Saturday 29 November 2014

The Swiss Gold Vote.

Baltic Dry Index. 1153 -34  Brent Crude 70.15

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."

Henry Hazlitt

Today, a special weekend update for the Swiss voters voting tomorrow on gold. I think it was an error, overkill, to make it impossible for the SNB to sell any gold without another referendum.  There needs to be some flexibility, perhaps only a referendum if the gold percentage dips below 17.5 percent, however, the correct course throughout history, has always been to vote in favour of gold. Sadly, my impression is that the Swiss voters are about to be duped.

Below, the whole article is well worth the read.

"You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold."

George Bernard Shaw.

Why Citi Bank Chief Economist Willem Buiter’s Attack On The Swiss Gold Vote Is Gibberish

by Thad Beversdorf • 
Normally this time of year I would be out on my land looking to ‘harvest’ some venison for the winter but the 5′ of snow outside my cottage has gotten the better of me today.  Instead I had a read through Zerohedge this morning and found an article  referencing Citi Bank Chief Economist Willem Buiter.  The article basically points out that Buiter is making a fool of himself and the article is quite convincing.  But I want to dig into it a little deeper because I honestly believe this Swiss gold referendum is one of those incredibly important moments in history that have the ability to change the world.  And the fact that guys like Citi Bank’s Chief Economist are pleading with Swiss to vote “No” to their upcoming referendum tells me I’m not the only one that thinks so.   And so I felt compelled to have a look at his arguments and what I found is a bit shocking.

Now Buiter is arguing against the value of gold and thus the value of a central bank holding gold.  Because he is directing his commentary at the Swiss ahead of their referendum he structure’s his arguments to coincide with the 3 stated aspects of the Swiss vote on gold to take place on November 30.  The three aspects of the referendum are as follows.

(1) the Swiss National Bank (the SNB) must hold 20% of its assets as gold, (2) the SNB has to repatriate the 30% of its official gold stock that is now held abroad by the Bank of England and Bank of Canada and has to physically hold all its gold in Switzerland, and (3) the SNB may never sell any gold again.

Buiter provides the following respective conclusions to each of the above aspects and then goes on to explain each conclusion in some detail.

(1) Gold has no intrinsic value but is in a 6,000 year old bubble and it is unsound for a central bank to hold 20% of its assets in any single commodity even if it has some intrinsic value. (2) It is unsound to forego the custodial risk diversification of holding gold in various countries. (3) If the gold holdings can never be sold then it is, in effect, worthless.

Now very quickly we can invalidate most of Buiter’s rebuttals.  Let’s jump to the second and third aspects of the referendum.  Buiter’s rebuttal to second aspect of the referendum to not repatriate gold remaining with foreign nations is premised on custodial risk reduction.  Having lived through the Refco and MF Global implosions I am very conscious of custodial risk.  However, it would seem that holding gold with a foreign bank also carries significant risk.  For instance, when Germany demanded its gold back the US was either unable or unwilling to do so.  And so if there is risk either way, I would choose to be in control of my gold as I have more incentive not to lose it than does a foreign bank to whom it doesn’t belong.

Buiter’s rebuttal to the third aspect of the referendum is that if gold can never be sold they are making it worthless.  Well the referendum is making it so the Swiss National Bank cannot sell the Swiss people’s gold.  The Swiss people will still have a process by which they can sell their gold holdings if it is deemed in their best interest.  And so that is a ridiculous argument.

Let’s now take the second part of Buiter’s rebuttal to the first aspect of the Swiss gold referendum which is that central banks should not hold 20% of their assets in any single commodity.  He really doesn’t support this argument at all.  In fact, he seems to argue that gold and currency are both fiat which he seems to define as something with no intrinsic value.  But if gold and currency are essentially the same asset he doesn’t explain why it would be ok to hold currency but not gold.  Also the Swiss already hold more than 7% of assets in gold and so if it is a problem with the allocation amount, he really does nothing to differentiate between the 7% and 20% so really there isn’t anything in that to refute as he doesn’t give a reason.

But quite ironically what Buiter does do in his attempt to prove that gold is really just a fiat commodity currency no different from any fiat currency is to prove the exact opposite and thus provides the Swiss with the very argument they need to vote “Yes”.

And so let’s have a detailed look at his proof that gold is just another worthless fiat currency.

----To bring this home for the Swiss people.  The takeaway from Buiter’s thought experiment is that because gold is limited and is costly to produce it has intrinsic value.  And because it has intrinsic value it is a much better storage of value than fiat currency.  In fact, Buiter proves that because fiat currency has no intrinsic value that ultimately it will inflate to a zero value over time.   And so Buiter attempted to convince you that a Yes vote for the referendum will leave you with a money stock that is intrinsically worthless, that you will be taking on extraordinary custodial risk and that you will be making your gold holdings worthless.  But what we’ve just done is methodically proven that the exact opposite is true.  That by voting Yes on the referendum you will have a money stock that is a far better asset to preserve value, that you will be reducing your custodial risk and that if you, the Swiss people, decide it is in your best interest to sell gold at some point in the future it will be there for you to sell.  I would conclude that when even the best and brightest economists in the world are at a loss to make a reasonable argument to vote no in the upcoming referendum, it becomes abundantly clear that a “Yes” vote is the right vote.  And I expect a Yes vote in the Swiss gold referendum does more to nudge humanity back on track than any other single event since the fall of the Berlin Wall.

"The modern mind dislikes gold because it blurts out unpleasant truths."

Joseph Schumpeter.

The monthly Coppock Indicators finished October.

DJIA: +137 Down. NASDAQ: +275 Down. SP500: +210 Down.  

Friday 28 November 2014

Oil – The Rout Starts.

Baltic Dry Index. 1187 -52   Brent Crude 72.08

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

J. K. Galbraith.

They came (to Vienna,) they saw (the oil price collapsing,) and the old men of OPEC did nothing. The result was a somewhat predictable start of a rout. I suspect it’s a rout that will be deeper and longer than most think. Next week we will likely see Brent crude trading down in the 60s. My guess is that, short of World War Three, we won’t see $100 oil again for several years.  Fracking in Europe is dead as the Dodo. It remains to be seen if US frackers can live up to their brave words about living with lower prices. Sell Angola, sell Brazil, sell Canada, sell Nigeria, sell Russia, sell Texas. We haven’t seen anything yet.

If all else fails, immortality can always be assured by spectacular error.

J. K. Galbraith.

Oil in New Era as OPEC Refuses to Yield to U.S. Shale

Nov 28, 2014 6:03 AM GMT
OPEC’s decision to cede no ground to rival producers underscored the price war in the crude market and the challenge to U.S. shale drillers.

The 12-nation Organization of Petroleum Exporting Countries kept its output target unchanged even after the steepest slump in oil prices since the global recession, prompting speculation it has abandoned its role as a swing producer. Yesterday’s decision in Vienna propelled futures to the lowest since 2010, a level that means some shale projects may lose money.

“We are entering a new era for oil prices, where the market itself will manage supply, no longer Saudi Arabia and OPEC,” said Mike Wittner, the head of oil research at Societe Generale SA in New York. “It’s huge. This is a signal that they’re throwing in the towel. The markets have changed for many years to come.”

The fracking boom has driven U.S. output to the highest in three decades, contributing to a global surplus that Venezuela yesterday estimated at 2 million barrels a day, more than the production of five OPEC members. Demand for the group’s crude will fall every year until 2017 as U.S. supply expands, eroding its share of the global market to the lowest in more than a quarter century, according to the group’s own estimates.

Benchmark Brent crude fell the most in more than three years after OPEC’s decision, sliding 6.7 percent to close at $72.58 a barrel. Futures for January settlement extended losses and were at $71.69 a barrel in London today. Prices peaked this year at $115.71 in June.

Ruble, loonie driven lower after OPEC keeps output target

Published: Nov 27, 2014 12:08 p.m. ET
LONDON (MarketWatch)— The currencies of Russia, Norway and Canada dropped against the U.S. dollar, with the oil-producing countries feeling the weight of a decision by the Organization of the Petroleum Exporting Countries not to cut its production target.

The 12-country cartel said it would stick with its current production target of 30 million barrels a day. Leading up to the meeting in Vienna, there was speculation in the markets that the organization would cut production in an effort to stop a recent drop in global oil prices.

The decision to keep the target was made “in the interest of restoring market equilibrium,” said OPEC in a statement.

U.S. crude futures CLF5, -7.38%  and Brent crude futures each tumbled more than 7% after the decision. The Russian ruble USDRUB, +0.11%  was also swept lower, with the greenback buying 48.795 rubles, more than the 47.384 rubles it bought late Wednesday in North American trade.

The dollar fetched 6.939 Norwegian krone USDNOK, +0.30% up from 5.979 krone on Wednesday. “Norway derives nearly 70% of its exports from crude oil and petroleum products, representing 20% of GDP, so changes in the price of oil have a massive impact on the nordic nation’s economy,” said in a note earlier this month.

The greenback after the OPEC statement bought 1.134 Canadian dollars USDCAD, +0.12%  from 1.124 Canadian dollars in the previous session.

US shale boom is same as dotcom bubble, says Russian oil executive

Vice-president of Lukoil, Russia’s second-largest oil producer, says many companies will simply 'vanish'

The rise of US shale is similar to the dotcom boom of the late Nineties and will cause many companies to fail, one of Russia's top oil executives has warned.

Leonid Fedun, vice-president of Lukoil, Russia’s second-largest oil producer, believes that with the price of Brent crude and WTI at multi-year lows, fracking companies will struggle to make fracking profitable.

These fears were given extra weight on Thursday after Opec's members agreed to leave oil production quotas unchanged, sending oil prices plummeting.

Some believe Opec, which controls the majority of the world's oil output, is threatened by the emergence of US shale and is trying to force many American drilling companies out of business.

“In 2016, when Opec completes this objective of cleaning up the American marginal market, the oil price will start growing again,” Mr Fedun told Bloomberg.

He said the current oil market was similar to the rise of the technology sector more than a decade ago that saw companies' stock prices surge before collapsing several years later.

“The shale boom is on a par with the dotcom boom. The strong players will remain, the weak ones will vanish,” added Mr Fedun, who is worth around $4bn.

----Much of America’s shale oil is expensive to produce and the industry is comprised of numerous small companies who were forced to leverage their operations with debt to fund the high cost of drilling wells through a process known as hydraulic fracturing, or fracking.

Should oil prices fall for a prolonged period of time many who have been forced to borrow at a higher rate could be forced out of business.

"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians."

Henry Hazlitt

At the Comex silver depositories Wednesday final figures were: Registered 64.28 Moz, Eligible 112.55 Moz, Total 176.83 Moz.   

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, more on the growing fiat currency anarchy. The Swiss voting initiative this coming Sunday, identifies the right problem, but comes up with the wrong overkill solution. Not to worry though, polls show the initiative failing by quite a large margin. Still the gold initiative is a direct result of the increasingly dysfunctional Great Nixonian Error of fiat money. There is no central bank on the planet with anything remotely like a stable, secure form of currency money. The collapse of the crude oil price might yet be the trigger that ends the Great Nixonian Error of fiat money forever.

"The fate of the nation and the fate of the currency are one and the same."

Dr. Franz Pick

Swiss vote provokes '6,000-year gold bubble' attack

'Save Our Swiss Gold' referendum is a primordial scream against a world of quantitative easing but would paralyze the Swiss National bank

Five million Swiss voters will decide on Sunday whether to force the Swiss National Bank to repatriate all its gold from vaults in Britain and Canada, boost its holdings of bullion to 20pc of foreign reserves and then keep the metal forever.

The “Save Our Swiss Gold” referendum is a valiant attempt by Switzerland’s army of gold bugs - and the populist Swiss People’s party (SVP) – to lead the world back to the halcyon days of the international Gold Standard. It is a primordial scream against a quantitative easing and money creation a l’outrance by the leading central banks.

Yet there is a snag. The Swiss National Bank (SNB) is the biggest printer of them all in relative terms, far outstripping the Bank of Japan, let alone the US Federal Reserve or the Bank of England – mere amateurs at this game.

The SNB has boosted its balance sheet to a colossal 83pc of GDP in a maniacal – but fully justified – effort to stop the Swiss franc appreciating beyond 1.20 to the euro, and to head off deflation. It vowed to print whatever is necessary to buy foreign bonds and defend the exchange rate. It has been true to its word since 2011.

At one stage it was mopping up half of the entire sovereign bond issuance of the eurozone each month, a scale of action that the European Central Bank’s Mario Draghi can only dream of. During the eurozone debt crisis, Standard & Poor’s even accused the SNB of becoming a conduit for capital flight, via Switzerland, to German, Dutch and French bonds, and therefore indirectly exacerbating Euroland's North-South rift.

----The result of this buying blitz is that the SNB now has a balance sheet of 522bn francs (£345bn). Only 7.5pc of this is in gold, some 1,040 metric tonnes. It will have to buy 1,733 tonnes to reach the 20pc target mandate by 2019 if the vote passes.

Gold bulls are snorting. The world’s annual mine output is roughly 2,500 tonnes. We can all do the arithmetic. The SNB might persuade a friendly central bank to sell a few crates, but last year the central banks were net buyers. Led by Russia and other BRICS states, they bought 367 tonnes.

Citigroup’s Willem Buiter has poked fun at the Swiss plan, and at metal fetishism in general, in a lascerating report entitled Gold: a six thousand year-old bubble revisited.

“Making it illegal to ever sell any of the gold the central bank has now or acquires in the future would make the gold useless as an international reserve. The gold stock can never be used for foreign exchange market interventions and it cannot be used as collateral. The gold becomes useless as a store of value of any kind. Its value is therefore zero.”

Mr Buiter says gold is a “fiat commodity” of almost no intrinsic value, coveted only as an asset “to the extent that enough people believe it has value as an asset”.

Personally, I find this a rarefied argument, bordering on Jesuitical, a subjective preference dressed as science. Nothing has intrinsic value beyond what we give it, including the things that Mr Buiter likes. But let us not quibble.

----The gold revivalist wave is a window into our age, an anthropological phenomenon. Establishments are fighting a rear-guard battle as well-organised campaigns force a change in policy. The Dutch central bank has repatriated 122 tonnes from New York. The Bundesbank is shipping its gold home to placate the “Bring Back Our Gold” movement and its allies in the Bundestag.

What it shows is a breakdown in trust. A system of custodial holdings that survived the First World War and even the Second World War – to a high degree – is unravelling. When it comes to foreign reserves, Europe’s states are becoming even more nationalist than they were in the 20th century.

“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”

“Adam Smith” aka George Goodman.

Another weekend, and the traditional start of the Great Christmas Consumerism Insanity. Half of the world goes into unrepayable debt, to celebrate the Greatest Retailing Con of the new lawless consumerist age. Having just turned 65, sadly for me, the odds are high that I will get to live on through coming biggest bust of all times, as the Great Nixonian Error comes to its end.  Thanks to the many trillions of unrepayable, unbacked, gambling and consumer debt racked up since August 15th, 1971, the end when it comes is likely to be like 479 AD, but on speed. Have a great weekend everyone.

The monthly Coppock Indicators finished October.

DJIA: +137 Down. NASDAQ: +275 Down. SP500: +210 Down.  

Thursday 27 November 2014

D-Day For Oil.

Baltic Dry Index. 1239 -74   Brent Crude 76.49

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

The real interest rate is probably minus 2% in the world today. It should be in line with the per capita income growth rate or 1%. The difference is 3%.

This environment redistributes wealth from savers to debtors on a scale of over $2 trillion per annum or $55 billion per day. This must be the biggest legal robbery ever in human history. But it is always coded in arcane academic lingos spoken by respected central bankers with impeccable CVs. All that is just packaging; it is robbery nevertheless.

Andy Xie

We have arrived at Decision Day for crude oil. OPEC’s riggers and fixits are meeting in Vienna to decide on the level of OPEC production heading into 2015. Will they cut production by about 2 million barrels a day, which is about what it would take to move the oil price up from about $75 a barrel for Brent, back towards $100, or will they leave production unchanged and risk a price slump towards $60? At $60, European fracking is dead on arrival, while US frackers and Canadian tar pits face another oil bust. Short Texas, the Dakotas, Alberta, Brazil, Nigeria, Russia and Angola. Short Portugal too, as it will lose two export destinations for its unemployed youth generation. Their decision will likely be the big story of tomorrow.

We open today in holiday celebrating America, with yet another market rigging bankster scandal unfolding. Like all good bankster scandals, this one involves Goldie and mega bank HSBC. Both have form, as they say down at Scotland Yard. In banksterland, in London at least, in my generation we have gone from “my word is my bond” to sophisticated and unsophisticated theft on biblical scale. But on the Great Nixonian Error of fiat money, why would anyone expect honesty to prevail in our Great Financialised Casinos, aka markets. The banksters, after all, are only following the dishonest lead of  their mostly Goldmanite Central Banksters.

Old Ebenezer Squid had one-way pockets. He would walk ten miles in the snow to chisel an orphan out of tuppence.

With apologies to P.G. Wodehouse and the Duke of Dunstable

HSBC, Goldman Rigged Metals’ Prices for Years, Suit Says

Nov 26, 2014 7:22 PM GMT
Goldman Sachs Group Inc. (GS) and HSBC Holdings Plc (HSBA) were sued in New York over claims they conspired for eight years to manipulate prices for the precious metals platinum and palladium in what plaintiffs’ lawyers say is the first such class-action lawsuit in the U.S.

Standard Bank Group Ltd. and a metals unit of BASF SE (BAS), the world’s largest chemical company, were also sued. The four companies used inside information about client purchases and sale orders to profit from price movements for the metals used in products ranging from jewelry to cars, according to a complaint filed yesterday in Manhattan federal court.

Modern Settings LLC, a jeweler that buys precious metals and derivatives set on their prices, claims the companies “were privy to and shared confidential, non-public information about client purchase and sale orders that allowed them to glean information about the direction” of prices.

Similar lawsuits have been filed this year in Manhattan accusing banks of rigging the benchmark price for gold. Authorities around the world are examining the gold market for signs of wrongdoing.

Regulators tightened scrutiny of benchmarks after uncovering price-rigging in interbank-loan rates and currencies. In August, the price-setting mechanism for silver became the first traditional procedure for a precious metal to be replaced, and Intercontinental Exchange Inc. (ICE) will run the replacement for the 95-year-old London gold fixing. A new mechanism for platinum and palladium is set to be in place Dec. 1.

Banks are an almost irresistible attraction for that element of our society which seeks unearned money.

J. Edgar Hoover

In other news. Past performance and all that, plus “this time it’s different.” Fiat currency anarchy has arrived, the logical consequence of a race to the bottom in our QE and ZIRP world of casino banksterism.

China Trading Boom That Marked End of Past Rallies Is Back

Nov 27, 2014 2:47 AM GMT
The surge in Chinese equity trading that coincided with market peaks in 2009 and 2010 is back again after the Shanghai Composite (SHCOMP) Index jumped to a three-year high.

The 30-day average daily value of shares changing hands on the Shanghai exchange exceeded 200 billion yuan ($32.6 billion) for the first time in four years on Nov. 25, after rising threefold in the past six months, according to data compiled by Bloomberg. Turnover last breached this level on Nov. 9, 2010, the same day the Shanghai Composite began its slide into a 38 percent bear market. The previous surge came on Aug. 7, 2009, two days after the start of a 23 percent retreat.

“It’s a good chance we’re at a market top right now,” David Cui, the China strategist at Bank of America Corp. (BAC) who’s ranked No. 1 by Institutional Investor magazine, said by phone yesterday. “Based on the experience since the global financial crisis, surging volumes each time marked a temporary top for the market.”

China Loosens Monetary Policy Further as PBOC Scraps Repo Sales

Nov 27, 2014 6:13 AM GMT
China’s central bank refrained from selling repurchase agreements for the first time since July, loosening monetary policy further as a report showed industrial companies’ profits fell by the most in two years.

The People’s Bank of China didn’t conduct any open-market operations in today’s auction window, after cutting interest rates last week for the first time since 2012. It last suspended sales of repos, which drain funds from the banking system, in the week of July 21 as initial public offerings boosted cash demand. Guotai Junan Securities Co. estimated such share sales tied up 1.6 trillion yuan ($261 billion) this week, while maturing repos injected a net 35 billion yuan.

China is headed for its slowest full-year economic expansion since 1990 amid a property slump, weakening industrial output and factory-gate deflation. There’s scope for further rate cuts or even a reduction in banks’ reserve requirements, said Liu Jiazhang, a strategist at Tianhong Asset Management Co., which manages the nation’s biggest money-market fund.

Most Asian Stocks Retreat as Japan Falls on Yen, Oil Declines

Nov 27, 2014 12:09 AM GMT
Most Asian stocks fell as Japanese shares retreated on a stronger yen and a drop in oil weighed on energy companies.

About three shares declined for every two that gained on the MSCI Asia Pacific Index (MXAP), which was little changed at 141.34 as of 9:03 a.m. in Tokyo. The Standard & Poor’s 500 Index climbed 0.3 percent to a fresh record yesterday ahead of the Thanksgiving holiday as investors weighed economic data.

“In the medium-term, things are still moving positively in most economies, but growth is slower universally,” said Angus Gluskie, managing director at White Funds Management in Sydney, which oversees about $550 million. “You want to be in the markets, but you don’t expect a spectacular return.”

---- The Asia-Pacific measure rebounded 5.7 percent from an Oct. 17 low through yesterday as the Bank of Japan added stimulus, China cut interest rates and speculation grew the European Central Bank will take more stimulus measures.

U.S. consumer confidence climbed to a more than seven-year high in November as Americans’ views of their financial well-being improved heading into the holiday shopping season. A separate report showed consumer spending climbed in October at the same pace as incomes, showing households are staying within their means as the holiday-shopping season begins.

Orders for U.S. business equipment such as machinery and electrical gear unexpectedly declined in October. Other data showed jobless claims increased by 21,000 to 313,000 in the week ended Nov. 22, the highest since early September, from 292,000 in the prior period. New homes in the U.S. sold at a slower pace than forecast last month.

Oil futures closed at the lowest level in more than four years amid skepticism OPEC ministers will cut supply. A Bloomberg News survey showed 20 analysts were evenly divided on the decision by the Organization of Petroleum Exporting Countries.

"God, no, we don't club baby seals. We club babies."

Goldmanite, quoted in The Times of London. November 8 2009

At the Comex silver depositories Wednesday final figures were: Registered 64.28 Moz, Eligible 112.55 Moz, Total 176.83 Moz.   

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Below, more on GB headed for the EUSSR exit. Who would want to remain in a Bilderberger lunatic asylum like this.

It’s morally wrong to let a [UK] sucker keep his money.

The EUSSR, with apologies to W. C. Fields.

UK faces £34bn bill for black hole in EU budget

EU accused of financial mismanagement after auditors find huge black hole in the Brussels budget

Bruno Waterfield in Brussels and Peter Dominiczak 1:53PM GMT 26 Nov 2014
Auditors have identified a blackhole in European Union budgets that could lead to extra demands for cash from the British taxpayer of up to £34billion over the next six years.

David Cameron will be legally obliged to make up a share of a shortfall of £259billion by 2020 with liabilities for the Treasury estimated at £33.7bn, calculated at the usual rate of Britain’s EU contributions.

The hole in EU spending has been identified by the European Court of Auditors and represents a political disaster for the Prime Minister who has made repeated pledges to bring down the amount Britain pays into Brussels budgets.

“The EU’s ability to just grab money from taxpayers whenever it wants is an outrage. It underlines what is structurally wrong with our relationship under the existing treaties," said Bernard Jenkin MP, the chairman of the House of Commons public administration select committee.

"The UK parliament should decide how much we want to pay the EU not bureaucrats in Brussels."

In a special report earlier this week, EU auditors identified the sum in outstanding bills for legally binding spending commitments made by the European Commission over the last four years.

“Assuming that commitments will not be de-committed, and we don’t see how most of them could, it might be problematic to get this money from member states to finance the expenditure foreseen,” Igor Ludborzs, an EU auditor, told the Euractiv website.

“We don’t see a happy ending. The amounts are getting bigger and bigger.”

Eurosceptic Conservative MPs are "spitting with rage" at the prospect of increased EU contributions and a failure to control Brussels spending at a time when Britain is making cuts to balance the budget.

“The commission is out of control and needs to be brought back under control. This is a problem with having no real democratic check to the EU. The commission writes cheques without any balances," said Jacob Rees Mogg, Tory MP for North East Somerset and member of the Commons European scrutiny committee.

John Redwood, the Conservative MP for Wokingham, said: “We cannot go on like this, with the EU constantly sending new larger bills to the UK when we are desperately trying to control public spending and get our deficit down. For most British taxpayers we would start our cuts with European programmes rather than protecting them. The commission needs to learn to manage the budget."

Unless we change our ways and our direction, our greatness as a nation will soon be a footnote in the history books, a distant memory of an offshore island, lost in the mists of time like Camelot, remembered kindly for its noble past.

Margaret Thatcher.

The monthly Coppock Indicators finished October.

DJIA: +137 Down. NASDAQ: +275 Down. SP500: +210 Down.