Nov 21.GLD/SLV remain constant/Huge story: The Dutch repatriate 122.5 tonnes of gold to Amsterdam/gold and silver rise

NOV 21

My website is now ready but we still have to add a little  stuff to it.  You can find my site at the following url: or

I will continue to send the  comex data down to my good friends at the Doctorsilvers website on a continual basis.

They provide the comex data. I also provide other pertinent data that may interest you. So if you wish you can view that part on my website.




Gold: $1197.50  up $6.80
Silver: $16.40  up 26  cents

In the access market 5:15 pm

Gold $1201.50
silver $16.45

Gold and silver had  a very strong day despite the antics of our bankers..

(described below)

The gold comex today had a poor delivery  day, registering  16 notices served for 1600 oz.  Silver comex registered 0 notices for nil oz.

A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 252.709 tonnes for a loss of 51 tonnes over that period. .

In silver, the open interest rose again  despite yesterday’s loss in price ( 16 cents).  It looks like we have a few nervous shorts in silver racing against the clock to cover some of their shortfall!! The total silver OI  remains extremely high with today’s reading  at 176,523 contracts. The big December silver OI contract lowered to only 61,763 contracts.  We have 4 more trading days before first day notice and our banker friends are not sleeping well these past couple of days.

In gold we had a gigantic gain in OI even though yesterday we saw a loss in price of gold to the tune of $3.00.  The total comex gold  OI rests tonight quite elevated at 468,051  for a whopping gain  of  8,492 contracts. The December gold OI rests tonight at 162,509 contracts.  We witnessed a subnormal contraction of 13,838 contracts. We lost most of these paper longs as these guys  rolled into February and wished to keep the paper game alive .







In trading of  gold and silver today, our two precious metals were hit a little softly in last night’s  access market/Asian trading zone.  I thought that we were going to have another repeat of the last two Fridays. However by 12 midnight EST gold was right back up to $1195.00

Right after London’s first fixing of gold (2 am est),  after our ancient metal of kings registered a fix of $1197.00, gold then swooned to $1188, its nadir for the day,  upon which the gold bulls forcefully had enough of the bankers games as gold marched northbound  hitting its peak at 8 am est of $1206.50. It stayed at that level until London was put to bed (end of physical trading) upon which our banker friends provided copious non backed comex gold paper driving gold down to $1193.  Not to be undone, our sovereign (s) showed up again and drove the price to close at 1197.50 at comex closing time and $1201.50 at access market close.



Silver performed much better than gold during last night’s trading.  By 12 midnight, silver was already at $16.29.  By London’s first fix the price of silver had already reached $16.33.  The bankers would have no part of silver’s advance so they whacked it all the way down to $16.16, its nadir at  4 am est.  From there it was one steady climb whereupon silver hit its zenith at $16.61 at around noon time. In sympathy to gold, silver was hit again by the criminal bankers once London was put to bed. However this time the bankers could not get silver to below $16.33.  That was the signal to the bulls that a noose was around the necks of our bankers.  Silver then advanced  and closed as indicated above in my headlines.




Also remember that options expiry is on Monday for comex and on next Friday for the OTC gold and silver markets.



Today, we had no changes in tonnage of gold Inventory at the GLD / inventory rests tonight at  720.91 tonnes.


In silver, no changes:



SLV’s inventory  rests tonight at 349.296 million oz.



We have a few important stories to bring to your attention today…

Let’s head immediately to see the major data points for today.


OH OH!!!

First:   GOFO rates:


all rates move again back into the negative  moving deeper  into backwardation!!


Now, all the months of GOFO rates( one, two, three  six month GOFO and one year) moved toward    the negative with the mostly used 1 to 6 month rates deeper into the negative and thus  in backwardation.   On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates.

It looks to me like these rates even though negative are still fully manipulated.

London good delivery bars are still quite scarce.

The backwardation in gold is incompatible with the raid on gold . It does not make any economic sense.

Nov 21 2014

1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate

-.2450%            -0.1725%           -0.1125%     – .02500%          + .1025%

Nov 20 .2014:

1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate

-.2225%         -.1525%           -09255%           -007500%       +110%





Let us now head over to the comex and assess trading over there today,



Here are today’s comex results:



The total gold comex open interest rose by a whopping margin of 8,492 contracts from 459,559 all the way up to 468,051  with gold down by $3.00  yesterday (at the comex close). As I have stated on numerous occasions,  the bankers will continue to sell non backed paper on a continual basis whereupon major entities are taking on those bankers like today. It seems to me that  we now have a major entity going after gold as well as silver.  The front delivery month is November and here the OI remained constant at 28 contracts for a gain of 0. We had 0 delivery notice filed  yesterday so we neither gained nor lost any gold contacts standing for the November delivery month.  The big December contract month  saw it’s Oi fall by a  subnormal 13,838 contracts down to 162,509 with the November contract moving off the board Monday.  All of the selling  December longs rolled into February.   The estimated volume today was fair at 140,922 .   The confirmed volume yesterday was good at 227,183 with a huge assist to Bart’s HFT team..  Strangely on this 19th day of notices, we  had a tiny 16 notices filed for 1600 oz.

And now for the wild silver comex results.  The total OI surprisingly rose by a huge 1,888  contracts from  174,655 all the way up to 176,523 despite the fact that  silver was down 16 cents yesterday.  It seems that judging from silver’s OI, our banker friends are now getting paranoid as they try to cover their massive shortfall in silver but to no avail as raids no longer work.   In ounces, the total OI   represents a total of 882 million oz or 126.0% of annual global supply.  We are now in the non active silver contract month of November and here the OI remained constant at 88. We had 0 notices filed yesterday so we neither gained nor lost any  silver contracts oz that will stand for the November contract month.  The big December active contract month saw it’s OI fall by an infinitesimal 3864  contracts down to 61,763.   A normal contraction now is around  9000 contracts per day  on a roll. The December contract month remains highly elevated for this time in the delivery cycle.  In ounces the December contract  is represented by 308 million oz or 44.0% of annual global production  (production = 700 million oz – China). The estimated volume today was very good at 47,546.  The confirmed volume yesterday  was excellent at 61,541. (and OI rises with a sizable drop in price?) We also had 0 notices filed  today for nil oz.

I have been corrected on the first day notice.  It will be on Friday, Nov 28.2014 the day after Thanksgiving. Options expiry as mentioned above is Monday.  We thus have 5 more  comex sessions.

Data for the November delivery month.

November initial standings

Nov 21.2014



Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 163,324.514 oz (,Scotia)includes 2 kilobars
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil
No of oz served (contracts) today  16 contracts(1600 oz)
No of oz to be served (notices) 28 contracts (2800 oz)
Total monthly oz gold served (contracts) so far this month  1409 contracts  (140,900 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month    80,623.1  oz

Total accumulative withdrawal of gold from the Customer inventory this month

 777,138.1 oz

Today, we had 0 dealer transactions

total dealer withdrawal:  nil   oz

total dealer deposit:  nil oz

we had 2 customer withdrawal: and it was a dandy!!

i) Out of Scotia: 163,260.214 oz

ii) Out of Manfra: 54.30 oz (2 kilobars)


we had 0 customer deposits:

total customer deposits : nil  oz

We had 0 adjustments:

Total Dealer inventory: 868,910.561 oz or   27.02 tonnes

Total gold inventory (dealer and customer) =  7.961 million oz. (247.6) tonnes)

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 55 tonnes have been net transferred out. We will be watching this closely!

Today, 0 notices was issued from  JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts  of  which 0 notices were stopped (received) by JPMorgan dealer and 0  notices were stopped (received) by JPMorgan customer account.

To calculate the total number of gold ounces standing for the November contract month, we take the total number of notices filed for the month (1409) x 100 oz to which we add the difference between the OI for the front month of November (12) – the number of gold notices filed today (16)  x 100 oz  =  the amount of gold oz standing for the November contract month.

Thus the  initial standings:

140,900  (notices filed today x 100 oz + (  28) OI for November – 16 (no of notices filed today)= 142,100 oz or 4.419 tonnes.

We  neither gained nor lost any gold oz standing for the November contract month.


And now for silver



Nov 21/2014:

 November silver: initial standings



Withdrawals from Dealers Inventory  nil  oz
Withdrawals from Customer Inventory 111,580.48 oz
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 50,000.36 oz (Brinks)
No of oz served (contracts) 0 contracts  (nil oz)
No of oz to be served (notices) 88 contracts (440,000 oz)
Total monthly oz silver served (contracts) 156 contracts 780,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  1,383,689.0 oz
Total accumulative withdrawal  of silver from the Customer inventory this month 8,247,935.4 oz

Today, we had 0 deposits into the dealer account:

 total dealer deposit: nil oz



we had 0 dealer withdrawal:

total  dealer withdrawal: nil  oz



We had 1 customer withdrawals:

i) Out of Brinks:  111,580.48 oz

total customer withdrawal  111,580.48  oz

We had 1 customer deposits:


i) Into Brinks;  50,000.36 oz  (is the .36 oz to appease me?)

total customer deposits: 50,000.36    oz

we had 1 adjustment  (and get a load of this):


i) Out of the Delaware vault:

78,640.55 oz enters and

78,645.55 oz leaves

thus a net of 5.0000 oz totally evaporates into thin air!!

Total dealer inventory:  64.899 million oz

Total of all silver inventory (dealer and customer)   177.637 million oz.

The total number of notices filed today is represented by 0 contract or nil oz.  To calculate the number of silver ounces that will stand for delivery in November, we take the total number of notices filed for the month (156 ) x 5,000 oz to which we add the difference between the total OI for the front month of November (88) minus  (the number of notices filed today (0) x 5,000 oz =   the total number of silver oz standing so far in November.

Thus:  156 contracts x 5000 oz  +  (88) OI for the November contract month – 0 (the number of notices filed today)  = amount standing or 1,220,000 oz of silver standing.

we neither gained nor lost any silver ounces standing today.

It looks like China is still in a holding pattern ready to pounce when needed.

For those wishing to see data on the currencies and bourse closings you can see it on my site at


The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.

***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold.  I can visualize demand coming to the buyers side:

i) demand from paper gold shareholders

ii) demand from the bankers who then redeem for gold to send this gold onto China


vs no sellers of GLD paper.



And now the Gold inventory at the GLD:


Nov 21.2014: no change in tonnage of gold inventory at the GLD/inventory 720.91 tonnes

Nov 20.2014; no changes in tonnage of gold at the GLD/tonnage 720.91 tonnes

Nov 19.2014: we lost 2.1 tonnes of gold/Inventory back to 720.91 tonnes.  No doubt physical gold is heading to China.

Nov 18.2014: no change in inventory/ Inventory level 723.01 tonnes

Nov 17.2014; we had a huge addition of 2.39 tonnes of gold added to the GLF inventory/inventory rests tonight at 723.01 tonnes. They may be running out of metal to give China!!!

Nov 14. we had no change in gold inventory at the GLD/inventory 720.62 tonnes

nov 13. we lost another 2.05 tonnes of gold at the GLD/Inventory at 720.62 tonnes

Nov 12.2014; we lost another 1.79 tonnes of gold at the GLD/Inventory at 722.67 tonnes

This gold left the shores of England and landed in Shanghai.

Nov 11.2014: we lost another 0.900 tonnes of gold at the GLD/Inventory 724.46 tonnes

Nov 10. we lost another 1.79 tonnes of gold at the GLD/Inventory 725.36 tonnes

Nov 7 wow!! we lost another huge 5.68 tonnes of gold at the GLD/inventory 727.15 tonnes

Nov 6.2014: we had another huge withdrawal of 2.99 tonnes of gold. Inventory 732.83 tonnes

This gold is also heading to Shanghai.  If I was a shareholder of GLD I would be quite concerned as there will be no real gold inventory left per outstanding shares.

Nov 5 we had another huge withdrawal of 3.000 tonnes of gold.  This gold will be heading to Shanghai/GLD inventory 735.82 tonnes


Today, Nov 21 no changes in tonnes of gold  inventory



inventory: 720.91 tonnes.



The registered  vaults at the GLD will eventually become a crime scene as real physical gold  departs for eastern shores leaving behind paper obligations to the remaining shareholders.   There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat  (same banks).

GLD :  720.91 tonnes.









And now for silver:

Nov 21.2014: no change in silver inventory at the SLV

Inventory:  349.296 million oz


Nov 20.2014; no change/inventory 349.296 million oz

Nov 19.2014: a huge addition of silver inventory to the tune of 2.396 million oz/inventory 349.296 million oz

Nov 18.2014; no change in silver inventory  346.90 million oz

Nov 17.2014 .SLV inventories remain constant tonight at 346.90 million oz

Nov 14.2014; wow!! we had an addition of 2.012 million oz into the SLV/inventory at 346.900 million oz

Nov 13. no change in silver inventory at the SLV/344.888 million oz.

Nov 12.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz.  And please note that gold leaves GLD/silver does not.  Why? there is no physical silver at the SLV..just paper obligations.

Nov 11.2014: no change in silver inventory at the SLV/inventory rests tonight at 344.888 million oz.

Nov 10/ we had an addition of 1.438 million oz of silver into inventory at the SLV/Inventory 344.888 million oz  (again note the difference between gold and silver)

Nov 7/ 2014/no change in silver inventory/inventory rests at 343.45 million oz.  (please note the difference between silver (SLV) and gold  (GLD)

Nov 6.2014: no change in silver inventory/(as of 6 pm est) inventory rests at 343.45 million oz.

Nov 5  today, the total silver inventory drops of 2.074 million oz/SLV inventory: 343.45 million oz

Nov 4.2014: wow!! we had another addition of 1.151 million oz of silver inventory/SLV inventory rises to 345.524

Please note the difference between GLD and SLV.  The GLD has physical gold to send on its way to Shanghai/SLV has no silver to offer to the participants to give to various players..



Nov 21.2014  no change in inventory at the SLV /349.296 million oz






And now for our premiums to NAV for the funds I follow:

Note:  Sprott silver fund now deeply into the positive to NAV

Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

1. Central Fund of Canada: traded  at Negative 10.3% percent to NAV in usa funds and Negative   10.5% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold  61.6%

Percentage of fund in silver:37.90%

cash .5%

( Nov 21/2014)   

2. Sprott silver fund (PSLV): Premium to NAV falls to positive 3.19% NAV (Nov 21/2014)  

3. Sprott gold fund (PHYS): premium to NAV  falls to negative -0.65% to NAV(Nov 21/2014)

Note: Sprott silver trust back hugely into positive territory at 3.19%.

Sprott physical gold trust is back in negative territory at  -0.65%

Central fund of Canada’s is still in jail.







At 3:30 pm the CME attempts to give us the semblance of a COT report which shows position levels of our major players.  I strongly believe that the data is fudged.  However for completeness sake here it is:


First the Gold COT:

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
187,955 106,533 44,726 193,668 264,665 426,349 415,924
Change from Prior Reporting Period
10,687 -14,692 -1,865 9,342 30,315 18,164 13,758
133 102 101 52 57 236 225
Small Speculators  
Long Short Open Interest  
33,308 43,733 459,657  
-1,929 2,477 16,235  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, November 18, 2014

My goodness!!!


Our large specs:


Those large specs that have been long in gold added a rather large 10,687 contracts to their long side.


Those large specs that have been short in gold finally saw the light and they started to cover in a hurry to the tune of 14,692 contracts.


Our commercials;

Those commercials that have been long in gold added a huge 9342 contracts to their long side.


Those commercials that have been short in gold added a monstrous 30,315 contracts to their short side.

(can someone call in the FBI, the Serious Fraud Squad, BaFin and Scotland Yard??)

Our small specs:


Those small specs that have been long in gold pitched (???) 1929 contracts from their long side

Those small specs that have been short in gold added  (???) 2477 contracts to their short side

in total contrast to their older and wiser brother the large specs.


Conclusions:  fraud anyone?


and now for the silver COT:



Silver COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
56,831 45,077 18,742 74,136 92,503 149,709 156,322
-634 -1,956 -541 4,424 5,179 3,249 2,682
76 74 57 43 46 148 153
Small Speculators  
Long Short Open Interest  
23,366 16,753 173,075  
-858 -291 2,391  
non reportable positions Change from the previous reporting period
COT Silver Report – Positions as of Tuesday, November 18, 2014


Our large specs:


Those large specs that have been long in silver pitched 577 contracts from their long side.


Those large specs that have been short in silver covered 2259 contracts from their short side


Our commercials;


Those commercials that have been long in silver added 43484 contracts to their long side


Those commercials that have been short in silver added a monstrous 5539 contracts to their short side


Our small specs:


Those small specs that have been long in silver pitched 1023 contracts from their long side

Those small specs that have been short in silver covered 496 contracts from their short side.


Conclusions: none






And now for your most important physical stories on gold and silver today:

Early gold trading from Europe early Friday morning:

(courtesy Goldcore/Mark O’Byrne)



Swiss Gold Poll Likely Tighter Than Polls Suggest

Published in Market Update  Precious Metals  on 21 November 2014

By Ronan Manly


There is just over one week to go before the Swiss gold initiative referendum on Sunday 30 November. The release of the latest opinion poll earlier this week shows a strengthening of opposition to the initiative at the expense of the yes camp, with the level of undecided voters still a significant component of the equation. Taking the ‘maybes’ into account, there are still, according to the latest poll, 37% of voters who are not definitely yes or definitely no at this stage.

GoldCore founder and Research Director, Mark O’Byrne on CNBC today

The official pollsters believe that the initiative will likely fail, and perhaps, at this stage they are correct. The intervention of the Swiss National Bank (SNB) into the campaign at every turn seems to have dissuaded some previously ‘yes’ leaning voters. However, the SNB is still not taking any chances and continues to make statements on what it see as the dangers to Swiss monetary policy from increased gold reserves in the form of a 20% gold minimum in the reserves, and a ban on gold sales if the initiative does go through.

The SNB governing board members are also having to contend with a Euro to Swiss Franc rate (EUR/CHF) which has now approached and arrived at the SNB’s Maginot Line, even as the gold and foreign exchange markets perceive that the ‘threat’ of the gold initiative may be about to subside. While investment bank commentary and research is in the majority thinking that the gold initiative will not succeed, recent weeks have seen increased coverage and analysis of the referendum event by the currency and commodity strategists of major banks and trading houses.

Even if the Swiss gold initiative fails and its proponents don’t achieve their desired outcome, the initiative will still be seen in some quarters as an historic event that panicked the Swiss National Bank into a coordinated campaign of opposition and that made currency strategists and financial media around the world sit up and begin to analyse what they may now realise has always been a world class currency in its own right.

It’s also fortuitous in its own way that while the focus has been building on the Swiss gold initiative over the last few weeks, the man who once called gold “a protector of property rights”, that “stands in the way” of the “confiscation of wealth” should now reiterate a similar view when he said on 29 October in New York that:

“Look, remember what we’re looking at. Gold is a currency. It is still by all evidences the premier currency where no fiat currency, including the dollar, can match it. And so that the issue is, if you’re looking at a question of turmoil, you will find, as we always have in the past, it moves into the gold price.[1]”

No matter what you think of Greenspan, he knows that gold is the world’s premier currency, as do the governing board of the SNB. But whereas Greenspan is now free to say this, the SNB board look too afraid to admit this.

Yes lead fades in new poll

Wednesday 19 November saw the release of a new opinion poll addressing the upcoming Swiss gold initiative referendum. This poll, the second of two polls from well-respected political research institute gfs.bern, and the only officially conducted poll on the Swiss gold initiative, is the final poll before the 30 November referendum.

The gfs.bern survey, which follows on from a similar poll released on 24 October and was conducted on behalf of Swiss state broadcaster SRF, found that 38% of respondents would vote yes to the gold initiative, 47% would vote no, and 15% were still undecided.

The previous poll from gfs had found 44% in favour, 39% against, and 17% undecided, so there has now been a 6% swing away from the yes side, an 8% gain for the no side, and a 2% reduction in the undecided camp. With the previous gfs poll having been published four weeks previously, it appears that campaigning from the ‘No’ coalition of political parties and the Swiss National Bank has had a noticeable impact on the Swiss electorate’s thinking. However, the results also show an electorate that is still someway off from full decisiveness on the Swiss gold reserves issue.

Claude Longchamp, political scientist and chairman of gfs.bern, which carried out the surveys, said the gold initiative, is ‘likely to fail’[2]. SRF, who commissioned the poll, commented that the increasing ‘No’ vote is a normal development in popular initiate polls but conceded that “with 15 percent undecided, the process of opinion formation is far from complete.”[3]

Definitely Maybe

Technically, survey respondents to these Swiss surveys can answer these polls in one of five ways, and there are two extra response categories for those who ‘might’ vote either yes or no but who are still not entirely sure of their intention when responding to the survey. Then, for each side, the pollsters add the ‘definitely’ and ‘maybe’ categories together.

This is best illustrated by the full gfs.bern survey results which were as follows: definitely yes 27%, probably yes 11%, definitely no 36%, probably no 11%, and undecided 15%. Interestingly, this gives a figure of 37% who are, at this stage, not completely definite on how they would vote.

Throughout this gold initiative campaign, another separate on-line poll has also been conducted on behalf of media publication ‘20 Minuten’[4]. The latest gold initiative results from 20 Minuten’s online poll, released on 18 November, showed the Yes vote at 28% versus the No vote at 64%, with 8% undecided. This poll also adds a definitely and a maybe together, for example ‘tend to yes’ and ‘yes’ together become ‘yes’.

The previous 20 Minuten poll on 31 October showed 38% yes, 47% no and 15% undecided, so according to 20 Minuten, ‘Yes’ has dropped 10 percentage points while ‘No’ has gained this 10% plus another 7% from the ‘Undecided’.

As per usual in the non-stop Swiss election and referenda calendar, two other referenda are taking place in Switzerland on 30 November in addition to the gold initiative referendum. Both of these referenda were also surveyed in gfs.bern’s two polls, and there were also noticeable swings in the latest survey results for both of these referenda.

In the Ecopop initiative, which broadly deals with immigration issues, there was a positive 4% swing in the Yes vote from 35% to 39%, with the No and ‘Undecided’ both losing 2% each. In the third referendum, on lump sum taxation for rich foreign nationals, there was a 6% drop in support (6% drop in the Yes side) from 48% to 42%. Therefore it was not just the gold initiative survey results which swung dramatically over the one month measurement period.

Gfs.bern also breaks down its poll results by various different criteria, including region (German, French, and Italian speaking), by political party, and by income level[5].

An Italian leaning towards gold?

Although Switzerland is a multilingual country, each area is officially classified into the German, French or Italian speaking regions, thereby creating three regions. The poll shows that in Italian speaking areas, the yes vote was actually ahead with 47% in favour, versus 28% against. In the German speaking region, the results were 40% yes versus 50% no, while in the French speaking region it was 29% yes versus 41% no. The ‘Undecided’ were a low 10% in the relatively decisive German speaking region, 24% in the Italian region, and a significant 30% in the relatively indecisive French speaking region.

Including the ‘maybes’, then the total combined non-yes and non-no cluster was 33% in the German, 44% in the Italian and 56% in the French region. Therefore, there is still a lot of scope for change in the actual referendum given the large number of respondents who did not give a definitive yes or no answer in the latest poll.

Only SVP voters show a yes-majority

Even though the gold initiative campaign was launched by representatives of the Swiss People’s Party (SVP),  following a closely contested party vote, the central SVP membership structure decided not to officially recommend a ‘Yes’ vote. However a lot of the local cantonal SVP party chapters, after their own local votes, did decide to support the initiative. This means that although none of the main Swiss parties actually endorse a ‘Yes’ vote, there is still grassroots supports for a ‘Yes’ vote amongst many SVP parliamentarians and SVP supporters within the Swiss electorate.

This was reflected in the findings of the gfs.bern poll, where, amongst SVP voters, 62% said they would vote for the initiative, while 32% said no. Voters of the other four big parties only indicated yes votes of between 22% and 27%, and no votes of between 58% and 64%. These parties were the Greens, the CVP, the SP, and the FDP. Of respondents without a party affiliation, 29% said yes, 29% were undecided, and 42% said no.

All of these party allegiances, as well as the non-aligned vote, were influential in strengthening the overall ‘No’ vote intentions. However, it’s worth remembering that in the February 2014 popular initiative on Swiss immigration, the ‘Yes’ vote gained a slim majority of 50.3% despite all the main political parties, apart from the SVP, recommending a ‘No’ vote.

There were also differing trends in support for the gold initiative amongst income classes in Switzerland, as measured by household income. Those on lower incomes displayed higher support for the gold initiative compared to those on higher incomes. Amongst respondents with monthly household incomes below CHF 3,000 (€2,500), 52% would vote yes versus 28% no, between CHF 3,000 and CHF 5,000 per month 56% would vote yes and 33% no, while above CHF 11,000 per month (€9,160), only 21% would vote yes and 64% no.

‘Polls are Snapshots’

The gfs.bern survey (via telephone) was conducted by interviewing 1,412 voting residents of Switzerland between 7 November and 15 November[6]. This did not include Swiss expatriates residing in other countries (Swiss expats can vote in Swiss elections as long as they are registered in their home commune, and as long as they vote via their local Swiss consulate or embassy). Approximately 2.6% of the Swiss electorate are registered abroad. For example, in the February 2014 referenda, out of 5.21 million eligible voters, 137,000 were registered as being abroad.

The gfs survey actually asked respondents how they would vote if they were voting the next day, and was open not just to those who intended to vote or had already voted (note that in Switzerland a lot of people vote by post in advance).

Of the survey respondents, 52% said they would actually be voting on the three referenda on 30 November (or had already voted). Gfs.bern says that a 52% turnout is about average for elections in the last year, and this indication is an improvement on the last poll, during which 47% of respondents indicated that they would vote. As an example, in the February 2014 immigration referendum, the turnout was 56.57%, with 2.91 million people voting.

As gfs stated in its conclusion, “polls are snapshots” and they also highlighted that “the authors of the study emphasize that the survey reflects the current situation.”

Sorcerers’ Apprentices

Following a Swiss TV debate about the gold initiative conducted in German last week, another television debate addressing the initiative was held earlier this week, this time in French, and hosted by Radio télévision Suisse (RTS) part of the SRG Swiss Broadcasting group. The transmission included various representatives from both sides of the initiative debate including Luzi Stamm, the SVP lead of the yes campaign, Yves Nidegger national councillor with the yes campaign, investment manager Egon von Greyerz, also of the yes campaign, and Jean-Pierre Roth, a former chairman of the Swiss National Bank representing the no campaign.

Yves Nidegger said that “In 2,500 years I am sure that the Euro won’t have any value, but gold will always have value”. Egon von Greyerz said that “gold is money, gold represents a stable money”. Jean-Pierre Roth countered that “with your initiative you are interfering with the defense of the Swiss Franc, and he added somewhat colourfully that “the initiators (of the gold initiative) are sorcerers’ apprentices because the initiative has tied the hands of the SNB.” Luzi Stamm argued that because of its gold, non Swiss historically see Switzerland as a strong stable country, and he said that “through foreign glasses, a country that has gold inspires confidence.”

Throughout its campaign, the SNB has pleaded that the ‘rules’ required by the gold initiative wording would stifle the flexibility of its monetary policy as regards fx interventions. This argument focuses on two connected points Firstly, the SNB argues that if, while tackling deflation, it expanded its balance sheet while defending the EUR/CHF rate, then it would, under the 20% rule, also have to buy more gold so as to keep the gold cover ratio above 20%. Secondly, if the SNB tried to contract its balance sheet to counter inflation, that since it would be prevented from selling gold, that it would have to sell other reserves, i.e. foreign currencies, and that theoretically, the entire balance sheet could end up being just gold.

While this may be true in the medium term, in a recent report, Commerzbank note that since the gold initiative rules allow the SNB a five year period in which to build its gold reserves towards a 20% level, then in the short term, the SNB can continue to pursue its EUR/CHF defence policy[1]. It also begs the question, how long does the SNB intends to pursue this continuous weakening of its own currency by tying it to a continually weakening Euro. Its also worth looking at how exactly the SNB began their EUR/CHF experiment and what they might do next as regards further intervention.

EUR/CHF 1.20 – Line in the Sand

Since the beginning of November, the Swiss Franc has strengthened noticeably against the Euro, with the EUR/CHF rate moving down from 1.206 to just above 1.201, perilously close to the SNB’s 1.200 line in the sand. It may not appear to be a large move but the approach to the 1.201 area is very significant. Indeed, some of this exchange rate move has been attributed to the market’s anticipation of a close race in the gold referendum.

Most of the EUR/CHF drop occurred in the first two weeks of the month, and the exchange rate has been flat lining since then just above 1.201 after actually breaching the 1.201 mark on a few occasions this past week.

The SNB are terrified about the risks of deflation and the looming escalation of continued loose monetary policy by the European Central Bank which will further weaken the Euro. Inflation in Switzerland is projected to be about 0.3% year-on-year for 2015, and the SNB may need to now crank up the size of its balance sheet to try to induce further inflation back up towards its ‘price stability’ target of circa 2% per annum.

This Swiss Franc strengthening has prompted further remarks from the SNB that the Bank will do whatever it takes to defend the 1.20 level. Fritz Zurbruegg, one of the three members of the SNB governing board, said as much at a banking gathering in Geneva on Thursday (20 November), where he reiterated that the SNB would use the ‘utmost determination’ to defend the 1.20 line, by buying unlimited quantities of Euros and also by using other unspecified policy measures[1]. Is the SNB intervening now? Probably not, but it may be making preparations to do so, given that the EUR/CHF rate is currently staying so close to the 1.200 mark.

Zurbruegg, whose other role is as head of the SNB department with responsibility for financial markets and banking operations, also used the banker get-together occasion to again try to influence the referendum result, when he encouraged the Swiss electorate to reject the gold initiative on 30 November.

One possible unconventional policy measure (for the SNB at least) would be to introduce negative interest rates, thereby making it unattractive for Swiss Franc depositors to make such deposits, which might weaken demand for the Swiss Franc.

Zurbruegg is not the first SNB executive to make such comments about unusual policy measures. The use of unconventional monetary policy instruments has already been alluded to by the SNB. In early October while attending the annual IMF conference in Washington DC, SNB chairman Thomas Jordan said that the SNB was “ready to take immediate action with other instruments”, and he said that “we do not exclude any other measure if it’s necessary, including negative interest rates.[2]”

Intervention or no Intervention?

Apart perhaps from the reference to unconventional instruments, the above views are essentially existing official SNB policy, and none of these recent statements from the SNB adds anything new. In fact, the wording of nearly everything Jordan, Zurbruegg & Co continue to pronounce on is nearly identical to the press release that the SNB issued over three years ago on 6 September 2011 titled “Swiss National Bank sets minimum exchange rate at CHF 1.20 per euro” in which it was stated:

“The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development. The Swiss National Bank (SNB) is therefore aiming for a substantial and sustained weakening of the Swiss franc.

With immediate effect, it will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20. The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.

Even at a rate of CHF 1.20 per euro, the Swiss franc is still high and should continue to weaken over time. If the economic outlook and deflationary risks so require, the SNB will take further measures.[3]”

In the summer of 2012 there was further large scale interventions by the SNB where the Bank bought Euros and added about another CHF 150 billion to the SNB balance sheet (Some of these Euros are then converted into other major reserve asset currencies such as the US Dollar using a weighted target portfolio of currency reserves that the SNB adheres to).

In September 2012, the SNB again reiterated its September 2011 monetary policy stance, nearly verbatim, when it said:

“The Swiss National Bank (SNB) is leaving the minimum exchange rate unchanged at CHF 1.20 per euro, and will continue to enforce it with the utmost determination. It remains committed to buying foreign currency in unlimited quantities for this purpose.

The Swiss franc is still high and is weighing on the Swiss economy. For this reason, the SNB will not permit an appreciation of the Swiss franc, given the serious impact this would have on both prices and economic performance in Switzerland.[4]”

The SNB governing board now appear to have painted themselves into a corner. With the EUR/CHF rate now at their defining line, there is little that they can do under their current monetary policy except continual balance sheet expansion and purchasing of Euros. No matter whether the gold initiative passes or not, this SNB monetary policy looks unsustainable in the long run. Moving back towards a strong currency partially backed by gold might admittedly cause deflationary issues for Switzerland in the short run, but with other currency blocks globally apparently indicating that they are accumulating gold reserves in order to back their currencies with gold in the medium term, maybe Switzerland could lead the way for other Western economies by using gold in its monetary system in the way that it has historically done.

Sovereign Wealth Fund transfers

A number of investment bank currency strategists have raised the possibility that the SNB could create a sovereign wealth fund (SWF) so as to lessen the amount of gold it would need to purchase in the event of a ‘Yes’ outcome in the gold referendum.

These approaches suggest that the SNB could transfer some of the SNB’s existing reserve assets to a Swiss sovereign wealth fund, thereby reducing the amount of reserve assets on the SNB’s balance sheet, the outcome of which would be that the existing gold reserves would then comprise a higher percentage of total reserve assets.

This strategy has been suggested by both Morgan Stanley[1] and Deutsche Bank[2] in recent currency research reports focusing on the Swiss gold initiative.

The balance sheet reserve assets of the SNB are currently valued in the region of CHF 520 billion, of which gold reserves comprise approximately CHF 40 billion, or just over 7.5%, of this total. If today the SNB had to bring its gold reserves up to 20% of its reserve assets this would require the purchase of approximately CHF 65 billion in gold.

Instead, if the SNB transferred a majority of its reserve assets to a sovereign wealth fund, this would reduce the overall size of the balance sheet and could create a balance sheet where the existing gold comprises over 20% of total reserve assets, thereby negating the need to purchase any gold at all.

Deutsche Bank suggests that the SNB could “transfer intervention-related reserves into the sovereign wealth fund as an accounting matter”, and that if these reserves were needed for intervention, then, based on ‘trigger points’ these funds could again “flow from the SWF to the central bank to be used in interventions”.

However, such strategies involving a sovereign wealth fund are not politically palatable in Switzerland. Morgan Stanley points out that the transfer of SNB reserve assets to a SWF would be controversial with the Swiss cantons, because the SNB is expected to maintain its reserve assets at a level which enables it to fulfil monetary policy while distributing other earnings to the cantons. If a transfer of reserves that were deemed to be in excess was undertaken with a SWF, the question would then arise as to why the cantons had not received this transfer.

Deutsche Bank also highlights the political fallout that the use of a SWF might entail, saying that “transferring the SNB’s fx reserves to a fund to avoid gold purchases would be a blatant disregard of the political will and probably involve another referendum.”

Conscious of the controversies surrounding this possibility, the SNB’s Thomas Jordan came out with a statement this week guaranteeing that such a strategy would not be pursued by the SNB if the Yes vote triumphed. Jordan said that such a move was ‘unthinkable’, and he commented that “the SNB cannot simply use some tricks to circumvent the will of the people. I rule that out categorically[3]”.

Gold Swap Tricks

Given that Thomas Jordan is categorically against ‘tricks to circumvent the will of the people’ in a scenario under which the SNB had to increase its gold reserves following a ‘Yes’ majority in the gold referendum, then Jordan should also be expected to be against Deutsche Bank’s other main suggestion in how to allow the SNB to meet the gold initiative 20% rule without actually having to purchase any additional gold.

Using round trip gold swap transactions, where the SNB swaps currency for gold with counterparties on a temporary basis, Deutsche Bank suggests that the SNB could borrow gold just before balance sheet reporting dates, thereby making it look like the SNB had increased gold reserves, and then reverse the swap again after reporting day, returning the claim on the gold back to the lending counterparty.

Deutsche Bank believes that this swaps strategy would be “politically more straightforward than the introduction of a sovereign wealth fund.” But given that in the opaque world of central bank cooperation in gold trading and pooling, central banks are not even obliged to report the details of gold swap activity, surely Deutsche really means that it would be “politically more straightforward” since no one outside a handful of SNB and BIS gold traders, SNB executives, and BIS governors might even be aware that such a gold swap strategy was even being implemented?

And it would also be naïve to think that, in the eyes of many Swiss citizens, the use of gold swaps could in any way be less of a “blatant disregard of the political will” than a sovereign wealth fund, even those citizens who in the eyes of those who might be voting against the gold initiative.


With a large minority of voters still seemingly undecided on the gold initiative question, there still appears to be a lot of uncertainty within the electorate. Therefore, with the final week of campaigning now approaching, the ‘Yes’ and ‘No’ campaign teams may still have one final shot left at making their case to the ‘undecided’ and the ‘maybe’ groupings, as they try to sway these undecided voters over to one or other side of the argument.

And with the Dutch central bank, De Nederlandsche Bank, having just announced the completion of the repatriation of 120 tonnes of its gold from the Federal Reserve Bank of New York back to Amsterdam, the Swiss electorate may now be wondering whether repatriation of their 300 tonnes of Swiss gold held abroad should now take on added urgency.







Swiss gold exports rise as referendum campaign leader is blocked from TV debate


7:35p ET Thursday, November 20, 2014

Dear Friend of GATA and Gold:

Net exports of gold from Switzerland increased to 100 tonnes in October, Bullion Star market analyst and GATA consultant Koos Jansen reports tonight, with most of it going to China and India. Jansen’s analysis is posted at Bullion Star here:…

And a leader of the Swiss Gold Initiative referendum campaign, Luzi Stamm, tells King World News tonight that he was barred from participating in the debate on the initiative broadcast on national television in Switzerland. Stamm describes the overwhelming attack on the initiative by the country’s political and financial establishment. An excerpt from the interview is posted at the KWN blog here:…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.





Strange headlines from Ukraine:  after disclosing it does not know were its gold reserves are, they reported that they sold 14 tonnes of gold last month.  They state they are down to 26 tonnes.  In all probability the sale is really the USA paying for the gold that they stole.


The good news is Russia who continues to pile into gold.

Russia added 17 tonnes to its reserves (now 1168 tonnes)

last month;




(courtesy Reuters)



UPDATE 1-Ukraine slashed gold holdings in October, Russia added more – IMF
Fri, Nov 21 08:43 AM IST

(Adds background on Ukraine crisis, gold prices)

NEW YORK/SINGAPORE, Nov 20 (Reuters) – Ukraine slashed its gold reserves by more than a third in October, data from the International Monetary Fund showed, as the near-bankrupt country reels from fighting a pro-Russian separatist movement in the east.

The reserves data from IMF also showed Russia raised its gold holdings for a seventh straight month in the same period – the country’s longest such buying spree in more than a year.

Ukraine ended last month with 26 tonnes of gold, down by 14 tonnes from September, while Russia added another 18.9 tonnes, taking its total to 1,168 tonnes – still the fifth biggest holding by a central bank.

Ukraine, locked in a conflict with separatists since early this year, is near bankruptcy, dependent on international loans, and deeply in debt for natural gas to Russia, the former imperial master it accuses of waging war on behalf of separatists on its territory.

Its currency, the hryvnia, has lost 83 percent of its value against the dollar this year and its foreign currency reserves plunged to a nine-year low last month.

The crisis has also had an impact on Russia’s gold holdings with the central bank being forced to step up buying from domestic producers hurt by Western sanctions, and to boost liquidity in its foreign reserves, Reuters reported this month.

It was not known if Ukraine has continued to sell gold reserves in November as well.

More selling by Ukraine, or any other central bank, could hurt gold prices, which earlier this month sank to 4-1/2-year lows following a sell-off that began in late October. Gold is extremely sensitive to buying and selling by central banks – the biggest holders of bullion.

In 2013, gold tumbled $200 an ounce in two days on fears that Cyprus – with less than 15 tonnes of gold – could sell bullion to shore up its finances. That drop in April sparked a big sell-off with gold losing 28 percent last year.

IMF data on Thursday also showed Turkey cut its holdings by 2.7 tonnes to 521 tonnes and Azerbaijan raised its reserves by 3.2 tonnes to 30.2 tonnes. Belarus added 2.1 tonnes to 41.1 tonnes.

(Reporting by A. Ananthalakshmi and Josephine Mason; Editing by Richard Pullin)




Your big story of the day. Today we received news from Amsterdam that 122 tonnes of gold was repatriated from the FRBNY to the Dutch central bank. This was done in secret and by boat. The reason given by the central authorities was that it is far more prudent to have gold on their side of the pond than on the USA side.

I checked the FRBNY earmarked gold account and it showed a loss of 57 tonnes in September. I think you can bet the farm that 65 tonnes left in October but we will need to see that data next month.

This is devastating news to our bankers.  Remember that for every ounce of gold, we have 100 oz of paper obligations written on it.  Thus a removal of 122 tonnes causes a derivative mess of 12200 tonnes of gold. No wonder we have such a high negative GOFO rate.

Ladies and Gentlemen:  the following is your big story of the year!!



(courtesy Koos Jansen)





Posted on 21 Nov 2014 by

The Netherlands Has Repatriated 122.5t Gold From US

The Dutch central bank, De Nederlandsche Bank (DNB), has repatriated in utmost secret 122.5 tonnes of gold from the Federal Reserve Bank of New York (FRBNY) to its vaults in Amsterdam, The Netherlands, according to a press release from DNB published today (November 21).

DNB states it has changed allocation policy from 11 % in Amsterdam, 51 % at the FRBNY, 20 % in Canada and 18 % at the Bank Of England (BOE); to 31 % in Amsterdam, 31 % at the FRBNY, 20 % in Canada and 18 % at the BOE. According to the World Gold Council’s latest data DNB has 612.5 tonnes in official gold reserves.

The Netherlands Official Gold Reserves Allocation
Source: the WGC, DNB

Translation DNB press release:

DNB Adjusts Gold Reserves Allocation Policy

Press release, date November 21, 2014.

De Nederlandsche Bank has adjusted its allocation policy for its gold reserves. To achieve a more balanced distribution of gold over the various locations, DNB has shipped gold from the US to the Netherlands.

In the old situation 11% of the gold reserves were located in the Netherlands, 51% in the US, with the remainder in Canada (20%) and the UK (18%). The location distribution according to the revised policy is as follows: 31% in Amsterdam, 31% in New York, while the percentages for Ottawa and London with 20 and 18  % remain unchanged.

This adjustment of DNB joins other central banks that store a larger share of their gold reserves in their own country. Next to a more balanced distribution of the gold reserves over the different locations, this can also contribute to more trust towards the public.

The distribution of gold stocks over various locations is often subjected to change. For example, in the period after the Second World War until the early seventies DNB added a lot to its gold reserves – underBretton Woods – especially in New York. Since then, more mutations occurred. The main reasons for this have been the gold sales over the past decades and the closure of the vaults of the Reserve Bank of Australia, which made DNB ship gold from Australia to the UK in 2000. 

A few weeks ago I heard a rumor that the Netherlands were repatriating some of their official gold reserves from the FRBNY. From one of my sources I even heard which security logistics company is shipping the metal, but I was kindly asked to not share this company’s name.

Last week I was approached by a financial journalist, Theo Besteman, from the biggest newspaper in The Netherlands,De Telegraaf. He asked me if I knew anything about the repatriation of Dutch gold from the FRBNY as he heard from several sources DNB was following the German central bank in repatriating gold (for the ones that are under the assumption Germany has ceased its repatriation program, please read this). I told him I heard some rumors about it and that the source was one of the big security logistics companies. He wanted to know which one, but I couldn’t tell him that. Apparently the rumors were true and Besteman did a good job finding out what was happening. The front page of De Telegraaf today: Tonnes back from the US, Gold Shipped In Secret.

Screen Shot 2014-11-21 at 9.17.12 AM

De Telegraaf reports that for years there have been doubts at the DNB if the Dutch gold was still in New York. After a very secret and almost military operation DNB has shipped gold from Manhattan to Amsterdam, to bring about a more balanced allocation of its gold reserves and give the Dutch citizens more confidence by storing the gold on ownsoil to guide the country, if necessary, through a following major crisis. In the previous weeks many armored trucks were seen at the DNB in Amsterdam. Quote from De Telegraaf:

It is no longer wise to keep half of our gold in one part of the world,” said a DNB spokesman on themassive operation of shipping gold bars to Amsterdam. “Maybe that was desirable during the Cold War,not now.”

Global Consequences

The impact of the Dutch gold repatriation can be huge. First of all, because it underlines more and more countries are getting nervous about their gold reserves stored in the US. Venezuela repatriated most of its reserves from abroad in 2012, the year Germany also announced a repatriation schedule from the US and France. While Germany settled with the US to ship 300 tonnes spread over 8 years, the Dutch set a new trend to insist on immediate delivery. If more counties will follow there can be a global run on gold.

Recently the Swiss people also got nervous about the Swiss National Bank (SNB) its gold policy and asked for a referendum to store all of the official gold reserves on Swiss soil. The Swiss referendum is held on November 30 and will most likely be influenced by the 123 tonnes of gold repatriated by The Netherlands.

Koos Jansen

De Nederlandsche Bank 2




I do not think that Dave is correct on his latest piece but

I will let you decide.  The Dutch gold is held in New York (FRBNY) and is earmarked.

Now it would be interesting (and it is probable) that the Dutch received new bars instead of their earmarked gold.

We still must see the 122 tonnes of gold leave FRBNY.

It doesn’t say how many oz of derivative obligations were underwritten on that tonnage..




Here is Dave’s version:


(courtesy Dave Kranzler IRD)



Was GLD Gold Moved To The Dutch Central Bank?

In a move that is much more significant and relevant than the Chinese interest rate cut news, it was revealed that Netherland’s Central Bank repatriated 120 tonnes of gold this year.   The move was accounted for as a transfer of gold from the NY Fed to De Nederlandsche Bank (DNB).   I say “accounted for”  because I believe it is highly likely that the physical transfer took place from the GLD custodial vaults to the DNB.   Here’s the article:   LINK.

I think this also explains the 33 tonnes of gold that the U.S. military airlifted out of Ukraine:  Original SourceTranslated Version. (“Jesse” of Jesse’s Cafe Americain reminded about the Ukraine gold)

Recall that the Fed, together with Germany’s Bundesbank, explained that it would take 7 years to move 300 tonnes of gold from NY to Germany because it was complicated and expensive.   As we know, that was a glaringly transparent cover story for:  “the Fed does not have 300 tonnes to ship back to Germany and it will take 7 years to buy and move that amount of gold without driving up the world price of gold.”

Why do I make this assertion?  This is from the link above:  “In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said.”

So, why was the DNB able to move 120 tonnes in a matter of months but it will take 7 years to move 300 tonnes to Germany?

I think we all know the answer to that question, which is why I make the assertion that the bars shipped to the DNB came from GLD (click to enlarge):


On March 21, GLD had 821 tonnes of gold.   Currently it has 720 tonnes.   Given what we know about the failure of the Fed to send Germany any gold other than 5 tonnes of miscellaneous scrap, and given that it appears as if Germany has abandoned its efforts to have any part of 300 tonnes of gold moved from NY to Germany (other than the 5 tonnes of crap), it is highly likely that the 100 tonnes removed from GLD since March has been moved to Amsterdam.  I’m sure the  balance was the gold airlifted by the U.S. from Ukraine.

The ONLY way gold is removed from GLD is if one of the Approved Participant bullion banks accumulated 100,000 share “baskets” and redeems the baskets for bars.  It’s the only way.  Even a big investor must transfer its shares to the bullion bank in order to execute the transaction.   And it says right in the Prospectus that the Trustee can deny the investor’s request for reasons that are not clear.

Whether or not my theory is accurate, I would bet my dog’s life that the 120 tonnes that the DNB received this year into its vaults unequivocally did not come from the NY Fed vaults.





And now zero hedge on this huge story!!


Gold Repatriation Stunner: Dutch Central Bank Secretly Withdrew 122 Tons Of Gold From The New York Fed by Tyler Durden on 11/21/2014 08:25 -0500

A week ago, we penned “The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed“, in which we got, for the first time ever, an admission by an official source, namely the bank that knows everything that takes place in Germany – Deutsche Bank – what the real reason was for Germany’s gold repatriation halt after obtaining a meager 5 tons from the NY Fed:

… the gold community paid great attention to the decision of the German Bundesbank to “bring German gold home”. At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.

Some took offense with this, pointing out, accurately, that the gold held at the NY Fed in deposit form for foreign institutions had continued to decline into 2014 despite the alleged German halt. Well, today we know the answer: it wasn’t Germany who was secretly withdrawing gold from the NYFed contrary to what it had publicly disclosed.

It was the Netherlands.

This is the stunning statement made by the Dutch Central Bank earlier today, and which, all compliments to China’s rate cut, is truly the biggest news of the day, as it shows that one doesn’t need a referendum to repatriate their gold, nor does one run into logistic or diplomatic problems if one is truly set on procuring their physical.

As to why the DNB decided it was time to cut its gold held at the NY Fed by 122 tons? “”It is no longer wise to keep half of our gold in one part of the world,” a DNB spokesman told Telegraaf. “Maybe it was desirable during the Cold War, but not now.”

From the source:

De Nederlandsche Bank (DNB) has adjusted its gold stock location policy and has shippedgold from the United States to the Netherlands to spread its gold stock in a more balanced way.

Under the previous policy, 11% of the gold stock was located in the Netherlands, 51% in the United States, with the remainder held in Canada (20%) and the United Kingdom (18%). Under the new policy, the breakdown by location is as follows: 31% in Amsterdam, 31% in New York, with the relative holdings in Ottawa and London remaining unchanged at 20% and 18%, respectively. Following this adjustment, DNB is in line with other central banks holding a greater part of their gold stock in their own countries. Beyond realising a more balanced distribution of the gold stock across the different locations, this may also have a positive effect on public confidence.

Changing the distribution of the gold holdings across the different locations is not without precedent. From the end of the Second World War until the early 1970s, for example, DNB increased its gold reserves following the Bretton Woods Accord, mainly in New York. Since then, there have been other movements in DNB’s gold stock. The main reasons for this being the gold sales in the past few decades and the closure of the vaults of the Reserve Bank of Australia, as a result of which DNB shipped gold from Australia to the United Kingdom in 2000.

Sure enough, AP confirmed:

The Dutch Central Bank says it has recently shipped 122.5 tons of gold worth around 4 billion euros ($5 billion) from safekeeping in New York back to its headquarters in Amsterdam.

In a statement Friday morning the bank said that its 612.5-ton national gold reserve is now divided 31 percent in Amsterdam, 31 percent in New York, 20 percent in Ottawa, Canada and 18 percent in London.

“With this adjustment the Dutch Central Bank joins other banks that are keeping a larger share of their gold supply in their own country,” the bank said in a statement. “In addition to a more balanced division of the gold reserves...this may also contribute to a positive confidence effect with the public.”

This is how the Old and New gold allocation of the Dutch Central Bank look currently: Gold holdings.jpg Gold holdings.jpg

Note: the reallocation has already taken place, and is not – like Germany – subject to a 5 year period during which the NY Fed is expected to recoup the gold. So it can be done!?

As to when it was done, here is the NY Fed’s monthly reports of gold deposits by foreign entities: here we can see that while the 5 tons outflow in 2013 was most likely Germany, the recent surge in gold repatriation from Liberty 33 was the Netherlands. That said, only 57.5 tons of NY deposits gold has been officially repatriated through September, which means the October update, when it comes out, will be a doozy.

Some more details from the Dutch Telegraaf, google-translated:

In the vaults at the Amsterdam Frederiksplein was until recently 11% percent of the total of 612 tons of government gold. That is screwed up to 31%.

For years there were major concerns of the gold was still there. This months of almost military organized gold shipments from Manhattan DNB wants a ‘balanced’ distribution of the national gold buffer.

In addition, DNB expects Dutch citizens more confident that enough of our gold is in their own ‘home’ to guide the country if necessary following major crises.

At that effect also highlights the German Bundesbank, which are gold also partially recovered. De Nederlandsche Bank has great silence in recent months retrieved 130 tons of gold bars.

Last week drove armored trucks back and forth towards the Amsterdam Frederiksplein. “It is no longer wise to keep half of our gold in one part of the world,” the DNB spokesman on the massive operation with gold bars to Amsterdam says. “Maybe that was during the Cold War still desirable, not now. ‘

In Amsterdam is recently 31% of the gold. In the vaults of New York is 31%. It remains. De Nederlandsche Bank carries no gold bars back from the protected storage in Ottawa, Canada, where 20% of the gold remains. In London, the Netherlands keeps 18% of all Dutch ‘sandwiches’ gold as nest egg.

Netherlands moved his gold in the past frequently. In the period after the Second World War until the early seventies the Dutch central bank bought gold to replenish its reserves. That was mainly focused on the vaults in New York, which are built to earthquakes and bomb attacks endured. Since then bought and sold DNB gold and earned it every robustly.

Another curiosity: the gold was repatriated by ship. From Dutch News:

In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said. The high security reparations for the move took months.

Luckily, that particular vessel did not suffer any “boating incidents.”

And now that the Dutch have shown just how “easy” it is to repatriate one’s gold when not entangled in shifting alliances, diplomatic feuds, or suffering from “logistical problems” preventing one from collecting their gold, we wonder just how much more eager Germany or Switzerland will be to collect their own gold, or whether the Swiss November 30 referendum will decide to let countries like the Netherlands have a right of first refusal of whatever gold may still be held at the vault located 90 feet below street level at the New York Federal Reserve Bank (which as we reported a year ago, is connected by an underground tunnel to the JPMorgan precious metal which was located just across the street).









Alasdair Macleod: That G-20 meeting


10:18a ET Friday, November 21, 2014

Dear Friend of GATA and Gold:

With economies declining nearly everywhere, GoldMoney research director Alasdair Macleod writes today, the recent G-20 meeting in Brisbane may have given a boost to government intervention.

Macleod writes: “We might look back on Brisbane as a milestone in global economic policy, when governments and central banks changed the emphasis of economic management from monetary stimulation through the financial system toward a greater emphasis on direct government intervention. In the process two things are likely to happen: Currencies will begin to lose their purchasing power with respect to everyday goods, and government bond yields are likely to rise, undermining financial asset valuations. … It will be very good for inflation hedges like gold.”

Macleod’s commentary is headlined “That G-20 Meeting” and it’s posted at GoldMoney here:…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



Top-performing gold miner readies warchest in bust industry


By Thomas Biesheuvel
Bloomberg News
Friday, November 21, 2014

LONDON — The gold industry is a “busted flush,” said Mark Bristow, surveying the ruin wrought by a 38 percent slump in the bullion price from a 2011 peak. For the Randgold Resources Ltd. chief executive officer, that’s an opportunity.

“This is an exciting time,” Bristow said in an interview at his London office near the Savoy Hotel. “The industry blows its brains out every time. The reason we’re still in the industry is because the competition isn’t that sharp.”

The world’s biggest gold miners racked up $30 billion of debt during a 12-year-bull run for the precious metal that spurred acquisitions and new mines. That has become a millstone as costs escalate and gold tumbled from a record $1,921.17 an ounce in September 2011 to $1,189.62 in London today.

Randgold, the best performing gold miner in the past decade, is debt free and profitable at current gold prices, said Bristow, who has a war chest of $500 million to $700 million to acquire assets from floundering rivals. …

… For the remainder of the report:…




Now there is an ‘interesting new concept’


(courtesy Quayle/Kingworldnews)



Russia, China will accuse U.S. of gold scam, bullion dealer tells KWN


11a ET Friday, November 21, 2014

Dear Friend of GATA and Gold:

Montana coin and bullion dealer Steve Quayle, whose motto is “If You Can’t Touch It, You Don’t Own It,” tells King World News today that Russia and China soon will tell the world that the United States doesn’t have the gold it claims to have. An excerpt from the interview is posted at the KWN blog here:…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.





Indian central bank cautious on response to gold import surge


By Suvashree Choudhury and Neha Dasgupta
Friday, November 21, 2014

MUMBAI, India — The Reserve Bank of India, grabbling with a surge in gold imports last month, could support some restrictions for trading houses but two senior policymakers involved in the bank’s decision-making said officials were also wary of overreacting. …

A senior finance ministry source told Reuters on Tuesday the country would soon announce measures set to center on import restrictions for private trading house that were eased earlier this year. Private jewellery exporters account for the bulk of demand for gold.

But the country has yet to announce any steps, and the two policymakers said on Friday there was no agreement yet. “No decision has yet been taken on curbing gold imports,” said one of the policy makers, who declined to be named. …

… For the remainder of the report:…




(courtesy Sprott  Money/Nathan McDonald)

November 21, 2014



Precious metals have taken a horrible beating over the past month. They were suppressed to levels not seen since 2010. The result of this price depression was a massive increase in demand from individual investors and nations alike.

No longer are people fooled by the paper price of precious metals. Premiums have remained relatively high through this price correction and demand has been so intense, that the US Mint was forced to cease sales of their ever-popular Silver American Eagles.

Nation states, such as China and Russia are well known for their affinity to gold and have also continued their accumulation of precious metals. Russia, which officially became the fifth largest holder of gold recently, announced that it has once again increased their gold reserves by another 150 additional tonnes in 2014. An increase of 8.4% year over year.

The demand from China, Russia and India are well known, but now a previous seller of gold products could be entering the arena. The ECB, a long time disbeliever in precious metals is currently battling stubbornly low inflation and may be forced into a very unconventional strategy.

Russian Coin

Yves Mersch, a member of the ECB’s executive board, indicated that inflation levels are only 0.4 percent, a far cry from the targeted goal of 2 percent set by the ECB. The average person should take this news as positive, given that your standard of living and hard earned savings are not being eroded at a faster pace. Yet central bankers don’t look at it this way. To them, this is incredibly negative news.

Western central banks know that they need to massively increase inflation. This is the only way in which they can alleviate the huge debt levels that have been accumulated by their misguided wars and spending.








And now for the important paper stories for today:

Early Thursday morning trading from Europe/Asia

1. Stocks  up on major  Asian bourses except Australia    with a  higher yen  value rising to 117.92

1b Chinese yuan vs USA dollar  (yuan weakens) to 6.12555

2 Nikkei up 57  points or 0.33%

3. Europe stocks all up  /Euro falls/ USA dollar index up at 88.14.

3b Japan 10 year yield at .47% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 118.23

3c  Nikkei now above 17,000

3e  The USA/Yen rate crosses back below the 118 barrier

3fOil:  WTI  77.68  Brent:    81.22 /all eyes are focusing on oil prices.  A drop to the mid 60′s would cause major defaults.

3g/ Gold up/yen up;  yen just below 118 to the dollar/at fresh 7 year lows.

3h/ Japan is to buy the equivalent of 108 billion usa dollars worth of bonds per MONTH or $1.3 trillion

Japan’s GDP equals 5 trillion usa/thus bond purchases of 26% of GDP

3i  Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt (see Von Greyerz)

3j  Japanese GDP plummets/sales tax hike will no doubt be delayed and

Snap election  called. Stimulus of 26 billion usa to be initiated.

3k  Chinese home sales suffer/iron ore plummets as does copper/surprise Chinese rate cut


3m Gold at $1197.00 dollars/ Silver: $16.32

4.  USA 10 yr treasury bond at 2.34% early this morning.
5. Details: Ransquawk, Bloomberg/Deutsceh bank Jim Reid

(courtesy zero hedge/your early morning trading from Asia and Europe)


In Addition To China, Here Is What Other Central-Banks Moved Overnight Markets

Tyler Durden's picture


While the biggest news of the day will certainly be China’s rate cut (and the Dutch secret gold repatriation but more on the shortly), here is a list of all the other central-banking events which have moved markets overnight, because in the new normal it no longer is about any news or fundamentals, it is all about the destruction of the value of money and the matched increase in nominal asset values.

As RanSquawk recounts, European equities opened in the green in a continuation of the Wall Street close and positive performance overnight in Asia-Pacific equities with little else in the way of macro newsflow to dictate the price action. However, this subdued start to the session was short-lived as ECB’s Draghi took the stage in Frankfurt and presented an increasingly dovish tone. More specifically, the ECB head said the inflation situation in the euro area has become increasingly challenging and will seek to raise inflation as fast as possible, with participants taking these as comments as one of the clearest indications yet that an ECB QE programme is increasingly likely.This subsequently saw European stocks surge higher with gains in excess of 1% amid hopes of further liquidity while Bunds staged a fast-money move higher to print session highs and the Euribor strip was also seen bid following the dovish rhetoric. On a stock specific basis in Europe this morning, newsflow remains relatively light. However, energy and basic material names lead the way higher alongside the recent modest recovery seen in commodity prices.

Overnight Buletin Headlines form Ransquawk and Bloomberg

  • European price action has been largely controlled by particularly dovish rhetoric from ECB’s Draghi.
  • As such EUR/USD prints a weekly low, while European equities enter the North American crossover firmly in the green.
  • Looking ahead, today’s session sees a lack of tier 1 US data, with Canadian CPI the main event.
  • Treasuries headed for second consecutive weekly loss amid gains for stocks, surge in corporate issuance including Alibaba’s $8b, largest USD- denominated sale by an Asian issuer.
  • China cut interest rates for the first time since July 2012,    lowering the 1-year deposit rate to 2.75% from 3.00% and the    one-year lending rate by 0.4ppt to 5.6%
  • Draghi said the ECB must drive inflation higher “as fast as possible,” and will broaden its asset-purchase program if needed to achieve that
  • Japan’s finance chief said the yen has been weakening too fast over the past week, the strongest statement yet by one of the nation’s top policy makers as the central bank’s expanded stimulus drives down the exchange rate
  • Obama lifted the immediate threat of deportation and opened the way to better jobs for about 5m undocumented immigrants, thrusting a long-simmering fight to the forefront as he takes on a Republican-controlled Congress
  • The U.S. health secretary, Sylvia Mathews Burwell, said her agency made a mistake when it added dental-plan customers to recent figures on Obamacare enrollment.
  • Russia is seeking to build a high-speed rail link to further bolster ties with China after agreeing on the biggest natural gas supply deal in history
  • The U.K. Independence Party dealt a new blow to Prime Minister David Cameron as it won a second seat in Parliament from his Conservatives in six weeks
  • U.S. prosecutors are seeking to settle criminal currency- rigging cases with multiple banks at the same time, allowing lenders to avoid being singled out for industrywide conduct, according to people familiar with the matter
  • Sovereign yields lower. Asian stocks gained. European stocks, U.S. equity-index futures higher. Brent crude, gold gain; copper falls



In terms of FX moves, until the PBOC shocker just before 6 am eastern time, the comments from Draghi have dictated a bulk of the price action, with EUR/USD breaking back below 1.2500. This subsequently provided USD with a strong bid which lifted USD/CHF and subsequently saw EUR/CHF reach its highest level in 9 days, with some also citing SNB intervention alongside the move in the cross. Elsewhere, overnight, USD/JPY was dragged lower following the pair failing to break above 119.00 yesterday, with the move to the downside exacerbated by comments by Japanese Fin. Min. Aso who said the speed of JPY weakening has been too fast, with this move also resulting in heavy selling in EUR/JPY and GBP/JPY. Once the PBOC hit the tape, the AUD soared against all pairs, and as a result lifted all AUDJPY carry driven trades, which as we showed yesterday, was the key correlation pair for E-Mini algos, thus sending the S&P to new all time highs.


Elsewhere, the commodity complex has been particularly subdued. Early in the European session spot gold failed to break above USD 1,200 before being dragged further away from the handle following the broad-based USD strength. WTI and Brent crude futures enter the North American crossover in modest negative territory with participants looking ahead to the OPEC meeting, ahead of which analysts at Commerzbank said OPEC are unlikely to cut 30mln bpd target next week, while SocGen sees Saudi Arabia leading 1mln b/d to 1.5mln bbd OPEC cut.

* * *

DB’s Jim Reid concludes the overnight news recap

Yesterday was certainly a day for the data-watchers with a host of prints across Europe and the US. The result was, perhaps unsurprisingly, a mixed bag and continues the theme we’ve seen recently with less than encouraging PMI prints out of Europe in the morning being met with a generally solid set of releases in the US in the afternoon. Starting in the US, CPI came in modestly ahead of consensus as the flat mom October CPI headline print was a tad above the -0.1%mom expected, whilst the core reading showed further acceleration to +0.2%mom (+0.1%mom expected) from +0.1% previously. Our US economists interestingly pointed out that the continually deflating goods prices recently have been offset by ongoing gains in services prices – this in turn has raised the core inflation print by a tenth to 1.8% in year-over-year ended terms.

Looking further ahead, our colleagues expect that it’ll be difficult for core inflation to move lower given that core services prices accounts for a chunky 75% of overall core CPI inflation. With core goods prices moving lower as a result of a significant deceleration in non-petroleum import prices, we’ve seen core goods decline year-over-year since April 2013. On the other hand core services prices have consistently grown well above +2.0% for the last three years (with the current run rate at +2.5%). This is largely as a result of shelter costs that we mentioned yesterday which have once again risen in October to a +3.1% yoy growth rate, now a recession high. Given the expected further decline in the rental vacancy rate, we should see shelter costs continue to rise in the near term which should offset any downwards goods sector pressure and hold inflation above 2%. All-in-all the divergence in the two factors of CPI highlights the current inflationary conditions in the US and is worth keeping a keen eye on as we move through 2015.

Away from the CPI readings, there were further positive prints in the housing market with existing home sales increasing 1.5%mom, ahead of expectations of a small decline. As well as this, the Philadelphia Fed survey was Strong with the solid 40.8 reading up from 20.7 in October. Claims were largely mixed although the flash manufacturing PMI was the slight blip in an otherwise encouraging day for the region with a 1.2pt fall to 54.7 weaker than expected. Finally October’s leading index showed a +0.9%mom rise, ahead of consensus.

Looking at how the market reacted, the +0.20% close in the S&P yesterday somewhat hides the +0.6% bounce off the lows, closing just shy of Wednesday’s record highs. Treasuries weakened modestly with the curve some 2-3bps wider whilst the Dollar closed down slightly weaker (DXY -0.06%).

Before all this yesterday, there was little for the market to get encouraged about in Europe following disappointing PMI’s. The Eurozone November flash print of 51.4 was materially down on expectations of 52.4 and last month’s 52.1 reading. However, this is largely explained by a drop in the German composite to 52.1 (54 expected) from 53.9 previously and comes after what had been an encouraging recent ZEW survey. Just on the German reading, the most disappointing reading was perhaps a fall in the services index to 52.1 from 54.4, marking the lowest level since July 2013. The weakness in these numbers backs up our German economists’ view that GDP is set to stagnate through the next two quarters with the potential for a risk of a negative quarter. Away from Germany, France didn’t fare much better with the composite coming in below expectations at 48.4 (vs. 48.7), although the services print improved from Octobers reading. Looking forward, our European economists see the overall PMI outcome consistent with their GDP growth call in 2015 of +0.8% as well as providing further strength around the argument that that the ECB will have to include government bonds in its QE programme to meet its inflation target. Over the last few weeks of touring round Europe its been noticeable how sentiment has changed towards QE. Two months ago at the start of my recent travels, most people were still skeptical that the ECB could ever sanction Government bond QE. Fast forward to the present day and the vast majority think it’s an inevitability.

In terms of market reaction in Europe yesterday, 10yr Bunds closed some 5bps wider whilst the Stoxx 600 (-0.26%) and DAX (+0.12%) initially weakened some -0.9% post PMI’s only to rally into the close following the better sentiment out of the US. Credit markets largely reflected the equity moves, Xover closing some 4.5bps wider on the day.

Whilst on the subject of credit markets, the latest weekly fund flows are in. A look at the HY mutual fund flow numbers shows that the past week saw further outflows in Europe (-$143mn or -0.3% of NAV). We have now seen just one week of inflows in the past eight with 15 of the past 19 weeks seeing outflows. Net outflows over the 19 weeks have totaled $4.1bn (around 10% of NAV). US HY funds also saw outflows over the past week (-$809mn or -0.3% of NAV) breaking a streak of four consecutive weeks of inflows. Overall it does seem that flows have stabilised but we probably need inflows to encourage fund managers to exploit the wider and quite attractive levels – especially those in Europe. Maybe the US small set back is not being helped by the continued Energy sector concerns.

Just wrapping up the data prints yesterday, industrial orders out of Italy came in weaker than expected (-1.5% mom vs. -1.0% mom expected) although October retail sales in the UK surprised to the upside. The headline print including auto’s came in at +0.8% mom (vs. +0.3% mom expected and -0.3% previously) whilst the core reading (excluding auto’s) was above market at +0.8% mom. Finally, DB’s George Buckley noted that the picture painted by the UK’s CBI survey painted something of a mixed picture, with two key forward-looking activity measures in expected output and total orders – moving in opposite directions.

Elsewhere, Bloomberg has reported that the ECB has put together the necessary requirements to start purchasing ABS from as soon as today. This follows on from earlier comments from ECB member Mersch who commented that the central bank may start purchasing the securities this week. Rounding out central bank news, SNB board member Zurbruegg has defended the national banks cap of 1.20 to the Euro whilst commenting that the bank won’t hesitate to enact supplementary measures.

Before we look at the day ahead, markets in Asia this morning are generally firmer. In particular Japan appears to be trading well ahead of the anticipated dissolving of the lower house today. The Nikkei is currently +0.36% higher whilst the JPY has strengthened +0.21% versus the Dollar to 117.96 buoyed somewhat by comments from the Finance Minister that the currency’s decline had been too fast. Elsewhere bourses in China, Korea and Hong Kong are +0.76%, +0.35% and +0.19% better respectively as we go to print.

In terms of the day ahead, after yesterday’s raft of data releases the market could get something of a breather today with just the Kansas City Fed manufacturing index in the US to look forward to after we get public finances data in the UK and hourly wages out of Italy. Perhaps of more interest however, we will hear from both the ECB’s Draghi (commenting on ‘Reshaping Europe’) and Nouy (commenting on Banking and Regaultion) this morning as well as the Fed’s Williams later so we will keep an eye out for anything interesting.







Another joke;  Japanese Finance Minister warns that the speed of the yen collapse has been too fast.


what doorknobs..


(courtesy zero hedge)




Yen Surges After Japan FinMin Says Speed Of Yen Collapse Has Been Too Fast

Tyler Durden's picture



First the Japanese central bank proceeds to monetize all new debt issuance and is on route to holding 50% of all 10 Year bond equivalents within 2 years, sending the Yen year plummeting to 7 years lows daily, and then – just like Europe – Japan gets cold feet and realizes that the next steps are USDJPY 145+, meaning a complete collapse of the Japanese economy and a full on FX, if not shooting, war in Asia. So what does Japan’s finance minister Aso do? Why he talks the Yen higher, in the process completely confounding the FX algos, and risking a full blown collapse in the Nikkei just 3 weeks ahead of the Japanese snap elections.


And this is not how you win the reitrees’ vote:


Then again, considering Abe may really just want to get the hell out of Dodge before he is forced out (and before all the Imodium runs out again) a market crash may be just what the Prime Minister ordered…


A surprise Chinese rate cut sends bourses flying:
(courtesy zero hedge)

Futures Soar On Surprise Chinese Rate Cut

Tyler Durden's picture

Moments ago, as traditionally is the case, the Chinese central bank caught the world by surprise and cut rates, notably the deposit rate by 25 bps and the lending rate by 40 while allowing banks to offer interest of 1.2 times the benchmark rate.

According to the press release posted moments ago (google translated):

The People’s Bank of China decided to cut financial institutions RMB benchmark interest rate loans and deposits with effect from November 22, 2014. The one-year benchmark lending rate down 0.4 percentage points to 5.6%; one-year benchmark deposit rate down 0.25 percentage point to 2.75%, while the combination of market-oriented reforms to promote the interest rate, the upper limit of the floating range of interest rates on deposits of financial institutions by the benchmark deposit 1.1 times the adjusted interest rate is 1.2 times; other grades adjusted accordingly benchmark interest rate loans and deposits, and to make appropriate benchmark interest rate maturities degenerate.

The summary table:

This happens as many analysts had been calling for more easing from China for months to help stabilize the faltering economy, but also happens a day after as Bloomberg reported, “Distressed Debt in China? Ain’t Seen Nothing, DAC Says.” Bascially well over a year after promising deleveraging reforms and a lower trendline growth rate, one which would not see incremental monetary stimulus, Xi Jinping threw in the towel and joined Japan and Europe in aggressively pursuing greener pastures.

It also means that, as expected, China is now clearly paying attention to Japan’s unprecedented currency destruction and as Albert Edwards noted a few weeks ago, now that China has finally broken the seal, it is only a matter of time before China also devalues its currency outright.

The good news for the liquidity addicts, is that the S&P futures are now 12 points higher on what is clearly the only growth strategy left in a centrally-planned world, and are approaching 2070 and just 30 points away from Goldman’s 2015 year end target!

Finally, a quick reaction comment from Diapason’s Sean Corrigan who points out a few less obvious features of the PBOC rate cut:

Shibor has been and will remain well inside that corridor for some time to come. Note, too, that the CB is also allowing banks to bid for depo at 1.2 x the new 2.75 floor (i.e., at 3.3%) versus the previous level of 1.1 x 3.0 (i.e., errr — well, 3.3%, actually)!



Given dysfunctional financing, there has been recent discussion at Leading Group level about trying to unblock the market by relaxing the 75% loan:depo rule — perhaps by reclassifying non-deposit taking financial institutions as plain depos (which count towards the total) and away from interbank (which do not). That then got some pointing out that this would only unleash even more Reg Arb and even that it might then require a cut in the RRR rate (since the newly-designated depos would now fall under the rule) and so send out a signal the PBOC has been desperately trying to avoid. On top of all this, the recent slew of IPOs and the flood of money into the stock market had tightened up the short-date market again to the extreme of a 322 bp intraday jump in the 7-day rate. This, in turn, prompted a liquidity injection which was all the more needed since banks are supposedly now banned from window-dressing at month end.


The rate cut should therefore probably be seen more as an attempt to prevent blockages in the credit system becoming critical and as a sign that the bank itself is becoming confused, having allowed so many parts to move all at once as part of its ‘reform’ process.


Initial reaction to the headline has, of course, been a jerk higher (though modest so far) but it is far to early to start screaming ‘reflation’, not least because the CB itself is using language which very much goes against this whereas, one presumes, were it really wanting to gun the engines again, it would be jawboning a la Draghi for all it was worth.

Then again, all central banks started off jawboning in a calm, cool and collected manner before they all turned into Draghi and Kuroda.






Ladies and Gentlemen:


please read the following very carefully!!

Jim Reid is one smart cookie:


(courtesy Jim Reid/Deutsche bank)



Deutsche Bank: “People Are Talking About Helicopter Money And Debt Cancellation Being The End Game”


If Deutsche Bank’s Jim Reid is right, what just took place overnight from the PBOC is just a pleasant start and an enjoyable dress rehearsal of what is about to take place. Where it ends is precisely where we have said it would ever since QE1 was announced in March 2009.

I had a few meetings yesterday and one of the biggest surprises I had was that for the first time in a long time people were talking about helicopter money and debt cancellation being the end game. This was a major theme of our 2013 long-term study but one that we’ve struggled to get much traction with over the last year. Perhaps there’s an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock. Maybe Japan’s move this week in delaying the further sales tax increase and the economy’s adverse reaction to the first increase reminds the market how difficult it might be to actually pay the bills with real money. As we said earlier this week it could be that the last few days marks the first steps towards monetization. Anyway, this is not something for today or tomorrow but the fact that different clients brought it up independently of each other makes me think that’s its starting to get into people’s thoughts.

Indeed it is, as we warned last September in “Bernanke’s Helicopter Is Warming Up” and yet everyone will be shocked, shocked, when the playbook that was clearly revealed by Ben Bernanke himself in 2002 is finally implemented:

… A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money

– Ben Bernanke, Deflation: Making Sure “It” Doesn’t Happen Here, November 21, 2002

And now your closing data for today from early morning until tonight:
Your more important currency crosses early Friday morning:

Eur/USA 1.2435 down .0107

USA/JAPAN YEN  117.92  down  .380

GBP/USA  1.5661  down .0038

USA/CAN  1.1271   down .0038

This morning in  Europe, the euro well down, trading now well below the  1.25 level at 1.2435 as Europe reacts to deflation and announcements of massive stimulation. In Japan  Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31. And now he wishes to give gift cards to poor people in order to spend. The yen continues to reverse like a yoyo as last night, Japan’s finance minister stated that the yen is fallen faster than it should.  It finally settled  in Japan up 38  basis points and settling above the 118 barrier to  117.92 yen to the dollar (heading towards 120).  The pound is slightly down  this morning as it now trades well below  the 1.57 level at 1.5661.(very worried about the health of Barclays Bank and the FX/precious metals criminal investigation).  The Canadian dollar is up again today trading at 1.1271 to the dollar.

 Early Friday morning USA 10 year bond yield:  2.34% !!!  up 1  in  basis points from Thursday night/

USA dollar index early Friday morning:  88.14 up 55 cents from Thursday’s close


The NIKKEI: Friday morning up 57 points or 0.33% (Abe’s helicopter route to provide free cash)

Trading from Europe and Asia:
1. Europe  all in the green

2/    Asian bourses all in the green except  Australia      / Chinese bourses: Hang Sang  in the green, Shanghai in the green,  Australia in the red:  /Nikkei (Japan) green/India’s Sensex in the green/

Gold early morning trading:  $1197.00

silver:$ 16.32

Closing Portuguese 10 year bond yield:  3.00% down 13 in basis points on the day

 Closing Japanese 10 year bond yield:  .46%  down 1 basis point from Thursday

Your closing Spanish 10 year government bond Friday/ down 9   in basis points in yield from Thursday night.

Spanish 10 year bond yield:  2.01% !!!!!!

Your Wednesday closing Italian 10 year bond yield:  2.21% down 10  in basis points:

trading 20 basis points higher than Spain:


Closing currency crosses for Friday night/USA dollar index/USA 10 yr bond:

Euro/USA:  1.2383  down .0152 !!!!!!!!!!!!

USA/Japan:  117.75 down .4900 !!!!

Great Britain/USA:  1.5650  down .0041

USA/Canada:  1.1242 down .0067

The euro collapsed in value during this afternoon’s  session,  and it was down big time , closing well below the 1.24 level to 1.2383.  The yen was up  during the afternoon session, and it gained 49 basis points on the day closing below the 118 cross at 117.75.   The British pound lost more  ground   during the afternoon session and it was down on the day closing  at 1.5650.  The Canadian dollar was well  up  in the afternoon and was up on the day at 1.1242 to the dollar.

Currency wars at their finest today.

Your closing USA dollar index:   88.32  up 74 cents  from Thursday.

your 10 year USA bond yield , up 1   in basis points on the day: 2.32%

European and Dow Jones stock index closes:

England FTSE up 71.86 or 1.08%

Paris CAC  up  113.02  or 2.67%

German Dax up 248.58 or 2.67%

Spain’s Ibex up 311.60 or  3.05%

Italian FTSE-MIB up  745.29    or 3.88%

The Dow: up 91.06 or .51%

Nasdaq; up 11.10   or 0.24%

OIL:  WTI 76.62  !!!!!!!

Brent: 80.50!!!!





And now for your big USA stories

Today’s NY trading:



Stocks Close At Recordest Highs As All Central Banks Go All In



(courtesy zero hedge)

Despite the knee-trembling awesomeness of a double-whammy promise of liquidity, US equity markets ended the week on a decidedly down note. The realization that Draghi’s all talk (no impact on US stocks) and PBOC’s move is not a liquidity surge and has limited impact on the economy left stocks tumbling once the opening OPEX levels had printed. The USD rose notably on the day after EUR plunged under 1.24 on Draghi (USD +0.9% on the week). Despite USD strength, gold rose 1% (as did Silver) on the week, rising for the 3rd week in a row for the first time in 4 months (and the 3rd Friday surge in a row). Oil rose 1% on the week, breaking an 8-week losing streak but Copper prices fell around 0.3% on the week, having given back the kneejerk gains post-PBOC today. Treasury yields dropped after kneejerking higher on PBOC. 30Y at 3.01% had its 2nd lowest weekly close since May 2013. VIX melted down into the close to 13.01. Late-day buying panic lifts stocks off their lows leaving Dow & S&P at all-time recordest highs of all-time ever in history (as small caps closed red).

The last 4 weekly closes for the Russell 2000 are 1173.5, 1173.3, 1173.8, 1173.5


From Draghi/PBOC…


Cash markets were a one-way street from the smash OPEX open…bounced in their nornal Friday afternoon way BUT closed ugly…


On the week… Russell Red on the week


AUDJPY was the driver for US equity’s surge… but JPY carry largely uncoupled after the US open…


And gold, Treasuries, and stocks decoupled on the day…


VIX melted down to 13.01 into the close to ensure every index closed green (as Nasdaq briefly trouched unch)


Credit and Treasuries notably decoupled on the week…


Treasury yields fell today after a modest kneejerk higher on the Draghi/PBOC headlines… 30Y yields closed at the 2nd lowest weekly close since May 2013.


FX markets saw major USD strength today led by EUR plunging back below 1.24 on Draghi’s jawbone… 4th up week for USD in last 5


The USD strength did not weigh on precious metals which gained around 1% on the week after volatile days on Wednesday (FOMC Minutes) and today (Draghi/PBOC). Oil broke ts 8 week losing streak ahead of next week’s OPEC meeting. Copper dropped on the week despite PBOC


Commodities were volatile today, dropped on Draghi, surged on PBOC, then faded after Europe closed…


Charts: Bloomberg

What a joke!!
(courtesy zero hedge)

Bullard Does It Again, Says Market “Misread” His QE4 Comment

Here we go again.

By now everyone, including 2 year old E-trade babies and Atari algos know, that the only reason the market soared from the October 15 bottom, a move which we showed was entirely due to multiple expansion and thus nothing to do with earnings and everything to do with faith in even more free central-planning liquidity (something the PBOC was all too happy to provide overnight), was James Bullard’s casual “QE4” hint on Bloomberg TV.

Since then Bullard has become the punchline of every financial joke, as it has become far too obvious that the Fed will never allow even a regular 10% correction (October 15 halted the closing market drop at just under 10%).

And now that the market is at ridiculous all time highs and trading above 19x GAAP PE, far above the level when in September the IMF, the G-20, the BIS and even the Fed all warned of assets bubbles, here is Bullard once again, with a fresh mea culpa and a new attempt to jawbone stocks, only this time back down, because as Dow Jones reports, “Bullard Says Markets Misread Him In October Bond-Buying Dustup.”

According to a DJ report, markets were rattled by comments Mr. Bullard made in a Bloomberg interview just ahead of the late October Fed policy meeting. He said the central bank might want to consider extending a bond-buying stimulus that was almost universally expected to end that month.

Then, after the meeting, Mr. Bullard praised the Fed’s decision to end the bond purchases, and again argued in favor of interest rate increases next spring, at a point earlier than many investors and officials expect. There was sense of whiplash: that Mr. Bullard had within a short period shifted gears on monetary policy.


In a Wall Street Journal interview Thursday, Mr. Bullard attributed some of the confusion to the fact that many market participants didn’t listen closely enough to what he said. He allowed that monetary policy making has become far more complex and thus more challenging to communicate. But he underscored an underlying consistency to his view, noting what he said about the Fed’s bond-buying program hadn’t altered his long-running view that short-term interest rates should be lifted off their current near zero levels next spring.


“If you actually go look at the [Bloomberg] interview and go look at what I said, one of the things I actually said was I’m not backing off my interest rate, my March interest view,” Mr. Bullard said.


The idea that it might be a good idea to press forward for a bit longer with bond-buying was rooted firmly in the ominous market conditions that prevailed ahead of the October Fed meeting, the official said.


Global markets were saying there was going to be a global recession. And one way for the Fed to react to that would be to delay the end of [bond-buying] and get more information,” Mr. Bullard said.


So according to the brain behind the St. Louis Fed, a 9% drop in the S&P is indicative of an imminent global recession? And, one wonders, what does the subsequent 15% jump “say” about the global economy? Oh wait, Mr. Bullard, is only attuned to the moves down in the S&P, which are due to the market being wrong. However, when the market surges on hopes of more liqufity, the market is said to be right about an economic recovery.

Got it.

“Maybe global markets would have been right and maybe there would have been a global recession coming, in which case we would want to have plenty of leeway to react to that,” he explained. It would have simply been a “low-cost” insurance policy to keep going with what was then $15 billion per month in bond purchases, get to the December Fed meeting, and see where things stood, he said.


But as it turned out, the market problems proved short-lived, recession fears abated quickly, so the factors facing Fed decision making changed, which in turn supported an end of bond-buying in October, as expected, Mr. Bullard said.

Then agan, this being Bullard, it is, sadly, all bullshit:

“I’m one that wants the committee to be nimble and be able to react to data that’s coming in. So maybe it’s more natural for me to say we can shade our position one way or another in response to macroeconomic developments” as they happen, Mr. Bullard said.

Sorry, James, have lost all credibility, but thanks to you all those others who have been correctly claiming that it is only the Fed that impacts asset prices were once and for all vindicated.

However, it appears that the FOMC comments have finally overriden Bullard, who will have zero leeway to comment the next time the market “plummets” by 9%. As a reminder, this is what the Fed explained about the next time there is a surge in volatility:

… members considered the advantages and disadvantages of adding language to the statement to acknowledge recent developments in financial markets. On the one hand, including a reference would show that the Committee was monitoring financial developments while also providing an opportunity to note that financial conditions remained highly supportive of growth. On the other hand, including a reference risked the possibility of suggesting greater concern on the part of the Committee than was actually the case, perhaps leading to the misimpression that monetary policy was likely to respond to increases in volatility. In the end, the Committee decided not to include such a reference.

Translation: Bullard had not been given the green light to comment and lead to the market surge which wiped out all mid-October losses.  And now the Fed has explicitly warned that the next time the market swoons, nobody will be stepping in with casual, if snyde, QE X commentary.

Then again, we will believe it once we see it.

Let us close this week out with Greg Hunter with his wrap of events:
(courtesy Greg Hunter/USAWatchdog)

WNW 167: Obama Immigration Amnesty, Jerusalem Violence, Ferguson Mo Decision

By Greg Hunter’s

President Obama, who many are now calling emperor, has made millions of illegal aliens legal with the stroke of his pen. Some in Congress say the time is up and something had to be done, but that is not how our government works. Obama says he is within his power, while Republicans in the House and Senate say the Constitution clearly says he is not. Expect another flood of illegal immigration on the southern border. Who is going to pay for all this welfare? What about the high unemployment rates among black youth already? I don’t think Obama or the Democrats care about these folks. The Democratic Party has such bad policies they do not want to change that they have resorted to importing millions of desperate future voters. This way, they can keep going with bad policies that most Americans do not like or want. Even Oregon, the bluest of blue states, overwhelmingly voted down giving illegal immigrants driver’s licenses.

The President went on TV to explain his unconstitutional amnesty plan for illegals, and the first thing I thought about was Obama Care. I no longer believe a single word the President says. I am sure I am not alone. Did Obama explain his illegal immigration policy the way he explained Obama Care? That is now the biggest policy fraud in U.S. history with many, many concocted lies that the President and Democrat leaders crafted with the help of Jonathan Gruber. By the way, the enormous policy lie to get Obama Care passed is what folks need to focus on, not that Gruber repeatedly called American voters “stupid.”

Violence has erupted again in Israel. This time, it is at a synagogue where five people, including some rabbis, were killed by gun and meat cleaver wielding Palestinians. The attackers were killed, but the violence is far from over. The fight is concerning a holy site in Jerusalem. It is really one that both Jews and Muslims claim. The battle is ongoing and, at its heart, is really about land and who has a right to be on it. This is going to get much worse before it gets better and turn in to all-out war.

In Ferguson, Missouri, the Governor activated a State of Emergency and called in the National Guard on Tuesday of this week. I guess that was the big tipoff that Officer Wilson would not be charged by a Grand Jury in the Michael Brown shooting case. Weeks ago, the Holder Justice Department also gave us a tipoff when it said it would not pursue civil rights charges against Officer Wilson. The local news here in Missouri gave many more details than you heard on national media. For example, there was lots of blood evidence inside Wilson’s patrol car. The blood was from Brown. Also, tens of thousands of dollars have already been raised via internet groups that are supposed to be used if Wilson is prosecuted for the death of Brown.

Finally, the drought in the Midwest is nonexistent. In fact, the farmers here complained there was too much rain, and that damaged some of the crops at harvest time. Still, farmers had a good year. Out west is a totally different story, particularly California. Everybody thinks of Hollywood and moving making in the Golden State, but agriculture is very big there. All parts of California are in some sort of drought level. About 75% of the state is suffering from the highest drought level, and there is no end in sight. It will affect the rest of the country and the world in terms of food and food prices.

Join Greg Hunter as he analyzes these stories and more in the Weekly News Wrap-Up.

That is all for today

I will see you Monday night

I expect huge volatility tomorrow

bye for now



  1. Terry Moore · · Reply

    Welcome back Harvey.


  2. Harvey, can you change the color and intensity of your quotable text as it extremely hard to read? At present I skip over it or read it elsewhere where it is more legible.


  3. paulindoon · · Reply

    Although Silverdoctors site made possible a sizeable contribution to the community by carrying (part of) yr writings, nonetheless it is a far better situation to have you present yr “stuff” in full on yr new site. Welcome back &ethnic for yr efforts.


  4. paulindoon · · Reply

    How I dislike software that thinks it knows what I mean to spell & butts in!!!
    My previous comment should say:
    Welcome back & thnx for yr efforts.


  5. Mike Magar · · Reply

    Great to have you back Harvey. I am looking forward to your posts. Some suggestions to improve your site; – Your quotes are too faint and your Friday post terminated abruptly.


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