Swiss Gold Poll Likely Tighter Than Polls Suggest

Submitted by Mark O’Byrne  – Founding Partner of  GoldCore

By Ronan Manly, GoldCore Consultant

Introduction

There is just over one week to go before the Swiss gold initiative referendum on Sunday 30 November. The release of the latest opinion poll earlier this week shows a strengthening of opposition to the initiative at the expense of the yes camp, with the level of undecided voters still a significant component of the equation. Taking the ‘maybes’ into account, there are still, according to the latest poll, 37% of voters who are not definitely yes or definitely no at this stage.


GoldCore founder and Research Director, Mark O’Byrne on CNBC today

The official pollsters believe that the initiative will likely fail, and perhaps, at this stage they are correct. The intervention of the Swiss National Bank (SNB) into the campaign at every turn seems to have dissuaded some previously ‘yes’ leaning voters. However, the SNB is still not taking any chances and continues to make statements on what it see as the dangers to Swiss monetary policy from increased gold reserves in the form of a 20% gold minimum in the reserves, and a ban on gold sales if the initiative does go through. Continue reading

Mr. Gono, Are You on the Line?

Submitted by Bill Bonner – Chairman, Bonner & Partners

The Dow is still pushing higher. Gold is back below $1,200 an ounce.

The US economy appears stable. The stock market – which is supposed to know all, see all and understand nothing – tells us it is clear sailing ahead.

We are fools to believe it; perhaps we are fools if we don’t.

We can almost hear former governor of the Reserve Bank of Zimbabwe Gideon Gono’s phone ringing. He quiets his wives so he can hear. It is a voice with a strange accent… speaking from far away.

“Can you come give us some advice?”

Once again, the Japanese economy has slipped into a coma. And once again, the stimulus policies of the central bank… and the Ministry of Finance… have failed to revive it.

New York Times columnist and Nobel laureate economist Paul Krugman has gone to advise Shinzō Abe on how to deal with its latest crisis.

Could Abe find anyone worse to give him counsel?

That would be the aforementioned Mr. Gono. Continue reading

Sell, Sell, Sell……The Central Bank Madmen Are Raging

Submitted by David Stockman – The Contra Corner Blog

The global financial system has come unglued. Everywhere the real world evidence points to cooling growth, faltering investment, slowing trade, vast excess industrial capacity, peak private debt, public fiscal exhaustion, currency wars, intensified politico-military conflict and an unprecedented disconnect between debt-saturated real economies and irrationally exuberant financial markets.

Yet overnight two central banks promised what amounts to more monetary heroin and, presto, the S&P 500 index jerked up to 2070. That is, the robo-traders inflated the PE multiple for S&P’s basket of US-based global companies to a nose bleed 20X their reported LTM earnings.

And those earnings surely embody a high water mark in a world where Japan is going down for the count, China’s house of cards is truly collapsing, Europe is plunging into a triple dip and Wall Street’s spurious claim that 3% “escape velocity” has finally arrived in the US is soon to be discredited for the 5th year running. So it goes without saying that if “price discovery” actually existed in the Wall Street casino, the capitalization rate on these blatantly engineered earnings (i.e. inflated EPS owing to massive buybacks) would be decidedly less exuberant. Continue reading

That G20 meeting

Submitted by Alasdair Macleod – FinanceAndEconomics.org

G20 gatherings of world leaders on the surface are all the same: they conclude with a meaningless anodyne statement that everyone can agree with. But these meetings do serve a purpose: they allow the world leaders to meet informally and exchange views.

Since the last G20 in St Petersburg in 2013 when there was a high degree of conviction that economic growth would return, the global economic outlook has instead deteriorated significantly. Instead of last time’s mutual bonhomie over the prospect of their collective success, the world’s leaders this time are almost certainly worried. They would have learned about the failure of monetary policy everywhere. They would have had this first-hand from Japan’s delegation, which is on its way to financial and currency destruction. The despair in the European delegations would have been obvious as well.

The problem is that post-war monetary theories have failed to deliver. Lower interest rates and increased quantities of money in order to promote economic growth no longer work. The abandonment of the laws of the markets in favour of stimulating consumer demand by monetary means has turned out to be a blind alley. Time will tell, but if the global economy is heading for a slump, the banking system will become overburdened with defaulting borrowers, and government deficits will rise uncontrollably, especially in the welfare nations. This cannot be permitted to happen under any circumstances. It is therefore quite likely that the alternative to monetary-driven policy, accelerated government deficit spending as a pre-emptive measure, will be tried instead. And in this respect the relative success of the British and American economies will be attributed to their large budget deficits, while the misery of austerity is identified with the problems in France and the southern Eurozone. Continue reading