Thursday, February 16, 2017

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Gold World News Flash

The Goal Of Socialists Is Socialism - Not Prosperity

Posted: 16 Feb 2017 01:00 AM PST

Submitted by William Anderson via The Mises Institute,

About 40 years ago, economist Bruce Yandle went to Washington to work for the Council on Wage and Price Stability, ready to apply his knowledge of economics and educate his fellow workers. After all, he reminisces, one eye-rolling, head-scratching decision after another was coming from government regulators that surely someone versed in economics could expose as stupid, wasteful, and downright ridiculous.

Government Serves the Interests of Government

At some point, Yandle realized that the lay of the regulatory land looked quite different in Washington than it did in Clemson, South Carolina, where he was on the faculty at Clemson University. Regulators — and the representatives of the enterprises they regulated — were not looking to create an atmosphere in which the government tried to find the “optimal” set of regulatory policies that both minimized regulatory costs and allowed for the maximum removal of whatever “externalities” were created.

No, as Yandle writes:

… instead of assuming that regulators really intended to minimize costs but somehow proceeded to make crazy mistakes, I began to assume that they were not trying to minimize costs at all — at least not the costs I had been concerned with. They were trying to minimize their costs, just as most sensible people do.

The more he examined the situation, the more he realized that all of the various actors in the system were acting in their own perceived self-interests — regulators, politicians, and those being regulated — and the combination of their interests created perverse outcomes. The “big picture” view that those on the outside of the situation might have is irrelevant to what actually happens, and understandably so.

Far from the stated goals of the regulators and those involved in the process - that regulation was pursued in order to promote a lofty “public interest” -  the real purpose of the regulatory apparatus is the promotion of the regulatory apparatus. The system exists to preserve and protect itself.

Socialists Are Interested in Control, not Economic Prosperity 

As I observe (and participate in) a few discussions on Facebook and elsewhere about socialism, I have come to a few conclusions about the nature of the arguments and the reasons why socialists remain socialists even as we see the utter failure of socialist economies throughout history. Maybe the meme that appears once in a while — “If socialists understood economics, they wouldn’t be socialists” — might be true, but I doubt it. As I see it, the purpose of establishing socialism is to further promote socialism, not improve the lot of a society and certainly not to promote prosperity.

First, and most important, the minds of socialists work differently than do the minds of economists that see an economy as a mix of factors of production, prices, final goods, markets, and entrepreneurs that drive the whole route. Those of us who are economists are fascinated by this process because we see human ingenuity, the coordination of the goals of numerous people, and, when the system works, a higher standard of living for most people.

Socialists, however, don’t see what we see. Instead, they see chaos and unequal outcomes. Not everyone benefits, right? In some situations, someone may lose a job or a way of doing things becomes obsolete. In the end, some people won’t be helped at all, at least not directly, and in the mind of someone that has an organic view of society, the fact that certain entrepreneurial actions taken by some individuals have created goods that meet the needs of others is irrelevant. Society should be providing those goods for free! People should not have to pay for what they need!

Are you a surgeon who had done well financially because you have performed medical miracles for people who desperately needed your services? You have exploited sick people! Are you like Martha Stewart, who became wealthy in part by showing people how to make holiday celebrations better? What about the poor? They don’t have nice houses!

When I first started writing about economics nearly 40 years ago, I was like Bruce Yandle, believing that all that was needed to convince socialists to stop being socialists was a well-reasoned economic argument. You know, explain that entrepreneurs don’t earn profits by exploiting workers, but rather entrepreneurs make workers better off by directing resources to their highest-valued uses. You know, explain how a price system really does result in morally-just outcomes because, in the end, it directs resources toward fulfilling the needs of consumers. And so on.

I still believe the arguments, and over the years have come to understand them even better than I did when I wrote my first article for The Freeman in 1981. (It’s funny how Economics in One Lesson continues to become increasingly relevant to my thinking each time I read it.) However, I believe that the end of all of this activity is — or should be — the improvement of life for people in a way that is not predatory and brings about voluntary cooperation among economic actors. In other words, economic activity is a means to an end, and the end is free people gaining in wealth and standards of living.

A socialist does not and will not see things this way. The end of socialism is not a higher living standard or even making life better for the poor, as much as a socialist will talk about the well-being of poor people. No, the end of socialism is socialism, or to better put it, the ideal of socialism. Once socialism is established, as it was in Venezuela or in the former USSR or Cuba, the social ideal had been met no matter what the actual outcome might be.

But what about the problems that inevitably occur in a socialist economy? Are not socialists shaken by the economic meltdown in Venezuela? The answer is a clear NO. For example, The Nation, which has supported various communist movements for generations, takes the position that Venezuela suffers from not enough socialism:

If socialism is understood as a system in which workers and communities (rather than bureaucrats, politicians, and well-connected entrepreneurs) exercise effective democratic control over economic and political decision-making, it would appear that Venezuela is suffering not from too much socialism, but from too little. Who can deny that Venezuela would be much better off if the hundreds of billions of dollars reportedly diverted through corruption were instead in the hands of organized communities?

The author assumes, of course, that socialism can be separated from the state, which shows either dishonesty or naivety, or perhaps both. After all, the author continues by claiming that the vast system of price controls the government has laid down over Venezuela’s economy has had little economic effect and certainly has not been harmful, just as the author assumes that because most businesses in Venezuela officially are privately-owned, the government has little economic control over their operations. (As we know, the government there has seized businesses, arrested store owners for raising prices in the face of blizzards of paper money, and made ridiculous claims about conspiracies to overthrow the government.)

The one thing the author does not suggest is the government backing off its policies and its socialist ideology. To do so, obviously, would mean that socialism had failed and no socialist is going to ever embrace the idea that socialism could fail.

Perhaps the best example of this is Robert Heilbroner’s famous 1989 New Yorker article, “The Triumph of Capitalism,” written even before the Berlin Wall went down, along with the communist governments of Eastern Europe and the USSR. He followed this a year later with “After Communism,” also in the New Yorker. In his first article, the Marxist Heilbroner wrote:

The Soviet Union, China & Eastern Europe have given us the clearest possible proof that capitalism organizes the material affairs of humankind more satisfactorily than socialism: that however inequitably or irresponsibly the marketplace may distribute goods, it does so better than the queues of a planned economy ... the great question now seems how rapid will be the transformation of socialism into capitalism, & not the other way around, as things looked only half a century ago. 

Yet, it is clear, especially after the second article, that Heilbroner was not advocating the establishment of free markets, but rather saw the collapse of the communist system as little more than a strategic pause of the Long March to Socialism. To reach that Utopia, wrote Heilbroner, socialists needed to turn to environmentalism to deliver the goods. (That most of the socialist countries also were ecological disasters did not penetrate Heilbroner’s mind, and that should not surprise anyone. To Heilbroner, the end of socialism was not a better way to produce and equally distribute goods; no, the end of socialism was socialism.)

In other words, even after seeing the socialist system that economists like he, John Kenneth Galbraith, and Paul Samuelson praised for a generation melt down right in front of him, Heilbroner could not bring himself to admit that maybe socialists needed to turn in their membership cards and promote capitalism. No, Heilbroner decided that socialists simply needed new strategies to find ways to have state (read that, social) control of resources and economic outcomes. Interestingly, he wrote these words even after acknowledging that Ludwig von Mises and F.A. Hayek were correct in their assessment of socialism’s “economic calculation problem,” but even that admission did not bring Heilbroner to the logical end of his analysis: total rejection of the socialist system.

Like the Fonzie character from Happy Days that never could admit being “wrong” on an issue, Heilbroner — and others like him — could not concede that socialism in any form still would run aground, be it in providing medical care, establishing strict environmental policies, or the establishment of a vast welfare state. The central problem facing socialism — economic calculation — does not disappear just because a government does not directly own factors of production and engage in five-year economic plans.

This hardly means that economists like me should stop writing about the failures of socialism or stop explaining how a private property order and a free price system work. First, one never can be too educated in economic analysis and neither can anyone in public life. Socialists may not be able to abandon their faith, but others who might like to hear well-reasoned arguments might not be willing to join the Church of Socialism in the first place.

Second, there is nothing wrong in speaking the truth and just because socialists and their followers are averse to truth does not mean we give up saying what we know to be true. Just because socialists refuse to believe that socialism fails - even when the evidence points otherwise - does not mean they have the moral and intellectual high ground.

The Public Should Demand To See The Michael Flynn Transcript

Posted: 15 Feb 2017 08:00 PM PST

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

The United States is much better off without Michael Flynn serving as national security adviser. But no one should be cheering the way he was brought down.


The whole episode is evidence of the precipitous and ongoing collapse of America’s democratic institutions — not a sign of their resiliency. Flynn’s ouster was a soft coup (or political assassination) engineered by anonymous intelligence community bureaucrats. The results might be salutary, but this isn’t the way a liberal democracy is supposed to function.


President Trump was roundly mocked among liberals for that tweet. But he is, in many ways, correct. These leaks are an enormous problem. And in a less polarized context, they would be recognized immediately for what they clearly are: an effort to manipulate public opinion for the sake of achieving a desired political outcome. It’s weaponized spin.


In a liberal democracy, how things happen is often as important as what happens. Procedures matter. So do rules and public accountability. The chaotic, dysfunctional Trump White House is placing the entire system under enormous strain. That’s bad. But the answer isn’t to counter it with equally irregular acts of sabotage — or with a disinformation campaign waged by nameless civil servants toiling away in the surveillance state.


– From The Week article: America’s Spies Anonymously Took Down Michael Flynn. That is Deeply Worrying.

I never intended to write about the Michael Flynn affair. I figured it had been covered to death and I probably wouldn’t have anything to add to the conversation. That said, I hadn’t been following the story closely so I decided to get caught up by reading a diverse selection of articles on the topic. One of my favorite sources on such subjects is Glenn Greenwald, and I eagerly read his latest piece on the matter: The Leakers Who Exposed Gen. Flynn’s Lie Committed Serious — and Wholly Justified — Felonies.

There are several key points he outlines in the piece, most of which I agree with. First, he proves that the leakers committed serious felonies under the law. Second, he states that if illegal leaks lead to the disclosure of information that is clearly very much in the public interest, then such action is not only justified, but ethically necessary. I agree with this as well. Where he doesn’t really convince me, is the argument that this particular leak represented some sort of great public service. He writes:

This Flynn episode underscores another critical point: The motives of leakers are irrelevant. It’s very possible — indeed, likely — that the leakers here were not acting with benevolent motives. Nobody with a straight face can claim that lying to the public is regarded in official Washington as some sort of mortal sin; if anything, the contrary is true: It’s seen as a job requirement.


Moreover, Gen. Flynn has many enemies throughout the intelligence and defense community. The same is true, of course, of Donald Trump; recall that just a few weeks ago, Democratic Sen. Chuck Schumer warned Trump that he was being “really dumb” to criticize the intelligence community because “they have six ways from Sunday at getting back at you.”


It’s very possible — I’d say likely — that the motive here was vindictive rather than noble. Whatever else is true, this is a case where the intelligence community, through strategic (and illegal) leaks, destroyed one of its primary adversaries in the Trump White House.


But no matter. What matters is not the motive of the leaker but the effects of the leak. Any leak that results in the exposure of high-level wrongdoing — as this one did — should be praised, not scorned and punished.

Glenn’s conclusion here is that the Flynn leak exposed high-level wrongdoing. What wrongdoing are we talking about specifically? Yes, it seems he clearly lied to the public and Mike Pence about the content of his conversation with the Russian ambassador. The lie to Mike Pence in particular led to Pence embarrassing himself publicly by repeating that lie, and this betrayal seems to be the primary motivator (from my seat) of why Trump fired him. Others are referring to potential violations of the Logan Act, but as we learned from Lawfare:

Flynn certainly breached protocol. He may also have broken the law by interfering with U.S. diplomatic efforts while still a private citizen, which is forbidden by the Logan Act. The centuries-old law is vague, however, and has never resulted in a conviction. Furthermore, there may be significant First Amendment problems with enforcing it. Officials became more alarmed when Flynn was not forthcoming with Vice President-Elect Pence and others, possibly including federal agents, about the conversations. Those officials feared that Flynn’s dissembling might open up him up to risks of blackmail.

Yes, Flynn was a private citizen, but he was less than a month away from being a high-level government official, and the Obama administration was doing everything it possibly could to antagonize Russia during its last few weeks in office. I’m not justifying what Flynn said in those conversations, or the lies he told about it, but there’s a key problem with this whole leak. It wasn’t really a leak meant to inform the public. It was a leak to specific journalists, at specific papers, with a clear intent of political assassination through the manipulation of public opinion via cryptic releases of filtered information.

For example, here’s how the New York Times reported on the information in its February 9 article, Flynn Is Said to Have Talked to Russians About Sanctions Before Trump Took Office:

WASHINGTON — Weeks before President Trump’s inauguration, his national security adviser, Michael T. Flynn, discussed American sanctions against Russia, as well as areas of possible cooperation, with that country’s ambassador to the United States, according to current and former American officials.


Throughout the discussions, the message Mr. Flynn conveyed to the ambassador, Sergey I. Kislyak — that the Obama administration was Moscow’s adversary and that relations with Russia would change under Mr. Trump — was unambiguous and highly inappropriate, the officials said.


But current and former American officials said that conversation — which took place the day before the Obama administration imposed sanctions on Russia over accusations that it used cyberattacks to help sway the election in Mr. Trump’s favor — ranged far beyond the logistics of a post-inauguration phone call. And they said it was only one in a series of contacts between the two men that began before the election and also included talk of cooperating in the fight against the Islamic State, along with other issues.


The officials said that Mr. Flynn had never made explicit promises of sanctions relief, but that he had appeared to leave the impression it would be possible.

How do we know what was really said without the transcript?

During the Christmas week conversation, he urged Mr. Kislyak to keep the Russian government from retaliating over the coming sanctions — it was an open secret in Washington that they were in the works — by telling him that whatever the Obama administration did could be undone, said the officials, who spoke on the condition of anonymity because they were discussing classified material.


Federal officials who have read the transcript of the call were surprised by Mr. Flynn’s comments, since he would have known that American eavesdroppers closely monitor such calls. They were even more surprised that Mr. Trump’s team publicly denied that the topics of conversation included sanctions.


Prosecutions in these types of cases are rare, and the law is murky, particularly around people involved in presidential transitions. The officials who had read the transcripts acknowledged that while the conversation warranted investigation, it was unlikely, by itself, to lead to charges against a sitting national security adviser.

I have so many issues with the above reporting it’s hard to know where to start. Everything mentioned above is given to us secondhand via “anonymous American officials.” Nowhere do I see any specific quotes from the transcript, despite the fact that the paper admits it talked with federal officials who read it. Why not? Why must we hear about the content of the transcripts secondhand from anonymous officials? This is the most significant red flag with this whole story. If the leakers were truly interested in transparency, and wanted the public to know the truth, why not leak the transcript to Wikileaks and let the public decide?

I’ll tell you why. They didn’t do this because transparency was never the goal here. They wanted to illegally use intelligence information to take a scalp from a Trump administration they hate, and they knew they could do this via mainstream media journalists. I know what you’re thinking, Edward Snowden didn’t leak everything to Wikileaks either. He likewise picked a few journalists and trusted them to responsibly report the information. How is this any different?

It’s different in two important respects. First, we are talking about a single transcript, or a few transcripts, as opposed to the enormous intelligence data-dump that Snowden provided. Secondly, The Intercept and others who reported on the Snowden material provided a huge amount of primary source documentation for the public to see so that it could come to its own conclusion. They didn’t simply tell everyone what to think about leaked documents while refusing to share any actual content. Where are the specific, comprehensive quotes from the Flynn transcript? Why doesn’t the public have a right to see the entire thing? Instead, we are being told what happened and what to think via secondhand anonymous sources. Sorry, but this doesn’t cut it for me.

I have yet to see any excerpts from the transcript. All I’ve seen is what anonymous officials say was discussed. This is absurd. We the people should demand the content of the relevant transcripts so we can decide for ourselves just how bad Flynn’s actions were. In the absence of this, we’re essentially being manipulated on a massive scale by rogue intelligence agents and told what to think through the major newspapers. This doesn’t cut it for me. I want to see the content of these conversations so I can make up my own mind. Perhaps it’s even worse than we know. So be it. We should be treated as adults and allowed to see the actual conversation if it’s going to be made into a story of such huge national importance.

Finally, I want to end with the mind-boggling absurdity of those who wanted Edward Snowden’s head on a platter, but are somehow ok with these leaks. As Lawfare explains:

Furthermore, these leaks are criminal. As Edward Snowden has learned, the Espionage Act makes intentional disclosure of classified “communications intelligence activities” a felony if such disclosure is made in a “manner prejudicial to the safety or interest of the United States or for the benefit of any foreign government . . . .”  18 U.S.C. § 798(a). This particular group of leakers might argue their motives were in defense of U.S. interests—to protect the nation from national security policy guided by a hand tainted by Russian influence—but under current law, that argument is highly unlikely to prevail. As Snowden well knows, there is no public interest defense to prosecution for violations of the Espionage Act.

Somehow I doubt the Flynn leakers will find themselves in the same position as Snowden, scrambling to get to a country that will provide them safe haven from the vast, vindictive reach of the U.S. government. That’s because the leakers in this case are powerful operatives of the deep state. As Greenwald explained:

It’s hard to put into words how strange it is to watch the very same people — from both parties, across the ideological spectrum — who called for the heads of Edward Snowden, Chelsea Manning, Tom Drake, and so many other Obama-era leakers today heap praise on those who leaked the highly sensitive, classified SIGINT information that brought down Gen. Flynn.


It’s even more surreal to watch Democrats act as though lying to the public is some grave firing offense when President Obama’s top national security official, James Clapper, got caught red-handed not only lying to the public but also to Congress — about a domestic surveillance program that courts ruled was illegal. And despite the fact that lying to Congress is a felony, he kept his job until the very last day of the Obama presidency.


But this is how political power and the addled partisan brain in D.C. functions. Those in power always regard leaks as a heinous crime, while those out of power regard them as a noble act. They seamlessly shift sides as their position in D.C. changes.

Finally, if you want to get a sense of the mindset behind the most adamant defenders of the Flynn leaks, take a look at the following tweets from former NSA analyst and Naval War College professor, John Schindler.

If that’s “the resistance,” I want no part of it. As I summarized on Twitter:

The Difference Between "F##k You Money" And "F##k Everybody Money"

Posted: 15 Feb 2017 07:10 PM PST

Submitted by Daniel Drew via,

Something strange happened at Google recently. Bloomberg alleges that Google paid its top level employees so much that they crossed the line into "F*** You Money" territory, prompting the employees to pack up and quit. While this intriguing turn of events may have transpired at Google and other technology companies, this would never happen on Wall Street for one reason alone: "F*** You Money" is simply not good enough for the fast money crowd. The pinnacle achievement in the investment industry is "F*** Everybody Money."

As the Wall Street Journal aptly noted in their concise chart, most people making less than $10,000 are dissatisfied with life.

As people approach the $100,000 mark, most of them are satisfied. That's why it's not terribly surprising to see stories like this one. Bloomberg reports,

"Early staffers had an unusual compensation system that awarded supersized payouts based on the project's value. In addition to cash salaries, some staffers were given bonuses and equity in the business and these awards were set aside in a special entity. After several years, Google applied a multiplier to the value of the awards and paid some or all of it out. The multiplier was based on periodic valuations of the division, the people said. A large multiplier was applied to the compensation packages in late 2015, resulting in multi-million dollar payments in some cases, according to the people familiar with the situation. One member of the team had a multiplier of 16 applied to bonuses and equity amassed over four years, one of the people said."

The whole purpose of compensation is to prevent employees from leaving. Ironically, Google's high pay caused just the opposite, turning traditional compensation theory on its head. This whole episode will be a case study for human resources departments for years. Why does high pay cease to be an incentive after a certain point? The compensation analysts apparently forgot to read the Wall Street Journal study. Most people are satisfied with "F*** You Money."

Legitimate retention efforts start at the hiring process. If you have such a valuable project, finding highly qualified people is not enough. You have to find people who are both qualified and exponentially driven by money - with no cutoff point. You need someone who isn't satisfied with "F*** You Money." What you need is someone who settles for nothing less than "F*** Everybody Money."

What is "F*** Everybody Money," and where can you find these people? Look no further.

Agnico plans to invest $1.2 billion in gold projects in Canada's north

Posted: 15 Feb 2017 06:09 PM PST

By Danielle Bochove
Bloomberg News
Wednesday, February 15, 2017

Agnico Eagle Mines Ltd. plans to invest more than $1.2 billion in Canada's subarctic in the next three years as it builds one new mine and expands another.

North America's fourth-largest gold miner by market value is moving ahead with plans to develop its Meliadine project and a deposit near its Meadowbank mine in Nunavut, the company said today in its fourth-quarter earnings statement. The decision will boost Agnico's gold production to 2 million ounces a year by 2020, about 20 percent more than last year's output of 1.66 million ounces.

"This is very much low-risk, high-quality growth because it's an extension of what we've been doing for the last many, many years," Chief Executive Officer Sean Boyd said in an interview at the company's Toronto offices. ...

... For the remainder of the report:


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Silver, Gold Stocks and Remembering the Genius of Hunter S. Thompson

Posted: 15 Feb 2017 05:56 PM PST

Precious metals expert Michael Ballanger ponders the timelessness of Hunter S. Thompson's "blistering attacks on the status quo" and their applicability to today's political landscape. He also reminds us of the "incredibly bullish" fundamentals for silver and lays out the evidence for why this precious metal is on its way to $25/ounce by mid-year.

Gold Price Closed at $1231.70 Up $7.80 or 0.64%

Posted: 15 Feb 2017 05:01 PM PST

15-Feb-17PriceChange% Change
Gold Price, $/oz1,231.707.800.64%
Silver Price, $/oz17.950.080.42%
Gold/Silver Ratio68.6300.1480.22%
Silver/Gold Ratio0.0146-0.0000-0.22%
Platinum Price1,007.80-10.60-1.04%
Palladium Price786.25-8.15-1.03%
S&P 5002,349.2511.670.50%
Dow in GOLD $s345.93-0.39-0.11%
Dow in GOLD oz16.73-0.02-0.11%
Dow in SILVER oz1,148.481.190.10%
US Dollar Index101.16-0.07-0.07%

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SPOT GOLD:1,233.30

American Eagle1.001,264.131,274.001,274.00
1/2 AE0.50634.63649.331,298.66
1/4 AE0.25323.48331.451,325.80
1/10 AE0.10129.39135.051,350.46
Aust. 100 corona0.981,199.811,208.811,233.23
British sovereign0.24292.50305.501,297.77
French 20 franc0.19230.26236.261,265.44
Maple Leaf1.001,243.301,257.301,257.30
1/2 Maple Leaf0.50709.15647.481,294.97
1/4 Maple Leaf0.25314.49329.911,319.63
1/10 Maple Leaf0.10130.73134.431,344.30
Mexican 50 peso1.211,475.711,486.711,233.07
.9999 bar1.001,233.301,245.301,245.30

VG+ Morgan $B4 19050.7723.0027.0035.29
VG+ Peace dollar0.7717.0020.0026.14
90% silver coin bags0.7212,483.9012,841.4017.96
US 40% silver 1/2s0.305,106.455,256.4517.82
100 oz .999 bar100.001,786.001,811.0018.11
10 oz .999 bar10.00181.10186.1018.61
1 oz .999 round1.0018.2118.5118.51
Am Eagle, 200 oz Min1.0019.4620.9620.96

Plat. Platypus1.001,022.801,052.801,052.80

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China's holdings of Treasuries dropped in 2016 by most on record

Posted: 15 Feb 2017 04:40 PM PST

By Sarah McGregor and Andrea Wong
Bloomberg News
Wednesday, February 15, 2017

China's holdings of U.S. Treasuries declined by the most on record last year, as the world's second-largest economy dipped into its foreign-exchange reserves to buttress the yuan. Japan, America's largest foreign creditor, trimmed its holdings for a second straight year.

A monthly Treasury Department report released in Washington today showed China held $1.06 trillion in U.S. government bonds, notes, and bills in December, up $9.1 billion from November but down $188 billion from a year earlier. It was the first monthly increase since May.

The People's Bank of China, owner of the world's biggest foreign-exchange reserves, has burned through a quarter of its war chest since 2014 in an effort to underpin the yuan and deter capital from fleeing the country. Chinese sales have made borrowing more costly for the U.S. government: 10-year yields rose to 2.6 percent last year, from as low as 1.3 percent. ...

... For the remainder of the report:


K92 Mining Drills Multiple High-Grade Gold Intersections

Company Announcement
Friday, January 27, 2017

K92 Mining Inc. (TSXV–KNT) announces the latest results from the ongoing grade control drilling program at its high-grade Kainantu Gold Mine in Papua New Guinea. K92 is ramping up the Kainantu gold mine toward commercial production, with its longest continuous production run to date now commenced.

In September 2016 K92 began a campaign of close-spaced underground diamond drilling as part of a comprehensive grade-control strategy. The current grade-control drilling program is focused on the areas of Irumafimpa and is designed to bring a high degree of confidence to the production planning and scheduling. K92 plans to mine this area in the coming six months. The closed-space drilling pattern of approximately 15 metres by 15 meters has significantly increased the confidence in this sparsely drilled area, with most holes recording high-grade intersections. Approximately 80 percent of the holes completed to date have recorded multiple high-grade intersections indicating the presence of multiple parallel to sub parallel high-grade veins. ...

... For the remainder of the announcement:

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Gold Seeker Closing Report: Gold and Silver Erase Early Losses and End Higher

Posted: 15 Feb 2017 02:01 PM PST

Gold fell $10 to $1217.40 by a little after 8:30AM EST, but it then rallied back higher for most of the rest of trade and ended with a gain of 0.42%. Silver slipped to as low as $17.76 before it jumped back to $17.982 and then chopped back lower at times, but it still ended with a gain of 0.17%.

Four Signs U.S-China Relations are Destined for Conflict

Posted: 15 Feb 2017 01:58 PM PST

This post Four Signs U.S-China Relations are Destined for Conflict appeared first on Daily Reckoning.

The drums to conflict between U.S-China relations have reached fever pitch.

President Trump had direct diplomatic contact and conversations with at least 18 world leaders before extending such offerings to Chinese leader Xi Jinping.

While acting as president-elect, Trump held a very provocative conversation with the Taiwanese president. It became clear that the incoming administration was not going to be acting on standing protocols that had existed for decades.

Since then, President Trump and President Xi have opened communications, but upon first impressions the indicators for a U.S-China conflict are greater than recent memory.

As Xi Jinping remarked while at the World Economic Forum in January 2017, 'It was the best of times, it was the worst of times.' These are the words used by the English writer Charles Dickens to describe the world after the Industrial Revolution. Today, we also live in a world of contradictions."

It is not only contractions in rhetoric, but the actions that should be evaluated when looking at what could build into a very real conflict between the U.S and China.

Here are the four signs that U.S-China relations could reach a crisis level:

1. Advisors: Strategy for Disaster

After the U.S inauguration and the breaking of its one China policy, the U.S has seemingly reversed course.  “President Trump agreed, at the request of President Xi, to honour our ‘one China’ policy,” read a statement released by the Chinese government.

This type of quick shifting in policy can present dangerous situations. The advisors for both respective government leaders will be key to navigating norms and policy. They will also present the greatest adversarial paths to conflict and power maneuvering.

Economist and bestselling author, Jim Rickards while referencing Steve Bannon, the president’s chief strategist, reminds us that only a few months back the National Security Council member indicated that "we're going to war in the South China Sea…no doubt."

Rickards reports, "Admittedly, this forecast was made before Trump's election and was a long-term forecast, not an immediate warning. Still, such comments do not go unnoticed in Beijing."

"A conflict between the U.S. and China would be the most momentous confrontation since the end of the Cold War, in 1991, with enormous consequences for investor portfolios."

These comments come as the Secretary of State Rex and former ExxonMobil CEO, Rex Tillerson made reflective comments. During his confirmation hearing the former CEO added that, "we're going to have to send China a clear signal that, first, the island-building stops and second, your access to those islands also is not going to be allowed." It should also be noted that his former oil company, ExxonMobil, maintains relations and drilling operations in the region – specifically with with Indonesia and Vietnam.

While military conflict is a more blatant possibility between the U.S and China, the economic friction might be an even greater urgent matter for advisors.

U.S trade representative Robert Lighthizer has heavily voiced his concern about the history of exports to the U.S rising faster than U.S. exports to China. This export history built up a considerable trade deficit.

In 2010, Lighthizer was a leading advocate for tariffs on China that would "force change in the system" even if it elevated "trade frictions." While the new U.S trade representative might have been in favor of retaliatory tariffs, the Chinese side has also offered its caution to the incoming administration.

From the Chinese leadership, an American-educated political figure and arguably the top economic adviser, Liu He, has ranked as President Xi Jinping's right hand man. He will continue to offer signals toward which way the Chinese government will direct its policy and the sentiment toward U.S-China relations.

The economic adviser has been relatively mute in public about his plans but in a study that was released over three years ago the New York Times reported that the advisor argued China "cannot shoulder excessive responsibility" for reducing its trade deficits with other economies.

The top Chinese economic figure wrote, "Populist policies adopted by the governments of developed countries are often the instigators of crisis." What that translates to is a vocal defamation of what the new White House proposals both in rhetoric and in action.

The Chinese Ambassador to the U.S, Cui Tiankai was referenced by Chinese state media run operation, The People's Daily, where he remarked that "the talks on formulating the Code of Conduct in the South China Sea and maritime cooperation." Ambassador Cui said, "countries from outside the region should support such efforts to restore tranquility instead of creating new hurdles."

While the remarks may be mild in tone, the Chinese have made clear their position that the U.S government should stay away. The Chinese Ambassador, if these issues continue to escalate, will be a vocal center for his respective government. He will also be forced to reckon with translating policy between the world's two largest economic forces.

The influence and advisory direction on matters of economic and military action will be vital to watch in the months and years ahead.  These advisors could present clear signals of things to come between a U.S-China conflict and shape policy that impacts governments and extends all the way through to everyday investors.

2. Power Dynamics: Pivot East to West

The nature of China and Japan relations has defined the Asian region for over half a century. The two powerhouse economies for the region have also had two of the most divided diplomatic channels in the world.

As the U.S and other regional powers continue to push at China, the government has been looking to bridge the gap in once taboo relations.

Nomi Prins, a former Wall Street insider who is currently working on her latest book, Artisans of Money, was recently in Japan and China. While there she met with government and financial figures. She reports that, "geo-bullying will also push former adversaries, China and Japan closer together. The two nations are already negotiating some historic agreements."

"We could be approaching a new era in which Sino-Japanese relations allow for diplomatic normalization and more economic partnerships, which would be mutually beneficial."

China has also begun considerable infrastructure projects that would allow it to navigate outside of the U.S. With these considerations it has gone as far as to initialize plans for a One Belt, One Road program. This program will expand and establish greater trade between Europe and Asia.

Chinese development banks have made more than $3 billion available for projects in a number of along those routes.  The Chinese government views this infrastructure generation as a step forward for eastern relations, and a way to diversify away from the western hemisphere.

The move eastward, instead of strengthening relations between the world's top two economic forces, has mounting considerations. The closer trade and investments are between states, the less likely they are to come into direct economic and physical conflict.

Enter the Trump administration where it has enacted an immediate exit from any further Trans-Pacific Partnership trade negotiations. The withdraw of the U.S from the TPP, a deal that included 12 Pacific Rim countries, was part of a series of Trump's executive orders. These efforts were made in an effort to withdraw the U.S government from global trade institutions.

While the TPP had its serious flaws, it was to put forward a U.S centered trade policy that would set the standard for technology and regulatory systems in Asia.  The TPP, if imposed correctly, would have forced China to follow a new trading standard and provided challenge to its undisputed regional influence throughout Asia.

What the U.S left, the Chinese government picked up.

“China will forge ahead with the negotiation of the Regional Comprehensive Economic Partnership (RCEP) and the construction of the Free Trade Area of the Asia-Pacific (FTAAP) so as to add new impetus to regional and global economic development,” read the statement from the Chinese Foreign Ministry immediately after the U.S withdraw. The Chinese government is now creating its own TPP and seeking to build on regional trends toward partnership.

What all this signals is a further shift east by the Chinese government, and a greater divide between U.S-Chinese relations that defined trade for an era.

Further indicators of U.S-China relations edging toward separation will only create a larger potential for rivalry and opposition. The shift from western integration to an eastern pivot will heighten the stakes between U.S-China relations for decades to come.

3. South China Sea: Theatre for Proxy Skirmishes

The South China Sea has the second highest frequency in sea travel through its channels in the world. To put that into perspective, every year an estimated $5.3 trillion of trade passes navigates through those waters.

For the U.S, its trade share accounts $1.2 trillion of the total commerce that passes through the South China Sea.

According to the U.S. Energy Information Administration the South China Sea has an estimated 11 billion barrels of oil. That makes it nearly equal to Mexico's reserves. It also holds 190 trillion cubic feet of natural gas.

That makes the watershed and sea channel a bastion for natural resources in a region where energy demands are in abundance. It also makes the region an even greater target for competition and has caused economic and military backlash.

The Chinese government has also stated that it has historical rights to over 80% of the South China Sea.

Disruptions to that trade patterns from land and sea grabs would not only negatively impact local economies along the sea routes, it would drastically impact domestic markets.

Many have speculated that under president Trump, sectors in logistics, shipping and transportation would be major areas of improvement in the economy with infrastructure stimulus. Any economic, military or trade frictions could jeopardize all of the speculative investments that have been placed into the market.

Currently, the U.S government has active operations and government access to at least five publicly disclosed military outlets.

Kyle Bass while speaking on Bloomberg remarked that in the instance that a tariff is imposed on Chinese imports by the United States government certain responses will be given directly, and sharply by the Chinese government. In this shift, Bass poses, "The question is does all of this economic wrangling really start a fire that ends up moving into a kinetic response in the South China Sea? That is something we hope does not happen."

Bass is the founder of Hayman Capital who was spot on in predicting the U.S. subprime mortgage crisis before the devastating real estate bubble burst.

He poses that, "The big question is, where is this all going as far as trade? When I look back at armed conflicts I think they are all rooted in some sort of economic [origin]."

"This is a fire that's been smoldering and it's now starting to burn, and Trump is just more gasoline."

How that fire continues to burn will be important to watch from a military, financial and trade perspective.

4. Chinese Debt: The Next Financial Crisis

The outstanding loans held by China has topped $28 trillion. That total equals nearly the entire commercial banking systems in both the U.S and Japan combined.

Courtesy of: Visual Capitalist

Beginning in September 2016, the Bank for International Settlements (one of the most influential banking organizations in the world), released for the first time data on the credit-to-GDP ratio gaps since 1961.

The information revealed that China reached an astronomical total of 30.1 in this ratio gap. Typically anything over a figure of 10 offers room for concern and the Chinese economy has tripled that.

That puts the major Asian giant at the highest ratio to date, and above all other major economies evaluated by the governing institution.

The 30.1 ratio gap is higher than the numbers seen during the Asian boom in 1997 and the subprime mortgage bubble experienced just prior to the Lehman Brothers crisis of 2008.

All of this mounts the story for a Chinese debt bubble that continues to inflate.

Former Reagan White House insider and bestselling author David Stockman noted even at the beginning of 2016 that, "The fact is, no economy can undergo the fantastic eruption of credit that has occurred in China during the last two decades without eventually coming face to face with a day of reckoning."

Stockman did not skip a beat saying that, "Massive borrowing to pay the interest is everywhere and always a sign that the the end is near. The crack-up phase of China’s insane borrowing and building boom is surely at hand."

While a collapse in China might be unlikely, it is clear that the Asian giant has lost its economic swagger. The Chinese economy acting with a muddled sense of direction could cause mass confusion amongst foreign exchange markets. That alone should offer concern to investors both domestically and on an international scale.

The looming Chinese debt build up has caused the government to continue a program of burning through trillions of foreign currency reserves.  With a population of well over a billion people, the prospect of a collapse and no reserves to back it up would threaten global stability and disrupt trade.

Kenneth Rogoff wrote in Project Syndicate that, "China has financial weapons, including trillions of dollars of US debt. A disruption of trade with China could lead to massive price increases in the low-cost stores – for example, Wal-Mart and Target – on which many Americans rely."

That means that what happens in the Chinese economy will directly impact the wallets of Americans. As the global economy continues to recover from the global financial crisis, and further shock to the system could generate a conflict that no country would be capable of affording.

Jim Rickards, the author of Road to Ruin states, "While the exact path and timing of such a conflict may be unclear, it's not too soon to start building a defensive allocation in your portfolio just in case.

"The single best asset class for the coming conflict is gold. When trade and monetary cooperation between the U.S. and China break down, gold will re-emerge as genuine world money, as it has many times before."

During the elite power games that continue to unfold, those in the real economy could be caught between the conflict of these two world powers.

While these indicators may shift in the months ahead, U.S-China relations will be vital to understand and monitor.  Staying aware of the changes and updates in these will allow you to better position yourself for the road ahead.

Thanks for reading,

Craig Wilson, @craig_wilson7
for the Daily Reckoning

The post Four Signs U.S-China Relations are Destined for Conflict appeared first on Daily Reckoning.

TF Metals Report: Inflation's 'sudden' onset isn't sudden at all

Posted: 15 Feb 2017 12:39 PM PST

3:40p ET Wednesday, February 15, 2017

Dear Friend of GATA and Gold:

Inflation is not suddenly surging, as the financial establishment wants people to believe, but has been rising steadily all along as the U.S. dollar has been depreciating. That's today's commentary from the TF Metals report, headlined "The Sudden Onset of Inflation," posted here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Dollar Vigilante Internationalization and Investment Summit
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For a 10% percent discount, use the discount code "GATA"

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Tuesday-Friday, March 28-31, 2017
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Wednesday-Friday, April 5-7, 2017
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Biggest News Story Of The Year And you've never heard about it Until Paul Craig Roberts

Posted: 15 Feb 2017 09:15 AM PST

 The Empire of Chaos has Russia backed into a corner and Putin says we are on the brink of WWİ. Darrin McBreen talks to Paul Craig Roberts about NATO's . The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative...

[[ This is a content summary only. Visit for full links, other content, and more! ]]


Posted: 15 Feb 2017 07:52 AM PST

thumbs up for Farage, Trump, Putin, Italian 5star, Orban, Wilders, Le Pen, Hofer, German AFD, the Swedish Democrats, Danish Peoples Party, Polands Korwin-Mikke and Australia's Pauline Hanson. any ive missed, let me know. The Financial Armageddon Economic Collapse Blog tracks trends and...

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Gold Bull Market? Or was 2016 Just a Gold Bug Mirage?

Posted: 15 Feb 2017 07:04 AM PST

The consensus view in the precious metals sector is that we have embarked on the next great bull market in gold and silver. The story is gold and the entire mining sector bottomed in early 2016 and launched into its first leg up into early August. The sector then underwent a stiff correction from August to December, and has now finally found its legs and the upward advance has resumed. Money is now flowing into exploration and development plays reflecting the belief in this narrative.

Gold and Silver Market Morning: Feb 15 2017 - Gold not moving except to adjust to exchange rates!

Posted: 15 Feb 2017 06:03 AM PST

Shanghai was trading at 273.34 Yuan towards the close today. This equates to $1,238.40, but allowing for the different quality of gold being traded [.9999 fineness] and on today's exchange rate, to align it with New York and London prices it equates to $1,233.41. LBMA price setting: The LBMA gold price was set today at $1,225.15 down from yesterday's $1,229.65.

Silver Price To Surge As “Investors and Users Fighting Over Available Physical Supplies”

Posted: 15 Feb 2017 05:59 AM PST

What Mr. Butler's brilliant analysis has uncovered is extremely complex, so I've had to simplify it so I could understand it myself. Over the years, he has pointed to the technical hedge funds as the big buyers and sellers who move prices up and down. The big banks such as JPMorgan take the other side of these trades. These technical funds usually go long as prices rise and short as prices fall. They trade in and out of their positions based on price movements.

Now devout Muslims can help bullion banks and central banks short gold

Posted: 15 Feb 2017 05:27 AM PST

Top Gold ETF Gets Islamic Finance Certification to Tap New Markets

By Bernardo Vizcaino and Arpan Varghese
Tuesday, February 14, 2017

The world's largest physically-backed gold fund said today it has been certified as sharia-compliant, the latest effort aimed at spurring demand for bullion from investors across majority-Muslim countries.

Gold had traditionally been classified as a currency in Islamic finance, confining its use to spot transactions, but new guidance issued in December is making room for a wider range of investment products.

The SPDR Gold Trust, an exchange-traded fund that holds 836.7 tonnes of bullion worth $33 billion, now falls in line with rules from the Accounting and Auditing Organization for Islamic Financial Institutions.

World Gold Trust Services, a subsidiary of the World Gold Council (WGC), said in a statement to Reuters that the ETF had received the certification from Malaysia-based Islamic advisory firm Amanie Advisors. ...

... For the remainder of the report:


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Join GATA here:

Dollar Vigilante Internationalization and Investment Summit
Friday, February 24, 2017
Resort Mundo Imperial
Acapulco, Mexico
For a 10% percent discount, use the discount code "GATA"

Mining Investment Asia
Tuesday-Friday, March 28-31, 2017
Marina Bay Sands, Singapore

Mines and Money Asia
Wednesday-Friday, April 5-7, 2017
Hong Kong Convention and Exhibition Centre

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:

Jim Rogers Reiterates His Call For A Crash Of Epic Proportions

Posted: 15 Feb 2017 05:20 AM PST

Last year we covered a number of big name investors’ warnings regarding the future of financial markets. Many had quite a stark view including George Soros’ Quantum Fund co-founder, Jim Rogers. This past May, Rogers had such a dismal outlook that he warned “A $68 trillion ‘Biblical’ collapse is poised to wipe out millions of Americans.”

Gold Intermediate Cycle Update

Posted: 15 Feb 2017 05:14 AM PST

NOTHING is certain or guaranteed in Markets.... ever. Anyone who tells you otherwise is a charlatan. That said, within Bressert's Cycle framework the norm is that a new Intermediate Cycle in any asset should test or breach the Intermediate Cycle downtrend before topping and those are my expectations based on my current analysis on both Gold and the USD.

Gold Bull Market? Or was 2016 Just a Gold Bug Mirage?

Posted: 15 Feb 2017 05:03 AM PST

The consensus view in the precious metals sector is that we have embarked on the next great bull market in gold and silver. The story is gold and the entire mining sector bottomed in early 2016 and launched into its first leg up into early August. The sector then underwent a stiff correction from August to December, and has now finally found its legs and the upward advance has resumed. Money is now flowing into exploration and development plays reflecting the belief in this narrative. I have an alternative interpretation of the markets action and I would like to share it with you. Intellectual integrity requires me to remain objective and skeptical of the market action since Jan 2016 due to various reasons we will discuss. As an investor I participated in last year’s colossal rally from start to finish, however I am NOT convinced the epic gold bear market which began in 2011 ended in early 2016.

Silver Price To Surge As “Investors and Users Fighting Over Available Physical Supplies”

Posted: 15 Feb 2017 05:02 AM PST

Breaking News And Best Of The Web

Posted: 15 Feb 2017 01:37 AM PST

US stocks at all-time highs on Trump tax-reform promise, gold and silver near multi-week highs. Trump national security adviser quits under Russian cloud. Debate over Putin intensifies. French election becomes even more complex.  Best Of The Web Vice-chairman of EuroThinkTank: "euro may already be lost" – Mish Witch’s brew: sentiment up, complacency up – but […]

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What is Trump's US Dollar Policy?

Posted: 14 Feb 2017 09:46 AM PST

The United States Treasury Department has supported a strong dollar policy since its inception in 1789. Period. There were no qualifications or equivocations with that stance, especially since the ascendance of the dollar as the world's reserve currency. That's why it was so highly unusual when the newly confirmed Treasury Secretary, Steven Mnuchin, uttered this quote recently: "From time to time an excessively strong dollar could have a negative short-term effect on the economy."

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