NC Renegades

As we explained over the weekend, should the Swiss gold referendum pass successfully, the price of gold will surge. It was none other than JPM who warned that the “markets under appreciate this event”, explaining that “If the referendum is passed, the Swiss National Bank (SNB) will be forced to increase reserves by around 1,500 tonnes over five years, i.e. 300 tonnes per year. This 300 tonnes per year accounts for 7.5% of annual gold demand of 4,000 tonnes per year.”

Well, even as the SNB has been scrambling to make the referendum seem like a non-event, with very little chance of passing, moments ago Deutsche Bank released a piece that roundly refuted everything the Swiss Central Bank has been peddling. To wit, here is a note just out from DB’s Robin Winkler:

• On 30 November, the Swiss will vote in a referendum to decide whether the SNB’s constitutional mandate should be changed to require the central bank to 1) never sell any gold reserves once acquired, 2) store all its gold on Swiss territory, 3) hold at least 20% of its official reserve assets in gold.
• The likelihood of a yes vote is considerable. The proposal requires a simple country-wide majority to pass, as well as a majority in at least 50% of Swiss cantons. Current polling shows the ‘yes’ campaign with a narrow but clear lead and there are reasons to believe that factors on the day could be favourable for the amendment. If an affirmative vote was recorded, there is little political leeway to delay or dilute implementation.
• We find that some of the concerns over the technical implementation of the 20% rule may be overblown. The SNB should be able to meet its gold demands with relative ease. Nor do we subscribe to the view that this would have a long term impact on gold price trends. In the event of further intervention, SNB rebalancing into gold could have a more marked impact on short term price trends, however. The SNB should easily be able to repatriate its gold holdings from abroad.
• The possibility that the SNB could circumvent the requirement through the creation of a sovereign wealth fund is remote. While technically attractive, this option is not politically feasible. However, the SNB could use gold swaps to mitigate some of the adverse implications of the gold vote, in particular with respect to asset return risk and market footprint.
• The amendment would carry significant balance sheet risks for the SNB. As well as concentrating market risk, the SNB would be effectively short an option on gold but without having received a premium. Balance sheet risks could be mitigated by the SNB returning to marking gold at purchase rather than market prices.

Some more:

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The term “anarcho-capitalism” has, we might say, rather an arresting quality. But while the term itself may jolt the newcomer, the ideas it embodies are compelling and attractive, and represent the culmination of a long development of thought.

If I had to boil it down to a handful of insights, they would be these: (1) each human being, to use John Locke’s formulation, “has a property in his own person”; (2) there ought to be a single moral code binding all people, whether they are employed by the State or not; and (3) society can run itself without central direction.

From the original property one enjoys in his own person we can derive individual rights, including property rights. When taken to its proper Rothbardian conclusion, this insight actually invalidates the State, since the State functions and survives on the basis of systematic violation of individual rights. Were it not to do so, it would cease to be the State.

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Against the State

Against the State: An Anarcho-Capitalist Manifesto diagnoses what is wrong with the American political system, and tells us in no uncertain terms what is required to stop leviathan. Rockwell’s prescription is radical, calling for the wholesale realignment of society away from the state and toward voluntary order. As the book incontrovertibly shows, the overwhelming problems that confront us today are no accident. They stem from the nature of government itself. Only peaceful cooperation grounded in individuals, families, civil society, and markets can rescue us from our present plight.

Researchers at the Cockrell School of Engineering at The University of Texas at Austin have achieved a milestone in modern wireless and cellular telecommunications, creating a radically smaller, more efficient radio wave circulator that could be used in cellphones and other wireless devices, as reported in the latest issue of Nature Physics.

Source

State Department official told a United Nations panel Wednesday that the United States “did not always live up to our own values” after the 9/11 terrorist attacks, and she announced that the U.S. now acknowledges that a ban against torture applies in areas beyond its sovereign jurisdiction, including Guantanamo Bay and on U.S.-registered ships and aircraft.

“As President Obama has acknowledged, we crossed the line and we take responsibility for that,” acting legal adviser Mary McLeod told the Geneva-based U.N. Committee Against Torture, a body of legal experts that monitors implementation of the 1984 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment.

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h/t WRSA

It appears the rumors are true. Islamic State is set to become the only ‘state’ to back its currency with gold (silver and copper) as it unveils the new coins that will be used in an attempt to solidify its makeshift caliphate. ISIS says the new currency will take the group  out of “the oppressors’ money system.”

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The clock is ticking on the petrodollar. Our debt is $133,430,000,000,000.00 and our gold reserves at $1651.50 are $333,936,650,975.00 (from USdebtclock.org). This means our dollars are worth 1/4 penny each. So $1,000,000 USD is actually worth $2500. Assuming that the spending stopped. I wonder what our Treasury holders are thinking?

David DeGerolamo