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The Gold Trade Examined (Video)

By EconMatters


We discuss the Gold Trade in this video, as it is actually a part of a much bigger trade that is currently taking place across multiple asset classes in the markets. At what Price Point do Physical Buyers come into the Gold Market?

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Turkey Detains BBC, VoA Reporters

Not content with arresting or firing any potential source of domestic political opposition, Turkey’s president Erdogan is targeting foreign journalists. Having previously arrested dozens of Turkish journalists after the failed July “coup” attempt led to a nationwide crackdown on the media, overnight the Turkish government detained reporters working for BBC and Voice of America in southeastern Turkey.

Hatice Kamer, a correspondent for BBC Turkey, was detained Saturday in the town of Sirvan. She was covering a November 17 mine collapse, which left at least 11 people dead and five missing under the rubble. The Turkish language service of the BBC said Kamer intended to meet with families of the victims. Kamer was released on Sunday, BBC Turkey later reported.

Another journalist, Voice of America freelance reporter Khajijan Farqin, was detained in Diyarbakir the US government-funded outlet said according to RT, citing a Saturday message from her family. Details remain unclear, with her attorney unable to reach her for five days due to the state of emergency in the province, the report said.

However, like in the case of the BBC reporter, VOA noted moments ago that Farqin had been released after being detained by Turkish authorities in Diyarbakir. 

Farqin, who also freelanced for the BBC, was taken into custody in Turkey’s Siirt province at a police checkpoint while on her way to report on a landslide at a copper mine, turkishminute.com reported.

Earlier this month, Olivier Bertrand, who works for the French news website lesjours.fr, was detained while reporting in Gaziantep, north of Turkey’s border with Syria. He was subsequently deported.

Since declaring a state of emergency days after a failed coup attempt on July 15, the Turkish government has shut down close to 195 newspapers, broadcasters, publishers and distribution companies and imprisoned about 150 journalists on terrorism charges, an accusation that has become fairly common since the attempted overthrow of President Recep Tayyip Erdo?an’s government.

Late last month, a few thousand people protested in Diyarbakir following the removal from office and arrest of the city’s co-mayors, Gultan Kisanak and Firat Anli, on terrorism charges. Diyarbakir, the largest city in the predominantly Kurdish southeast, is the center of the pro-Kurdish movement.

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Kellyanne Blasts Mitt: Trump Supporters “Feel Betrayed By Governor Romney”

For weeks the Trump campaign has seemingly been agonizing over the Secretary of State position.  Media reports, to which we attribute the utmost credibility, have suggested that the decision has divided Trump’s transition team into three factions: those who want Romney, those who want Giuliani and those who prefer anyone other than those two frontrunners.

While we have no way of knowing what is actually fact versus fiction, what we do know is that Kellyanne Conway is not in the Romney camp.  Conway has made the rounds on this weekend’s political talk shows bashing Romney for his brutal criticism of Donald Trump throughout the primaries and general election saying that Trump supporters would “feel betrayed to think that Governor Romney, who went out of his way to question the character and the intellect and the integrity of Donald Trump, now our president-elect, would be given the most significant cabinet post of all, Secretary of State.”  Per Politico:

“I’m all for party unity, but I’m not sure that we have to pay for that with the Secretary of State position,” Conway said. “We don’t even know if Mitt Romney voted for Donald Trump.”

 

And she wasn’t done yet.

 

Later, on NBC’s “Meet the Press,” Conway continued to make the case against Romney.

 

“People feel betrayed to think that Governor Romney, who went out of his way to question the character and the intellect and the integrity of Donald Trump, now our president-elect, would be given the most significant cabinet post of all, Secretary of State,” Conway told host Chuck Todd.

 

“They feel a bit betrayed that you can get a Romney back in there after everything he did.”

Here’s what Conway had to say on CNN’s “State of the Union”:

 

And here is Conway on “Meet the Press” with the beacon of mainstream media impartiality, Chuck Todd (fast forward to 8:00 minute mark for the Romney exchange):

 

Of course, this latest media blitz follows a Thanksgiving Day tweet sent out by Conway which served as her first “shot across the bow.”

 

Meanwhile, Conway isn’t the only one speaking out against Romney taking the Secratary of State position as Newt Gingrich and Mike Huckabee have also been vocal critics.

 

Sadly, Mitt Romney is probably among the most qualified candidates in the country for the Secretary of State position though his criticisms of Trump rightfully elicit concerns of loyalty.  So, the question becomes will Trump cave to supporters angry over campaign rhetoric or will he overlook past aggressions to choose the most qualified candidate?  We should know soon.

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India’s Modi Admits Plan Shifting Nation To “Cashless Society”

Well who could have seen this coming? Just as we noted, the slippery slope towards full government control in a cash-less society is where Indian PM Modi is heading following his chaos-creating demonetization efforts of the last two weeks. While massive opposition protests are planned tomorrow, Modi remains indignant, as Reuters reports, "we can gradually move from a less-cash society to a cashless society…this is the chance for you to enter the digital world."

Indian Prime Minister Narendra Modi on Sunday urged the nation's small traders and daily wage earners to embrace digital payment channels, as a cash crunch following the government's surprise ban on high-value bank notes drags on.

 

 

Modi, speaking in his monthly address on national radio, said the government understands that millions have been affected by the ban on 500-rupee and 1000-rupees notes, but defended the action.

 

"I want to tell my small merchant brothers and sisters, this is the chance for you to enter the digital world," Modi said speaking in Hindi, urging them to use mobile banking applications and credit-card swipe machines.

 

"It's correct that a 100 percent cashless society is not possible. But why don't we make a beginning for a less-cash society in India?," Modi said. "We can gradually move from a less-cash society to a cashless society."

 

More than 90 percent of consumer purchases in India are transacted in cash, Credit Suisse estimates. While a smartphone boom and falling mobile data prices have led to a surge in digital payments in recent years, the base still remains low.

 

Modi urged technology-savvy young people to spare some time teaching others how to use digital payment platforms.

But, as GoldMoney.com's Alasdair Macleod explains, the economic consequences of Mr. Modi's action are far more significant…

Two weeks ago, India’s Prime Minister Narendra Modi demonetised an estimated 86% of rupees in circulation, offering conversion into a bank account or into smaller currency notes until 31 December, after which these notes will have no redemption value.

 

Together with forgeries in circulation, it could be over 90% of all circulating money. The terms of redemption are so inconvenient for anyone other than black-marketeers, that for all purposes $50bn equivalent of rupees have been eliminated from the economy at a stroke, pending the introduction of new currency notes.

 

The sadness in all this is that Modi should have foreseen the extent of the disruption to the poor and rural communities, but has obviously forgotten the hard lessons of life learned in his youth as a lowly chai wallah. It could be that the Reserve Bank went along with it as a government puppet, consoling itself with the thought it would be a good way to write off obligations, believing a significant quantity of notes is likely never to be redeemed by black-marketeers and tax evaders. It effectively reduces the central bank’s obligations to the private sector at the expense of those the state likes least. However, the $10-20bn equivalent the state will make from it is less important than the disruptive economic effect and the likely impact on the rupee’s future purchasing power.

 

The purpose of this article is to look at the economic consequences of Modi’s action. Initial estimates by western macroeconomists of the effect on GDP seems to be benigni. It could be because their contacts in India are typically the more highly-paid city bourgeoisie, who rarely spend cash except for tips, using bank and credit cards more normally for everyday purchases. These people would almost certainly welcome moves to bring illegal trading under control and extend the income tax base, playing down the negatives. However, the cash immediately removed amounts to about 2.5% of GDP, eventually to be replaced at an unspecified time in the future by the new notes bearing a portrait of the Mahatma. But while these notes are shortly to become available, it could take months to convert ATMs and ensure their widespread availability.

 

If the long-term consequences will be to bring unrecorded transactions into the GDP statistic, some western macroeconomists postulate recorded GDP could end up rising faster than anyone expected before Modi’s action. This misses the point. Banning high denomination notes worth as little as $7.50 equivalent to be replaced by the new Ghandi notes has been a major disruption in most Indians’ lives, particularly for the rural population. Removing everyday money is like trying to run an engine without any oil in it. It seizes up, which is what the Indian economy is certain to do. India’s economy is therefore likely to face a short-term slump, which government economists will counter by reflating, in other words by increasing the quantity of money. It will do the economy no good, but nominal GDP, which is not the same thing, will eventually rise, to the satisfaction of the central planners.

 

Behind the confusion in government economists’ minds is a false conviction that GDP records the performance of an economy. This is wrong. GDP is just a money-total at a previous point in time, and no more than that. It is not a measure of economic progress or regress. A change in GDP reflects only a change in the quantity of money in the economy, so it is perfectly possible for an economy to contract, or even collapse, while nominal GDP rises. Not only is this fatally misunderstood by today’s economists, but this outcome has become far more likely for India, and will simply end up generating more monetary inflation from the banking system. Behind the Indian authorities’ poor grasp of the economic consequences of their actions are misconceptions common with establishment economists everywhere. However, it is likely that central bankers in India and elsewhere are at least vaguely aware of the long-term danger of increasing price inflation. But the consensus in banking circles is that more money and credit may be required to stave off recession, and even systemic risk. And in the case of systemic risk, cash is a danger because it allows the public to expose a bank’s insolvency. If only cash was somehow replaced, there could perhaps be greater control over economic and systemic outcomes.

 

All the signs of this loose thinking are there. We keep on hearing of central banks planning to do away with cash, and Modi’s action is consistent with this standpoint. His government is not only trying to eliminate black markets, but it is also brutally trying to eliminate economic dependence on physical cash. It rhymes with the direction of travel for central bank policy in the advanced economies as well as in the emerging.

 

Doubtless, for this reason, central banks everywhere will be watching the Indian experiment closely. But we can easily guess what their analysis will conclude. If the experiment succeeds, it will encourage them to proceed with their own plans to digitise money and dispense with the folding sort. If it doesn’t, failure will be deemed to be due to the peculiarities of the Indian economy and the failure of the Reserve Bank to implement policy effectively, so they will proceed with their plans anyway.

 

However, hopes that the elimination of cash will give central banks greater control over inflationary outcomes appear to be badly misplaced. Not only does history tell us the exact opposite is the case, and that the reality is central banks have no control over price outcomes, but subjective price theory also confirms. The pricing power of money is not and never has been in the control of central banks; it is a matter only for the users of money in their day-to-day transactions. Money’s use as money is wholly down to its public acceptance as money, as experience proves, and central banks’ abuse of this trust is ultimately dangerous, as so often demonstrated. For example, despite government diktats and heavy-handed enforcement, Zimbabwe’s currency has become at best, to put it politely, a replacement for another form of paper whose vital supply has been disrupted. The digital version has even less value, because it has no alternative use.

 

India and Gold

We must return to the specific subject of India, and the likely outcome of Modi’s clumsy attempt to eliminate means of payment using cash. It is almost certainly going to backfire. Indians have little respect for government as it is, and this action will only convince them with renewed purpose to have as little to do with the government and its money as possible. When the new Gandhi notes come into circulation, they will likely be rejected as the preferred money by growing numbers of a rightly suspicious public. This means that the rupee’s purchasing power will diminish more rapidly than if Modi had not disrupted what had become a relatively stable monetary situation.

 

Ordinary people in their actions are well ahead of western financial analysts, having quickly anticipated this outcome for themselves. Despite longstanding government attempts to persuade them otherwise, they are rushing to convert worthless rupees into the one form of money they have trusted for millennia and over which government has no control, gold. They know that priced in rupees, gold will be more expensive in the months to come, so anything that can be encashed will be encashed for gold, not rupees.

 

This is the reason why gold in India is now trading at a substantial premium to international prices. The Indian government restricts its supply because it has always seen gold, correctly, as a challenge to its own fiat money. Accordingly, the central planners condemn gold as being more appropriate to history than today’s economic environment. And having dismissed its relevance as money and as a superior store of value to the rupee, they see gold imports as unproductive hoarding. The government and central bank also appear to make the mistake of believing that if gold imports were eliminated, the balance of trade would improve accordingly. The result is various acts and regulations since the Gandhi era have only encouraged gold smuggling. The importation of gold has never halted, and responding to every twist and turn of monetary policy has increased over the long-term, and will continue to do so following Modi’s clumsy action.

 

The impact of government ineptness on the gold market is likely to be considerable. After a period of relative currency stability, gold demand, at the officially recorded level, had in fact declined earlier this year. The premium on gold was less than the new sales tax, putting many jewellers out of business, because they could not compete with smuggled gold, which bore no tax and attracted a lower premium than the sales tax. More jewellers will probably be put out of business by this latest action. Smuggling will consequently rise and rise, particularly if the rupee’s purchasing power declines because of escalating public distrust of it as money.

 

The central banking community, headed by the Bank for International Settlements, was concerned at Indian gold demand increasing at a time when Chinese citizens were absorbing most of the world’s free supply of newly-mined and scrap gold. It is almost certain that the appointment of Raghuram Rajan in September 2013 as Governor of the Reserve Bank of India had much to do with the urgency to bring Indian demand for gold under control, because he was and still is the BIS’s establishment man. He has generally failed in this mission, and his tenure was not renewed for reasons unknown, other than he preferred to return to the calmer pastures of academe and his Vice-Chairmanship of the Bank for International Settlements.

 

This is not characteristic of a career central banker at the height of his powers and influence. Perhaps Rajan realised his attempt to manage gold demand would never work, and Modi was proving too dangerous for his own legacy at the Reserve Bank to survive unblemished. He was recently quoted as saying that the RBI’s ability to say no to the government must be protected, some months after he declined the opportunity to serve a second term. Was this a reflection of something that happened?

 

In conclusion, the surprise money-grab by the Indian authorities intensifies the public’s perception of a corrupt, overly-bureaucratic, and ineffective government. The public’s suspicion that government paper money is ultimately worthless will have, in its collective mind at least, gained immeasurable credence. An accelerating decline in the purchasing power of the rupee is the most likely economic consequence of Mr Modi, ultimately destabilising for both the country and his government.

As we concluded previously, on a final philosophical point. Our entire monetary system depends on trust. A banknote is a piece of paper that says the RBI will give the bearer another similar piece of paper, or make an entry in an electronic ledger for that amount. The system works because everybody believes that those pieces of paper will be accepted by everybody else and therefore, money serves as an useful medium of exchange. This move has shaken that trust. Expecting a nation used to 90% cash transactions to ever trust government-sponsored digitzation is beyond farce and financial repression, it is monetray larceny.

One final question, will the police be enlisted to beat the population into a cash-less society also?

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Juppe And Fillon Clash For Republican Nomination As France Picks Marine Le Pen’s Opponent

Following last weekend’s latest latest “stunning” political outcome, in which French former PM Francois Fillon trounced pollsters’ favorite Alain Juppe in the first round of the French conservative primary and which saw the latest political career termination for former president Nicolas Sarkozy, on Sunday the two former prime ministers are going head-to-head in a runoff vote for France’s center-right presidential nomination, with the victor expected to face a showdown against a resurgent Marine Le Pen in the May 2017 presidential election.

In next year’s presidential election, the conservative nominee’s toughest competition will come from the right-wing National Front leader Marine Le Pen. Polls in the build-up to the primaries showed Le Pen ahead in the first round of next year’s vote, with a Republican candidate also making it to the runoff. France goes to the polls in April 2017 for the presidential election with the second round scheduled to be held in May.

In the first round of the Republican Party primary held on November 20, Fillon, who served as the prime minister from 2007-2012, won 44.1 percent of the vote, beating Juppe, who secured 28.6 percent.

The winner, either Francois Fillon or Alain Juppe, will most likely represent the entire French political mainstream against the National Front’s Marine Le Pen, in what Reuters dubs another test of the anti-establishment anger in Western countries that saw Britain vote to leave the EU and Americans elect Donald Trump as president.

Fillon is a surprise frontrunner who heads into the runoff on November 27 after being “more convincing” during the two hour TV debate with his rival Juppe, who was prime minister of France from 1995 to 1997 under President Jacques Chirac.

Having previously declared Juppe a favorite for the presidency until last weekend, opinion polls have since swung and now show Fillon, a social conservative with a deep attachment to France’s Catholic roots, as the clear favorite after stunning his more centrist challenger with a surge in support just before the Nov. 20 party nomination first round. Still, recent lessons from Brexit and the US presidential election suggest that one should be very careful with poll predictions, which is why a Juppe surge is not out of the question.

Voting opened at more than 10,000 polling stations across France at 8 a.m. (0700 GMT) and was set to close at 7 p.m. (1p.m. Eastern) with the first results likely up to an hour and a half later.

A 62-year-old racing car enthusiast who lives in a Loire valley chateau, Fillon promises radical reforms to France’s regulation-encumbered economy, vowing to roll back the state and slash government’s bloated costs.

Scrambling to regain momentum, Juppe, 71, a soft-mannered moderate who is now mayor of Bordeaux, has attacked the “brutality” of his rival’s reform program and says the Paris lawmaker lacks credibility. But in a blow to Juppe, television viewers found the harder-line Fillon more convincing in a head-to-head debate on Thursday.

While both candidates are running as Republicans, there are substantial difference in their platforms, with the following key distinctions in foreign, economic and social policy courtesy of RT:

  • On  foreign policy, Fillon is seen as having little experience with international affairs. Juppe, on the other hand, was in office when the Arab Spring unfolded in the wider Middle East. Fillon, unlike his rival, has a positive outlook on Paris’ relations with Moscow. Unlike Juppe, who sees Russia as more of a threat to be contained, the 62-year-old has called Moscow a “crucial partner” for Europe and has supported calls for the lifting of sanctions against Russia. The two hopefuls also diverge on Syria. Seventy-one-year-old Juppe said Russia had committed “war crimes” in Syria, while Fillon wants closer cooperation with Moscow in fighting terrorism. Fillon is the author of a book called, “Beating Islamic Totalitarianism,” and advocates a hard line against Islamist terrorism at home. He wants to bar French jihadists from returning to France after fighting in Syria or Iraq by stripping them of their citizenship. Juppe has a somewhat softer approach to terrorism and supports the arrest of jihadists returning from Iraq or Syria. He has also made calls to place suspected Islamist radicals who pose a threat under house arrest.
  • On the economic front, Fillon advocates tough free-market positions. His economic proposals include cutting 500,000 to 600,000 civil servant jobs and cutting public spending by €110 billion ($117bn). He also wants to raise the retirement age from the current 62 years to 65 years and VAT rates by 3.5 percent. The Republican also advocates for ending the 35-hour work week, allowing unions to negotiate up to 48-hour working weeks. Juppe has similar proposals but without the shock therapy. His proposals include firing only 250,000 civil servant jobs and cutting public spending by €100 billion ($106bn). The 71-year-old wants to end job guarantees for civil servants, and increase the work week to 38 hours. Just like Fillon, Juppe wants to raise the retirement age. He also wants to increase VAT rates by 1 percent.
  • On social policy, the 62-year-old Fillon, for instance, opposes same-sex partners adopting children. Such a conservative agenda has allowed him to secure votes among anti-gay marriage groups. He also advocates making it harder for children born to foreign surrogate mothers to obtain French citizenship. Juppe, while on the campaign trail, stated that he does not plan to amend the 2013 gay marriage law to prohibit adoptions or change France’s adoption rules.

Today’s vote is expected to see a substantial turnout with Reuters reporting that according to organizers from the center-right party by midday the participation rate was 10 to 15% higher than in last week’s first round.

Public reactions to the two candidtes are, as in other recent political votes, polarizing.

“He’s not ashamed of being on the right, and even less of being Catholic,” Fillon backer Valerie Sonnard, a childminder in her forties, told Reuters at a polling station in Toulouse, southern France on Sunday.

 

“My choice is Francois Fillon because I don’t want a right that is tainted by the left,” said Harold Bakinsian, a 51 year-old architect voting in Frejus on the Mediterranean coast.

 

As the two candidates voted, Fillon told reporters: “It is the voters who are talking now, not the candidate.”

 

Juppe meanwhile said he was proud of his campaign, but also complained over the way he had been cast on social media as soft on Islamist militancy – a sensitive subject in France, where more than 230 people have died in Islamist militant attacks since January last year. “Some truths came out too late,” he said.

Since any registered voter can take part in the primary, the outcome of the vote is especially hard to predict.

As noted above, another consideration in picking today’s winner is that the he will be France’s consensus candidate expected to stop the National Front, a fact which could help the more centrist Juppe, particularly if many voters from outside the ranks of the center-right take part. “I voted for Alain Juppe because I fear Francois Fillon’s economic program, too rightist and too conservative, will divide society too much,” said Daniel Dunia, a Toulouse-based researcher in his forties who considers himself a leftwing voter.

Which brings us again to the determination by local pollsters who have decided that the winner of the center-right primary will be the favorite to enter the Elysee palace, likely to place in the top two alongside Le Pen in a first round in April and defeat her in a run-off in May. Polls show either Fillon or Juppe would beat Le Pen, Juppe would do so by a more comfortable margin. But as even Reuters admits – whose daily Reuters/IPSOS polling showed Hillary Clinton a decisive leader in the days ahead of the US election – the shock results in the British referendum and U.S. presidential contest mean forecasters’ assumptions are being treated with caution.

Like in the UK and US, local voters are angry: they say they are fed up with France’s near double-digit rate of unemployment, nearly double that of some European peers, and sluggish job creation in an economy that is forecast to grow an anemic 1.4 percent in 2016.

Meanwhile, French President Francois Hollande is so unpopular and his Socialists so divided that pollsters say he would be unlikely even to reach the run-off should he decide to run. With France still under a state of emergency since Islamist militant attacks over the past two years, cultural tensions in a country that hosts Europe’s biggest Muslim community have been central to the election debate. Hollande has two weeks in which to decide whether to run for re-election. A win for Fillon and his hardline economic platform would give the 62-year-old Hollande a target to attack and could convince him to make a bid for a second five-year mandate against the odds. His Prime Minister, Manuel Valls, is also gearing up to stand. The Socialist primaries are due to take place in January.

* * *

For the first results of today’s vote tune in around 2:30pm Eastern time, and remember there is much more excitement ahead: voter anger is sweeping aside establishment figures in Western countries, with Italy’s Prime Minister Matteo Renzi forecast to lose a referendum on constitutional reform on Dec 4, the same day as the Austrian presidential election revote in which a right-wing candidate is favorite to win. Germany’s Angela Merkel faces a fight for re-election next year. Europe’s full political calendar is below, courtesy of SocGen:

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OPEC Can Make Those Shale Hedges Lose Money at 55 Dollars Per Barrel (Video)

By EconMatters


We discuss the idea that nobody else has thought of regarding how OPEC will actually hurt the Shale Industry by making all those financial hedges punitive, i.e., lose money above $52 a barrel on the front month with corresponding forward curve hedges all losing money for Shale Producers.

Shale Producers all put on “Financial Hedges” which start turning negative once the oil market busts out to new highs. So they will make money on their production sales, but lose money on their financial hedges as these forward hedges are strictly financial in nature. Thus, OPEC Can Stick It to the Shale Industry by raising prices above expectations!

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Ron Paul Lashes Out At WaPo’s Witch Hunt: “Expect Such Attacks To Continue”

 

Washington Post Peddles Tarring of Ron Paul Institute as Russian Propaganda, via The Ron Paul Institute for Peace & Prosperity,

 

The Washington Post has a history of misrepresenting Ron Paul’s views. Last year the supposed newspaper of record ran a feature article by David A. Fahrenthold in which Fahrenthold grossly mischaracterized Paul as an advocate for calamity, oppression, and poverty — the opposite of the goals Paul routinely expresses and, indeed, expressed clearly in a speech at the event upon which Fahrenthold’s article purported to report. Such fraudulent attacks on the prominent advocate for liberty and a noninterventionist foreign policy fall in line with the newspaper’s agenda. As Future of Freedom Foundation President Jacob G. Hornberger put it in a February editorial, the Post’s agenda is guided by “the interventionist mindset that undergirds the mainstream media.”

On Thursday, the Post published a new article by Craig Timberg complaining of a “flood” of so-called fake news supported by “a sophisticated Russian propaganda campaign that created and spread misleading articles online with the goal of punishing Democrat Hillary Clinton, helping Republican Donald Trump and undermining faith in American democracy,” To advance this conclusion, Timberg points to PropOrNot, an organization of anonymous individuals formed this year, as having identified “more than 200 websites as routine peddlers of Russian propaganda during the election season.” Look on the PropOrNot list. There is the Ron Paul Institute for Peace and Prosperity’s (RPI) website RonPaulInstitute.org listed among websites termed “Russian propaganda outlets.”

What you will not find on the PropOrNot website is any particularized analysis of why the RPI website, or any website for that matter, is included on the list. Instead, you will see only sweeping generalizations from an anonymous organization. The very popular website drudgereport.com even makes the list. While listed websites span the gamut of political ideas, they tend to share in common an independence from the mainstream media.

Timberg’s article can be seen as yet another big media attempt to shift the blame for Democratic presidential nominee Hillary Clinton’s loss of the presidential election away from Clinton, her campaign, and the Democratic National Committee (DNC) that undermined Sen Bernie Sanders’ (I-VT) challenge to Clinton in the Democratic primary.

The article may also be seen as another step in the effort to deter people from looking to alternative sources of information by labeling those information sources as traitorous or near-traitorous.

At the same time, the article may be seen as playing a role in the ongoing push to increase tensions between the United States and Russia — a result that benefits people, including those involved in the military-industrial complex, who profit from the growth of US “national security” activity in America and overseas.

This is not the first time Ron Paul and his institute has been attacked for sounding pro-Russian or anti-American. Such attacks have been advanced even by self-proclaimed libertarians.

Expect that such attacks will continue. They are an effort to tar Paul and his institute so people will close themselves off from information Paul and RPI provide each day in furtherance of the institute’s mission to continue and expand Paul’s “lifetime of public advocacy for a peaceful foreign policy and the protection of civil liberties at home.” While peace and liberty will benefit most people, powerful interests seek to prevent the realization of these objectives. Indeed, expect attacks against RPI to escalate as the institute continues to reach growing numbers of people with its educational effort

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Google Maps Briefly Renames Trump Tower To “Dump Tower”

On Saturday night, anyone seeking to find the Trump Tower on Fifth Avenue in New York was met with an unexpected result: the Trump residence and transition campaign HQ was briefly renamed “Dump Tower” on Google Maps. The unofficial new name didn’t last too long, however, with the president-elect’s transition headquarters completely removed shortly after.

After social media discovered the renaming and, the location vanished completely from the map before reappearing with its original “Trump Tower” moniker. Trump International Hotel & Tower in Columbus Circle was also renamed Dump International Hotel & Tower, according to PIX11.

Donald Trump, who ealier this morning tweeted his latest opinion on Jill Stein’s push for a recount, has yet to comment on the temporary name change, which under Google’s current procedures would have had to be approved by someone on Google’s side before being displayed on the map.

Speaking to AP, a Google spokesperson explained that the company changed the names back when alerted to the alterations, which had stemmed from “user contributions.” The alternative is that the prank could have been the work of a hacker, hardly a narrative Google would like to embrace.

As RT points out, some Twitter users called the name change apt, as the building was a perfect place to “drain the swamp.”

Others focused on the humorous side of the prank, some saw it as pettiness from the “childish” left.

In 2015, Google apologized after racist search terms including “n*gger house” and “n*gger king” returned the White House when searched for in the Washington DC area. “Some inappropriate results are surfacing in Google Maps that should not be, and we apologize for any offense this may have caused. Our teams are working to fix this issue quickly,” a spokesperson said at the time.

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OPEC Deal Disintegrates After Iran Press Accuses Saudi Arabia Of “Reneging” On Agreement

On Friday, after reading the latest shift in the every changing, always fluid OPEC narrative, according to which Saudi Arabia was demanding Iranian oil production cuts contrary to the agreement reached at the end of September in Algiers, in which Iran was granted an exemption from the upcoming supply cut negotiation in Vienna on November 30, we were confused:

This morning it appears that there is far less confusion: according to Iran’s semi-official Mehr news agency, the OPEC agreement is effectively dead with Iran’s government mouthpiece reporting that “oOn the eve of OPEC Meeting, Saudi Arabia has officially declared a war on oil prices by releasing a tactical letter as well as applying pressure on certain OPEC members.“

As the news report – which likely telgraphs the position of Iran’s oil ministry – lays out, Iran is now once again lashing out at Saudi Arabia and raising a diplomatic scandal over the terms of the November 30 OPEC meeting just days in advance, in what will likely lead to a substantial renegotiation if not outright failure of the deal.

Here are the key excerpts from the report:

On the verge of the 171st Ordinary OPEC Meeting to convene on November 30 in Vienna of Austria and at a time when the world’s major producers and exporters of crude oil are preparing to adopt one of the most historic decisions on freezing oil prices, Saudis seem to have reneged on earlier promises.  

 

During the earlier informal meeting of OPEC ministers in Algeria in late September, members of the Organization of Petroleum Exporting Countries (OPEC) reached a consensus on putting a cap on production levels and the session urged participants to prepare for freezing or even reducing OPEC’s aggregate oil output to 32.5 million barrels per day by holding expert meetings and forming a common working group.

 

Over the past few weeks, several meetings at expert level were held among member states in different parts of the world and even non-OPEC states like Russia, Kazakhstan, Azerbaijan and Oman voiced readiness to stabilize or decrease their production levels.

 

Nevertheless, Saudi Arabia has questioned all agreements and negotiations on freezing oil prices by publishing a political and planned letter ahead of the forthcoming OPEC meeting.

 

Accordingly Saudi Arabia, in an official letter to OPEC, has announced that it will not take part at the lower-tier talks on Nov. 28 in Vienna ahead of the OPEC ministerial meeting on Nov. 30 since “OPEC ministers first need to agree on cutting output and inform non-member countries about their agreement.” 

When news of this surprising announcement by Saudi Arabia hit on Friday, oil tumbled the most in weeks. However, if Iran is right, and if the Saudi move indicates that the preliminary Algiers framework is dead, then crude has a long way more to fall:

In time with the tactical retreat on Saudis from attending the joint meeting of OPEC and non-OPEC members on Monday, Russia has also announced that it will not participate in the session in order to make any comprehensive deal literally impossible. 

Needless to say, Iran is not happy with what it sees as Saudi Arabia reneging on the terms of the origianl deal to “pressure” member states into once again accepting its demands, something that has been a key hurdle to any OPEC deal since November 2014: “apparently, under the pretext of lack of agreement among members, Saudi Arabia refuses to attend the Monday meeting, while in fact, Saudis, as OPEC’s largest oil producers plan to apply pressure on certain countries in order to dictate their policies to the member states.”

The Iranian complaint is simple: it believes it should be allowed to produce more:

In the past 12 years, Saudi Arabia and Iraq have enjoyed the lion’s share in crude production among all OPEC members to the extent that both countries, Saudi Arabia in particular, have taken over shares of other states by exploiting turbulent conditions like Iran’s oil sanctions, Libya’s internal conflicts, technical issues in Venezuela’s oil industry not to mention ongoing disputes in Nigeria. 

 

According to secondary sources, Saudi Arabia’s production share in OPEC has risen from 29.1% in 2004 to 31.5% in 2016 and the figure for Iraq increased from 6.5 to 13.2 per cent in the same  period. 

 

Moreover, share of the UAE rose from 7.7 to 8.8 and for Kuwait from 7.6 to 7.8 while the figure for Iran dropped from 13% in 2004 to 8.6% in the present year even though the country’s production soared following implementation of the Joint Comprehensive Plan of Action (JCPOA). 

Furthermore Iran’s production concerns, explained previously, are legitimate: “The aggregate total of oil output in Saudi Arabia has reached 10.525 million barrels per day (bpd) indicating a rise of over one million bpd as compared with the year 2014. Iraq’s crude oil production also rose from 3.11 million to over 4.776 million bpd in the same timespan.   Iran’s output level, however, stands at about 3.92 million bpd still lower than pre-sanction levels which were over four million bpd.”

As a result, it all boils down to market share:

In other words, Saudi Arabia has, in one sense, seized shares of other OPEC manufacturers during the past decade and, once again though this time with a politically-motivated and non-economic plan, Saudi princes intend to wage a full-blown psychological war against Iran and a number of other OPEC members in order to prevent achieving a comprehensive agreement on reduction of oil output so that they could maintain the highest production capacity while ignoring interests of other members. 

What happens next? According to Iran a full court press by Saudi media “friends” to scapegoat Iran as the offending party should the Vienna summit fail to reach a solution:

No doubt in the remaining hours before the OPEC meeting, Saudi Arabia will resort to some Western media to launch a new psychological war against Iran’s oil industry in order to virtually direct attention of market activists from its own uncapped and high output levels to countries like Iran, Iraq and other OPEC countries.  

 

In the meantime, it is worth recalling that due to the sharp decline in global oil prices from $100 per barrel to lower than $50, any decline in oil market will undoubtedly bring about the greatest loss to Saudis, with a production of over 10.6 million bpd, than it would do to Iran who produces less than four million bpd. 

What makes matters worse for Saudi Arabia is that Iran is now confident it can pursue its oil strategy on its own, and does not need either OPEC or Saudi Arabia to further its interests:

Despite all measures taken by Saudis, Iran has reached a record high in oil sales by deploying 2.442 million barrels of oil per day to global markets, marking anunprecedented figure in the past two decades. Moreover, Iran has recently managed to find a place in emerging markets like Poland, Hungary as well as some states in the Eastern Bloc of Europe. 

 

Also in Asia, Iran has taken  over the place of Saudi Arabia turning into the largest supplier of crude oil to India and statistics reveal that in October, Iran shipped 789 thousand barrels of crude to the Asian state remaining ahead of Saudis who exported 697 thousand barrels in the same time preiod. 

 

The question remains whether Saudi Arabia will manage to attain its political objectives in the oil market by waging a new oil war on the verge of the OPEC meeting in Austria in order to postpone the plan to freeze OPEC’s oil output.

We will know the answer in three days.

Original report here

via http://ift.tt/2fFcLip Tyler Durden

How Will China’s Soft-Landing-Policy Suffer Under Trump?

china-5

Source: iaffairscanada.com

When it became clear Trump was about to win the US presidential elections, the value of the Mexican Peso nosedived and lost in excess of 10% overnight. That wasn’t surprising, as Trump had made several anti-Mexico statements in its bid to become the next president of the USA, and the economic repercussions and impact from a ‘cold trade war’ between Mexico and the USA would have been huge.

But Mexico wasn’t the only country president-elect Trump has made comments about, as he was also particularly harsh on China. However, since he has effectively been elected to take office, Trump has been backtracking on some of his previous statements, which confirms the Dutch expression ‘the soup is never eaten as hot as it’s served’. It will be interesting to see how President Trump will engage in a long-term relationship with the Chinese, and it might not be as confrontational as one was previously expecting.

A more difficult and constraining relationship with the USA could be tough for China, as its central government is still trying to position its economy for a soft landing. The growth rate has been decreasing for several years now, and the main task is now to make sure the deceleration of this growth rate doesn’t cause any severe difficulties.

china-4

Source: tradingeconomics.com

This won’t be easy, as the country still has a severe overcapacity in the glass and steel  sectors, despite the fact the government has unveiled plans to reduce the steel output by 10-15%. Despite these aggressive plans, China is hopelessly behind with regards to the output reduction. A large part of the responsibility for this lies with the government, as the state-owned enterprises are still massively inefficient. According to Danske Bank, the SOE’s had a total share of 39% of the country’s industrial assets, but employ just 18%.

The focus seems to have shifted from a market-based intervention (using the state-owned enterprises to steer the economy) to a fiscal policy-based attempt to let the economy make a soft landing. However, this could also backfire, as the current plan mainly consists of a substantial monetary expansion, and an increased access to credit, and the 2008 global financial crisis has taught us that’s perhaps not always the best way to create growth as this growth rate might be out of touch with how the ‘real’ economy is trending.

Indeed, let’s have a look at a chart which shows the growth rate in the private consumption:

china-1

Source: Danske Bank

It’s very clear the consumption growth rate is slowing down. Perhaps this isn’t a surprise, but it’s practically the start of a vicious circle of lower growth. The consumption expenditures are slowing down, causing the economy to contract (as a lower demand for products reduces the supply-side as well), and the GDP to grow at a continuously slower rate.

china-2

Source: Danske Bank

And yes, China is willing to do a lot to protect its economy. Surprisingly, the forex reserves have hit a 5 year low, and have fallen by approximately 25% since the peak of 2014.

china-3

Source: ABN AMRO

But at the same time China has been reducing its forex reserves, its gold purchasing pace remains remarkably consistent. The country added 170,000 ounces in July, 160,000 ounces  in August and again 160,000 ounces in September. That’s remarkable (and suspiciously) consistent, and it will be interesting to see if the country is buying more gold now it’s on sale again.

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