- The "Islamization Of Europe"? What's Behind Erdogan's New Muslim Political Network
Authored by Yves Manou via The Gatestone Institute,
- What is notable is that France's new Muslim party, the Equality and Justice Party (PEJ), is an element of a network of political parties built by Turkey's President Erdogan and AKP to influence each country of Europe, and to influence Europe through its Muslim population.
- What is their program? The classic one for an Islamic party: abolishing the founding secularist law of 1905, which established the separation of church and state; mandatory veils for schoolgirls; and community solidarity (as opposed to individual rights) as a priority. All that is wrapped in the not-so-innocent flag of the necessity to "fight against Islamophobia", a concept invented to shut down the push-back of all people who might criticize Islam before they can even start.
- "[The Islamist party's] purpose is to conquer the world, not just have a mandate. Its mechanics were already established…. Islamists took power in the name of democracy, then suspended democracy by using their power…. Convert the clothes, the body, the social links, the arts, nursing homes, schools, songs and culture, then, they just wait for the fruit to fall in the turban… An Islamist party is an open trap: you cannot let it in. If you refuse it, your country switches to a dictatorship, but if you accept it, you are at risk of submission…." — Kamel Daoud, Algerian writer, in Le Point, 2015.
In the legislative elections that will take place June 11 and 18 in France, political parties are finalizing preparations: choosing their candidates, and printing posters and stickers. Business as usual? Not really.
(Image source: Rama/Wikimedia Commons)
One newcomer arose in the political spectrum: a Muslim party, the Parti Egalité Justice ("Equality and Justice Party"; PEJ).
What is notable is that PEJ is an element of a network of political parties built by Trukey's President Recep Tayyip Erdogan and his Justice and Development Party (AKP), to influence each country of Europe, and to influence Europe through its Muslim population.
PEJ: A Pro-Erdogan Party in France
The PEJ was created in 2015 in Strasbourg, the de facto capital of eastern France, on the border with Germany. PEJ has already approved 68 candidates — not enough to cover the whole territory but enough to compete efficiently in districts where Turkish and Muslim populations are strongly represented. French citizens of Turkish origin are estimated to represent 600,000 people in France, out of a Muslim population estimated at 5-15 million, but official statistics do not exist.
Another Muslim party, "Français et Musulmans" ("French and Muslims"), is also quietly preparing to erupt on the political scene of the French legislative elections. "Français et Musulmans" originates from L'Union des Organisations Islamiques de France (UOIF) which has been rebaptized "Muslims of France". "Français et Musulmans" is the French branch of Muslim Brotherhood.
The PEJ, is the first party in France established by Turks. PEJ already participated in elections of the Provincial General Assembly in March 2015, but was eliminated in the first round. According to the magazine Marianne: "PEJ is closely connected to Council for justice, equality and peace (Cojep), an international NGO which represents, everywhere it is based, an anchor for AKP", the party of Turkey's president, Recep Tayip Erdogan. According to L'Express "many managers of PEJ are also in charge in Cojep".
What is their program? The classic one for an Islamist party: abolishing the founding secularist law of 1905, which established the separation of church and state; veils mandatory for schoolgirls in public schools; halal food for all schools; support for Palestinians; and community solidarity (as opposed to individual rights) as a priority. All that is wrapped in the not-so-innocent flag of the necessity to "fight against Islamophobia", a concept invented to shut down the push-back of all people who might criticize Islam before they can even start.
According to the magazine Marianne, Mine Gunbay, responsible for women's rights in the city council of Strasbourg, fearlessly and tirelessly denounced the metamorphosis of Strasbourg into "political laboratory of the AKP". Strasbourg is the city where Erdogan was authorized by former president Hollande to hold an electoral rally in October 2015. Legally.
Another noteworthy Turkish move in France is the probable nomination of Ahmet Ogras, the representative of Turkish Islam in France, as next president of the Conseil français du culte musulman ("French Council of Muslim worship", CFCM). Ahmet Ogras is known for his good relationship with Erodgan's AKP party. CFCM is the legal structure built by French politicians to have a single Muslim talking-partner. Until now, all presidents of CFCM were of Algerian or Moroccan origin.
Austria
In Austria, in 2016, "Turkish citizens" founded the New Movement for the Future (NBZ) party. The goal of the party is to give Turks a voice in politics across Austria. The NBZ Chairman, Adnan Dinçer, explained that the rise of extremist right-wing parties have caused them to work faster. "Political actors are making decisions about the minorities working here, but we are not involved in this decision-making mechanism," he said. The NBZ makes it clear that they support controversial Turkish President Recep Tayyip Erdogan and condemn the "Gülen movement", which the Turkish government claims carried out a coup attempt in July 2016.
Netherlands
Denk, a party founded by Tunahan Kuzu and Selçuk Öztürk in March 2017, became the first-ever ethic minority party in the Dutch parliament. The party, apparently a mouthpiece for Turkish president Erdogan, won three seats in the recent election, which was focused on immigration.
Party leader Tunahan Kuzu said: "This is the beginning of a new chapter in our history. The new Netherlands has given a vote in the House."
Bulgaria
The Muslim population of Bulgaria is made up of Turks (Sunni), some Shi'ites, Bulgarians and Roma, who together represent 7-8% of the total population. In Bulgaria, there are three Muslim political parties, in which most of the members are Turkish and Muslim.
One of these parties is The Movement for Rights and Freedoms (HÖH), founded in 1990 by Ahmet Do?an. In 2014, HÖH was represented by 38 people in the 240-member parliament and had four MEPs in the European Parliament (EP).
HÖH, which made a coalition with the Bulgarian Socialist Party (BSP), thus has a say in the country's administration, even though leadership changed after a 2013 assassination attempt against Do?an.
Because Erdogan was not satisfied with HÖH, he has worked to create other pro-Turkish parties in Bulgaria.
Germany
Many Germans of Turkish descent have chosen to invest in German established political parties and influence them from within. Some, however, are trying to influence policy from without.
The Allianz Deutscher Demokraten ("Alliance of German Democrats", ADD) is a small party founded by Remzi Aru, evidently as a reaction to the German Parliament's recognition of the Armenian Genocide.
ADD is friendly toward Erdogan and has been trying to establish an electoral base within immigrant and Muslim communities. Its leaders nevertheless had difficulty collecting the 1,000 signatures necessary to participate in the May 2017 North Rhine-Westphalia state election.
Another Muslim-German party is the Bündnis für Innovation und Gerechtigkeit ("Alliance for Innovation and Justice", BIG), which has existed since 2010, but without much success.
German law prohibits foreign funding of political parties, and a party of Turks would have to fulfill a certain range of obligations to get its certification as an official political party.
The Islamist Trap
An Islamist party in a democracy is, according the Algerian writer, Kamel Daoud, "a trap". Especially in France. In an op-ed published in Le Point in 2015, he writes:
"An Islamic party in France? What a fascinating political object: one cannot refuse it, but one cannot accept it. Nothing better summarizes the situation as a French trap… If France says Yes, she submits in the long term. An Islamic party is an Islamist party by a natural slope…. By definition. Its purpose is to conquer the world, not just to have a mandate. Its mechanics were already established…. Islamists took power in the name of democracy, then suspended democracy by using their power. At best. At worse, Islamists opted for the approach of the crab that keeps its claws behind his back: no political ambitions, but a millenary ambition in the mind: convert the clothes, the body, the social links, the arts, nursing homes, schools, songs and culture, then, they just wait for the fruit to fall in the turban… An Islamist party is an open trap: you cannot let it in. If you refuse it, your country switches to a dictatorship, but if you accept it, you are at risk of submission….
"As soon as it bursts onto the political scene, the same consequences appear as in Algeria, Egypt, Pakistan, the Sahel or Tunisia: it divides the country between Eradicators (those who want to eradicate the Islamists) and Reconcilers (those who advocate dialogue with Islamist monologue) and the Fatalists (those who are waiting for something good to happen)."
As a fine political analyst, Kamel Daoud knows — and everybody knows with him — that nobody in France has the solution to confront the Islamist problem. The only question is: who will win? Reconcilers or Eradicators? One thing is sure for now, Reconcilers are in power for the next five years.
Another thing is sure: the first veiled woman elected as a Member of Parliament will trigger a civilizational that which has no equivalent in French history.
- Former CIA Director, James Woolsey ‘Stunned’ Comey Leaked Private Discussions With President to Press
Content originally published at iBankCoin.com
Former CIA Director under Bill Clinton, James Woolsey, is ‘stunned’ that former FBI Directors, James Comey leaked notes of private conversations with the President of the United States to his friend and then the press.
The CNN host, Fareed Zakaria, attempted to advocate on Comey’s behalf, suggesting that since Comey was a ‘private citizen’ he had the right to leak his notes. Woolsey was having none of that horseshit and said it was ‘stunning’ that ‘he would give up the secrecy of a conversation with the President of the United States.’
In the land of snitches, everyone is a leaker.
- Florida Sheriff Declares "This Is War!!", Tells Americans To Arm Up
Authored by Mac Slavo via SHTFplan.com,
A Florida Sheriff’s video, which urges civilians to arm themselves and prepare for war, is quickly making the rounds on social media. But he has a point when one listens logically. He warns that when a mass murderer strikes, the government won’t immediately be there to save you; it’ll be your job to save yourself.
Brevard County Sheriff Wayne Ivey posted the controversial video message on Facebook Wednesday, two days after a deadly workplace shooting in nearby Orlando claimed the lives of five people. The Florida sheriff urged citizens to arm themselves in self-defense saying “this is war.”
He doesn’t mean war in the sense that nukes will be flying, but the war against mass homicides and sociopaths who only seek the destruction of human life.
“What’s next is to fully understand that this is war, and you better be prepared to wage war to protect you, your family, and those around you if attacked,” he said. Ivey stressed that attackers rely on people running, hiding, and waiting for help, rather than fighting back.
And they will use guns, knives, bombs, and even trucks to kill innocents. “What they don’t count on is being attacked themselves, having to become defensive to save their own lives,” Ivey argued.
Become the first line of defense to prevent the loss of life, and protect yourselves and others. That was the underlying message the sheriff sought to convey.
Ivey’s video is irritating anti-gun lobbyists and politicians who seem content with letting people die with a minimal chance of survival. Ivey encouraged people to take self-defense classes and urged those with concealed weapons permits to carry their guns with them at all times. “No matter who you are or what your position is on guns, there’s no denying the fact that the only thing that stops a bad guy with a gun or a knife is an armed and well-prepared citizen or law enforcement officer,” Ivey said. Ivey is simply stating the obvious. Yet, he’s being called “controversial.”
Ivey’s being accused of “fear mongering” and riling up vigilantes for refusing to toe the line. As those in government, police included, continue to lean toward more gun control, (for everyone but themselves, of course) it’s becoming obvious that those in charge want us to suffer at the whims of the sociopathic mass murderers. Leonard Papania, the police chief in Gulfport, Mississippi, spoke out against weakening gun regulations to the New York Times, saying, “Do you want every incident on your street to escalate to acts of gun violence?”
Gun control is a sensitive issue for most, as the logical in society understand that gun ownership doesn’t make one a mass murdering homicidal maniac or terrorist. But the emotional side of people inhibits their brain from understanding that a gun can be used in self-defense, and may even prevent the loss of innocent life. When guns become outlawed, only outlaws will have guns. An old saying, but one the hoplophobes seem to continue to forget.
- In Showdowns With The US President, The FBI Is 4-0
Tim Weiner, Pulitzer-prize winning author of “Legacy of Ashes” and a longtime chronicler of US intelligence agencies, sat down for an interview with Bloomberg’s Tobin Harshaw to discuss how the FBI has handled previous investigations involving the White House.
The feud between President Donald Trump and former FBI Director James Comey is hardly unprecedented in modern US history. As Weiner explains, there have been four instances during the past 45 years – excluding the present day – where the FBI has confronted a sitting president. And up until now, the bureau has prevailed every time.
“Five times in the last 45 years the bureau has gone up against the White House. With all due respect to Bob Woodward and Carl Bernstein, it was the FBI that brought down Richard Nixon. Twelve years later it was the FBI that served search warrants and subpoenas on members of Ronald Reagan's National Security Council after the Iran-Contra imbroglio. Agents recovered 5,000 documents from their computers – a forensic feat unprecedented in technological virtuosity. That led to the indictments of a dozen of Reagan's national security aids.
A decade later, it was the FBI, in the form of a subpoena to the White House physician who drew blood from the arm of President Bill Clinton for DNA evidence to match the famous blue dress of Monica Lewinsky, that proved he committed perjury and led to his impeachment in the House.
In 2004, then-director Robert Mueller, along with Comey, who was acting attorney general, directly confronted the George W. Bush administration over the unconstitutional and illegal effects of the eavesdropping program Stellar Wind. Bush later wrote in his memoirs that the two men threatened to resign, and that visions of the Saturday Night Massacre flashed before his eyes. The president backed down.”
The role of the FBI, and its director, has changed dramatically since the bureau was created by President Teddy Roosevelt and then-Attorney General Charles Bonaparte (a great-nephew of the French emperor) in 1908. Then known as the Bureau of Investigations, its primary duty was rooting out organized criminals and other “malefactors of great wealth," though it was also tasked with investigating corruption in Congress.
But the bureau's focus shifted away from this original intent after J Edgar Hoover became director in 1924, Weiner said. Hoover, remembered for his crackdowns on political radicals and civil rights activists, ran the agency for decades, until his death in 1972. Afterward, Congress tried to impose statutory limits on his former post to make it expressly apolitical, eventually imposing a term limit of 10 years.
But Congress was unsuccessful. If the tensions between Comey and his old boss, the Trump-appointed Attorney General Jeff Sessions, have taught us anything, it's that it's impossible for the FBI director to be 100% free from political considerations, Harshaw said.
Weiner agreed.
“Statutorily, the FBI is part of DOJ. But there is a reason its DC headquarters is located equidistant between the White House and the Capitol. The director has to answer to both the executive and legislative branches,” Weiner said.
Moving on from the Trump investigation, Harshaw asked Weiner about the so-called “Comey effect” – the idea that Comey cost Hillary Clinton the election by deciding to reopen the FBI’s investigation into her mishandling of classified information a week before the vote.
Weiner said this explanation for why Clinton lost is a “false assumption," and far down the list of reasons why Clinton lost.
“It’s a false assumption. I know Hillary disagrees, but I think the Comey effect, knowing what we now know about Russian meddling in the election, is farther down the Top 10 list of why she lost.”
Weiner closed the interview by drawing one more comparison between Nixon and Trump – an apparent reference to the fact that Congressional investigators have subpoenaed any tapes Trump might have of his conversations with Comey.
“Let's not forget what the smoking gun tape of Nixon was: an attempt to get the FBI to stop the Watergate investigation dead in its tracks. Once it was revealed by order of the Supreme Court, Nixon was finished. He resigned two days later.”
We can't help but believe that by the end of President Trump's term (whenever that is), The FBI will be leading 5-0 in this epic Deep State vs Democracy battle.
- "Burn Them And Their Families": As ISIS Crumbles, Vigilantes Run Amok in Iraq
Authored by Daniel Lang via SHTFplan.com,
It’s hard to appreciate the effect ISIS has had on ordinary Iraqis and Syrians who wanted nothing to do with the terror group.
There are cities in these countries that have been ruled by these monsters for several years. Monsters whose cruelty and depravity knows no bounds. Most people in the West can’t imagine what that must be like, because the vast majority of us have never lived under those conditions.
So what does happens to people who have been living under ISIS for so long?
Well, try to imagine what you would do if a bunch of lunatics had been running your community for several years. Imagine if they had cut you off from the outside world, tortured and killed family members and neighbors, sold female relatives into sexual slavery, and indoctrinated your children.
Some people manage to move on with their lives after those conditions pass. Others do not. In Iraq for instance, there are now vigilante groups that have risen in the wake of the Islamic State’s collapse, and they’re targeting members of ISIS, as well as their families.
Eleven suspected jihadists who were recently found blindfolded, bound and shot to death on the side of the road 20 miles south of Mosul are some of the victims of the group, which on its Facebook page tells supporters to ‘burn’ the families and homes of ISIS members.
The vigilante group, which has dubbed themselves the Hammam al-Alil Revolution, created a Facebook group to launch revenge on ISIS members in May. It now has 650 members.
‘Soon we will start our operation, we are now locating Deash families,’ read the first post on the page from May 28. ‘We will make them regret joining. Good luck everyone,’ it signs off.
This is what happens when law and order breaks down. People don’t just mete out justice. They are free to go on bloody rampages.
‘Today we targeted Mohammad Atrash, we threw two grenades and attacked the family with gunfire, as they did to us,’ the post said.
The Facebook page posts the addresses of dead and imprisoned ISIS fighters, encouraging its members to go after them and their families.
The group told its followers last month to ‘burn them and their families’.
One member of the group told The Telegraph that it was carrying out attacks as revenge after his cousin was killed by ISIS militants.
The man, only identified as Omar, said: ‘It’s a reciprocity. They hurt my family, now we will hurt theirs.’
So these people, who have had their families shattered by ISIS, are now doing the same thing to the noncombatant families of ISIS fighters. It reminds me of a famous quote from Friedrich Nietzsche. “Whoever fights monsters should see to it that in the process he does not become a monster.”
- Iran Claims To Have Proof Of "Direct US Support" For ISIS
Days after Trump issued a characteristically undiplomatic statement on last week’s s terrorist attack in Iran by ISIS which killed 17 people and which the US president accused Tehran of basically provoking by stating that “states that sponsor terrorism risk falling victim to the evil they promote”, which prompted Iran to slam the “repugnant WH statement… as Iranians counter terror backed by US clients…. Iranian people reject such US claims of friendship”, on Sunday senior Iranian officials responded by accusing the US of supporting the Islamic State and effectively forming an alliance with it, claiming that Tehran possesses documents to prove the allegations.
Tbe deputy Chief of Staff of the Iranian Armed Forces Major General Mostafa Izadi, said that Iran is “facing a proxy warfare in the region as a new trick by the arrogant powers against the Islamic Republic,” according to Fars News Agency.
“As the Supreme Leader of the Islamic Revolution (Ayatollah Seyed Ali Khamenei) said, we possess documents and information showing the direct supports by the US imperialism for this highly disgusting stream (the ISIL) in the region which has destroyed the Islamic countries and created a wave of massacres and clashes,” he added.
Deputy Chief of Staff of the Iranian Armed Forces Major General Mostafa IzadiSo far, however, Iran has yet to present any evidence.
Izadi’s statement echoed remarks made by Iran’s Parliamentary Speaker Ali Larijani on Friday, who condemned the Wednesday terrorist attacks in Tehran, and said that Washington is behind most of the terrorist acts in the world.
“The United States has aligned itself with the ISIL in the region,” Larijani said on Friday, addressing a funeral ceremony held for the victims of ISIL’s Wednesday terrorist attacks on the Iranian parliament and the holy shrine of late Imam Khomeini in Tehran. Larijani’s was addressing a funeral ceremony of the victims of Wednesday terrorist attacks in Tehran. Larjani added that “The terrorist attacks indicated that the terrorist groups had failed to achieve their main goal and targeted the parliament and Imam Khomeini Mausoleum, finally resorted to martyring the innocent people and the staff at the parliament.”
Thousands of Iranians had gathered to commemorate the dead, shouting “Death to Saudi Arabia” and “Death to America.”
Also on Friday Iran’s supreme leader, Ayatollah Ali Khamenei – whose clerical protege recently lost the Iranian presidential elections – said the attacks would only increase Tehran’s hatred against the US and its “stooges,” including Saudi Arabia. He is not wrong.
- In Her First Interview, Chelsea Manning Explains Why She Went To Prison For You
Authored by Andrea Germanos via TheAntiMedia.org,
In her first interview since being released from prison, whistleblower said she felt “responsibility to the public.”
US Chelsea Manning has given her first interview since being released from prison last month in which she explains her motivations for making public thousands of military documents.
Excerpts of her interview with ABC‘s “Nightline” co-anchor Juju Chang aired Friday on the network’s “Good Morning America.”
Asked about why she leaked the trove of documents, she says,
“I have a responsibility to the public … we all have a responsibility.”
“We’re getting all this information from all these different sources and it’s just death, destruction, mayhem.”
“We’re filtering it all through facts, statistics, reports, dates, times, locations, and eventually, you just stop,” she adds.
“I stopped seeing just statistics and information, and I started seeing people.”
Asked by Hing what she would tell President Obama, Manning, choking up, says,
“I’ve been given a chance,” she says. “That’s all I asked for was a chance.”
Watch excerpts from the interview below:
- The Risk To The "Bull" Thesis
Authored by Lance Roberts via RealInvestmentAdvice.com,
Following the election, the markets began pricing in a strongly recovering economic environment driven by a wave of legislative policies. While the market has indeed advanced, the economic and fundamental realities HAVE NOT changed since the election. As noted on Friday:
“Economic data is not buying it either. Headline after headline, as of late, has continued to disappoint from new and existing home sales to autos, inventories, and employment. This also puts the Fed at risk of further rate hikes this year.
‘It appears traders are losing faith in the rest of the year as the odds of a hike occurring in December is now above that of September (as both drop to around 25%). As economic data has crashed since The Fed hiked rates in March, so the markets expectations has dropped to just 1.44 rate-hikes this year (one in June guaranteed), well below The Fed’s guidance of 2 more rate-hikes minimum.’”
Another huge risk going forward, as well, is the risk to further stock buybacks to support higher EPS as the lack of legislative reforms to boost the bottom line fade. As noted by Goldman just after the election:
“We expect tax reform legislation under the Trump administration will encourage firms to repatriate $200 billion of overseas cash next year. A significant portion of returning funds will be directed to buybacks based on the pattern of the tax holiday in 2004.” – Goldman Sachs
But it is not just the repatriation but lower tax rates that will miraculously boost bottom line earnings, but as noted from Deutsche Bank tax cuts are the key.
“Every 5pt cut in the US corporate tax rate from 35% boosts S&P EPS by $5. Assuming that the US adopts a new corporate tax rate between 20-30%, we expect S&P EPS of $130-140 in 2017 and $140-150 in 2018. We raise our 2017E S&P EPS to $130.”
Maybe not so fast. Here is the problem.
While you may boost bottom line earnings from tax cuts, the top line revenue cuts caused by higher interest rates, inflationary pressures, and a stronger dollar (as expected would be the result of tax reform) will exceed the benefits companies receive at the bottom line.
I am not discounting the rush by companies to buy back shares at the greatest clip in the last 20-years to offset the impact to earnings by the reduction in revenues. However, none of the actions above go to solving the two things currently plaguing the economy – real jobs and real wages.
Economic realities and wishful fantasies eventually reconnect and generally in the worst possible way.
- The Anatomy of Brown’s Gold Bottom, Report 4 June, 2017
As most in the gold community know, the UK Chancellor of the Exchequer Gordon Brown announced on 7 May, 1999 that HM Treasury planned to sell gold. The dollar began to rise, from about 110mg gold to 120mg on 6 July, the day of the first sale. This translates into dollarish as: gold went down, from $282 to $258. It makes sense, as the UK was selling a lot of gold… or does it?
We won’t get into the theories of his motivation. However, we note that if he wanted to—pardon the dollarish—push down gold, he was not particular effective. He squandered half of Britain’s gold to get the price to drop 8.5%. That lasted but a few months. By the end of September, the price was not only back up to $282 but rising rapidly on its way past $320. Then it came down with volatility, rose, slowly fell to just under $260 about two years later. The price bottom just about coincides with the end of his selling.
This is history, and it’s been discussed and analyzed many times. What has not been seen until now is a look at the gold basis and cobasis during this time. Was gold becoming abundant due to selling? Or did something else happen?
Here is a graph showing the continuous gold basis and cobasis, overlaid with the price of the dollar.
Several features are noteworthy:
- The basis begins to fall on the announcement, but not a lot yet. The cobasis may be arguably said to begin to rise. Both appear to change character.
- The dollar begins rising immediately (i.e. the price of gold falls), but nothing alarming happens in the basis yet. Almost the entire initial price move occurs, with little move in the basis.
We believe this confirms our view that there is a lot of gold out there. This was as clear a case of short selling as can be. Brown wasn’t even selling yet, and the market price was driven down 8.5%. Actually, the market price began falling before the announcement, which suggests that privileged information may have leaked. Yet the market makers handled this with aplomb. The basis moved, but not that much.
- Once he began the actual selling, the price did not move much further. Notably, the basis and cobasis begin much larger moves. Gold became significantly scarcer.
- Three months later, we see a wicked backwardation. That is no small number, like the many little temporary backwardations of today. That was a cobasis of +1.95%. And not a near-month contract cobasis, but the continuous cobasis. This is big, albeit only one day.
Wait… Brown is selling large quantities of gold and yet gold is become less abundant and scarcer, peaking at significant scarcity indeed? Selling physical metal should—all else being equal—cause it to become more abundant. But it didn’t.
It’s appropriate to quote Sir Arthur Conan Doyle here (doubly so, as Keith is in London at the moment). “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”
Those fool speculators thought they could short gold with impunity. After all, the price dropped. A major country was selling in quantity. We assume the charts painted a bearish picture. Even some gold bugs may have thought that with major governments against them, the price could be driven down even further. This was the end of a long period of a falling gold price. Sentiment must have been in the pits.
- Gold could become scarcer for a while, and to a point.
- But when the shorts push it past the breaking point, the price of gold snaps violently to the upside.
If you were watching the basis, you would have seen this move coming. Here is a graph of our fundamental price, zoomed in to show just a small window around the price explosion.
The difference between the fundamental and market prices gives us the premium or discount. Here is a graph of that for the same time period.
You might have traded before the fundamental moved decisively based on the basis graph. In any case, by 27 Sep the fundamental was up sharply and the market price was still only $281.
You might have closed the trade when the price hit $325 by 5 Oct. A week later, and you had a 16% gain. The fundamental by itself would still have gotten you out of the trade. By 14 Oct, it had overshot and come back down and was clearly falling. The exit price was only $4 lower that day, $321.
Daily updated charts of the basis, both near contract and continuous, fundamental, and premium/discount are available on our website.
There is one other thing worth mentioning. Linear thinking may be tempting and convenient. However, we see here that Brown set something in motion. A linear view would ask how much price drop to expect for a given quantity of gold. Like draining a tank of liquid, how much will the level drop for a gallon pumped out?
That is not what happened. This is more like a resonant system. Brown jerked on a spring. He set it in motion, reverberating for quite some time. And the price ended up moving higher, both in the short term (4 ½ months later) and long term (a bull market that went for a decade, and took the price up more than 6 ½ times).
Obviously, many buyers increased their purchases of gold perhaps in response to the drop in price. New buyers came into the market. Perversely, in a world where central banks are selling their gold—literally debasing their currencies—there is more reason to own gold.
A linear model like supply and demand curves cannot explain what happened (or predict what will happen). Virtually all of the gold mined over thousands of years is potential supply, at the right price and under the right conditions. Everyone is potential demand, at the right price and under the right conditions. Brown had a modest effect on price, but he perturbed the market and that changed the conditions.
The other sellers of gold (metal, not futures contracts) decided they might rather not sell and/or buyers stepped up their purchases. Ironically, it could even have been the British, who had been happy to own pounds knowing that each pound represented a certain amount of gold backing. Brown’s move convinced them to buy the gold, and he ended up simply shifting gold to the people. This is just conjecture, but it would fit.
…
This week, the prices of the metals fell. However, with all the previous discussion, we are sure you want to see the fundamentals of supply and demand.
Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved up a bit.
In this graph, we show both bid and offer prices. If you were to sell gold on the bid and buy silver at the ask, that is the lower bid price. Conversely, if you sold silver on the bid and bought gold at the offer, that is the higher offer price.
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.
We had a rising price of the dollar (the mirror image of the dropping price of gold), and a slightly falling abundance (the basis) and slightly rising scarcity (the cobasis). Our gold fundamental price shows a decrease of $10 (to $1,324).
Now let’s look at silver.
In silver terms, the dollar rose more (i.e. the price of silver fell more). The metal became less abundant and scarcer. Our silver fundamental price shows a decrease of 11 cents (to $17.52).
Keith will be in London the week of June 19, and in New York the week of June 26. If you’re interested in attending a Monetary Metals seminar on GOFO and transparency in the gold market in either city, or to meet with Keith to discuss gold investment, please click here.
© 2017 Monetary Metals
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