What does the FBI’s new announcement about Clinton-related emails mean?
Washington’s Blog asked the NSA executive who created the agency’s mass surveillance program for digital information, who served as the senior technical director within the agency, who managed six thousand NSA employees, the 36-year NSA veteran widely regarded as a “legend” within the agency and the NSA’s best-ever analyst and code-breaker, who mapped out the Soviet command-and-control structure before anyone else knew how, and so predicted Soviet invasions before they happened (“in the 1970s, he decrypted the Soviet Union’s command system, which provided the US and its allies with real-time surveillance of all Soviet troop movements and Russian atomic weapons”), Bill Binney – what he thought about the FBI’s announcement that it was re-opening the investigation into Hillary Clinton’s emails.
He told us:
They must have something significant for the FBI to reopen the investigation. Plus I think [FBI Director] Comey had to inform congress of his incomplete testimony to them or else he could be charged with perjury to congress and impeached.
***
Any way you look at it, FBI has a black black eye over this. I have been saying for a long time that when you couple secret intelligence agencies with the police, you get a secret police. In German, that’s a GESTAPO (meaning “State Secret Police”). Plus, when you add to that what the DOJ has been doing relative to this, you have a Department of “Just Us.” Not good for the citizens of this or any other country.
Similarly, Chicago Times reporter John Kass writes:
FBI director James Comey’s announcement about the renewed Clinton email investigation is the bombshell in the presidential campaign. That he announced this so close to Election Day should tell every thinking person that what the FBI is looking at is extremely serious.
And one of the two reporters who broke the Watergate story which led to the resignation of Richard Nixon (Carl Bernstein) says:
We don’t know what this means yet except that it’s a real bombshell. And it is unthinkable that the Director of the FBI would take this action lightly, that he would put this letter forth to the Congress of the United States saying there is more information out there about classified e-mails and call it to the attention of congress unless it was something requiring serious investigation.
But Zero Hedge reports that Twitter, Facebook, Buzzfeed and Snapchat appear to be censoring the biggest bombshell of this election cycle … that the FBI re-opened its investigation of Clinton’s emails 11 days before the election.
I can add that I’ve been checking Reddit’s front page – the top 25 stories – every day, and there hasn’t been a single reference to the FBI, Clinton or emails since the FBI made its announcement.
As we’ve documentedforyears, social media is manipulated by the powers-that-be to prevent news that challenges the status quo from going viral.
Shortly after the first Project Veritas video revealed efforts by Robert Creamer and Scott Foval, working in concert with the DNC and Clinton campaign, to incite violence at Trump rallies across the country, Hillary Clinton campaign manager, Robby Mook, took to CNN to vehemently deny all accusations. Among other things, Mook said that Creamer and Foval “never had a relationship with the Clinton campaign.”
“These individuals no longer have a relationship with the DNC. They’ve never had a relationship with the Clinton campaign.“
“It’s unacceptable for anyone from either party to do that. But, again, no one who was working for the DNC or the Clinton campaign was doing that. This is again an attempt by Donald Trump to distract from the real issues of this campaign. He’s spiraling after his last debate, and he doesn’t want to talk about substance.”
And here is the clip:
In light of those comments, we would be curious to get Mook’s reaction to the following email which suggests Creamer is “close to Robby Mook.”
Just another private versus public position? Or perhaps the Russians altered this particular email…though we’ll never know because the Clinton campaign just doesn’t have the time to verify the authenticity of the WikiLeaks material.
For those who still haven’t seen Project Veritas Part 1, here it is:
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Speaking of poor policymaking, hyperinflation and violence – Venezuela is sliding closer and closer to the brink of collapse, with some sobering consequences.
This was among the topics of conversation this week at the Mining & Investment Latin America Summit in Lima, Peru. While there, I had dinner with a couple of Canadian lawyers who represented a few Latin American oil producers, some of them based in Venezuela.
Things have gone from bad to worse, they informed me. Since 2013, when Nicolás Maduro took power after the death of Hugo Chávez, the socialist country has struggled with skyrocketing inflation, food and medicine shortages, a shrinking economy and rising violence and corruption. (Its capital city of Caracas recently overtook San Pedro Sula, Honduras, for having the world’s highest homicide rate.)
These have only intensified since oil prices fell by half more than two years ago, as oil accounts for 95 percent of Venezuela’s export earnings.
Venezuela's shrinking economy
Now, President Maduro has effectively suspended a scheduled recall referendum, backed by the opposition-controlled National Assembly, despite as many as 80 percent of Venezuelans in favor of his removal from office. The suspension has led to widespread protests in the streets, with accusations of a coup being tossed around on both sides.
Venezuelan President Nicolas Maduro has effetively suspended democratic elections, spurring mass protests.
The fear, the lawyers said, is that if Caracas falls, the vacuum it leaves behind would serve as a prime terrorist base of operations—a Latin American Syria, as it were, complete with the world’s largest proven oil reserves to finance it.
We’ve already seen the country cozy up to fellow OPEC member Iran, recognized by the State Department as the world’s leading state sponsor of global terrorism. According to the Gatestone Institute, a New York-based international policy think-tank, Iran is “partnering with Venezuela’s drug traders and creating a foothold” in the Latin American country.
It’s such a travesty that a nation as resource-rich as Venezuela could allow itself to rot from within. Its descent into chaos should serve as just the latest cautionary tale to other countries that are willing to risk stability and prosperity for even more socialism.
Yesterday we revealed that the ABC / Wapo poll is a complete farce after even their own pollsters admitted that the recent 10-point convergence between Clinton and Trump, in a matter of just a couple of days, was “not mainly about people shifting in their candidate preference, but about changes in who’s intending to vote“…so it wasn’t about voter preference but about how ABC / Wapo chose their “oversamples.”
In any event, the latest results, out today, show Hillary’s lead shrinking further to just 1-point. The poll was conducted October 25-28, so, in theory, it includes 1 day of the FBI announcement. That said, the FBI announcement didn’t really hit the media until late in the day on Friday so it’s unclear if it has impacted this particular poll as of yet. To be sure, ABC / Wapo clearly made an effort to maintain a slight Hillary lead in this latest poll by expanding their democrat “oversample” margin from 8-points yesterday to 9-points in today’s poll.
METHODOLOGY – This ABC News/Washington Post poll was conducted by landline and cellular telephone Oct. 25-28, 2016, in English and Spanish, among a random national sample of 1,160 likely voters. Results have a margin of sampling error of 3 points, including the design effect. Partisan divisions are 37-28-30 percent, Democrats-Republicans-independents.
Interestingly, ABC / Wapo found that “a third of likely voters say they’re less likely to support Clinton given FBI Director James Comey’s disclosure Friday that the bureau is investigating more emails.”
About a third of likely voters say they’re less likely to support Clinton given FBI Director James Comey’s disclosure Friday that the bureau is investigating more emails related to its probe of Clinton’s use of a private email serverwhile secretary of state. Given other considerations, 63 percent say it makes no difference.
The potential for a pullback in motivation of Clinton supporters, or further resurgence among Trump’s, may cause concern in the Clinton camp–especially because this dynamic already was underway. Intention to vote has grown in Trump support groups in the past week as the intensity of criticisms about him has ebbed, including allegations of sexual misconduct, disapproval of his position on the election’s legitimacy and his poorly rated final debate performance.
Not that we have any confidence in these numbers, but here is how ABC / Wapo see the current state of play in the 2016 presidential election:
Meanwhile, they see voter intensity continuing to decline:
Perhaps more frightening for the Clinton camp, the latest NBC/WSJ/Marist poll shows Trump opening up a 9-point lead in Florida and a 2-point lead in North Carolina.
NBC/WSJ/Marist Poll Among those who haven’t voted yet:
Meanwhile, even the New York Times sees Trump opening up a 4-point lead in Florida despite the poll being conducted prior to the revelation of the latest FBI bombshell.
The New York Times also pointed out, as we have in the past, that Clinton has a real challenge with Black voters versus Obama’s performance in 2008 and 2012. While the NYT focused on Clinton’s support among black voters dropping from 90% to just 81%, we would suggest that the bigger issue for Clinton is whether black voters care enough about her candidacy to show up on election day in the same numbers as they did for Obama…we have our doubts.
Finally, even the New York Times seemingly admits that polling data around the country is likely skewed. As they point out, Democrats are much more likely to participate in polls which often results in large “oversamples” in polling data even though those registration gaps aren’t reflective of who shows up to vote on election day.
One of the biggest questions in political survey research is partisan nonresponse — the possibility that Democrats or Republicans are more or less likely to respond to polls.
Most public polls don’t have many ways to deal with it. They weight their surveys to match the demographic composition of adults — say, the right number of white and black voters — but they don’t adjust the number of Democrats or Republicans.
Our surveys are different: As mentioned earlier, they’re adjusted to have the right number of Democrats or Republicans.
In our survey, registered Democrats were much likelier to respond than Republicans. Registered Democrats had an eight-point registration advantage in our unweighted sample, even though it was representative by other measures.
Mrs. Clinton would have actually led in The Upshot’s survey if it, like most others, didn’t weight by party registration.
One possibility is that the public polls are understating Mr. Trump’s support because registered Republicans aren’t answering the telephone.
Should be interesting 9 days to come. One thing is for certain, if Hillary has any additional bombshell “secret” recordings of Trump then we suspect we’ll get to listen to those very soon.
As noted here yesterday, citing reports in British newspapers such as The Times and Mail Online, Mark Carney’s “self-imposed deadline” for declaring whether he will stay in office beyond 2018 is fast approaching, and the central banker may decide to step down as soon as next week. Reportedly, the 51-year old Canadian may announce his decision “within days” at his next scheduled public appearance on Thursday, when the BOE announces its policy decision and the governor holds a press conference in London.
Today, the FT followed up with a report that suggests Carney’s tenure at the BOE may indeed be coming to an end, when it reported that “the BoE declined on Sunday to dismiss speculation that the governor might announce his decision this week alongside the quarterly inflation report.”
The FT’s Chris Giles prefaced this by saying that “ardent supporters of Britain’s vote to leave the EU believe they are on the verge of another victory by forcing Mark Carney to resign as governor of the Bank of England before the end of his term in 2018.”
The impact on sterling will likely be rather adverse when it opens for trading:
With the governor seen by financial markets as a steady hand on economic policy in contrast with much more volatile government communication of its economic plans, sterling would again be vulnerable were he to announce his departure.
The fate of Carney may be linked to recent speculation whether the BOE has become too political, or is even independent: “Brexiters, who feel Mr Carney was always too supportive of Britain remaining in the EU, scent blood in their feud with the governor. Daniel Hannan, a Conservative MEP, said: “I am sorry to say this — he seems a nice enough fellow — but Mark Carney should indeed resign. He politicised his office inexcusably.””
The post-Brexit political regime has been on the fence about the fate of the BOE governor: Lord Lawson, the former chancellor, and Jacob Rees-Mogg and Bernard Jenkin, prominent Conservative MPs have also called for the governor’s head in recent weeks, saying that he was too doom-laden on the post-Brexit economy and had been too political in office.
On the other hand, Carney has received strong support from the chancellor, who has urged him to stay until 2021, and from allies of Theresa May in 10 Downing Street. “They have believed until recently that the governor would stay until 2021. The governor has played his cards close to his chest, stressing
repeatedly that he would fulfil the commitment he made on appointment in
2013 to serve until 2018 and adding that the decision of whether to
serve a full term until 2021 was personal.”
In evidence to the House of Lords last week, he dismissed suggestions that the prime minister was putting the BoE under pressure to change monetary policy or the personnel at the top of the central bank.
“To be clear, it’s an entirely personal decision and no one should read anything into that decision in terms of government policy. It is a privilege for me to have this role,” he said. “Like everyone, I have personal circumstances that I have to manage. This role demands total attention and I intend to give it as long as I can.”
As the FT concludes, “Financial markets interpreted the governor’s words as an indication he would stay on, while Brexiters thought he was hinting he would leave.”
However, today’s report may tip the scales to the former. Keep an eye on GBP for further indications of whether the market is becoming convinced that Carney is on his way out, in the process further weakening the UK currency.
The popular economic theme being reported by the popular press still remains. That the economy is grinding higher. That growth is improving, albeit slowly. That blue skies are just over the horizon.
Naturally we have some misgivings. As far as we can tell, business is not humming along. Earnings are stagnant. Profits are slim. Moreover, corporate reductions in force (RIFs) are being executed with the imprecise targeting of a sledge hammer. Even Google’s laying off staff.
Most notably, if the economy were improving there’d be demand for raw materials and new construction equipment to fabricate it into stuff. This doesn’t appear to be the case at the moment.
Earlier this week, for example, Caterpillar CEO Doug Oberhelman remarked that, “Economic weakness throughout much of the world persists and, as a result, most of our [Caterpillar’s] end markets remain challenged. In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks.”
Oberhelman’s comments were delivered as part of Caterpillar’s third quarter earnings report. What’s more, he wasn’t too optimistic about the coming year either. “We remain cautious as we look ahead to 2017.”
Structural Deficiencies
Perhaps Oberhelman is being overly guarded. But given his company’s core market of providing equipment for mining and construction he gets a unique window into the demand for materials and construction. By Oberhelman’s account, global demand is poor. What to make of it?
The explosion of debt coupled with policies of mass money debasement over the last 40 years has relentlessly borrowed demand from the future. Tomorrow’s demand was already attained yesterday. Thus, in place of today’s demand, is an abundance of slack.
In other words, the world has been pushed well past the effectiveness of such policies. Stimulating new demand with new debt no longer results in new growth.
Even negative interest rates have failed to give the economy much of a boost. As far as we can tell, capacity has so far outpaced demand that a recession is needed to bring things back into alignment.
Alas, efforts to combat the Great Recession did not solve the economy’s structural deficiencies. They merely suspended the recession. What’s more, in doing so, they set us up for something even greater…like a depression.
By our estimation, things have become quite precarious. The U.S. stock market, as measured by the S&P 500, is nearing its all-time highs. So, too, U.S. housing, as measured by the Case-Shiller Index, is just 0.1 percent below its record high set in July 2006. At the same time, over the last eight years, the national debt has nearly doubled to $19.7 trillion.
Yet even with all this new government debt and inflated asset prices, GDP slumps over like a weighty sack of potatoes. The cost of greater and greater issuances of debt now far outweighs any benefit. Nonetheless, the Federal Reserve intends to keep juicing the credit market.
Here’s why…
Meddling with Markets for Work and for Pleasure
Fed Chair Janet Yellen’s primary liability is not her bowl haircut. To the contrary, that’s her primary asset. Rather, her primary liability is her 40 year career yanking the chains of credit to her liking.
Unfortunately, Yellen’s long run of employment has had the ill effect of making her believe she’s somehow good at her job. But how does she really know if she’s any good?
If government statistics say unemployment’s 5 percent, inflation’s 2 percent, and GDP’s 3 percent does that mean she’s doing a good job? Or does it mean the propaganda mill still supports her? Certainly, any accomplishments she can point to are all based on fluff.
To be clear, Fed Chair Janet Yellen has been meddling with credit markets – and by extension the economy – since Moby Dick was a minnow. That’s a long time to be doing something that, in effect, is so broadly destructive of wealth.
Undeniably, Yellen’s main accomplishment is that she primes the pump for Wall Street and the big banks so they can siphon off the accrued livelihood of the hoi polloi. All the while she mucks around with the lives of hundreds of millions of people in ways that only the most ardent of central planners could find pleasure slobbering over.
Until the Friday blockbuster news that the FBI was reopening its probe into the Hillary email server, the biggest overhang facing the Clinton Campaign was the escalating scandal involving the Clinton Foundation, Doug Band’s consultancy firm Teneo, and Bill Clinton who as a result of a leaked memo emerged was generously compensated for potential political favors by prominent corporate clients using Teneo as a passthru vehicle for purchasing influence.
In a section of the memo entitled “Leveraging Teneo For The Foundation,” Band spelled out all of the donations he solicited from Teneo “clients” for the Clinton Foundation. In all, there are roughly $14mm of donations listed with the largest contributors being Coca-Cola, Barclays, The Rockefeller Foundation and Laureate International Universities. Some of these are shown below (the full details can be found in “Leaked Memo Exposes Shady Dealings Between Clinton Foundation Donors And Bill’s “For-Profit” Activities“)
Band also offers the following commentary on the “$50 million in for-profit activity” he was able to secure for Bill Clinton (as of November 2011) as well as the “$66 million in future contracts, should he choose to continue with those engagements.”
Independent of our fundraising and decision-making activities on behalf of the Foundation, we have dedicated ourselves to helping the President secure and engage in for-profit activities – including speeches, books, and advisory service engagements. In that context, we have in effect served as agents, lawyers, managers and implementers to secure speaking, business and advisory service deals. In support of the President’s for-profit activity, we also have solicited and obtained, as appropriate, in-kind services for the President and his family – for personal travel, hospitality, vacation and the like. Neither Justin nor I are separately compensated for these activities (e.g., we do not receive a fee for, or percentage of, the more than $50 million in for-profit activity we have personally helped to secure for President Clinton to date or the $66 million in future contracts, should he choose to continue with those engagements).
With respect to business deals for his advisory services, Justin and I found, developed and brought to President Clinton multiple arrangements for him to accept or reject. Of his current 4 arrangements, we secured all of them; and, we have helped manage and maintain all of his for-profit business relationships. Since 2001, President Clinton’s business arrangements have yielded more than $30 million for him personally, with $66 million to be paid out over the next nine years should he choose to continue with the current engagements.
In effect, what Band was doing, as the NYT’s Nick Confessore summarized, “was selling his clients on idea that giving to foundation was, in essence, a way to bolster their influence. Clinton & Band built a platform for executives to bolster their companies’ images, bathe in BC’s praise, and do some good, while Teneo extracted earnings for Band and, depending on what you see in these e-mails, Clinton himself. Teneo paid Clinton until late ’11.“
As Confessore also pointed out, “I guess you can wave it all off as a nothingburger. But Chelsea Clinton and some of Clinton’s other aides were clearly freaking out.”
And he concluded by saying “Generally, the emails show Clinton’s *own closest aides* troubled or horrified by things that her surrogates have spent years waving off.“
Today, with this context, we focus on one particular email disclosed in the latest Podesta email release, in which an email from Doug Band to Cheryl Mills and John Podesta dated November 12, 2011, or just days before the abovementioned memo was sent out, admits that “I’m starting to worry that if this story gets out, we are screwed.”
Need get this asap to them although I’m sure cvc [Chelsea Clinton] won’t believe it to be true bc she doesn’t want to Even though the facts speak for themselves.
John, I would appreciate your feedback and any suggestions I’m also starting to worry that if this story gets out, we are screwed. Dk [Declan Kelly] and I built a business. 65 people work for us who have wives and husbands and kids, they all depend on us. Our business has almost nothing to do with the clintons, the foundation or cgi in any way. The chairman of ubs could care a less about cgi. Our fund clients who we do restructuring and m and a advising the same just as bhp nor tivo do. These are real companies who we provide real advice to through very serious people. Comm head for goldman, dep press secretary to bloomberg, former head of banking, and his team, from morgan stanley for asia and latin am.
I realize it is difficult to confront and reason with her but this could go to far and then we all will have a real serious set of other problems. I don’t deserve this from her and deserve a tad more respect or at least a direct dialogue for me to explain these things. She is acting like a spoiled brat kid who has nothing else to do but create issues to justify what she’s doing because she, as she has said, hasn’t found her way and has a lack of focus in her life. I realize she will be off of this soon but if it doesn’t come soon enough…
Four years later, the story is out, not thanks to Chelsea Clinton as Doug Band was concerned, but due to a hack of John Podesta’s email account.
However, in light of the latest FBI scandal involving Anthony Weiner, It remains to be seen if either Band or the Clintons are screwed – it appears that the general public has more than enough distractions to forget about this potential graft scandal involving the Clintons and their influence-peddling clients.
As reported earlier this morning by Fox News’ Bret Baier, disgraced former Democratic congressman and the latest cause of headache for the Clinton campaign, Anthony Weiner, is said to be cooperating with authorities in the FBI investigation of his laptop that contains emails that prompted the Federal Bureau of Investigation to reopen its probe into Hillary Clinton’s use of an unauthorized email server.
Breaking now on #FNS per @BretBaier — Anthony Weiner is said to be cooperating with the FBI investigation.
As the Washington Examiner reports, though FBI Director James Comey told lawmakers Friday his agency found emails related to Hillary Clinton’s private email server, he didn’t yet have a warrant to read them. As of Saturday night, the FBI had not received a search warrant from the Justice Department, an unnamed agency official told Yahoo News, but the agency was in talks to get one. When Comey wrote the letter, “he had no idea what was in the content of the emails,” said one official.
It adds that Comey has also begun participating in briefings with the Republican chairman and Democratic ranking members of congressional committees, according to Bill House, a congressional correspondent for Bloomberg News, citing unnamed sources.
Comey has started briefings with chairs of committees and rankers. As of saturday, still had no warrant. Sources.
It is possible that as a result of the cooperation, the FBI will be able to obtain a clearer assessment of just what is contained in the emails, facilitating the Clinton campaign request for the FBI to “come clean” with what he been uncovered; alternatively it may accelerate the disclosure into any “smoking guns” as some pundits have claimed had been uncovered in the email trove.
Precious metals investors are being misled by most analysts’ price forecasts because they do not understand the critical underlying fundamental value mechanism. Furthermore, there seems to be a great deal of animosity from the short-term trading analysts who view many in the precious metals community as pandering hype and conspiracies.
Feel free to check out these articles as Avi Gilburt condemns those precious metals analysts who continue to regurgitate the “manipulation” theme over and over. On the other hand, Avi truly believes the value of the metals, and other commodities are based upon looking at the “tea leaves” or studying “goat entrails” as it pertains to the Elliott Wave theory.
Most certainly, he will defend the Elliott Wave theory to the death. While I admire that sort of conviction, Avi Gilburt is just as guilty in his forecasting of the “value” of gold and silver just as much as the precious metals community that he constantly criticizes.
That being said, there is a difference between the two camps, in my opinion. While I am frustrated with the precious metals community in their lack of understanding of the true value of gold and silver, the short-term trading analysts such as Avi Gilburt and Dan Norcini are quite vicious in their critiques.
This is also true for CPM Group’s Jeff Christian. I heard from a source that when Jeff Christian was apart of a precious metals round table, when the question was posed to the group to the number of individuals who believed the metals were being manipulated, he blurted out, “Anyone in this group that follows my work, YOU BETTER NOT RAISE YOUR HAND.” Now, that isn’t the exact remark… but close enough.
The subject of precious metals manipulation is quite complex, so I’d rather not get into it in this article. However, I will show where the precious metals community and the short-term trading analysts are incorrect in their approach for forecasting the value of gold and silver.
What Has Been The Real Driver Of The Gold & Silver Price
Even though I have discussed this in prior articles, new information confirms my analysis. While most economists, traders and the those in the precious metals community believe that “Supply & Demand” have been the leading factor in determining the value of gold or silver, it’s not, rather it has always been the “ENERGY FACTOR.”
Here is an updated chart showing the relationship between the price of silver and oil since 1900:
As you can see, the price of silver and oil remained flat (on the chart) until 1971. Actually, the price of oil and silver stayed below $2.00 (except for a few years) from 1900-1970. When President Nixon dropped the Gold-Dollar peg in 1971, this significantly changed the value of the precious metals and oil.
Even though the movement of the oil and silver price are not exactly related, we can definitely see a high degree of correlation. Thus, as the price of oil skyrocketed in the 1970’s, so did the price of silver. Moreover, the same thing took place in 2000-2016.
Does Avi Gilburt have a chart showing this to his members? I doubt it. Of course, the short-term price movements of silver and oil are not as precise as the longer term valuations shown in the chart above, but we can clearly see that the forces of “Supply & Demand” are less of factor than the changing value of oil.
This is also true for gold. This chart shows the price of gold versus oil since 1940:
Again, we can clearly see that the price of gold and oil remained flat-lined until 1971. As the oil price shot up in the 1970’s, so did the gold price. When the oil price declined and stayed low in the 1980’s and 90’s, so did the value of gold. However, as the price of oil surged to $112 in 2012 from $20 in 1999, so did the value of gold. Gold jumped from $279 in 2000 to $1669 in 2012.
There’s no coincidence that the value of oil and gold jumped 500+% from 2000-2012. While the silver price jumped seven times from $4.95 in 2000, to $35 in 2012, its current price is 3.5 times higher than 2000 and gold is 4.5 times higher.
Which means, there are more factors in determining the gold and silver price than just the metals relationship with the oil price. That being said, supply and demand factors play a “ROLE” in impacting the price of gold and silver… BUT ONLY AS A MINOR PART compared to the overriding oil price dynamics.
What I am saying here is this… the value of gold and silver has been, and will continue to be tied to the oil price dynamics, however, supply and demand factors are contributor… BUT TO A MUCH LESS DEGREE.
Gold & Silver Are Beginning To Disconnect To The Value Of Oil
Something interesting has happened recently in the price movement of gold and silver… they seem to be now disconnecting from the value of oil. If we take a look at the two gold and silver charts below, we can see that as the price of oil has remained flat in 2015-2016, the gold and silver price has turned higher, especially the gold price:
While the gold price has jumped up higher than the silver price (in relative terms), they are both moving up as the oil price remains flat. To understand why this is happening, I have to explain two KEY FUNCTIONS;
Market Sentiment The Coming Oil Price Crash
Short-term trading analysts suggest that “Market Sentiment” plays a role in determining the price of a commodity, stock or bond. While I would agree with them to a small degree, they are correct for the wrong reason.
Let me explain this as it pertains to the value of gold and silver. At the beginning of the year, the stock market crashed 2,000 points quickly, so investors moved into gold and silver in a big way, especially the institutional investors who bought the Gold ETFs. So, the “Knee-Jerk” reaction by most traders and investors is that market sentiment turned around and the movement of funds into gold and silver pushed up their price.
Again, I agree with that on principle, but for a very different reason. “Market Sentiment”, as it is used as a tool for determining the price of gold and silver, is only working to the extent that it is “WAKING UP INVESTORS TO THE TRUE FUNDAMENTAL VALUE”, but just for a brief period of time.
You have to think of precious metals market sentiment similar to when a spouse believes their partner might be having an affair. When something very suspicions happens, the spouse gets very angry and the partner tries to calm them down by giving a reason (excuse) why is not true. So, in a few days, the spouse believes the partner and everything calms down.
This type of “UP & DOWN” sentiment continues in the relationship causing a great deal of volatility in the marriage. However, one day, the spouse finally catches the partner in the act and the TRUTH finally comes out. Then there is no more lies, deceit, excuses or manipulation of the facts to keep the spouse believing that everything is fine. The spouse has now taken the RED PILL, so to speak, and cannot unlearn what they now know.
This is a perfect example of what is taking place as it pertains to “MARKET SENTIMENT” in the precious metals market. When investors start to get fearful or extremely worried about the Stock & Bond markets, they rush into the precious metals… for a brief period of time.
When the Fed and Central Banks pump Trillions of Dollars of liquidity into the financial system, they bring calm back into the markets easing investors fear and worry. Thus, gold and silver demand declines.
Unfortunately, this is a game that is hiding the truth. So, when investors finally realize the Stock and Bond Market are the biggest Ponzi Schemes in history, the MAD RUSH into the metals will begin.
Now, the reason the Stock and Bond Market are nothing more than HOT AIR and the typical Ponzi Scheme, can be seen in this chart by Louis Arnoux:
The value of U.S. GDP per head, in Oil & Gold all went up together until 1970. While U.S. GDP has continued higher and higher, we can clearly see that the gold and oil (red & blue color) trend lines behaved much different;y. I would advise watching my Thermodynamic Collapse Interview with Dr. Louis Arnoux to explain the details:
However, the only way for real wealth to be generated, it has to coincide with the value of gold and oil. Unfortunately, the value of gold and oil in GDP per head for each American crashed (2012), while stated GDP continued to record territory.
Thus, the real GDP value reported by the U.S. Government is highly inflated. This is based on understanding the “Thermodynamic Oil Collapse” and its impact on the entire global economy. According to Louis Arnoux and the Hills Group work, the price of oil will continue to crash to a MAXIMUM PRICE of $12 by 2020.
This is due to their calculation of the “Remaining Value” of oil in a barrel. You have to think about it like an automobile. When the car is brand new, the value is say, $30,000. However, after 15 years, the car is only worth $5,000. The economic value of that car has been “DEPLETED.” While it still works, the 15 year-old car does not contain the same “embedded” energy as a brand new car…. so the value is much less.
The Hills Group ETP oil model has calculated that the value of a barrel of oil is behaving similar to a used car. The costs of producing a barrel of oil is so high now, when we consider the entire Oil Industry & Support Systems”, there won’t be much value left to the Globalized Industrial World in five years.
I will be writing more on this going forward as gold and silver investors will benefit the most as the Thermodynamic Oil Collapse goes over the cliff.
Why Will The Value Of Gold & Silver Surge When Most Everything Else Implodes
While the oil price has been the leading driver in the value of Gold & Silver for more than a century, it is beginning to disconnect. Why? Because the gold and silver price have been valued as “commodities”, rather than as “high-quality stores of value.”
I will be writing an article showing this more in detail, however total Global Assets are estimated to be $373 trillion, according to a report by Savills World Research. The majority of those assets are real estate…. mostly residential real estate.
As the price of oil continues lower and lower, it will destroy the value of most Stocks, Bonds and Real Estate. These assets only derive their value from burning more energy each year. However, the cost to produce a barrel of oil has become so high now, there isn’t much value left over to support the $373 trillion in global assets.
Which means, the collapse in the price of oil, will be the FACTOR that finally wakes up the world that they have been investing in the wrong assets. It will be the MOTHER OF ALL MARKET SENTIMENT moves.
I gather Avi Gilburt will discard this article as just another complete waste of time, but he is undoubtedly blind to the oil-energy dynamics. So, I would bet my bottom Silver Dollar that Avi will continue to read the tea leaves and goat entrails of the Elliott Wave Theory right up until the point the system disintegrates. And maybe he should, because when the PHAT LADY SINGS, he will have to find some other occupation.