurozone budget for investment and financial assistance in case of shocks. At the EU council in December 2017 he would propose democratic conventions in all EU countries for 6-10 months.</p> <p>&nbsp;</p> <p>We note that his Berlin speech did not make headlines in the French press. They were more interested in comparing Macron with the Socialist candidates or to François Fillon, or in the question whether Macron exaggerated his arguments. There is a clear national bias in reporting, as we have observed so many times in the past.</p> <p>&nbsp;</p> <p>The Front National took the chance to pick up on the point that Macron gave his speech in English rather than French. Pauvre France, tweeted Marine Le Pen. Florian Philippot writes it only shows Macron&rsquo;s disrespect for the French language, and that he does not believe in France.</p> <p>&nbsp;</p> <p>The latest Ifop poll for Paris Match shows Marine Le Pen (26%) advancing to the pole position for the first round, overtaking Francois Fillon (24%). Macron comes third (17%), far ahead of the Manuel Valls (10.5%). Le Pen is still expected to lose in the second round against Fillon (64% to 36%) or Macron (65% to 35%). We agree with François Heisbourg, who tweeted that this is a wildly unpredictable election.</p></blockquote> <p><u><strong>Wildly Unpredictable</strong></u></p> <p>I agree with Eurointelligence this is a wildly unpredictable election.</p> <p>Already we have seen &ldquo;wild&rdquo; results with former president Nicolas Sarkozy unexpectedly getting clobbered in the first round of the primary by Francois Fillon.</p> <p><u><strong>Germany a Loser No Matter Who Wins?</strong></u></p> <ul> <li><strong>Le Pen</strong>: Eurosceptic &ndash; Seeks better relations with Russia</li> <li><strong>Macron</strong>: Pro Europe but seeks a common eurozone budget for investment and financial assistance in case of shocks.</li> <li><strong>Mélenchon</strong>: A socialist who will not be in favor of reforms France desperately needs</li> <li><strong>Valls</strong>: After the 2016 Nice attack, he was booed for saying that &ldquo;France will have to live with terrorism.&rdquo;</li> <li><strong>Fillon</strong>: Fillon aims to reduce the public sector and cut 500,000 civil-service jobs.&nbsp; He wants the state healthcare program (securité sociale) to work better with fewer payments. Fillon is in favor of increasing the retirement age to 65. He seeks better relations with Russia.</li> </ul> <p>Of the five, Germany could work best with Fillon. But his pro-Russia stance poses at least a minor problem.</p> <p><u><strong>Fillon vs. Le Pen</strong></u></p> <p><a href=""><img alt="le-pen-fillon" class="alignnone size-large wp-image-43451" height="363" src=";h=363" width="529" /></a></p> <p><u><strong>Can Le Pen Win?</strong></u></p> <p>I think the current odds are wildly off, just as there were in the US with Trump. Le Pen is eurosceptic, but she will not seek to gut civil-service. Her message that France throws money at the EU will resonate with some. She regularly denounces France&rsquo;s bandwagoning towards the USA. Her anti-immigration message will appeal to anyone who blames immigration for loss of jobs.</p> <p><strong><em>Since Bottoming in November, Le Pen has steadily picked up voter approval vs. Fillon.</em></strong></p> <p><strong><em>What happened? Fillon had to disclose more and more of his policies in his&nbsp; primary vs. Sarkozy.</em></strong></p> <p>Many of Le Pen&rsquo;s ideas are socialistic at heart. The socialists will not want an increased work week, hundreds of thousands of civil service jobs cut, etc.</p> <p>In round one of the French presidential election there will be lots of mud thrown, some of it at le Pen, but most of it will go to Macron, Mélenchon, Valls, and Fillon, all wanting the second spot.</p> <p>It is by no means certain le Pen makes it to the second round, but that outcome is highly likely.</p> <p><strong>And if le Pen comes out better than expected, especially if there is a big mud-fight among the others, her chances in round 2 are far better than most believe.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="226" height="139" alt="" src="" /> </div> </div> </div> Emmanuel Macron ETC European people European Union Euroscepticism Eurozone France François Fillon French people French presidential election Front National Germany headlines Humboldt University in Berlin Jean-Luc Mélenchon Marine Le Pen National Front National Front Nicolas Sarkozy Nicolas Sarkozy Politics Politics of France Socialist Party Union for a Popular Movement Mon, 16 Jan 2017 09:00:00 +0000 Tyler Durden 585563 at A Hint of Gold Backwardation - Rising Gold Scarcity <p>Last month, we noted that there could be a trend change in progress. Not only are the prices of the metals rising (which is just a mirror-image of the dollar falling, from 27.6 milligrams of gold just before Christmas to currently under 26mg). But the scarcity of gold as we measure it, using the spread between the price of gold in the spot and futures markets, has been rising.</p> <p>What could cause this? One thing is for sure. It is not about the quantity of dollars. This theory is as popular as ever, despite the absolute lack of a rising gold price from September 2011-2016. The quantity of dollars has risen steadily since then.</p> <p>We write much about the frequent cases when traders place big bets on something which is wrong. But the fact of their big bets drives up the price. Suppose speculators were betting on a big increase in the quantity of dollars under Trump. Then we would see a rising price alright, but we would see a rising basis—our measure of abundance of gold to the market. This cannot explain the current market either.</p> <p>So what can? Recall Keith Weiner’s gold <a href="" target="_blank">backwardation thesis</a>. In times of stress or crisis, it is always the bid, and never the offer, which is withdrawn. Suppose the US Geological Survey were to make a dire announcement—THEY ARE NOT SAYING THIS, SO DO NOT MISCONSTRUE!! Suppose they said that there will be an earthquake in LA, an 11 on the Richter Scale. Nothing taller than a dollhouse will be left standing.</p> <p>There would be no lack of offers to sell real estate. Some would hold out hope of getting “their price”. Others would generously offer to discount it 10% or 25% from the previous level.</p> <p>However, what would be conspicuously absent would be a bid. Most likely from Santiago Chile to Vancouver, British Columbia and as far east as the Mississippi River. At least until the quake hit and the danger was passed.</p> <p>It is gold that will withdraw its bid on the dollar. The bid sputtered 8 years ago, and intermittently since then. Then it has mostly been steady in the past few years. And now there is a hint of it, in the February gold contract. It’s just what we call <em>temporary backwardation</em>—a short term blip confined to the near contract that is heading into expiry.</p> <p>However, we think it is notable. It means someone or many someones are switching their preference to gold, in spite of the higher yields available in the market now. Or maybe because of it. This preference, unlike speculators buying futures with leverage, is not about betting on price. It is about safety. Gold, unlike a bond, does not default.</p> <p>Is this the explanation, and the whole explanation? We don’t know. We can only report that there is a change in behavior in the market. Whereas previously—this was the pattern for years—a rising price was accompanied by rising basis. And now we have rising price and the cobasis is rising instead. Rising scarcity rather than rising abundance.</p> <p>To be sure, it is still a nascent trend. There is no guarantee that this won’t go poof like it has in the past. We will keep showing the data, and calling it like we see it.</p> <p>Indeed, look for a new website soon. We plan to have more charts, many more, and updated daily. Including one data series that all the experts said could not be calculated.</p> <p>Below, we will look at the supply and demand fundamentals for gold and silver. But first, the price action.</p> <p>The Prices of Gold and Silver</p> <p><img src="" alt="The Prices of Gold and Silver" title="The Prices of Gold and Silver" width="1064" height="365" /></p> <p>Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It fell a bit this week.</p> <p>The Ratio of the Gold Price to the Silver Price</p> <p><img src="" alt="The Ratio of the Gold Price to the Silver Price" title="The Ratio of the Gold Price to the Silver Price" width="1016" height="383" /></p> <p><em>For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.</em></p> <p>Here is the gold graph.</p> <p>The Gold Basis and Cobasis and the Dollar Price</p> <p><img src="" alt="The Gold Basis and Cobasis and the Dollar Price" title="The Gold Basis and Cobasis and the Dollar Price" width="1025" height="348" /></p> <p>Look at that rising red line, the cobasis (our measure of scarcity). Since mid-December, it has moved opposite to the green line, which is the price of the dollar. Previously, they had moved together. That is, a rising dollar (i.e. falling price of gold, as measured in dollars) went with rising scarcity of gold, and a falling dollar had falling scarcity.</p> <p>And now they are opposite. The more the price of gold is bid up (i.e. the more the dollar is sold), the scarcer gold becomes.</p> <p>On Friday, our calculated fundamental price was just about $100 over the market price.</p> <p>The February cobasis is +0.12%. That is, the Feb contract is backwardated.</p> <p>Now let’s look at silver.</p> <p>The Silver Basis and Cobasis and the Dollar Price</p> <p><img src="" alt="The Silver Basis and Cobasis and the Dollar Price" title="The Silver Basis and Cobasis and the Dollar Price" width="1018" height="330" /></p> <p>In silver the cobasis is rising a bit, though it is at a much lower level. Far from backwardation, it is -.90%.</p> <p>Our calculated fundamental price moved up 3 cents from last week. It is no longer above the market price, as that moved up a lot more.</p> <p>© 2016 <a href="" target="_blank">Monetary Metals</a></p> Backwardation Bond default Economy Finance Futures contract Futures exchange Futures markets Gold Investment Money Normal backwardation Precious metals Price Action Real estate Silver as an investment United States dollar Mon, 16 Jan 2017 07:33:56 +0000 Monetary Metals 585564 at At Least 20 Killed (6 Children) After Turkish Airlines 747 Crashes Into Kyrgyzstan Residences <p>Turkish Airlines Flight 6491, a cargo plane, has crashed into a residential area near the Kyrgyzstan capital of Bishkek, <strong>killing at least 20 people </strong>and injuring others, according to local authorities say.</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>The<strong> Boeing 747</strong> was flying<strong> from Hong Kong to Manas International Airport,</strong> which is located just northwest of the Kyrgyz capital Bishkek.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 329px;" /></a></p> <p><a href=""><em>As reports</em></a>, <strong>photos and videos from the scene showed a large fire burning shortly after the crash,</strong> and subsequent images after the fire was extinguished showed that multiple buildings were completely destroyed.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 356px;" /></a></p> <p>At least 15 buildings were affected.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 366px;" /></a></p> <p>Kyrgyzstan&#39;s Ministry of Emergency Situations said <strong>more than 20 people had been killed in the crash</strong>, though it provided no further details. The health ministry had earlier put the death toll at 16, which included 15 people on the ground, of whom<strong> 6 are children.</strong></p> <p><a href=""><img height="432" src="" width="600" /></a></p> <p>It was not immediately clear how many people were on board the aircraft when it went down, though a Boeing 747 cargo plane typically carries a crew of at least two people. <strong>Turkish Airlines did not immediately respond to a request for information.</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 364px;" /></a></p> <p><a href=""><em>RT reports</em></a> that among those killed are three crew members, RIA Novosti news agency reported. <strong>One of the crew members survived the crash, the local Emergencies Ministry said</strong>, as cited by TASS.</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 674px;" /></a></p> <p><strong>Members of the Kyrgyzstan government, including Vice prime minister Mukhammetkaliy Abulgaziev, are at the scene,</strong> according to reports.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 365px;" /></a></p> <p><strong>All flights to and from Kyrgyzstan&rsquo;s Manas airport have been suspended until further notice,</strong> RIA Novosti reported, citing local sources.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="590" height="350" alt="" src="" /> </div> </div> </div> Air Manas Asia Aviation Aviation accidents and incidents Bishkek Boeing Chuy Province Disaster Emergencies Ministry Epic of Manas Geography of Asia Hong Kong Iran Aseman Airlines Flight Kyrgyzstan Kyrgyzstan government Kyrgyzstan's Ministry of Emergency Situations Manas Manas International Airport Silk Way Airlines Transport Turkish Airlines Mon, 16 Jan 2017 04:11:02 +0000 Tyler Durden 585562 at US Military Deploys Nuke-Spotting Radar To Monitor North Korea <p><strong>The Sea-based X-Band Radar has deployed out of Pearl Harbor</strong> after North Korean dictator Kim Jong Un recently said his country was in the &quot;final stages&quot; of test-launching an intercontinental ballistic missile. Media sources reported that the SBX was <strong>being sent about 2,000 miles northwest of Hawaii</strong> to watch for a possible North Korean launch in coming months. <strong>The Pentagon downplayed the floating radar&#39;s Monday departure</strong>.</p> <p><a href=""><img height="350" src="" width="560" /></a></p> <p><a href=""><em>As The Honolulu Star Advertiser reports</em></a>, <strong>dispatching the &quot;SBX&quot; out to sea sends &quot;a very clear strategic message of deterrence to the ICBM threat of the North Korean leader that has intensified since first announced on Jan. 1,&quot; </strong>said Riki Ellison, chairman of the Missile Defense Advocacy Alliance, a Virginia-based nonprofit that advocates a strong U.S. missile defense.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Media sources reported that the SBX was being sent about 2,000 miles northwest of Hawaii to watch for a possible North Korean launch in coming months. The Pentagon downplayed the floating radar&#39;s Monday departure.</p> <p>&nbsp;</p> <p><em><strong>&quot;The SBX&#39;s current deployment is not based on any credible threat; however, we cannot discuss specifics for this particular mission while it is underway,&quot;</strong></em> Navy Cmdr. Gary Ross, a Defense Department spokesman, said in an email.</p> <p>&nbsp;</p> <p>Kim said in a Jan. 1 speech that North Korea was prepping for an ICBM test launch.</p> <p>&nbsp;</p> <p><em><strong>&quot;The SBX deployed in the Pacific Ocean enhances and boosts the probability of kill for each of the current 37 and soon to be 44 (ground-based interceptors) in both Alaska and California, if fired at a North Korean ICBM,&quot; </strong></em>Ellison said Thursday in an MDAA release.</p> <p>&nbsp;</p> <p>If the North Korean test ICBM does not target U.S. or allied territory, <strong>the SBX would be in a position &quot;to collect invaluable precision data on the warhead and debris of a North Korean ICBM test-flying in space,&quot; </strong>the release said.</p> <p>&nbsp;</p> <p>Defense Secretary Ash Carter also suggested this week that the United States might just monitor the launch if it didn&#39;t appear to be a threat.</p> </blockquote> <p><strong>The more than 280-foot-tall SBX is topped by a golf ball-like dome containing a phased array radar and is a hard-to-miss sight at its mooring off Ford Island.</strong> The powerful radar, which is only operated at sea, acquires, tracks and discriminates the flight characteristics of ballistic missiles.</p> <p><a href=""><img height="265" src="" width="560" /></a></p> <p>TheUnion of Concerned Scientists reported $2.2 billion SBX is designed for long-range precision tracking and discrimination of warheads from other objects, <em><strong>but it &quot;has a number of serious limitations, including a very limited electronic field of view.&quot;</strong></em></p> <p><em><strong>&nbsp;</strong></em>Based on shortcomings of the SBX, <strong>the U.S. Missile Defense Agency announced plans to develop by 2020 a long-range discrimination radar in Alaska,</strong> the scientific group said.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="568" height="355" alt="" src="" /> </div> </div> </div> Ammunition Ballistic missile Department of Defense Ford Intercontinental ballistic missile KIM Military Missile defense Missile Defense Advocacy Alliance Missile Defense Advocacy Alliance Missile Defense Agency North Korea North Korea Pentagon SBX Sea-based X-band Radar U.S. Missile Defense Agency United States national missile defense War Mon, 16 Jan 2017 03:45:00 +0000 Tyler Durden 585509 at In Scathing Attack, CIA Director Brennan Warns Trump To "Watch What He Says" <p>The <strong>departing CIA director John Brennan has launched a scathing attack on Donald Trump</strong>, warning the President-elect does not fully understand the threat posed to the US by Russia.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&quot;I think Mr. Trump has to understand that <strong>absolving Russia of various actions it has taken in the past number of years is a road that he needs to be very, very careful about moving down.</strong>&quot;</em></p> </blockquote> <p><a href=""><img height="319" src="" width="560" /></a></p> <p><a href=";feedName=worldNews&amp;utm_source=Twitter&amp;utm_medium=Social&amp;utm_campaign=Feed%3A+Reuters%2FworldNews+%28Reuters+World+News%29">As Reuters reports</a>, Brennan&#39;s comments, during an interview on &quot;Fox News Sunday,&quot; exposed the simmering tensions between the president-elect and the intelligence community he has criticized and is on the verge of commanding.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&quot;Spontaneity is not something that protects national security interests and so therefore when he speaks or when he reacts, just make sure he understands that the implications and impact on the United States could be profound,&quot; </strong></em>Brennan said.</p> <p>&nbsp;</p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p>&nbsp;</p> <p>&quot;It&#39;s more than just about Mr. Trump.<strong> It&#39;s about the United States of America.</strong>&quot;</p> <p>&nbsp;</p> <p><strong>&quot;What I do find outrageous is equating intelligence community with Nazi Germany,&quot; Brennan said. &quot;I do take great umbrage at that.&quot;</strong></p> </blockquote> <p>Brennan also questioned the message it sends to the world if the president-elect broadcasts he does not have confidence in the United States&#39; own intelligence agencies.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;<strong>The world is watching now what Trump says and listening very carefully.</strong> If he doesn&rsquo;t have confidence in the intelligence community, what signal does that send to our partners and allies as well as our adversaries?&quot;</p> <p>&nbsp;</p> <p><strong><em>&quot;There is no basis for Mr Trump to point fingers at the intelligence community for &#39;leaking&#39; information that was already available publicly,&quot; </em></strong></p> </blockquote> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p>Speaking earlier on Sunday, <strong>President Barack Obama&#39;s chief of staff Denis McDonough said the intelligence community was &quot;staffed by an unbelievably cadre of professionals&quot;</strong> and he dismissed the notion that they would seek to undermine Mr Trump&#39;s victory as the President-elect has suggested. As <a href="" target="_blank"><strong>Jacob G. Hornberger warns</strong></a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>In a truly remarkable bit of honesty and candor regarding the U.S. national-security establishment, new Senate minority leader Charles Schumer has accused President-elect Trump of &ldquo;being really dumb.&rdquo;&hellip; for taking on the CIA and questioning its conclusions regarding Russia.</strong></p> <p>&nbsp;</p> <p><strong>&ldquo;Let me tell you, you take on the intelligence community, they have six ways from Sunday at getting back at you&hellip;. He&rsquo;s being really dumb to do this.&rdquo;</strong></p> <p>&nbsp;</p> <p>[&hellip;]</p> <p>&nbsp;</p> <p><strong>No president since John F. Kennedy has dared to take on the CIA or the rest of the national security establishment </strong>[&hellip;] They knew that if they opposed the national-security establishment at a fundamental level, they would be subjected to retaliatory measures.</p> <p>&nbsp;</p> <p>Kennedy&hellip; After the Bay of Pigs, he vowed to tear the CIA into a thousand pieces and scatter them to the winds. He also fired CIA Director Allen Dulles, who, in a rather unusual twist of fate, would later be appointed to the Warren Commission to investigate Kennedy&rsquo;s murder.</p> <p>&nbsp;</p> <p>Kennedy&rsquo;s antipathy toward the CIA gradually extended to what President Eisenhower had termed the military-industrial complex, especially when it proposed Operation Northwoods, <strong>which called for fraudulent terrorist attacks to serve as a pretext for invading Cuba, and when it suggested that Kennedy initiate a surprise nuclear attack on the Soviet Union.</strong></p> <p>&nbsp;</p> <p>[&hellip;]</p> <p>&nbsp;</p> <p><strong>Worst of all, from the standpoint of the national-security establishment, [Kennedy] initiated secret personal negotiations with Soviet Premier Nikita Khrushchev and Cuban leader Fidel Castro</strong>, both of whom, by this time, were on the same page as Kennedy.</p> <p>&nbsp;</p> <p>[&hellip;]</p> <p>&nbsp;</p> <p>Kennedy was fully aware of the danger he faced by taking on such a formidable enemy.</p> </blockquote> <p>And, <a href="">as we previously noted</a>, to the extent that President Kennedy consciously stood up to the system, he paid the price for his attempt at independent wielding of power from the Oval Office.</p> <p>It is a shuddering thought. A sharp lesson in history that must not be misinterpreted.</p> <p><strong>The implications for Trump are quite clear.</strong> If his refusal to take intelligence briefings, or follow CIA advice is serious, then serious consequences will follow. If Trump is serious about peace with Putin when they insist on war, there will be a problem.</p> <p>The CIA director will likely <strong>be replaced by Mr Trump&#39;s pick Mike Pompeo next week.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="541" height="308" alt="" src="" /> </div> </div> </div> American people of German descent Barack Obama Business Central Intelligence Agency Central Intelligence Agency Charles Schumer Climate change skepticism and denial Director of the Central Intelligence Agency Donald Trump Donald Trump Donald Trump presidential campaign Fox News Germany Mike Pence national security Political positions of Donald Trump Politics Politics of the United States Reuters Senate The Apprentice Trump Warren Commission Mon, 16 Jan 2017 03:25:00 +0000 Tyler Durden 585507 at Trump's Delusion: Halting Eurasian Integration And Saving 'US World Order' <p><a href=""><em>Submitted by Federico Pieraccini via,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>The preceding three parts of this series <strong>analyzed the mechanisms that drive great powers.</strong> </em></p> <p>&nbsp;</p> <p><em>The most in-depth understanding of the issues concerned the&nbsp;<a href=""><strong>determination of the objectives&nbsp;and logic that accompany the expansion of an empire</strong></a>. </em></p> <p>&nbsp;</p> <p><em>Geopolitical theories, the concrete application of&nbsp;foreign-policy doctrines, and <a href=""><strong>concrete actions that the United States employed to aspire to global dominance</strong></a> were examined. </em></p> <p>&nbsp;</p> <p><em>Finally, the last bit of analysis focused particularly on<a href=""><strong> how&nbsp;Iran, China and Russia&nbsp;have adopted over the years a variety of cultural, economic and military moves to repel the continual assault on their sovereignty by the West</strong></a> with specific attention was given to the American drive for global hegemony and how this has actually accelerated the end of the &#39;unipolar moment&#39;, impelling the emergence of a multipolar world order.</em></p> <p>&nbsp;</p> <p><em>In this fourth and final analysis I will focus on a possible strategic shift in the approach to foreign policy from Washington. <strong>The most likely hypothesis suggests that Trump intends to attempt to prevent the ongoing integration between Russia, China and Iran</strong>.</em></p> </blockquote> <p>The failed foreign-policy strategy of the neoconservatives and neoliberals has served to<strong> dramatically reduce Washington&#39;s role and influence in the world</strong>. Important alliances are being forged without seeking the assent of the United States, and the world model envisioned in the early 1990s &ndash; from Bush to Kagan and all the signatories of the PNAC founding statement of principles&nbsp;&ndash;&nbsp;is increasingly coming undone. Donald<strong> Trump&rsquo;s victory represents, in all likelihood, the last decisive blow to a series of foreign-policy strategies that in the end undermined the much-prized leadership of the United States.</strong> The ceasefire in Syria, reached thanks to an agreement between Turkey and Russia, notably excluded the United States.</p> <p>The military, media, financial and cultural assault successfully prosecuted over decades by Washington finally seems to have met its Waterloo at the hands of the axis represented by Iran, Russia and China. The recent media successes (RT, Press TV and many alternative media), political resistance (Assad is still president of Syria), diplomatic struggles (negotiations in Syria without Washington as an intermediary) and military planning (Liberation of Aleppo from terrorists) are a result of the efforts of Iran, Russia and China. Their success in all these fields of operations are having direct consequences and implications for the internal affairs of countries like the United Kingdom and the United States.</p> <p>The relentless efforts by the majority of Western political representatives for a successful model of globalization<strong> has created a parasitic system of turbo capitalism that entails a complete loss of sovereignty by America&rsquo;s allies. </strong>Brexit and Trump have served as an expression of ordinary people&rsquo;s rejection of these economic and political regimes under which they live.</p> <p>In Syria, Washington and its puppet allies have almost exited the scene without achieving their strategic goal of removing Assad from power. <strong>Within the American political system, the establishment, spanning from Clinton to Obama, was swept away for their economic and political failures. </strong>The mainstream media, spewing an endless stream of propaganda aimed at sustaining the political elite, completely lost their battle to appear credible, reaching unprecedented peaks of partisanship and immorality.</p> <p><strong>Donald Trump has emerged with a new approach to foreign policy affairs</strong>, shaped by various political thinkers of the realist mould, such as Kenneth Waltz and John Mearsheimer. First on the to-do list is doing away with all the recent neoconservative and neoliberal policies of foreign intervention (Responsibility to Protect - R2P) and soft-power campaigns in favor of human rights. And there will be no more UN resolutions deviously employed as cover to bomb nations back into the stone age (Libya). Trump does not believe in the central role of the UN in international affairs, reaffirming this repeatedly during his campaign.</p> <p><strong>The Trump administration intends to end the policy of regime change, interference in the internal affairs of foreign governments, Arab Springs, and color revolutions. </strong>Such efforts, they argue, are ultimately ineffective anyway and are too costly in terms of political credibility. In Ukraine the Americans have allied themselves with supporters of the Nazi Stepan Bandera, and in the Middle East they finance or indirectly support al Qaeda and al Nusra Front. These tactics, infamously branded as &#39;leading from behind&#39;, never achieved their desired results. The Middle East is in chaos, with a Moscow-Tehran axis emerging and going from strength to strength. In Ukraine, the government in Kiev not only seems incapable of complying with the Minsk agreements but also of prosecuting a new military campaign with no guarantees from their European and American partners.</p> <p><strong>There is a wild card that Trump hopes to play in the first months of his presidency. </strong>The strategy will focus on the inherited chaotic situation in the Middle East and Ukraine. Obama will be blamed for the previous chaos, it will be argued that sanctions against the Russian Federation should be removed, and Moscow will be given a free hand in the Middle East. <strong><em>In one fell swoop, the future president may decide not to decide directly on the Middle East or on Ukraine, avoiding any further involvement and instead finally making a decision in the national interest of his country.</em></strong></p> <p>A sustainable strategy may finally be attained by remaining passive towards the developments in the Middle East, especially on the Syrian front, leaving it firmly in Russian hands, while emphasizing at the same time the effort against Daesh in cooperation with Moscow. Another wise choice would see Kiev falling by the wayside, trashing Ukrainian ambitions to regain the Donbass and recover Crimea. Finally, removing sanctions would allow the next president to strengthen the alliance with European partners (a diplomatic necessity that Trump must make as the new president). <strong>Over two years the EU has suffered from economic suicide in the name of a failed policy strategy imposed by Washington.</strong> The Trump presidency will seek to normalize relations between Moscow and Washington as well as with European allies more willing to actively collaborate with the Trump administration.</p> <p>The Middle East will accordingly see a decline in violence, increasing the chances of seeing an end to the conflict in Syria. This plan for the initial phase of the Trump presidency has been widely announced during the months leading up to his election, both by himself or by members of his staff.</p> <p><strong>The implicit message is to seek dialogue and cooperation with all nations.</strong> Probably what lies behind these overtures is actually an explicit willingness to try to break the cooperation between Russia, Iran and China. The motivations for this action stem from the implications for the United States if a full military, cultural and economic alliance between Beijing, Moscow and Tehran is formed. It would almost ultimately consign the United States to irrelevance on the grand chessboard of international relations.</p> <p><strong>More realistically, Trump aims to shift the focus of the United States from the Atlantic to the Pacific, where the largest US commercial interests will reside in the future; a shift of focus from the Middle East to the South and East China Seas.</strong> The geopolitical reasons behind this decision, and the guiding theories behind it, were addressed particularly in the first article of this series. In summary, Trump intends to accelerate Obama&rsquo;s Asian pivot, bringing about profound changes to US foreign policy. Smoking the peace pipe with Russia will free up resources (to &quot;build up our military&quot; in naval terms) to be focused in the Pacific. He intends to emphasize the importance of bilateral relations between allies (&quot;free riders&quot; Japan and South Korea) to focus on containing China.</p> <p><strong>The wildcard that Trump hopes to play in breaking the alliance is called Russia. </strong>Thanks to previous peace talks developed with Moscow, Trump hopes for a reprise of Kissinger&#39;s strategy with China in 1979, with the addition of a promise of non-interference in the Middle East against Iran and Syria by the United States. In an exchange unlikely to happen, the American administration is hoping to convince the Kremlin that no action will be taken in the Middle East against Moscow and its allies, including Iran, in exchange for help in containing the Republic of China.</p> <p>With this in mind, Trump&rsquo;s choice of a very questionable personality to liaise between Washington and Tel Aviv, combined with the strong rhetoric of Trump against the Islamic Republic of Iran, and the equally harsh responses from Tehran to the threats of the future president, seem to satisfy the roles and rhetoric of all parties involved. No actions, only rhetoric. For Tehran and Tel Aviv it is easier to argue that to sign an agreement. <strong>The Iranian nuclear deal will, for this reason, continue to be a major point of tension, but also the guarantor of unlikely military action.</strong></p> <p>The real problem for the future administration in this strategy is offering a consistent plan of non-interference in the Middle East. Putin is well aware, in any case, that Washington is not able to intervene and change the fate of the balance of power that is forming in the Middle East. Trump&rsquo;s indirect offer not to take action in the Middle East is at best a bluff that will not last long. Trump ignores (or, being a good negotiator, pretends not to want to see) that very few cards in his deck can be attractive to Moscow. The alliance between Moscow, Beijing and Tehran is firm and certified by strategic exchanges in many fields, a trend promising tremendous growth. <strong>The war in Syria has shown the results of effective coordination between the three nations.</strong> The addition of the Islamic Republic of Iran to the Shanghai Cooperation Organization (SCO) will further strengthen security ties, without forgetting that the north-south corridor between Russia and Iran also ensures stability in an area of ??the globe where the danger of subversive terrorism is very high..</p> <p><strong>During the period of sanctions, Russia and China signed the most important and immense trade agreement in history, sealing Moscow&rsquo;s turn toward the east. </strong>Such a move involves a level of strategic planning that goes well beyond the four years of a presidential term. If Trump hopes to achieve cooperation of some kind with Putin to further his grand strategy, he is deluding himself. However, he must out of necessity cooperate against terrorism in the Middle East with Russia and moderate Washington&rsquo;s allies in the region who support terrorist. He will be forced to remove sanctions and reset the international relationship between Washington and Moscow, freeing the EU from a counterproductive situation in opposing the Russian Federation. He will probably then decide to ignore permanently the matter of Ukraine and Crimea, burying one of the tactics and strategies that was the cornerstone of the neoconservatives, namely an attempt to prepare the Ukrainian army to face the Russian Federation militarily, then drawing in NATO into an all-out war.</p> <p>Trump knows he is in an inferior negotiating position vis-a-vis Moscow and Beijing. <strong>He is well aware that effecting a rupture of relations between China, Russia and Iran is almost impossible. </strong>The only advantage, from his point of view, is having more room to negotiate with Moscow, given the abysmal levels of relations between Putin and Obama.</p> <p>Naturally, if Trump should really embark on such a mission of dividing the Eurasian continent, he is likely to expect very specific guarantees about the future attitude of Moscow towards Beijing. Putin will have very few problems in playing him to his advantage. Moscow has everything to gain from this situation. Trump hopes to have on his side the Russian Federation, then proceed to convince countries like Japan, the Philippines and South Korea that containing China is the only viable strategy for limiting China&rsquo;s influence and future domination over Asia. These actions will provoke the opposite effects to those intended, thereby promoting further integration of Eurasia (AIIB and Silk Road 2.0), as shown by Obama&rsquo;s Asian pivot. <strong>Any attempt to impose a new Asian pivot will end up in flames, as has been the case with the commercial Trans-Pacific Partnership Agreement.</strong></p> <p>In the meantime, with the removal of sanctions, <strong>many EU countries will finally be able to resume their energy and technology integration with the Eurasian continent,</strong> especially with Russia. Japan will in all likelihood be able to sign a peace treaty with Russia without violating its obligations to Washington.</p> <p>In general, the removal of sanctions on Russia will accelerate many projects placed on hold by tensions between Washington and Moscow. Trump&rsquo;s attitude, if he decides to have an aggressive posture towards Beijing, will force the Chinese elite to see what lies in store for it. Washington does not intend to have joint relations with Beijing. <strong>Trump has repeatedly reiterated the thoughts of Mearsheimer, a prominent contemporary geopolitical theorist, who states that in less than a decade China&rsquo;s growth will likely pose a threat to the United States as a superpower.</strong> Mearsheimer argues that within a few years, thanks to the growth of nominal GDP and demographic increase, the Republic of China will be the first military power in the world to dominate Asia. Trump intends to concentrate all his efforts, in terms of foreign policy, on this factor. To succeed, he understands that he needs to have on his side several regional players (Japan, South Korea, Vietnam, India, the Philippines), especially the Russian Federation, as well as oversee a sea change that will transfer the attention in Washington from the Atlantic to the Pacific .</p> <p><strong>This period of time will represent for Moscow, Beijing and Tehran a time to make definitive choices, a season in which the national policy-makers of these nations will have to understand what road to embark on.</strong> For Tehran, the cards are dealt face up, with a predetermined role as regional power. For Moscow and Beijing the issue is far more complicated. Much will depend on how Beijing intends to oppose openly any hostile action of Trump. Moscow has for many years openly questioned the world order led by Washington. Beijing understandably seems reluctant to engage in direct confrontation. In all likelihood, Trump and his realist foreign-policy attitude will lead the Chinese elite to understand that Washington considers itself to be the only one entitled to grant world order. The Chinese elites need to understand that the only sustainable path for the future is the construction, with all actors, of a multipolar world that includes Washington, New Delhi, Moscow, Tehran, London and Brussels. Realistically, it is hard to think that the new administration would alter the strategic partnership formed between China, Iran and Russia. After all, Trump would retrace the same steps of his predecessors, simply by changing the angle of approach and trying to further shuffle the cards of international relations. The decision to improve the world through cooperation and mutual respect does not exactly match the aspirations of the American deep state that seeks war, chaos and conflicts.</p> <p>The big difference we will see with a candidate like Trump is easy.<strong> Once all diplomatic efforts have failed against Beijing, instead of doubling down with military or terrorist efforts, the strategy will be abandoned in silence.</strong> The strong expressions against Beijing, the feared increase in military spending for the Pacific (to satisfy the industrial-military apparatus), and the rhetoric against Iran (to appease the Israel lobby), will be used to moderate the deep state&rsquo;s intentions, <strong>while Trump will try to focus on economics and security (counter-terrorism) and much less on foreign policy.</strong></p> <h3><u>Series Conclusion.</u></h3> <p>This series has sought to invite readers to reflect on the epochal events that are occurring. <strong>The global hegemonic project that was supposed to be realized with a Clinton presidency has been stopped.</strong> The inevitable military confrontation with Russia, Iran and China has been averted thanks to the preventive actions of these countries together with the defeat of the Democratic candidate. <strong>A huge blow has been delivered to the establishment, with its impulse toward globalism and US imperialism.</strong></p> <p><strong>The emergence of a multipolar world order has altered the way nations interact with each other in the field of international relations. </strong>Washington is no longer the only referent, and it is this that represents a pivotal transition from a unipolar world dominated by Washington. The mechanisms that regulate the great powers have varied in form and content, leading to an almost unprecedented international situation. <strong>The future multipolar world order, historically unstable, will in fact hold the promise of stability thanks to the actions of opposing nations to the American superpower.</strong> United they will stabilize the world.</p> <p><strong>The key to a sustainable future world order is the synergy between the newly formed Beijing, Moscow and Tehran axis as an economic, military and cultural counterweight to the US. </strong>The union and the alliance of these three nations has created a new super-pole, able to balance effectively the often destructive actions of Washington. Rather than a multipolar world order, we are actually faced with a situation of two superpowers, one of which is based on the integration between dozens of nations on more than two continents. It is a new era that will accompany us over the coming decades. <strong>The unipolar world is over &ndash; forever!</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="630" height="326" alt="" src="" /> </div> </div> </div> AIIB al-Qaeda American administration American people of German descent Business China Climate change skepticism and denial Donald Trump Donald Trump East China European Union Foreign policy of the United States India International reactions to the United States presidential election Iran Israel Japan Middle East Middle East Nominal GDP North Atlantic Treaty Organization Political positions of Donald Trump Politics Politics of the United States Shanghai Cooperation Organization South China The Apprentice Trump Administration Turkey Ukraine Ukrainian army United Kingdom United Nations United States WWE Hall of Fame Mon, 16 Jan 2017 03:15:00 +0000 Tyler Durden 585550 at Davos Elite Eat $40 Hot Dogs While "Struggling For Answers", Cowering in "Silent Fear" <p>For those unfamiliar with what goes on at the annual January boondoggle at the World Economic Forum in Davos, here is the simple breakdown. </p> <p>Officially, heads of state, captains of industry, prominent academics, philanthropists and a retinue of journalists, celebrities and hangers-on will descend Tuesday on the picturesque alpine village of Davos, Switzerland, for the World Economic Forum; </p> <p>Unofficially, it's the world's biggest echo chamber, where wealthy, influential and/or powerful people, yet vastly out of touch with the rest of the world, sit down with other wealthy, influential and/or powerful people who are just as out of touch, to validate to each other that nobody really knows anything (also known as the "ratings agency effect"), but because the press is there and fails to point out that these emperors of industry, commerce, entertainment and politics are naked in hopes of maintaining their annual invitation and direct access, everyone goes home happy. And just as clueless. </p> <p>Hence Trump.</p> <p><img src="" width="500" height="300" /></p> <p>Case in point, as <a href="">Reuters fondly recalls</a>, last year, <strong>the consensus here was that Trump had no chance of being elected </strong>(actually, last January the world's elites were far more worried about plunging markets as we pointed out in "<a href="">How Billionaires Are Investing In 2016: "The Only Winning Move Is Not To Play The Game</a>").&nbsp;</p> <p>Trump was elected. His victory, less than half a year after Britain voted to leave the European Union, "was a slap at the principles that elites in Davos have long held dear, from globalization and free trade to multilateralism."</p> <p>We'll get to Trump in a second, but first some more on the background of this festival which revels in everything the populist backlash of 2016 found excerable, courtesy of the <a href="">NYT</a>.</p> <p><strong>Who Attends the Conference?</strong></p> <p>More than 2,500 people will attend this year’s conference from 90 different countries, paying up to $50,000 per person to attend (that of course excludes the ultra-celebrities who get in for free). In fact, so many people are attending, some of the <a href="">local staff may sleep in shipping containers</a>. Most of the participants are corporate executives, but more than two dozen heads of state and government are expected to attend.&nbsp; Theresa May, the prime minister of Britain, and Xi Jinping, president of China, are attending the conference for the first time this year. Xi is the first Chinese president to attend the event, and will also be the star attraction. His presence is being seen as a sign of Beijing's growing weight in the world at a time when Trump is promising a more insular, "America first" approach and Europe is pre-occupied with its own troubles, from Brexit to terrorism.</p> <p>On the other hand, Trump has decided not to officially send a member of his team as it <a href="">would "betray his populist-fueled movement.</a>" Likewise German chancellor Merkel will be absent, worried about her own image ahead of the 2017 German elections.</p> <p>Aside from politicians, Shakira and the actor Forest Whitaker are to receive awards this year. Expected attendees include Sheryl Sandberg, COO at Facebook; Matt Damon; Formula One driver Nico Rosberg; and Alibaba's Jack Ma. While only 17% of last year’s participants were women, according to the forum, this year the number is not expected to change.</p> <p><strong>How Are These People Kept Safe?</strong></p> <p>All of those dignitaries need security. During the conference, Davos transforms into a fortress. Roadblocks restrict traffic on the city’s main streets and checkpoints spring up outside each venue. At the Congress Center, where the main panels take place, and at each hotel that hosts parties and talks, attendees pass metal detectors, armed guards and beneath the watchful eyes of sharpshooters. In the past, the conference was targeted by protesters associated with the anticapitalist Occupy movement. In 2013, members of the Ukrainian activist group Femen were arrested after a topless demonstration. The Swiss government estimated it will spend 8 million Swiss francs, about $8 million, on security, but said that number could increase if there were a credible threat to the conference. “Switzerland is still not regarded as a priority target for jihadist terrorists,” the Federal Council said on its website. “On the other hand, even on Swiss soil, the interests of states participating in the military coalition against the so-called Islamic State face an increased threat.”</p> <p><strong>Is It as Elitist as It Sounds?</strong></p> <p>Yes. The meeting runs on a tiered system of colored badges <em><strong>denoting just how important one is, or is not. </strong></em>White badges are for attendees able to attend any official event and make full use of the forum’s facilities. Orange badges are reserved for the 500 journalists who cover the forum, but are not allowed at some parties. Other badges, like purple ones, denote technical or support staff and limit their holders to a few areas. Local hotels like the Belvedere and the InterContinental often sell their own badges to the bankers and consultants who descend upon Davos to strike deals and chat up clients. These souls camp out at the hotels, renting rooms for business meetings by day and soiree hopping at night.</p> <p><strong>What About the Parties? </strong></p> <p>Beyond the boring, ineffective, and circle-jerking lectures and panel discussions, a much more important agenda unfolds after sunset. One notable event, according to the NYT, is a simulation of a refugee’s experience, where Davos attendees crawl on their hands and knees and pretend to flee from advancing armies. <strong>It is one of the most popular events every year. </strong>The theme of this year’s conference is “Responsive and Responsible Leadership.” But attendees like to play as hard as they work.</p> <p>There are several official cocktail receptions, but the action really lies in a galaxy of events hosted by corporations. Some are small, intimate dinners that feature the likes of Leonardo DiCaprio and Bono. Others are dazzling affairs worthy of a modern day Gatsby: JPMorgan Chase, for example, has previously taken over the Kirchner Museum Davos for drinks with its chief executive, Jamie Dimon, and Tony Blair, the former British prime minister. Google’s annual party at the InterContinental Hotel has become the hottest ticket in town. The investor Anthony Scaramucci, now an adviser to Donald J. Trump, for years has hosted a reception at the famed Hotel Europe featuring a sometimes eye-popping list of high-end Champagne and Bordeaux red wine. A more recent up-and-comer is hosted by, a business software maker, whose chief, Marc Benioff, is one of the forum’s most ardent boosters. Last year’s Salesforce party included Mr. Benioff flying in scores of fresh flower leis and a band from Hawaii, as Eric Schmidt of Google and other tech notables danced in a corner. Several years ago, Sean Parker of Napster and Facebook fame, <strong>hosted an over-the-top gathering that featured stuffed animal heads shooting laser beams out of their eyes. </strong>And the Russian billionaire Oleg Deripaska has thrown opulent gatherings at a nearby villa where the Champagne flowed freely For a nightcap, the Davos crowd traditionally retires to the Tonic Bar at Hotel Europe, sipping cocktails while the forum fixture Barry Colson leads the crowd in Billy Joel singalongs.</p> <p>* * * </p> <p>With the background of the event covered, we once again focus on the key topic at hand, namely quite ironic "<em>social and wealth inequality</em>" - which incidentally has been a core topic for the past several years, demonstrating just how clueless Davos really is, and of course Trump.</p> <p>Just so readers can get a sense of just how delightfully surreal this whole event is, one of the most <a href="">prominent panels is called </a><strong>"Squeezed and Angry: How to Fix the Middle-Class Crisis</strong>"</p> <p>Its description: "<strong>Poor employment prospects and low-income growth in many developed economies have laid the groundwork for the rise of populism. Did policy-makers ignore these trends or do too little to redress them? What can be done to restore growth in the middle class and confidence in the future?</strong>"</p> <p>Who are these experts on the woes of the middle class? Read em and weep: <strong>Ray Dalio </strong>- a billiionaire who encourages spying on his employees; <strong>Christine Lagarde </strong>- a convicted criminal and tax evader, head of an organization that takes from the poor and gives to the world's creditors; and <strong>Larry Summers, </strong>a firm believer, and doer, in wealth redistribution from the middle classes to the wealthy.</p> <p>* * * </p> <p>While in previous years the Davos party was not to be spoiled with any actual concerns about the real world violating the inner sanctum of the world's uber-poseurs, this year something has changed. </p> <p>Beneath the veneer of optimism over the economic outlook lurks acute anxiety about an increasingly toxic political climate and a deep sense of uncertainty surrounding the U.S. presidency of Donald Trump, who will be quite symoblically, even if purely accidentally, inaugurated on the final day of the forum.</p> <p>And with Trump's election come worries that the ivory towers inhabited by the 2,500 or so Davosites, are far less sturdy than previously believed.&nbsp; "Regardless of how you view Trump and his positions, his election has led to a deep, deep sense of uncertainty and that will cast a long shadow over Davos," said Jean-Marie Guehenno, CEO of International Crisis Group, a conflict resolution think-tank. </p> <p>Moises Naim of the Carnegie Endowment for International Peace was even more blunt, suggesting that the people in Davos are even more clueless than usual, which is saying quite a lot.</p> <p><strong>"There is a consensus that something huge is going on, global and in many respects unprecedented. But we don't know what the causes are, nor how to deal with it.</strong>"</p> <p>Brilliant.</p> <p>* * * </p> <p>Meanwhile, in an attempt to figure out the causes and "how to deal with it", the participants in the World Economic Forum, which runs from Jan. 17 to 20, will partake in such panels as the abovementioned "<strong>Squeezed and Angry: How to Fix the Middle Class Crisis", "Politics of Fear or Rebellion of the Forgotten?", "Tolerance at the Tipping Point</strong>?" and "<strong>The Post-EU Era".</strong></p> <p>The central question in Davos, a four-day affair of panel discussions, lunches and cocktail parties that delve into subjects as diverse as terrorism, artificial intelligence and wellness<strong>, is whether leaders can agree on the root causes of public anger and begin to articulate a response... aside from the forum participants themselves of course.</strong> </p> <p>A WEF report on global risks released before Davos highlighted "diminishing public trust in institutions" and noted that rebuilding faith in the political process and leaders would be a "difficult task". Guy Standing, the author of several books on the new "precariat", a class of people who lack job security and reliable earnings, believes more people are coming around to the idea that free-market capitalism needs to be overhauled, including those that have benefited most from it.</p> <p>"The mainstream corporate types don't want Trump and far-right authoritarians," said Standing, who has been invited to Davos for the first time. "They want a sustainable global economy in which they can do business. More and more of them are sensible enough to realize that they have overreached." </p> <p>But Ian Bremmer, president of U.S.-based political risk consultancy Eurasia Group, is not so sure, and he <a href="">recounted ro Reuters </a>a recent trip to Goldman Sachs headquarters in New York where he saw bankers "<strong>rejoicing in the elevators" at the surge in stock markets and the prospect of tax cuts and deregulation under Trump</strong>. Both Goldman CEO Lloyd Blankfein and his JP Morgan counterpart Jamie Dimon will be in Davos. </p> <p>It remains to be seen if there will be as much "elevator rejoicing" when the market finally crashes under Trump, an inevitable outcome which some speculate is precisely why Trump was allowed to become president: so that all the blame on the grand crash, once it, happens can be placed on him.</p> <p>Others are less worried about the impact of Trump, and more concerned that the pace of technological change and the integrated, complex nature of the global economy have made it more difficult for leaders to shape and control events, let alone reconfigure the global system. The global financial crisis of 2008/9 and the migrant crisis of 2015/16 exposed the impotence of politicians, deepening public disillusion and pushing people towards populists who offered simple explanations and solutions.</p> <p>The problem, says Ian Goldin, an expert on globalization and development at the University of Oxford, is that on many of the most important issues, from climate change to financial regulation, only multilateral cooperation can deliver results. And this is precisely what the populists reject.&nbsp; "The state of global politics is worse than it's been in a long time," said Goldin. "At a time when we need more coordination to tackle issues like climate change and other systemic risks, we are getting more and more insular."</p> <p>* * * </p> <p>Whatever the reason, sense of dread that things are moving, changing beyond the participants' control will be all too tangible. </p> <p>It is also why, as <a href="">Bloomberg reported today</a>, the World Economic Forum will convene a special meeting in Washington this year to discuss issues raised during the president-elect’s campaign "and the populist wave that swept him to victory" WEF founder Klaus Schwab told Bloomberg Television on Sunday. <strong>The gathering will explore U.S. investment and job-creation opportunities for companies that participate in the forum, he said.</strong></p> <p>“It<strong>’s very natural that with the new administration we plan a major event in the U.S. to see what are the implications of the new president and how the business community could engage,” </strong>Schwab said in advance of the forum’s 47th annual meeting in the Swiss ski resort of Davos. “<strong>We have to be responsive to the call</strong>.” </p> <p>“<strong>People have become very emotionalized, this silent fear of what the new world will bring</strong>,” Schwab said in the town’s hulking conference center. “We have populists here and we want to listen. We have to respond to these individuals’ fears and to offer solutions. It’s not just enough to listen; we have to provide answers and that’s what were here for in Davos."</p> <p>No, that's what you were there for in Davos in 2013, 2014, 2015 and 2016, and you did nothing. Now it's too late as the pendulum has already swung.</p> <p>That, however, is not obvious to the forum organizers who will enjoy another blockbuster year. Business is booming for the WEF and Schwab, 78, said he has no plans to abandon or alter its annual retreat. Revenue is up 45%&nbsp; in the past five years and staff have increased by about a third - with employees earning an average of 135,000 Swiss francs, ($133,875) which rises to 213,000 Swiss francs with the addition of costs such as pensions and healthcare.</p> <p>“Our salary structure is completely in line with others such as the Bretton Woods organization, the World Bank or the International Monetary Fund,” Schwab said. “We also have to be competitive with organizations like Goldman Sachs and McKinsey. We are competing for the same talent.”</p> <p>How does Schwab reconcile the glaring hypocricy of the world's wealthiest debating social injustice and wealth inequality? Simple:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> Despite the glitzy parties that have become the hallmark of the annual gathering<strong>, Schwab said his aim is not to celebrate the “outrageous excesses of life,” but rather to create a “global village,” where participants can mull weighty issues facing the world without the distractions of a large city. </strong>And he insists that as the power and beliefs of business and political leaders face unprecedented challenges, the meeting is needed more than ever.</p> </blockquote> <p>Schwab says the WEF’s annual meeting, where companies host lavish parties awash in champagne and rare vintage wines, attendees pay $50,000 and thousands of soldiers and police stand guard, remains an appropriate forum to discuss political issues like the rise of populism and seek solutions to society’s biggest problems. Unfortunately, that's all it is, as no concrete, revolutionary decisions can ever take place within the confines of this giant echo chamber.</p> <p>Schwab concludes by saying that "the right solution will require a lot of effort and many steps in the right direction. I am optimistic that in a new multi-polar world we still have the notion of a joined and shared destiny" but adds that his "<strong>biggest fear is that we will believe there are very simple answers to very difficult questions.” </strong></p> <p>Actually, herr Klaus Schwab, there are other far more tangible things you and your peers should be afraid of, but somehow we doubt that those will become apparent <a href="">while eating $40 hot dogs</a>.<strong><br /></strong></p> <p><strong>&nbsp;</strong></p> <p><a href=""><img src="" width="502" height="259" /></a></p> <p>&nbsp;</p> <p><a href=""><img src="" width="506" height="300" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1277" height="659" alt="" src="" /> </div> </div> </div> American people of German descent Bretton Woods Business Cantons of Switzerland Carnegie Endowment China Climate change skepticism and denial Congress Center Creditors Davos Davos Davos party Donald Trump Donald Trump Economy European Union European Union Federal Council Financial Regulation Global Economy goldman sachs Goldman Sachs Google Graubünden International Crisis Group International Monetary Fund International Monetary Fund Jamie Dimon JPMorgan Chase Larry Summers laser Lloyd Blankfein McKinsey Oleg Deripaska ratings Ray Dalio Reuters Salesforce party simulation Steel Serpent Swiss Government Switzerland The Apprentice University of Oxford World Bank World Bank World Economic Forum World Economic Forum WWE Hall of Fame Mon, 16 Jan 2017 02:48:45 +0000 Tyler Durden 585561 at