Dec 4/GLD remains constant/SLV loses another 2.2 million oz/gold falls but silver rises/Draghi no longer has majority support at ECB/




My website is now ready     You can find my site at the following url: or  www

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: $1207.50. down $1.00
Silver: $16.52  up $0.16

In the access market 5:15 pm

Gold $1205.50
silver $16.46

The gold comex today had a poor delivery  day, registering 0   notices served for 800 oz.  Silver comex registered 57 notices for 185,000 oz.

A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 244.51 tonnes for a loss of 59 tonnes over that period.

In silver, the open interest fell by a small 917 contracts with Wednesday’s loss in price of only $0.05.  Looks like some of the shorts are vacating the arena. For the past year, we have been witnessing massive liquidation of contracts despite the fact that it cost nothing to roll.  This makes no sense and it smacks of cash settlements which are totally illegal. Since I have been following comex data, I have never witnessed such a massive liquidation in both gold and silver.  The total silver OI still  remains relatively high with today’s reading  at 147,505 contracts. The big December silver OI contract lowered by 117 contracts down to 611 contracts.

In gold we had a good gain in OI with the rise in price of gold yesterday to the tune of $9.30.  The total comex gold  OI rests tonight  at 370,912  for a  gain  of 2,791 contracts. The December gold OI rests tonight at 2,105 contracts losing 144 contracts.



Gold straddled the 1206 dollar mark at midnight as the bankers were adamant to suppress the price having sent the signal to the boys earlier via  silver yesterday.

By 3 am (London first fix) gold traded at $1203.00. Gold hovered at these lower values and hit its nadir at $1202 at 5 am.  By 9 am (news from the ECB of non action) saw gold shoot up to $1213.  However the suppression scheme was still on and gold was knocked down to close at $1207.50 at the comex closing time and $1205.50 at the access closing time.


Silver performed much better than gold.

At 12 midnight, silver was hovering around $16.45.  By London’s first fix it remained at $16.45.  At 8 am it hit its nadir at $16.39 and in sympathy with gold it shot up immediately on the ECB no news to $16.65.  By comex closing time it reversed to $16.55 staying clear of the key $16.60 resistance level.  It closed in the access market at $16.46.

Today, we had no change in tonnage of gold Inventory at the GLD / inventory rests tonight at  720.02 tonnes.

In silver, we had a huge decrease in silver inventory of 2.204 million oz:

SLV’s inventory  rests tonight at 345.223 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.

First:   GOFO rates:

all rates moved closer to the positive but still in backwardation!!

Now, all the months of GOFO rates( one, two, three  six month GOFO remain negative but moved closer to the positive needle.  They must have found a few bars to lease.  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.

Dec 4 2014

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

-.170.%         – .1200  -%        –.0750   -%   –. 01  .%          +. 0825%

Dec 3 2014:

-0.2825%           -.217500%       -.160 %         -.03%    +.065%


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 today  by 2,791 contracts from 368,121 all the way up to 370,912  with gold up by $9.30 yesterday (at the comex close). We are now into the  big December contract month where the number of OI standing for the gold metal registers 2105 contracts for a loss of 144 contracts.  We had 8 delivery notices yesterday so we lost 136 contracts or  13,600 oz of gold standing for the December contract month.  The non active January contract month fell by 140 contracts down to 536.  The next big delivery month is February and here the OI rose to 235,749 contracts for a gain of 2,938 contracts. The  estimated volume today was awful at 67,405.  The confirmed volume yesterday was fair at 152,913 even with the help of high frequency traders. The comex now has no credibility and many investors have vanished from this crooked casino. Today  we  had 0  notices filed for nil oz .

And now for the wild silver comex results.    Silver OI  surprisingly fell by another 917 contracts from 148,422 all the up to 147,505   as  silver was down by $0.05 yesterday.   I do believe we lost a few more bankers.   The big December active contract month saw it’s OI fall by 117  contracts down to 611 contracts. We had 110 notices served upon for Wednesday’s delivery.  Thus we lost 7 contracts or  35,000 oz will not stand.  The  estimated volume today was the lowest in quite some time registering a tiny 18,842.  The confirmed volume yesterday  was good at 43,151. We also had 57 notices filed  today for 285,000 oz today.

December initial standings


Dec 4.2014



Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 57,640.584 oz (JPMorgan,HSBC)
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz nil oz
No of oz served (contracts) today 0 contracts(nil  oz)
No of oz to be served (notices) 2105 contracts ( 210,500 oz)
Total monthly oz gold served (contracts) so far this month  1849 contracts  (184,900 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month

Total accumulative withdrawal of gold from the Customer inventory this month

 132,129.7  oz

Today, we had 0 dealer transactions

total dealer withdrawal:  nil   oz

we had 0 dealer deposits:

total dealer deposit:  nil oz

we had 2 customer withdrawals

i) Out of HSBC: 37,738.997  oz

ii) Out JPMorgan: 19,901.587 oz

total customer withdrawal:  57,640.584 oz

we had 0 customer deposits:


total customer deposits :nil oz

We had 0 adjustments:



Total dealer inventory:  871,232.762 oz or 27.098 tonnes

Total gold inventory (dealer and customer) =  7.861 million oz. (244.51) tonnes)

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 59 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 December contract month, we take the total number of notices filed for the month (1849) x 100 oz to which we add the difference between the OI for the front month of December (2105) – the number of gold notices filed today (0)  x 100 oz  =  the amount of gold oz standing for the December contract month.

Thus the  initial standings:

1849  (notices filed for the month x 100 oz + (2105) OI for November – 0 (# of notices filed today equals 395,000 oz  standing for the December contract month or 12.29 tonnes)

we lost 136 contracts 13,600 oz standing.

This initiates the month of December for gold.




And now for silver


Dec 4/2014:

 December silver: initial standings



Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 41,038.800 oz (Delaware,Brinks, HSBC)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 599,497.330 oz (Scotia)
No of oz served (contracts) 57 contracts  (285,000 oz)
No of oz to be served (notices) 554 contracts (2,770,000 oz)
Total monthly oz silver served (contracts) 2472 contracts (12,360,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  1,163,562.6  oz
Total accumulative withdrawal  of silver from the Customer inventory this month  1,306,023.4  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 3 customer withdrawal:

i) Out of Delaware:  1008.05 oz

ii) Out of Brinks: 19,627.46 oz

iii) Out of HSBC:  20,403.29  oz


total customer withdrawal  41,038.8  oz

We had 1 customer deposits:

i) Into Scotia:  599,497.330  oz

total customer deposits: 599,497.33    oz

we had 0 adjustment


Total dealer inventory:  64.515 million oz

Total of all silver inventory (dealer and customer)   177.321 million oz.

The total number of notices filed today is represented by 57 contracts or 285,000 oz.  To calculate the number of silver ounces that will stand for delivery in December, we take the total number of notices filed for the month ( 2472) x 5,000 oz to which we add the difference between the total OI for the front month of December (611) minus  (the number of notices filed today (57) x 5,000 oz =   the total number of silver oz standing so far in November.

Thus:  2472 contracts x 5000 oz  +  (611) OI for the November contract month – 57 (the number of notices filed today)  =15,130,000 oz of silver that will stand for delivery in December.

we lost 35,000  oz standing.

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

at or


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:

Dec 4 no change in tonnage/720.02 tonnes

Dec 3 no change in tonnage/720.02 tonnes/

December 2/2014; wow!! we had a huge addition of 2.39 tonnes of gold /Inventory 720.02 tonnes

December 1.2014: no change in gold inventory at GLD

Nov 28.2014: a loss  in inventory of 1.19 tonnes/tonnage 717.63 tonnes

Nov 26.2014: we lost 2.09 tonnes of gold heading to India and or China/inventory at 718.82 tonnes

Nov 25.2014/no change in tonnage of gold inventory at the GLD/inventory at 720.91 tonnes

Nov 24.2015: no change in tonnage of gold inventory at the GLD/inventory at 720.91 tonnes

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.



Today, December 4  no change in inventory at GLD.

inventory: 720.03 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 :  720.03 tonnes.






And now for silver:

Dec 4/we lost another 2.204 million oz of silver/inventory 345.223 million oz

dec 3. we lost 2.73 million oz of silver/inventory 347.427 million oz and back where we were on Dec 1.2014.

dec 2 wow@!!@ a huge addition of 2.20 million oz of silver/inventory 350.158 million oz.

December 1: no change in inventory/347.954 million oz

Nov 28.2014: no change in inventory/347.954 million oz

Nov 26.2014; no change in inventory/347.954 million oz

Nov 25.14 we had a loss of  1.342 million oz from the SLV/inventory 347.954 million oz

Nov 24.2014: no change in silver inventory at the SLV/Inventory 349.296 million oz

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



December 4/2014/  we had another huge loss 2.204 million oz /inventory 345.223 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 10.2% percent to NAV in usa funds and Negative   10.4% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold  61.5%

Percentage of fund in silver:38.00%

cash .5%

( December 4/2014)   

2. Sprott silver fund (PSLV): Premium to NAV  falls to positive 1.76% NAV (Dec 4/2014)  

3. Sprott gold fund (PHYS): premium to NAV  falls to negative -0.44% to NAV(Dec 4/2014) 

Note: Sprott silver trust back hugely into positive territory at 1.76%.

Sprott physical gold trust is back in negative territory at  -0.44%

Central fund of Canada’s is still in jail.







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

Early gold trading from Europe early Thursday morning:



Gold +14.3%, 12.3%, 5.8% and 0.4% in JPY, EUR, GBP and USD 2014 YTD

Published in Market Update  Precious Metals  on 4 December 2014

By Mark O’Byrne

Despite the worst sentiment towards gold we have seen since the brief 30% price fall in 2008, gold continues to eke out gains in all major currencies. So far in 2014, gold is 14.3%, 12.3%, 5.8% and 0.4% higher in japanese yen, euros, sterling and dollars respectively (see chart).

Gold is again acting as a hedge against currency weakness and the ongoing devaluation of currencies as stealth currency wars continue. Overnight, gold rose to over EUR 986/oz and looks set to challenge the significant and important level of resistance that is EUR 1,000/oz due to euro weakness and concerns that Draghi may launch the ECB money printing ‘Bazooka’ in 2015.

There is a perception that gold has performed badly recently and in 2014 due to the recent dip in gold prices in dollar terms and despite the fact that gold is actually higher even in dollar terms in 2014.

This focus on gold solely in dollar terms is misleading. It shows a peculiarly dollar centric way of looking at the world. It is important for investors in the UK, EU, Japan and elsewhere to always consider performance in local currency terms.

Gold is not “priced in dollars” solely as is frequently, simplistically asserted.

Rather the COMEX price of gold in dollars is a leading benchmark price and is one of the most commonly quoted prices of gold in the world. Traders and speculators tend to speculate on gold in dollar terms.

However, investors internationally buy gold in their own currency. Investors in Switzerland and Germany buy gold in their banks and are quoted Swiss franc and euro prices and pay in Swiss francs and euros. Irish investors buying gold are quoted in euros and pay in euros. UK investors buying gold are quoted in sterling and pay in sterling.

Similarly, in the two largest gold buying markets in the world, India and China, gold is quoted in rupees and yuan and people buy gold in rupees and yuan respectively. In most countries throughout the world, investors are quoted in local currency terms and pay in local currency terms. Indeed, we allow people to pay us in any major currency, they wish to pay us in.

This almost sole focus on gold in dollar terms is can mislead regarding gold’s performance and is contributing to poor sentiment in the gold market.

The mood music and the psychology is as bad as we have seen it in the gold market – worse than after the sharp 30% fall in 2008 after Lehman. It is even worse than very low level of public interest shown towards gold in the period prior to the crisis in 2007.

Sentiment then was neutral. Today it is negative. There is little or no new buyers coming into the market. Demand in western markets is primarily from existing bullion owners  adding to allocations and from investors opting to own gold in safer allocated and segregated storage. This is bullish from a contrarian perspective.

In terms of the cycle of market emotions, we are as close to ‘depression’ as we have seen.

Momentum is clearly down and gold remains technically vulnerable going into year end. We subscribe to the market adage to never catch a falling knife and are cautious in the short term and advise dollar cost averaging into positions.

However, we remain confident that the recent price falls are setting the stage for a new bull market as there are still strong fundamentals including very high demand from the Middle East, India and China.

Official sector and central bank demand from large creditor nation central banks is continuing and they are set to be net buyers again this year. Not to mention, very high levels of demand from the Bank of Russia and the stealth buying of the Peoples Bank of China (PBOC).

The recent price falls were not a surprise. We said in an interview when gold was near $1,900 that there was going to be a correction and that in a worst case scenario gold could replicate the 1970s pattern when gold fell nearly 50%.

It is always worth looking at gold’s last bull market in the 1970s when gold rose from $35/oz in 1971 to over $197/oz by January 1975. In the next 21 months, gold fell in value by nearly 50% to $103/oz by late August 1976. This led to many pronouncements that gold’s bull market was over and the bubble had burst.
In the next 40 months from August 1976 to January 1980, gold rose 8 fold from nearly $100/oz to $850/oz.
We think there is a real possibility of the same pattern playing out in the coming months and years. An 8 fold increase is very unlikely but we believe that gold will conservatively double from here given the scale of debt in the western world, continuing QE and potentially QE in EU and the risk of a global recession or depression.

Negative real interest rates are set to continue for the foreseeable future. Gold will continue to rise until we see positive real interest rates for a period of time. That day is a long way off.

Get Breaking News and Updates On Gold Markets Here

Today’s AM fix was USD 1,204.00, EUR 977.59 and GBP 767.42 per ounce.
Yesterday’s AM fix was USD  1,203.25, EUR  975.24 and GBP 768.95 per ounce.
Gold climbed $12.20 or 1.02% to $1,210.50 per ounce yesterday. Silver slipped $0.03 or 0.18% to $16.42 per ounce.

Gold in EUR – 2014 YTD (Thomson Reuters)

Gold consolidated above $1,200 again today ahead of today’s ECB rate meeting and despite the dollar reaching a 5 year high.

Gold for immediate delivery fell 0.5% to $1,204 in late morning trading in London. Silver for immediate delivery added 0.5%  to $16.50 an ounce. Platinum rose 1% to $1,237 an ounce. Palladium gained 0.5% to $800.75 an ounce.

Today, the European Central Bank (ECB) will give its official interest rates at 1:45 p.m. CET. Following this Draghi will hold a press conference in Frankfurt from the central bank’s new premises in the city’s east end at 2:30 p.m. CET. Starting next month, the ECB will switch to a six-week cycle of monetary-policy decisions, with the first meeting on January 22.

Last month the head of the ECB, Mario Draghi pledged to raise inflation in the euro zone “as fast as possible”. However, Draghi now faces a stalling from multiple members of the Governing Council. Amid German worry over bond-buying and a wait-and-see approach by his own vice president, Draghi is looking for consensus on what further action the ECB can take and when.

Demand from Asian store of wealth buyers has been strong again this week. India, the world’s second biggest gold buyer after China, last week scrapped a rule mandating traders to export 20% of all gold imported into the country.

Gold trading on China’s largest physical bullion bourse is already exceeding last year’s record volume as the world’s biggest gold buyer seeks to exert its influence on the global market according to Bloomberg.

The volume of all contracts on the Shanghai Gold Exchange (SGE), including those in the city’s free-trade zone, was 12,077 metric tons in just the 10 months to October, compared with 11,614 tons during all of 2013, according to data on the bourse’s website. This may climb to 17,000 tons by the end of the year, the exchange’s Chairman Xu Luode told a conference in Shanghai today.







More ways that China is trying to put gold into the hands of it’s citizens:


(courtesy Rong/Bloomberg/GATA)



China said to consider scaling back restrictions on gold imports


By Feiwen Rong
Bloomberg News
Thursday, December 4, 2014

BEIJING — China’s central bank has circulated a draft plan to ease restrictions on gold imports, said people with knowledge of the matter, in a move that may lead to lower prices in the world’s biggest market for bullion.

The People’s Bank of China drafted a plan that will open up gold imports to qualified miners as well as all the banks that are members of the Shanghai Gold Exchange, according to the people, who asked not to be identified because the proposal hasn’t been made public. China Gold Coin Inc., a maker of commemorative gold and silver coins, could also qualify to import bullion, they said.

Chinese regulators are pushing to open up the country’s gold trade and lure foreign investors as part of its broader effort to link the mainland to global markets. In September the country began offering international institutions access to yuan-denominated gold contracts in Shanghai’s free-trade zone, a move that may extend its influence over prices while boosting the role of its currency in global trade. …

… For the remainder of the report:…








The New York Sun reports of the Bernard Von NotHaus Liberty silver dollar case:




(courtesy New York Sun/GATA)



New York Sun: Beyond Bernard von NotHaus


From the New York Sun
Wednesday, November 3, 2014

Congratulations are in order to U.S. District Judge Richard Voorhees of North Carolina for the judiciousness of his decision in the case of Bernard von NotHaus. We weren’t present at the courthouse at Stateville, where von NotHaus had been ordered to appear Tuesday for sentencing on his conviction of uttering — introducing into circulation — his Liberty Dollars. But we were on tenterhooks because von NotHaus, 70, was looking at the possibility of spending the rest of his life in prison.

The reason we’ve been watching the case is that von NotHaus’ demarche is one of the few direct challenges to what the Foundation for the Advancement of Monetary Education likes to call “legal tender irredeemable electronic paper ticket money.” That refers to the scrip being issued by the Federal Reserve. Von NotHaus had designed and circulated a medallion made of pure silver, the same specie that was fixed on by the Founders of America as the basis of the constitutional dollar. …

… For the full commentary:








Two important discussions from Bill Kaye with Eric King. The major topic is the huge demand for physical gold/silver and the risk of default.


We also highlight problems with one bullion dealer:




(courtesy Bill Kaye/Eric King/Stephen Quayle/GATA)

KWN interviews Kaye on metals’ rise and reports trouble at NW Territorial Mint


9:49a GMT Thursday, December 4, 2014

Dear Friend of GATA and Gold:

King World News offers a two-part interview with Hong Kong fund manager William Kaye about the surprising upward reversal in gold and silver prices, which he attributes to heavy physical demand offsetting the usual price suppression focused on futures market delivery dates and option expirations:……

King World News also reports the apparent inability of bullion dealer Northwest Territorial Mint to deliver purchased metal:…

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








We have brought this story to your attention last week. Today, Nathan McDonald discusses the case and why the Ukrainian citizens are angry:


(courtesy Nathan MacDonald/Sprott Money).



Charges Brought Against National Bank of Ukraine for Liquidating Gold Reserves

Sprott Money's picture


Nathan McDonald for Sprott Money


It has been speculated that western central bankers have been dishoarding their peoples hard earned gold reserves in a futile attempt to keep the price of precious metals down and to artificially prop up fiat currencies.


Although it is a horrible crime against its citizens, one needs to understand that the source of government power comes from its ability to fool its people into thinking fiat currency has real value.


Governments have done a brilliant job in doing so and have thus been able to make promise after promise to get themselves re-elected. All while leading their countries into unavoidable bankruptcy; but that’s someone else’s problem! Or so they think.

Not only is there ample evidence that western gold vaults are being depleted, but it is becoming more and more obvious that western politicians and bankers’ influence has spread to other parts of the world.



One such country is Ukraine, which has recently reported, that they have sold almost all of their gold reserves. This announcement shocked people, as there was no indication as to why they intended to do this.


This has lead to widespread speculation that this was the Ukrainian price for Western aid against the Russian government and President Putin. Perhaps this is the case, or perhaps not. Regardless, this announcement has enraged the citizens of Ukraine.

A Kyiv-based court has taken action, instructing Kyiv prosecutors to file charges against the National Bank of Ukraine. Governor Valeriya Gontareva in case No. 757/33660/14 is specifically charged with “abuse of power or misuse of office under Article 364 of the Criminal Code of Ukraine”.


The plaintiff is lawyer Rostyslav Kravets, who claims that Governor Gontareva, “has intentionally committed an extremely unfavorable transaction for the gold and forex reserves of Ukraine”.

Under the Ukrainian constitution, the sale of Ukraine’s gold is seen as a criminal act, given that the central bank is in charge of maintaining its countries gold reserves. I don’t believe any sane person would believe that the sale of all but 1% of anything, would be considered maintaining, but rather liquidating.

This development has prompted Olena Shcherbakova, head of the of the monetary policy department at the Ukrainian central bank, to resign from her position. Bloomberg, who attempted to reach her by phone was told that she did not need to give a reason for her decision. Clearly, she believes that this case is not going to go well and that the wrath of the Ukrainian people is coming.

It is unseen as to what the result of these charges will bring. Yet it is undoubtedly a positive sign and shows that the Ukrainian people are awake and tired of being pawns in this global currency war. It is unfortunate that they are unlikely to ever get their gold back.



What is most ironic is the fact that the Ukrainian government, much to the outrage of its citizens, was selling its gold reserves, while its enemy, Russia was buying gold in vast quantities and continues to do so.


Clearly this story goes much deeper than first assumed and is incredibly complex. It is a strong possibility that it was western central banks that encouraged Governor Gontareva to commit political suicide and sell her citizens hard money for fiat dollars.

Regardless of the motivation, it is clear the people of Ukraine are not going to take this lying down. They have been through enough grief and turmoil as of recently, they should be and are angered that they are being sold out by one of their own.

Perhaps, people in the West should take note of this and think long and hard about the actions of their central bankers, who clearly don’t have their citizens’ best interest at heart. Perhaps it’s time people took notice and stand up for what is right.


Nathan McDonald for Sprott Money






We originally brought this to your attention two weeks ago with Butler’s paper on  how Russia could back its currency, the rouble with gold.

Now Alasdair Macleod has picked up on the idea and further advances the cause:

(courtesy Alasdair Macleod/

Russia’s Monetary Solution

Submitted by Alasdair Macleod via,

The hypothesis that follows, if carried through, is certain to have a significant effect on gold and the relationship between gold and all government-issued currencies.

The successful remonetisation of gold by a major power such as Russia would draw attention to the fault-lines between fiat currencies issued by governments unable or unwilling to do the same and those that can follow in due course. It would be a schism in the world’s dollar-based monetary order.

Russia has made plain her overriding monetary objective: to do away with the US dollar for all her trade, an ambition she shares with China and their Asian partners. Furthermore, in the short-term the rouble’s weakness is undermining the Russian economy by forcing the Central Bank of Russia (CBR) to impose high interest rates to defend the currency and by increasing the burden of foreign currency debt. There is little doubt that one objective of NATO’s economic sanctions is to harm the Russian economy by undermining the currency, and this policy is working with the rouble having fallen 30% against the US dollar this year so far with the prospect of further falls to come.

Russia faces the reality that pricing the rouble in US dollars through the foreign exchanges leaves her a certain loser in a currency war against America and her NATO allies. There is a solution which was suggested in a recent paper by John Butler of Atom Capital, and that is for Russia to link the rouble to gold, or more correctly put it on a gold exchange standard*. The proposal at first sight is so left-field that it takes a lateral thinker such as Butler to think of it. Separately, Professor Steve Hanke of John Hopkins University has alternatively proposed that Russia sets up a currency board to stabilise the rouble. Professor Hanke points out that Northern Russia tied the rouble to the British pound with great success in 1918 after the Bolshevik revolution when Britain and other allied nations invaded and briefly controlled the region. What he didn’t say is that sterling would most likely have been accepted as a gold substitute in the region at that time, so running a currency board was the equivalent of putting the rouble in Russia’s occupied lands onto a gold exchange standard.

Professor Hanke has successfully advised several governments to introduce currency boards over the years, but we can probably rule it out as an option for Russia because of her desire to ditch US dollar relationships. However, on further examination Butler’s idea of fixing the rouble to gold is certainly feasible. Russia’s public sector external debt is the equivalent of only $378bn in a $2 trillion economy, her foreign exchange reserves total $429bn of which over $45bn is in physical gold, and the budget deficit this year is likely to be roughly $10bn, considerably less than 1% of GDP.These relationships suggest that a rouble to gold exchange standard could work so long as fiscal discipline is maintained and credit expansion moderated.

Once a rate is set, the Russians would not be restricted to just buying and selling gold to maintain the rate of gold exchange. The CBR has the power to manage rouble liquidity as well, and as John Butler points out, it can issue coupon-bearing bonds to the public which would be attractive compared with holding cash roubles. By issuing these bonds, the public is in effect offered a yield linked to gold, but higher than gold’s interest rate indicated by the gold lease rates in the London market. Therefore, as the sound-money environment becomes established the public will adjust its financial affairs around a considerably lower interest rate than the current 9.5%-10% level, but in the context of sound money it must always be repaid. Obviously the CBR would have to monitor bank credit expansion to ensure that lower interest rates do not result in a dangerous increase in bank lending and jeopardise the arrangement.

In short, the central bank could easily counter any tendency for roubles to be cashed in for gold by withdrawing roubles from circulation and by restricting credit. Consideration would also have to be given to roubles in foreign ownership, but the current situation for foreign-owned roubles is favourable as well. Speculators in foreign exchange markets are likely to have sold the rouble against dollars and euros, because of the Ukrainian situation and as a play on lower oil prices. The announcement of a gold exchange standard can therefore be expected to lead to foreign demand for the rouble from foreign exchange markets because these positions would almost certainly be closed. Since there is currently a low appetite for physical gold in western capital markets, longer-term foreign holders of roubles are unlikely to swap them for gold, preferring to sell them for other fiat currencies. So now could be a good time to introduce a gold-exchange standard.

The greatest threat to a rouble-gold parity would probably arise from bullion banks in London and New York buying roubles to submit to the CBR in return for bullion to cover their short positions in the gold market. This would be eliminated by regulations restricting gold for rouble exchanges to legitimate import-export business, but also permitting the issue of roubles against bullion for non-trade related deals and not the other way round.

So we can see that the management of a gold-exchange standard is certainly possible. That being the case, the rate of exchange could be set at close to current prices, say 60,000 roubles per ounce. Instead of intervention in currency markets, the CBR should use its foreign currency reserves to build and maintain sufficient gold to comfortably manage the rouble-gold exchange rate.

As the rate becomes established, it is likely that the gold price itself will stabilise against other currencies, and probably rise as it becomes remonetised. After all, Russia has some $380bn in foreign currency reserves, the bulk of which can be deployed by buying gold. This equates to almost 10,000 tonnes of gold at current prices, to which can be added future foreign exchange revenues from energy exports. And if other countries begin to follow Russia by setting up their own gold exchange standards they likewise will be sellers of dollars for gold.

The rate of increase in the cost of living for the Russian population should begin to drop as the rouble stabilises, particularly for life’s essentials.This has powerfully positive political implications compared with the current pain of food price inflation of 11.5%. Over time domestic savings would grow, spurred on by low welfare provision by the state, long-term monetary stability and low taxes. This is the ideal environment for developing a strong manufacturing base, as Germany’s post-war experience clearly demonstrated, but without her high welfare costs and associated taxation.

Western economists schooled in demand management will think it madness for the central bank to impose a gold exchange standard and to give up the facility to expand the quantity of fiat currency at will, but they are ignoring the empirical evidence of a highly successful Britain which similarly imposed a gold standard in 1844. They simply don’t understand that monetary inflation creates uncertainty for capital investment, and destroys the genuine savings necessary to fund it. Instead they have bought into the fallacy that economic progress can be managed by debauching the currency and ignoring the destruction of savings.

They commonly assume that Russia needs to devalue her costs to make energy and mineral extraction profitable. Again, this is a fallacy exposed by the experience of the 1800s, when all British overseas interests, which supplied the Empire’s raw materials, operated under a gold-based sterling regime. Instead, by not being burdened with unmanageable debt and welfare costs, by maintaining lightly-regulated and flexible labour markets, and by running a balanced budget, Russia can easily lay the foundation for a lasting Eurasian empire by embracing a gold exchange standard, because like Britain after the Napoleonic Wars Russia’s future is about new opportunities and not preserving legacy industries and institutions.

That in a nutshell is the domestic case for Russia to consider such a step; but if Russia takes this window of opportunity to establish a gold exchange standard there will be ramifications for her economic relationships with the rest of the world, as well as geopolitical considerations to take into account.

An important advantage of adopting a gold exchange standard is that it will be difficult for western nations to accuse Russia of a desire to undermine the dollar-based global monetary system. After all, President Putin was more or less told at the Brisbane G20 meeting, from which he departed early, that Russia was not welcome as a participant in international affairs, and the official Fed line is that gold no longer plays a role in monetary policy.

However, by adopting a gold exchange standard Russia is almost certain to raise fundamental questions about the other G20 nations’ approach to gold, and to set back western central banks’ long-standing attempts to demonetise it. It could mark the beginning of the end of the dollar-based international monetary system by driving currencies into two camps: those that can follow Russia onto a gold standard and those that cannot or will not. The likely determinant would be the level of government spending and long-term welfare liabilities, because governments that leech too much wealth from their populations and face escalating welfare costs will be unable to meet the conditions required to anchor their currencies to gold. Into this category we can put nearly all the advanced nations, whose currencies are predominantly the dollar, yen, euro and pound. Other nations without these burdens and enjoying low tax rates have the flexibility to set their own gold exchange standards should they wish to insulate themselves from a future fiat currency crisis.

It is beyond the scope of this article to examine the case for other countries, but likely candidates would include China, which is working towards a similar objective. Of course, Russia might not be actively contemplating a gold standard, but Vladimir Putin is showing every sign of rapidly consolidating Russia’s political and economic control over the Eurasian region, while turning away from America and Western Europe. The fast-track establishment of the Eurasian Economic Union, domination of Asia in partnership with China through the Shanghai Cooperation Organisation, and plans to set up an alternative to the SWIFT banking payments network are all testaments to this. It would therefore be negligent to rule out the one step that would put a stop to foreign attempts to undermine the rouble and the Russian economy: by moving the currency war away from the foreign exchanges and into the physical gold market were Russia and China hold all the aces.

*Technically a gold standard is a commodity money standard in which the commodity is gold, deposits and notes are fully backed by gold and gold coins circulate. A gold exchange standard permits other metals to be used in coins and for currency and credit to be issued without the full backing of gold, so long as they can be redeemed for gold from the central bank on demand.




At Mario Draghi’s press conference this morning:


Draghi: We Have Nothing To Fear But Gold-Buying Itself


ECB head Mario Draghi made it clear where the real battle is taking place in the world this morning. When asked what form QE would take, his response was to the point… “On what sorts of assets should be included in QE… we discussed all assets BUT gold” and gold dropped, right on cue.


Not really sure which assets we discussed but definitley not gold!!


And the result…

*  *  *

So to summarize, the ECB will willingly take on Greek bank CDOs, Italian 3rd lien espresso shop loans, Spanish condo HELOCs, and Portuguese Used-Car ABS… but not – never – gold.

*  *  *

It appears we now know who the enemy really is… not deflation but the dreaded barbarous relic, gold.

Perhaps this is why, as Kyle Bass so eloquently noted:

“Buying gold is just buying a put against the idiocy of the political cycle. It’s That Simple”







this is a very important paper by Paul Mylchreest.  It will take you over 1 hour to read.  He takes data to suggest that the big hedge fund investment is to buy the Nikkei long and then short gold and then hedge a bit with purchases of silver futures on the comex.


If so, this may end in a nuclear implosion:


(courtesy Paul Mylchreest)




Paul Mylchreest: Long Nikkei / short gold — profitable, dangerous, and missed by everybody?


3:41p GMT Thursday, December 4, 2014

Dear Friend of GATA and Gold:

Market analyst Paul Mylchreest of ADM Investor Services International Ltd. in London today published a report arguing that for more than two years gold has been pushed down as part of a two-pronged trade boosting the Japanese stock index, a trade hedging its gold short with silver futures. Such a trade, Mylchreest writes, would be both “cynical” and “really clever” even as it created systemic risk. Mylchreet’s report is headlined “Long Nikkei/Short Gold — Profitable, Dangerous, and Missed By Everybody?” and it has been posted at GATA’s Internet site here:

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






Another outstanding commentary from Bill Holter



(courtesy Bill Holter/Miles Franklin)




Paying it back …”what’s in your wallet?”







While wondering what to write about today I remembered seeing something that was shocking even though I was aware of it.  I have not paid much attention recently to 10 yr. yields in the Eurozone.  The non logical yields had just slipped through the cracks of my cognitive memory.  The story I read pointed out the various countries in Europe where their 10 yr. yields were trading below U.S. rates, in some cases, WELL below.  I knew many Eurozone countries were below U.S. rates but the vast majority?

  For example, the rates in Germany, Belgium, Italy, Spain, Ireland, Denmark, Sweden, Austria, France and the UK are all trading with yields lower than U.S. Treasuries.  The only two with yields higher are Portugal (3/4% higher) and Greece (a basket case).  Looking at this from a broad perspective, it should tell you several things.  First, either the U.S. is underpriced or the Eurozone is overpriced.  Another way to look at this is either market participants are currently making a bet the U.S. is more “risky” or Europe is “safer” by comparison.  Of course the same could be said about the currencies themselves, maybe market participants feel the Euro will do better in the future versus the dollar?  This really does not add up though as the dollar has been strengthening and the euro weakening.  Is it because there is fear of deflation in the Eurozone which theoretically should cause interest rates to drop?  Or maybe “growth” estimates?  I might be on to something with these two?
  Let’s walk this “insanity” through to see why it makes no sense.  Let’s assume the market participants are correct and the U.S. will grow faster than Europe (I do not make this assumption personally because both are on the same Titanic).  There is one question which is not entering the equation, this question is the one of “solvency”.  In other words, will the issuer of the bonds have the ability to pay back the interest and principal?  What I am saying here is “risk” has absolutely zero input to the pricing of all of these bonds!  Do you really believe Spain will remain solvent?  Or Italy?  France?  Or whomever?  Remember, these countries have no ability whatsoever to “print” the euro currency, they can only borrow more to pay current retiring obligations.  It is the same thing in the U.S. but at least we know that enough dollars are always readily available via the Fed.  Maybe this is it?  This is why “deflation” is the expectation in Europe?  They can’t print as fast as we can?
  But hold on a second, deflation?  How would any of these sovereigns be able to pay their outsized debt loads back during an outright deflation?  The answer of course is “they can’t”, because individually no Eurozone country has the ability to print, which is a core problem.  Let’s look a little further at the “deflation” question as it does pertain to gold and silver.  Of course, deflation is the reason put forth by the Harry Dent’s of the world as to why PM prices are down and will collapse …  So we assume the deflationists are correct, what happens to the currencies of these countries (including the U.S.) who have such low interest rates because inflation is “too low”?  This is THE question, what happens to the currencies?  If sovereign after sovereign fall to boogeyman of deflation, they go bust or “restructure” their debt somehow, right?  And we are to believe the currencies issued and backed by their “full faith and credit” will remain the same value …or somehow strengthen?  Really?
  Let’s take Spain for example but it could be anyone.  Spain’s economy just plain sucks.  Real estate is glutted and has crashed, unemployment, particularly of younger workers is 25% or more  They are already in recession …again.  Looking out past the end of your nose, they will default.  What sense does it make to invest for 10 years in a piece of paper promising less than 2% per year?  Oh, and the promise is …to give you back more pieces of paper which MUST be inflated just to pay current obligations, forget about future ones!  This is not even logical.
  Let’s compare this situation to that of instead putting your money into ounces of gold.  I will do this exercise in dollars for sake of ease (mentally) for me.  If you invest $1,200 today into a U.S. Treasury you will get back 2% per year for the next 10 years. Assuming you compound this money into some more “safe” Treasuries along the way, maybe your total return will be 23-25%, so you get back a total of let’s say $1,500.  Compare this to purchasing one ounce of gold at $1,200  (even though you cannot purchase gold or silver at paper spot).  You have “risk” here as opposed to the Spanish bonds because “gold might go down”, right?  You don’t get any contract explaining what you will receive.  In fact, you won’t receive anything over the 10 years.  So in owning gold instead of Spanish Treasuries, you assume risk your gold “might go down” AND you don’t even get any interest as compensation for your risk!  (What I just did by the way is give you the spiel Warren Buffet and the other elite misdirectionists will give you).
  Now for the reality.  Gold doesn’t pay interest, it isn’t “FDIC” insured, it is not legal tender (except at stupid face values), and it isn’t guaranteed …but the Spanish bonds ARE all of these.  They pay interest, backed by the sovereign government of Spain, any bank will accept them as deposit, payment or collateral.  …But who guarantees Spain?  Germany?  Who guarantees Germany?  The U.S.?  Because we have all these reserves of gold which we can’t give back to Germany?  Sorry for the rant, I hope you get my point?
  What I am trying to say here is the “sovereign bond” markets don’t make any sense at all.  The various yield curves are out of whack and don’t make sense.  This market is now larger than $100 trillion!  The principal can never be repaid in current currency values and if interest rates ever normalize to 6%, neither can the interest.  Think about it, can the world’s sovereigns really support over $6 trillion of interest payments annually?  The problem in a nutshell is this; the global bond market is now THE biggest bubble in the history of history.  It was so much fun “spending” the borrowed money, it always is …but the hard part is paying it back!  …And this is exactly where we are now.
  We have been at a crossroads for several years now as to “how” will all of this be paid back.  In Europe there was (past tense) waffling between austerity and (U.S./Japan) “pedal to the metal” policy, this is no longer because each effort at austerity was met by “oops” market temper tantrums.  None of the current Western sovereign debt can or will be paid back in current currency values, this is mathematically so.  What we are watching now is nothing but “dancing”.
  Think about this for a moment, have you ever had anyone who owed you money, “dance” while explaining they’ll “have it next week”?  This is where we are today.  Yes, sovereigns have borrowed to pay interest and roll debt over for years, and it worked …but we have hit the ceiling so to speak twice now.  First, we hit the ceiling prior to 2000 when debt built up to unsustainable levels…the answer of course was lower rates.  Then another reflation (debt orgy) took place and we are again at unsustainable levels but rates can go no lower.  The answer?  Hyperinflate and devalue currencies as there are no other options.  The only way to “pay” is to not pay …in current values.
  Let me finish by mentioning the “deflation” option which is no option at all.  If by “mistake” deflation does take hold, all fiat currencies will be deemed worthless because the issuing sovereign will have bankrupted.  In other words, the currencies will still end up busted and we will experience hyperinflation by another road.  With either inflation (printing) or deflation (defaults), all fiat currencies will bust.  Do you hold or save these?  As the advertisement says, “what’s in your wallet”?  Regards,  Bill Holter




And now for the important paper stories for today:

Early Thursday morning trading from Europe/Asia

1. Stocks  up on major  Asian bourses     with a  lower yen  value rising to 119.94 ( Moody’s lowering of its investment grade)

1b Chinese yuan vs USA dollar  (yuan slightly weakens) to 6.14982 (potential for another rate cut)

2 Nikkei up 167  points or 0.94%

3. Europe stocks all up except Spain  /Euro flat/ USA dollar index up to 88.98./

3b Japan 10 year yield at .44% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 117.70

3c  Nikkei now above 17,000

3e  The USA/Yen rate comes above the 119 barrier

3fOil:  WTI  67.29  Brent:   70.04 /all eyes are focusing on oil prices.  A drop to the mid 60′s would cause major defaults.

3g/ Gold down/yen down;

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 Draghi reports today on ECB rates/left unchanged

3k Japan defends the 120 yen to the dollar level

3l  :Polls show Abe will win a landslide in his election bid Dec 14.2014

3m Gold at $1203.00 dollars/ Silver: $16.43

3n USA vs russian rouble:  53.45

4.  USA 10 yr treasury bond at 2.28% early this morning.
5. Details: Ransquawk, Bloomberg/Deutsceh bank Jim Reid

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




Algo Eyes On Draghi Ahead Of ECB Announcement




Today we’ll learn more about whether Mr Draghi becomes Super Mario in the near future as the widely anticipated ECB meeting is now only a few hours away. We will do another summary preview of market expectations shortly, but in a nutshell, nobody really expects Draghi to announce anything today although the jawboning is expected to reach unseen levels. The reason is that Germany is still staunchly against outright public QE, and Draghi probably wants to avoid an outright legal confrontation. As DB notes, assuming no new policy moves, the success of today’s meeting will probably depend on the degree to which Draghi indicates the need for more action soon and the degree to which that feeling is unanimous within the council. Over the past weekend Weidmann’s comment about falling oil prices representing a form of stimulus highlights that this consensus is still proving difficult to build. It might need a couple more months of low growth and inflation, revised staff forecasts and a stubbornly slow balance sheet accumulation to cement action.

As if hypnotized by Draghi’s perpetual inability to actually do anything (as opposed to say), a massive barrier of selling has emerged at the 120 level in the USDJPY. It will surely be taken out later today in a major stop hunt, which will in turn push US futures, whether bought by central banks or not, to new record highs, while the Japanese currency ploughs on to SocGen’s point of no return, first at 123 then at 145, and then at #Div/0. Another question has emreged on European bonds: if and when Draghi does finally implement sovereign QE, will that be the signal to sell everything? Judging by the reaction in the US fixed income market, bonds have sold the news in each of the previous 3 QE episodes. Why should Europe be any different?

European equities have lacked direction and remain marginally higher ahead of today’s ECB & BoE rate decision with both central banks expected not to take any action. On a sector basis, consumer discretionary is the best performer, however energy stocks have been lagging as the FTSE 100 marginally underperforms given its large gearing toward resource based firms. In stock specific news, Ryanair opened the session significantly higher trading as high as 8.5% after raising their FY profit forecast with easyJet higher by 2.4% in sympathy with the move.

In Fixed income, Bunds have traded sideways and remained relatively unchanged as this morning’s session which has been directionless aided by the lack of pertinent macro news ahead of the ECB press conference. Elsewhere, the Spanish Tresoro sold a total of EUR 3.5bln as the Spanish 10y printed a record low yield at 1.840%; the French Tresor selling combined 4bln in 2023, 2025 and 2027 bonds as expected. Ahead of the ECB conference, analysts at Credit Suisse say risks are skewed toward ECB under-delivering on investors’ expectations for sovereign QE given recent moves in EUR rates market.

In China, equity markets are extending their gains to 3 year highs with the strong performance overnight being largely driven by large caps and brokers. The CSI 300, Shanghai Composite and Shenzhen Composite are up +2.9%, +2.3% and +1.6% overnight to be up +31%, +34% and +39% YTD. Money market rates were lower in China overnight whilst expectations of a RRR cut seems to be building up. In terms of year to date performance in Asian equities, China has closed the gap sharply and is not that far off from the Modi-driven rally in India and would say those two markets are broadly on par now. Whilst on this our Asian economists now expect China to decelerate from 7.3% in 2014 to 6.9%yoy in 2015H1, dragged by weak property investment. Contingent on supportive policy actions, they see risks to the outlook as balanced. Lagged effects of monetary policy easing, together with more expansionary fiscal policy, will pull up GDP growth to 7.2% in 2015H2. In India, data show an economy still treading sideways, but sharply rising consumer and business sentiment bodes well for the cycle. An investment recovery and re-acceleration in consumption seem likely in the coming year.

In summary, today’s key drivers and changes: ECB, Bank of England meetings today. Ruble erased gains; Putin gives annual speech. U.K. house price growth slowed last month. The Dutch and French markets are the best-performing larger bourses, Swedish the worst. The euro is little changed against the dollar. German 10yr bond yields rise; Spanish yields increase. Commodities gain, with natural gas, wheat underperforming and nickel outperforming. U.S. jobless claims due later.

Market Wrap

  • S&P 500 futures up 0% to 2073.6
  • Stoxx 600 up 0.2% to 350.1
  • US 10Yr yield down 0bps to 2.28%
  • German 10Yr yield up 2bps to 0.76%
  • MSCI Asia Pacific up 0.6% to 140.5
  • Gold spot down 0.4% to $1202.4/oz

Bulletin Headline Summary from RanSquawk and Bloomberg

  • With the lack of any tier 1 data or speakers, markets have lacked any firm direction ahead of the BoE at 1200GMT/0600CST & ECB at 1245GMT/0645CST and the ECB press conference at 1330GMT/0730CST
  • Treasuries steady before BOE and ECB decisions on interest rates, with Draghi press conference scheduled for 8:30am ET; Nov. nonfarm payrolls tomorrow, est. +230k with unemployment rate holding at 5.8%.
  • 2Y yield has risen more than 10bps from Monday’s low, including 4bps increase Tuesday after Fed vice-chair Stanley Fischer said policy makers were getting closer to dropping “considerable time” language from its statement
  • After pledging last month to raise inflation “as fast as possible,” Draghi is looking for consensus on what further action the ECB can take amid German disquiet over bond- buying and a wait-and-see approach by his own vice president
  • ECB should follow U.S. example and accelerate bond purchases to stimulate economic recovery, la Repubblica reports, citing interview with Fed’s Fischer
  • Saudi Arabia will probably deepen discounts for crude supplies to Asia after leading OPEC to maintain the group’s output target amid a global battle for market share
  • Putin pledged to punish speculators attacking the ruble with “harsh” measures in a defiant speech that reached into Russian history to defend his annexation of Crimea and compared his international opponents with Adolf Hitler
  • U.S. health-care costs grew 3.6%  to $2.9t in 2013, the smallest increase in more than 50 years and one that probably won’t be matched soon as spending accelerates to meet the needs of millions gaining insurance under Obamacare
  • Obama exceeded his constitutional authority with an executive order allowing as many as 4m undocumented people to stay in the U.S. temporarily, a coalition of U.S. states claimed in the first lawsuit filed over the immigration action
  • In American health-care worker who may have been exposed to the Ebola virus in West Africa is headed to a U.S. hospital for evaluation and possible treatment
  • Sovereign yields mostly higher. Asian, European stocks, U.S. equity-index futures gain. Brent crude rises, gold and copper falls

Central Banks

  • 7:00am: Bank of England seen maintaining 0.5% bank rate
  • 7:45am: ECB seen maintaining 0.05% main refinancing rate
  • 8:30am: ECB’s Draghi holds news conference
  • 8:30am: Fed’s Mester speaks in Washington
  • 12:30pm: Fed’s Brainard speaks in Washington Supply


In the FX market, EUR/USD initially fell below the 1.2300 handle before staging a recovery to trade back above Aug. 2012 lows, a move primarily attributed to the pullback from multiyear highs observed in the USD-index. Elsewhere, USD/JPY remains in close proximity to the 120.00 level to the upside, which is a large size option expiry (2.1bln) for today’s 10am NY cut (1500GMT). Moreover, the RUB has weakened this morning following a public address from Russian President Putin who appeared to blame the West for the situation in Ukraine. Overnight, the AUD/USD traded slightly weaker, ignoring stronger retail sales as more banks look for more cuts from the RBA.


The metals complex shows divergence among spot gold and silver following Russian President Putin’s somewhat aggressive statements blaming the West for the ongoing problems in Ukraine. Furthermore, Platinum trades higher by around 1% helped by the slight strength of the RUB as Russia is the second largest producer of the metal. In precious metal related news, earlier reports emerged that China are said to consider loosening restrictions on gold imports, according to Bloomberg. The energy complex has been relatively quiet with the USD broadly flat with direction on the session to be dictated by the open of the NYMEX pit.

DB’s Jim Reid concludes the overnight recap

Today we’ll learn more about whether Mr Draghi becomes Super Mario in the near future as the widely anticipated ECB meeting is now only a few hours away. DB’s Mark Wall is not expecting anything concrete to be delivered with no new commitments to asset purchasing or tweaks to the tLTRO terms. He thinks that the council remains in wait and see mode until the impact of the current ABS/covered purchase programmes and take up from the Dec 11th tLTRO2 are known. Mark’s team continue to believe that a broad based asset purchase scheme (including Government bonds) will be announced by the end of Q1 but unlikely before. Assuming no new policy moves, the success of today’s meeting will probably depend on the degree to which Draghi indicates the need for more action soon and the degree to which that feeling is unanimous within the council. Over the past weekend Weidmann’s comment about falling oil prices representing a form of stimulus highlights that this consensus is still proving difficult to build. It might need a couple more months of low growth and inflation, revised staff forecasts and a stubbornly slow balance sheet accumulation to cement action.

In terms of trading, given that I’m confident broad based QE is coming I don’t think setting up for disappointment today is a particularly fruitful policy. It might work for a short while but given the illiquidty, especially in assets like credit, one would have to be confident of a big move wider in the short-term or a view that the ECB will never quite be able to pull the trigger. We think we’ll get a few small hints today and the trigger in Q1. As such we continue to be bullish European credit.

Away from Europe and the ECB, the recent Fed speak on balance has been viewed to be more hawkish than what the market was prepared for. Indeed earlier this week we heard from both Dudley and Fischer who seemed keen to emphasise that that normalisation of short term rates is just a matter of time. Yesterday Philly Fed’s Plosser noted that US recovery is well advanced and that means “we should no longer be conducting monetary policy as if we were still in the midst of a financial crisis or in the depths of a recession”. He added that “Keeping the funds rate target near zero when inflation is close to our goal
and the economy is near full employment is both unprecedented and risky”.

Speaking on financial market stability and in her first public address since joining the Fed, Governor Lael Brainard also said that Fed should be prudent and circumspect in using monetary policy to combat financial stability risks because of its broad effects on the economy. Treasuries bear flattened modestly overnight in reaction to these comments with the 2yr closing 2bp higher at 0.55% with the 10yr falling 1bp to 2.28%. The June 2016 Fed Funds implied rate is 8.5bp higher this week.

In terms of other markets equities were higher on both sides of the Atlantic. The S&P 500 (+0.38%) and Dow (+0.18%) made new highs whilst the Stoxx600 was more than half a percent higher on the day. Brent was lower once more to close just below US$70/bbl whilst WTI was slightly higher on an unexpected decline in US crude inventory. Energy stocks added another 1% to be up for a third day in a row. Its hard to say if we are forming a bottom here but it does seem that the correlation between crude oil and energy stocks have somewhat faded in recent days.

Switching to Asia, Japan’s upcoming election and the ongoing rally in Chinese equities are the two notable market themes for now. On Japan local polls are pointing towards a landslide victory for PM Shinzo Abe’s ruling LDP in the Dec 14th parliamentary elections. Local polls by four news outlets all showed that LDP was set to win around 300 seats in the 475-seat lower house. A convincing victory should strengthen the government’s mandate for Abenomics and increases the prospect of PM Abe staying in office through 2018. Indeed in a scenario where LDP wins 295 or more seats our Japanese macro strategist thinks equities could rise sharply and JPY will weaken more with temporary upward pressure on JGB yields due to further currency depreciation.

In China, equity markets are extending their gains to 3 year highs with the strong performance overnight being largely driven by large caps and brokers. The CSI 300, Shanghai Composite and Shenzhen Composite are up +2.9%, +2.3% and +1.6% overnight to be up +31%, +34% and +39% YTD. Money market rates were lower in China overnight whilst expectations of a RRR cut seems to be building up. In terms of year to date performance in Asian equities, China has closed the gap sharply and is not that far off from the Modi-driven rally in India and would say those two markets are broadly on par now. Whilst on this our Asian economists now expect China to decelerate from 7.3% in 2014 to 6.9%yoy in 2015H1, dragged by weak property investment. Contingent on supportive policy actions, they see risks to the outlook as balanced. Lagged effects of monetary policy easing, together with more expansionary fiscal policy, will pull up GDP growth to 7.2% in 2015H2. In India, data show an economy still treading sideways, but sharply rising consumer and business sentiment bodes well for the cycle. An investment recovery and re-acceleration in consumption seem likely in the coming year.

Away from Asia, the Russian Ruble bounced off its record lows yesterday on reports of central bank intervention. Russia’s central bank yesterday said that it spent US$700m of its FX reserves to support the currency on Monday which also marks its first intervention since fully free floating the Ruble on Nov 10. The currency hit another fresh low against the Dollar of 54.87 yesterday morning before recovering to close at around 53.2. The Ruble is still the worst performer in the EM world this year though after having lost around 38% of its value against the US Dollar. Its a similar story in the EM credit space with Russia 5Y CDS being the standout laggard amongst peers. Russia CDS is around 120bp wider this year which compares with the c.35-40bps YTD spread tightening in Indonesia, Hungary, Thailand and Turkey.

Moving onto today, we have more Fed speak to look forward to with Fisher (on the Texas economy and monetary policy), Mester (opening remarks at a Financial Stability conference) and Brainard (keynote address on Financial stability) lined up for today. Weekly jobless claims will be the only notable release ahead of tomorrow’s NFP. All eyes will be on ECB today as previewed above although we also have the BoE’s policy meeting although consensus is not looking for any major changes there.





Early this morning: ECB keeps rates unchanged as expected:


(courtesy zero hedge)




ECB Keeps Rates Unchanged, As Expected

No surprises in the official ECB statement…

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.05%, 0.30% and -0.20% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

… However, the same will hardly be said about Draghi’s presser in 45 minutes.







…and they keeps kicking the can down the road again.  Markets do not like it.

Gold rebounds/oil falls.


(courtesy zero hedge)






Markets Slide As Draghi Kicks The Can

But, but, but all the clever talking heads said he had to do it now…


This is not what the market wanted to hear – Draghi kicking the can with no indication they are any closer to getting Zee Germans on board with direct monetization of European fiscal irresponsibility.

US Stocks and EURUSD reacted first


As S&P Futures are now unch on the week…


Gold moved early but has extended its gains for now…


and European bond spreads jumped higher…


And DAX Futures just lost 10,000

Charts: Bloomberg

*  *  *

This would appear to be the perfect BTFD opportunity because EVERYONE has cash on the sidelines and knows Draghi will do it eventually… right?





Putin is very upset as we vows to punish speculators.   He also states that he has instruments to thwart speculators.  I wonder what he is talking about?



(courtesy zero hedge)



Putin Vows to Punish Speculators Pushing Down Ruble’s Value

President Vladimir Putin vowed to punish speculators attacking the ruble with “harsh” measures in a defiant speech that reached into Russian history to defend his annexation of Crimea and compared his international opponents with Adolf Hitler.

“The authorities know who these speculators are and the instruments we can use to influence them,” Putin said today in his annual address to parliament regarding efforts to defend the country’s currency, which is trading near a record low. “The time has come to use these instruments.”

Putin, who did not comment on the tailspin in oil prices in his 70-minute speech, also announced plans for an amnesty for those returning capital to Russia. The president said he’ll eliminate unnecessary bureaucracy as he works to reassure a nation threatened by a spiraling economic crisis.

The data from Russia depict an economy that’s reeling from a plunge of more than a third in global oil prices this year and sanctions imposed by the U.S. and its allies over the conflict in Ukraine. The Economy Ministry acknowledged this week that gross domestic product in the world’s biggest energy exporter may shrink in 2015 for the first year in six.

Nazi Invasion

Putin, speaking in a chandeliered hall of the Grand Kremlin Palace in Moscow, vowed to repel any effort to force Russia to back down over Ukraine as he recalled how his country fought off the Nazis in World War II, which is known in Russia as the Great Patriotic War and is an emotional rallying-point for the population. More than 27 million citizens of the Soviet Union died during the conflict, which began when Hitler invaded the country in 1941, violating a non-aggression pact.

Photographer: Vasily Maximov/AFP via Getty Images

President Vladimir Putin speaks during his annual address in the Grand Kremlin Palace in Moscow, today.

“Hitler, with his humanity hating ideas, was going to destroy Russia and throw us back behind the Urals,” Putin said. “Everyone should remember how this ended. Next year we will commemorate the 70th anniversary of the victory in the Great Patriotic War. Our army overcame the enemy, freedEurope.”

The ruble has lost a third of its value since Putin started his incursion into the Ukraine’s Crimean peninsula in March, the most among 24 developing countries Bloomberg tracks. The ruble slid 1.1 percent to 53.77 per dollar following Putin’s comments, erasing gains earlier in the day.

Weakening Russia

Putin’s anti-West rhetoric during the speech was “one degree higher than usual” as the Russian leader tried to use it to rally support, saidGleb Pavlovsky, a former Kremlin adviser. “The historical part of the speech was very strange. Putin is in a conspiracy mode.”

“Western” allies are seeking to weaken Russia with sanctions and attacks on the ruble and oil price, Foreign Intelligence Chief Mikhail Fradkov, a former prime minister, told reporters after Putin’s annual address.

The drop in the oil price is partially caused by U.S. actions and foreign investment funds are “taking part” in ruble speculation via intermediaries, Fradkov said.

The Bank of Russia today reduced the rate it charges banks to borrow foreign currency in a bid to slow the ruble’s slide and ease a dollar shortage. The ruble has “substantially” deviated from its fundamental value, creating risks for financial stability and spurring expectations of inflation and depreciation, the central bank said in a statement on its website, reiterating its readiness to intervene without limits.

“The Bank of Russia has moved to a free-floating ruble but this doesn’t mean it is distancing itself completely from influencing the ruble and that the exchange rate can become a target for financial speculation,” Putin said.

Recession Warning

Russian GDP may shrink 0.8 percent next year, compared with an earlier estimate of 1.2 percent growth, Deputy Economy Minister Alexei Vedev said Dec. 2. Inflation accelerated to 8.3 percent in October, the fastest since July 2011. It will end the year at 9 percent and slow to 7.5 percent at the end of 2015, Vedev said, predicting that retail sales will shrink in 2014 amid rising unemployment.

Putin said Russia must escape the “trap” of zero growth by achieving annual productivity gains of 5 percent, to return GDP expansion to above the world average within 3-4 years.

State-run VTB Group, the second-largest lender, gained as much as 12 percent in Moscow trading after Finance Minister Anton Siluanov said the government would give out aid from its $82 billion National Wellbeing Fund to finance infrastructure projects via VTB.

Annual Tradition

The “good part” of Putin’s address is that he said he’d like a reduced government role in the economy and more freedom for business activity, said Luis Saenz, head of equity sales and trading inLondon for Moscow-based BCS Financial Group. “The bad part is that Putin’s recipe for overcoming the crisis is made mostly from general proclamations.”

The speech has become an annual tradition after then-PresidentBoris Yeltsin first delivered it in 1994. Putin has previously used the occasion to declare major policy initiatives, including an effort he backed two years ago to goad companies and individuals to repatriate capital by ending the use of offshore destinations.

“I am sure if none of this happened, they would have invented another excuse to hold back the growing potential of Russia,” Putin said of the sanctions. “Every time they believe that Russia gets too strong, they use these instruments. But it’s pointless to talk to Russia in the language of force.”






With bourses around the world tumbling, out comes Draghi with another stick save:




(courtesy zero hedge)




Here Comes The Stick Save: ECB “QE Coming” Headline Sends Stocks To New Record High



Who could have seen that coming!!??? Apparently Draghi could not clarify exactly what he meant in 90 minutes, 3 hours ago!!!!


So, despite telling us earlier than not January and not ready, we get this spurious headline just as EURUSD crossed 1.2450… Fun-durr-mentals indeed.


Here is Bloomberg’s Jana Randow:

  • European Central Bank Governing Council expects to consider proposal for broad-based asset program including sovereign debt next month, two euro-area central-bank officials familiar with deliberations said.
  • Package envisaged to include all kinds of bonds, no equities
  • Package hasn’t been designed yet; no decision on implementation taken yet
  • Composition of package may be influenced by incoming data
  • Officials asked not to be identified because discussion is private
  • ECB spokesman declines to comment


We would guess this is thanks to ECB’s Daniele Nouy who is speaking at a German Finance Ministry event.

Here’s the machines reading the headlines…

Is the market really going to fall for this again?!!

*  *  *

And now Bloomberg is retracting!!!

It appears the tweet was redacted for reasons unknown

Charts: Bloomberg





Then late in the afternoon this bombshell:




“Draghi Loses The Majority” Blasts A Triumphant German Press



Wondering why stocks suddenly found a soft patch in the last few minutes of trading? Here is the reason: according to a report in German Die Welt, the ECB’s president and former Goldman Sachs employee, Mario Draghi, has just lost the majority on the ECB Executive Board:

Back row (left to right): Yves Mersch, Peter Praet, Benoît Cœuré
Front row (left to right): Sabine Lautenschläger, Mario Draghi (President), Vítor Constâncio (Vice-President)

From a just released report (google translated) in Germany’s Die Welt:

The outlooks for growth and inflation are bleak. Mario Draghi will therefore open the gmoneyates – and is met with increasing resistance. And on the ECB’s Executive Board, he has just lost the majority.


According to information obtained by “Die Welt”, internal resistance to Draghi is now larger than previously thought. He can no longer count on a majority within the Board currently. In the vote on the official opinion of the Governing Council on monetary policy are for information of the “world” three of the six directors supported by the President to the original tune.


In addition to Sabine Lautenschlager andYves Mersch, who had already previously expressed skepticism about bond purchases, one can now add the Frenchman Benoît Coeuré who is against Draghi’s course.  …There had been dissenting voices within the Board on several occasions, but there was always a majority behind the President.

Not this time. Then again, “Draghi is still able to enforce his position easily. Because ultimately decides the proportion of votes on the Board, but in the 24-member Governing Council, in addition to the directors and the governors of the national central banks are represented. Among them there were reportedly more votes against, among others, Bundesbank President Jens Weidmann.”

So will Draghi follow Obama in pursuing QE by “executive decision” without a clear majority support? Recall that even Kuroda had a slim 5:4 majority when he decided to go full-Krugman. And if he does so, expect the cold war between South and North Italy to go ballistic and make the smoldering cold war 2.0 between Russia and the West seem like a dress rehearsal.








And the farce in Venezuela continues:  Maduro is to include foreign held gold as official reserves..???   confiscation?? and diamonds????




(courtesy zero hedge)


Venezuela “Boosts” Reserves With Rocks, Other “Easily Converted To Cash” Stuff; Suffers Major Blackout


With its bonds trading at 50% of face value, CDS implying an 84% chance of default, a black-market FX rate that signals massive devaluation is likely, and a teetering-on-the-brink of social unrest population entirely dependent on President Maduro’s generosity (and the military junta), it is perhaps not entirely surprising that they are trying any trick in the book to bolster reserves. The Venezuelan Central Bank issued a statement today (akin to Europe’s hookers-and-blow GDP adjustment) that enables them to count a whole new set of ‘assets’ as potential international reserves including “stones” and “precious metals held in their vaults on behalf of foreign financial institutions.” Hey presto… new reserves.

Risk is rising…


And Reserves are sliding


So make up some new ones…As Bloomberg reports,Central bank sends e-mailed statement explaining parts of new central bank law issued by President Nicolas Maduro.

“Foreign currencies that are easily converted in the principal international marketplaces and that are used as a unit of account or payment in commitments assumed by the Bolivarian Republic of Venezuela will make up part of international reserves”


“Assets that can be added as reserves include diamonds and stones or precious metals defined as reserve assets by the bank board and that have been deposited in the bank’s own vaults or those of financial institutions abroad rated as first class”


Venezuela’s intl reserves have traditionally been made up of sources including monetary gold, deposits and FX-denominated securities issued by foreign financial institutions or foreign public entities where Venezuela has a stake and interest: Central bank

*  *  *

Did Venezuela just say they will use foreign-deposited gold in their vaults as reserves? Confiscation?

*  *  *

And if that wasn’t enough, a massive blackout just hit Caracas







Michael Snyder continues on the same theme as Charles Smith of TwoMindsBlog that there is a monstrous derivatives underwritten on oil which will break the banks:

(courtesy Michael Snyder/EconomicCollapseBlog)

Plummeting Oil Prices Could Destroy The Banks That Are Holding Trillions In Commodity Derivatives

Your more important currency crosses early Thursday morning:

Eur/USA 1.2311 flat

USA/JAPAN YEN  119.94  up  .150

GBP/USA  1.5666 down .0020

USA/CAN  1.1365   flat

This morning in  Europe, the euro is flat, trading now well below the  1.24 level at 1.2311 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.   It finally settled  in Japan down 15  basis points and settling just below the 120 barrier to  119.49 yen to the dollar (heading towards 120).  The pound is down this morning as it now trades just below  the 1.57 level at 1.5666.(very worried about the health of Barclays Bank and the FX/precious metals criminal investigation).  The Canadian dollar is flat today trading at 1.1365 to the dollar.

 Early Thursday morning USA 10 year bond yield:  2.28% !!!  down 2  in  basis points from Wednesday night/

USA dollar index early Thursday morning:  88.98 up 3 cents from Wednesday’s close

The NIKKEI: Thursday morning up 167 points or 0.94% (Abe’s helicopter route to provide free cash)

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

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

Gold early morning trading:  $1203.75


Closing Portuguese 10 year bond yield:  2.80% up 2  in basis points from Wednesday

 Closing Japanese 10 year bond yield:  .44% !!! par   in basis points from Wednesday

Your closing Spanish 10 year government bond Thursday up 6   in basis points in yield from Wednesday night.

Spanish 10 year bond yield:  1.89% !!!!!!



Your Tuesday closing Italian 10 year bond yield:  2.04% up 5 in basis points from Tuesday:

trading 15 basis points higher than Spain:


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

Euro/USA:  1.2368  up  .0017

USA/Japan:  119.81 up .0200

Great Britain/USA:  1.5675  down .0011

USA/Canada:  1.1382 up .0017

The euro rose in value during this afternoon’s  session,  and it is up by closing time , finishing just below the 1.24 level to 1.2368.  The yen was down  during the afternoon session, and it was down 2 basis points on the day closing above the 119 cross at 119.81.   The British pound lost some  ground   during the afternoon session and it was down on the day closing  at 1.5675.  The Canadian dollar was well down  in the afternoon and was down on the day at 1.1382 to the dollar.

Currency wars at their finest today.

Your closing USA dollar index:   88.73  down 23 cents  from Wednesday.

your 10 year USA bond yield , down 3   in basis points on the day: 2.27%!!!!

European and Dow Jones stock index closes:

England FTSE  down 37.26 or 0.55%

Paris CAC  down 67.97  or 1.55%

German Dax down 120.44 or 1.21%

Spain’s Ibex down  257.90 or  2.37%

Italian FTSE-MIB down  533.94    or 277%

The Dow: down 12.52 or .07%

Nasdaq; down 5.03   or .11%

OIL:  WTI 66.70  !!!!!!!

Brent: 69.51!!!!





And now for your big USA stories

Today’s NY trading:



ECB Mutiny Sparks Late-Day Selling Scramble As QE Hopes Fade


Once again the internals of the market (advancers vs decliners, new highs vs new lows and trends) triggered aHindenburg Omen as today’s dump-and-pump on the European close and Draghi ‘mis-characterization and clarification’ headlines left stock green with an hour to go.Then came headlines from Die Welt that appeared to show Draghi has no majority and stocks tumbled into the close (with a small bounce late to get S&P green on the week). For the 2nd day in a row, Treasury yields fell 1-4bps (short to long-end), notably decoupling from stocks after Europe closed. HY Credit also pressed to wider wides after Europe closed even as stocks surged. The USD lost ground as EUR strengthened giving back half the week’s gains (USDJPY broke 120 early but faded). Copper and Silver gained modestly, gold was flat, but oil prices slipped 1% lower back below $67.VIX briefly tested below 12.2 but ended the day barely higher at 12.6.


US equity futures end the day down from the release of ECB’s “nothing” statement this morning… banged around by European headlines…


and USDJPY tried to rescue stocks during the ECB conference call… ran the stops over 120.00 then recoupled to fade lower with stocks… fun-durr-mentals


On the day, a rescue off the European close dragged stocks green – was then juiced by ECB QE headlines at lunchtime for record highs, but then faded into the close… with a last 30 ramp for good measure


which managed to get the S&P barely back into the green On the week, Trannies and Nasdaq are lagging…


VIX was actively bid this afternoon – perhaps hedging ahead of payrolls…


2nd Hindenburg Omen in 3 days – didn’t end well before (2 days after FOMC) and tomorrow we have payrolls…


Bonds & Credit notably decoupled from stocks today…


as Bonds and stocks remain in different worlds ahead of tomorrow’s payroll data…



As Treasury yields rolled over significantly…10Y under 2.25%, 30Y under 2.95%


And the USD closed lower as even with the late-day jawbone they could not rescue EUR back from its strength…


Oil prices slipped modestly on the day, silver and copper gained, and gold was flat (with noise around Draghi)


Charts: Bloomberg

Bonus Chart: New cycle lows for Shale oil stocks…





Initial jobless claims miss again for the 4th week in a row. However it is below the 300,000 mark as magically the BLS revised the jobless number the week before.



(courtesy BLS/zero hedge)


Initial Jobless Claims Miss For 4th Week In Row

After last week’s jerk higher (now revised even higher to 314k), this week saw a modest 17k drop to 297k (magically back below the 300k Maginot Line) but still missed expectations. Obviously, initial claims still linger near 14 year lows but the smoother 4 week average rose around 5k to 299k. Continuing claims rose 39k and has hovered at these decade-long lows for 6 weeks now – though unadjusted Regular State (ex) employees claiming UI benefits jumped 125K from 2.065 million to 2.190 million.. It appears the trend of improvement has ended/stabilized.



Charts: Bloomberg







That is all for today

I will see you Friday night

bye for now




  1. What’s all this Hype about the GDF and 1.715 million metric tons of Gold stored there?


  2. Harvey. You said some months ago that when Shanghai exchange is out of metal then the game is over.
    But I can’t recall seeing you regularly reporting on inventory levels. Why is that? Can you please consider adding some more reporting/commentary on this?

    PS, told you they would come up with some shenanigans for the December contract period.
    Personally I was watching the miners thinking that if we really faced a default the miners would jump. This never happened.
    But for sure you are right that they will play the short games until the paper market completely collapses. Until then we stack.



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