burning smell

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hello there, just bought a 1986 90 which has got a knock when turning coming from the front axle also offside front wheel area smells of burning. any help would be appriecated
 
binding brakes caused by distorted discs? - drive it for a mile without using the brakes and then feel if the discs are hot
 
the swivel housing is ok,i dont think it is the brakes as the wheel spins freely also seems to be oil coming out of the hub on the drivers side wheel thinking that iswhere the smell is coming from
 
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