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Gold and Silver Aren’t Getting Stronger, Report 29 May, 2016

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By Monetary Metals

prices

The dollar moved up, though most people would say gold fell about $40, and silver 32 cents. In the mainstream view, the value of the dollar is 1/N (N is the quantity). So how could the dollar go up? Certainly, the quantity keeps on increasing.

Our view is different. If you borrow dollars to buy an asset, and the asset doesn’t produce generate enough yield to pay the interest, you have to sell or default. It should go without saying that it’s an unsustainable Ponzi scheme if everyone keeps borrowing more and more to simply bid up the price of any asset (including gold).

So here we are, and the dollar is getting more valuable again.

Let’s take a look at the supply and demand fundamentals. But first, here’s the graph of the metals’ prices.

The Prices of Gold and Silver

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio was down a bit this week.

The Ratio of the Gold Price to the Silver Price
ratio

For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

Here is the gold graph.

The Gold Basis and Cobasis and the Dollar Price
gold

The red line is back to a tight correlation with the green. That is, the price of the dollar is rising (i.e. the price of gold, measured in dollars is falling). Along with it, we finally see a noticeable rise in the scarcity of gold. Gold finally got a bit scarcer as its price fell another $40. Speculators finally flushed a bit, with stop orders getting hit in this brutal (to them) price action. Regular readers of Monetary Metals didn’t get caught, as we have been saying that the fundamental price of gold is below the market.

Our calculated fundamental price of gold is just under $1,170. Sure, gold got scarcer with the price drop. But only in proportion.

Now let’s turn to silver.

The Silver Basis and Cobasis and the Dollar Price
silver

The same pattern applies in silver.

As in gold, silver is scarcer at this lower price. Proportionally.

The fundamental is $13.90. This gives us a fundamental gold-silver ratio of about 84.

© 2016 Monetary Metals

…read more

Source: Gold and Silver Aren’t Getting Stronger, Report 29 May, 2016

    

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The Global Bear Market In Freedom

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By Tyler Durden

Submitted by Erico Matias Tavares via Sinclair & Co.,

Americans will be celebrating Memorial Day this weekend, to honor those who fought and died for the values they have traditionally cherished the most as a nation: life, liberty and the pursuit of happiness.

The world has changed dramatically in recent decades. The geopolitical situation is much more complex, with rising powers challenging America's supremacy. The intractable war on terror seems interminable. Old foes appear to spring back to life even more powerful than before. And things at home look dicey in terms of politics and economics.

As we reflect upon the ultimate sacrifice that others have made‎, it is an opportune moment to consider a very important question: is the US winning the fight for freedom?

More than other dictatorial regimes, “totalitarianism” represents the opposite of everything America is supposed to stand for. For most people it conjures images of a repressive leader and his minions having total control of a society with very limited freedoms. That’s not too far off from reality, but there’s more to it and a process to get there.

The term was first coined by Giovanni Amendola in 1923 to describe the emergence of Italian fascism (which was different from other dictatorships). However, it only gained traction in academic research during the 1960s largely based on the work of political scientists Carl Friedrich and Zbigniew Brzezinski. They reformulated the definition to account for the Soviet Union as well as the fascist regimes of the 20th century, where a totalitarian system featured the following mutually-supportive defining characteristics:

  1. An elaborate guiding ideology;
  2. A single mass party, typically led by a dictator;
  3. A system of terror, using such instruments as violence and secret police;
  4. A state monopoly on weapons;
  5. A state monopoly on the means of communication; and
  6. Central direction and control of the economy through state planning.

As far as we can tell this definition has not been materially updated since it was first proposed, perhaps because the topic has lost academic interest following the collapse of the Soviet Union. One critique is that many totalitarian regimes do not exhibit all these characteristics at‎ the same time, and not with the same intensity. Initially they may even be welcomed and perceived as necessary by the general population, only to become more radical and pervasive over time, particularly as a result of a political or economic crisis.

We could also argue that in today’s globalized world the ability to restrict the emigration of citizens has become an important component. After all, the “total” aspect of it becomes less relevant if everyone can get out of Dodge.

Be that as it may, we will broadly employ these six characteristics to summarily analyze the shifts that have been occurring in the main geopolitical blocks across the world.

The pattern that emerges should concern freedom lovers everywhere.

The Islamic World

“Muhammadan [Islamic] law did not derive directly from the Koran but developed… out of popular and administrative practice under the Umaiyads, and this practice often diverged from the intentions and even the explicit wording of the Koran…. …read more

Source: The Global Bear Market In Freedom

    

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Dozens Shot Over Memorial Day Weekend As The Collapse Of Chicago Accelerates

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By Michael Snyder

Gang Violence - Public Domain

Chaos and violence threaten to spiral out of control in America’s third largest city, and nobody seems to have any idea how to solve the problem.  After decades of control by the radical left, many parts of the “Windy City” have become rotting, decaying, gang-infested hellholes.  Just like Detroit, the city of Chicago is rapidly becoming a joke to the rest of the world, but a horribly corrupt political culture likely stands in the way of any type of major reform any time soon.  And just like much of the rest of the nation, a spirit of violence and civil unrest is rising in Chicago.  So far this year, the number of shootings in Chicago is up 50 percent compared to the same time period last year, and that was before we even got to Memorial Day weekend.  As of Sunday morning, at least 40 people had already been shot, and authorities were bracing for even more violence as the holiday weekend stretched on…

A string of nearly two dozen shootings on the West Side has pushed the number of people shot during the Memorial Day weekend to at least 40, with two more days to go.

As of early Sunday morning, the toll stood at four dead and 36 wounded across the city, including a 15-year-girl shot to death as she rode in a Jeep on Lake Shore Drive near Fullerton Avenue, police said.

The cries to fix what is wrong with Chicago are becoming increasingly desperate, but at this point the city is drowning in debt and is pretty much flat broke.

So the options for doing anything about this growing crisis are quite limited.

But that isn’t stopping prominent city leaders from speaking out.  According to the New York Times, Rev. Corey Brooks believes that “we could be looking at a blood bath” this summer if nothing changes…

“If something doesn’t change, if we don’t get jobs for these kids, if we don’t change the economic situation, I’m worried that we could be looking at a blood bath,” said the Rev. Corey Brooks, a pastor on the city’s South Side, a mostly African-American area where some of the shootings have been concentrated. “If something doesn’t happen, I fear that we’re potentially looking at one of the worst summers we’ve ever had.”

As of Friday morning, homicides in Chicago were up 52 percent in 2016, compared with the same period a year ago, and shootings had increased by 50 percent, though the pace of violence had slowed in recent weeks, the police said.

I believe that Rev. Brooks is correct, but he isn’t identifying the core of the problem.

Thanks in large part to unchecked illegal immigration, gang membership has been surging in Chicago.  Back in 2012, the Chicago Crime Commission estimated that there were 150,000 gang members living in the city, but of course by now that number is likely far higher.

No city in the United States has a higher population of gang members than Chicago does, and hundreds of factions …read more

Source: Dozens Shot Over Memorial Day Weekend As The Collapse Of Chicago Accelerates

    

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Libertarian Party Chairman Candidate Strips To His Underwear On Stage

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By Tyler Durden

While badly needing an alternative to the fake left-right division plaguing US society, Americans will not get a much needed, credible libertarian “third choice” for at least another year. Here’s why.

Earlier today, the Libertarian Party nominated former New Mexico Gov. Gary Johnson and former Massachusetts Gov. William Weld as its presidential ticket Sunday, as the party attempts to elevate itself into the mainstream during an election that’s given the small party unprecedented opportunity. Unfortunately, “taking itself into the mainstream” was just not meant to be for a party that earlier today saw a candidate for chairman strip to his underwear and give the entire convention a striptease.

The pair, both two-term governors, have more executive experience than any other candidate in the race, and they will offer an alternative to two historically unpopular candidates, presumptive Republican nominee Donald Trump and Democratic front-runner Hillary Clinton.

“This is the best message team going forward,” Johnson, the Libertarians’ presidential nominee, told reporters after Weld won the vice presidential nomination.

And, as NBC reports, it all came to be in a contested convention. After endless speculation that the Republican Party’s divided primary might end in a contested convention in Cleveland and continued theories that the Democrats’ primary could end in Philadelphia with a floor battle between party insiders, 2016 finally had a contested convention, in Orlando.

Johnson won on the second ballot after falling short of a majority by just a few votes — getting 49.5 percent — on the first. However, unlike the democratic or republican races, there were no superdelegates who will make all the difference.

Unfortunately, it is here that things took a turn for the bizarre. The tense hour between ballots left candidates scheming and delegates making floor deals and chanting for and against candidates. It was the kind of drama political reporters had previously only dreamed about.

While Johnson locked down enough votes on the second ballot, the drama was far from finished Sunday. Libertarians also allow their party to choose the vice presidential nominee, and Johnson’s chosen running mate — Weld — is not a party favorite, as many question whether he’s really a Libertarian. It didn’t help that he endorsed Ohio Gov. John Kasich for the Republican presidential nomination earlier in the primary cycle.

Weld fells a couple of dozen votes short on the first ballot, but he won on the second — by just a few votes — and the crowd erupted in boos and cheers.

And then, the Libertarians showed that when it comes to stealing the stage and making a total farce, Trump is at best an amateur, when a candidate for the chairmanship of the Party decided to unleash in a stripteaser on the stage.

As The Hill reports, the man took the stage and defended his chosen candidate for the party’s vice presidential nomination, Derrick Grayson, as the results of the second ballot were tabulated, according to reporters on the scene. During that time candidates for chairman of the party were …read more

Source: Libertarian Party Chairman Candidate Strips To His Underwear On Stage

    

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"This Is Not The America My Parents Immigrated To In 1957"

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By Tyler Durden

Submitted by 'Stucky' via The Burning Platform blog,

Not that I remember what America was like in 1957, as I was not yet five years old. Years later, when I was old enough to understand, they told me their story. Briefly, it goes like this.

Dad was born in Romania (Czernowitz in Northern Bulovina), but he identified (haha) as German because, well, his dad was German, his mom was German, they spoke German and kept German customs, and lived in a German community so, applying the “quacking duck” theory, that’s what he was. Mom was born in Yugoslavia (now, Slovenia), but she identified as German for the same reasons as dad did. The Nazi regime would refer to folks such as my parents as “Volksdeutsche” —- being German as a people or race, regardless of citizenship. More on that here.

When dad was about seventeen the Deutsche Wehrmacht (army) made a pit stop in his neck of the woods, and forcibly yanked his ass off the farm, and within a few weeks turned him into a bonafide Mortarman (dudes who launch grenades). He might have destroyed or damaged a Russkie tank or two, but was eventually captured by the Russians, and spent the rest of the war, and some time thereafter, in one of their luxurious prison camps. When mom was a pre-teen the Russian army made a pit stop in her neck of the woods, killed most of her family, but spared her life and put her to work as a slave laborer and sex-toy (cuz she was very pretty), in one of their gulags.

Obviously they both survived this ordeal (otherwise I probably wouldn’t be writing this). However, after the war ended, neither parent was allowed back to their ancestral homes. In order to keep Germans from becoming a “problem” again, Eastern Europe (with approval of all the Western powers) decided to enact a program of ethnic cleansing by expelling as many as 14 million Germans. This German Diaspora comprised the largest migration of any European people in modern history. More here. Many died, estimates range from 500,000 to 2,000,000. My parents survived that as well, obviously.

They arrived as Flüchtlinge (refugees) in an Austrian camp for such people … two Germans as refugees in a German country, how weird is that … found each other, did the nasty posthaste, and produced me, at the time a bastard child mostly unwelcome anywhere. (I’m just glad my dad wasn’t some anonymous Russian soldier!). They gave it their best shot living this way. But, even as late as 1957, there wasn’t enough work in Austria. They felt their future would be better elsewhere. So, they came to America … for work.

You do understand the meaning of that last sentence? It means my parents came to America for a selfish reason, as all immigrants do. Sure, the stated reason for most immigrants may be for economic betterment, to escape political repression, or flee religious persecution, and such. But, the …read more

Source: "This Is Not The America My Parents Immigrated To In 1957"

    

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Paul Craig Roberts: Killary Will Be The Last US President

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By Tyler Durden

Authored by Paul Craig Roberts,

As Our Past Wars Are Glorified This Memorial Day Weekend, Give Some Thought To Our Prospects Against The Russians And Chinese In World War III

The Saker reports that Russia is preparing for World War III, not because Russia intends to initiate aggression but because Russia is alarmed by the hubris and arrogance of the West, by the demonization of Russia, by provocative military actions by the West, by American interference in the Russian province of Chechnya and in former Russian provinces of Ukraine and Georgia, and by the absence of any restraint from Western Europe on Washington’s ability to foment war.

Like Steven Starr, Stephen Cohen, myself, and a small number of others, the Saker understands the reckless irresponsibility of convincing Russia that the United States intends to attack her.

It is extraordinary to see the confidence that many Americans place in their military’s ability. After 15 years the US has been unable to defeat a few lightly armed Taliban, and after 13 years the situation in Iraq remains out of control. This is not very reassuring for the prospect of taking on Russia, much less the strategic alliance between Russia and China. The US could not even defeat China, a Third World country at the time, in Korea 60 years ago.

Americans need to pay attention to the fact that “their” government is a collection of crazed stupid fools likely to bring vaporization to the United States and all of Europe.

Russian weapons systems are far superior to American ones. American weapons are produced by private companies for the purpose of making vast profits. The capability of the weapons is not the main concern. There are endless cost overruns that raise the price of US weapons into outer space.

The F-35 fighter, which is less capable than the F-15 it is supposed to replace, costs between $148 million and $337 million per fighter, depending on whether it is an Air Force, Marine Corps, or Navy model.

A helmet for a F-35 pilot costs $400,000, more than a high end Ferrari.

(Washington forces or bribes hapless Denmark into purchasing useless and costly F-35)

It is entirely possible that the world is being led to destruction by nothing more than the greed of the US military-security complex. Delighted that the reckless and stupid Obama regime has resurrected the Cold War, thus providing a more convincing “enemy” than the hoax terrorist one, the “Russian threat” has been restored to its 20th century role of providing a justification for bleeding the American taxpayer, social services, and the US economy dry in behalf of profits for armament manufacturers.

However, this time Washington’s rhetoric accompanying the revived Cold War is far more reckless and dangerous, as are Washington’s actions, than during the real Cold War. Previous US presidents worked to defuse tensions. The Obama regime has inflated tensions with lies and reckless provocations, which makes it far more likely that the new Cold War will …read more

Source: Paul Craig Roberts: Killary Will Be The Last US President

    

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The Source of Failure: We Optimize What We Measure

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By Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Rather than measure consumption and metrics that incentivize debt, what if we measure well-being and opportunities offered in our communities?

The problems we face cannot be fixed with policy tweaks and minor reforms. Yet policy tweaks and minor reforms are all we can manage when the pie is shrinking and every vested interest is fighting to maintain their share of the pie.

Our failure stems from a much deeper problem: we optimize what we measure. If we measure the wrong things, and focus on measuring process rather than outcome, we end up with precisely what we have now: a set of perverse incentives that encourage self-destructive behaviors and policies.

The process of selecting which data is measured and recorded carries implicit assumptions with far-reaching consequences. If we measure “growth” in terms of GDP but not well-being, we lock in perverse incentives to boost 'growth” even at the cost of what really matters, i.e. well-being.

If we reward management with stock options, management has a perverse incentive to borrow money for stock buy-backs that push the share price higher, even if doing so is detrimental to the long-term health of the company.

Humans naturally optimize what is being measured and identified as important.

If students’ grades are based on attendance, attendance will be high. If doctors are told cholesterol levels are critical and the threshold of increased risk is 200, they will strive to lower their patients’ cholesterol level below 200.

If we accept that growth as measured by gross domestic product (GDP) is the measure of prosperity, politicians will pursue the goal of GDP expansion.

If rising consumption is the key component of GDP, we will be encouraged to go buy a new truck when the economy weakens, whether we need a new truck or not.

If profits are identified as the key driver of managers’ bonuses, managers will endeavor to increase net profits by whatever means are available.

The problem with choosing what to measure is that the selection can generate counterproductive or even destructive incentives.

This is the result of humanity’s highly refined skill in assessing risk and return. All creatures have been selected over the eons to recognize the potential for a windfall that doesn’t require much work to reap.

When humans were hunter-gatherers—our natural state for hundreds of thousands of years, compared to roughly 5,000 years of agriculture—those on the lookout for a calorie-rich windfall that didn’t require a lot of work ate better (and had more offspring that survived) than those who failed to reap windfalls. In the natural world, such windfalls might be a tree heavy with ripe fruit or a beehive loaded with honey.

Calories were scarce, and work burns a lot of calories, so the ideal scenario for the hunter-gatherer is a windfall that can be harvested with a minimal investment of calories/effort.

In our economy, qualifying for a positive reward without investing too much effort is a windfall. As a result, whatever is measured sets up a built-in incentive to game the system (i.e. exploit short-cuts) or cheat …read more

Source: The Source of Failure: We Optimize What We Measure

    

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"Bill Clinton Was Here": The Elite One-Percent’s ‘Orgy Island’ Exposed

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By Tyler Durden

Submitted by Shepard Ambellas of IntellliHub

The Elite One-Percent’s ‘Orgy Island’ Exposed

If you can name it — it has likely taken place this the lavish private island off the coast of Puerto Rico which boasts a beautifully landscaped plush luxury estate complete with its own helipad, privy only to certain members of the global elite.

Owned by Jeffery Epstein, a wealthy American financier and convicted sex offender, Little St. James Island appears to be somewhat of a gathering place and is a well desired hangout among key figureheads, actors and royalty to the likes of former U.S. President Bill Clinton, Kevin Spacey and even Prince Andrew.

Bill Clinton made multiple trips to Epstein’s private island,
Little St James (pictured), between 2002 and 2005

However, the people attending the lavish residence are likely do not go there to discuss “cutting edge scientific and medical research” as the Epstein VI Foundation would like you to believe, but rather go there to experience full-on sexual encounters with underage girls as young as fourteen.

That’s right, just like a scene out of the Hollywood blockbuster film Eyes Wide Shut, starring Tom Cruise, from wild parties to prostitution, orgies and even underage sex, Little St. James reportedly has it all and is seemingly a gathering point frequented by prominent jet-setters, and it is all being exposed. The cat is out of the bag so to speak.

Back in 2005 police conducted an 11-month-long undercover investigation on Jeffery Epstein and his estate after the mother of a 14-year-old girl went to police after suspecting her daughter was paid $300 for at least one sexual act on the island in which she was ordered to strip, leaving on just her panties while giving Epstein a massage.

Although police found tons of photos of young women on the island and even interviewed eyewitnesses, Epstein was hit with a mere slap on the wrist after “pleading to a single charge of prostitution.” Epstein later served 13-months of his 18-month service in jail.

In 2008 Epstein was hit again, this time with a $50 million civil suit after another victim, a woman, made a filing in a federal court claiming that she was “recruited” by Epstein to give him a “massage” but was essentially forced into having sexual intercourse with him for $200, which was payable upon completion.

Additionally it is important to point out that Bill Clinton has been mentioned by the press often over the years — and not just for his controversial relationship with Monica Lewinsky, but rather his friendship with Jeffery Epstein.

In fact, flight records indicate that ol’ Billy-boy would frequent the island paradise around the 2002 and 2005 era, while Hillary, Bill’s wife, was a Senator in New York.

Bill Clinton and Jeffrey Epstein

The Daily Mail wrote about one woman’s experience on the island:

‘I remember asking Jeffrey what’s Bill Clinton doing here kind of thing, and he laughed it off and said well he owes me a favor,’ one unidentified woman said in …read more

Source: "Bill Clinton Was Here": The Elite One-Percent’s ‘Orgy Island’ Exposed

    

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Homeland Insecurity

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By Tyler Durden

Be afraid… be very afraid (oh and lay down your arms)

Source: The Burning Platform

…read more

Source: Homeland Insecurity

    

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"All Men Are Not Created Equal" Louisiana State Rep. Rejects Declaration Of Independence

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By Tyler Durden

Via The Hayride,

HB 1035, a bill by Rep. Valarie Hodges that would have mandated that schoolchildren in Louisiana be taught the Declaration of Independence, sailed through the House Education Committee with a 6-2 vote. But Wednesday, when the bill reached the floor of the House, it had a different fate – amid a torrent of squabbling, Hodges returned the bill to the calendar and it’s likely finished for the session.

The Louisiana House of Representatives has 61 Republican members out of 105, and yet it was apparent no consensus for a cornerstone of basic civics in the state’s public schools was available to the bill’s supporters.

And yet, the bill did serve to provide a bit of civic education for the people of Louisiana – although perhaps not the lesson Rep. Hodges was looking for.

What we found out was something many of us knew – namely, that Rep. Barbara Norton, a Democrat from Shreveport, isn’t a fan of our founding documents – and also is a barely sentient being.

Have a look at Norton’s cranky questioning of Hodges about the Declaration of Independence, and consider the prospects of Louisiana’s legislature contributing positively to the state’s civic progress…

…read more

Source: "All Men Are Not Created Equal" Louisiana State Rep. Rejects Declaration Of Independence

    

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