Swiss Vote: Marker For The End Of Western Monetary Dominance

As anticipated the Swiss gold referendum failed, but the margin of 77% Nein to 23% Ja should serve as an embarrassment to a country and a currency once considered hard money. I would suggest this attitude might prompt some no confidence outflows out of Switzerland’s allegedly secure banking system.

In fact this is a perfect juncture for Russia and China to make a different kind of statement about hard currency, the global monetary racket by partially backing the Ruble and Yuan with gold. I see this extreme vote outcome as marking the end of western monetary dominance.

Important bullish news came with the surprise ending of the Indian 80/20 gold import restriction. For what it is worth no one (except me) called this one. The fact is India is a large part of the gold demand story, and this will add to that demand. Initially the reaction was to sell some excess inventory and eliminate the premium.  Some rare actual physical selling temporarily hit the global gold price and then the algos piled on. That premium is gone and Indian gold sells at 1-1.5% discount to spot, an overshoot.

This aggressive suppression and monetary debasement has gotten so severe that I now think we will see an XL (Extra Large) precious metal super bull. It will last about 3 years. These XL cycle occur about every 35-40 years. The move in gold could be 300-400% to over $3000. The move in miners and real juniors would be a multiple of that, say 3000-5000%. That will probably turn out to be low.

Friday we find out what the large drop in Crimex open interest was about.  Alasdar Macleod think it was swap dealers closing out spreads because of the high interest expense of leasing. This makes sense.

“It is most likely to be spread positions being closed, which could have become loss-making due to the unexpected surge in backwardation in the physical market. On 18th November, total spread contracts in gold were 104,445 contracts and in silver 40,580 contracts, which would fit this explanation. Furthermore, the effect on the market has been broadly neutral, which would not have been the case had naked bull or bear positions been liquidated.”

The Saudis make up a substantial portion of the western faux monetary dominance and petrodollar racket.  The Saudi stock market is now in crash mode. This should cause movements out of western bubbles (such as junk bond) to play defense.

I have to pass on one of the most laughable Potemkin Village, comments yet. The National Retail Federation, reported absolutely abysmal numbers: sales during the four-day Thanksgiving holiday period cratered 11% from $57.4 billion to $50.9 billion. Now here is the twisted logic as to why from  NRF’s CEO Matt “Baghdad Bob” Shay:

 “The improving economy means “people don’t feel the same psychological need to rush out and get the great deal that weekend, particularly if they expected to be more deals.”