Dec 9.2015/Yesterday it was Anglo American suspending their dividend, today it was Freeport McMoRan/Glencore falls to 75 pence and now their credit default swaps indicate a 50% chance of default/Huge drop in the yuan also causes a huge fall in usa dollar index/ The euro rises which indicates the market does not believe that the EU will QE/Iraq cancels with security agreement with the USA: Russia waiting in the wings/IMF breaks all of its rules as it loans money to the bankrupt Ukraine/ the IMF hilariously forgives the Russian 3 billion usa debt owed by Ukraine/Brazil is in one complete mess: i) double digit inflation ii) huge unemployment/ iii political scandal extraordinaire and iv)tumbling currency and tumbling foreign reserves/Where there is smoke there is fire and it looks like there is trouble underneath KinderMorgan/Jeffery Snider believes that something blew up as the CCC bond yields are huge and liquidity is gone from the market/

Gold:  $1076.30  par    (comex closing time)

Silver $14.09 par

In the access market 5:15 pm

Gold $1073.00

Silver:  $14.17

At the gold comex today,  we had an extremely poor delivery day, registering 133 notices for 3,300 ounces. And this is the biggest delivery month of the year for gold? Silver saw 0 notices for nil oz.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 196.44 tonnes for a loss of 106 tonnes over that period.

In silver, the open interest fell by a smallish 152 contracts as silver was down 31 cents with respect to Tuesday’s trading.  The total silver OI now rests at 162,758 contracts In ounces, the OI is still represented by .813 billion oz or 116% of annual global silver production (ex Russia ex China).

In silver we had 0 notices served upon for nil oz.

In gold, the total comex gold OI fell by a small 273 contracts as the OI rose to 394,128 contracts as gold was down by $.10 with respect to Tuesday’s trading. Today the bankers provided the initial HFT and the specs longs continued their assault on the short side but this failed as the bankers continued their assault on the specs by continually buying causing gold to finish in the positive.

We had no changes in  gold inventory at the GLD, / thus the inventory rests tonight at 634.63 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex.   In silver, we had no change in silver inventory at the SLV/Inventory rests at 321.507 million oz

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver fall by 152 contracts down to 162,538 as silver was down in price by 19 cents to with respect to Tuesday’s trading.   The total OI for gold fell by 273 contracts to 394,128 contracts as gold was down by $.10 with respect to yesterday’s trading.

(report Harvey)

2 a) Gold trading overnight, Goldcore

(Mark OByrne)


i) Last night, 9:30 pm TUESDAY night, WEDNESDAY morning Shanghai time.  Japan Nikkei closed down by 191.53  POINTS OR 0.98%, Shanghai finishes barely in the positive /    Hang Sang falls,Australia falls.  Base metal companies take it on the chin as Anglo American and Freeport suspend their dividend.  Oil rebounds a touch.  China devalues their yuan the most in quite some time which also causes the dollar to fall/gold and silver rise.  Glencore stock at 75 pence and credit default swaps indicate a 50% chance of default.

( zero hedge)

ii) Later in the evening:

China fixes its yuan at its weakest level since August 2011 which also forces the dollar lower/this is the 45th consecutive month of deflation in China as PPI falls in November by 5.9%/it looks like China is seeking a total of 20% devaluation start to finish!

(courtesy zero hedge)

iii) Zero hedge and Meijer  explain the huge deflationary problem that China is bestowing on the world:  how we got here and what is going to happen.  Take particular care to Raul Meijer’s piece at the end of the commentary:

(courtesy zero hedge/Raul Meijer)
i) Glencore falls to 75 pence/credit default swaps rise to 50% chance of a default
(LME) and zero hedge
ii)  Notowny of the ECB blames investors for not reading the tea leaves properly
what an absolute moron!
(zero hedge)

iii) That did not take long:  Greek stocks crash as trading restrictions are lifted:

(courtesy zero hedge)

iv) You will recall that the Danish central bank, the Swedish central bank and the Norwegian central bank, already in NIRP, was ready to increase their NIRP even more, if the ECB made good on its threat for increasing QE.  Now that there is a ceasefire in the currency wars as Draghi did not get the OK from the hawks, maybe our Scandinavian central banks will get a little head start ahead of the ECB by increasing NIRP a little(courtesy zero hedge)


i) for the first time, Russia targeted sites in Syria from a submarine!! The defense minister also hinted that there may be a need to nuke ISIS:

(courtesy zero hedge)

ii) a huge story!! Iraq now seeks to cancel that all important security agreement with the USA as they invite Russian to fight the terrorist organization ISIS.

the middle east is heating up again

(courtesy zero hedge)

iii) The IMF just broke all of its rules as it funds Ukraine against rebels.  It basically “forgave” the Ukraine’s debt to Russia/totally unbelievable/

(courtesy Michael Hudson/the Saker)

iv) Five arrests last month and surprisingly they were Israeli Arabs. Generally Israeli Arabs have been quite peaceful until now.  To the Shin Beit, it appears that ISIS may shift their strategy and attack Israel from within

(courtesy Breaking Israel
A strange helicopter route and bribe/Basically they are stating: please leave us alone?
Just look and see what Norway offered refugees to stay away from Norway!!
(courtesy Mac Slavo/
Zero hedge describing the current situation in Brazil after they record a double digit increase in inflation:

“What could be better? Collapsing GDP, double-digit inflation, rising unemployment, an intractable political crisis, and double-digit interest rates. This isn’t even a “sub”merging market anymore. We’re back to “frontier” status in Brazil.”

 (courtesy zero hedge)
(courtesy zero hedge)

ii) Andy Hall’s big oil hedge fund looks ready for defeat and they may succumb:

(courtesy zero hedge)

iii) Here is another group of oil men that are in trouble due to oil below 50$: the strippers!!(courtesy Michael McDonald

i) the Bank of Canada wants to be ready for negative interest rates
(GATA/National Post/Toronto)
ii) a huge story brought to your attention yesterday i.e. the massive 85,000 job cuts at Anglo American
iii)And today, the world’s second largest copper miner and a huge gold producer, Freeport McMoRan suspends i’ts dividend.
(zero hedge/Freeport McMoRan)

iii) Bill Holter tackles beautifully the problems at the gold comex/as well as the explosive situations surrounding the globe

 (courtesy Bill Holter/Holter-Sinclair collaboration)
iv)  Dr. Chris Martenson is one smart cookie:  you must read his latest piece
i) a)  With the devaluing yuan, the USA dollar is also tanking  (this morning)
(zero hedge)

b) Trading today at the NY:  mid afternoon

In a nutshell, once the USA/Jap Yen failed, they went to the WTI crude trade for liftoff and then that failed as the Dow fell badly in negative territory:
(courtesy zero hedge)
ii) inventories fall which causes 4th Quarter GDP estimations to fall
(zero hedge)

 iii) The last bastion of support for the NY stock market just flew out the window as rail car freights for cars has just tumbled as well as coal shipments.  A strong bellwether of coal, feights for autos seems to suggest that the markets have tanked since October:

(courtesy zero hedge)

iv) We have been harping on this for quite some time as public pension funds have a huge liability hole due to the assumptions of controllers that they would be earning 7 to 8 % on pension funds.  Many public pension funds have resorted to hedge funds trying to augment their returns.  Instead hedge funds have performed miserably and now the funds are really short of funds required to satisfy pensioners in the future

(courtesy zero hedge)

v) a( Three weeks ago, giant Kinder Morgan stated that it was contemplating increasing its dividend by 6 to 10 per cent from its 2 dollars per share budgeted  (thus $2.12 to $2.20).  Then, shockingly they reduced by 75% its dividend to 50 cents.

To Jeffrey Snider, this is not just oil but the whole financial scene just blew up.  He details why he thinks so!!
(courtesy Jeffrey Snider/Alhambra Investment Partners)
b) Dave Kranzler is also worried about Kinder Morgan:
(courtesy Dave Kranzler/IRD)

vi)  We get a sneak preview of the big retail sales number coming  on Dec 11.2015.  Retail sales show a decline:(Bank of America/zero hedge)

vii)  we close with this great interview of Rob Kirby by Greg Hunter

Let us head over to the comex:

The total gold comex open interest fell to 394,128 for a loss of 273 contracts as  gold was down by $.10 with respect to yesterday’s trading.   For the past two years, we have strangely witnessed two interesting developments with respect to the gold open interest:  1) total gold comex collapse in OI as we enter an active delivery month, and 2) a continual drop in the amount of gold standing in an active month. Today, the boys did it again as OI for the front month fell despite no issuance of paper as both of the above scenarios continued in earnest. We are now in the big December contract which saw it’s OI fall by 1327 contracts from 3603 down to 2276.  We had 120 notices filed upon yesterday, so we lost 1207 contracts or an additional 120,700 oz of gold that will not stand for delivery in this active delivery month of December. The next contract month of January saw it’s OI rise by 36 contracts up to 658.  The next big active delivery month is February and here the OI rose by 108 contracts up to 282,824. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was 135,181 which is poor. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was also poor at 137,077 contracts.

Today we had 33 notices filed for 3300 oz.
And now for the wild silver comex results. Silver OI fell by 152 contracts from 162,910 down to 162,758 as the price of silver was down 37 cents with respect to yesterday’s trading.  The big December contract month saw its OI fall by 32 contracts down to 380. We had 1 contracts served upon yesterday so we lost 31 contracts or 155,000 oz of additional silver that will not stand in this active delivery month of December. The next non active month of January saw it’s OI fall by 294 contracts down to 649.  The next big active contract month is March and here the OI fell by 594 contracts down to 128,562. The volume on the comex today (just comex) came in at 34,371 , which is fair. The confirmed volume yesterday (comex + globex) was very good at 42,573.
We had 0 notice filed for nil oz.

December contract month:

INITIAL standings for DECEMBER

Dec 9/2015

Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil 1,221.700 oz


Deposits to the Dealer Inventory in oz  nil
Deposits to the Customer Inventory, in oz   nil
No of oz served (contracts) today 33 contracts

3300 oz

No of oz to be served (notices) 2243 contracts

(224,300 oz)

Total monthly oz gold served (contracts) so far this month 244 contracts(24,400 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month 154,487.3 oz
 Today, we had 0 dealer transactions
Today, we had 0 dealer transactions
Total dealer withdrawals:  nil oz
total dealer deposit:  nil oz
We had 1  customer withdrawal:
i) Out of Brinks: 1221.700 oz
total customer withdrawal 1221.700 oz
We had 0 customer deposit:

Total customer deposits  nil oz

 JPMorgan has a total of 7975.14 oz or 0.2480 tonnes in its dealer or registered account.
***JPMorgan now has 369,271.339 oz or 11.48 tonnes in its customer account.
Today we had two adjustments;
Out of HSBC:  2915.445 oz was adjusted out of the customer and this landed into the dealer account of HSBC
Out of Delaware:  192.9000 oz was adjusted out of the customer and this landed into the dealer account of HSBC
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 33 contracts of which 33 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received)  by JPMorgan customer account.
To calculate the final total number of gold ounces standing for the Dec contract month, we take the total number of notices filed so far for the month (244) x 100 oz  or 24,400 oz , to which we  add the difference between the open interest for the front month of December (2276 contracts) minus the number of notices served upon today (33) x 100 oz   x 100 oz per contract equals the number of ounces standing.
Thus the initial standings for gold for the December. contract month:
No of notices served so far (244) x 100 oz  or ounces + {OI for the front month (2276) minus the number of  notices served upon today (33) x 100 oz which equals 248,700 oz standing in this active delivery month of December 7.7356 TONNES)
we lost a whopping 1207 contracts or an additional 120,700 oz  will not stand for delivery.  These were cash settled no doubt.
We thus have 7.7356 tonnes of gold standing and only 4.1797 tonnes of registered gold for sale, waiting to serve upon those standing
Total dealer inventory 134,378.176 oz or 4.1797 tonnes
Total gold inventory (dealer and customer) =6,315,561.584  or 196.44 tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 196.44 tonnes for a loss of 106 tonnes over that period.
JPmorgan has only 10.5 tonnes of gold total (both dealer and customer)
And now for silver


Dec 9/2015:

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 658,402.000 oz


Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 599,862.500  oz


No of oz served today (contracts) 0 contracts

nil oz

No of oz to be served (notices) 380 contracts 

(1,900,000 oz)

Total monthly oz silver served (contracts) 3514 contracts (17,570,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month nil oz
Total accumulative withdrawal  of silver from the Customer inventory this month 2,367,406.2 oz

Today, we had 0 deposit into the dealer account:

total dealer deposit; nil oz

we had no dealer withdrawals:

total dealer withdrawals:  nil


we had 1 customer deposit:

i) Into JPMorgan: 599,862.500 oz

total customer deposits: 599,862.500 oz

We had 3 customer withdrawals:  and take a look at the totals:  exactly 658,402.000 oz!!
i) Out of JPMorgan: 594,850.800 oz
ii) Out of Scotia:  62,613.0000 oz ?????
iii) Out of Brinks:  938.200 oz

total withdrawals from customer account: 658,402.000    oz  ???



The total number of notices filed today for the December contract month is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in Dec., we take the total number of notices filed for the month so far at (3514) x 5,000 oz  = 17,570,000 oz to which we add the difference between the open interest for the front month of December (380) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing
Thus the initial standings for silver for the December. contract month:
3514 (notices served so far)x 5000 oz +(380) { OI for front month of December ) -number of notices served upon today (0 x 5000 oz or 19,470,000  of silver standing for the December. contract month.
we lost 31 contracts or 155,000 additional oz that will not stand for delivery in this active month of December..
Total number of dealer silver:  42.271 million oz
Total number of dealer and customer silver:  down to 158.376 million oz
we again we more silver leave the customer account.
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

And now the Gold inventory at the GLD:

DEC 9/no change in gold inventory at the GLD/inventory rests at 634.63 tonnes

Dec 8/ no change in gold inventory at the GLD/inventory rests at 634.63 tonnes

Dec 7/another huge withdrawal of 4.23 tonnes of gold/inventory rests at 634.63 tonnes

Dec 4/no change in gold inventory at the GLD/Inventory rests this weekend at 638.80

Dec 3/ a massive withdrawal of 16.oo tonnes of gold heading straight to Shanghai/tonnage rests tonight at 638.80 tonnes

Dec 2.2015: no change in gold inventory at the GLD/inventory rests at 654.80 tonnes

Dec 1.2015:/no change in gold inventory at the GLD/inventory rests at 654.80 tonnes/
Nov 30/no change in gold inventory/rests tonight at 654.80 tonnes
Nov 27/we had a withdrawal of .89 tonnes of  gold inventory at the GLD/Inventory rests at 654.80 tonnes
Dec 9.  inventory 634.63 tonnes
*this is the lowest level in quite some time.  It looks like physical gold acquired in the past few months have now left the GLD vaults heading for China.
Now the SLV:
DEC 9/we had no change in silver inventory at the SLV/Inventory rests at 321.507 million oz/
Dec 8.2015:no change in silver inventory at the SLV/rests tonight at 321.507 million oz/
Dec 7./no change in silver inventory at the SLV/rests tonight at 321.507 million oz/
Dec 4./a huge deposit of 2.287 million oz into the SLV/no doubt this would be a paper addition and not real silver
Inventory rests at 321.507 million oz/
Dec 3 a tiny withdrawal of 131,000 oz and this was probably sold to pay for fees/inventory at 319.220 million oz
Dec 2. no change in silver inventory at the SLV/Inventory rests at 319.353 million oz
dec 1.2015: a huge deposit of 1.144 million oz of silver into the SLV/Inventory rests at 319.353 million oz

Nov 30/no change in silver inventory at the SLV/Inventory rests at 318.209 million oz

Nov 27/no change in silver inventory at the SLV/rests at 318.209
Dec 9/2015:  tonight inventory rests at 321.507 million oz***
******Note the difference between the GLD and SLV.  GLD sees liquidation of metal but not SLV. Why?  because the SLV has no real silver behind it only paper silver. Today the addition of silver was a paper silver entry and I extremely doubt that real silver entered the SLV vaults.
And now for our premiums to NAV for the funds I follow:
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 11.7 percent to NAV usa funds and Negative 12.2% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.5%
Percentage of fund in silver:37.4%
cash .1%( Dec 9/2015).
2. Sprott silver fund (PSLV): Premium to NAV falls to -0.26%!!!! NAV (Dec 9/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV falls to- 0.81% to NAV Dec 9/2015)
Note: Sprott silver trust back  into negative territory at -.26% /Sprott physical gold trust is back into negative territory at -0.81%Central fund of Canada’s is still in jail.

Sprott Issues Open Letter to Unitholders of Central GoldTrust and Silver Bullion Trust

Dear Unitholder,

The Trustees of GTU and SBT have made clear their intentions. They have entered into an agreement with Purpose Investments that will put your investment at significant risk in order to protect their own fees. You made the choice to invest in a closed-end physical bullion security, and now the Spicers and their Trustees are ignoring this choice, and betraying the principles of physical bullion securities, to ensure they continue to profit.

The Purpose Investments transaction would convert your security to an open-ended ETF. Similar transactions have resulted in redemptions of greater than 50% of assets in the first three months of trading as an ETF. There is no reason to believe something similar will not occur with your investment, given the competitive landscape of the bullion ETF market. In short, you made the decision to invest in physical bullion, and the Trustees of GTU and SBT see fit to offer you a sub-standard investment. Do not be fooled.

The proposed transaction with Purpose is highly conditional, and may yet prove to be a defensive measure by the Spicers, as there is no guarantee, or likelihood, that it will close. Such a drastic step is a reflection of their weak position. GTU and SBT have been plagued by significant underperformance, gross mismanagement and questionable side payments to the Trustees and other friends of the Spicer family.

This transaction was principally negotiated by the Spicers themselves, not the Trustees, and there are undisclosed financial arrangements between the Spicers and Purpose. This is especially troublesome, given the history of fees and self-dealing involving the Spicers and their bullion products.

The Sprott offers provide you with an immediate and real premium, certainty, and most importantly, a direct investment in physical bullion. The GTU and SBT transaction with Purpose Investments offers you none of these things.

This proposed conversion presents a number of considerable risks, many of which the GTU and SBT Trustees have declined to disclose. The tax consequences to GTU and SBT unitholders of the anticipated significant redemptions that are likely to occur at GTU and SBT are highly uncertain, and the Trustees have elected to remain silent on the issue. Until further details are provided, it is reasonable to believe that U.S. unitholders are likely to be subject to material taxes. There is no possibility for unitholders to access their physical gold or silver bullion in this investment structure, and ETFs are designed to ensure that GTU and SBT will not trade at a premium, even in a gold or silver bull market.

We urge you to not be distracted by this desperate attempt and to tender into the Sprott offers. The Sprott offers represent an opportunity to preserve the nature of your investment, receive an immediate premium, close the historical discounts to NAV, and participate in a security that trades at, near or above NAV.

With the support of the majority of your fellow unitholders, we will take the necessary steps to remove the Trustees of GTU and SBT and call a special meeting to allow you to vote on the Sprott offers. You have the right to decide. Those have not yet tendered to the Sprott offers, we urge you to tender your units today.

Thank you for your support.


John Wilson
CEO, Sprott Asset Management



And now your overnight trading in gold and also physical stories that may interest you:

Trading in gold and silver overnight in Asia and Europe
First gold/silver trading courtesy of Mark O’Byrne/Goldcore:

“There Is True Value” and “Bargains” In Silver and Gold – Silver Guru

With blood on the streets across the entire commodities sector, Future Money Trends interviewed ‘Silver Guru’ David Morgan of the Morgan Report about the outlook for markets and why he remains bullish on silver and gold.

David Morgan astutely noted:

“At this moment in time, that we are truly at a level that it is really only the ardent silver bulls and resource investors who truly understand where we are in the market. Not only are we skipping along the lows, perhaps we can go lower, but there is true value here – in all aspects – not only in the gold and silver but also in the natural resource sector as a whole with bargains all over the place”.

People understand nothing lasts forever. The bottom does not last forever. You want to buy low and sell high.”

GoldCore: David Morgan Silver Outlook 2015 Silver Sumit 2015: David Morgan Silver Update

According to Future Money Trends:

David’s analysis of the Federal Reserve (FED) is that they truly are in a real bind here. They want both a weaker dollar and for the dollar to remain the reserve currency. With a huge multi-year trend out of the dollar for major transactions amongst some of the top countries in the world, like Russia, China, and Brazil, the FED is likely now being forced to raise rates.

Though the rate increase will be meaningless for the most part, the FED needs to shore up support for dollar denominated transactions.  An attractive dollar means the FED remains the manager of the top reserve currency of the world.

However, David said to expect the FED to quickly do what they can to weaken the currency later in 2016.

At the core of all of the world’s problems is debt. David believes that it is the ultimate debt bomb that will spark an avalanche of demand into anything precious metals.

He noted the supply and demand concerns for physical metals, but said the real market to watch is the debt market.



Today’s Gold Prices: USD 1078.40, EUR 985.60 and GBP 715.38 per ounce.
Yesterday’s Gold Prices: USD 1071.75, EUR 988.43 and GBP 714.79 per ounce.

GoldCore: Gold Price Performance
Gold price performance

Gold closed up slightly yesterday by $1.70 to $1074.60.  Silver was down $0.12 at the end of the day to $14.16.  Platinum lost $8 to $841.

Mark O’Byrne

Bank of Canada wants to be ready with negative rates just in case


Bank of Canada Willing to Resort to Below-Zero Interest Rate in Major Economic Crisis, Poloz Says

By Drew Hasselback
National Post, Toronto
Tuesday, December 8, 2015

TORONTO, Canada — The Bank of Canada would be willing to cut its benchmark interest rate to below zero percent if the country is faced with a major economic shock, says Stephen Poloz, governor of the Bank of Canada.

In a speech to the Empire Club of Canada in Toronto, Poloz described the use of negative interest rates as one of four “unconventional monetary policy measures” it would be willing to deploy if faced with a major economic crisis. Yet he said the bank is unlikely to use such measures as it expects the Canadian economy to grow in 2016 and reach full capacity in mid-2017.

“We don’t need unconventional policies now, and we don’t expect to use them,” Poloz said. “However, it’s prudent to be prepared for every eventuality.” …

… For the remainder of the report:



a very big story that we brought to your attention yesterday, but it is worth repeating

(courtesy UKTelegraph/zero hedge)

Anglo American cuts dividend and 85,000 jobs in ‘radical’ restructuring


It’s OK. The company and all South Africa are happy to sacrifice through commodity price suppression to help maintain living standards in more developed countries.

* * *

By Jon Yeomans
The Telegraph, London
Tuesday, December 8, 2015

Anglo American is to suspend its dividend payouts, cut jobs, and slash capital expenditure in a “radical” restructuring that will transition it to “a very different company.”

The FTSE 100 miner, which — along with its peers — is battling collapsing commodity prices, will suspend dividends through to the end of the 2016.

Anglo’s assets will shrink from around 50 facilities to the “low 20s” by the end of the restructuring and its workforce will drop to around 50,000, from 135,000 now.

It had already announced cuts that would take its headcount down to 92,000 in July, after announcing the sale of its labour-intensive platinum operations in Rustenburg, South Africa. …

… For the remainder of the report:



And today, the world’s second largest copper miner and a huge gold producer, Freeport McMoRan suspends i’ts dividend.

(courtesy zero hedge/Freeport)

Freeport McMoRan, World’s Second Largest Copper Miner, Suspends Dividend

They are dropping like flies. A day after Kinder Morgan announced it would slash its dividend by a more than expected 74% overnight to reflect collapsing commodity prices and a debt-heavy balance sheet, moments ago Freeport McMoRan, the world’s second largest copper miner behind Codelco and one of the world’s biggest producers of gold, just announced it too would suspend its dividend of $0.20, an action expected to save some $240 million per year.

This follows a comparable dividend cut announced in March of 2015 when the company slashed the bulk of its dividend by 84%, from $0.3125 to $0.05 quarterly.

This however may not be sufficient to stem the bleeding and prevent further turmoil for the company which has seen its stock price drop to the lowest level in over a decade, and as a result the company is also slashing its CapEx guidance from $2 billion for 2016 and 2017 to just $1.2 and $1.8 billion respectively.

The headlines:


From the release:

Freeport-McMoRan Inc. (FCX) today announced additional actions in response to market conditions, including further revisions to its oil and gas capital spending plans, additional curtailments in copper and molybdenum production and the suspension of its common stock dividend.

Oil & Gas Review. As previously reported on August 5, 2015, Freeport-McMoRan Oil & Gas (FM O&G) is deferring investments in several long-term projects in response to oil and gas market conditions. Following an ongoing review, capital expenditures for 2016 and 2017 have been reduced further from $2.0 billion per year in 2016 and 2017 to $1.8 billion in 2016 and $1.2 billion in 2017, including idle rig costs. The revised plans, together with initiatives to obtain third party financing or other strategic alternatives, will be pursued with the goal of achieving funding for oil and gas capital spending within its cash flows and resources.

The revised plans incorporate a reduction in rig utilization from three Deepwater Gulf of Mexico drillships to one drillship while increasing production from third quarter 2015 rates of 150 barrels of oil equivalents per day (MBOE/d) to an average of 159 MBOE/d in 2016 and 2017. FM O&G expects to bring eight wells on line in late 2015 and 2016 from its successful tie back drilling operations at the Holstein Deep, Horn Mountain and King Projects in the Deepwater Gulf of Mexico. These projects, combined with other initiatives, are expected to add low cost oil production, enabling cash production costs to decline from $19 per barrel of oil equivalents (BOE) in 2015 to less than $16 per BOE in 2016 and 2017. Under the revised plans, FM O&G’s cash flows would substantially fund its capital expenditures at $45 per barrel of Brent crude oil in 2017.

FM O&G is engaged in ongoing discussions with its rig vendors and other service providers to obtain reductions in costs and to evaluate opportunities to market idled equipment to third parties.

As previously reported on October 6, 2015, the FCX Board is engaged in a strategic review of its oil and gas business to evaluate alternative courses of action designed to improve FCX’s financial position, enhance value to FCX shareholders and achieve self-funding of its oil and gas business from its cash flows and resources. FM O&G’s high quality asset base, its substantial underutilized Deepwater Gulf of Mexico infrastructure, its large inventory of low risk development opportunities and its talented and experienced personnel and management team provide alternatives to generate value.

Mining Review. FCX continues to review its capital projects and costs to maximize cash flow in a weak commodity price environment and to preserve its resources for anticipated improved future market conditions. FCX previously announced a 25 percent reduction in its capital spending for its mining business for 2016 (from $2.7 billion to $2.0 billion, including $0.6 billion in sustaining capital) and announced curtailments at its North America and South America mines totaling 250 million pounds of copper and 20 million pounds of molybdenum per year. FCX is undertaking further actions involving plans for a full shut-down of its Sierrita mine in Arizona and adjustments to its operating plans from its primary molybdenum mines, which will increase its curtailments to approximately 350 million pounds of copper and 34 million pounds of molybdenum per annum. FCX is continuing to evaluate its mining operating plans in response to market conditions and will make further adjustments as required.

FCX is also evaluating other financing alternatives, the potential sale of minority interests in certain mining assets and other actions to provide additional proceeds for debt reduction. FCX has a broad set of natural resource assets that provide alternatives for future actions to enhance its financial flexibility.

Dividend on Common Stock. FCX also announced today that its Board has suspended its annual common stock dividend of $0.20 per share. This action will provide cash savings of approximately $240 million per annum and further enhance FCX’s liquidity during this period of weak market conditions. FCX’s Board will review its financial policy on an ongoing basis and authorize cash returns to shareholders as market conditions improve.

Assuming prices of $2.00 per pound for copper and $45 per barrel Brent crude oil for 2016, FCX estimates consolidated operating cash flow would exceed capital expenditures by more than $600 million.

James R. Moffett, FCX’s Chairman of the Board and Richard C. Adkerson, Vice Chairman, President and Chief Executive Officer said, “We are taking further actions to strengthen our financial position during a period of weak and uncertain market conditions. While copper prices have weakened in recent weeks and the near-term copper outlook is uncertain, we view the medium and longer term outlook positively, supported by copper’s important role in the global economy and limitations on global supplies. As we approach 2016, we are positioning the company for free cash flow generation in a weak commodity price environment and remain focused on actions to reduce debt. Our high quality portfolio of long-lived assets, flexible operating structure and experienced management team provide a solid base to address the current market conditions while maintaining an attractive portfolio of assets positioned for long-term success.”

Equity Transactions. Since commencing its $2 billion at-the-market equity programs in August 2015, FCX has sold a total of 154.6 million shares of common stock, generating gross proceeds of $1.6 billion through December 4, 2015. Approximately $0.4 billion remains available under the programs. As of December 4, 2015, FCX had 1.19 billion common shares outstanding.

Amendment to Bank Credit Facility. Following recent declines in prices for its primary products, FCX has reached agreement with its bank group to amend the Leverage Ratio (Net Debt/EBITDA) under its revolving credit facility and $4 billion term loan from the previous limit of 4.75x to 5.5x at December 31, 2015, 5.9x for the first half of 2016, and stepping down to 5.0x by year-end 2016 and 4.25x in 2017. The Leverage Ratio is unchanged at 3.75x thereafter.

FCX is a premier U.S.-based natural resources company with an industry-leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. FCX is the world’s largest publicly traded copper producer.

FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; significant mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America; the Tenke Fungurume minerals district in the DRC; and significant U.S. oil and natural gas assets in the Deepwater GOM, onshore and offshore California and in the Haynesville natural gas shale, and a position in the Inboard Lower Tertiary/Cretaceous natural gas trend onshore in South Louisiana.

Dr. Chris Martenson is one smart cookie:  you must read his latest piece
Bill Holter tackles beautifully the problems at the gold comex/as well as the explosive situations surrounding the globe
 (courtesy Bill Holter/Holter-Sinclair collaboration)

Crunch Time?

Many situations around the world now look to be coming to a head.  Geopolitically the East/West push and pull has heated up in the Middle East.  Iraq now looks to be pivoting toward Mr. Putin and Russia and away from the U.S..  Turkey’s recent shoot down of a Russian plane also turned up the heat.  Economically, the price of oil breaking through $40 has shone a spotlight on a weak global economy and confirms weakness.  Trade, whether international or internal is collapsing.  Freight rates are at decade lows and even internally, trucking has collapsed.
  Financially speaking, FOREX markets are experiencing daily volatility unseen before.  The credit markets have become illiquid as spreads have blown out.  This “illiquidity” has traders terrified because they know they have no exit door.  Even the Treasury market has begun to display the “locked in” feeling of thin markets.  We should not forget about the Fed meeting next week, raise rates or hold rates …traders are in fear of the aftermath. 
Let’s take a look at what just happened yesterday in COMEX gold since we are talking “crunch time”.  The December contract added 881 net contracts standing for delivery.  This is another 88,100 ounces of gold that someone just stepped up for and is asking delivery.  Some ground work first …we have watched for over two years as COMEX gold contracts outstanding would dwarf deliverable inventory coming into first notice day and decline in a huge way just prior.  Then, many of those standing for delivery would just “evaporate”.  I have said many times that this did not make any sense.  Why would anyone FULLY FUND their account by FDN (first day notice) to pay cash for their contracted gold …only to vanish?  It is obvious in my opinion these contracts were cash settled at a premium or bribe to entice these buyers not to take physical delivery because of strained inventory.
  I can only remember one month in the past where contracts “standing” actually increased after the first notice day.  As I recall there were two days in a row where the open interest increased (after the OI had already declined as it has this month).  First, anyone who opens a contract after FDN truly wants the gold.  Better said, they probably “need” the gold for whatever reason.  These buyers will not be bribed into FRN settlement, only “weight” will do.
COMEX truly has a problem this month.  As it stands, there are roughly 11.5 tons standing for delivery while COMEX holds just over 4 tons for delivery.  In ounces we are looking at 370,000 versus 130,000.  Yesterday’s increase was 88,100 ounces or roughly 2/3rds of deliverable inventory.  For well over two months, COMEX has had almost ZERO gold enter the “registered” category.  In fact, even the eligible (customer) inventory has been bleeding down and hemorrhaged yesterday with over four tons being withdrawn.  The obvious question is “where will the gold come from for delivery”?  Yes I know, “don’t worry because they always deliver” …  
  The additional 88,100 ounces yesterday should really OPEN SOME EYES for several reasons!  First, someone obviously NEEDS nearly three tons of gold.  Secondly and most importantly, this should display just how tenuous the inventory really is.  In just one day, someone stepped up and is demanding TWO THIRD’s of deliverable gold.  As I have said all along, with any type of black swan event (not one that is “created” and of the false flag variety) has the ability to clean out what COMEX can supply!  What then?
Please think to yourself “what if?”.  What if we wake up one day and a big bank somewhere in the world defaults?  Or even a sovereign nation?  What if we wake up to find Russian and U.S. forces going at it somewhere?  The list of potential black swans is long (plus the trolls will go wild saying “it can never happen in our lifetime) so I won’t list them.  I would simply ask, what if “something unscripted” happens?
  The answer is simple.  When something, whatever it may be that is
“unscripted” happens …life as we have known it for so many years is OVER!  EVERYTHING will change.  Markets, valuations, beliefs, customs, economics/finance and distribution, even the way and “what” you eat …ALL OF IT!  The title of “crunch time” is not meant to be U.S. centric or even about the post war “American age”.  We are living “crunch time” for a 300 year plus fractional reserve Ponzi banking and monetary scheme.  We are at the end of a 300 year plus “credit cycle” where The Great Depression was merely a large and painful belch leading up to a final heart attack.  Standing watch,Bill Holter
Holter-Sinclair collaboration
Comments welcome



And now your overnight WEDNESDAY morning trading in bourses, currencies, and interest rates from Europe and Asia.

1 Chinese yuan vs USA dollar/yuan falls in value , this  time to  6.4320/ Shanghai bourse: just in the green , hang sang: red

2 Nikkei closed down 191.53 or 0.98%

3. Europe stocks all in the red /USA dollar index down to 98.40/Euro up to 1.0944

3b Japan 10 year bond yield: falls to .312%   !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 123.14

3c Nikkei now just above 18,000

3d USA/Yen rate now well above the important 120 barrier this morning

3e WTI: 37.74  and Brent:   40.58

3f Gold up  /Yen up

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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.

3h Oil up for WTI and up for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund falls to  .583%. German bunds in negative yields from 5 years out

 Greece  sees its 2 year rate fall to 8.11%/:  still expect continual bank runs on Greek banks 

3j Greek 10 year bond yield rises to  : 8.23%  (yield curve now flat)

3k Gold at $1069.40/silver $14.18 (7:45 am est)

3l USA vs Russian rouble; (Russian rouble up 8/100 in  roubles/dollar) 69.38

3m oil into the 37 dollar handle for WTI and 40 handle for Brent/ China purchases huge supplies from Saudi Arabia

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar.

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9894 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0882 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p Britain’s serious fraud squad investigating the Bank of England on criminal charges/arrests 10 traders for Euribor manipulation

3r the 5 year German bund now  in negative territory with the 10 year falls to  + .583%/German 5 year rate negative%!!!

3s The ELA lowers to  82.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.24% early this morning. Thirty year rate at 3% at 2.98% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.


(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)



  1. Not sure if anyone is paying attention to the SHFE and the number of silver contracts, which could potentially stand for delivery on December 15th. 33K contracts (15Kg each) standing with 4 trading days left. That’s 495 metric Tons. Their current inventory is just about 509 metric Tons, which means that the SHFE silver warehouses could easily get depleted is those 33K contracts stood for delivery. Where is China going to get it Silver next? At the Comex , perhaps?


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