Ukraine Claims To Have Detained “Terrorists” With 100,000 Pre-Marked Referendum Ballots

While the following YouTube clip is – in the eyes of the West – irrefutable proof of potential vote-rigging ahead of tomorrow’s referendum, we find it somewhat intriguing that a group of heavily-armed “rebels”, carrying boxes with 100,000 pre-marked ‘positive’ referendum ballots


…would be detained by Ukraine’s anti-terrorist operations without firing one shot


…still men laying down with bags on their head proves it… right?


via Zero Hedge Tyler Durden

Damon Root: Why Civil Rights and Gun Rights Are Inseparable

Today’s gun debate
focuses overwhelmingly on the social costs that arise from keeping
and bearing arms. Yet as Senior Editor Damon Root explains in his
review of the new book Negroes and the Gun: The Black Tradition
of Arms
, privately owned guns have also played a profoundly
moral and beneficial role in our society. Indeed, from the time of
Frederick Douglass, who called a “good revolver” the “true remedy
for the Fugitive Slave Bill,” to that of civil rights icon Fannie
Lou Hamer, who braved the worst of 20th century Jim Crow and
declared, “I keep a shotgun in every corner of my bedroom,” armed
self-defense has always gone hand in hand with the fight for racial
equality in America.

View this article.

from Hit & Run

“The Gold Cartel” And The Giant Credit Bubble

Submitted by Pater Tenebrarum of Acting-Man blog,

Dimitri Speck is an expert on commodities markets who may actually be familiar to many of our readers as the creator of seasonal charts (which incidentally are the statistically most accurate seasonal charts available). Readers may also recall that we referred to Mr. Speck’s work in the past, when speculators were accused in the media of causing hunger in the third world, as their activities were alleged to artificially inflate the prices of agricultural commodities. When we wrote about the topic,  the voices of reason were few and far between. Mr. Speck’s unique and highly original contributions to the debate certainly took some of the wind out of the sails of the economically illiterate scaremongers in the media and politics.


The Gold Cartel

The English language edition of Mr. Speck’s book “Geheime Goldpolitik”, has been published early this year under the title “The Gold Cartel”, in parallel with an updated second German edition. The book has received great praise from many quarters, and it is well-deserved (ironically, even from a central banker, in spite of the fact that central bankers come in for a lot of criticism in the book).

The first few pages of the book right away prove to the discerning reader that the author actually understands gold. Surprisingly, this can often not be taken for granted. A great many analysts continue to regard gold as akin to an industrial commodity, including many working for ‘expert’ organizations, whose main job it is to publish data and forecasts on the gold and silver markets.

Essentially one could say that the Gold Cartel consists of three major parts, namely statistical studies, a historical disquisition and a theoretical part that deals with the consequences the adoption of a full-fledged fiat money system has wrought.

Note: This is an abridged and edited version of the review that appeared in issue 92, January/February 2014 of the Hedge Fund Journal.


Statistical Studies

When Frank Veneroso published a study on gold lending in 1998, many people probably heard the term ‘gold carry trade’ for the first time. However, it became a staple of deliberations about the gold market in subsequent years. A superficially legitimate (if ultimately slightly dubious) business activity, namely the hedging of future gold output by mining companies, had apparently been turned into a major and potentially explosive financial engineering scheme. However, research was hampered by the fact that the carry trade involved gold held by central banks. It was shrouded in secrecy and its size could only be estimated. While Veneroso’s work was path breaking, it was marred by its lack of precision, which partly resulted from the difficulty of obtaining good data.

Central bank accounting for gold was (and in most cases remains) rather peculiar: gold receivables and bullion still in their vaults are treated as a single line item in their balance sheets. This makes it nigh impossible for outsiders to ascertain how much of their gold is actually on loan. Central banks used inter alia the alleged need to protect the trade secrets of their business partners as an excuse to avoid publishing the data. This flimsy pretext naturally fanned speculation about the amounts involved as well as the planners’ motives. It was no secret that central banks once upon a time intervened in the gold market quite openly. Given gold’s nature as the ‘political metal’, it didn’t seem a big stretch to suspect them of still doing so clandestinely.

Estimates of the size of the carry trade published by researchers varied enormously (the more establishment-friendly they were, the smaller their estimates would be). Enter Dimitri Speck, who has delivered what is to date probably the best such estimate ever produced by an independent gold market analyst, not least because he actually employed sound statistical analysis.  His estimate of the amount of gold lent out by Germany’s Bundesbank over time, calculated from the meager tidbits of information that could be gleaned from the BuBa’s balance sheet, confirmed the soundness of his methods. The BuBa recently relented in the face of public pressure and finally lifted the veil of secrecy from the data, so we know how close the estimate came (the BuBa is no longer lending out gold by the way).

‘The Gold Cartel’ presents the results of painstaking statistical analysis of the gold market from every conceivable angle. It never gets so technical as to bore the reader – the analysis reads rather like a detective story. It focuses specifically on whether anomalies that point to possible interventions are detectable in the gold market and whether the beginning of these anomalous activities can be dated. Gold’s behavior during financial crises, as well as the  carry trade and the determination of its overall size are other focal points.  There is a refreshing difference in Mr. Speck’s approach to the subject compared to that often encountered elsewhere, which we believe makes the book an enjoyable and highly informative read even for people who are skeptical  about the intervention thesis. There is very little speculation, instead the focus is strictly on known or knowable facts.  Speck lays out a logically consistent and coherent history of the gold market. Some of his conclusions naturally remain open to debate; history is a thymological discipline and as such always leaves room for interpretation. It should be mentioned that although central banks nowadays increasingly strive to provide greater transparency, Speck thoroughly disabuses the reader of the naïve notion that they ‘would never intervene clandestinely in markets’ by providing hard evidence of past transgressions (which include even the deliberate falsification of data in one instance).



Gold lent out by the German Bundesbank over time – click to enlarge.



Estimate of central bank gold entering the market worldwide – click to enlarge.


Historical Background

The book’s statistical analysis is buttressed and supplemented by a gripping account of the history of the modern monetary system, beginning with the step-by-step disintegration of the Bretton Woods system in the late 1960s (which culminated in Nixon’s gold default in 1971) and encompassing everything that has happened since then, including the creation and first major crisis of the euro. All these events are brought into context with what happened concurrently in the gold market. There is a detailed look at the FOMC meetings of the early 1990s, which show that although gold had been thoroughly ‘demonetized’ from an official standpoint, it still was very much on the minds of many FOMC members at the time, including then chairman Greenspan. The conversations at these meetings clearly show that there was major concern at the time both over gold’s potential as a competitor of the US dollar as a store of value as well as its function as an indicator of inflation expectations.

As Speck explains with respect to the gold carry trade, once gold lending by central banks had grown well beyond the hedging needs of mining firms, the interests of private parties involved in the trade and those of central banks at first increasingly converged, only to diverge again at a later stage. He demonstrates convincingly that once the carry trade exceeded a certain size, the role played by private profit motives must have grown ever larger. In order to keep being able to play the game and avoid losses, bullion banks started putting pressure on central banks to motivate them to continue to sell and lend out ever increasing amounts of gold. For a time, an odd role reversal between bullion banks and central banks took hold with respect to their gold market-related interests.

Speck looks closely at what happened during this phase in the late 1990s.  A great many politicians, whose credentials as experts on gold or monetary policy were rather dubious, attempted to influence the climate and official attitudes toward gold. Unwilling central banks such as e.g. the Swiss National Bank were put under great political pressure to agree to gold sales. Many of the events surrounding official gold policy in the late 1990s are largely forgotten today, and Speck does us a great service by rescuing them from the memory hole.

Gordon Brown’s famously ill-timed sale of the bulk of the UK gold reserves is of course discussed as well. To this day it remains a bit of a mystery why Brown deliberately chose to perform the sales in a manner that ensured that the UK would get the lowest possible price. Clearly though, there was more to it than just the fact that he was evidently one of the worst market timers of all time. The discussion of the Washington agreement, which effectively froze the carry trade and limited official sales, was especially interesting to us. Few people will remember all the details and announcements that were made just prior and after the agreement was struck, or may never have been aware of them at all. The information Speck provides in this context serves to greatly enhance one’s understanding of these events.

In this context, Speck also provides a logical explanation as to why the carry trade never ‘blew up’ as so many forecasters had expected it to do – in spite of the considerable size it had attained at its peak and in spite of the fact that a bull market in gold began in 1999/2000.



Gold sales by central banks, net – click to enlarge.


The Giant Credit Bubble

The statistical and historical analysis of the gold market is followed by a theoretical part that deals in great detail and in a highly original manner with the problems the abandonment of gold as an anchor of the monetary system has ultimately brought about. The conceptual approach to the topic will be recognizable to readers familiar with the Austrian School of Economics, even though Speck employs at times a slightly different, somewhat idiosyncratic terminology. The most notable effect of demonetizing gold has been and continues to be the recurrence of numerous sizable booms and busts, although Speck rightly acknowledges that the emergence of credit expansions could not necessarily be completely averted in a gold-based system, although gold would   definitely ‘serve as a brake’, as he puts it.

A detailed description of how credit-financed bubbles begin and are then continuing to grow, driven by their inherent dynamics, is provided. The most important feature of such bubbles is that speculation for some time appears to ‘pay for itself’, as artificial accounting profits emerge. Wealth is seemingly created ex nihilo, and profits are booked even though no-one has actually produced anything tangible. This explains the enduring popularity of credit-driven bubbles, as it is simply human nature to embrace the ‘something for nothing’ mirage that is their major characteristic.

Since financial bubbles have real economic effects, and since their recurrence can seemingly not be averted, the  focus of the authorities soon shifted to the question of how the effects of their bursting could be mitigated –  a momentous decision, as Speck proceeds to show. The mitigation policy involves governments intervention in the form of a further expansion in debt and credit claims, the very policies that lead to the emergence of bubbles in the first place. Illogical as this is, it almost always seems to ‘work’ in the short term.  As credit claims accumulated in the past are never extinguished, but merely added to, a kind of ‘mega-bubble’ evolves over time. Private and public sector indebtedness both continue to expand, effectively egging each other on. An ever greater pile of credit claims towers over the real economy. Speck also points out that the vast expansion in public sector liabilities is deeply undemocratic, as it lulls the population into believing that it can get ‘something for nothing’. As a result, there are only superficial deliberations over the wisdom of public spending. Ultimately, no-one is taking responsibility while the political class pursues its own narrow interests. Indeed, as official remarks preceding the abandonment of gold in 1971 show, it was precisely the ability to run deficits in quasi-perpetuity that attracted governments to the new monetary system. The ability to increase spending without having to increase taxation is deemed a highly desirable method of achieving short term political goals.

Establishment economists have done us a great disservice by ignoring and/or whitewashing the long term implications of the ever-growing level of financial claims. Ever since the 1987 crash, central bankers have begun to consistently err on the side of easier monetary policy and their focus has increasingly turned toward he chimera of price stability, while the growth in credit claims has been ignored. ‘Mitigation of busts’ has become the official mantra to this day.

Speck also discusses the question of the long term consequences of this spiral of ever-growing debt. As he points out, the classical denouement of a credit-financed bubble used to be a major deflation, egged on by debt defaults and the associated destruction of deposit liabilities held by banks falling into insolvency. There can however be no guarantee that this outcome will be repeated in modern times. Today, the authorities can and do intervene to avert deflationary reductions in outstanding financial claims. Their countermeasures could eventually result in the exact opposite outcome (i.e., a major inflation). However, other possibilities are just as thinkable (such as e.g. a prolonged period of stagnation as has happened in Japan).



Japan’s debt to GDP, total and disaggregated: the world’s biggest debtberg – click to enlarge.



Global debt to GDP – click to enlarge.


Summary and Conclusion

We highly recommend this book to anyone with an interest in the gold market. In fact, anyone with an interest in financial markets and/or the economy will undoubtedly benefit from reading it. It provides a solid statistical analysis of every aspect of the gold market, a thoroughly researched and well-presented account of the history of the modern monetary system and a highly original perspective of the growing bubble in debt and credit claims we have experienced since adopting today’s system of credit-based money.


Dimitri Speck, The Gold Cartel (link to Amazon)

via Zero Hedge Tyler Durden

Donetsk Region May Shift To Rubles After 1.7 Million Vote In Referendum

Despite denouncements from the West (how did that work out in Crimea?) and diplomatic calls for postponement from Putin, tomorrow appears to be setting up for the next crucial catalyst in the ever-escalating civil (and not so civil) war in Ukraine. As RIA reports, Referendum organizers printed about 1.7 million ballots and on the day of voting in the region there will be more than 1,600 polling stations. The referendum will ask voters to answer the simple question: “Do you support the act of state independence of the People’s Republic of Luhansk.” and will take place from 8am to 8pm local time. Organizers claim that “the willingness to vote is almost total,” which makes the decision of the People’s Mayor that “after the referendum… gradually, we will move to the Russian ruble,” even more economically significant for the IMF-supported nation.


The referendum poll is happening:

Ballots in the referendum on the status of the Lugansk region delivered almost all polling stations in the region, told RIA Novosti spokesman Army southeast Vasily Nikitin.


In the Donetsk and Lugansk regions May 11 must pass a referendum on the status of the regions. In Lugansk region submitted to the vote the question “Do you support the act of state independence of the People’s Republic of Luhansk.” Voting will take place from 8.00 to 20.00 (9.00 – 21.00 MSK).


“Newsletters delivered to almost all areas, the willingness to vote almost wholly” – said Nikitin.


Referendum organizers printed about 1.7 million ballots. Nikitin said that on the day of voting in the region will work more than 1.6 thousand polling stations.

Which followed this…

In March in eastern Ukraine – Donetsk, Kharkiv and Luhansk – started rallies federalization, dissatisfied with the actions of the Kiev authorities new. Later protests spread to a number of cities of Donetsk and Lugansk regions. From mid-April in Kiev authorities carried out a special operation against the protesters with military support. In Moscow, Kiev decision to use army against the population identified extremely dangerous developments.


On Wednesday, Russian President Vladimir Putin has urged supporters federalization postpone the referendum to create the conditions for dialogue to de-escalate the situation in the country. However, the militia decided to hold a referendum on May 11, as originally planned.

And, as seems likely, independence is voted for, separatist leaders are already making plans…

“People’s Mayor” Vyacheslav Ponomarev Sloviansk not exclude that the Donetsk region eventually move to settlements in Russian rubles. Tomorrow, May 11, in the region must pass a referendum on self-determination.


“After the referendum will go until ukrainian hryvnia, but gradually, I think we will move to the Russian ruble,” – the words Ponomareva RIA Novosti .


“People’s Mayor” explained that closer economic integration with the Russian Federation. “Economically we strongly tied with Russia. Our industry is almost entirely focused on Russia “, – said Ponomarev.

Of course, the West are denouncing and proclaiming the referendum illegal…

  • Ukraine govt, EU and U.S. officials say referendums are illegal

But  just as in Crimea, things tend to be beyond the control of the West’s ire for now…

  • Donetsk Separatists Say Vote to Be Valid at Any Turnout: RIA

via Zero Hedge Tyler Durden

Did Money Center Bank Ignorance of CryptoCurrencies Allowed A Start-up To Patent The Future of Global Finance

Bloomberg ran a story earlier this week illustrating the human capital flight out of the Wall Street machine and into tech:

At elite universities, fewer MBA and finance candidates are willing to even consider a life of missed weddings, busted romances and deep-into-the-night deal negotiations. The percentage of Harvard Business School graduates entering investment banking, sales or trading dropped to 5 percent last year from 12 percent in 2006, while those entering technology almost tripled to 18 percent during that period.

At the University of Pennsylvania’s Wharton School, the percentage of MBAs entering investment banking dropped to 13.3 percent last year from 26 percent in 2006, while those entering tech more than doubled to 11.1 percent.

 Those of you who have been following finance from the Wall Street/Bay Street/Canary Wharf perspective realize that this is a cyclical occurence. Basically, Wall Street falls out of favor with MBA whiz kids every ten years of so. But!!!! This time is different. This time around, Wall Street, et. al. is about to succumb to the destructive forces of technology that transformed, revolutionized, disintermediated, gutted and absolutely reinvigorated the media, news and retail industries. 

That’s right! The Internet Paradigm Shift has finally hit Global Finance… and it’s going to hurt, and hurt a lot!

As many know, the I’ve poured my time and resources into a start-up by the name of UltraCoin. Many have been clamoring for white papers and details, and I have been purposely secretive about such. The reason? I needed to entrency protection from my competition – the money center banks. How did I do this? Well…

I patented the future of Global Finance!

patent to the Future of finance big

This video illustrates my presentation to both the mainstream and alternative media as I start my capital raising rounds from venture capitalists and strategic investos alike. Check it out!

We’re looking for financial and human capital as we prepare to expand globally. Financial capital is self-explanatory. On the human capital side…
We’re seeking a full stack contract developer. Must be proficient in: Java or C#; git, bzr, or similar. Must have a solid understanding of: race conditions and how to avoid them; scalable concurrency and data integrity architectural concepts (replication, sharding, etc.); software development processes and best practices. Proficiency in some CRUD technology (*SQL, NoSQL, etc.) as well as and some scripting language (Javascript, PHP, Python, etc.) is highly preferred. Experience with the Bitcoin protocol is a huge plus. Your first interview is to e-mail your resume along with a response to this challenge:

The Base64 at the top of that Gist decodes to:

Hint: make this as close to production-ready source code as you can!
Bonus points for telling us what this does:

”.join(itertools.chain(*zip(s[-2::-2], s[::-2])))

Must be willing to sign an NDA. You should be knowledgeable and competent, but we prefer grit to genius. Prima donnas need not apply.

via Zero Hedge Reggie Middleton

Windsor Mann on Feel-Good Politics

Going green has never felt so good, writes
Windsor Mann. Whether or not you celebrated Earth Day last month,
odds are that you celebrated Earth Hour on March 29 the
same way he did: accidentally. That night at 8:30 p.m.,
millions of people all over the world turned off their lights for
an hour “to raise awareness for the planet.” In doing so, they
became “Super Heroes for the planet,” according to an
official Earth Hour press release. Mann points to the history
of high profile political events that have succeeded only in making
people feel better about themselves.  

View this article.

from Hit & Run

FEC Chairman Warns Of Forthcoming Government Media Censorship

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

When I first read this story I wasn’t sure whether to highlight it or not. While the claims made by Federal Elections Committee (FEC) Chairman Lee E. Goodman are extraordinarily frightening, sometimes people with strong partisan leanings can exaggerate threats and so I like to be careful. I’m not certain if this is the case with Mr. Goodman, but since it is his word against other folks at the FEC and I don’t work there, it’s hard to know what the true state of affairs is.

Nevertheless, the fact that Ajit Pai, a commissioner at the FCC, recently warned in a Wall Street Journal editorial of government plans to “monitor” media organizations, makes me concerned enough to post on it. I highlighted the Ajit Pai editorial back in February in my post: The Obama Administration Plans to Embed “Government Researchers” to Monitor Media Organizations.

As far as the Goodman comments, The Washington Examiner reports that:

Government officials, reacting to the growing voice of conservative news outlets, especially on the internet, are angling to curtail the media’s exemption from federal election laws governing political organizations, a potentially chilling intervention that the chairman of the Federal Election Commission is vowing to fight.


“I think that there are impulses in the government every day to second guess and look into the editorial decisions of conservative publishers,” warned Federal Election Commission Chairman Lee E. Goodman in an interview.


“The right has begun to break the left’s media monopoly, particularly through new media outlets like the internet, and I sense that some on the left are starting to rethink the breadth of the media exemption and internet communications,” he added.


Noting the success of sites like the Drudge Report, Goodman said that protecting conservative media, especially those on the internet, “matters to me because I see the future going to the democratization of media largely through the internet. They can compete with the big boys now, and I have seen storm clouds that the second you start to regulate them, there is at least the possibility or indeed proclivity for selective enforcement, so we need to keep the media free and the internet free.”


“The picking and choosing has started to occur,” said Goodman. “There are some in this building that think we can actually regulate” media, added Goodman, a Republican whose chairmanship lasts through December. And if that occurs, he said, “then I am concerned about disparate treatment of conservative media.”

The main issue I have with Mr. Goodman’s comments is that he frames them in a very partisan manner. Sure, I don’t doubt that the current state of affairs might have the FEC concerned about the threat posed by conservative media, but in ten years who knows, it could be the reverse. The key here is that media, in particular the internet, must be kept free and open. The internet is what allows an individual like me, armed with only a computer and an internet connection, to reach thousands of people per day on a shoestring budget. This is a revolution in humankind and must be preserved at all costs.

Full article here.

via Zero Hedge Tyler Durden

Ukraine Scrambles Figher Jets, Intercepts Airplane Carrying Russian Deputy Premier

A few short hours ago, a Russian delegation which contained the deputy premier of Russia Dimitry Rogozin was flying back from Moldova’s capital Chisinau following his visit to Tiraspol as part of May 9 celebrations, when Ukraine scrambled fighter jets to intercept the Yak-42 carrying the Russian vice premier and forced it to promptly land back in Moldova.

The reason why this is surprising is that Rogozin was well aware in advance of taking off that Ukraine had closed its airspace to the Russian delegation.

But the punchline is that while Rogozin managed to fly into Moldova over Romanian airspace, on his return the EU and NATO member country served him with a surprise – it followed in Ukraine’s footsteps and blocked off its airspace to the Russian Deputy PM as well.

So suddenly Rogozin found himself unable to access the airspace of either Ukraine or Romania. Which is a problem, because as the map below shows, Moldova share a contiguous border with just these two countries, and in effect if both neighbors block their airspace to Russians in the country, there is no way to leave!


So what does Rogozin do? Precisely what the outspoken member of the US counter-Russia sanctions list would be expected to do:

Sadly for him, it did not work out quite as expected:

Here is a map showing the moment when the Russian Yak was met with Ukraine Migs:


This is how the Moldovan website Actualiti described the incident:

Aircraft of Vice Premier of the Russian Federation Dmitry Rogozin was intercepted by a Ukrainian MiG after he entered the airspace of Ukraine, reports

Earlier, the Deputy Prime Minister said that he would still fly to Moscow via Ukraine.

“I am taking off despite the ban,” – wrote Rogozin in social networks.

Rogozin flew on board the Yak -42 (aka RUS-Jet) from Chisinau airport. recalls that Ukraine refused to allow its airspace to Russian officials. To Dmitry Rogozin, May 8 was in Tiraspol, the board was forced to fly through Bulgaria and Romania.

The Vice PM was not the only one who was forced to return. According to Ukraine also intercepted the flight of the Russian culture minister Vladimir Medinsky.

Ukrainian authorities have blocked and did not allow passage through its airspace the plane on which the Russian delegation headed by the Minister of Culture of Russia Vladimir Medinsky which was returning from Chisinau to Moscow, according to the minister’s Twitter account.


“Our aircraft with the Russian delegation was ordered to return to Chisinau , threatened by a forced landing in Ukraine ” – said Medinsky.


The minister said that Ukraine previously allowed overflights . In Bawtry is on the State Duma delegation includes , Ministry of Foreign Affairs and the Government.

However, before Ukraine pats itself on the back for its success in keeping the Russian landlocked, Rogozin sent out the following tweet supposedly next to Moscow’s airport Domodedovo, where he praised the efficiency of the Russian “Military-Industrial commission” in finding alternative paths:

Of course, had this little incident escalated and the Russian’s plane had been shot down, something tells us those who were furiously selling VIX on Friday afternoon to paint the record Dow Jones tape, would be in a bit of a pickle coming Monday.

Still, while this incident was contained, the big one remains: tomorrow’s referendum which is still going ahead as planned and following which it is only a matter of time before East Ukraine, now independent, requests Russian “peacekeepers” to enter the country and, well, keep the peace.

via Zero Hedge Tyler Durden

Political Speech, Cellphone Searches, and the Future of TV: Three Supreme Court Cases to Watch

“Political Speech, Cellphone Searches, and the Future of TV:
Three Supreme Court Cases to Watch” is the latest from Reason TV.
Watch above or click the link below for full text, links,
downloadable versions, and more.

View this article.

from Hit & Run

Peter Suderman on Video Games Every Libertarian Should Play

is a post-apocalyptic role-playing game set in a
bombed-out, futuristic Washington, D.C., known as the Capitol
Wasteland. Warring tribes of wannabe authority figures fight for
control, thugs and scammers try to take your guns and your money at
every turn, super-intelligent robots try to reengineer society, and
the whole place is overrun with mutants. In other words, it’s a lot
like the Washington, D.C., we all know and love today. It’s one of
the most darkly funny games ever made, says Peter Suderman,
who lists five other video games every libertarian should

View this article.

from Hit & Run