What does ‘peer to peer contracts trading’ mean

With the movie “The Wolf of the Wall Street” still on their mind, many people tend to be more cautious when it comes to investing their money. Because, in the end, all binary option trading go through a broker, a person just like you who also wants to make some profit. But he only wins when you play big and it’s obviously not too concerning for him if his trading advice has failed you.

So what seems to be the solution? Cutting out the third-party, of course, and you can do that by redirecting your options and consider peer-to-peer contracts trading. According to Investopedia, a peer-to-peer service is a decentralised platform where individuals can get in touch directly, eliminating the “third wheel”, and it’s done without the use of a company of business selling a product or service.

Businesses are evolving and the invisible war between traditional service providers and innovative peer-to-peer operators don’t seem to be in favour of the first one. Paraphrasing a 1955 movie, “The future is Now”, so expect a big change soon enough. Peer-to-peer contracts trading is the necessary step in the evolution of this market and brokers are so absolute. It’s like bringing an old Canon to record your daughter’s wedding, if you want.

In a peer-to-peer manner, without the need for trusted third parties, you can trade much smoother and make more profit, while enjoying a perspective where you can select your transactions and directly answer for your well-being. We could give you another bunch of reasons why peer-to-peer contracts trading is the future, but if you want to see other opinions, you can check out a few reasons put previously together by us here at Advice Worth Gold. An interesting article, that lets you comprehend why you shouldn’t stay in the past.

If you’re now convinced that you need to make a change, you should probably find out that there’s already a platform where you can buy and sell binary contracts directly from other clients, with no hidden fees: Daweda Exchange. Among many benefits, it offers an affordable, low cost fee per trade, 100% payouts and gives you access to some great trading tools, all for free.

With Daweda Exchange, there’s no more conflict of interest with the broker, and you can profit on winning trades. Back in the days, you needed to share your earnings with your broker. If only you could have divided with him your losses, maybe these guys wouldn’t have been soon just a glimpse from the past.

A 24/7 trading option lets you utilise every piece of information you get your hands on and be active when you want, at any hour of the day or night, and count your earnings afterwards.  With Daweda, you can trade until the last second and have full statistics at your disposal. Also, you can now find out what and when went wrong, what business you need to avoid or how to deepen your pockets.


Choose to be part of an agreement between two independent traders and let the old brokers behind. Select the perfect platform, Daweda Exchange, where traders meet and agree on a contract, and trust your instincts. Good luck!

Narconomics

When we speak about narcotics, you all think about cocaine or heroin, and you all think that they are illegal and liable for world’s most death cases. You may also think that they are used by low-class individuals. You are all wrong. Narcotics are legally manufactured for their use in medicine, and they are on the top of the world’s biggest market and at the bottom of the world’s deadliest product; numbers will be analyzed later in this article. The name “NARCONOMICS” is not here by accident. It is collateral to the name “ECONOMICS”. Narconomics can define and drive a country’s healthy economy or a country’s recession. I can compare the numbers of narconomics with the very important economic indicator “DURABLE GOODS”. As we all know, durable goods are an indicator to the health of an economy. They show that people in a country, after they have spent money on food, mortgage, electricity, water, and taxes, still have available money in their pocket to buy durable goods like a new television, washing machine, car, boat, etc. Narconomics are the same. From middle-class to the rich, people are using drugs, like cocaine, for pleasure or relaxing or even to keep them awake more hours in order to work more. For instance, back in the 80’s cocaine was widely used and also in fashion with wall street traders because they could stay awake many hours and trade more to make more money. Now, from an economic point of view, drugs are overused when the economy is booming and people have extra money in their pocket so they can afford it. On the other hand, drugs are underused when the economy is in a recession because people are fearful of the future’s uncertainty, and they do not have that extra money to spend on drugs for pleasure.

THE NUMBERS: (based on global annual records)

Drugs retail values $400 billion (not including government taxes, not including unknown users and unknown dealers not including legal pharmacy sales)

Cigarette retail values $698 billion (including an average of 300% government taxes)

Alcohol retail value $1.2 trillion (including an average of 100% government taxes)

4 million die from smoking cigarettes

3.3 million die from alcohol abuse and alcohol related car accidents

200 thousand die from drug abuse

THE CARTELS:

We’ve all heard that drugs are controlled by cartels, and they are killing each other for control of the market. Did you ever wonder if the other industries are controlled by the same cartel-like method?

Drug cartels like Sinaloa, Zetas, Guadalajara, Tijuana, and Golf are controlling 80% of the world’s cocaine. Taliban in Afghanistan are controlling 80% of the world’s heroin.

By 2014, 84% of the cigarette market was controlled by transnational tobacco companies. Over the last decade, the international cigarette market has been dominated by five companies, China National Tobacco Corporation, Philip Morris International, British American Tobacco, Japan Tobacco Inc., and Imperial Tobacco.

Alcohol industry is controlled as follows:

Global Market Share, % (Ranking)
Corporation (Headquarters) 2006    2008
Diageo plc (United Kingdom) 10.8 (1)      10.2 (1)
Pernod Ricard (France) 8.3 (2)       8.9 (2)
United Spirits Ltd (India) 6.7 (3)       7.9 (3)
Bacardi (Bermuda) 3.7 (4)         3.4 (4)
Beam Global Spirits & Wine (United States) 3.7 (5)         3.3 (5)
Central European Distribution Corp (Poland) 1.8 (7)         2.1 (6)
Brown-Forman (United States) 1.9 (6)         1.9 (7)
Gruppo Campari (Italy) 1.7 (9)          1.7 (8)
Sazerac Co Inc (United States) 1.7 (10)          1.5 (9)
Suntory (Japan) 1.8 (8)           1.5 (10)
Total share of top 10 41.8           42.5

NARCONOMICS VS ECONOMICS

All economies, including big businesses and people, are passing through recession and financial crises, except one: the drug business. The main reason behind the success of this industry is the huge profit margin from the cost of production to the market price. From the day it was discovered, cocaine’s production price was from 200 -500$/kg. Its selling price is constant at $20.000 from the first day it was imported in the US until today.

The cocaine business, by contrast, has switched its attention to Europe, which goes through twice as much coke as it did at the end of the 1990s. The average Brit now buys more than the average American, albeit of lower quality. Mexican sellers are also making inroads in Australia, another promising market.

The drug industry’s flexibility is partly due to its exemption from import duties. Whereas legitimate Mexican traders have free access to America and Canada via the North American Free-Trade Agreement (NAFTA), drug smugglers are granted tariff-free entry to every country in the world thanks to the Single Convention on Narcotic Drugs, which prohibits the regulation or taxation of their product. Pesky rules of origin, which prevent many Mexican manufacturers from selling goods in America, do not apply to Colombian cocaine processed in Mexico.

All those factors are making the drug cartels more and more powerful and financially independent, and producing a huge portion of GDP in their country of origin. One of the main reasons for the US to invade Afghanistan and change the government was the opium production (heroin). The 9/11 attack and the hunt for Bin Laden were simply a convenient excuse. After the US took control of the opium production in Afghanistan, the opium production increased and, at the same time, the price of heroin doubled.

Three reasons why peer-to-peer contracts trading is the future

Today, all binary option trading is done through a broker (broker-client). It doesn’t matter what you think of your broker, it makes no difference if you switch platforms – there’s no getting away from the fact that you need a broker to trade. And the brokers aren’t necessarily working in your best interests either.

When you win a position, your broker pays you from losing accounts. And when you lose, you are paying for someone else’s wins.

But is it that simple? Not really.

There is one key information that they are hiding away from you.

All those brokers NEED you to lose to make profits. Yes, when you lose a position, your money is not vanishing away in the abstract and mysterious market’s fog, but it is rather going in a very real place: the broker’s pocket.

The reality is if you win, they lose, if you lose they win. The conclusion is very simple: there is a deep conflict of interest in the deepest roots of those trading platforms.
If you could trade binary options directly with each other, so called peer-to-peer trading in binary contracts (a contract between two clients) – we not only get to keep all of our profits, we also avoid any conflict of interest with the broker.

Here’s why direct contracts trading is the next logical step.

Reason 1: With the traditional binary option brokers the odds are against you

It’s simple really – on traditional binary options platforms, you’ll usually make an 80% profit on successful trades. But when you lose, that’s the whole 100% gone. So even if you’re great at what you do, or you’re on a really amazing streak, the odds are stacked against you. If there’s a broker involved, you will never be able to make a profit in the long run.

Reason 2: The sharing economy is here to stay

In March 2015 the accommodation website Airbnb was valued at $24 billion with annual revenues that are a relatively low $0.9 billion. Compare this to the Marriott chain of hotels that has annual revenues of $13.8 billion, but a recent valuation of only $21 billion. Can you think of a reason for this gap?

Airbnb is just one of a number of start-ups that are changing the way people think about buying and selling products and services. In today’s social media world, it’s all about working with our community – we’re finding ever more ways to skip the brokers in our lives to save, profit and experience more.

Reason 3: How much do you trust your broker?

Binary options brokers do this for a living – they’ll always have the inside scoop on the markets, and the technology to back them up. Even if you’re top of your game, it’s an uneven playing field, you are simply no match for the broker, so you need to have a solid trust in your broker and unfortunately most of them cannot be trusted.

In summary

The best way to get a fair trading experience, with the greatest profit potential, is to trade without a broker. And there’s currently only one platform out there that offers true peer-to-peer contracts trading. Daweda Exchange lets you buy and sell binary contracts directly from other clients, with no hidden fees. Check for yourself.

Wine as an Investment

Wine history goes back as far as 4,000 B.C., but it is uncertain if the oldest winery was found in Armenia or Georgia. By 3,000 B.C., the pharaohs had risen to power in Egypt. They began making a wine-like substance from red grapes and, due to its resemblance to blood, used it in ceremonies. During this time, the Egyptians came in contact with the Jews as well as the Phoenicians. It would be the Phoenicians who would cultivate the wine and begin to spread it around the world. By 800 B.C., the Phoenicians began to trade across the Mediterranean, including with the Middle East (current day Israel) and stretching around the sea from North Africa to points in Greece and Italy. It was during their trading that they also brought with them wine, transported in ceramic jugs, as well as grapevines. During their travels, the Phoenicians came in contact with the Jews, who began to use wine to mark religious ceremonies. We first hear the mention of wine in the book of Genesis, when, after the flood, Noah—drunk on wine—exposes himself to his sons. The Romans take wine as their own, creating Bacchus, their own god of wine, and make wine a central part of their culture, just as the Greeks had done. They build upon and formalize the Greek’s cultivation methods to the point that terroir is recognized and famous vintages (121 B.C. the most well-known) are enjoyed for decades. As the Empire and its troops expand across Europe, Romans plant grapevines in modern day France, Germany, Italy, Portugal, Spain and a number of Central European nations.

Today the world’s most well-known and recognized wines are the French ones. Although there are many new producers of wine, which are known as the new world including places like South Africa, New Zealand, Argentina and California. The French wines are the ones which will be the most popular within the wine investor community. Wine can be enjoyable to all social levels with price vary from as little as $3/bottle to as much as $170,000/bottle.

There are now three wine exchanges in the UK: Berry Bros. & Rudd (BBX), London International Vintners Exchange (Liv-ex), and Cavex. The three programs focus mainly on top Bordeaux and also handle logistics. In the UK, wine investments are stored in “bonded”, temperature controlled warehouses. Bonded wines avoid the 20% excise tax, but also must remain in a warehouse until the tax is paid. These wines are very desirable to international buyers, restaurants and brokers. If you invest in these markets, it is possible to never even see your wine.

An investment wine should have all the traits of an age-worthy wine, but it also should be in demand when it sells. The most in-demand investment wines are fine Bordeaux and Grand Cru Burgundy. Prestige wines such as these start at $600/bottle and are offered in 6 bottle wooden boxes. When buying in this market, buy by the case and do everything you can to create a paper trail of provenance to show the wine is not fake. If you plan on investing in French wines, it’s important to make your wine easy to sell on the international market.

If you want to become a serious wine investor, you must stop choosing wine based on brand name or how nice a bottle looks. Building a Wine Investment Portfolio, would most likely specialize in a specific region and select a few producers that will continue to prosper. You should attempt to get on those wineries’ allocation lists and also pay the winery a visit to taste their wines and get a feel for who they are. Pay close attention to vintage variation reports, as the reports will help you decide to purchase either 1 or 2 case lots. Do not buy any less than a case. After 5 years, you should have about 22-24 cases of wine. Then, wait another 3-5 years to start selling. In any case you must read carefully and collect some investment tips before you start, so visit www.wineinvestment.com

Over the last decade, the price for French Bordeaux has reached astronomical levels. Much of this is due to rising wealth in China, where fine wine has become a sort of status symbol. In fact, the Chinese were buying so much Bordeaux, they surpassed the US in 2009 as the largest non-European export market, according to the Wall Street Journal.  Investing into a good wine has an annualized return of 16.9%. The S&P 500, by comparison, was up only 12.9%.

It’s a big time for fakes—fake news, fake art, fake handbags, fake wine. A few years back, a report in a French newspaper, Sud Ouest, estimated that 20 percent of wines might be fake. That’s a huge number—experts doubt it’s that high, but it still indicates a growing concern. The problem is bigger in China because of its exploding wine market, which is projected to be a $69.3 billion business by 2019, an 81 percent increase over four years.

In 2016, Italian authorities seized 9,000 bottles of fake Moët Chandon—discovered in a shed in Padua in northern Italy. The faux Champagne—actually sparkling table wine—had a retail value of $375,000. There was also a cache of 40,000 fake Moët labels, worth close to $2 million. The Italian police are becoming experts at spotting fake wines. Two years earlier, they seized 30,000 bottles of counterfeit Brunello and Chianti Classico in a raid in central Italy.

But the most notable cases of counterfeit wine involve extremely high-end bottles, and the man behind the priciest swindles is getting increased media attention these days. In 2014, Rudy Kurniawan was sentenced to 10 years in prison for selling victims, among them the businessman Bill Koch, more than $20 million in fake wine. (Koch now fights fake wine directly.) Insiders describe a kitchen that he turned into a fake wine factory, filling up bottles that he’d drunk at restaurants; he had the empties sent back to him, he said for trophies. Among the tip-offs: Collectors reported that bottles they had previously seen only once or twice in their lives—a ’59 Romanée-Conti, for example flooding the market.

The prestigious Château Palmer does two things to combat fraud. Since 2009, it has embossed the bottom of each bottle with the name “Château Palmer”. And along with other top wineries, such as Lafite-Rothschild and Ornellaia from Italy, Palmer has begun using something called a Bubble Tag. This sticker-like strip is affixed over both the foil covering the cork and the glass of the bottle with a unique, random pattern of bubbles, as well as an alphanumeric code and a QR code, which act as a unique fingerprint for each bottle. When you scan the code, you’ll get verification.

Mexit

In Europe, we are all talking about building walls on our boarders with non-EU countries in order to avoid the flow of refugee. In the U.S., they are talking about building a wall between themselves and Mexico in order to stop illegal immigrants crossing the border, as well as drug smuggling.

In Europe, we worry about “BREXIT”. In Mexico and the U.S., they worry about “MEXIT”. You’ve never heard about “MEXIT” because this article is the first ever mention of it. Donald Trump has said repeatedly that the U.S. should revisit its NAFTA agreement because Mexico is “killing us on trade”. What is the “North American Free Trade AgreementNAFTA”? It is a regulation implemented on January 1, 1994 in Mexico, Canada, and the United States to eliminate most tariffs on trade between these nations.

The U.S. goods and services trade deficit with Mexico was -$49.2 billion in 2015. Mexico is currently the U.S.’s 3rd largest goods trading partner with $531 billion in total (two-way) goods trade during 2015. Goods exports totaled $236 billion; goods imports totaled $295 billion.

Yes, it is true that America’s trade imbalance with Mexico is quite high right now in terms of dollars. Last year, for example, the U.S. imported $53.8 billion more goods from Mexico than it exported in 2014, as per the U.S. Census Bureau. Over the first six months of 2015, the figure was $27.8 billion, which would prorate out to $55.6 billion for the year.

However, at the same time, these figures are lower than average U.S.-Mexico trade imbalances for most of the past decade. The all-time high was $74.95 billion in 2007, and the trade deficit topped $60 billion for six of the seven years between 2006 and 2012.

The actual cost for the rest of the border wall (roughly 1,300 miles) could be as high as $16 million per mile, with a total price tag of $15 billion to $25 billion.

For me, it does not make any sense spending 25 billion building a wall that actually does not eliminate the trade deficit between countries. As far as the goods traded are crossing legal borders, the deficit will be the same with or without the wall.

From a drug smuggling perspective, it might work a little bit, but still not enough to offset the cost. Because, as we know, many cartels are smuggling their drugs from Mexico to the U.S. through underground channels, with submarines by the sea, and even right past the eyes of custom agents on the borders’ official entry points.

Most of the illicit drugs come into the United States across the vast 2,000-mile land border between the U.S. and Mexico, called the Southwestern border or SWB. Mexican drug cartels make an estimated $19-$29 billion a year on drug sales in the United States.

Illegal drug abuse costs American society $181 billion a year in health care costs, lost workplace productivity, law enforcement, and legal costs.

Illegal drugs in the United States create a huge black market industry; an estimated $200-$750 billion a year in size—with the current decade seeing the largest per person drug usage per year in American history.

From an illegal immigration limitation prospective, the wall might be worth it.

It is estimated that there are approximately 720,000 Mexicans who cross the border each year illegally. Approximately half of these are caught by border control.

The U.S. has spent $132 billion since fiscal year 2005 on border security, according to the Migration Policy Institute. That spending  includes thousands of additional agents, fencing, ground sensors, surveillance cameras with night vision, radar, helicopters, drones and criminal prosecutions of undocumented migrants caught crossing illegally. This number give us an annual expense of $11 billion for preventing illegal immigrants. Building a wall of 25 billion in order to reduce the amount of 11 billion /year to at least half might be worth as the wall will be giving a return on the initial investment and saving US Government at least 6 billion per year, after 6 years from today.

The big question now is: will the congress approve this amount in order to satisfy Mr. Trumps’ desire?

The Role of Central Banks

When we are speaking about central banks, we are all thinking about a nice traditional building with old style architecture, housing a huge machine inside that’s printing money, and deep below the surface of land, holding huge stores of gold. What is really behind those walls, only few people know.

Many of us we know that central banks have a main role, controlling the economy. They issue more and more money, giving liquidity to the banking institutions in order to lend the money to normal people like us, to build our houses, buy new cars, or to go on holiday. And then, after working like donkeys all our lives, we can pay them back, the money they printed, plus interest, with money that we didn’t print.

Many times, we hear people saying that the banks steal their money, or they lost it in the stock market during a financial crisis. My dear readers, nobody took your money. Nobody stole your money. Did you ever look closely at one of the banknotes you hold every day in your hands? Take a close look and read what is written on it: “ECB”, “FED”, “BOJ”, “BoE”, “SNB” … Those are the names of some of our central banks. As long as your name is not printed on the money, it does not belong to you. It belongs to them. They give the notes to you to rotate in the market, to buy something to eat, so that you will not die, and you will continue to live and work for them. So, as long as their name is written, on their money, they will give it to you, and they will take it back anytime they want, and how they want.

The other role of central banks is to control inflation. According to them, inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar or euro you own buys a smaller percentage of a good or service. The value of money does not stay constant when there is inflation.

According to me, inflation is defined as the gun used by central banks and governments to keep you on the same social level and in the same standard of living from the day you were born until you die unless you belong to the 1% of the earths’ population, or you are a pioneer, or by accident you discover something that will turn you into a multi-billionaire.

Did you ever wonder why central banks are afraid of deflation? If a country’s economy is entering into the territory of deflation, the central bank immediately devalues their currency in order to create inflation. And if they do not succeed in increasing inflation, then the governments introduce extra taxes on products in order to accelerate inflation. And the reason is simple: they do not want people to finish the month with extra money left over in their pocket.

Which One of the Central Banks is the Strongest One?

Many of you may think that the FED of the USA is the strongest central bank or Bank of England or European Central Bank. This is not the case. The world’s strongest bank is in the world’s smallest country and many don’t know about it. It is the SNB (Swiss National Bank) situated in Bern, Switzerland. Known as the most discreet bank, holding money and gold undeclared because of amnesty.

The National Bank Law was enforced on 16 January 1906. The National Bank began business activities on 20 June 1907, and is thought to then be founded sometime during either 1906 or 1907. SNB itself states that it was founded in 1907. Since then, the Swiss franc known as “CHF” has been in circulation. The abbreviation “CHF” is derived from the Latin name of the country, “Confoederatio Helvetica”.

How did a small country like Switzerland managed to survive so many years and remain the most powerful of all? Let’s go back to World War 2. All of the world was at war, except one country, Switzerland. Without an army, without belonging to any military alliance, and by keeping their neutrality, they succeeded. This is not enough, of course. Hitler, while he was creating his empire, was stealing gold from all European countries; and we are speaking about many tons of gold. In order to finance his long-lasting war, he needed to buy food, clothing, and raw materials. Since no country would sell him products in exchange for gold, he had only one solution: to sell the gold to the SNB and receive Swiss francs in order to pay for all the needs and finance his war. So, all those tons of gold are in the SNB. It was unofficially reported that around 500 tons of gold made it to the SNB. At that time, Switzerland was producing goods like textile and food and exported them to Germany. Those goods were paid for with Swiss francs. So, by the end of the war, all countries of Europe were financially destroyed except Switzerland because they had all the gold in the SNB, and people were paying for all their products and services with Swiss francs.

The SNB was in the mass media’s spotlight many times for smuggling Nazi gold, and many times it was forced by the USA to break its secrecy and unveil to the world the truth. Every attempt failed because there is no evidence that the gold came from Germany or that it was the gold stolen by the Nazis. All cases have been archived. The most shocking of all is the gold stolen from the dead bodies of Jews. We may not be speaking about tons, but the gold was still collected from their jewelry and their golden teeth, melted down, and sent to the SNB as gold bars. Recently, when some Jews sued SNB for 10.5 million Euros, the SNBs’ officials answered them with a smile and said they were disturbing them for peanuts. The case was closed again because there were no death certificates for the Jews burned or murdered and buried in mass graves.

THE FED

In 1913, the Federal Reserve Bank was established and it began issuing Federal Reserve Notes the following year. Once free of the restrictions imposed by the limitations of available, physical gold for coinage, the quantity of Dollars in circulation increased dramatically. The increase was mostly in the form of paper money, not specie. The result was an economic “boom”, also known as “The Roaring Twenties” (1923-1929). But like all artificially-induced stimulus, it came to a crash in the fall of 1929. The burden of over-extended credit was the culprit. Prior to the formation of the Federal Reserve, money in circulation consisted of copper, silver, and gold coins, United States Notes, Silver Certificates, and Gold Certificates. All of these were non-interest-bearing, were issued directly by the US Treasury, and did not have any debt associated with their issuance. Notes issued by the Federal Reserve, however, were generally lent out, with interest due. So, for every Federal Reserve dollar in circulation, somebody needed that dollar to pay off a debt. During the Roaring Twenties, a lot of people took on debt, resulting in a great credit expansion. When only physical gold and silver was used as money, institutions were very cautious about lending it out because if the debtor defaulted, the creditor would be out some serious (sound) money.

President Franklin Delano Roosevelt’s 1933 executive order outlawing the private ownership of gold in the United States was arguably unconstitutional. But why did he do it?  Many historians and economists point to efforts to get the economy moving again as the reason, the theory being that people were hoarding gold, and the velocity of money in circulation needed to be sped up. But the real reason for the gold confiscation was a bailout of the privately-controlled Federal Reserve Bank. And the evidence has been printed right in front of our faces.

ECB

The first step towards creating the ECB was the decision, taken in 1988, to build an Economic and Monetary Union: free capital movements within Europe, a common monetary authority, and a single monetary policy across the euro area countries. The ECB took over responsibility for monetary policy in the euro area in January 1999, two years before the euro was introduced into circulation.

The ECB is made up of three decision-making bodies: the General Council, the Executive Board, and the Governing Council. The General Council, which operates largely as an advisory body for the ECB, includes all of the EU’s national central bank governors, as well as the president and vice president of the ECB. The Executive Board of the ECB, the hub of day-to-day operations and decision-making, consists of the ECB president, vice president, and four other members, all of which are appointed by the European Council. The Governing Council is comprised of the entire Executive Board and all of the national central bank governors of countries that use the euro, and meets bi-monthly to adopt decisions on monetary policy for the euro area.

Is ECB a genuine independent body? I say no! I also call them the “Neo-Nazi”; “neo” being the Greek word “new”. With offices in Frankfurt Germany, and mainly financed by the German economy, ECB is created with one publicly unknown scope: to control all European countries financially and to lend to them with traditional printed money as an exchange for interest paid in real money or natural resources.

In conclusion, our central banks aren’t doing anything other than controlling the economy. Do not expect to become super rich in this life because richness belong to central banks.

What Is Bitcoin?

It took me more than one week to decide how to start this article, and I am still not sure if it is correct.

Is it a new pyramid scheme, which will collapse at a certain point?  Is it a clever Chinese invention to make our lives easier and our payments more cost efficient by avoiding the huge bank charges we’ve all been paying for so many years? Or is it just another attempt at introducing a currency not regulated or controllable by central banks and governments so that the big smugglers can clean their money?

A few years ago, nobody had heard about bitcoin. A year ago, many platforms introduced bitcoin on electronic trading as many other currencies. A few days ago, every mass media was talking about it, and everybody turned their head to take notice, tracing the crazy spike of its price and looking at it as an opportunity to make money.

Some articles were even saying that bitcoin has the same value as gold: 1bitcoin/1200$.

Let’s take it from the beginning: Bitcoin is a crypto-currency designed in 1998 by Wei Dai and introduced as a form of trade in 2009 by Satoshi Nakamoto. Although Satoshi was behind the bitcoin, by keeping his anonymity and letting the crypto-currency be developed through different bitcoin software exchangers, it is still uncertain to this day who really introduced bitcoin in the market and how. Even so, bitcoin took over a big portion of the market very quickly and is expanding worldwide.

Everybody around the world can buy and sell bitcoins as simple as they can buy EUROs or GBPs or USDs through a platform which is connected to the electronic network. The bitcoin network shares a public ledger called the “block chain”.

Anyone can go to any bitcoin exchanger, open an eWallet, and start buying and selling. The only difference is that you don’t need to upload multiple personal documents, and you can also keep your anonymity from being visible. For many, this is an advantage, but you must take into account that these bitcoins and your eWallet are nothing more than an online software. So, it can be erased or hacked or God knows what else.

Not long ago we saw what happened to it when it’s biggest exchanger went bankrupt. The bitcoin price drooped almost 50% in a day. A few months after that, it was hacked and millions were stolen from eWallets. And a few days before an announcement of the possibility of being regulated, its price went from $500 to $1,200 within the span of 2 days, then pulled back to $800 the day after. It’s a volatile instrument because of its low liquidity. There are only 1,500,000 bitcoins in circulation, so any amount changing hands can create turbulences in its price. Its price is calculated mathematically and is based only by demand and supply. Its big price movements are very attractive for profit making, but also risky for big losses. Unless you are a big trader with many millions, the best for you is to trade bitcoin through a platform offering small contracts, peer-to-peer, with small time intervals. For this, www.daweda.com is recommended.

Many questions surround its future as a non-regulated and non-government controlled currency. All normal currencies and their transactions are well monitored by central banks and regulatory authorities, not only for their sovereignty, but also for the newly introduced law on money laundering and funding of terrorist activities. As far as we know, and all central banks and governments know, bitcoin is easily accessible to all kinds of terrorists and people holding illicit money. They can easily and anonymously buy bitcoins from any exchanging point and then change them into USD, then clean them through their bank accounts or transfer them between users without any restrictions.

In my point of view, it’s only a matter of time before bitcoin will belong to the past unless central banks and governments find a way to regulate it and control its transactions.

OIL vs. SOLAR

Oil became known to humanity about 4,000 years ago, according to some history archives. It was first seen in ancient Persia, (today’s Iran) then in Dacia (today’s Romania), and many other countries thereafter. The first oil well was built in Russian in 1745 under the Empress of Elizabeth of Russia.

Petrol began its road to success and popularity in 1856 when the polish pioneer Ignacy Lukasiewicz built the world’s first refinery and invented the modern kerosene lamp, which later illuminated the streets of Europe.

By 1910, oil was established as a commodity in our lives, in our modern history, and humanity became 100% dependent on it. Refineries and wells started to appear like mushrooms in every country around the world. Three of them were on the top of the list, and they are still today: Saudi Arabia, Russia, and the United States. In that order, they produce and control 80% of world’s oil.

Oil, and many other goods, started to be traded in small markets organized by merchandisers, in the streets, or in in rail stations. In 1933, COMEX was formed and, since then, other exchange groups followed—all of them housed in world trade center.

In August 1994, NYMEX was the main point of trading merchandise goods. Since 2000, electronical trading became commonplace, and everyone could buy and sell oil on their PC from their house.

We all enjoyed and created a modern world dependent on oil, without thinking about and understanding the disaster that would follow. The so called “black gold” will be the main factor behind the coming dark days of our planet. The over-value and super profitability of the product is the only factor behind all the wars that continue around the world today. It took us only 100 years to destroy our planet. A planet that took 5,000,000 years to be created.

However, one war humanity could not foresee, I have named “The Invisible War”. Global warming and climate change are threatening to extinguish our civilization.

The world mostly agrees that something needs to be done about global warming and climate change. The first stumbling block, however, has been trying to get an agreement on a framework. In 1988, the Intergovernmental Panel on Climate Change (IPCC) was created by the United Nations Environment Program (UNEP) and the World Meteorological Organization (WMO) to assess the scientific knowledge on global warming. The IPCC concluded in 1990 that there was a broad international consensus: Climate change was human-induced. That report led way to an international convention for climate change, the United Nations Framework Convention on Climate Change (UNFCCC), signed by over 150 countries at the Rio Earth Summit in 1992. This section looks at this Convention and some of the main principles in it. The United States, plus a few other countries (and many large corporations), have opposed climate change treaties; seemingly afraid of profit impacts if they have to make substantial changes to how they do business. However, as more climate change science has emerged over the years, many businesses are accepting this and even asking their governments for more action so that there is quick clarification on the new rules of the game in order to carry on with their businesses.

Many countries gathering together at different summits finally agreed in 2016 to cut pollution by 0.5%.

Europe introduced a plan ordering all its countries’ members to cover at least 25% of their energy needs with alternative energy solutions, like sun and wind, within 10 years. It looks like it worked. Germany and Denmark are the first countries to succeed in completely eliminating dependence on oil. In Christmas of 2016, Germany announced that electricity cost is below zero for German consumers. Last year, Argentina was also giving free electricity to its consumers due to the over supply of electricity produced by solar parks. Alternative energy is the future. Even the car industry is turning to the production of cars powered by electricity.

Saudi Arabia decided a few months ago, in an annual economic meeting, that by 2027 they will not depend any more on oil for income. Saudi Arabian’s Aramco, known as the world’s biggest oil company, will now become one of the world’s biggest sovereign wealth funds. They will increase its capital up to 2 trillion US Dollars in cash in order to buy APPLE, GOOGLE, and MICROSOFT. Although we don’t know if this can happen, due to the fact that such a purchase must be approved by the high court in the U.S., one is sure that Saudis are not joking; they really want to secure their future income without the oil industry.

Bill Gates has pulled together a multinational band of investors to put billions into clean energy.

The Microsoft co-founder and philanthropist announced his latest endeavor: the Breakthrough Energy Coalition at the climate change summit in Paris.

“We need to bring the cost premium for being clean down,” Gates said Monday in an interview with CNN’s New Day. “You need the innovation so that the cost of clean is lower than the coal based energy generation.” Lowering the cost of clean energy to make it competitive with fossil fuels is the best way to get poor countries to make the switch without sacrificing economic growth, Gates said. Clean energy can make air conditioning, refrigerators, stoves and fertilizer more affordable for poor people. “All these things that enable to modernize lifestyle are very energy intensive,” he said, noting that five years from now, “I see the price of energy actually being lower than today, and that’s for clean energy.” The new Gates fund will be fed by a group that spans more than two dozen public and private entities — including national governments, billionaire philanthropists, investment fund managers and tech CEOs. “The renewable technologies we have today, like wind and solar, have made a lot of progress and could be one path to a zero-carbon energy future. But given the scale of the challenge, we need to be exploring many different paths — and that means we also need to invent new approaches,” Gates said in a statement.

Among the list of backers are Alibaba (BABA, Tech30) CEO Jack Ma, Mark Zuckerberg of Facebook (FB, Tech30), Meg Whitman of HP (HP), and Virgin (VA) Group’s Richard Branson. More than a dozen governments have also committed to double their spending on carbon-free energy development over the next five years in a complementary effort dubbed “Mission Innovation”. Twenty countries — including the U.S., China, and India — have signed the pledge, which was announced in Paris alongside the Gates initiative.

President Obama called the Gates effort a “groundbreaking new public-private initiative”.

According to government data, the U.S. spent about $5 billion on energy R&D in 2013, compared to $31 billion on health care research and nearly $70 billion on defense research.

The Obama Administration said:

“Private companies will ultimately develop these energy breakthroughs, but their work will rely on the kind of basic research that only governments can fund,” Gates added. There is no fund raising goal for private investors in the Gates initiative. But the fund represents billions in money to seed promising ideas in large-scale clean energy production. The fund says it will invest broadly and focus on five key areas: electricity generation and storage, transportation, industrial uses, agriculture, and projects that make energy systems more efficient.  For example, Gates says more research is needed in new kinds of batteries — “flow batteries” — that he says hold more promise than current battery technology. According to Gates, the goal is to spur new clean energy tech while combating climate change by “keeping global temperatures from rising more than 2 degrees.”  Reducing global reliance on fossil fuels also holds the potential for massive economic benefits, Gates added. “It would help millions more people escape poverty and become more self-sufficient,” Gates wrote. “And it would stabilize energy prices, which will have an even bigger impact on the global economy as more people come to rely on energy in their daily lives.”

In conclusion, we can still make money by investing in our green planet and alternative energy solutions instead of oil. It’s in our hands if we want our children to enjoy a clean planet.

Gold from Jungle Ground to LME

Gold has occupied a unique social status for millennia. It has a long history as a valuable metal and its history is far from over.

The first firm evidence we have of human interaction with gold occurred in ancient Egypt around 3,000 B.C. Gold played an important role in ancient Egyptian mythology and was prized by pharaohs and temple priests. It was so important, in fact, that the capstones on the Pyramids of Giza were made from solid gold.

The Egyptians also produced the first known currency exchange ratio which mandated the correct ratio of gold to silver: one piece of gold is equal to two and a half parts of silver. This is also the first recorded measurement of the lower value of silver in comparison to gold.

The Egyptians also produced gold maps – some of which survive to this day. These gold maps described where to find gold mines and various gold deposits around the Egyptian kingdom.

As much as the Egyptians loved gold, they never used it as a bartering tool. Instead, most Egyptians used agricultural products like barley as a de-facto form of money. The first known civilization to use gold as a form of currency was the Kingdom of Lydia, an ancient civilization centered in western Turkey.

In 1792, the United States Congress made a decision that would change the modern history of gold. Congress passed the Mint and Coinage Act. This Act established a fixed price of gold in terms of U.S. dollars. Gold and silver coins became legal tender in the United States, as did the Spanish Real (a silver coin of the Spanish Empire).

At the time, gold was worth approximately 15 times more than silver. Silver was used for small denomination purchases while gold was used for large denominations. The U.S. mint was legally required to buy and sell gold and silver at a rate of 15 parts silver to 1 part gold. As a result, the market rate for gold rarely varied beyond 15.5 to 1 or 16 to 1.

That ratio would change after the Civil War. During the Civil War, the U.S. was unable to pay off all its debts using gold or silver. In 1862, paper money was declared to be legal tender, marking the first time a fiat currency (not convertible on demand at a fixed rate) was used as an official currency in the United States.

Just a few years later, silver was officially removed from the U.S. Mint’s fixed rate system in a bill called the Coinage act of 1873 (and criticized by American citizens as the Crime of ’73). This removed the silver dollar from circulation, although coins worth less than $1 still contained silver.

The United States would never use silver dollars again. Throughout the late 1800s, the issue remained an important political topic. In 1900, the gold dollar was declared the standard unit of account in the United States, and paper dollars were issued to represent the country’s gold reserves.

Gold has mesmerized humanity for thousands of years, but the metal’s surge to a record $1,900 an ounce in 2011 sent miners to ever-riskier places. Enter Kibali. Randgold Resources and AngloGold Ashanti. They bought a gold ore deposit deep in the jungle of northeastern Democratic Republic of Congo in 2009 as the country recovered from Africa’s worst-ever civil war, which killed at least 3.1 million people. With pioneering hydropower and social cohesion plans, the companies have built one of Africa’s biggest and most profitable gold mines.

Kibali will produce about 600,000 ounces per year for the next decade.

The operation first produced gold in 2013. An underground mine is currently being developed to access deeper gold and is scheduled for commissioning next year.

The mine, processing plant, and power generating units cost Randgold and AngloGold an estimated $2.5 billion to build.

Each year, the mine’s plant can process 7.2 million tons of rock, which contains about 3.5 grams of gold for every ton of ore.

The mine is situated in the extreme northeast of DRC, near the border of Uganda and 1,800 kilometers (1,120 miles) from the Kenyan port of Mombasa.

Over the past two decades, gold has gone through a number of major changes. August 1999 was a landmark moment in the price of gold as it dropped to a price of $251.70 per ounce. This occurred after central banks around the world were rumored to be reducing their gold bullion reserves and at the same time, mining companies were selling gold in forward markets.

By February 2003, outlook on gold had reversed. Many viewed gold as a safe-haven after the U.S. invasion of Iraq in 2003.

Geopolitical tensions between 2003 and 2008 continued to elevate the price of gold. And in 2008, the global economic crisis increased the price of gold even further. After reaching a high of over $1,900 per ounce in 2011, gold has fallen to between $1,200 to $1,400 in recent years.

As of 2014, no countries in the world use a gold standard. In other words, no currency in the world is backed by gold.

The last major currency to use a gold standard was the Swiss Franc, which used a 40% gold reserve until the year 2000.

Of course, that doesn’t mean that countries have sold all their gold, or that their currencies are based on nothing. Most countries in the world maintain large gold reserves in order to defend their currency against possible future emergencies.

America’s gold reserves are famously held at Fort Knox, Kentucky. The heavily-defended location holds an unknown amount of gold, as the amount is officially classified by the United States government. However, it’s widely accepted that the United States holds more gold bullion than any other country in the world (approximately 1.3 times as much gold as the next leading country, Germany).

As with anything labeled “classified” in the United States, there are plenty of conspiracy theorists who argue that Fort Knox is actually empty and that the gold is held in some secret location or does not exist at all. You’ll have to figure that out on your own.

Gold has been seen as a smart investment for millennia. However, the use of gold as an investment became hugely popular after the end of the Bretton Woods system in 1971.

Since the 1970s, the price of gold has steadily increased. In 1970, gold was pegged at $35 per ounce. In August 2011, that number had risen to nearly $2000 per ounce. However, the years in between were not a smooth upward slope, and gold – like any other investment – has gone through a number of ups and downs over the past few decades.

When looking at gold investment charts, it’s important to recognize inflation. Some charts show the price of gold as virtually a straight line from the bottom left corner of the graph to the top right corner.

However, the price of gold has experienced two major spikes since the 1970s: once in 1980 and the other in 2011.

Furthermore, due to inflation, paying $35 for an ounce of gold in 1970 wasn’t the same as paying $35 for an ounce of gold today. Judging by the Purchasing Power Calculator – which looks at how Customer Price Index (CPI) has changed over the last few decades in the United States – $35 in 1970 would be worth approximately $200 today.

By carefully weighing all of this information and current trends, you can build an accurate view of the present value and future value of gold.

Some of the biggest names in finance are fighting for control of the London gold market — a $5 trillion, three-century-old trading hub that is being forced to adapt to a digital age.

As the London Bullion Market Association revamps over-the-counter trades that are the market’s major pricing benchmark, new ways of buying and selling precious metals are set to start next year from CME Group Inc., Intercontinental Exchange Inc., and the London Metal Exchange. Some big banks have stakes in the outcome, including Goldman Sachs Group Inc., HSBC Holdings Plc, and JPMorgan Chase and Co.

“There are four weddings, and we have to dance at all of them, because we don’t know which marriage will last,” said Adrien Biondi, the global head of precious metals at Commerzbank AG in Luxembourg. “Only one will win.”

Almost half the world’s known gold trading occurs in London. OTC transactions are sealed by virtual handshakes, leaving default risk with buyers and sellers rather than relying on clearinghouses, which use collateral to manage and offset risk. But since the financial crisis, all markets have been reevaluating how they do business and manage risk as regulators step up scrutiny. That’s particularly true for major price-setting exchanges, after it was discovered in 2012 that banks were manipulating a key benchmark for global interest rates.

A push for fewer risks and more disclosure has forced the LBMA to seek changes that would make it more transparent and secure for customers. The association, which counts HSBC and JPMorgan among its members, will introduce trade reporting for its members and a new trading platform in the first half of next year. That’s also when competitors plan to unveil new precious-metals derivatives built around the clearinghouse models.

Gold remains one of the world’s most-popular commodities and a core reserve for central banks around the world. While prices slumped for three straight years through 2015, demand has since rebounded. Data compiled by Bloomberg show holdings by exchange-traded funds are up 30 percent this year, and investors have poured a net $25.5 billion into precious metals funds.

That’s helped boost the business of buying and selling gold. In October, LBMA reported gold trading rose to a daily average of 18.6 million ounces. That’s about $23.5 billion, based on the average value of bullion for the month. Prices are up 9.4 percent this year at $1,160.30 an ounce as of Wednesday.

The LME, the world’s largest base-metals exchange, found so much promise in precious metals, it announced in August 2017 it will eventually add platinum and palladium. The exchange had the backing of a group of five banks including Goldman Sachs, ICBC Standard Bank Plc, and Societe Generale SA, as well as the World Gold Council, a group backed by the mining industry that seeks to develop markets for the metal.

ICE, which owns commodity and financial exchanges, already runs the daily London gold auction on behalf of the LBMA among 13 authorized participants who set the daily price. In October, the Atlanta-based company said it would start its own gold contract in February that would involve bullion held in London and traded on its New York exchange.

Chicago-based CME Group, owner of the Chicago Board of Trade and the world’s largest futures exchange operator, sought an even earlier entree into the London marketplace. In November during LME Week, CME said it would start London gold and silver contracts Jan. 9 that offer a spread between spot prices and benchmark U.S. futures.

“We’re going to see five years of turmoil in this market before things settle down,” Tony Dobra, an executive director at the U.K.’s biggest gold refiner, Baird & Co., said by phone from London on Dec. 6. “The good old London OTC market will keep soldiering on until we see some sort of consensus.”

Senior traders, including Biondi and Simon Grenfell, global co-head of commodities at Natixis SA, an LBMA member bank which offers trading and risk management services, said the change is both necessary and inevitable.

The development “reduces credit risk in the system and makes it easier to trade,” Grenfell said by e-mail from London. “While the overhaul to gold markets may reduce credit margins on client business, improving transparency is a welcome change.”

Opinion remains split on who will come out on top. Dobra, Biondi and founding member Raj Kumar, head of precious metals business development at ICBC Standard Bank, all said the LME offers the best solution for the market. Brad Yates, trading head for Dallas-based refiner Elemetal LLC, said the CME would best fit his business needs. And participation on ICE’s benchmark, which underlies its contract, keeps growing, with trading house INTL FCStone Inc. the latest to join the process.

“There will always be an OTC market in London, but much of what currently takes place here will shift to the exchanges,” said Kumar, who works at a unit of Industrial & Commercial Bank of China (Asia) Ltd., the world’s biggest bank. “Participating in any new contract incurs set-up costs, and so firms will need to prioritize which venues they are likely to trade.”

 

2017 Predictions

We all know that, nobody knows what will happen in the future, unless if you are “Casandra” or “Nostradamus”. But, we can give our predictions on how the markets might be move in 2017 after analyzing some fundamentals, and all we can do is to wait till the end and to see how accurate we were.

Equity markets:

After a year of stagnation in the equity markets with a close range of trading within a few points all year round, we’ve seen an extraordinary rally beginning of November and continuing in December 2016. There are many doubts about such a rallies in equity markets and the possibilities of a massive correction it will be unavoidable in 2017.

Despite the shock of the savings and loans crisis, two more crises took place before the 1989 Act. The most memorable was the 1987 stock market crash. On what became known as Black Monday, global stock markets crashed, including in the US, where the Dow Jones index lost 508 points or 23% of its value. The causes are still debated. Much blame has been placed on the growth of programed trading, where computers were executing a high number of trades in rapid fashion. Many were programmed to sell as prices dropped, creating something of a self-inflicted crash.

Markets would yet again forget the lessons of the past in the dotcom bubble and subsequent crash in 2000. As in most crises, it was preceded by a bull rush into one sector. In this case it was technology and internet-related stocks. Individuals became millionaires overnight through companies such as eBay and Amazon. The hysteria reached such a pitch that the inconvenient fact that few of these companies made any money scarcely mattered. By 2000, however, the game was up. The economy had slowed and interest rate hikes had diluted the easy money that was propping up these companies. Many dotcoms went bust and were liquidated.

It was only a few years later that an even nastier crisis would hit the entire world’s financial markets in 2008. In many ways it has still has not ended, with the billions in losses and slowing global economy manifesting themselves in the current European sovereign debt crisis. It resulted in the collapse of a number of large financial institutions and is considered by many economists to be the worst crisis since the Great Depression. While the causes are numerous, the main trigger is considered to be the crash of the US housing market.

Although 3 times in the history of financial markets after such a rally, global financial market entered into recession and they collapse, in 2017 this might not be the reason behind the coming Drop. Simply as that, this time the drop will be completely reflect the supply and demand. As we all know when investors are buying a stock, they buy it for only one reason, to sell it in a higher price and cash out profits. This will happen in early January 2017, we will see an extraordinary sell off and profit taking out of the U.S. markets as investors will focus more on the strengthening dollar and the possibilities in buying into European stocks, that are cheaper than the U.S. ones and the exchange rate will bring them back extra profit. So with much more selling position and less buy the result will be a correction of 10-20% from where we are now. DOW will pull back to 18500 and recover during 2017 from 18500 – 20000

GBP

The global populist uprising evident in the Brexit referendum, Donald Trump victory and Italian referendum disciplines the EU leadership into a new, more cooperative stance, both internally and towards the UK.

As the negotiations drag on, the EU realizes that it is stronger with the UK under its umbrella than without, and indicates a willingness to make a key concession or two on immigration and the UK’s financial services under its existing special status within the EU. By the time the Article 50 invocation vote is put before Parliament, it is turned down in favor of the new deal that goes far beyond former prime minister David Cameron’s original treaty change requests.

The much anticipated Brexit thus yields to a “Bremain” as the UK is kept within the EU’s orbit. The sigh of relief from huge foreign holders of capital in the UK worried about its future sees a massive lifting of sterling hedges and strong reweighting by financial services firms back into the pound.

The Bank of England hikes rates back to 0.50% to play a bit of catch-up with the US Federal Reserve and EURGBP to be trading between 0.7200-0.7400 and 1.2800-1.3200 with its counterpart U.S. DOLLAR.

EURO

ECB gave a mixed or miss-understood signal on their last meeting. They prolonged the timing of QE but on the same time they reduce the amount from 80 billions to 60 billions per month. Its very obvious that the program runs out of steam as ECB is running out of bonds to buy. On the other hand QE did not helped at all the inflation pick up as it was originally expected and did not boost either the economy. As we will surf through 2017 we will see a tapper of QE and a possible normalization in interest rates which will be translated into a stronger EURO. Inflation expectations will be shifted together with the increase in oil prices and the recovery in Chinese PPI as that was the main reason behind the drop of European inflation. China has been the main driver in the reduction in global inflation, but it has now moved into positive for the first time in six years. Taking into account that euro’s bigger counterpart, the U.S. Dollar will also become stronger through 2017 due to FED policy in increasing interest rates at least twice, we are expecting the EUR/USD exchange rate to remain between 1.08-1.15 for the coming year.

OIL

Oil prices were on the main stage last year as we’ve seen them drop as low as 30$/barrel. We all know the reason behind the drop was political, targeting Russia and I.S. in Syria. But, the drop in oil prices did not actually affect only those 2, it also create turbulence and financial instability with big deficits in the budget of Saudi Arabia and other OPEC members. Finally an agreement reach between OPEC and non-OPEC members to reduce the oil production and boost the oil prices back to 55$/barrel. Oil prices will continue to raise in 2017 and may reach 80$/barrel as this price is consider to be a profitable for producers and acceptable from buyers. Saudi Arabia on their last statement said that, is willing to cut production farther. With the election of Donald Trump in the U.S. and the socialist winning ground in Europe relation with Russian will be more tied and the suction may be lifted finally. I.S. in Syria is losing ground and the war may end finally so it will be no more political reason in pushing the oil prices down. We see oil prices to be trade between 60-80$ barrel in 2017.

GOLD

Gold prices are under pressure and they will continue to be through 2017 as the gold price is directly depends on U.S. Dollar value. As interest rates will be hike during 2017 we will face more downside pressure in the value of gold.

We need to take into account that there is a bottom for gold price believe it or not. The cost of extraction of gold varies from 900-1100$/oz. This will be a physical and real, not technical, bottom of the price of gold, because below 1100$/oz. many gold mining companies are entering into default and they are unable to pay their debts to their liquidity providers who are the world’s biggest banks. And nobody wants the banks to default because of that. So we are expecting the gold price to be trade between 1100-1320$/oz. during 2017.

Beware of the formation of a new cartel which will soon control the gold market. Almost half the world’s known gold trading occurs in London. OTC transactions are sealed by virtual handshakes, leaving default risk with buyers and sellers rather than relying on clearinghouses, which use collateral to manage and offset risk. But since the financial crisis, all markets have been reevaluating how they do business and manage risk as regulators step up scrutiny. That’s particularly true for major price-setting exchanges, after it was discovered in 2012 that banks were manipulating a key benchmark for global interest rates.

A push for fewer risks and more disclosure has forced the LBMA to seek changes that would make it more transparent and secure for customers. The association, which counts HSBC and JPMorgan among its members, will introduce trade reporting for its members and a new trading platform in the first half of next year. That’s also when competitors plan to unveil new precious-metals derivatives built around the clearinghouse models.