Mining Alliance Of Trust: Naked Short Selling, Silver Squeeze And Gold Manipulation - "Regulators To Take Steps Against Short Selling".

Finally, our Mining Alliance Of Trust movement against Predatory Naked Short Selling and Kamikaze Pilots In Junior Mining is getting some support from regulators in Canada. Amplified by Reddit and Twitter investment communities Silver Squeeze movement can open the doors to the Gold Manipulation pandora box next. 

"The Ontario taskforce didn’t recommend bringing back the tick test, but it did propose other substantial changes, including requiring shorters to confirm they can borrow the securities they’re attempting to short, and be subject to a mandatory buy-in if a sale fails to settle two days after the settlement date, or four days after the trading date.

 

The change would effectively end a practice known as naked shorting. Currently, short sellers are only required to have a “reasonable expectation” of settling a short trade, meaning they can short without actually having borrowed the stock – something that can be disruptive if the shorter cannot locate stock to buy back, creating more shares than actually exist in the market. Transactions must be settled in two days, but investors can have up to 10 days in exceptional circumstances." CIM Magazine.

A legally enforced ban on illegal Naked Short Selling must be implemented by all banks, brokerage houses and platforms providing apps-based trading facilities. It will bring a life-changing opportunity for junior mining companies. Dirty banksters are not only stealing our money, they are stealing our future. 

"Avoid flying with kamikaze pilots at all costs. The entry point in any investment will define your success. Always start with people. There are people building business in mining and there are banksters who are "stealing money in mining" and sucking the life out of business. The last thing any real owner would do is to build pyramids of convertible debentures sucking all money out of the company to insiders with a death spiral left for all other shareholders like banksters do. "Drilling through the pockets of shareholders" is the well-known practice, but granting themselves 50 million-plus "bonus warrants" used to be a "no go territory" even for wildest characters from the west who are minting shell companies based in Vancouver, but times have changed. "Life in a big city". 

 

Always Do Your Own Research. Avoid flying with Kamikaze Pilots at all costs. Everything hot, crypto and decentralised will attract scammers like honey attracts flies. Below you can find our Mining Alliance Of Trust 101 Rules on how to cut through all BS (Banking Slang) and separate all flies from your hamburgers. CIM Magazine article provides further update on the situation with Predatory Short Selling and response from regulators in Canada. Do your homework, stay safe and prosper. 

Silver Short Squeeze And Mining Alliance Of Trust: Eric Sprott - Save Canadian Mining, Stop Predatory Short Sellers.

Silver short squeeze idea is gaining momentum and, finally, we have the chance to channel a lot of positive energy and give some real power to the people. We can make the market a better place. The system is rigged, "The Efficient Market" is nothing more than the grand casino served by bought and paid academics and politicians talking on Bubble TV. A lot of very smart people are writing about it already. I would like to return today to our Mining Alliance of Trust movement that started many years ago. Now we have the real chance to change junior mining space and give hard-working people a chance to build their business and prosper. 

It seems to be very logical that you cannot sell what you do not own, as Elon Musk explains to millions in one single tweet. But there are always other rules for banksters. Maybe now it's time for them to face the music and angry people from whom they have been stealing for so many years? Even worse than stealing money they are stealing our future. Numerous companies have been run into the ground just because banksters can do it. We all know when it's stolen, not all of us have enough money and years to spend in courts to prove that life is unjust and unfair for so many. 

Gold and Silver market manipulations have been considered "conspiracy theories" for years until they become the trials in the courtrooms. But not a lot of things changed for real so far. The same banks which paid billions in fines for markets manipulations made billions back manipulating the same markets and continue to master their dirty deeds. Blowing up hedge funds that are facing the Robinhood brave souls can be the louder message this time. 

Even in our small Lithium Universe banksters try to rule and steal everything they can. Our shareholder NovaGold was under attack this year from short-sellers and this saga deserves your separate attention. Our partner Rob McEwen has suffered a lot and McEwen Mining was among the most shorted mining companies. Recent fireworks in the market show the power of real assets value, the strength of solid management and that the tide has changed. We all put our money where our mouth is, we are major owners of our Companies and we all are building businesses. People realise it and, finally, Mr Market gives us all some respect as well.

Chart by NorthStar

I cannot complain, "it just made us stronger". And today I would like to thank all our shareholders for your trust and thank all those who helped our Company to stay the course and survive during the very hard years. On your behalf, I would like to thank our very talented TNR Gold GEM Royalty Team for making this magic happen. 

The Internet has decentralised information, Energy rEVolution is decentralising production, storage and application of the most efficient form of energy known to humans - electricity. Decentralised, free-market access to the fair and transparent trading space without frontrunning, spoofing and other manipulations can not only realise the true market value of Gold and Silver but can totally change the game. Those who work hard and have brilliant ideas can deserve your vote of confidence and your money to invest it into the business to build it and grow. We all need solid values in uncertain times, like Gold and Silver. We need to supply The Switch and rEVolution with Copper and Lithium. 

Everything "free and decentralised" will attract scammers from all the corners of the earth, as usual. Crypto space learned "1000 and 1" ways to scam with a lightning speed of electrons running the show.  Always keep your eyes on the ball. Nobody will make you money. You must be in charge and making your own decisions. Below you can find my contribution with a few simple rules in mining on how to separate flies from your hamburgers.

Avoid flying with kamikaze pilots at all costs. The entry point in any investment will define your success. Always start with people. There are people building business in mining and there are banksters who are "stealing money in mining" and sucking the life out of business. The last thing any real owner would do is to build pyramids of convertible debentures sucking all money out of the company to insiders with a death spiral left for all other shareholders like banksters do. "Drilling through the pockets of shareholders" is the well-known practice, but granting themselves 50 million-plus "bonus warrants" used to be a "no go territory" even for wildest characters from the west who are minting shell companies based in Vancouver, but times have changed.  "Life in a big city".

 

Elon Musk and Eric Sprott amplified by Reddit and Twitter in fighting the cancel culture and going against short-sellers can change the world literally. Gold at $5,000 and Silver at $50 will give a generational life-changing opportunity to the best junior mining companies. The real fortunes will be made. The new secure supply lines for Energy rEVolution will be built. The future is already here, not everybody can see it yet, but megatrends are manifesting themselves. Learn, donate your retweet and share. Do your own research, join The Switch and rEVolution. Buckle up and stay safe. 

The Mining Alliance Of Trust: Eric Sprott - Save Canadian Mining, Stop Predatory Short Sellers.

As you already know, the best game requires the fare rules and strict enforcement of them for the benefit of all parties participating in the market place. Thank you, everybody, who started this extremely important action. Thank you, Eric Sprott, for your support of junior mining investors and companies. We need strong powerful leaders to build Canada into a modern investment hub for real economic growth in the 21st century. 

Return to solid values during uncertain times makes Gold shining bright and Energy rEVolution will power the rebuilding of the sustainable mining industry. We just cannot allow to miss this chance for all the hardworking people involved in our industry. Mining builds. Naked short selling is cancer killing our junior mining space and I am happy to join all these voices to stop it and build a healthy market in order not only to regain the trust of the investors but nurture the new generations of them.

The Mining Alliance Of Trust: Do Your Own Research - Avoid At All Costs Flying With Kamikaze Pilots.

It is time to return to our conversation about The Mining Alliance Of Trust. We have a lot of regulators in place who are helping to police and organise the market place in Canada. You can find them on my Twitter feed. Among others are the British Columbia Securities Commission, Investment Industry Regulatory Organisation of Canada and Ontario Securities Commission. Every investor in junior mining must follow them and subscribe to their e-news. Every junior mining company must follow them and invest in a professional Corporate Secretary in order to avoid costly mistakes and not to build fortunes for lawyers instead of their company.

All regulators in Canada are doing a great job and sometimes they are catching bad actors who are too sloppy, but how many still manage to muddy the waters of junior mining for years? We cannot restore the trust and build up the new generation of investors with the existing system. The hard-working geologists who became Executives of Junior Mining Companies in order to pursue their dream do not have a relevant legal and business education and just words IIROC and BCSC on the letterhead can bring them a heart attack. 

On another hand "smooth criminals" wearing expensive ties continue to find their ways to separate investors and their money with "1000 and one" "relatively innocent scams" - buyer beware. This system is not perfect: the good hardworking guys are spending literally millions of dollars on compliance, lawyers and other red tape requirements while "smooth criminals" are gaming the system and still walking from one company to another in the Bay Street jungle. Retail investors are running in herds from one hot tip to another and losing all their money in the process. 

We can and must improve our market place altogether by amplifying this discussion which we started as our initiative as The Mining Alliance Of Trust. On one side, all regulators must be open to the market participants and help them first and advise how to organise efficiently the trustworthy business in junior mining. They should not just seek to punish those who get caught the first time in the crossroads of some innocent mistakes. On another side, companies must really embrace regulations. Here I must say, that from my personal experience, I have only very positive encounters with all regulators, they are all very open and ready to help. We have to make a few improvements just to make it more user-friendly.

The very simple and helpful idea can be the systematic friendly review of the Companies by the regulators in order not just to find what to punish for, but to help these companies properly present their projects and avoid any innocent mistakes. This system is already in place for news releases with IIROC and I do recommend all companies to use it by sending news releases always to IIROC first.

Another very important step can be done with the new industry standard for Corporate Secretaries in Canada. BRE-X scandal has brought us Qualified Person certifications and NI 43-101. But we will not be able to rebuild the trust of the junior mining industry in Canada and bring the new generation of investors if Vancouver will remain The Wild West of mining. I believe that in order to solve this situation Corporate Secretary must be licenced as Auditors and Lawyers. They must be signing every news release on Corporate Material Information Disclosure as QPs do when it is necessary on technical disclosure.

For example, TNR Gold has our Continuous Disclosure, Confidentiality and Insider Trading Policy approved by the Board and Communication Protocols in place when all our news releases are prepared and approved by Corporate Secretary, signed by QP when required and can be released only by Corporate Secretary after being approved by Executive Chairman. But companies and regulators can do only so much to protect investors. Investing is a job and must be taken seriously, it requires very specific skills, discipline and making your homework every day. Respect your money.

Everybody is talking super-smart during the cocktail parties about investing in mining but many are salivating about speculation and investing in the drill holes not in the companies in junior mining. Respect your money. #DYOR. Do Your Own Research and start with people and their history - avoid at all cost flying with kamikaze pilots. You have very different goals. The Same Boat must be the concept that is checked out first - should you even spend more time on your Due Diligence? 

You can find a lot of very important questions for your DD of the mining companies on the charts on this blog. The first and most important: Who are the principals and major shareholders? Are they miners, entrepreneurs or banksters? How long have they been in the mining business? Are they building the junior mining company or financial pyramid where the average investor is lost in the amount of the different debt instruments and "ticking time bomb of delayed dilution"? How management is treating shareholders? Has the company become the candy store for the "super smart" executives syphoning all money back to them as interest payments, fees and commissions? Is the company diluting existing shareholders like there is no tomorrow just to keep it "as going concern"? What is a business plan? What is the burn rate in order to reach the milestones of this business plan? Have the company become a "drilling paradise" when naive investors are waiting for a golden dream intersection while management is drilling through shareholders pockets - spending all the raised money on the drilling by owned by them geological services or drilling company? 

Does It look like a lot of questions? But we are talking here about your money - does it deserve your respect? The entry point in any new investment will define the success of your investment. Start with people in order to weed out all the ones where you should not waste your time anymore. As Warren Buffett has brilliantly put it: "You can't make a good deal with a bad person", I think that we can Trust him on this one. 

 

CIM Magazine

Regulators to take steps against short selling

Canada is making changes to curb the practice of predatory short selling, a thorn in the side of junior mining companies

By Kelsey Rolfe

April 23, 2021

In the wake of growing concern from public companies, Canadian regulators have turned their attention to tightening the rules that govern short selling. 

Short sellers – investors who bet against public companies by borrowing shares and immediately selling them with the expectation the price will drop so they can repurchase at a lower value – serve an important price-discovery role in the public market and have even unearthed cases of fraud and corporate malfeasance. But experts say Canada’s lax regulations around the practice have allowed “short and distort” campaigns (spreading negative rumours about a company to artificially drive its value down) and other abusive forms of short selling to flourish in the country.

Mining companies have been frequent targets. In the past decade, Silvercorp Metals, Pretium Resources, Asanko Gold and Northern Dynasty Minerals have been caught in particularly high-profile campaigns. Most recently, Novagold Resources sued J Capital Research for defamation in a New York court over the firm’s May 2020 report that questioned the viability of the company’s Donlin gold project in Alaska, a joint venture with Barrick Gold. The miner’s stock took a tumble from roughly $16 to $10.75 in the 10 days following the report and is trading around $11 as of press time.

In January, the Ontario Capital Markets Modernization Taskforce recommended the provincial regulator create a new prohibition against “misleading or untrue statements” about public companies to prevent both short and distort campaigns and “pump and dump” (investors try to build up cheaply purchased stocks by spreading positive rumours) schemes. The prohibition, similar to legislation recently enacted in British Columbia, would require the Ontario Securities Commission only to prove intent, rather than causation.

According to capital markets lawyers, regulators already have the tools they need to crack down on short and distort campaigns through existing prohibitions against market manipulation, fraud and misleading statements. But these typically have not been well enforced, and there is no specific prohibition on third parties making false or misleading statements, other than defamation laws.

Paul Davis, a partner in McMillan LLP’s capital markets and securities practice, said companies and shareholders who have been victims of short and distort campaigns lack statutory recourse. The firm plans to advocate for a private right of action that would allow issuers and shareholders to enforce damages against malicious campaigners. While companies can pursue civil action, Davis said, it is “pretty difficult to be successful.” 

While activist campaigns tend to grab headlines, some of Canada’s junior miners are calling out what they call “predatory short selling” that they said flies under the radar, but uniquely affects them. 

Jaguar Mining chief financial officer Hashim Ahmed said the company has been the target of predatory shorting for years. After reporting unscheduled repairs at a mill at its Turmalina mine in Brazil in December 2015, prompting a share-price decline, the company has faced a “cloud of short sellers setting up on our stock.” He reported suspicious trading activity to the Investment Industry Regulatory Organization of Canada numerous times but got no traction.

“You’ve got somebody who’s just blocking your share price from appreciating naturally,” he said. “Every time we released good news, our stock price went up a little bit, but it never got appreciation because we knew our short positions were high. A few days later, the momentum of that good news [would] fade away because of that short seller blocking your shares from going up.”

Short selling has not yet directly impacted Jaguar’s ability to raise capital, but Ahmed believes it could be a detriment. “If your actual performance is improving but the stock is being depressed, your investors will have a hard time understanding. You can always tell them… but they may be afraid [that] if they get into that stock they could suffer.” 

Junior miners are particularly vulnerable, he said. The companies are typically tightly held by a few large investors with only some of the stock publicly traded, making it easier to cause price fluctuations.

Terry Lynch, chief executive officer of Chilean Metals and founder of the advocacy group Save Canadian Mining, agreed. Save Canadian Mining has called for reinstating the tick test, a rule repealed in 2012 that prevented short selling on stock that was already in decline. 

The Ontario taskforce didn’t recommend bringing back the tick test, but it did propose other substantial changes, including requiring shorters to confirm they can borrow the securities they’re attempting to short, and be subject to a mandatory buy-in if a sale fails to settle two days after the settlement date, or four days after the trading date.

The change would effectively end a practice known as naked shorting. Currently, short sellers are only required to have a “reasonable expectation” of settling a short trade, meaning they can short without actually having borrowed the stock – something that can be disruptive if the shorter cannot locate stock to buy back, creating more shares than actually exist in the market. Transactions must be settled in two days, but investors can have up to 10 days in exceptional circumstances. 

According to Lynch, hedge funds have exploited the current loopholes by shifting uncovered bets to another company on day 11, extending their time to short. The taskforce proposal, he said, “would eliminate kiting and that would be helpful to stop predatory shorts. If those [recommendations] are put in, we’ll have a good correction in the marketplace.” 

The taskforce also recommended a prohibition on short selling in connection with a prospectus offering or private placement, something that Lynch said is sorely needed.

“What happens when people use their financial muscle to push a stock down that’s unwarranted based on company news, it’s just scaring away other buyers,” he said. “Often these guys will do this in advance of a company’s financing, in particular mining companies, because it’s easy to identify when they need capital. Typically, they’ll know that their drilling program was successful and they’re going to go and raise money, and then they start to sell.” 

Lynch said he is optimistic about the taskforce’s recommendations, but added that the implementation will be key. “Soft implementation won’t be any good. Implementation with teeth would require some skill, but it could be very effective.”

Brilliant Minds Jim Puplava And Jim Rickards: "The New Case For Gold."

 Jim Rickards has timed his new blockbuster perfectly for the recent explosive move in the Gold market reflecting the crisis in the world financial system. "Gold is not investment - it is money. Nothing is fixed after 2008: "Too Big To Fail are just Bigger". Two brilliant minds: Jim Puplava and Jim Rickards discuss in depth the financial system, FED and the coming monetary crisis. This is the best presentation of The New Case For Gold.

Perfect Timing - Jim Rickards' New Release: The New Case For Gold.

Financial Sense:

Jim Rickards on his Book: The New Case for Gold

Jim welcomes Jim Rickards to discuss his new book: The New Case for Gold. Through his depth of experience and sound analysis, Rickards offers a thought-provoking and compelling case for gold in today’s turbulent world. He takes on six popular arguments against holding gold and shows that none of them hold up to analysis and scrutiny. Rickards also looks at gold from a historical basis and notes that even legendary economist John Maynard Keynes favored gold at many times throughout his long career. James Rickards is Chief Global Strategist of West Shore Funds, where he focuses primarily on alternative investing, macroeconomic trends and global currency & monetary policy."

China Did Half of QE3 In A Month: Long Term View On Gold And U.S. National Debt.

Gold Trends.

  Gold Trends presents very interesting long term view on Gold in Canadian Dollars. This chart demonstrates the incredible performance of Gold: the only true money - during all boom and bust cycles in 21st century. Another very important reference point is on the chart below with U.S. Debt. China is coming back from holiday after it has created half of QE3 amount of debt in just a month: $520 Billon in January, according to ZeroHedge, this is what I was calling "Central Bank Panic" few weeks ago.

Perfect Timing - Jim Rickards' New Release: The New Case For Gold.

  

  Jim Rickards has timed his new blockbuster perfectly for the recent explosive move in the Gold market reflecting the crisis in the world financial system. "Gold is not investment - it is money. Nothing is fixed after 2008: "Too Big To Fail are just Bigger".

  Just a couple of months ago nobody will even talk about Gold anymore, now: after yesterday it has toped $1,250 with $50 move of 4.5% in just one day - it will be back in the headlines. Banks are jumping now on the FED Reverse Trade as well with targets for this Gold rally going all the way up to $1,350 and even $1,440. 

  Close above $1,224 today will be important and we can expect an attack to bring it lower. Short squeeze will be driving Gold to $1,300 after which, with close above it on monthly chart, we will be back into the Gold Bull. Read more."

Why Gold? Deutsche Bank And $60 Trillion Derivatives - Is It The Last Snowflake Before The Avalanche? 

  

  Dan Stringer wrote a great article covering Deutsche Bank's exposure to derivatives, why it doesn't matter you can read in the official reports. Why it does matter market is telling us today: DB is at all time low, Credit Swiss is at all time low and Barclays is down another 5% today. As you know, I have a very unconventional theory: that actual state of financial system is so bad that they will save it by all means now. By the way, if they fail - it will not matter any more anyway. Tomorrow just watch Janet Yellen turning this market around and US Dollar will be the victim. Gold is shining bright now. We will have a very interesting situation with the majority of market participants reversing the trades this year from being Short Gold and other Commodities and Long Us Dollar, once the message from the FED will be clear - we have just made a policy mistake. FED has never had a chance to reload "Efficient Central Bankers Economy" gun this time. 

Why Gold? Debt Is An Elephant In The Room And It’s Going To Rampage.

   We have very interesting market action today and Gold is knocking now on $1,200 with Barclays bank halted in London due to the market volatility and Deutsche Bank crashed over 11% to 7 year lows. Gold is breaking out from the down trend now. FED will save the market, but we can forget now about 4 FED rates hikes for sure. Gold must retake $1,224 this week to ignite the short squeeze and if we can jump above $1,300 the Gold Bull will be back. Now we are entering the stage with banks when Bubble TV will be discussing "not a return on the capital, but the return of the capital." Samuel Bryan provides very interesting analysis of the Debt "crashing American economy", I can only add that it is not only U.S.

"Expect to learn the words Shale Oil Credit Bust and Derivatives related to it by heart in the next few weeks now from the headlines. I guess, that FED was too late to reload the "Efficient Central Bankers Economy Gun" in the end and now we all will face the music. This time the real panic will start among Central Banks even before the Retail: everybody became totally complacent these days - but "saved" World Financial System does not mean that everybody will have the Return of The Capital.  We can expect coordinated actions now starting with China, Japan, Europe and FED dialling down any further expectations about the Rate Hikes. Gold must be finally coming to life now." Read more.

The Last Chance To Prevent The Crash: Stock Market's Worst January Ever.

  

  "We have now the last chance to prevent the real Crash. If market slides below August 2015 Low the floodgates will be open and waterfall will bring us not only the worst January for markets on record so far, but the real Crash. I think that it will be averted by the coordinated action by all Central Banks now killing the US Dollar rally. It is an election year in the U.S. and nobody will be taking any chances. Realisation that not only FED rate hikes are not coming, but another QE is in order will drive Gold prices back into the Bull market. Read more."

"Expect to learn the words Shale Oil Credit Bust and Derivatives related to it by heart in the next few weeks now from the headlines. I guess, that FED was too late to reload the "Efficient Central Bankers Economy Gun" in the end and now we all will face the music. This time the real panic will start among Central Banks even before the Retail: everybody became totally complacent these days - but "saved" World Financial System does not mean that everybody will have the Return of The Capital.  We can expect coordinated actions now starting with China, Japan, Europe and FED dialling down any further expectations about the Rate Hikes. Gold must be finally coming to life now."

Gold And FED: Tom McClellan Predicted Major Market Peak In August 2015, Bear Market Into 2016.

  This original post was made in June 2015: Tom McClellan deserves a very good attention - majority of the commentators are just going with the flow, while his analysis is based on liquidity and forward looking indicators. He is a must to study. I am very impressed and following him closely now. Jim Rickards and Peter Schiff were talking about this coming outcome of the FED decision for many, many months as well. Finally the Black Swan created by FED is coming to all the markets. I do not expect Crash, as it will be impossible to recover after it with FED without any bullets left and 4 Trillion Dollars balance sheet. But when you look at FCX falling down today 17% below 5 dollars and Copper below $2/lb, you start to think who will blow up this time. Arch Coal - America's second biggest coal company has just announced the bankruptcy and Oil is sliding today towards $31 per barrel with both WTI and Brent. Expect to learn the words Shale Oil Credit Bust and Derivatives related to it by heart in the next few weeks now from the headlines. I guess, that FED was too late to reload the "Efficient Central Bankers Economy Gun" in the end and now we all will face the music. This time the real panic will start among Central banks even before the Retail: everybody became totally complacent these days - but "saved" World Financial System does not mean that everybody will have the Return of The Capital.  We can expect coordinated actions now starting with China, Japan, Europe and FED dialling down any further expectations about the Rate Hikes. Gold must be finally coming to life now.

Energy Metals Royalty Company TNR Gold Corp. Announces Restructure of Loan.

TNR Gold Receives Royalty From McEwen Mining On "One Of The Largest Undeveloped Copper Projects".

  

TNR Gold holds:

1. Royalty in giant Los Azules copper project with McEwen Mining and 1% on Sale of this project;

2. Royalty on Batidero Copper and Gold Project with Lucas Lundin's NGeX Resources; 

3. 25.5% in International Lithium, which develops J/V Mariana Lithium project in Argentina being financed by giant from China - Ganfeng Lithium. 

4. Royalty on Mariana Lithium project in Argentina with International Lithium and Ganfeng.

5. Shotgun Gold project in Alaska.

  Please carefully read my legal disclaimer and you can find all latest financial information about TNR Gold and International Lithium on SEDAR. Please never make any investment decisions without consulting with your preferred qualified financial adviser. Read more.

Perfect Timing - Jim Rickards' New Release: The New Case For Gold.

  

  Jim Rickards has timed his new blockbuster perfectly for the recent explosive move in the Gold market reflecting the crisis in the world financial system. "Gold is not investment - it is money. Nothing is fixed after 2008: "Too Big To Fail are just Bigger".

  Just a couple of months ago nobody will even talk about Gold anymore, now: after yesterday it has toped $1,250 with $50 move of 4.5% in just one day - it will be back in the headlines. Banks are jumping now on the FED Reverse Trade as well with targets for this Gold rally going all the way up to $1,350 and even $1,440. 

  Close above $1,224 today will be important and we can expect an attack to bring it lower. Short squeeze will be driving Gold to $1,300 after which, with close above it on monthly chart, we will be back into the Gold Bull. 

Why Gold? Deutsche Bank And $60 Trillion Derivatives - Is It The Last Snowflake Before The Avalanche? 

  

  Dan Stringer wrote a great article covering Deutsche Bank's exposure to derivatives, why it doesn't matter you can read in the official reports. Why it does matter market is telling us today: DB is at all time low, Credit Swiss is at all time low and Barclays is down another 5% today. As you know, I have a very unconventional theory: that actual state of financial system is so bad that they will save it by all means now. By the way, if they fail - it will not matter any more anyway. Tomorrow just watch Janet Yellen turning this market around and US Dollar will be the victim. Gold is shining bright now. We will have a very interesting situation with the majority of market participants reversing the trades this year from being Short Gold and other Commodities and Long Us Dollar, once the message from the FED will be clear - we have just made a policy mistake. FED has never had a chance to reload "Efficient Central Bankers Economy" gun this time. 

Why Gold? Debt Is An Elephant In The Room And It’s Going To Rampage.

   We have very interesting market action today and Gold is knocking now on $1,200 with Barclays bank halted in London due to the market volatility and Deutsche Bank crashed over 11% to 7 year lows. Gold is breaking out from the down trend now. FED will save the market, but we can forget now about 4 FED rates hikes for sure. Gold must retake $1,224 this week to ignite the short squeeze and if we can jump above $1,300 the Gold Bull will be back. Now we are entering the stage with banks when Bubble TV will be discussing "not a return on the capital, but the return of the capital." Samuel Bryan provides very interesting analysis of the Debt "crashing American economy", I can only add that it is not only U.S.

"Expect to learn the words Shale Oil Credit Bust and Derivatives related to it by heart in the next few weeks now from the headlines. I guess, that FED was too late to reload the "Efficient Central Bankers Economy Gun" in the end and now we all will face the music. This time the real panic will start among Central Banks even before the Retail: everybody became totally complacent these days - but "saved" World Financial System does not mean that everybody will have the Return of The Capital.  We can expect coordinated actions now starting with China, Japan, Europe and FED dialling down any further expectations about the Rate Hikes. Gold must be finally coming to life now." Read more.

The Last Chance To Prevent The Crash: Stock Market's Worst January Ever.

  

  "We have now the last chance to prevent the real Crash. If market slides below August 2015 Low the floodgates will be open and waterfall will bring us not only the worst January for markets on record so far, but the real Crash. I think that it will be averted by the coordinated action by all Central Banks now killing the US Dollar rally. It is an election year in the U.S. and nobody will be taking any chances. Realisation that not only FED rate hikes are not coming, but another QE is in order will drive Gold prices back into the Bull market. Read more."

"Expect to learn the words Shale Oil Credit Bust and Derivatives related to it by heart in the next few weeks now from the headlines. I guess, that FED was too late to reload the "Efficient Central Bankers Economy Gun" in the end and now we all will face the music. This time the real panic will start among Central Banks even before the Retail: everybody became totally complacent these days - but "saved" World Financial System does not mean that everybody will have the Return of The Capital.  We can expect coordinated actions now starting with China, Japan, Europe and FED dialling down any further expectations about the Rate Hikes. Gold must be finally coming to life now."

Gold And FED: Tom McClellan Predicted Major Market Peak In August 2015, Bear Market Into 2016.

  This original post was made in June 2015: Tom McClellan deserves a very good attention - majority of the commentators are just going with the flow, while his analysis is based on liquidity and forward looking indicators. He is a must to study. I am very impressed and following him closely now. Jim Rickards and Peter Schiff were talking about this coming outcome of the FED decision for many, many months as well. Finally the Black Swan created by FED is coming to all the markets. I do not expect Crash, as it will be impossible to recover after it with FED without any bullets left and 4 Trillion Dollars balance sheet. But when you look at FCX falling down today 17% below 5 dollars and Copper below $2/lb, you start to think who will blow up this time. Arch Coal - America's second biggest coal company has just announced the bankruptcy and Oil is sliding today towards $31 per barrel with both WTI and Brent. Expect to learn the words Shale Oil Credit Bust and Derivatives related to it by heart in the next few weeks now from the headlines. I guess, that FED was too late to reload the "Efficient Central Bankers Economy Gun" in the end and now we all will face the music. This time the real panic will start among Central banks even before the Retail: everybody became totally complacent these days - but "saved" World Financial System does not mean that everybody will have the Return of The Capital.  We can expect coordinated actions now starting with China, Japan, Europe and FED dialling down any further expectations about the Rate Hikes. Gold must be finally coming to life now.

Energy Metals Royalty Company TNR Gold Corp. Announces Restructure of Loan.

TNR Gold Receives Royalty From McEwen Mining On "One Of The Largest Undeveloped Copper Projects".

  

TNR Gold holds:

1. Royalty in giant Los Azules copper project with McEwen Mining and 1% on Sale of this project;

2. Royalty on Batidero Copper and Gold Project with Lucas Lundin's NGeX Resources; 

3. 25.5% in International Lithium, which develops J/V Mariana Lithium project in Argentina being financed by giant from China - Ganfeng Lithium. 

4. Royalty on Mariana Lithium project in Argentina with International Lithium and Ganfeng.

5. Shotgun Gold project in Alaska.

  Please carefully read my legal disclaimer and you can find all latest financial information about TNR Gold and International Lithium on SEDAR. Please never make any investment decisions without consulting with your preferred qualified financial adviser. Read more.

Dan Stringer:

Deutsche Bank: Just A Snowflake Away

SUMMARY

Deutsche Bank has accumulated a substantial derivatives book, worth over 52 trillion Euros in notional value, over 50% higher than Lehman Bros. was at the time of its bankruptcy.

This large derivatives book makes DB vulnerable to potential Black Swan events.

The company's management oversight is in question as it is being investigated or litigated against by numerous parties.

This lack of oversight, combined with the sheer size and complexity of its derivatives, make DB a risky proposition in this increasingly volatile world.

In Nassim Nicholas Taleb's seminal book Antifragile, he outlines the concept of fragility. Fragility is an indication of vulnerability or being easily broken or damaged. It is a key component of complex systems. Today, we may not have a more complicated, man-made, complex system than the international financial system.

A financial system's basic tenant is to enable lenders and borrowers to exchange funds. However, as you increase the scope from a regional basis to a global basis, the complexities begin to abound with different currencies, different financial instruments and country-specific issues, such as the relative strength of each country's economy.

Financial instruments are tradeable assets of any kind, such as cash, equities, and bonds. They represent either an asset, a claim on an asset or a contractual right to an asset.

Derivatives, as their name would imply, derive their value from the performance of an underlying asset. They can fluctuate based on the price of the underlying asset and time. As these types of contracts can act as levered investments, they can potentially vary in value substantially, producing outsized gains and losses.

Derivatives were originally used mostly for hedging risk (for example, farmers could guarantee prices for corn, wheat etc. for the price of the derivative), but they are now mostly used as another type of financial instrument. The potential of outsized returns has caused them to proliferate extensively as speculators have adopted them as a way to increase their return on capital. Below are some common examples of derivative contracts:

Source: Wikipedia

Derivatives have added an extra layer to the financial system, making a complex system even more complex as now you can have significant fluctuations in not just the underlying assets, but in the derivatives of those assets, multiplying the effect. With the wider variety of counterparties available through the global system, these fluctuations are also spread globally as well. This magnification of risk is why Warren Buffett termed derivatives as financial "Weapons of Mass Destruction". Derivatives gone wrong were at the heart of the Long Term Capital Meltdown in 1998 and the Lehman bankruptcy in 2008 that triggered the Financial Crisis.

When we look specifically at where Lehman was at the time of its filing for bankruptcy, it had a derivative book of over $35 trillion in notional value over 900,000 contracts. Notably, its leverage ratio (capital to assets) peaked at an astronomically high 31x. The actual time to process the largest bankruptcy in history was over three-and-a-half years, with Lehman emerging as a liquidating company that still needed to settle its affairs.

It is widely assumed that the Financial Crisis of 2008 had made the banks learn their lesson with respect to risk. However, we will see that Deutsche Bank (NYSE:DB) has clearly not learned this lesson, making it extremely vulnerable to the many catalysts that could shock the global financial system.

Not Learning Its Lesson

Deutsche Bank AG is a German banking and financial services company headquartered in Frankfurt, Germany with operations around the world. Founded in 1870, the bank's operations range from private wealth management to corporate banking and securities to global transaction banking.

However, with size comes complexity. DB has operations in 71 different countries, so coordinating its businesses takes a high degree of management. My concern is that its operations have become too unwieldy. This is revealing itself in the number and range of legal matters and investigations that the bank is currently facing. DB actually had these investigations on a management slide in its most recent earnings call:

Since this earnings call, it has had several more actions initiated against it, including one by the Department of Justice. With this level of, at a minimum, alleged malfeasance, it appears management control has been severely lacking, making me question if appropriate risk controls are in place.

However, I believe this lack of risk control is even more apparent in the size of its derivative book. If we look at the notional value of its derivative book, the pure size of it is incredible:

Source: Annual Report 2014

This gives DB a notional value of its derivative book of 52 trillion Euros or $58.2 trillion, a full 66% higher than Lehman was at the time of its failure. DB's derivative book was 47.2 trillion Euros on December 31, 2007, prior to the financial collapse, so it is now at an even higher level than it was during the height of financial institution risk taking prior to the Financial Crisis.

Although this data is from 2013, this ZeroHedge graph illustrates the absolute magnitude of its derivative book:

As a comparison, I wanted to look at Commerzbank (OTCPK:CRZBF) (OTCPK:CRZBY), the second largest bank in Germany. It has a 3.6% CRD4 (capital requirements directive) fully loaded ratio, the same as DB. Commerzbank's market cap is only about a third of DB's, though. However, its notional derivative book is significantly smaller:

Source: Commerzbank Annual Report 2014

DB's level of risk is clearly not a symptom of the German banks, as Commerzbank's derivative book value is just 9.5% the size of DB's. It has been able to create an enterprise one third the size of DB (by market cap) with about 1/10th the risk level. This holds up in assets as well as CRZBF has $660 billion in assets, roughly 1/3 of DB's $1.8 trillion in assets.

However, DB trades at a TTM simple P/E ratio of 24.1 while CRZBF trades at 18.7x, a significant discount despite its less risky derivative book. For an American comparative, JPMorgan Chase (NYSE:JPM) trades at a P/E of just 11x. However, its derivative book is just as large as DB's. DB is clearly not being penalized for its risk taking and lack of management control based on its earnings multiple.

Where we start to see a risk discount reflected is in the price to book value of DB, which sits at just 0.46 (by comparison, CRZBF is even lower at 0.42 while JPM is at 1.0). DB's price to book has been in this range largely since 2009, not reflecting its continued increase in derivatives leveraging.

Jim Rickards described a potential economic collapse in the context of snowflakes landing on a ridge. You won't know which snowflake sets off the avalanche, only that one will. I believe that DB is at great risk to potential Black Swan risks due to the size of its derivative book. In the event that these types of transactions are impacted by an unanticipated shock (for example, the Swiss de-pegging of its currency to the Euro in January 2015), this could put severe liquidity risk in play. As we saw with Lehman, there is the potential that no one will be there to help them survive a liquidity squeeze.

If there is an attempt to try to unwind its book of contracts, this will not be an easy task. I include below the steps taken to unwind each derivative contract during the Lehman bankruptcy process:

Source: The Failure Resolution of Lehman Brothers, Michael J. Fleming & Asani Sarkar, December 2014

This will not be accomplished quickly and during a liquidity crisis, time is at a premium.

I believe that taking a short position in DB is a prudent position to take, especially as a hedge in a largely long portfolio. While I certainly cannot see the future, this is a bet against the fragility of the complex global financial system, of which DB is one of its most fragile entities.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in DB over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I will use long dated put options as a portfolio hedge.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks."