Dec 22/GLD remains constant/SLV loses 862,000 oz/Today we learn that Germany is really repatriating its gold/another raid on gold and silver with liquidity at it’s low point/

Good evening Ladies and Gentlemen:

Here are the following closes for gold and silver today:


Gold: $1179.90 down $16.20   (comex closing time)
Silver: $15.65 down 34 cents  (comex closing time)

In the access market 5:15 pm


Gold $1176.00
silver $15.67



The gold comex today had a poor delivery day, registering 3 notices served for 300 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 246.96 tonnes for a loss of 56 tonnes over that period.



In silver, the open interest fell by 996 contracts despite Friday’s silver price rose by 10 cents  . 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 148,101 contracts. The big December silver OI contract remained constant at 101 contracts.


In gold we had a slight rise in OI with the rise in price of gold on Friday to the tune of $1.20. The total comex gold OI rests tonight at 373,910 for a gain of 1076 contracts. The December gold OI rests tonight at 584 contracts losing 156 contracts.





you have more important things to read instead of how gold/silver traded today.





Today, we had no change in  gold inventory   at the GLD /Inventory 724.55 tonnes

In silver, we lost 862,000 oz  of silver inventory

SLV’s inventory rests tonight at 338.135 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 in both directions.  The One month GOFO and two month GOFO rates moved in  negative direction.  The three month GOFO moved remained constant and in  the positive and it is out of backwardation. The last two GOFO rates moved closer to the positive needle.

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 22 2014

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

.035.% – .015 %   +.02 % +. 0475 .% +. 1450%

Dec 19 2014:

-.03% +.01% +.0200 % +.045% +.1350%






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 1076 contracts from  372,834 all the way up to 373,910 with gold slightly up by $1.20 on Friday (at the comex close). We are now into the big December contract month where the number of OI standing for the gold metal registers 584 contracts for a loss of 156 contracts. We had 144 delivery notices served on Friday so we  lost another 12 contracts or 1200 oz will not stand for the December contract month. The non active January contract month rose by 12 contracts up to 479. The next big delivery month is February and here the OI rose to 223,967 contracts for a gain of 314 contracts. The estimated volume today was poor at 48,993. The confirmed volume on Friday was also poor at 76,891 even 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 3 notices filed for 300 oz .

And now for the wild silver comex results. Silver OI fell slightly by 996 contracts from 149,096 down to 148,101 even though silver was up 10 cents on Friday. We are again losing more short covering from our bankers. The big December active contract month saw it’s OI remain constant at 101 contracts. We had 0 notices served upon on yesterday. Thus we neither gained nor lost any silver contracts standing to delivery in the December contract month. The estimated volume today was simply awful at 10,339. The confirmed volume on Friday was just as bad at 24,149. 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


Dec 22.2014



Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz 683.713 oz (Brinks),
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 683.713 oz (HSBC
No of oz served (contracts) today 3 contracts(300  oz)
No of oz to be served (notices) 581 contracts (58,100 oz)
Total monthly oz gold served (contracts) so far this month  2795 contracts(279,500 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

 152,476.5 oz

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:  683.713 oz


total customer withdrawal: 683.713 oz


and this landed as a deposit:



we had 1 customer deposits:


i) Into HSBC:  683.713 oz

total customer deposits;  683.713  oz



We had 0 adjustment



Today, 0 notice was issued from JPMorgan dealer account and 3 notices were issued from their client or customer account. The total of all issuance by all participants equates to 3 contracts of which 3 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 (2795) x 100 oz to which we add the difference between the OI for the front month of December (584) minus the # gold notices filed today (3) x 100 oz = 339,000 the amount of gold oz standing for the December contract month.

Thus the initial standings:

2793 (notices filed for the month x 100 oz) + (584) the number of OI notices for the front month of December served upon – (3) notices served today equals 337,600 oz or 10.50 tonnes.

we lost 12 contracts or 1200 oz will not stand for delivery in the December contract month.



Total dealer inventory: 770,690.631 oz or 23.971 tonnes

Total gold inventory (dealer and customer) = 7.939 million oz. (246.96) 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



Dec 22/2014:

 December silver: initial standings



Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory 184,405.91  oz   (Scotia, Delaware )
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 643,401.7 oz (Scotia)
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  7,5545,645.9  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 2 customer withdrawals:

i) Out of Delaware: 9,940.15 oz

ii) Out of Scotia:  174,465.76 oz


total customer withdrawal 184,405.910 oz

We had 1 customer deposit:

i) Into Scotia:  643,401.7oo oz  (one decimal)

total customer deposits: 643,701.7oo  oz

we had 0 adjustments

Total dealer inventory: 64.594 million oz

Total of all silver inventory (dealer and customer) 175.321 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 neither gained nor lost any silver ounces that will stand for the December silver contract.



for those wishing to see the rest of data today see: 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 22.2014: no change in gold inventory at the GLD/724.55 tonnes

Dec 19.2014: a huge addition of 2.99 tonnes at the GLD/724.55 tonnes

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





Today, December 22 / we had no change in tonnage of gold   inventory / 724.55 tonnes


inventory: 724.55 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 : 724.55 tonnes.






And now for silver:


Dec 22.2014: today we lost 862,000 oz of silver inventory from the SLV.  this left late Friday night./Inventory 338.135  million oz

Dec 19.2014; No change in silver inventory at the SLV/Inventory 338.997 million oz.

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 22/2014/no change in   silver inventory at the SLV/inventory

registers: 338.135 million oz







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

Note: Sprott silver fund now for the first time into the negative 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 11.6% percent to NAV in usa funds and Negative 11.4 % to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.7%

Percentage of fund in silver:37.7.%

cash .6%

( December 22/2014)

2. Sprott silver fund (PSLV): Premium to NAV rises to – 0.26%!!!!! NAV (Dec 22/2014)

3. Sprott gold fund (PHYS): premium to NAV falls to negative -0.80% to NAV(Dec 22/2014)

Note: Sprott silver trust falls  into negative territory at -.26%.

Sprott physical gold trust is back in negative territory at -0.80%

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 Monday  morning:




Mark O’Byrne is off today/no report from Goldcore

(courtesy Mark O’Byrne/Goldcore)






as promised on Friday, Gold withdrawals = demand from Chinese citizenry equates to 50 tonnes .


(courtesy Koos Jansen)




Posted on 21 Dec 2014 by

Will Chinese Gold Demand End 2014 With A Boom?

Shanghai Gold Exchange (SGE) withdrawals in week 50 (December 8 – 12) accounted for 50 tonnes, year to date 1,955 tonnes have been withdrawn.

Screen Shot 2014-12-20 at 3.38.15 PM
Blue (本周交割量) is weekly gold withdrawn from the vaults in Kg, green (累计交割量) is the total YTD.

SGE Withdrawals In Perspective

I have written about this before, but I just want to make sure I have clearly shared my view on this subject (if you’ve read all my previous posts regarding withdrawals you can skip this chapter).

Many blogs are tracking SGE withdrawals currently, using it as the yardstick for Chinese wholesale gold demand. While partially true, I would like to emphasize this yardstick has become elastic.

Before the SGE’s subsidiary, the Shanghai International Gold Exchange (SGEI), was launched total SGE withdrawals provided us a clear view on Chinese wholesale gold demand, as the SGE is the exchange where all import and domestically mined gold is required to be sold first (in addition to scrap) before entering the Chinese domestic market. This clear view is now blurred.

The SGEI facilitates gold trading in the Shanghai Free Trade Zone (FTZ). Physical gold trading in the FTZ is completely separated form the Chinese domestic gold market, which is a closed market; bullion exports are prohibited and only 15 banks are licensed to import bullion. The banks that enjoy a PBOC bullion import license are:

  1. Shenzhen Development Bank / Ping An Bank
  2. Industrial and Commercial Bank of China
  3. Shanghai Pudong Development Bank
  4. Agricultural Bank of China
  5. Bank of Communications
  6. China Construction Bank
  7. China Merchants Bank
  8. China Minsheng Bank
  9. Standard Chartered
  10. Bank of Shanghai
  11. Industrial Bank
  12. Bank of China
  13. Everbright
  14. HSBC
  15. ANZ

The gold traded on the SGEI can be withdrawn from the vaults in the FTZ by foreign enterprises and shipped abroad, these SGEI withdrawals are captured in the total SGE withdrawals (only aggregated withdrawals are disclosed) and thus distorting our view on Chinese wholesale demand.

Would we get our clear view back if SGE and SGEI withdrawals would be disclosed separately? No. This is because Chinese domestic banks are also trading on the SGEI, when they withdrawal from the vaults in the FTZ they can import this gold into the mainland without it being required to be sold (again) through the SGE.

The trading volume/purchases on the SGEI (contracts iAu100g, iAu99.99 and iAu99.5) can be:

  • Not withdrawn at all and thus not distorting our view on Chinese wholesale demand.
  • Withdrawn by foreign traders and thus distorting Chinese wholesale demand. If we knew how much these withdrawals accounted for we could subtract them from total SGE withdrawals to have a clear view on Chinese wholesale demand. Unfortunately we don’t know these numbers.
  • Withdrawn by Chinese domestic banks to be imported into the mainland and thus being part of Chinese wholesale demand.

This is what we (I) know at this stage. Concluding weekly Chinese wholesale gold demand is at most total SGE withdrawals, at least total SGE withdrawals minus SGEI trading volume.

For example, in week 50 total SGE withdrawals accounted for 50,027.5 Kg. Total SGEI trading volume accounted for 6,159 Kg. Meaning Chinese wholesale gold demand was somewhere in between 50,027.5 Kg and 43,868.5 Kg (50,027.5 – 6,159). Year to date Chinese wholesale gold demand is somewhere in between 1,911,230 Kg and 1,955,090 Kg (at least 1,911 tonnes). 

Needless to say, if more information is disclosed by the SGE I will report about it as soon as possible.

Furthermore; Chinese wholesale gold demand is supplied by import, mine and scrap. The amount of mine supply we know from numbers of the China Gold Association (CGA), in 2014 it will be approximately 451 tonnes. The composition of the other two supply flows is not known, for this we have to make estimates based on numbers from previous years. In 2012 scrap (through the SGE) was 232 tonnes, in 2013 it was 247 tonnes. This year scrap is likely to be substantially higher. How come? By way of measuring Chinese wholesale gold demand as described above, it was at least 1,841 tonnes in the first eleven months of this year. The Chairman of the SGE said on a conference import was (approximately) 1,100 tonnes over this period and mining had to be 416 tonnes, setting scrap at 325 tonnes.

Nevertheless, China will import far more than 1,100 tonnes in 2014, added to 451 tonnes of domestically mined gold, the Chinese people will add about 1,700 tonnes to their reserves. Assuming the PBOC doesn’t buy gold through the SGE.

Will Chinese Gold Demand End 2014 With A Boom?

Seasonally December and January are strong months for Chinese gold demand, but will they be this year? To answer this question let’s have look at the next chart.

Shanghai Gold Exchange SGE withdrawals deliveries 2014 week 50, dips

We can see elevated withdrawals every December and January. Additionally, it’s clear the Chinese rather buy gold when the price is declining than when it’s rising, unlike Western gold investors. This thesis is also supported by the fact SGE premiums often move inverted from the price of gold.

Shanghai Gold Exchange SGE gold premium 2009 2014 moving averages

Now let’s zoom in on the former chart.

Shanghai Gold Exchange SGE withdrawals deliveries only 2014 week 50, dips

Though withdrawals are strong, in my opinion demand is somewhat held back by a rising price of gold in the past few weeks. How withdrawals/demand will develop around New Year is (of course) partially determined by the direction of the price of gold. If the price of gold continues to rise in renminbi I expect it will further dampen Chinese demand around New Year and Lunar Year.

Chinese Gold Trading Volumes

Worth mentioning is that SGE gold trading volume is going up exponentially since a couple of weeks. The biggest drivers are the Au(T+N1) and Au(T+N2) deferred contracts. On November 3, 2014, the SGE adjusted the specificationsof these contracts – that hadn’t been traded at all since October 2013, after which volumes skyrocketed. In week 50 the volume of these contracts combined accounted for 95 tonnes, which is 20 % of the total SGE gold volume traded (474 tonnes).

Screen Shot 2014-12-21 at 5.18.56 PM
Red: trading volume of Au(T+N1) and Au(T+N2) counted bilaterally. Purple: total SGE gold trading volume in week 50 counted bilaterally.

Shanghai Gold Exchange SGE weekly gold volume

Total gold volume traded on the SGE combined with the total gold volume traded on the Shanghai Futures Exchange (SHFE) accounted for 1,309 tonnes in week 50. This amount was more than half the gold volume traded on the COMEX in the same period (2,507 tonnes). I don’t see a trend of declining volumes on the COMEX, but I do see a trend of surging volumes in China, that are now starting to near COMEX volumes.

COMEX vs SGE + SHFE gold volume

Koos Jansen
E-mail Koos Jansen on:








Very important:  The Bloomberg story of a few months ago is a phony.

Germany has very intention of repatriation her gold.


(courtesy Koos Jansen)





Posted on 22 Dec 2014 by

More Confirmation Germany Continues To Repatriate Gold

In addition to a post I wrote earlier about the Bundesbank continuing to repatriate gold from the US and France, despite a misleading article from Bloomberg suggesting the program was canceled, I present an email I just got in from Peter Boehringer, founder of Repatriate Our Gold in Germany:

Dear E-Mail partners: A quick info in English because I know there are many people
around the world waiting for gold repatriation news from Deutsche Bundesbank (BuBa) in 2014. I always said BuBa would continue their repatriations in Germany despite many
official and unofficial news outlets claiming the opposite.

We still have no quantitative news – but this came in 8am CET today (45 mins ago).
See here for original German language interview text of BuBa´s “gold exec” Mr Thiele.
*) My translation of the text below. Followed by my short comment.

“Bundesbank has delivered gold to Germany according to plan Also in 2014, Deutsche Bundesbank has brought gold from foreign storage sites to Frankfurt. ‘We are within our plan with our delivery of gold from the Fed and the Banque de France.’. BuBa-executive Carl-Ludwig Thiele told the German Press
Agency dpa in Frankfurt.”

Boehringer comment:

  • This is really all there is, all we have right now. I would personally call it “non-news” as usual in that Mr Thiele does not give out ANY new info which we did not have before. With the possible exception that Bundesbank now officially says what I said all along throughout the year: The gold repatriation is continuing – albeit not transparent and probably way too slow but with a rate larger than 0 tonnes in 2014…
  • We still do not know exact numbers.Thiele does not seem to have given out tonnages for 2014 (in the press release we only have 2013 numbers which had been known since Dec 2013).
  • Every number below 70-100 tonnes would be shamefully little – and therefore this is exactly the range I am expecting in the final announcement with numbers (due early 2015).

So it is business as usual with Bundesbank. Too slow, too little, not transparent: this
holds true both for its information policy on gold and for its repatriation efforts! The fight for repatriation and for receiving more info from BuBa will have to continue. And since BuBa is stalling and our institutions are not helping – we the owners of the gold will have to do the work on our own. To be continued (in 2015)… Happy Christmas to everybody!

*) 22.12.2014 08:00 Bundesbank bei Gold-Verlagerung im Plan Die Deutsche Bundesbank hat auch 2014 tonnenweise Gold aus ausländischen Lagerstätten nach Frankfurt gebracht. “Mit der Goldverlagerung von der Fed in New York und der Banque de France in Paris liegt die Bundesbank voll im Zeitplan”, sagte Bundesbank-Vorstand CarlLudwig Thiele der Deutschen Presse-Agentur in Frankfurt. Die Notenbank will bis 2020 mehr als die Hälfte ihrer zuletzt 3387 Tonnen in heimischen Tresoren lagern. Dafür sollen 674 Tonnen des Edelmetalls aus Paris und New York nach Frankfurt gebracht werden. Zum Start der Aktion holte die Bundesbank 2013 fünf Tonnen aus New York und 32 Tonnen aus Paris.

Koos Jansen
E-mail Koos Jansen on:








A very important commentary from Dr Roberts.  He claims that Russia is in reality pretty good shape.  However, Russia can, if she wishes can bring down the west:


i) by  defaulting on bonds owed which would trigger credit default swaps bringing down western banks


ii) buying up all the Russian roubles and then raising the oil price in roubles.


iii)refusing to supply Western Europe of oil:


a must read..





(courtesy Dr Paul Craig Roberts/GATA)






Russia can bring West down any time, Roberts tells KWN


9:55p ET Friday, December 19, 2014

Dear Friend of GATA and Gold:

Russia can bring the Western financial system down any time it wants to with a couple of policy changes, former Assistant U.S. Treasury Secretary Paul Craig Roberts tells King World News today:…

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









After two years, the bozos London’s Serious Fraud Squad has opened up an extension of the libor manipulation to include gold and silver.  The manipulation of gold and silver is thus the GOFO rates;


Friday night, saw the arrest of a Royal Bank of Scotland trader on manipulation of gold and silver.  We need to get the evidence from them so we can launch our own class action lawsuits.




(courtesy Reuters/GATA)




UK to extend Libor manipulation laws to cover gold, oil, silver


By William James
Monday, December 22, 2014

LONDON — Britain will widen the scope of laws that make the manipulation of market benchmarks a criminal offense to include seven more rates covering the currency, gold, oil, and silver markets by April 1, the government said Monday.

The move is the latest by the Conservative-led government to clamp down on malpractice in the City of London, whose reputation has been tarnished by an interest rate-rigging scandal and claims that traders colluded to manipulate currency rates.

“Ensuring that the key rates that underpin financial markets here and around the world are robust, and that anyone who seeks to manipulate them is subject to the full force of the law, is an important part of our long-term economic plan,” finance minister George Osborne said in a statement. …

… For the remainder of the report:









May I ask:  what mental asylum are the central bankers of Ukraine operating from?:




(courtesy RT)


$300,000 in gold missing from Ukraine Central Bank after swapped for lead bricks

Published time: December 22, 2014 15:54


Cunning fraudsters have conned the Ukraine Central Bank branch in Odessa into buying $300,000 worth of gold which turned out to be lead daubed with gold paint.

“A criminal case has been opened and we are now carrying out an investigation to identify those involved in the crime,” a spokesman for the Odessa police force is quoted by Vesti.

The news was first reported by Odessa’s State Ministry of Internal Affairs.

READ MORE: Where has all Ukraine’s gold gone?

A preliminary investigation suggests the gang had someone working for them inside the bank that forged the necessary paperwork to allow the sale of the fake gold bullion. It’s also been discovered that bank staff were not regularly checked when entering or exiting the premises.

Since the discovery, the National Bank no longer buys precious metal over the counter, as it cannot be sure of its authenticity, says the First Deputy Head of the National Bank of Ukraine, Aleksandr Pisaruk.

The National Bank of Ukraine (NBU) has confirmed the theft of several kilograms of gold in the Odessa region. The cashier involved has apparently fled to Crimea, Vesti Ukraine reports. Criminal proceedings began on November 18, even though the scam apparently took place between August and October.

In November, the Central Bank reportedly lost $12.6 billion in gold reserves, putting the total stockpile at just over $120 million.

However, the Central Bank reports that foreign currency and gold reserves stood at $9.97 billion at the end of November.





And zero hedge: on the same story:


the silver lining to this story:  The USA upon confiscating Ukraine’s gold may have received some of these lead bars


(courtesy zero hedge)



Ukraine Central Bank Conned Into Swapping Its Gold For Lead Bricks


Just when one thought the story of Ukraine and its (now non-existant) gold could not get any more surreal, it did.

As a reminder, it was about a month ago when we learned courtesy of an interview on Ukraine TV with the country’s central bank head Valeriya Gontareva, that Ukraine’s gold was virtually all gone, when she made the stunning admission that “in the vaults of the central bank there is almost no gold left. There is a small amount of gold bullion left, but it’s just 1% of reserves.”

That in itself would have been sufficient to explain why just a few short days later, the Netherlands shocked the world when it announced it had secretly repatriated 122 tonnes of gold from the NY Fed, and had the story of Ukraine’s missing gold ended there (or even with thecriminal probe launched by Ukraine whether the central bank head had abused her power and misused her office when she “intentionally committed an extremely unfavorable transaction for the gold and forex reserves of Ukraine”), it still would have been one of the most bizarre, surreal stories of 2014.

Luckily, the story just got far better, and far, far more bizarre and surreal.

As Bloomberg reports, Ukraine opened a criminal probe after several gold bars at the central bank’s storage in the southern city of Odessa turned to be painted lead.

“The management of the central bank’s branch in Odessa asked us to investigate fraud by their employee,” Volodymyr Shablienko, head of the Odessa police’s press office, said by phone today. “We are conducting a forensic audit now.”

As Bloomberg explains, the latest gold fraud involved a central bank employee passing lead bars covered with golden paint to the storage unit, registering them as gold, the Vesti newspaper reported today, citing an unidentified person with knowledge of the matter in Odessa’s police department.

According to additional information from RT, the central bank was actually conned into buying the gold-plated lead.

Yes lead, not even tungsten.

RT adds that the National Bank of Ukraine (NBU) has confirmed the theft of several kilograms of gold in the Odessa region. The cashier involved has apparently fled to Crimea, Vesti Ukraine reports. Criminal proceedings began on November 18, even though the scam apparently took place between August and October.

In other words, when Ukraine still, allegedly, had some gold left. Now it has no more gold, but at least it has some very expensive lead.

A preliminary investigation suggests the gang had someone working for them inside the bank that forged the necessary paperwork to allow the sale of the fake gold bullion. It’s also been discovered that bank staff were not regularly checked when entering or exiting the premises.

Altogether some 11 kilograms of gold worth about $420,000 are missing.

And while one can laugh at the stupidity of a central bank duped into believing gold-plated lead is the real deal, the real stunner is that according to the First Deputy Central Bank Governor Oleksandr Pysaruk, the central bank “took a principal decision that we will not buy gold any more from the population. We are making conclusions internally, including changing our procedures.”

In other words, until December, the central bank would buy any gold-plated lead, or tungsten, without any authenticity tests from any member of the population, or in other words, exchanging its existing reserves, i.e., gold (which it no longer has after converting most of it into dollars), into lead.

There is a potential silver lining here in that whoever ended up getting the bulk of Ukraine’s gold reserves, is now also the proud owner of a few hundreds kilograms of gold-plated lead.

One really couldn’t make this up, which is perhaps the point. Better for the public to be focused on the stupidity of its central bankers, than on their criminality for selling out the people’s gold (or worse, giving it away for free in exchange for political favors of the current class of US State Department muppets) to unknown buyers in exchange for a few pieces of green paper.

h/t Marco


This is interesting:  Volcker blasts Yellen and Wall Street



(courtesy London’s Financial Times)





Volcker lambasts Wall Street lobbying


Tom Braithwaite and Richard Blackden
Financial Times, London
Friday, December 19, 2014

Paul Volcker, the former Federal Reserve chairman, has lambasted the “eternal lobbying” of Wall Street after regulators granted the industry more time to comply with a rule designed to prevent them from owning hedge funds.

In a withering statement — as much an attack on his successors at the Fed as a critique of banks — Mr Volcker said: “It is striking that the world’s leading investment bankers, noted for their cleverness and agility in advising clients on how to restructure companies and even industries, however complicated, apparently can’t manage the orderly reorganisation of their own activities in more than five years.”

“Or do I understand that lobbying is eternal, and by 2017 or beyond, the expectation can be fostered that the law itself can be changed?” …

… For the remainder of the report:









Liam Halligan of the UK Telegraph writes that a volatile Russia is not in the west’s interests. He explains why:


(courtesy Liam Halligan/UKTelegraph)




Liam Halligan: Volatile Russia could be bad news for everyone


By Liam Halligan
The Telegraph, London
Saturday, December 20, 2014

“Be careful what you wish for, because you just might get it.”

Some say this aphorism has Spanish origins. Others attribute it to Oscar Wilde. Wherever it comes from, as sayings go, this one contains much truth. Getting what you want can indeed have unseen and unpleasant consequences. That’s worth remembering, as we celebrate cheaper oil while watching the Russian rouble plunge.

Since midsummer the rouble has largely tracked the decline in global oil prices. Last week everything changed. Crude remained stable but the Russian currency collapsed, losing a third of its dollar value in a day. Responding to “Black Monday,” Russia’s central bank hiked interest rates from 10.5 to 17 percent. …

We Westerners can cheer on Russia’s economic problems. We can hope for a full-on currency collapse and rub our hands with glee. If that happens, though, Russia’s next leader could make Putin seem like a softie. We could also provoke a repeat of the systemic global meltdown of 2008 — in which the big Western economies would suffer more than most.

… For the full commentary:…






Greg Hunter interviews Chris Powell


(courtesy Chris Powell/GATA/Greg Hunter)





USAWatchdog interviews GATA secretary about secret trading by central banks


8:55p ET Sunday, December 21, 2014

Dear Friend of GATA and Gold:

USAWatchdog’s Greg Hunter interviewed your secretary/treasurer last week about surreptitious suppression of the gold price and commodity prices generally by secret trading done by Western central banks; the U.S. government records of that trading that mainstream financial news organizations won’t touch; the chance of monetary metals confiscation in the United States; the increase of “financial repression” by central banks; and the destruction of the West’s market economy and democracy. The interview is a half-hour long and can be viewed at USAWatchdog here:…

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






Ron Paul writes on the absurdity of Janet Yellen’s two words:


we can ” be patient” with respect to raising rates:


(courtesy Ron Paul/GATA)


Ron Paul: Janet Yellen’s Christmas gift to Wall Street


By Ron Paul
Ron Paul Institute for Peace and Prosperity, Clute, Texas
Sunday, December 21, 2014

Last week we learned that the key to a strong economy is not increased production, lower unemployment, or a sound monetary unit. Rather, economic prosperity depends on the type of language used by the central bank in its monetary policy statements.

All it took was one word in the Federal Reserve Bank’s press release — that the Fed would be “patient” in raising interest rates to normal levels — and stock markets went wild. The S&P 500 and the Dow Jones Industrial Average had their best gains in years, with the Dow gaining nearly 800 points from Wednesday to Friday and the S&P gaining almost 100 points to close within a few points of its all-time high.

Just think of how many trillions of dollars of financial activity that occurred solely because of that one new phrase in the Fed’s statement. That so much in our economy hangs on one word uttered by one institution demonstrates not only that far too much power is given to the Federal Reserve, but also how unbalanced the American economy really is. …

… For the remainder of the commentary:…





No price discovery, just misinformation, Embry tells KWN


12:34p ET Monday, December 22, 2014

Dear Friend of GATA and Gold:

There’s no price discovery in markets anymore because they’re so manipulated, Sprott Asset Management’s John Embry tells King World News today, adding that the mainstream news media are full of financial misinformation:…

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





A massive 40.316 million oz of silver imported into India in November




(courtesy Arabian money and Steve St Angelo/SRSRocco)


2014 Indian silver imports surge to a massive 28% of global silver output

Posted on 22 December 2014

The latest data puts Indian silver imports for 2014 on track to hit 234 million ounces or 28 per cent of the world’s mining output, according to the SRSrocco Report.

‘In October and November India imported twice as much as in January and April, and a great deal more than the following two quarters,’ said its authors. ‘If India imports at least 700 million tonnes in December, then the fourth quarter will be nearly double the amount imported during the second highest quarter, April to June.’

According to the GFMS Silver Interim Report released at the end of last month… ‘demand for silver bars and coins has soared in recent weeks as bargain hunting retail investors returned to the silver market after a disappointing first half of the year.

Incredible India

‘Nowhere is this more evident than in India where imports of silver are up by 14 per cent year-on-year for the January to October period and set for an annual record. With imports in the first ten months totalling a massive 169 million ounces many vaults in the UK, traditionally the largest supplier to India, have seen significant drawdowns, leading to more supply flowing from China and Russia.’

SRSrocco notes: ‘If London was already suffering a drawdown of silver inventories in October from huge Indian demand, how bad is the situation after another 1,254 million tonnes was imported by India in November? How tight is the wholesale silver market now?’

Silver prices jumped today on this news. Could silver be the surprise star of 2015?



Yuan-ruble swap shows China challenging IMF as emergency lender


By Ye Xie
Bloomberg News
Monday, December 22, 2014

China is stepping up its role as the lender of last resort to some of the world’s most financially strapped countries.

Chinese officials signaled Saturday that they are willing to expand a $24 billion currency swap program to help Russia weather the worst economic crisis since the 1998 default. China has provided $2.3 billion in funds to Argentina since October as part of a currency swap, and last month it lent $4 billion to Venezuela, whose reserves cover just two years of debt payments.

By lending to countries shut out of overseas capital markets, Chinese President Xi Jinping is bolstering the country’s influence in the global economy and cutting into the International Monetary Fund’s status as the go-to financier for nations in financial distress. While the IMF tends to demand reforms aimed at stabilizing a country’s finances in exchange for loans, analysts speculate that China’s terms are more focused on securing its interests in the resource-rich countries. …

… For the remainder of the report:…




An extremely important commentary from Bill Holter as he explains why the end game is not massive deflation but a massive hyperinflation.  He explains what happened in 1929 in the USA and compares it to the situation we face today:


(courtesy Bill Holter/Miles Franklin)




Harry Dent is dangerously delusional!

  Before getting to my main topic, Harry Dent’s monetary delusion, we have been barraged with information over the last two weeks.  Normally at this time of year we do not see much in the way of news whether it be financial or geopolitical, not so this year!  In just the last two weeks we experienced some very strange combinations of news and actions.  It was just last Monday when I connected many dots for you.   China changed collateral rules, crashing oil has impaired low credit shale debt which is spreading to other high yield credits, Congress snuck $303 trillion worth of derivatives on to taxpayers shoulders, Russia began testing their alternative SWIFT system and CME/COMEX announced wide collars beginning Dec. 22 for metals trading.
  Here we are a whopping 5 business days later and a whole new set of data points are available to chew on.  First, the IMF seems to be targeting the dollar in their gun sights .  Will their be a try at supplanting the dollar with SDR’s? Another new set of sanctions has been placed on Russia which are a cut and dry declaration of war (Congress).  Also, very quietly two more things happened last week.  The Volcker rules which would have mandated higher capital ratios at banks were postponed, again, why do you suppose this was?  Why can’t the U.S. “allow” marking held assets to market?  Why can’t we agree to capital ratios similar to those the rest of the world already agreed to …4 years ago?  Why can’t we play the game like the rest of the world wants to?
  We also learned Australia would like to have their 80 tons of gold, purportedly held in London, audited.  How odd is this?  Australia does not trust London?  What a turn of events, as I understand it, the Brits look at the Australians as “criminals” based on how (and “who”) the country was originally born.  Sorry, but I view this piece of news as quite humorous, were Australia to join other recent European nations and ask for repatriation of their gold … hilarious would be more like it!
   …Moving along, I must take Harry “Mr. Deflation” Dent to task regarding his adamant call of $250-$400 gold.  Normally I try not to call names or disparage people for their views but what he is doing is scaring people away from their only avenue of safety.  The only word I can think of which describes him in my mind is “DELUSIONAL”.  I would also add “dangerously” before the word delusional because following his advice in my opinion will place you personally in grave danger.  Harry did an interview with Greg Hunter last Tuesday  , please watch this from about minutes 7-20.  The first seven minutes I was thinking to myself, “he sounds logical”.  Beginning at about the seven minute mark,  he totally lost it in the logic department.  Greg asked him about his prediction of gold going to $700 and Harry said yes, “at a minimum”, he then went on to forecast $250-$400 as a hard bottom over the next several years because of “deflation”.  He contends gold can ONLY do well in an inflationary environment and uses the crash of 2008 as his example when gold went from north of $1,000 down to $690.  I am here to tell you “deflation” is THE BEST environment to hold gold.  The classic example of course being from 1929-1939.  Back then (until 1933), gold and the dollar were interchangeable.  You could go into a bank with dollars and leave with gold or vice versa.  Dollars were simply receipts for gold.  If you recall, gold was actually revalued higher by 69.33% in 1933 after it was “called in” (confiscated).  The public was paid $20.67 per ounce …and presto, gold was revalued to $35.  So in the greatest “deflation” in U.S. history, gold outperformed dollars and dollars outperformed everything else.  Dollars were considered “as good as gold” until they were devalued, the unequivocal “king” of money was gold, NOT dollars. It is also interesting THE best investment of that time period were mining shares because of the leverage they had to gold itself but is a story for another day.
  This is the core flaw (among many) to Harry Dent’s logic, he says dollars will “disappear” through defaults and bankruptcies.  Yes, this is correct but these dollars are issued BY a bankrupt entity …!  The dollar is not only no longer a “gold receipt”, they are the OPPOSITE of gold.  Gold has value because “it is”.  Dollars on the other hand have value because the government says they do, a bankrupt government!  Gold is no one’s liability, dollars are the liability of a bankrupt issuer.  I would also like to point out, the U.S. was not “broke” in 1929, we were a surplus nation.  The U.S. carries a habitual trade deficit and has funded debt greater than 100% of GDP, if we were not the issuer of the reserve currency these two facts would have already relegated us to “banana republic” status!  So, two very material facts differ now from the last time we experienced deflation, we were on much more solid footing in both trade and finance …AND gold was what backed our money and gave it value!
  Dent also went on to say “Russia and China  are dumb money” and they are the only ones buying gold …everyone else is selling it.  Really?  He is missing a huge point, there is physical gold and then there is paper gold.  No Harry, “everyone else is not selling gold”.  The physical market is showing all the signs of being very tight.  GOFO is negative, we see backwardation in Asia and refiners have been running flat out to meet demand.  From what I see at Miles Franklin, we are getting 200 purchases for every sale request.  The only place “selling” is taking place is on the paper exchanges …where you do not need physical metal in order to sell it, all you need is collateral.  (As a side note, China sold over $100 billion worth of U.S. Treasuries last month)!
  One huge error Dent is making is not distinguishing between real metal and paper contracts.  He very well may be correct, COMEX gold could possibly go to $250 per ounce …or even zero for that matter, but, this will be accompanied by the real metal approaching “priceless”.  If he is correct about a financial collapse (I believe he is), he is very dangerously (to the public) telling people to sell THE ONLY insurance policy with the ability to actually “pay out” when it will be needed!  How can dollars which are issued by a mathematically bankrupt entity and at the epicenter of the coming leveraged panic become worth more?  History has shown time after time going back to the days of Rome, early China and before, when a government goes too far into debt …they print or debase their currency in order to make the debt cheaper.  Governments cannot debase gold and gold cannot default, these are two reasons (among others) that gold IS money and why governments detest it.
  I am sure you have heard the old saying “cash is king” when it comes to financial collapses, this is very true.  The important thing for you to understand is what “cash” actually is.  Cash is money, “money” which cannot default.  Cash during normal times (when confidence is high)can include “currency” but we are not talking about normal times here.  We are talking about a global margin call leading to global bankruptcy… and in it, many currencies will also “go broke”.
  For further proof of Harry Dent’s delusion, he suggests people move money balances to brokers and out of the banks.  Really?  Do you really believe the brokers will stay open if the banks are closed?  I haven’t checked recently but SIPC had even less reserves to coverage than FDIC …and they do not have a direct line of funding to the Treasury.  Next, what sort of “cash” investments is Harry Dent talking about?  Money markets?  Commercial paper?  Unless he is speaking about T-bills and only direct obligations of the Treasury he is pointing investors in front of another oncoming train!
  I for one just do not get it.  Harry Dent says “history proves that gold does poorly during deflation” but only uses the most recent history as proof.  He says “look at all the panics we’ve been through and yet the dollar always went higher”, I would suggest that “control” was not lost …which it certainly will during a global and systemic margin call!  All I can say is history is full of examples where gold was revalued higher during deflationary panics …the difference now is that for the first time in history, no money issued by any government on the planet has metals backing it.  This has been the case since 1971 and as I said, for the very first time in human history where no currency, anywhere, had gold backing.
  Let me finish with this, it is clear to me Harry Dent does not understand what “money” really is.  He is confusing money with currency which many times do act similarly but NOT during times where confidence breaks.  He is also very dangerously suggesting to move to brokers in lieu of banks with cash balances, does he not believe broker after broker will fail in the scenario he is suggesting?  He says he uses Scott Trade as his broker, does he really believe they will stay solvent ALONG with all of his “cash” investments?  Does he not understand when you deposit money with a bank or broker you will have risk the “end borrower” will default?  Even if he is correct and the dollar does strengthen versus foreign currencies (I do not believe so), this still does not guarantee the “borrower of your funds” will be able to pay.  Does he not understand what “money markets” actually are and what they are comprised of?  Please remember this and never forget it, when you “deposit” into a bank or broker and place it into a CD or a money market, you ARE LENDING the money to “someone”.  If you put it into Treasuries, you are lending to the government.  If you hold gold in your hand, it is yours.  It does not matter who in the world goes broke which includes individuals, corporations or governments.  Gold has value because it is no one else’s liability and cannot default.  It is THIS very truth as the reason why gold does better than all other currencies during a time of default and currency crisis.  Under Harry Dent’s scenario of deflation, confidence will be at its lowest level.  Capital will seek the safest money available in stampede fashion.  Dollars have absolutely no traits of being money, they are a currency and a failing one at that!
  So, that about does it for news from me until after the first of the year.  Next week I plan to pen a piece which so many of you have asked me for.  I will try to write a fictional account of “The Day After” and what types of hardships and events I believe might happen after the markets seize up.  If nothing else, it will be entertaining to me while writing it.  Hopefully for you the reader, something, anything you may have forgotten in your preparations may get jarred loose in your mind and acted on.  By no means will this missive be all encompassing as a full book is necessary but hopefully you will get more out of it than pure fantasy!  Wishing you all the best in this coming year, Bill Holter
Attachments area


And now for the important paper stories for today:



Early Monday morning trading from Europe/Asia



1. Stocks up on major Asian bourses as the  yen continues to fall    to 119.82, a fall of 26 basis points.

1b Chinese yuan vs USA dollar/ yuan  weakens  to 6.2216
2 Nikkei up 14 points or 0.08%

3. Europe stocks up  /Euro up/ USA dollar index down to 89.45/

3b Japan 10 year yield at .34% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.82

3c Nikkei now above 17,000

3e The USA/Yen rate well above the 119 barrier
3fOil: WTI 56.80 Brent: 61.21 /all eyes are focusing on oil prices. This should cause major defaults.

3g/ Gold slightly 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 Oil falls this morning for both WTI and Brent after rising on Rouble stability.

3k Greek’s Syriza party lead narrows

3l  Russia purchases 600,000 oz of gold/18.66 tonnes of gold. She refuses to sell any gold despite the fall in the rouble.

3m Gold at $1196 dollars/ Silver: $16.05

3n USA vs Russian rouble:  ( Russian rouble up in value)  55.10!!!!!!  Russian currency stabilizies

3o  Caterpillar global sales out and indicates huge slowdown.

4. USA 10 yr treasury bond at 2.18% early this morning. Thirty year rate well below 3%  (2.78%!!!!)
5. Details: Ransquawk, Bloomberg/Deutsche bank Jim Reid

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





US Equities Set For Record Open On Crude Commentary, Stable Russian Rouble


There are two key events driving overnight risk prices: first, there is the Bloomberg story that “China Offers Russia Help With Currency Swap Suggestion“, which was previously covered extensively here a week ago, but now that the algos have official confirmation that China will back Russia, they have sent the Ruble shorts into a panic short squeeze, with the USDRUB tumbling another 6% as of latest.

The other key development pushing oil prices modestly higher again, and Brent touching $63 overnight (if sliding fast since), is yesterday’s speech by Saudi oil minister Ali al-Naimi who “expressed confidence prices will pick up”, however not due to a drop in supply – because he made it very clear OPEC will never cut output and instead will wait for the high cost producers to exit the game – but amid improved economic growth. Which of course means the plunge in oil had little to do with supply and everything to do with demand, which in turn means the entire narrative has to be uprooted once again, and spun that rising oil prices are now bullisher for the economy than plunging oil prices. Frankly, it’s difficult to keep track of all the constantly changing, relentless spin. And good luck with a surge in demand considering China’s slowdown and its secondary impacts on Brazil and Australia (for a clear breakdown just see CAT’s latest retail sales).

Finally, there is China, although not its economy but its stock market, which just like the west keeps rising ever higher the worse the economic prospects are. As a result, the SHCOMP rose to a fresh multi-year high of 3,189 before closing at 3,127, up 0.6%. Things have gotten so out of control for the politburo which now has to do with two main bubble: a housing one that is popping, and a soaring stock market bubble to replace it, that as the WSJ reports in the aftermath of the surge in Chinese stocks, “China Investigates Possible Stock-Price Manipulation” in hopes of slowing down if not bursthing this latest Chinese bubble.

In any event, with Brent higher the RUB stable, China soaring and the USDJPY in its traditionall blastoff mode the second Europe opened for trading in illiquid, low-volume pre-Christmas tape, we are virtually assured a new all time high in the S&P as the FX rigging algos do their best to push USDJPY solidly over 120 and with it, the S&P into record territory.

Heading into the Christmas period, volumes have been considerably light as expected with European equities trading in positive territory following the trend from Fridays Wall Street rally. Furthermore, the upside seen in oil prices from Friday has also continued, with the energy sector outperforming in Europe supporting European equities as the USD-index (-0.10%) is slightly weaker this morning. On the Eurozone political front, the GR/GE 10yr bond yield spread continues to remain tighter this morning as bribery claims are brushed aside as latest polls indicated that Syriza’s lead in latest polling has narrowed; this comes ahead of the next Presidential vote on Tuesday. The Bund future has remained flat despite equities in the green as volumes are exceedingly light with less than 50,000 contracts traded, moreover, light volumes are expected throughout the holiday period.

Market Wrap

European shares remain higher with the oil & gas and chemicals sectors outperforming and basic resources, travel & leisure underperforming. China offers Russia ruble support with currency swap suggestion. Ruble strengthens. The Dutch and French markets are the best-performing larger bourses, Spanish the worst. The euro is stronger against the dollar. Japanese 10yr bond yields fall; Greek yields decline. Commodities gain, with natural gas, soybeans underperforming and wheat outperforming. U.S. Chicago Fed index, existing home sales due later.

  • S&P 500 futures up 0.3% to 2073.2
  • Stoxx 600 up 0.7% to 342.6
  • US 10Yr yield up 1bps to 2.17%
  • German 10Yr yield up 1bps to 0.6%
  • MSCI Asia Pacific up 0.8% to 138
  • Gold spot little changed at $1196.4/oz

Bulletin Headline Summary

  • While the market remains relatively muted, the energy sector is granted some reprieve and in turn, lifting European equities.
  • The GE/GR spread trades 16bps tighter with the Syriza poll showing their lead against the incumbent has narrowed.
  • Looking ahead, on today’s light data slate we have Chicago Fed Nat. Outlook, US Existing Home Sales and a 2yr note auction.


In FX markets, EUR/USD is among the outperformers in the pairs with support stemming from RANsquawk sources noting real money buying in EUR/GBP. NZD has pared back some of its overnight losses brought upon by weaker than previous NZ Westpac Consumer Confidence; (Q4) Q/Q 114.8 vs. Prev. 116.7. The USD-index has retraced some of Friday’s losses and has been edging marginally higher as lack of macro news flow has given the greenback much direction.
Friday’s CFTC report showed USD long positions narrowed for a fourth consecutive week, while net short EUR positions narrowed to their smallest since July and the narrowing in bearish AUD sentiment is the largest in 8 months. (ScotiaBank)


In the commodity complex, the USD has dictated much of the movements with WTI and Brent crude futures experiencing some earlier respite. However, both WTI and Brent crude futures have since come off best levels with the USD-index gradually edging higher from intra-day lows of 89.37. There were earlier reports that Libya said they are concerned about events around Mellitah oil port, adding Bahr Essalam offshore gas field output declined and are unable to fulfil contracts to international gas clients. In precious metals, Gold has dipped back below 1,200/oz as the USD continues to gain some momentum heading into the US crossover.








As we have stated before, if Russia needs China’s help, it will be forthcoming:


(courtesy Reuters)



China foreign minister says willing to help Russia

Chinese Foreign Minister Wang Yi gestures during a news conference on Asia-Pacific Economic Cooperation (APEC) related meetings at the China National Convention Center in Beijing, November 8, 2014. REUTERS/Rolex Dela Pena/Pool

Chinese Foreign Minister Wang Yi gestures during a news conference on Asia-Pacific Economic Cooperation (APEC) related meetings at the China National Convention Center in Beijing, November 8, 2014.



(Reuters) – China is willing to help Russia if needed but believes that the country has the ability to overcome its current economic problems, Chinese Foreign Minister Wang Yi was quoted as saying in a state newspaper on Monday.

The rouble has dropped about 45 percent against the dollar this year, suffering particularly steep falls early last week. President Vladimir Putin has declined to call it a crisis and said the currency would eventually rise again.

Wang, speaking to reporters over the weekend, said that Russia also had the “wisdom” to get out of difficulties, the official China Daily reported.

“If the Russian side needs, we will provide necessary assistance within our capacity,” he said, noting that the two countries had consistently helped each other.

He did not elaborate.

China’s trade minister, also speaking at the weekend, proposed more use of China’s currency in settling trade with Russia in the face of the weaker rouble to ensure safe and reliable trade.

China and Russia have close diplomatic and economic ties, particularly in the energy sector.

However, China has largely stayed out of the crisis over Ukraine, trying not to be seen to take sides and calling for talks to resolve the issue.

China’s exports to Russia rose 10.5 percent and imports climbed 2.9 percent in the first three quarters of the year from the same period in 2013, with total trade valued at $70.78 billion.

China’s foreign exchange regulator said last week that they were closely monitoring the slide in the rouble but that they hadn’t seen a significant impact on cross-border capital flows.

(Reporting by Ben Blanchard; Editing by Joseph Radford)







A good sign that the global economy is faltering and a good reason why oil is dropping due to lack of demand;


(courtesy Bloomberg/zero hedge)




The Baltic Dry Index Has Never Crashed This Fast Post-Thanksgiving


We are sure it’s nothing – since stock markets in China and The US are soaring – but deep, deep down in the heart of the real economies, there is a problem. The Baltic Dry Index has fallen for 21 straight days, tumbling around 40% since Thanksgiving Day.  



This is the biggest collapse in the ‘trade’ indicator (which we should ignore unless it is rising) since records began 28 years ago…

As The Index itself hovers very close to the post-crisis lows…


Charts: Bloomberg





My goodness, this was fast!!  Belarus now in full blown hyperinflation due to the huge fall in the Russian rouble. This illustrates the speed from which hyperinflation can occur.



Definition of hyperinflation: when the citizenry lose all confidence in the currency and bid up prices to astronomical levels.  All goods disappear rapidly from shelves.


in other words, when lack of confidence in their own currency causes huge demand for goods of which those goods are limited in quantity.


(courtesy zero hedge)




Belarus In Full-Blown Hyperinflation Panic: Blocks News, Online Stores; Bans All FX Trading For 2 Years


“We have to do something with these Belarussian rubles,” exclaims one Belarussian as she shops to turn worthless rubles (BYR) into physical assets. As AFP reports, The Belarussian currency was dragged down by the slide of the Russian ruble last week, leading authorities to impose draconian measures, forbid price increases even for imported goods, and warn people against panic. Now, however, in an effort to stem the flood of hyperinflating domestic prices, authorities have blocked online stores and news websites to stop the run on banks and shops as people scramble to secure their savings. One of the blocked news websites noted, it “looks like the authorities want to turn light panic over the fall of the Belarussian ruble into a real one,” calling the blockages “December insanity.”

And indeed they have stepped up the insanity, extending the halt in FX trading…

Today the Belarus central bank shocked its own population when it also announced full-blown capital controls designed, releasing additional measures to stem the “negative trends of currency and financial markets ” including raising mandatory sales of FX revenue to 0%, suspending all OTC FX trading (so pretty much all FX), introducing a 30% fee on all FX purchases, “recommending” that banks halt BYR lending until February, and sending 1-yr interest rates on liquidity operations with banks to a eyewatering 50% in hopes this leads to an increase in BYR deposit rates. It will. What it won’t lead to is stabilization in the deposit market as the natives realize they too are next up on the hyperinflation train.


End result:

through 2017…




As AFP reports,

Belarus blocked online stores and news websites Sunday, in an apparent attempt to stop a run on banks and shops as people rushed to secure their savings.


In a statement Sunday, BelaPAN news company, which runs popular independent news websites and, said that the sites were blocked Saturday without any warning.


“Clearly the decision to block the IP addresses could only be taken by the authorities because in Belarus the government has monopoly on providing IPs,” it said.


Other websites blocked Sunday were,, and others with an independent news outlook.


The blockage started on December 19, when the government announced that purchases of foreign currency will be taxed 30 percent and told all exporters to convert half of their foreign revenues into the local currency.


“Looks like the authorities want to turn light panic over the fall of the Belarussian ruble into a real one,” Belarus Partisan website wrote, calling the blockages “December insanity.”


Internet shopping websites were also blocked en masse. Thirteen online stores were blocked Saturday for raising their prices or showing them in US dollars, deputy trade minister Irina Narkevich said, Interfax reported.


The government announced a moratorium on price increases for consumer goods and ordered domestic producers of appliances to “increase deliveries” and keep prices the same at the risk of their management being sacked.


Belarussians lined up for hours to clear out their bank accounts and swept store shelves to secure their savings, stocking up on foreign-made appliances and housewares.


The Belarussian ruble has lost about half of its value since the beginning of the year, having been hit hard by the depreciation of the Russian ruble since its economy is heavily dependent on its giant neighbour.


With foreign currency swiftly depleted in exchange offices, Belarussians even launched a black market website where individuals could buy and sell dollars and euros.

And then there’s this… Belarus has introduced a 30% tax on the purchase of foreign currency…

$ 460 million will bring to the Belarusian budget introduction of a 30% tax on the purchase of foreign currency in Belarus. This is the TV channel “Belarus 1” said First Deputy Minister of Finance of the country Maxim Ermolovich.


“Given the daily supply and demand in the foreign exchange market budget revenues will amount to about 5 trillion Belarusian rubles, or $ 460 million at the exchange rate of the National Bank”, – he said.


Recall, December 19 NBB announced the introduction of December 20 temporary levy of 30% on the purchase of foreign currency for individuals and legal entities in connection with the sharply increased demand for foreign currency in the domestic market of Belarus. Legal persons will pay the tax on the stock exchange, and individuals – in the form of bank commission when buying foreign currency.

*  *  *
Expect to see more of this…

h/t @Russian_Market



Gary Shilling states that oil can fall to $20.00 or its marginal cost once drill holes have been dug,  Shilling also describes how various oil producing countries are in trouble:
(courtesy zero hedge)

Kazakhstan Prepares For $40 Oil, Gary Schilling Says “Oil Going To $20”

“People should not be worried,” explained Kazakhstan President Nursultan Nazarbayev in a TV address over the weekend, “we have a plan in place if oil prices are $40 per barrel.” Kazakhstan, the second largest ex-Soviet oil producer after Russia, explains “there are reserves which could support people, preventing living conditions from worsening.” However, if A. Gary Schilling’s reality check of $20 oil being possible comes to fruition, as he explains, what matters are marginal costs – the expense of retrieving oil once the holes have been drilled and pipelines laid. That number is more like $10 to $20 a barrel in the Persian Gulf… We wonder who has a plan for that?


The Kazakh President says “don’t worry”, as Reuters reports…

Kazakhstan, the second largest ex-Soviet oil producer after Russia, has plans in place should global oil prices fall as low as $40 per barrel, President Nursultan Nazarbayev told local TV channels.


“Kazakh people should not be worried. We have a plan if oil price are $70, $60, $50, $40 per barrel,” he said, according to a transcript published on his


“There are reserves which could support people, preventing living conditions from worsening,” he said, without providing any details.


Kazakhstan’s National Fund, which collects oil revenues, stood at $76.8 billion at the end of November. Separately, the central bank’s net gold and foreign exchange reserves stood at $27.9 billion.


Nazarbayev has also urged the Kazakh people not to worry about the slide in Russia’s rouble currency, which has lost some 45 percent of its value versus the dollar this year.

But A Gary Schilling is less sure… (via Bloomberg View)

When the U.S. Federal Reserve ended its quantitative-easing program in October, it also ended the primary driver of U.S. stocks during the past six years. So long as the central bank kept flooding the markets with money, investors had little reason to worry about a broader economy limping along at 2 percent real growth.


Now investors face more volatile markets and securities that no longer move in lock-step. At the same time, investors must cope with slower growth in China, minuscule growth in the euro area and negative growth in Japan.


Such widespread sluggish demand — along with ample supplies of oil and most everything else — is the reason commodity prices are falling. They have been since early 2011, but many people failed to notice until recently, when crude oil prices nosedived.


Normally, less demand and a supply glut would lead the Organization of Petroleum Exporting Countries, beginning with Saudi Arabia, to cut production. As the de facto cartel leader, the Saudis would often reduce output to prevent supply increases from driving down prices.


Of course, this also cost the Saudis market share and encouraged cheating by OPEC members. Saudi leaders must grind their teeth over the last decade’s unchanged demand for OPEC oil, while all the global growth has been among non-OPEC suppliers, principally in North America.


That may explain why, while Americans were enjoying their Thanksgiving turkeys, OPEC surprised the world.Pressed by the Saudis and other rich Persian Gulf producers, it refused to cut output despite a 38 percent drop in the price of Brent crude, the global benchmark, since June.


OPEC, in effect, is challenging other producers to a game of chicken. Sure, the wealthier producers need almost $100 a barrel to finance bloated budgets. But they also have huge cash reserves, which they figure will outlast the cheaters and the U.S. shale-oil producers when prices are low.


The Saudis also seized the opportunity to damage their opponents, especially Iran and what they see as Iran-dominated Iraq, in the Syria conflict. They also want to help allies Egypt and Pakistan reduce expensive energy subsidies as prices fall.


Then there’s Russia, another Saudi opponent in Syria, with its dependence on oil exports to finance imports and 42 percent of government outlays. With the ruble collapsing, the Russian central bank let the currency float in November after blowing through $75 billion to support it. Then the central bank tried to stop the free fall by raising interest rates by 6.5 percentage points to 17 percent on Dec. 15.


Still, the Russian currency is floundering, along with the economy. Consumer prices in Russia rose 9.1 percent in November from a year earlier. The economy will be in recession next year, the website of the Russian economy ministry acknowledged for a few hours on Dec. 2, before the posting was deleted.


Venezuela is also suffering. The government needs $125-a-barrel oil to cover its spending, of which 65 percent depends on oil exports. Its crude production is down a third since 2000. With inflation raging, the bolivar officially sells for 6.29 a dollar, but for 180 on the black market.


In Nigeria, where oil and natural gas account for 80 percent of government revenue and almost all its exports, the naira has fallen 11 percent versus the greenback so far this year.


How low can oil prices go? In the current price war, the global market price needed to support government budgets isn’t really the main issue. Nor are the total costs for exploration, drilling and transportation.


What matters are marginal costs — the expense of retrieving oil once the holes have been drilled and pipelines laid. That number is more like $10 to $20 a barrel in the Persian Gulf, and about the same for U.S. shale-oil producers. The estimated $50 to $69 a barrel break-even point for most new U.S. shale-oil production is less relevant. 


Developing countries that depend on commodity exports for hard currencies to service foreign debt will produce and export even at prices below their marginal cost. Until some major producer chickens out and cuts production, oil prices should remain low. They could decline a lot more than the 50 percent drop so far.





The whisper on the street is that the ECB is going to monetize 500 billion euros of sovereign bonds and the purchases will be according to contribution to GDP.  That means that Germany which is the front runner as far as GDP is concerned will be the lucky recipient of 130 billion euros purchase or approximately 90% of their issuance:
(courtesy zero hedge)

Don’t Tell Germany Draghi Is About To Monetize 90% Of Bund Issuance


The next time anyone is stupid enough to mention monetary policy “normalization”, either have them read this:

The Bank of Japan’s expansion of record stimulus today may see it buy every new bond the government issues.


The BOJ said it plans to buy 8 trillion to 12 trillion yen ($108 billion) of Japanese government bonds per month under stepped-up stimulus it announced today. That gives Governor Haruhiko Kuroda leeway to soak up the 10 trillion yen in new bonds that the Ministry of Finance sells in the market each month.

Translated: the BOJ will monetize 100% of all Japanese debt issuance (source).

… And this:

in Q1, we expect the ECB to announce a EUR500bn sovereign QE program and buy EMU government bonds according to each EMU country’s ECB capital key contribution. This implies that the ECB would purchase EUR130bn of German bonds, i.e., 90% of the 2015 gross issuance of German Bunds.

Translated: the ECB will monetize 90% of all German debt issuance (source).

Or just show them this chart.


And since Japan no longer cares what the lunatics in charge do as its fate is sealed anyway, please make sure any Germans observing the above are unable to see thechart below, which shows what happened the last time a central bank monetized all of their Bund issuance.

The Germans are going to need a bigger chart.’








Today Natural Gas crashes (along with oil) as the new polar vortex arrival is delayed.  The economy seems to need this vortex to raise natural gas prices and give to boast to natural gas companies:


(courtesy zero hedge)




NatGas Crashes Most In 10 Months As Polar Vortex Arrival Delayed


Natural Gas prices are down over 11.5% in the last 2 days, falling to their lowest price since January 2013, as a familiar tale of excess production in the face of ebbing demand looms large. As WSJ reports, BNP Paribas’ Teri Viswanath notes “the delayed return of cold weather has simply curbed all buying interest,”and this was exaggerated by technical selling as the market broke previous support around 3.50. Ironically, given its detrimental impact on GDP, Macquarie points out, “it is increasingly apparent to us that weather will need to bail the market out again this winter – otherwise prices could see material downside during the spring and summer months.”


Moar tax-cuts, more discretionary spending!! oh and less employment, capex, and EPS for Oil & Gas stocks…


As The Wall Street Journal reports,

Natural-gas futures slid to their lowest prices this year and entered a bear market Friday, as investors come to grips with surging production that is beginning to push the U.S. toward potential oversupply.



“The delayed return of cold weather has simply curbed all buying interest,” said Teri Viswanath, natural-gas strategist at BNP Paribas in New York. “Unseasonably warm weather that persisted through the month of December now necessitates extreme weather conditions to avoid a (gas supply) surplus.”


Analysts said Friday’s selling was partly driven by technically driven trading as the market broke through levels where it previously rebounded.



Though the U.S. has begun to draw on natural-gas stockpiles for fall and winter heating needs, continued booming production from U.S. shale fields is helping to replenish supplies. As a result, withdrawals from storage have been smaller than average, and the U.S. has begun to erase a supply deficit that has persisted most of this year, after outsize demand from the severe winter last season dragged stockpiles to an 11-year low.



“It is increasingly apparent to us that weather will need to bail the market out again this winter—otherwise prices could see material downside during the spring and summer months,” Macquarie Bank said in a research note. “At this point, winter weather will determine just how low prices can go.”

*  *  *
Unequivocally good again, right?






Your more important currency crosses early Monday morning:



Eur/USA 1.2261 up .0033

USA/JAPAN YEN 119.82 up 0.262

GBP/USA 1.5631 up .0015

USA/CAN 1.1615 up .0016

This morning in Europe, the euro is  up , trading now well below the 1.23 level at 1.2261 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.  He now wishes to give gift cards to poor people in order to spend. The yen continues to trade in yoyo fashion.  This morning it settled  down in Japan by 26 basis points and settling just below the 120 barrier to 119.82 yen to the dollar.  The pound is up this morning as it now trades just below the 1.57 level at 1.5631.(very worried about the health of Barclays Bank and the FX/precious metals criminal investigation). The Canadian dollar is down today trading at 1.1612 to the dollar.


Early Monday morning USA 10 year bond yield: 2.18% !!! par  in basis points from Friday night/


USA dollar index early Monday morning: 89.45 down 15 cents from Friday’s close



The NIKKEI: Monday morning up 14 points or 0.08%

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

2/ Asian bourses all in the green … 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: $1196.00





Closing Portuguese 10 year bond yield: 2.70% down 3 in basis points from Friday

Closing Japanese 10 year bond yield: .34% !!! down 2 in basis points from Friday

Your closing Spanish 10 year government bond, Monday ,down 3 in basis points in yield from Friday night.

Spanish 10 year bond yield: 1.67% !!!!!!
Your Monday closing Italian 10 year bond yield: 1.93% down 2 in basis points from Friday:

trading 26 basis points higher than Spain:


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

Euro/USA: 1.2227 down .0024

USA/Japan: 120.08 up 0.519

Great Britain/USA: 1.5583 down .0034

USA/Canada: 1.1640 up .0041

The euro fell badly again in value during the afternoon , and it was  down by closing time , finishing well below the 1.23 level to 1.2227. The yen was constant in the afternoon, but it was down by closing  to the tune of 52 basis points and closing just above the 120 cross at 120.08. The British pound lost considerable ground during the afternoon session and it was down on the day closing at 1.5839. The Canadian dollar was well down in the afternoon and was down on the day at 1.1635 to the dollar.

Currency wars at their finest today.

Your closing USA dollar index: 89.58 down 2 cents from Friday.


your 10 year USA bond yield , down 1 in basis points on the day: 2.17%!!!!





European and Dow Jones stock index closes:



England FTSE  up 31.47 or 0.48%

Paris CAC up 12.78 or 0.30%

German Dax up 78.80 or 0.81%

Spain’s Ibex up 7.40 or 0.07%

Italian FTSE-MIB up 90.21 or 0.48%

The Dow: up 154.64 or 0.87%

Nasdaq; up 16.05 or 0.34%

OIL: WTI 55.33 !!!!!!!

Brent: 60.07!!!!



Closing USA/Russian rouble cross: 55.24  strengthened by over 4 roubles per usa dollar.






And now for your more important USA economic stories for today:



Your trading today from the New York:


S&P 500 Surges To Record High As Black & Yellow Gold Battered


Who was buying today? Were they feeling lucky?


Stocks went up – again – with the Dow extending to almost 900 points in 4 days and pressing towards record highs…and S&P 500 hitting new record highs. At the same as bonds rallied back close to unchanged, USD was bid, and commodities collapsed led by Silver and Crude.


S&P closed at record highs but missed out on intraday highs by 1 point…


This is the biggest 4-day surge in over 3 years…


with everything up 5-6% off the pre-Fed close… in 4 fucking days!!!


Who could have seen that coming?

As USDJPY did indeed lead the way – as 120 was all that mattered


Because Fun-durr-mentals…


Trannies love lower oil prices (and higher ones)…


Energy and Utes sold off but Tech surged andhomebuilders rallied 0.5% on the back of a total freaking collapse in existing home sales… very bullish


The USD rose notably from the European Open to the US close…


Treasury yields roundtripped with 10Y and 30Y unch by the close…rallying during US session


and the decoupling since FOMC is becoming a joke… in Treasuries…


and crude…


Credit notably unimpressed today… HY spreads closed at the wides of the day as stocks ripped to record highs


Commodities were clubbed like baby seals with silver and oil synced… mirroring The USD (with plenty of beta)

Crude continues to swing between $59ish and $55ish…


Charts: Bloomberg

Bonus Chart: Stocks losing their FX Carry pillar of support…






Existing home sales collapse as the market just folds like an accordian.


(courtesy zero hedge)

Existing Home Sales Collapse Most Since July 2010, Downtick In Stock Market Blamed


Having exuberantly reached its highest level since September 2013 last month (despite the total collapse in mortgage applications), it appears the ugly reality of the housing market has peeked its head out once again. As prices rose, existing home sales plunged 6.1% – the most since July 2010 (against an expected 1.1% drop) to 4.93mm SAAR (the lowest in 6 months). As usual there is an excuse for this carnage… NAR’s Larry Yun blames the stock market (and rising home values). Quite a conundrum for the Fed…



Catchdown? Now investors have left the building…


NAR’s Larry Yun blames crash on stock market:

The stock market swings in October may have impacted some consumers’ psyche and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.”

Charts: Bloomberg




Dave Kranzler comments on the above:


(courtesy Dave Kranzler/IRD)



Whoops! Existing Home Sales Drop Well Below Forecast

Of course, this was not unexpected for anyone who reads my work…

The seasonally manipulated adjusted rate fell to 4.93 million – well below the expected rate of 5.2 million. Note: this is a statistically calculated annualized rate and bears no resemblance to the actual sales rate. As we know from an earlier post, SoCal home sales in November plunged 19%.  Inventory is climbing quickly, which is consistent with all of the new “for sale” and “for rent” listings all over the metro-Denver area.

More later, but suffice it so say that my homebuilder short-sell reports are very ripe and ready: Homebuilder Reports.


That is all for today.


I will see you Tuesday night

bye for now




  1. I absolutely do not like your new website. It sucks.


  2. If there is a technical reason you must use light blue text I will be understanding and not complain, but you should know it is difficult for older eyes to read. Or maybe my computer does not do a good job of displaying light blue. Either way, another color would be appreciated, preferably black.


  3. Ulrich Sherry · · Reply

    Hi Harvey, Good to see you back. Do you still think that silver will reach $200 by January or do you think that the manipulations will keep it down for a while?


  4. Dirk Vandercruyssen · · Reply

    Hi harvey, it is impossible to open some charts


  5. I’m not sure where you’re getting your info, but good topic.
    I needs to spend some time learning much more or understanding more.
    Thanks for magnificent information I was looking for this info for my mission.


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