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http://www.harveyorganblog.com or www .harveyorgan.wordpress.com
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: $1194.70 up $0.40
Silver: $15.89 unchanged
In the access market 5:15 pm
The gold comex today had a poor delivery day, registering 0 notices served for nil 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 247.02 tonnes for a loss of 56 tonnes over that period.
In silver, the open interest fell by 729 contracts despite yesterday’s rise in price of $0.17. The OI refuses to go down despite raids. Somebody has extremely strong hands and are very patient. The total silver OI still remains relatively high with today’s reading at 149,470 contracts. The big December silver OI contract fell by 79 contracts down to 101 contracts.
In gold we had a slight rise in OI with the rise in price of gold yesterday to the tune of $0.90. The total comex gold OI rests tonight at 373,815 for a gain of 2072 contracts. The December gold OI rests tonight at 764 contracts losing 7 contracts.
TRADING OF GOLD AND SILVER TODAY
Again, for the umpteenth time, gold surpassed the $1200 mark only to be repelled back. Gold’s zenith was $1212.00 set at 5 am early this morning and its nadir at $1193.50 at 11 am (well after London’s second fix). I strongly believe that gold at 1200 is very toxic to our bankers with the huge number of derivatives and forwards placed by them.
Silver’s zenith occurred at 5 am this morning at $16.21. Its nadir at
2:30 pm: $15.86.
It is useless to analyze trading because the bankers are manipulating gold and silver 24/7 for the entire 5 days of the week.
Today, we had no change of inventory with respect to gold inventory at the GLD /Inventory 721.56 tonnes
In silver, no change in silver inventory
SLV’s inventory rests tonight at 341.009 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!! Backwardation arrives in full force
First: GOFO rates:
all rates moved closer to the negative. The One month GOFO rates moved into negativity with the other others moving closer to backwardation.
Now, all the months of GOFO rates( one, two,three six and 12 month GOFO moved towards to the negative, with the one month, two month and 3 months already negative . On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates. These rates are still fully manipulated. London good delivery bars are still quite scarce.
Dec 18 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
–.0625.% – .0425 % -.025 % +. 0275 .% +. 11750%
Dec 17 2014:
-.0333% +.00667% +.0300 % +.075% +.1400%
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 2072 contracts from 371,743 all the way up to 373,815 with gold slightly up by $0.90 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 764 contracts for a loss of 7 contracts. We had 7 delivery notices served yesterday so we neither gained nor lost any contracts standing for the December contract month. The non active January contract month rose by 20 contracts up to 473. The next big delivery month is February and here the OI fell to 225,547 contracts for a loss of 945 contracts. The estimated volume today was poor at 88,467. The confirmed volume yesterday was very good at 181,283 although they had help from our 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 fell slightly by 729 contracts from 150,199 down to 149,470 even though silver was up by $0.17 yesterday.We are again losing more short covering from our bankers. The big December active contract month saw it’s OI fall by 79 contracts down to 101 contracts. We had 72 notices served upon on yesterday. Thus we lost 7 contracts or an additional 35,000 oz will not stand. The estimated volume today was awful at 20,894. The confirmed volume yesterday was huge at 51,041. We had 0 notices filed for nil oz today. It now seems that most of the volume at the comex is done off hours.
December initial standings
|Withdrawals from Dealers Inventory in oz||nil oz|
|Withdrawals from Customer Inventory in oz||1,478.99 oz (Brinks).|
|Deposits to the Dealer Inventory in oz||nil|
|Deposits to the Customer Inventory, in oz||2,612.77 oz (Brinks,HSBC)|
|No of oz served (contracts) today||0 contracts(nil oz)|
|No of oz to be served (notices)||764 contracts (76,400 oz)|
|Total monthly oz gold served (contracts) so far this month||2648 contracts(264,800 oz)|
|Total accumulative withdrawals of gold from the Dealers inventory this month||153,424.154 oz|
Total accumulative withdrawal of gold from the Customer inventory this month
Today, we had 0 dealer transactions
total dealer withdrawal: nil oz
we had 0 dealer deposit:
total dealer deposit: nil oz
we had 1 customer withdrawal
i) Out of Brinks: 1,478.99 oz
total customer withdrawal: 1,478.99 oz
we had 2 customer deposits:
i) Into Brinks: 683.71 oz
ii) Into HSBC; 1929.06 oz
total customer deposits; 2,612.77 oz
We had 0 adjustments
Today, 0 notice 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 (2648) x 100 oz to which we add the difference between the OI for the front month of December (764) minus the # gold notices filed today (0) x 100 oz = 341,200 the amount of gold oz standing for the December contract month.
Thus the initial standings:
2641 (notices filed for the month x 100 oz) + (764) the number of OI notices for the front month of December served upon – (0) notices served today equals 341,200 oz or 10.612 tonnes
we neither gained nor lost any gold contracts standing today.
Total dealer inventory: 737,866.946 oz or 22.95 tonnes
Total gold inventory (dealer and customer) = 7.943 million oz. (247.06) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 56 tonnes have been net transferred out. We will be watching this closely!
This initiates the month of December for gold.
And now for silver
December silver: initial standings
December silver: initial standings
|Withdrawals from Dealers Inventory||nil oz|
|Withdrawals from Customer Inventory||34,082.382 oz ( Delaware )|
|Deposits to the Dealer Inventory||nil|
|Deposits to the Customer Inventory||50,824.67 oz (Brinks)|
|No of oz served (contracts)||0 contracts (nil oz)|
|No of oz to be served (notices)||101 contracts (505,000 oz)|
|Total monthly oz silver served (contracts)||2933 contracts (14,665,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month||1,594,966.8 oz|
|Total accumulative withdrawal of silver from the Customer inventory this month||6,682,293.5 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 Delaware: 34,082.382 oz
total customer withdrawal 34,082.382 oz
We had 1 customer deposit:
i) Into Brinks: 50,824.67 oz
total customer deposits: 50,824.67 oz
we had 0 adjustments
Total dealer inventory: 64.594 million oz
Total of all silver inventory (dealer and customer) 175.433 million oz.
The total number of notices filed today is represented by 0 contracts for nil 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 (2933) x 5,000 oz to which we add the difference between the total OI for the front month of December (101) minus (the number of notices filed today (0) x 5,000 oz = the total number of silver oz standing so far in November.
Thus: 2933 contracts x 5000 oz + (101) OI for the November contract month – 0 (the number of notices filed today) =15,170,000 oz of silver that will stand for delivery in December.
we lost 35,000 oz that will not stand for the December silver contract.
for those wishing to see the rest of data today see:
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 18.2014: no change in inventory at the GLD/721.56 tonnes
Dec 17.2014: no change in inventory at the GLD/721.56 tones
Dec 16.2015 we lost 1.80 tonnes in tonnage at the GLD/721.56 tonnes
Dec 15.2014: we lost 2.39 tonnes of gold inventory at the GLD/Inventory at 723.36 tonnes
dec 12.2014: we had no change in gold inventory/GLD inventory 725.75 tonnes
Dec 11.2014: we had another addition of .95 tonnes of gold inventory at the GLD/Inventory 725.75 tonnes
dec 10.2014: we gained another 2.99 tonnes of gold at the GLD. If China cannot get its gold from London, then its only source will be the FRBNY.
Inventory: 724.80 tonnes
Dec 9.2014: we gained 2.69 tonnes of gold/inventory 721.81 tonnes
Dec 8.2014: we lost .900 tonnes of gold/inventory 719.12 tonnes
Dec 5.2014: no change in tonnage/720.02 tonnes
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
Today, December 18 / we had no change in tonnage of inventory / 721.56 tonnes
inventory: 721.56 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 : 721.56 tonnes.
And now for silver:
Dec 18.2014: we lost 2.012 million oz of silver from the SLV vaults/inventory 338.997 million oz
Dec 17.2014: no change in silver inventory/SLV 341.009 million oz
Dec 16.2014/ no change in silver inventory/SLV 341.009 million oz
Dec 15.2014: we lost 1.341 million oz of silver at the SLV/Inventory 341.009 million oz
Dec 12.2014 no change in silver inventory at the SLV/Inventory at 342.35 million oz
Dec 11.2014: we lost 2.873 million oz of silver inventory at the SLV/Inventory 342.35 million oz
December 10.2014; no change in inventory/345.223 million oz
Dec 9.2014: no change in inventory/345.223 million oz
Dec 8.2014: no change in inventory/345.223 million oz
Dec 5/2014: no change in inventory/345.223 million oz
Dec 4/we lost another 2.204 million oz of silver/inventory 345.223 million oz
December 18/2014/ we lost 2.012 million oz of silver inventory at the SLV/inventory
registers: 338.997 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 9.7% percent to NAV in usa funds and Negative 9.6 % to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.8%
Percentage of fund in silver:37.7.%
( December 18/2014)
2. Sprott silver fund (PSLV): Premium to NAV falls to positive 0.03%!!!!! NAV (Dec 18/2014)
3. Sprott gold fund (PHYS): premium to NAV falls to negative -0.53% to NAV(Dec 18/2014)
Note: Sprott silver trust back into positive territory at 0.03%.
Sprott physical gold trust is back in negative territory at -0.53%
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:
(courtesy Mark O’Byrne/Goldcore)
Is Russia Being Driven Into the Arms of China?
The “isolation of Russia” idea is one which has been receiving a lot of traction of late. Russia’s recent economic woes have sometimes been covered with barely contained glee despite the hardships that average Russians may have to endure if the rouble continues to collapse … not to mention the inevitable geo-political backlash.
Russia has become isolated from its western neighbours on account of the putsch in Ukraine which led to the predominantly ethnically Russian Crimea seceding from Kiev through a democratic process.
European governments slavishly adhere to U.S. imposed sanctions. So from a western elite point of view, Russia is indeed isolated.
Whether antagonising Russia is damaging to Russia is a moot point. Certainly in Russia’s current straits the bankrupt west is in no position to help. European farmers are suffering from loss of export markets while Europe is still dependent on Russian natural gas.
So how “isolated” is Russia in reality?
Firstly, it is worth pointing out the obvious fact that countries do not have “friends”, just “interests”. Representatives of countries may have good relationships but these are built on expediency – not friendship.
So while there may be a great deal of distrust between the major powers of Asia these issues are being overlooked for now because it is expedient. Standards of living across the board have been rising in Asia for twenty years. It is in no countries interest to enter into conflict.
By contrast, the west – led by the U.S. – has seen a remarkable fall in living standards over the same period. The bubble, prior to the 2008 crash, was not a golden-age for families as increasingly both parents were forced to work to just afford a roof over their heads.
The relationship between Russia and China has morphed with these changes. Russia supplies China with hi-tech military hardware. Russia has negotiated two major natural gas deals with China in the last year. China expects to double it’s gas usage by 2030. So from a Chinese point of view it is certainly expedient to keep Russia on side.
China may soon come to Russia’s aid and provide liquidity according to the South China Morning Post:
“Russia could fall back on its 150 billion yuan (HK$189.8 billion) currency swap agreement with China if the rouble continues to plunge”.
If the swap deal is activated for this purpose, it would mark the first time China is called upon to use its currency to bail out another currency in crisis. The deal was signed by the two central banks in October, when Premier Li Keqiang visited Russia.
“Russia badly needs liquidity support and the swap line could be an ideal tool,” said Bank of Communications chief economist, Lian Ping.
The swap allows the central banks to directly buy yuan and rouble in the two currencies, rather than via the U.S .dollar.
This highlights the long-term error of the west – pushing Russia into China’s sphere of influence.
For the first time in fifty years a country may be bailed out using a currency other than the dollar.
This, possibly, paves the way for the Chinese Yuan to assume the role of a global reserve currency.
Also, it is worth noting that a weak Russia is not in China’s military interest at this time of simmering geopolitical tensions.
In the event of problems in the international monetary system – sellers of tangible wealth will want payment in a currency with some intrinsic value.
GoldCore Insight: Currency Wars: Bye, Bye Petrodollar – Buy, Buy Gold
Today’s AM fix was USD 1,210.75, EUR 982.03 and GBP 773.64 per ounce.
Yesterday’s AM fix was USD 1,199.00, EUR 962.36 and GBP 763.16 per ounce.
Spot gold fell $7.40 or 0.62% to $1,188.90 per ounce yesterday and silver rose $0.03 or 0.19% to $15.77 per ounce.
Spot gold in London rose over 2% after the Federal Reserve stated yesterday that it would take a patient approach towards increasing interest rates. This led to rising stock and commodities markets and hurt the U.S. dollar.
Gold in Singapore rose nearly 1% to $1,202.08 an ounce, and traded at $1,201.11 at 2:49 p.m. in Singapore, noted Bloomberg.
U.S. Fed chief, Janet Yellen, said the Fed was not likely to raise rates for “at least a couple of meetings”, this has market participants focused on April 2015.
In London, spot gold climbed 1.8% to $1,209.46 an ounce after 1040 GMT.
Comex U.S. February gold was up 1.3% at $1,209.90 an ounce. Spot silver gained 3.2% to $16.19 an ounce.
Spot platinum was up 2.2% at $1,212.60 an ounce, while spot palladium rose 1.8% to $789.63 an ounce.
Get Breaking News and Updates On Gold Here
Switzerland imposes negative interest rates to keep franc from rising
Interest Rate Cut Shocks Swiss Franc Lower
By Jemima Kelly
Thursday, December 18, 2014
LONDON — The Swiss franc hit a 28-month trough against the dollar and fell against the euro on Thursday after the Swiss National Bank said it would introduce negative interest rates to stop further currency appreciation.
In a surprise statement, the SNB said it would impose an interest rate of -0.25 percent on some large deposits held by investors in Swiss francs, as it seeks to discourage buying of the currency as a safe haven.
SNB Chairman Thomas Jordan also confirmed on Thursday that the bank had intervened in foreign exchange markets, in another effort to defend the central bank’s three-year-old cap of 1.20 francs per euro. …
… For the remainder of the report:
Koos Jansen delves into the decision by Australia to audit the gold at the Bank of England. How on earth could there be something wrong with England’s figure of 80 tonnes for Australia?.
(courtesy Koos Jansen)
Written by Bullion Baron:
Two years ago the news was publicly broken on the BullionBaron.com website that 99.9% of Australia’s Gold reserves are stored at the Bank of England in the United Kingdom. Attempts by another blogger, interested in the whereabouts of Australia’s Gold, had been rejected by the Reserve Bank of Australia (RBA) only several months earlier, “The Bank does not publish the location of its gold reserves.”
Decisions like this don’t happen in a black hole. Something changed the RBA’s mind, between August 2012 and December 2012, on making the location of Australia’s Gold reserves public.
From my observation, the RBA tends to follow the lead of other Central Banks, so the decision to release information on the location of Australia’s Gold may have been a result of Germany’s Central Bank (Deutsche Bundesbank) deciding to do so in October 2012 (interview containing the information originally released is no longer published on the site, butavailable via Web Archive). Only a month later, in November 2012, the Austrian Central Bank released the location of their Gold reserves, revealing that 80% resided in the UK, 3% in Switzerland and 17% in Austria. Cue the RBA feeling comfortable to release the location details of Australia’s Gold around 1 month later.
A recent experience of mine with the RBA further highlighted their desire to follow in the footsteps of other Central Banks rather than to think for themselves. A Freedom Of Information (FOI) request I made for the Gold bar list was initially rejected, but after lodging an appeal with the Office of the Australian Information Commissioner (OIAC), highlighting that the United States published a list of their Gold bars details (sans the serial number), the RBA decided to follow suit (RBA Gold Bar Details).
Earlier this year I spotted a line in the RBA’s 2014 Annual Report indicating an audit had been performed (not something I have seen mentioned in previous years):
Gold holdings at the end of June 2014 were around 80 tonnes, unchanged from the previous year. Gold prices rose by 9 per cent in Australian dollar terms in 2013/14, increasing the value of the Reserve Bank’s holdings of gold by around $0.3 billion to $3.6 billion. Activity in the gold lending market remained subdued, with the Bank having only 1 tonne of gold on loan during the year. Income earned on that loan amounted to $0.2 million. During the year in review, the Bank audited its gold holdings, including that portion held in safe custody at the Bank of England.
A question posed by email to the RBA earlier in the year suggested that RBA officials had performed the audit themselves. I decided to lodge another FOI request.
“I request that a copy of the following documents be provided to me: All documents pertaining to the audit of the RBA’s gold holdings performed during the 2013/14 financial year, as was specified in the ‘Operations in Financial Markets’ section of the Reserve Bank of Australia Annual Report 2014 (“During the year in review, the Bank audited its gold holdings”).”
Two months later (decision on the documents was delayed due to consultation with the Bank of England) I received the following list of documents that would be provided (on payment of fees, which were reduced from an original quote due to the small number of documents that could be released):
And today the documents arrived. Here’s what we know…
In February 2013, the Assistant Governor (Financial Markets) requested the Audit Department to include in its audit program a review of the Bank’s gold holdings at the Bank of England (BoE). The Chief Representative in EU approached the BoE to facilitate this review and in late May 2013 initial planning discussions were held with BoE staff with tentative agreement that the review would take place in September 2013.
The audit included:
- An on-site physical verification on September 23, 2013, which will take 4-5 days to complete, assuming two RBA auditors are involved given the proposed scope.
- Inspecting a sample of RBA Gold bars (list to be provided in advance), including checking the details of these bars against the Bank’s inventory list and weighing of the bars by BoE staff using their equipment.
- Randomly selecting additional Gold bars from the inventory list and observing these bars being located and retrieved from their vault (plus verifying the details and weighing them).
- Obtain a high level understanding of the BoE gold safe custody service.
- Continuing discussions for a comprehensive safe custody agreement between the RBA and BoE.
As the above document list shows, those relating to final audit results were not provided. I would assume the audit was successful, but no doubt that would be a highly contested opinion in the Gold blogosphere. The following reason was provided for denying access to the report:
Documents 10, 11 and 12 are drafts of the report prepared by the RBA’s Audit Department detailing the findings of the audit and document 13 is the final of that report.
Denial of access to these four documents in terms of s33(a)(iii) is appropriate because release of the information (which relates to procedures for the conduct of the audit with the BoE and the subsequent results) ‘would, or could reasonably be expected to, cause damage to’ the relationship between the RBA and the BoE. This belief is soundly held by us on the basis that we are aware that the BoE provides safe custody services not only to the RBA, but also to other central banks around the world. Disclosure of the information in these documents could damage the relationship between the BoE and its other central bank clients, and by extension (as the source of the information), the relationship between the BoE and RBA. As foreshadowed to you in earlier correspondence, we consulted with the BoE in relation to these documents and they affirmed the views we held regarding the damage that would be done to the relationship between the BoE and RBA if the redacted information were disclosed.
Denial of access to these four documents is also appropriate in terms of s47E(a) (‘disclosure would, or could be reasonably expected to, prejudice the effectiveness of procedures or methods for the conduct of tests, examinations or audits’ by the Bank) and (b) (‘disclosure would, or could be reasonably expected to, prejudice the attainment of the objects of particular tests, examinations or audits conducted, or to be conducted’, by the Bank). The documents in question concern the ‘procedures and methods’ within both the RBA and the BoE regarding the conduct of the physical check of a sample of gold bars (for the purpose of conducting the audit). Disclosure of this information would, of course, reveal those procedures and methods, and by logical extension render them less effective. Also, the ability of the Bank to attain the objects of the audit (which is to reveal whether the Bank’s arrangements are robust and secure) would be prejudiced. These considerations apply to both the audit currently the subject of your FOI request and also any other audits undertaken by the RBA. A key requirement for undertaking a successful audit (of any aspect of the RBA’s work) is that there is as little opportunity as possible for individuals to take steps to predict what an auditor may choose to focus on, and/or how they will conduct the audit. It is self-evident that if such procedures and methods are revealed, then the opportunity to circumvent them is greatly increased. As s47E is a public interest conditional exemption, I must take into account whether the giving of access is in the general public interest (in terms of s11A(5)). When deciding whether access is in the public interest, I must take into account the following from s11B(3) and have noted my views in each case:
Section 11B(3) factors favouring access to the document in the public interest include whether access to the document would do any of the following:
(a) promote the objects of this Act (including all the matters set out in sections 3 and 3A); release would be contrary to some sections, particularly sections 2(a) and 3(3)
(b) inform debate on a matter of public importance; the Bank’s gold holdings, while important and of interest to some, are not a matter of public importance generating any level of debate.
(c) promote effective oversight of public expenditure; release of the information would not do this.
(d) allow a person to access his or her own personal information; the request is not seeking personal information.
Taking into account these factors, and the implications release of the information would have on the Bank’s audit processes, I have decided that it is clearly not in the public interest to disclose the information in these four documents (10, 11, 12 and 13). Disclosure of these documents would manifestly harm the public interest by way of reducing the ability of the RBA to successfully conduct audits and tests of its operations going forward.
The released documents (mostly a chain of various emails) also suggested the RBA has been invited back for another review in 12 months.
One interesting point from the documents; the Bank of England was emailing clients in June 2013 (those for whom they’re providing custodial services) inviting them to audit samples of their Gold:
Given that the RBA has followed the lead of other countries to release reserve location details, perform audits and release (some) bar list details, it will be interesting to see whether they go further and follow the lead of the many countries now deciding to repatriate some or all of their Gold reserves…However discussions on the RBA audit were already well advanced at that time.
I’m sharing links and opinions daily on Twitter (@BullionBaron).
E-mail Koos Jansen on: firstname.lastname@example.org
The United States declared economic war on Russia. It is hard to pinpoint the why of the matter but in this author’s opinion it always comes back to US dollar dominance. Russia has made no secret of its disdain for the global pricing mechanism of oil. The chart below shows what matters in the pricing of oil and it has zero to do with shale miracles or over supply.
It is the dollar and only the dollar that matters in the pricing of oil with an exception being an act of nature.
Much like the gold market, supply and demand fundamentals are completely ignored as the pricing of gold revolves around the dollar. Countries such as Russia understand fully that this dynamic of dollar dominance leaves them very vulnerable to shocks. The same is true of all resource rich countries. While some of them see the US as an ally and go along with this, Saudi being the obvious one, the Russian’s have made it clear they want change. Make no mistake about it the Russian’s will get the change they desire.
The chart below shows the dollar against the Ruble. That chart is an act of economic war as the West has attacked the currency of a sovereign nation for UNECONOMIC reasons.
Let me explain the previous sentence. Russian debt to GDP is roughly 14%. Their debt to GDP is pristine. Japan’s is 227%, Greece 175%, Italy 132%, and the US 105%. Now can someone kindly explain why a currency would implode like the Ruble when their financial condition relative to the West and Japan looks like a Ferrari among a bunch of Ford Pintos? You could argue that they are highly dependent on oil. True, but so are other nations and are you certain oil will remain this low for an extended period?
The next chart is the dollar against the Kuwati Dinar, a nation wholly dependent on hydrocarbons. Certainly the dollar has rallied against it but that chart is not even a faint resemblance to the Ruble.