New Gold-Backed Debit Card Launched In Partnership With MasterCard

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In recent years, there has been a major debate about the respective merits of gold versus Bitcoin, even though many, not all, gold bulls are also supporters of the latter. Gold advocates generally view favourably Bitcoin’s inherent characteristics of decentralisation, finite supply and ability to operate (so far) outside of the usual interference by western central banks. Having said that, the launch of Bitcoin futures on the CME in the coming weeks could lead to naked shorting of ‘paper Bitcoin’ by any parties, including central banks and large commercial banks, who deem capping of the Bitcoin price necessary. As we discussed last week in “Financial Times: Sell Bitcoin Because The Market Is About To Become “Civilized”, this could align Bitcoin with one of the major issues which has held the gold market hostage for years, time will tell.
While many gold investors remain entrenched in the view that gold will (eventually) prove to be the better store of value, one thing many would acknowledge is that Bitcoin is likely to evolve into a superior means of payment. However, that could be in the process of changing.
A fintech start up is partnering with some financial heavyweights to create a payments system backed by physical – not paper – gold. According to the Financial Times.
The world’s oldest currency is being brought into the digital age with the launch of a debit card and app that will allow people to pay for goods in gold. Fintech group Glint has teamed up with Lloyds Banking Group in the UK and MasterCard to create an app that enables people to load credit in various currencies, which can then be used to buy a portion of a physical gold bar. Customers use the app at the checkout to select whether to pay in a currency or gold, before transacting with their MasterCard.

This post was published at Zero Hedge on Nov 21, 2017.


Inflation and Gold – Precious Metals Supply and Demand

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Reasons to Buy Gold The price of gold went up $19, and the price of silver 42 cents. The price action occurred on Monday, Wednesday and Friday though so far, only the first two price jumps reversed. We promise to take a look at the intraday action on Friday.
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But first, we want to clarify something in light of our ongoing commentary about the struggles of the debtors and the lack of drivers for rising consumer prices. Just because farmers and restaurateurs are frantically producing and selling like mad, which results in soft prices, does not mean that people cannot begin to buy gold in earnest again.

This post was published at Acting-Man on November 21, 2017.




“None Of The Problems Are Solved” Despite Global ‘Plunge Protection’ Overnight

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When many American traders went to bed last night, China was tumbling, the euro was in trouble, and US equity futures were notching lower. Then, as former fund manager Richard Breslow scoffs, it appears the world “reconsidered” and everything rallied to erase any sign of discontent or uncertainty by the time everyone woke up…
Apparently, the word of the day is ‘reconsider.’
Across a whole host of assets, we got somewhat violent moves early in the 24-hour trading cycle that managed to unwind themselves over the course of the day.
I kept being told that the euro, Chinese equities, U. S. equity futures, gold, bond yields, Eurostoxx 50, and so on, all reversed their opening, sometimes gap, moves after the market reconsidered what it all meant.
Of course, that’s being a bit too kind. It would be more accurate to say things turned around when traders actually considered things for the first time. But this all matters more than just a collection of knee-jerk reactions that have come to naught as another trading region came in.

This post was published at Zero Hedge on Nov 20, 2017.



On The West’s Demise To The Sidelines Of History…

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The world is changing, but the west is clinging on to a unipolar vision of the world that has passed. It’s attempts to discard this changing reality in exchange for a western worldview expressed in their politics and media are so ungrounded, it’s comical as it is dangerous. This western bubble of reality laid down before the wests general public seems to hold up for now, although fragile and less and less by the day. Really, Russia again? Outside this western bubble however, credibility is lost daily as the west places itself on the sidelines of history.
The fundamental building blocs in western hard power and soft power are not under attack as the mediapolitical landscape could make us feel they are, it is more that they are revealed for what they are without the sugarcoating. As the multipolar world creates the political and economic power to pursuit alternatives and show new perspectives and interpretations, they now have the power to reflect the actions of the west mirrored back upon themselves as apposed to ‘just the way things are’ in the world.
Suddenly we are presented with another version of reality that also begs for a different version of history for the past decades. Our economic system seems to benefit the few as those few have a well managed grip on politics. Local business and craftsmanship, the real economy, have given way to the privileged multinationals and the financial world, the world of tax breaks and tax havens.
Whilst the real economy is breaking down, the central banks were printing money like never before to keep the banks and the familiar names afloat -so long as the Apple’s and Facebook’s and other household names keep the indices up, all is good. At the root of this infinite printing of money lies of course the petrodollar. The 1973 deal with Saudi-Arabia where the US would support the house of Saud so long as OPEC would sell all oil in US dollars only and buy US bonds, creating an immense need for dollars in the world and preventing inflation as the Federal Reserves printing presses make way for the economic, political and military US might since. Since, the whole international trade system has been dollar based. If Bolivia wants to sell logs to Venezuela, it will still use dollars. And by US law, every dollar has to be cleared by the bank of New York, thus making this transaction subject to US law. And don’t you dare circumvent it. Blocking Iran from the dollar-trade for not selling oil in dollars, and thus blocking it from the swift-system, and thus from world trade, was therefore the nuclear bomb in economics. Their currency devalued 50%. The earlier threats to the petrodollar -Libia selling oil for gold, Iraq for euro’s- have been met with heavy resistance. Now, in Syria, it seems the world has changed. The predominantly Saudi-US creation of ISIS to destabilize the nations of Iraq and Syria into chaos has now failed. Could we again see Syria, Iraq and Iran work together to create the Friendship Pipeline (a.k.a. the Islamic Pipeline in the west), exporting oil from Iran to Europe? Or will it be more of the same political-economic-monetary-military export of the west, with freedom, democracy and human rights as it’s sugarcoating?

This post was published at Zero Hedge on Nov 20, 2017.


The Difference Between GAAP And Non-GAAP Q3 EPS For The Dow Jones Was 16%

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The last time we looked at the near-record difference between GAAP and non-GAAP Dow Jones earnings, we found that it had crept to a (virtually) unprecedented 25%. To be sure, that was exactly one year ago, when the economy was perceived as being in worse shape than it is now, thanks to the narrative of a “global coordinated recovery” which is really just record central bank liquidity injections, and Chinese credit creation, both of which have recently hit the brakes.
That said, going back to the question of GAAP vs non-GAAP divergence, one would assume that in light of the so-called global recovery of 2017, company earnings would be more real and not the “pro forma, one-time, non-recurring” fabrication that US corporations are so fond of. Alas, one would be wrong.
As Factset’s John Butters writes in a recent blog post, as of today, all of the companies in the Dow Jones Industrial Average (DJIA) have reported actual EPS for Q3 2017, which brings up several questions: what percentage of these companies reported non-GAAP EPS for Q3 2017? What was the average difference and median difference between non-GAAP EPS and GAAP EPS for companies in the DJIA for Q3 2017? How did these differences compare to recent quarters?
Here are the answers:

This post was published at Zero Hedge on Nov 19, 2017.


Gresham’s Law

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This year’s Nobel prize in economics was awarded to Richard Thaler, a pioneer of behavioral economics. But there is a tale told by a lesser known Nobel laureate, Kenneth Arrow. As a World War II weather officer, he was tasked with analyzing the reliability of the army’s long-range weather forecasts. His conclusion: statistically speaking, the forecasts weren’t worth the paper they were printed on. Captain Arrow sent along his report only to be told, ‘Yes, the General is well-aware the forecasts are completely unreliable. But, he needs them for planning his military operations.’
Okay, maybe you don’t actually need a Nobel prize to know that rationality in the decision-making department is often lacking. Case in point: the capital markets. While subtle and ingenious in construction, the capital markets are, nonetheless, driven by the mass action of millions. They are a reflection of ourselves and necessarily express both the summit of our knowledge as well as the pit of our fears, and everything else in-between. And, this brings us to the subject at hand: Gresham’s Law. Sir Thomas Gresham was a financier in the time of King Henry VIII and his name is, of course, attached to the principle that ‘bad money drives out good money.’ Coin collectors of a certain age are familiar with the near immediate disappearance from circulation of all silver American coins once Congress had mandated the use of base metals beginning with the 1965 vintage. While all coins – silver and copper alike – carried identical legal tender value, it was the silver coins that vanished. Perhaps you are wondering what this has to do with bond investing? Everything!
Consider the state of financial markets as witnessed by metrics of implied volatility:

This post was published at Zero Hedge on Nov 19, 2017.


“People Ask, Where’s The Leverage This Time?” – Eric Peters Answers

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One of the Fed’s recurring arguments meant to explain why the financial system is more stable now than it was 10 years ago, and is therefore less prone to a Lehman or “Black monday”-type event, (which in turn is meant to justify the Fed’s blowing of a 31x Shiller PE bubble) is that there is generally less leverage in the system, and as a result a sudden, explosive leverage unwind is far less likely… or at least that’s what the Fed’s recently departed vice Chair, and top macroprudential regulator, Stanley Fischer has claimed.
But is Fischer right? Is systemic leverage truly lower? The answer is “of course not” as anyone who has observed the trends not only among vol trading products, where vega has never been higher, but also among corporate leverage, sovereign debt, and the record duration exposure can confirm. It’s just not where the Fed usually would look…
Which is why in the excerpt below, taken from the latest One River asset management weekend notes, CIO Eric Peters explains to US central bankers – and everyone else – not only why the Fed is yet again so precariously wrong, but also where all the record leverage is to be found this time around.

This post was published at Zero Hedge on Nov 19, 2017.