April 4/Japanese traders angry with Central Bank of Japan and its NIRP policy/IMF plans a credit event to occur in Greece as they force Germany to give debt relief for Greece/Russia and USA building up forces in Syria and Iraq/William Engdahl explains their ulterior motive/USA ISM new York mfg index falters again/

Gold:  $1,218.20 down $4.20    (comex closing time)

Silver 14.94  down 10 cents

In the access market 5:15 pm

Gold $1215.70

silver:  14.96


As many of you know, my theory on silver is that in 2003 China lent the USA their hoard of silver long believed to be in excess of 600 million oz.  The USA received the silver so as to continue the bashing of metals.  China then proceeded to massively buy and ship hoards of gold onto its shores.

I was thinking about Ted Butler’s piece, where he states that JPMorgan has bought physical metal in excess of 500 million oz. I thought that JPMorgan would not purchase that quantity of metal  while at the same selling massive amounts of paper silver at basically the same time.  That would be easy to trace and that would land many in jail.

What if JPMorgan was buying the USA silver hoard, on behalf of the USA government. The purchase of the metal was to return the silver that China has demanded to be returned at the end of the contract..  What if the contract period was 15 yrs and now the USA is rushing  to buy in quantity, the silver that was lent and then store the silver in JPMorgan’s vaults to return the silver once the contract period was over? That would make sense!!

We know that China is behind the selling of paper gold to purchase the physical cheap.Why not silver as well?

Just my thoughts.







Let us have a look at the data for today.

At the gold comex today, we had a good delivery day, registering 153 notices for 15,300 ounces  for gold,and for silver we had 0 notices for nil oz for the non active April delivery month.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 213.10 tonnes for a loss of 90 tonnes over that period.

In silver, the open interest ROSE by 678  contracts UP to 177,022, despite the fact that the silver price was down 42 cents with respect to FRIDAY’S trading. SOMETHING MUST BE UP ON THIS! In ounces, the OI is still represented by .885 billion oz or 126% 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 759  contracts down to 472,804 contracts as the price of gold was DOWN $12.00 with yesterday’s trading.(at comex closing).

We had another large change in the GLD, a withdrawal of 1.19 tonnes / thus the inventory rests tonight at 818.09 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, into inventory tonight  and thus the Inventory rests at 332.578 million oz.


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


1. Today, we had the open interest in silver rose by 678 contracts up to 177,022 despite the fact that the price of silver was DOWN 42 cents with Friday’s trading.Investors continue to flock into silver on the dovish Yellen speech where she indicated that she is reticent to raise rates. The total OI for gold fell by 759 contracts to 472,804 contracts as gold was DOWN $12.00 in price from Friday’s level and we are now entering a new active delivery month of APRIL.

(report Harvey)

2 a) Gold trading overnight, Goldcore

(Mark OByrne)

off today


.i)Late  SUNDAY night/ MONDAY morning: Shanghai closed FOR HOLIDAY /  Hang Sang closed FOR HOLIDAY The Nikkei closed DOWN 40.89 POINTS OR 0.25% . Australia’s all ordinaires  CLOSED DOWN 0.08%. Chinese yuan (ONSHORE) closed DOWN at 6.4760.  Oil FELL  to 36.73 dollars per barrel for WTI and 38.64 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.4797 yuan to the dollar vs 6.4760 for onshore yuan. lAST WEEK:Japanese INDUSTRIAL PRODUCTION plunges the most in almost 5 years as negative interest rates ARE KILLING BUSINESS./JAPANESE TANKEN CONFIDENCE INDEX PLUMMETS LAST THURSDAY NIGHT. SOUTH KOREA REPORTS BAD MFG DATA. )



A big story:  Japanese traders are getting quite angry with NIRP as the Central Bank of Japan is destroying the functionality of markets.  The short end of the curve is frozen due to inability to price.  Traders are worried once normalization returns, then bankruptcies will occur by a huge multitude. This is causing the Japanese banks to lay off workers as they cannot earn a profit and traders are now reluctant to front run the B of J.

( zero hedge)


An escalation, as Viet Nam seizes a Chinese boat carrying fuel.  The Chinese boat did enter territorial waters of Viet Nam and the captain states that the fuel was meant for Chinese vessels fishing in Viet Nam waters:

( zero hedge)


i)We start off on Saturday, with Wikileaks revealing an IMF plan to “cause an credit event” in Greece prior to the British vote on leaving the EU:

the official release..

( zero hedge)

ii)The above story is picked up by Bloomberg which offers their theory on the event:

( Bloomberg)
iii)Greece seeks answers to the above. Tsipras sends a letter to Largarde:

( zero hedge)
iv)Lagarde views the use of a credit event as nonsense.  The IMF, which always play the bad cop in the negotiations, has now seen their relationship in the troika go sub frigade:

( zero  hedge)


i)The following is a big story.  It seems that Russia never left Syria. Instead it is building up military supplies as they plan to first take Aleppo and then move onto Raqqa.  The USA seems to counter that move, as they will send troops to Iraq in an attempt to take MOSUL and then move onto RAQQA.  The big question is this:  who will arrive first.

an important read..

( zero hedge)

ii)Award winning author William Engdahl on his thoughts as to how Syria will be broken up

a must read…

(courtesy William Engdahl)


The following article by Peter Diemeyer of Sprott Money gives a good account as to what is happening to the finances for Canada.  Prime Minister Trudeau went full Keynesian by increasing spending by a whopping 317 billion for 2016-2017.  Although Canada’s debt to GDP is the lowest among G7 at 1 trillion dollars and a GDP of 1.8 trillion making its Debt to GDP at 55%.  However debt by provinces must be included (In the USA the individual states cannot have a deficit), the total debt to GDP is 85.6%.

( Peter Diekmeyer/Sprott Money)


i)Iran rejects the Saudi demand to freeze crude production

( zero hedge)

ii)Saudis now ban transport of Iranian crude in their territorial waters.  However what also happened over the weekend was Obama seems to be getting quite angry with Iran and they may cancel their agreement which will then remove much amounts of oil off the grid:

( zero hedge)
iii)French Bank, BNP Paribas sees oil revisting the year’s lows as fundamentals just do not add up:

( zero hedge/BNP)


i)Russia’s central bank governor is one smart cookie. Gold’s rise has made up for billions lost in foreign currency rout

( Bloomberg.Biryukov/GATA)
ii)The worthless SEC investigate ex JPMorgan debt traders. Do not worry, they will not convict anyone:( London’s Financial Times/Scannell and Rennison/GATA)

iii)The true state of affairs on physical gold and the most likely scenario of the Fed et al leasing Fort Knox gold to the bankers:

( SeekingAlpha/Jim Rickards/GATA)

iv) Chris Powell interviewed by Bernie Lo of CNBC Asia on gold manipulation:

( Chris Powell/CNBC/GATA)

v)NorthWest Territorial Mint files for bankruptcy after losing a defamation suit:

( Stech/Wall Street Journal)

vi)Low liquidity doomed the Singapore Exchange’s physical kilobar gold contract

( Ronan Manley/GATA)

vii)A must read.. Egon Von Greyerz tells us why all global markets will fail due to excessive debt and solvency issues

( Egon Von Greyerz/Kingworldnews)


viii)Today’s commentary from Bill Holter/Holter-Sinclair collaboration

 “Truth Bombs” AWAY! (public article)

ix) Ted Butler expands his theory

(Ted Butler)

x) Dr Chris Martenson and Jim Rickards discuss gold:

(Chris Martenson/Jim Rickards)


i)The ISM NEW York manufacturing index drops to September lows as all components decline. The all important employment component plunges.  So much for the USA recovery

( NY ISM mfg/zero hedge)

ii) later in the session we learn that factory orders plunge to 5 yr lows as the manufacturing recession within the USA deepens;

( zero hedge)
iii)Jim Quinn sets the record straight on the true state of the USA employment scene.

( Jim Quinn/Burning Platform)
iv)JPM has just capped some ATM withdrawals!.  Is there some sort of run on the banks for cash?

( zero hedge/JPM)
v)David Stockman takes on Yellen for his speech to the New York Empire club:

(an interesting read.)

( David Stockman/ContraCorner)

Let us head over to the comex:

The total gold comex open interest was down to 472,804 for a loss of 759 contracts as the price of gold was DOWN $12.00 in price with respect to Friday’s trading.  We are now entering the active delivery month of April. 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 or for that matter an inactive month, and 2) a continual drop in the amount of gold standing in an active month. We certainly witnessed both parts today . In the front month of April we lost 925 contracts from 5796 contracts down to 4871.  We had 576 notices filed so we lost 349 contracts or 34,900 amount of gold ounces that will not stand for delivery. The next non active contract month of May saw its OI fall by 86 contracts down to 2581. The next big active gold contract is June and here the OI fell by 2718 contracts down to 356,707. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 99,154 . The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was fair at 215,179 contracts. The comex is not in backwardation.  .

Today we had 153 notices filed for 15,300 oz in gold.


And now for the wild silver comex results. Silver OI rose by 678 contracts from 176,344 up to 177,344 despite the fact that the price of silver was down 42 cents with Friday’s trading.  We are now in the next contract month of April and here the OI  fell by 119 contracts down to 84. We had 119 notices filed yesterday so we neither lost nor gained any silver contracts that will not stand for delivery. The next active contract month is May and here the OI fell by 162 contracts down to 113,986. This level is exceedingly high. The volume on the comex today (just comex) came in at 30,898 , which is fair. The confirmed volume yesterday (comex + globex) was huge at 80,893. Silver is not in backwardation.    In London it is in backwardation for several months.
We had 0 notices filed for nil oz.

April contract month:

INITIAL standings for APRIL

April 4/2016

Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil 100.000oz



Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz  nil oz
No of oz served (contracts) today 153 contracts
(15,300 oz)
No of oz to be served (notices) 4718 contracts 471,800 oz/
Total monthly oz gold served (contracts) so far this month 787 contracts (78,700 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month 40,226.0 oz

Today we had 0 dealer deposits

Total dealer deposits; nil oz

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 0 customer deposit:

total customer deposits:  nil oz

Today we had 1 customer withdrawals:

i) Out of Brinks: 100.000 oz ??? exactly xxx.000 oz!!

total customer withdrawals; 100.00  oz

Today we had 1 adjustments:

From Brinks:  99.92 oz was adjusted out of the dealer and this landed into the customer account of Brinks.  This is likely a settlement(0003 tonnes)

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 153 contracts of which 36 notices was stopped (received) by JPMorgan dealer and 29 notices were stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the Mar contract month, we take the total number of notices filed so far for the month (787) x 100 oz  or 78,700 oz , to which we  add the difference between the open interest for the front month of April (4871 contracts) minus the number of notices served upon today (153) x 100 oz   x 100 oz per contract equals the number of ounces standing.
Thus the initial standings for gold for the April. contract month:
No of notices served so far (787) x 100 oz  or ounces + {OI for the front month (4871) minus the number of  notices served upon today (153) x 100 oz which equals 550,500 oz standing in this non  active delivery month of April (17.122 tonnes).
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
We thus have 17.122 tonnes of gold standing for April and 10.574 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing.
We now have partial evidence of gold settling for last months deliveries We now have 17.122 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes   = 25.112 tonnes still standing against 10.571 tonnes available.  .
Total dealer inventor 339,858.211 oz or 10.571 tonnes
Total gold inventory (dealer and customer) =6,850,937.289 or 213.09 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 213.10 tonnes for a loss of 90 tonnes over that period. 
JPMorgan has only 21.15 tonnes of gold total (both dealer and customer)
And now for silver


/April 4/2016:

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 40,238.520 OZ. CNT
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 600,171.98 oz


No of oz served today (contracts) 0 contracts nil oz
No of oz to be served (notices) 84 contracts)(420,000 oz)
Total monthly oz silver served (contracts) 121 contracts (605,000 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 1,244,458.3 oz

today we had 0 deposits into the dealer account

total dealer deposit: nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil


we had 1 customer deposits:

i) Into Scotia:  600,171.980 oz

total customer deposits: 600,171.980 oz

We had 1 customer withdrawals:


i) Out of CNT: 40,28.520 oz



total customer withdrawals:  40,238.520 oz



 we had 0 adjustments



The total number of notices filed today for the April contract month is represented by 119 contracts for 595,000 oz. To calculate the number of silver ounces that will stand for delivery in April., we take the total number of notices filed for the month so far at (121) x 5,000 oz  = 605,000 oz to which we add the difference between the open interest for the front month of April (84) 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 April. contract month:  121 (notices served so far)x 5000 oz +(84{ OI for front month of April ) -number of notices served upon today (0)x 5000 oz  equals 1,025,000 oz of silver standing for the March contract month.
we neither lost nor gained any silver ounces standing in this non active delivery month of April.
Total dealer silver:  32.908 million
Total number of dealer and customer silver:   154.394 million oz
The open interest on silver continues to rise despite the low price of silver. It looks like we are heading for a commercial failure.

And now the Gold inventory at the GLD

APRIL 4/a withdrawal of 1.19 tonnes from the GLD/Inventory rests at 818.09 tonnes of gold

April 1/no changes in gold inventory at the GLD/Inventory rests at 819.28 tonnes

MARCH 31/a small withdrawal of 1.19 tonnes/inventory rests tonight at 819.28 tonnes

MARCH 30/no changes in inventory/inventory rests tonight at 820,47 tonnes

March 29/a withdrawal of 3.27 tonnes of gold from the GLD/Inventory rests at 820.47 tonnes.  (No doubt we will see a rise in gold inventory with tomorrow’s reading)

March 28/no change in inventory at the GLD/Inventory rests at 823.74 tonnes

March 24.2016: a deposit of 2.08 tonnes of gold into its inventory/and this after a big drubbing these past two days??/Inventory rests at 823.74 tones

March 23/no changes at the GLD today despite the gold drubbing. Inventory rests at 821.66 tonnes

March 22./no changes in inventory at the GLD/Inventory rests at 821.66 tonnes

MARCH 21/another big deposit of 2.68 tonnes/inventory rests tonight at 821.66 tonnes

(and this was done with gold down $10.00 today!!)



March 17/we had a whopper of a deposit tonight: 11.89 tonnes/with London in backwardation this is nothing but a paper addition/inventory rests tonight at 807.09 tonnes

March 16.2016:/we had a deposit of 2.09 + 2.97(last in the evening)  tonnes of gold into the GLD/Inventory rests at 795.20 tonnes

March 15/ no changes in gold inventory at the GLD/Inventory rests at 790.14 tonnes


April 4.2016:  inventory rests at 818.09 tonnes




Now the SLV Inventory
APRIL 4/no change in silver inventory tonight/inventory rests at 332.578 million oz
Apri 1: we had a huge deposit of 2.189 million oz of silver into the SLV (with silver badly down?)/.Inventory rests tonight at 332.578 million oz
MARCH 31/ no change in silver inventory at the SLV tonight/inventory rests at 330.389 million oz
MARCH 30/no change in inventory/inventory rests at 330.389 million oz
March 29.2016: a huge deposit of 1.475 million oz of silver into the SLV/Inventory rests at 330.389 million oz
March 28/no change in silver inventory at the SLV/Inventory rests at 328.914 million oz
March 24.2016/no change in inventory/rests tonight at 328.914 million oz/
March 23/we lost 1.428 million oz as a withdrawal today/SLV inventory rests at 328.914 million oz
March 22./ a huge deposit of 1.809 million oz of a silver deposit into the SLV/inventory rests at 330.342 million oz.
MARCH 21/no change in silver inventory/inventory rests tonight at 328.533 million oz
March 17/no changes in silver inventory at the SLV/Inventory rests at 325.868 million oz
March 16./no changes in silver inventory at the SLV/Inventory rests at 325.868 million oz
March 15/ no changes in silver inventory at the SLV/Inventory rests at 325.868 million oz/
April 4.2016: Inventory 332.578 million oz
1. Central Fund of Canada: traded at Negative 7.4 percent to NAV usa funds and Negative 7.7% to NAV for Cdn funds!!!!
Percentage of fund in gold 63.5%
Percentage of fund in silver:34.5%
cash .0%( April 4.2016).
2. Sprott silver fund (PSLV): Premium to NAV rises to  5.77%!!!! NAV (April 4.2016) 
3. Sprott gold fund (PHYS): premium to NAV falls  to -0.50% to NAV  ( April 4.2016)
Note: Sprott silver trust back  into positive territory at +5.77%/Sprott physical gold trust is back into negative territory at -0.50%/Central fund of Canada’s is still in jail.

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

Trading in gold and silver overnight in Asia and Europe

By Mark O’Byrne

Silver Bullion Is Coiled Spring and Will “Explode Higher”

Silver bullion’s reluctant, sluggish participation in early 2016’s powerful gold rally has been glaringly obvious. Instead of amplifying the yellow metal’s big gains as in the past, silver largely failed to even keep pace. The lack of silver confirmation for gold’s big move has certainly raised concerns. But despite silver’s vexing torpidity in recent months, it is a coiled spring ready to explode higher to catch and surpass gold.

silver_bullion_April2016Gold (Red), Silver (Blue) ZealLLC

The bottom line is silver is a coiled spring today ready to explode higher. Silver was battered so low in recent years’ gold bear that it’s spent 2016 trading near stock-panic levels relative to gold. Such super-low prices aren’t sustainable, so silver is due for a massive mean reversion higher as investors start to return. Their lagging buying finally began in March, and will soon accelerate and become self-feeding.

Read article here

Gold Prices (LBMA)
4 April: USD 1,215.00, EUR 1,068.80 and GBP 854.58 per ounce
1 April: USD 1,232.10, EUR 1,080.69 and GBP 860.20 per ounce
31 Mar: USD 1,233.60, EUR 1,085.50 and GBP 857.62 per ounce
30 Mar: USD 1,238.20, EUR 1,094.12 and GBP 860.23 per ounce
29 Mar: USD 1,216.45, EUR 1,087.71 and GBP 853.04 per ounce

Silver Prices (LBMA)
4 April: USD 14.96, EUR 13.17 and GBP 10.52 per ounce
1 April: USD 15.58, EUR 13.92 and GBP 10.99 per ounce
31 Mar: USD 15.38, EUR 13.52 and GBP 10.68 per ounce
30 Mar: USD 15.38, EUR 13.58 and GBP 10.68 per ounce
29 Mar: USD 15.06, EUR 13.44 and GBP 10.56 per ounce

Gold News and Commentary
– Gold Rush by Russia Makes Up for Billions Lost in Currency Rout (Bloomberg)
– Gold nurses losses after robust U.S. jobs report (Reuters)
– Stars Align for Gold as Holdings Increase, Dollar Weaken (Bloomberg)
– Irish shadow banking system over 10 times size of the economy (RTE)
– Gold Scores Best Quarter in Nearly 30 Years; 2016 Silver Eagles Hit 14.8M (Coin News)

– Why The ‘Million Dollar Coin’? “Because We Can” (King5)
– Central bankers suppressing gold markets? (CNBC)
– Gold suppression have failed thruout history – Rickards (Seeking Alpha)
– Open Letter to the Next President (Gold Seek)
– Gold Lovers Bet Party Isn’t Over After Big First-Quarter Gain (Bloomberg)

Read More Here


‘7 Real Risks To Your Gold Ownership’ – Must Read Gold Guide Here

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Thank you

Russia’s central bank governor is one smart cookie. Gold’s rise has made up for billions lost in foreign currency rout
(courtesy Bloomberg.Biryukov/GATA)

Gold rush by Russia makes up for billions lost in currency rout

Submitted by cpowell on Mon, 2016-04-04 02:30. Section: 

By Andrey Biryukov
Bloomberg News
Sunday, April 3, 2016

Here’s why Governor Elvira Nabiullina is in no haste to resume foreign-currency purchases after an eight-month pause: Gold’s biggest quarterly surge since 1986 has all but erased losses the Bank of Russia suffered by mounting a rescue of the ruble more than a year ago.

While the ruble’s 9-percent rally this year has raised the prospects that the central bank will start buying currency again, policy makers have instead used 13 months of gold purchases to take reserves over $380 billion for the first time since January 2015. The central bank will wait for the ruble to gain more than 12 percent to 60 against the dollar before it steps back into the foreign-exchange market, according to a Bloomberg survey of economists. …

… For the remainder of the report:




The worthless SEC investigate ex JPMorgan debt traders. Do not worry, they will not convict anyone:

(courtesy London’s Financial Times/Scannell and Rennison/GATA)

SEC investigates ex-JPMorgan debt traders

Submitted by cpowell on Sun, 2016-04-03 22:03. Section: 

Kara Scannell and Joe Rennison
Financial Times, London
Sunday, April 3, 2016

NEW YORK — The top US securities watchdog has launched an investigation into government debt trades made by two former JPMorgan Chase employees who left the bank earlier this year after a dispute over compliance procedures.

The Securities and Exchange Commission inquiry, which is in its early stages, steps up the pressure on JPMorgan and comes amid greater regulatory scrutiny of the opaque $13-trillion Treasury market.

The Financial Industry Regulatory Authority, the industry watchdog, has already said that it was looking into the traders’ termination. Finra is also investigating the circumstances of the disclosures JPMorgan made when explaining the traders’ exit, a person familiar with the matter said. …

… For the remainder of the report:





The true state of affairs on physical gold and the most likely scenario of the Fed et al leasing Fort Knox gold to the bankers:

(courtesy SeekingAlpha/Jim Rickards/GATA)

‘Unallocated gold’ means ‘no gold,’ Rickards says

Submitted by cpowell on Sun, 2016-04-03 14:55. Section: 

10:58p HKT Sunday, April 3, 2016

Dear Friend of GATA and Gold:

Another day, another interview with fund manager, newsletter writer, and geopolitical strategist James G. Rickards about his new book, “The New Case for Gold,” but anyone who has had U.S. government security clearance as Rickards has had is worth listening to about the monetary metal, and in this new interview, with Collin Kettrell of Palisade Radio, Rickards continues to make interesting points and arguments. Among them:

— The U.S. Treasury Department and Federal Reserve refuse to audit the U.S. gold reserve lest they confirm gold’s continuing importance in the world financial system. (Your secretary/treasurer suspects that the refusal to audit the gold arises more from the fear that an audit would disclose gold swapping and leasing, surreptitious U.S. intervention in the gold market, which would really confirm gold’s importance.)

— The Fed’s balance sheet would look normal if it was credited for the value of the gold for which the Treasury Department has given the Fed a certificate.

— The Bank for International Settlements operates to mask the activity of its member central banks in the gold market.

— The U.S. gold reserve well may have been leased but that would not require the metal to leave the U.S. government vaults at Fort Knox and West Point. Indeed, Rickards says, the U.S. government’s gold remains in U.S. government vaults because leasing is just a paper operation allowing issuance by bullion banks of a hundred claims to every ounce of real metal. “‘Unallocated gold,'” Rickards adds, “means ‘no gold.'”

— “The evidence for manipulation” of the gold market “is overwhelming.”

— China and the United States are suppressing the gold price through trading on the Comex to facilitate China’s acquisition of gold and diversification away from U.S. debt instruments, and the United States thinks that’s good.

— There is a severe shortage of physical gold at refineries, which are starting to process gold bars that are 30 years old, an indication that supplies are nearing the bottom of the barrel, since vaults operate on a last-in-first-out basis.

— The gold price could explode rather than rise gradually and so it might not be good to delay purchases.

The interview is 36 minutes long but the audio is accompanied by a transcript. It’s posted at Seeking Alpha here:


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




NorthWest Territorial Mint files for bankruptcy after losing a defamation suit:

(courtesy Stech/Wall Street Journal)

Northwest Territorial Mint files for bankruptcy after losing defamation suit

Submitted by cpowell on Sun, 2016-04-03 03:10. Section: 

West Coast Mint Files for Bankruptcy after Losing Defamation Suit

By Katy Stech
The Wall Street Journal
Saturday, April 1, 2016

Northwest Territorial Mint LLC put its coin-and-medallion-making operations into bankruptcy on Friday, facing a demand to pay part of a $38.3 million defamation award — one of the country’s largest Internet defamation verdicts — to a Los Angeles businessman and his real-estate firm.

Officials for the mint, located near Seattle, listed the judgment owed to Bradley S. Cohen and to Cohen Asset Management Inc. as a “disputed” debt in bankruptcy court documents. A lawyer for the company couldn’t be reached to explain how the filing will affect its operations, which make coins and commemorative medallions for the U.S. military and other customers.

The 200-worker company, based in the town of Federal Way south of Seattle, on its website calls itself the country’s largest private mint with other minting facilities in Texas and Nevada and die-cutting and sculpting facility in Green Bay, Wis.

Earlier this year a jury awarded Mr. Cohen and his company, the mint’s former landlord, $38.3 million in his defamation suit against the mint and its owner, Ross Hansen. Northwest Territorial Mint is on the hook for $12.5 million of that amount. …

… For the remainder of the report:




My good friend, Chris Powell interviewed by Bernie Lo of CNBC Asia on gold manipulation:

(courtesy Chris Powell/CNBC/GATA)


GATA secretary covers gold and commodity market rigging on CNBC Asia

Submitted by cpowell on Mon, 2016-04-04 02:36. Section: 

10:34a HKT Monday, April 4, 2016

Dear Friend of GATA and Gold:

Your secretary/treasurer was interviewed today on CNBC Asia’s “Squawk Box” program with Bernie Lo in Hong Kong, discussing admissions and documents showing that governments and central banks are intervening surreptitiously and comprehensively in the gold and commodity markets and that as a result there are no markets anymore, just interventions. Lo volunteered that he follows GATA’s work and that the evidence of such surreptitious interventions is “through the ceiling,” and he disparaged the “mainstream, lamestream media” for failing to pursue the issue. A five-minute excerpt from the interview is posted at the CNBC Internet site here:


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






Low liquidity doomed the Singapore Exchange’s physical kilobar gold contract

(courtesy Ronan Manley/GATA)


Ronan Manly: Singapore Exchange’s gold kilobar contract flops

Submitted by cpowell on Mon, 2016-04-04 11:17. Section: 

7:16p HKT Monday, April 4, 2016

Dear Friend of GATA and Gold:

Gold researcher Ronan Manly reports today that the Singapore Exchange’s touted gold kilobar contract has failed utterly, with trading volume practically zero. Manly’s report is headlined “SGX Kilobar Gold Contract vs. Trading with BullionStar” and it’s posted at Bullion Star here:


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





A must read.. Egon Von Greyerz tells us why all global markets will fail due to excessive debt and solvency issues

(courtesy Egon Von Greyerz/Kingworldnews)


Truth can take a long time to get out but cycles do turn, von Greyerz tells KWN

Submitted by cpowell on Mon, 2016-04-04 11:27. Section: 

7:25p HKT Monday, April 4, 2016

Dear Friend of GATA and Gold:

Gold fund manager Egon von Greyerz, in commentary for King World News, draws on the experience of a long career to observe that all economic cycles have a season and turn eventually, even as realization of the truth is getting harder as governments increasingly commit themselves to disinformation. Von Greyerz’s commentary is posted at KWN here:


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




A good one:  Jim Rickards and Dr Chris Martenson:

(courtesy Jim Richards/Dr Chris Chris Martenson/Peak Prosperity)


Jim Rickards: The New Case For Gold (Podcast)

Apr. 4, 2016 6:34 AM ET


Monetary expert Jim Rickards returns this week to share the insights from his latest work The New Case For Gold, a detailed and highly-researched study of the fundamentals likely to drive the price of gold bullion in the years to come.

Rickards is quite confident that the price is going higher – much higher in fact – as the current world fiat currency regimes falter, to be replaced by ones backed (at least in part) by bullion.

On the way to that outcome, expect the price to be subjugated to the interests and aims of the largest players on the geopolitical chessboard:

Is there gold price manipulation going on? Absolutely; there’s no question about it. That’s not just an opinion.

I spoke to a PhD statistician who works for one of the biggest hedge funds in the world. I can’t mention the name but it’s a household name, you would know the fund. This guy is a PhD statistician. He looked at COMEX opening prices and COMEX closing prices for a 10-year period and he was dumbfounded. He said…This is the most blatant case of manipulation I’ve ever seen. He said if you went into the aftermarket, bought after the close and sold before the opening every day, you would make risk-free profits. He said statistically that’s impossible unless there’s manipulation going on.

I spoke to Professor Rosa Abrantes-Metz at the New York University Stern School of Business. She is the leading expert on globe price manipulation. She actually testifies in some of these gold manipulation cases that are going on. She wrote a report reaching the same conclusions. It’s not just an opinion, it’s not just a deep, dark conspiracy theory. Here’s a PhD statistician and a prominent market expert lawyer, expert witness in litigation qualified by the courts, who independently reached the same conclusion.

Now, where is the manipulation coming from? Well, there are a number of suspects but my number one suspect is China. To that you might say:Wait a second, China has 5,000 tons. They lie about it. They say officially they have 1,700 tons but it’s very easy to establish that China probably has 5,000 tons or more. Again, that’s not a made up number. How do we know? Well, we look at Hong Kong imports. China lies, Hong Kong doesn’t- they actually have fairly reliable trade statistics. They’re showing about 700 or 800 tons a year of exports from Hong Kong to China. Let’s just say 800 tons a year there and we have geological surveys that show China produces about 450 tons a year from the mining output and we know they have zero exports. Combine Hong Kong exports to China with Chinese indigenous mining output and you get a figure of about 1,200 or 1,300 tons a year times six years. That’s 9,000 tons right there. The only thing that’s not clear is how much of that is public and how much of it is private.

I was in Switzerland a couple of weeks ago and met with the head of the world’s largest gold refinery. His estimate is about 70% goes to private usage and about 30% to the government. Take the 9,000 tons, apply 30% and you get 3,000 tons, plus the 1,000 they admit, so you easily get to a figure of 4,000 or 5,000 tons. But here’s the problem: China has to get to 8,000 tons. If they want to look the US in the eye and have a big enough pile of poker chips the next time the major trading financial powers sit down to play poker and recut the deal and reform the international monetary system, they have to have as much gold as the US. So they’re still out to buy another 3,000 or 4,000 tons. Ultimately, the price will go much higher, but if you were a buyer of 3,000 tons wouldn’t you want a low price? Of course you would. By the way, they are untouchable by the CFTC or the Justice Department. We can’t prosecute China. We can’t get access to them. They would laugh at is.

So you’ve got a big whale out there buying thousands of tons through stealth interception motivated to have a low price, which is untouchable by US regulatory authorities. There’s your culprit right there(…)

(…) The senior officials know about it. They’re very relaxed about it. They think we need to do this. The question is: Why? Why does China need gold reserves? Obviously, you’re going to reset the monetary system on a gold basis. If you do that, back to Churchill 1925, you’ve got to get the price right. What is the implied, non-deflationary price of gold in the reset monetary system? The answer is at the low end $10,000 an ounce, at the high end $50,000 an ounce. It’s coming.

People say “I hear you Jim and I agree with your argument, but I’ll wait until it starts to take off.” Sorry, you’re not going to be able to get the gold. It will take off, but you’ll be standing there watching it on television going to $2,000, $3,000, $4,000 an ounce while frantically calling your dealer saying: Get me some gold! You know what the dealer is going to say? Sorry, sold out: back ordered. You call the Mint: back ordered. You’re not going to be able to get it. That’s my point. Get it now, while you can, at a good entry point. Not 100%. Just get 10% of your assets in gold, sit tight, and you’ll be fine.

Click the play button below to listen to Chris’ interview with Rickards (39m:36s)



And now Ted Butler

(courtesy Ted Butler)


Five Years – The Feedback

Theodore Butler


April 4, 2016 – 8:27am

There was quite a bit of commentary generated as a result of making public my article, “Five Years That Changed Silver Forever.”  This wasn’t particularly surprising, because if my assertions are correct about JPMorgan accumulating a massive quantity of physical silver at prices the bank rigged lower, nothing could be more important to the future price of silver.

I also realize that my premise may seem outlandish to those hearing of it for the first time. Hopefully, not many regular subscribers were surprised, since I have been writing about this for some time now. Because the issue is so important and because I am the one advancing it, I feel it is my responsibility to fully address any questions or disagreements with my take about JPMorgan.

While my prime motivation in making the article public was to expose the matter, I must confess that there was a hidden purpose as well – I wanted to draw out any objections to what I wrote. That’s the good thing about public reaction, particularly when anonymity is present; people tend to speak their minds. (The bad thing is that sometimes unfair or personal insults are made, but that’s the tradeoff for unvarnished disagreement). And while I was encouraged at the level of agreement to my premise about JPM and silver, there is little to be said about such agreement, aside from thank you.  So let me present the most compelling arguments against JPMorgan buying 400 to 500 million oz. of silver over the past five years. In order to gauge the public reaction, you might want to review the good, bad and ugly of the comments it attracted.


There is still much debate about the metal that I allege JPMorgan purchased in the form of American Silver Eagles and Canadian Maple Leaks (I claim 100 and 50 million oz respectively). This may be my most outlandish claim in some quarters, with the central dispute revolving around why JPMorgan would pay the $2 premium the US Mint tacks on to Silver Eagles, when the bank could just as easily buy 1000 oz bars instead with no premium.

To answer the last part first, JPMorgan cannot just buy all the 1000 oz bars it wants and that’s one of the big reasons it is buying coins instead. Anyone paying attention can see that JPMorgan has been almost the exclusive stopper or acceptor of physical delivery on the COMEX for the past year and, increasingly, has had to stand down and liquidate existing contracts for additional delivery of metal. The most plausible reason is because there is not enough metal available in 1000 oz bar form. There really is no other way of interpreting this month’s COMEX data, as I’ve been reporting.

But there’s an even more compelling reason why JPMorgan would buy Silver Eagles from the US Mint – anonymity. That’s proven in the debate about whether JPMorgan is buying Silver Eagles. No one knows for sure, or put differently, anyone who does know isn’t saying and that includes JPMorgan and the US Mint. I’ve been accused of speculating about my premise and I plead guilty as charged – that’s what I do. The only question is if my analysis and speculation is reasonable and in keeping with the facts that can be verified.

Ask yourself this – if JPMorgan (or any other large entity) was accumulating silver in every physical form available, would it not be to its advantage to keep that secret and not invite outside buying competition? The real question is why the US Mint is not shining a light on who is buying the record amount of Silver Eagles over the past five years, not the obvious motivation JPM has in keeping it secret. The Mint won’t even release a list of the authorized dealers it sells to, despite a Freedom of Information Act request. I always thought JPMorgan was buying Silver Eagles through one or two large intermediaries, but, heck, JPM might be buying directly from the Mint, as who would know?

My point is that someone has purchased the 200 million Silver Eagles that the Mint has sold over the past five years and in light of persistently weak retail sales over that time, the most plausible explanation is that someone big has been buying a good chunk of the coins sold. I’ve put a name, JPMorgan, and an amount, 100 million, on a fairly simple equation. If JPMorgan or the US Mint would like to state otherwise, I, for one, would be most interested in what they may say. I further think it is outrageous for an agency under the US Treasury Department not to disclose the full details about a bullion coin program authorized by Congress and intended for US coin collectors, particularly if the largest US bank is gaming the program. But this is separate from JPMorgan having a strong motivation to keep secret that it is buying Silver Eagles hand over fist.

Aside from the Silver Eagle issue, the next biggest public disagreement with my JPM/silver accumulation premise is what it portends for the future price of silver. I say it is very bullish (correction – the most bullish factor possible), while others say that if I am correct,  it is horribly bearish and promises to extend the silver price manipulation for as far as the eye can see. The recent public reaction mirrors the reaction early on from subscribers when I started writing about it, so I know the reaction is reasonable and genuine.

I fully understand why someone would feel that JPMorgan holding hundreds of millions of ounces of physical silver could head off and postpone any physical shortage by supplying metal as needed, particularly if the bank was still heavily short COMEX silver futures contracts (like now). Certainly, it has to be admitted that JPMorgan now has the capability of heading off a physical silver shortage, should it desire to do so. Not only does JPM have the capability of capping prices and, if it had to, of alleviating a physical silver shortage, it has done so up through today. Therefore, the extended manipulation worry is not unsound.

And, I would agree, it certainly feels like the silver manipulation can go on forever for the simple reason it has gone on for so long already. We’re all human and react and adjust to conditions that have persisted for long periods of time. In the case of the silver manipulation, it’s hard not to feel the “beat dog” syndrome. (I took that from Springsteen’s “Born in the USA,” – “you end up like a dog that’s been beat too much, till you spend half your life just covering up.”) Anyone who has lived through the years and decades of the silver manipulation has been beat in some way and that definitely includes me.

But how we feel collectively is not analysis and it would be a mistake, in my opinion, to conclude that JPMorgan accumulated the largest privately-owned stockpile of silver in history in order to keep prices depressed indefinitely. I do agree that JPM is continuing the manipulation as I write this, but all the data point to that being due to the bank continuing to acquire metal at depressed prices. And while it is true that JPMorgan backed down and retreated from demanding as much physical silver as it was entitled to originally in COMEX march futures contracts in order to keep prices in check; not taking as much is not the same as selling. If we start to see signs that JPMorgan is disposing of metal in the same serious quantities it had acquired the metal, I will likely change my tune. But until that occurs, it doesn’t appear to be the most probable outcome.

What does appear to be the most likely outcome in silver, particularly if JPMorgan has accumulated the amount of silver I allege, is whatever’s best for JPM.  Here, we have to look at JPMorgan in the most objective light possible. I know many think that JPMorgan is an agent of the US Government and that it is the government behind the silver (and gold) manipulation, but I believe it is the other way around – JPMorgan has more control and dominance over the government, through the bank’s army of lawyers and lobbyists and the revolving door between private and government service. Therefore, it isn’t about protecting the dollar or the financial system; it centers on what’s good for JPMorgan. And what’s good for JPM is mo’ money.

Senators and congressmen, Treasury and financial regulators come and go, but JPMorgan and the big financial institutions remain long after the comings and goings. And what remains for JPMorgan is to increase its financial assets and the making of as much money as possible and the power that comes with that. It isn’t personal, it’s solely about the money. So, if JPMorgan has acquired the massive amount of silver I claim, what is the best price outcome, not for you or me or the government, but for JPMorgan? The only plausible answer is sharply higher prices.

Having acquired hundreds of millions of ounces at progressively lower silver prices over the past five years, I would estimate JPM’s average price to be in the low $20 range, certainly not less than $20. As such, should it start to sell the metal it has acquired at prices below those levels, it would voluntarily lose money, the opposite of why the bank exists. I will report that if that’s what the data indicate. However, it is more logical to consider what profit objective that JPMorgan has in mind, rather than what losses it plans to take,

Based upon a quantity of 400 to 500 million ounces acquired at an average price just north of $20, JPMorgan has spent about $10 billion for its silver hoard and happens to be currently underwater by about $2 billion (perhaps offset completely by ongoing COMEX paper profits on the short side of gold and silver futures over the past five years). These are table stakes for JPM, as $10 billion is hardly a rounding error on a balance sheet where assets are measured in the trillions of dollars. And JPMorgan’s cost of silver will remain insignificant – unless and until it increases in value tremendously. At $100 an ounce, JPM’s stash will be worth $50 billion; at $200 silver, it will be worth $100 billion. What wouldn’t JPMorgan do to make its silver worth $100 billion? I would contend not much.

A good friend asked me the other day, why would JPMorgan give up the ongoing money making scam it has on the COMEX, where it has made, on average, around $100 million a year for its share of the total commercial collective take from the technical funds in COMEX silver since 2008?  He was using my numbers, so I couldn’t disagree with the question; instead, I pointed out that $100 billion (what JPM could make at $200+ silver) is a lot more than $100 million, in fact, a thousand times more. But there’s a lot more to it than that.

While JPMorgan is solely in pursuit of maximum profit and it is ruthless and conniving in that pursuit, it can never be said that the bank isn’t smart or doesn’t think three or four chess moves ahead. Because it is so smart it sees the silver manipulation ending one day. In fact, I would contend that it is that vision, first learned by the bank in April 2011 that lead to JPMorgan embarking on its physical silver acquisition spree. It was the lesson that silver did and could develop into a physical shortage that drove the bank to acquire metal.

It just doesn’t seem reasonable to me for JPMorgan to have manipulated the price of silver over the past five years, while acquiring hundreds of millions of physical ounces at bargain basement prices, only to turn around and “donate” that silver at big losses in order to keep silver prices depressed. Certainly, there is no profit motive in buying and then selling at artificial low prices. How does JPM profit by prolonging the silver price manipulation indefinitely? And if you answer that a low silver price keeps the dollar and financial system confidence strong, then why did “they” let it rise tenfold from years earlier into 2011? I didn’t notice any general financial panic in April 2011, when silver hit nearly $50. Gold didn’t even hit its high point until six months later.

Better than anyone, JPMorgan knows that the silver manipulation must end and its accumulation of the largest metal hoard in history is the proof of its knowledge. JPM knows the end of the silver manipulation is coming and may be close at hand and it is now prepared for the inevitable end. Yes, the COMEX commercial/technical fund wash, rinse and repeat cycle has been the goose that has produced golden eggs for the commercials, but neither geese nor price manipulations live forever.  JPMorgan knows better than anyone that the silver manipulation must end and it will profit more than anyone when it does. Simply put, there is no big money for JPM if the manipulation lasts very long (aside from continuing to acquire physical metal) and very big money for JPM when it ends. This is all about what’s good for JPM.

JPMorgan also knows that more are becoming aware of the silver (and gold) price manipulation daily and that can be seen in the growing commentary about the COTs and COMEX positioning. JPMorgan also knows that this isn’t a good development for it, as it would have much preferred not even being mentioned in terms of silver. In some ways, the sooner the silver manipulation ends, the better it may be for JPMorgan, now that its name is being more widely associated with accumulating silver and the manipulation. Let’s face it – JPMorgan has already accomplished the hardest part of its $100 billion silver profit potential in its massive acquisition of metal to date. By comparison, the eventual liquidation of the metal is much easier – all JPM has to do is stop capping prices on the next rally and that will guarantee soaring silver prices.

I did not intend for this to be the final word on JPMorgan’s accumulation of silver and would solicit any comments, particularly disagreements, concerning my contentions. By focusing on the evolving flow of data, JPMorgan’s role becomes clearer and more bullish for silver daily. My whole premise has come from the flow of data and it is that flow that I continue to rely upon.

Perhaps the best thing about JPMorgan accumulating hundreds of millions of silver ounces is the relief it has brought to the reasoning process, at least for me. The revelation explains everything about the past five years in silver, price wise and fact wise. I don’t know how anyone could begin to explain the past five years in silver leaving JPMorgan out. And when you do include it, the silver story becomes bullish beyond description.

Ted Butler

April 4, 2016


Today’s commentary from Bill Holter/Holter-Sinclair collaboration


 “Truth Bombs” AWAY! (public article)

I coined the phrase “Truth Bomb” well over a year ago to much skepticism it would or even could ever happen.  As you may know by now, information was dropped in “truth bomb” fashion regarding the clientele of a Panamanian law firm, Mossack Fonseca https://www.yahoo.com/news/panama-papers-secret-accounts-rich-powerful-043044966.html.  This information dump was collated by 100 international journalists.
  When I first heard the news I thought “here it is, THE TRUTH BOMB”!  After about 30 minutes or so and reading “who” was being exposed, I began to scratch my head.  Noticeably absent from being named were any prominent Americans or Europeans with exception of David Cameron’s father and several Members of British Parliament.  Then it dawned on me, this was sort of a “reverse truth bomb” where Putin, Xi and others were being discredited.
  As you know, it has been my contention we would see a massive truth bomb dropped by Putin and the East ON the various Western “dirties”.  You name it, bribes and hidden accounts of business leaders, Senators, Representatives, Governors, Ambassadors (past presidents?)…I believed we would see information regarding false flags including 911, election fraud and even empty vaults being exposed …  Instead, the “truth bomb” though very probably true was only detrimental to non Western interests.  Did I have it backwards?
  I believe what we have just seen was only an opening volley by the West to try to discredit what they KNOW is coming from the East!  In fact, it could turn out to be a free for all amongst the elites where the “sharks eat the sharks” by outing each other.  I have said for years we live in a world of true lies covered by holograms of the rule of law, we may very well soon see this.  The elites now look like they will begin outing each other in an effort to say “what I did wasn’t so bad, just look at what so and so did”!
  In reality this will be very good for the average Joe in the long run.  Notice I said “the long run” because the immediate aftermath of “truth” coming out means we will learn that “everything is worth nothing” or at least a small fraction of what we are being told.  “Trust” will completely break down and with it “markets”.  Stock and bond markets, cross trading and derivatives, institutions of all sorts will fail, and most importantly the global fiat currency markets themselves.  The aftermath may even approach Mad Max proportions but “truth” will be good in the long run …especially if the elites outing each other leads to lynching’s and unrest not seen since the French Revolution!  Truth now, though painful will lead to a washing away of the current system(s).  In the words of Chinese President Xi, “painful in the short term but very good for the long term”.
  I do need to make mention the “timing” of what is happening.  Global trade and GDP is collapsing.  Markets have been held up via derivatives while remaining unencumbered collateral is almost nonexistent.  Lowering interest rates and flooding the system with new speedballs is no longer working.  Put simply, we are hitting a wall in the global Ponzi scheme!  In about two weeks the Chinese will open for full trading in a cash only metals exchange.  Western inventories of less than $1 billion of gold and silver will not be able to withstand any arbitrage action which will be sure to follow.  Please note, China will say “we didn’t do it, the free market did”…
  Let’s ponder a question or two to wrap this up.  What would have been market reactions today were the “truth bombs” dropped on the West instead of the East?  What if we were given hard evidence that dozens of Congressmen took bribes (disguised as campaign contributions) in the $ billions and their “votes” were bought?  What if we got information of blackmail on Supreme court justices …or gold balances held individually by past and present central bankers?  What if proof of regularly rigged elections were to surface?  What if absolute proof that pointed to Israeli/Saudi/U.S. involvement in the planning and implementation of 911 were to come out?  What would be the reaction if scores of dirty dealing, fraud, tax evasion or even “eliminations” were performed by past presidents?  Not to leave Europe out of this party, what if similar information was dropped on them some sunny Sunday afternoon?
  I ask these questions because when the return volley of “TRUTH BOMBS” comes, it will not be pleasant!  Much of what we have come to believe as our “way of life” in the West will not only come into question, it will be GONE IN AN INSTANT!  Pooh pooh this at your own risk because it is coming as sure as the Sun will rise tomorrow morning.  We have lived in a dream world for well over a decade, the truth will be outed and the truth happens to be some very ugly stuff.  Our markets, our economy, OUR WAY OF LIFE will be permanently altered faster than you can ask “what just happened”.  We will go to bed on a Friday night in one world and wake up one Mondaymorning in another entirely different world!  If you want to short something …short country clubs!
  This is such an important topic it was decided we should put it out publicly.  If you liked (how could anyone “like” such news?) the content, my writings and interviews with Jim Sinclair, we can be found atwww.jsmineset.com.  Please join us and subscribe to our gold subscribe content, Click here to sign up now!
Standing watch,
Bill Holter
Holter-Sinclair collaboration
Comments welcome   bholter@hotmail.com

Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight



1 Chinese yuan vs USA dollar/yuan up to 6.4760 / Shanghai bourse  CLOSED,  / HANG SANG CLOSED FOR HOLIDAY 


3. Europe stocks opened ALL in the GREEN /USA dollar index UP to 94.77/Euro DOWN to 1.1365

3b Japan 10 year bond yield: FALLS   TO -.094%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.30

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  36.73  and Brent: 38.64

3f Gold DOWN  /Yen DOWN

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 DOWN for WTI and DOWN 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 0.122%   German bunds in negative yields from 8 years out

 Greece  sees its 2 year rate RISE to 10.84%/: 

3j Greek 10 year bond yield FALL to  : 8.72%   (YIELD CURVE NOW INVERTED)

3k Gold at $1217.70/silver $14.99 (7:15 am est) 

3l USA vs Russian rouble; (Russian rouble DOWN 52/100 in  roubles/dollar) 68.21

3m oil into the 36 dollar handle for WTI and 38 handle for Brent/

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/expect a huge devaluation imminently from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9602 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0920 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.


3r the 8 Year German bund now  in negative territory with the 10 year FALLS to  + .122%

/German 8 year rate negative%!!!

3s The Greece ELA NOW a 71.4 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 1.77% early this morning. Thirty year rate  at 2.59% /POLICY ERROR)

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

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

Global Stocks Rise, Europe Rebounds As Oil Halts Decline

In a quiet start to the week following last week’s surprisingly strong rebound which followed a stronger than expected jobs report (perhaps to demonstrate that good news is once again good news), Japan stocks continued to sink as the USDJPY dropped to fresh lows, while commodities declined for a fifth day as the supply glut from crude to copper weighed on prices, dragging down commodity currencies. European equities rose, rebounding from a one-month low.

Crude fell in early trading after Saudi Arabia’s deputy crown prince said last week the kingdom will only arrest production if Iran does, although it has since posted a modest rebound, while copper dropped to a one-month low. European stocks advanced after trading at their lowest valuations in more than a year relative to U.S. equities, even as France’s phone companies tumbled after a deal to consolidate the nation’s telecommunications industry fell apart.

“Three of the major commodities oil, gold and copper have all retraced in recent days,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S told Bloomberg. “Saudi Arabia caused a major upset on Friday by saying that a freeze deal was conditional of Iran joining which will not happen at this stage.” Copper and industrial metals have been hurt on concern China’s investment-led economic boom won’t be enough to avoid more cutbacks, he said.

In key macro news, Euro-area unemployment dropped to 10.3% in February down from an upwardly revised 10.4%, and the lowest level since 2011, in line with estimates. “I see this number as a movement sideways,” said Aline Schuiling, senior economist at ABN Amro Bank NV in Amsterdam. “This is a reflection of what is happening in the economy. Growth has clearly weakened in the second half of last year and the first quarter of this year will also probably be a bit weaker.”

Youth unemployment remained disturbingly high, with 21.6% of Europeans under 25 unemployed, just modestly lower than the 22.7% a year ago.

In other news, Eurozone producer price inflation also dropped, this time by -0.7%, and down -4.2%, to the most negative annual increase since the financial crisis.

The Stoxx Europe 600 Index added 0.8%, after being in the red earlier, while futures on the Standard & Poor’s 500 Index gained 0.2% despite the GAAP PE multiple on the S&P hitting approaching 24, the highest level since the dot com era. While U.S. stocks erased annual losses and closed at their highest level of the year on Friday, the rebound in European shares has stalled for more than two weeks. With a valuation of about 14.7 times estimated earnings, the Stoxx 600 traded at its lowest level since January 2015 relative to the S&P 500 on Friday.

This is where markets stood as of this moment:

  • S&P 500 futures up 0.2% to 2068
  • Stoxx 600 up 0.8% to 336
  • FTSE 100 up 0.3% to 6165
  • DAX up 0.3% to 9829
  • German 10Yr yield down less than 1bp to 0.13%
  • Italian 10Yr yield up less than 1bp to 1.23%
  • Spanish 10Yr yield up 1bp to 1.45%
  • S&P GSCI Index down 0.3% to 315.5
  • MSCI Asia Pacific up 0.3% to 126
  • Nikkei 225 down 0.3% to 16123
  • S&P/ASX 200 down less than 0.1% to 4995
  • US 10-yr yield down 1bp to 1.76%
  • Dollar Index up 0.13% to 94.74
  • WTI Crude futures down 0.7% to $36.53
  • Brent Futures down 0.3% to $38.55
  • Gold spot down 0.4% to $1,217
  • Silver spot down 0.6% to $14.96

Top News:

  • Orange-Bouygues Deal Collapse Ends Months of Tense Diplomacy: Deal to consolidate French telecom industry proved too complex; government demands on price, governance were late obstacle
  • Alaska Air Said Near Accord to Buy Branson’s Virgin America: Negotiations are advanced, deal could face regulatory scrutiny after wave of combinations; JetBlue Airways was said to be other competitor in bidding; Alaska Air Seen Winning Virgin America for ~$2.5b Cash: WSJ
  • World Leaders Hid Wealth Via Shell Companies, Report Alleges: Leaked files from Panama law firm show web of hidden wealth, International Consortium of Investigative Journalists says
  • Bank of Tokyo-Mitsubishi Mulls U.S. Regional Banks in Growth Bid: U.S. banking market remains aa focus because of size and steady growth as lender wants to be among top 10 U.S. banks by deposits
  • Biggest Ever Saudi Overhaul Targets $100 Billion of New Revenue: Levies on expats, energy, luxury goods, sugary drinks seen; plan is to boost non-oil revenue to balance budget by 2020
  • Amtrak Resumes Service After Fatal Crash Slows Northeast Trains: To restore regular train service today in Northeast after crash that killed 2 railroad workers near Philadelphia
  • Blackstone to Buy HPE’s Stake in Mphasis for $825m: To buy at least 84% of HPE’s stake for 430 rupees/share, remaining 16% will be bought through mandatory tender offer
  • SoftBank’s Arora Said in ‘Active’ Talks With Yahoo: N.Y. Post: SoftBank President Arora said to be in talks with Yahoo’s board, including CEO Marissa Mayer
  • Trump Back on Attack Demanding Kasich Exit, Predicting Recession: Trump demanded competitor John Kasich drop out of the Republican presidential race and asserted U.S. is headed for a “very massive recession”
  • Top JPMorgan Treasuries Trader’s Exit Said to Draw SEC Inquiry: Regulators examining alleged policy breaches that prompted JPMorgan’s U.S. head of government-bond trading and another employee to leave firm this year, according to person briefed on the matter
  • ‘Batman v Superman’ Rules Box Office for Second Weekend: movie registered hefty sales amid light competition from new releases

Looking at regional markets, we find that Asian stocks trade mostly positive following last Friday’s gains on Wall St. where stronger than expected NFP and Average Hourly Earnings data lifted sentiment, despite weakness across the commodities complex. This saw the ASX 200 (+0.05%) underpinned from the open with participants also short-covering following last week’s declines. Nikkei 225 (-0.25%) saw indecisive price action as a firmer JPY weighed on sentiment, while trade in the region was also thin with China, Hong Kong and Taiwan markets closed for Ching Ming festival. 10 year JGBs traded higher amid indecisiveness in riskier assets while the BoJ also entered the market to purchase about JPY 1.2trl of government debt.

Top Asian News

  • Goldman Says Sell Asia Currencies After Best Rally Since ’08: Predicts yen plunge to 130/dollar, yuan at 7 in 12 mos.
  • BOJ Negative Rates Risk Destroying Loan Market as Freeze Deepens: Call market activity at record low 2 mos. after shift
  • Japan Inc. Inflation Expectations Decline as Confidence Wanes: Cos. cut forecasts for inflation for next 5 yrs from now
  • Honda Fit Fires, Collisions Prompt at Least Sixth Major Recall: Co. recalls more than 283,000 Fits, Vezels in Japan
  • SunEdison Said to Seek Buyers for 1GW of India Solar Projects: Developer has 1,060MW of unbuilt solar projects in India, BNEF says

European equities have seen a downbeat start to the week in terms of newsflow, despite modest upside in Euro Stoxx (+0.2%), with significant underperformance seen in French telecom names after collapse of the potential deal between Orange (-5.5%) and Bouygues (-14.6%), with the likes of Iliad (-14.3%) and Numericable (-14.1%) also suffering as a consequence.

The German curve has reversed some of the initial flattening bias, with Bunds consequently moving off the best levels to trade near unchanged levels even as peripheral bond yield spreads remained broadly wider. GR/GE lOy spread widened by over 10bps even as the head of the IMF dismissed reports that the body is trying to push Greece towards default as “simply nonsense”. At the same time, market participants had to contend with a large slate of EUR denominated corporate supply, with the likes of Fedex and Credit Suisse due to price.

Dovish rhetoric from ECB’s Praet who said that the central bank will act forcefully to low inflation if conditions warrant did little to drive Bunds, with GE/UK spread widening amid the release of better than expected UK construction PMI data

Top European News

  • Praet Says ECB Will React ‘Forcefully’ to Low Inflation If Needed: Says “prolonged period of low inflation we are in today has increased the risks that inflation misses might become persistent”
  • SocGen Plans to Cut About 125 Jobs in France, Mostly in Trading: Plans cuts in France, mostly at trading operations as harsher capital rules put profitability under pressure
  • Melrose Said to Drop Out of Race for Philips Lighting Unit: Likelihood of IPO increases even as sale process continues
  • Greece’s Euro Future May Be Back in Play If Rescue Talks Drag On: Creditors resume talks in Athens on bailout program; pensions, tax policy remain obstacles, EU officials say
  • Lagarde Says IMF Greek Deal Far Off as Talks Roiled by Leaks: Rebuffed Greek calls to replace top officials overseeing country’s bailout, said IMF is “a good distance away” from agreement that would allow for additional loans
  • Banks, Investors Push EU to Fix Flaws in ABS Market Revival Plan: 32 Banks, asset managers and groups issue joint note on plan; signatories to letter include HSBC, BlackRock, UniCredit, BBVA

In currencies, the USD has seen modest gains today, notably against the commodity currencies and the JPY.  The Aussie weakened 0.8 percent to 76.17 U.S. cents, after climbing 2.3 percent last week. Retail sales were little changed in February from a month earlier, a report showed, missing economists’ forecast for a 0.4 percent gain. The nation’s central bank reviews monetary policy on Tuesday, when it’s expected to hold borrowing costs at a record low.

The yen added 0.1 percent to 111.54 per dollar after jumping 0.8 percent on Friday amid the greenback’s retreat. The won strengthened  0.7 percent. The ruble sank 1.5 percent, falling for a second day and South Africa’s rand slid 0.5 percent, leading declines in developing-nation currencies. India’s rupee climbed to the highest this year before foreign investors bid for quotas on the country’s bonds.

In commodities, WTI and Brent have both seen positive trade in mid European tradewith WTI finding support at USD 38.20/bbl with the next level in focus on the upside being USD 37.00/bbl. Gold has also seen an uptick in prices after falling earlier in the session and gapping down at the open. Silver also has recovered slightly after falling in the Asian and Early Eu session but there is a key resistance level higher a USD 15.2020/oz. Meanwhile Copper prices were subdued and remained near a monthly low with a lack buyers due to holidays in the Asia including largest consumer China on a technical note there is a key support level for Copper at around the 214.90 level which also coincides with an upward trendline on the daily chart where prices first made its lower highs. In base metals Zinc, Tin and Lead are all following in the same direction with prices edging lower.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • French telecom names lead the way lower for European equities, while Bunds fail to gain from risk off sentiment.
  • Commodity linked currencies experiencing modest weakness amid downside in the energy and metals complexes, with AUD continuing to underperform after the downbeat data from overnight.
  • Looking ahead, highlights include US Factory Orders and Durables Goods with speakers including Fed’s Rosengren (Voter, Dove) and Kashkari (Non-Voter, N/A)
  • Treasuries little changed, European equity markets rise and Asian markets fall (China closed), oil higher in overnight trading. Today’s economic data includes factory orders, Labor Market Conditions Index.
  • Societe Generale SA said it plans to cut about 125 jobs in France, mostly at its trading operations, as stricter market regulations squeeze profitability
  • Euro-area unemployment retreated in February to 10.3%, the lowest since 2011, continuing its slow decline as the economy grows at a modest pace
  • EU efforts to revive the asset-backed securities market and boost financing for small businesses could falter if repairs aren’t made to its plan for a new class of “simple, transparent and standardized” products, some of the biggest financial firms in the 28-nation bloc said
  • Copper is heading for its longest losing streak in two years amid concern a glut will persist as miners press on with cost cuts and banks such as Barclays Plc see more losses
  • Gold’s biggest quarterly surge since 1986 has all but erased losses the Bank of Russia suffered by mounting a rescue of the ruble more than a year ago.
  • The freeze in Tokyo’s market for overnight loans looks set to extend into a third month as the Bank of Japan’s negative rate policy makes it harder for brokers to price and process transactions
  • Leaked files from a Panama law firm that creates shell companies show that politicians, criminals and celebrities worldwide have used banks and shadow companies to hide their finances
  • Iceland PM Gunnlaugsson faces a no confidence vote in parliament amid revelations he had an investment account in the British Virgin Islands created with the aid of the Panama-based law firm at the center of a global tax evasion leak.
  • Sovereign 10Y bond yields mostly steady; European and Asian equity markets mixed (China, Hong Kong, Taiwan closed); U.S. equity-index futures rise. WTI crude oil rises; gold and copper move lower

DB’s Jim Reid completes the overnight wrap

This week we’ve got the usual post-payrolls lull in the data but there are still a couple of events which will have some bearing on the near-term direction for markets. The first is on Wednesday evening where we’ll get the March FOMC minutes to comb through. Given the range of dovish (mainly Yellen) and hawkish (Bullard, Lacker, Lockhart, Williams) Fedspeak of late it’ll be interesting to see what clues the minutes throw up. Also potentially interesting this week is a panel interview on Thursday evening which will see current Fed Chair Yellen participate along with former Chairs Bernanke, Volcker and Greenspan.

With that to look forward to, this morning in Asia, with China and Hong Kong closed for holidays it’s been a bit of slow start with most of the price action relatively benign. In Japan we’ve seen the Nikkei (-0.18%) and Topix (+0.10%) trade between gains and losses for the most part, while elsewhere the Kospi is +0.14% and the ASX +0.19%. Credit markets are a touch tighter generally. In the FX space the Aussie Dollar is slightly weaker post some softer than expected retail sales numbers in Australia.

Moving on. News flow over the weekend and this morning has been fairly light but one story which has attracted some attention is coming out of the talks between Greece and its Creditors. Greek PM Tsipras is said to have questioned the credibility of the negotiations following the release of a leaked transcript in which negotiations were said to be ‘difficult’. In an FT article this morning IMF Chief Lagarde is said to have responded to claims that the Fund was looking to push Greece towards default as a negotiating tactic as being false. Lagarde did however say that in her view a coherent program for Greece was ‘still a good distance away’ and the weekend’s incident ‘has made me concerned as to whether we can indeed achieve progress in a climate of extreme sensitivity to statements of either side’.

Reversing gear now and quickly recapping that data from Friday. In terms of the March employment report in the US, headline non-farm payrolls printed at a slightly higher than expected 215k (vs. 205k expected). That follows a 245k reading in February which was revised marginally higher on Friday. That takes the Q1 average to 209k which compares to the average monthly reading of 229k in 2015. There was good news also in the average hourly earnings numbers which rose a greater than expected +0.3% mom (vs. +0.2% expected) last month, which has had the effect of lifting the YoY rate one-tenth to +2.3%. Meanwhile, the labour force participation rate edged up one-tenth to 63.0% (highest in two years) which was seen as causing the U-3 unemployment rate to nudge up one-tenth to 5.0%. There was also no change in average weekly hours worked at 34.4hrs after expectations had been for a slight increase.

Away from the employment numbers, the March ISM manufacturing print rose a better than expected 2.3pts last month to 51.8 (vs. 51.0 expected) which is the first reading greater than 50 since August last year. New orders (+6.8pts to 58.3) were a big standout in the data with that index alone at the highest level since November 2014. That said there was a slightly softer employment component in the data which was also evident in the payrolls data for the sector. It’s worth noting that tomorrow will see the confirmation of the March non-manufacturing index reading which is expected to rise to 54.1. Should that be the case, then the spread between the two last month of 2.3pts would be the least since December 2014 (when the spread was 2pts). Meanwhile, also of note on Friday was an upward revision to the final University of Michigan consumer sentiment print last month by 1pt to 91.0. The manufacturing PMI was also nudged up 0.1pts in the final read to 51.5, however there was less good news in the construction spending numbers in February when spending was said to have decreased -0.5% mom (vs. +0.1% expected). Finally, towards to the end of Friday we also saw some disappointment in the latest US vehicle sales numbers where sales were said to have fallen back to 16.5m saar in March from 17.4m in the prior month (expectations had been for little change). While the early Easter holiday period played a part, vehicle sales have now been in a downward trend since the recent high in October last year.

In terms of the price action, risk markets had initially weakened post the flow of economic data on Friday but that was quickly reversed and markets traded firmer right up until the closing the bell. The S&P 500 eventually finished with a +0.63% gain to kick off the new month which means the index gained +1.81% over the past week. Credit markets also had a strong session on Friday with CDX IG closing 3bps tighter. The Dollar was volatile but ultimately ended up flat on Friday which means the Dollar index was down a steep 1.72% last week, the second worst week this year. US Treasuries also chopped around but the end result being little change with the benchmark 10y currently sitting at 1.765% this morning. Comments from the Fed’s Mester added little to the recent debate with the Cleveland Fed President suggesting that she sees the US economy as evolving in a way that would mean rate hikes are appropriate this year, but refusing to comment on her thoughts on potential timing.

Interestingly, the moves for risk assets in the US on Friday came despite the backdrop of a steep leg lower for Oil markets. WTI ended the week with a -4.04% loss on Friday to close at $36.79/bbl (and is down further this morning) which is the lowest closing price since March 3rd. In fact prices are now down close to 15% from their highs of last month and ahead of the upcoming meeting between producers in Doha on the 17th of April, for which expectations of a positive outcome appear to diminishing quickly. Friday’s move seemingly came about on the back of comments from Saudi Arabia’s deputy Crown Prince who said that the nation will only freeze output should Iran follow suit. This of course comes following the remarks from Iran’s oil minister who downplayed the possibility of the nation freezing current production levels.

Those declines for Oil on Friday weighed most heavily on European equity markets where we saw the Stoxx 600 tumble -1.30%, despite a late effort to bounceback into the close. That concluded a third consecutive weekly decline for the index. Prior to that we had seen some supportive manufacturing PMI numbers in the region with the Euro area print in particular revised up 0.2pts at the final read to 51.6.

As usual we’ll also be keeping a close eye on the latest chatter out of Fed officials. Kashkari and Evans are due to speak on Tuesday with Mester on Wednesday. We then hear from Kaplan early on Thursday before Fed Chair Yellen is scheduled to speak in a discussion with Bernanke, Greenspan and Volcker on Thursday evening. The Fed’s George will speak on Friday. Over at the ECB we’ll hear from Praet and Constancio during the week, as well as ECB President Draghi on Thursday at a presentation in Lisbon.



i)Late  SUNDAY night/ MONDAY morning: Shanghai closed FOR HOLIDAY /  Hang Sang closed FOR HOLIDAY The Nikkei closed DOWN 40.89 POINTS OR 0.25% . Australia’s all ordinaires  CLOSED DOWN 0.08%. Chinese yuan (ONSHORE) closed DOWN at 6.4760.  Oil FELL  to 36.73 dollars per barrel for WTI and 38.64 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.4797 yuan to the dollar vs 6.4760 for onshore yuan. lAST WEEK:Japanese INDUSTRIAL PRODUCTION plunges the most in almost 5 years as negative interest rates ARE KILLING BUSINESS./JAPANESE TANKEN CONFIDENCE INDEX PLUMMETS LAST THURSDAY NIGHT. SOUTH KOREA REPORTS BAD MFG DATA. )



A big story:  Japanese traders are getting quite angry with NIRP as the Central Bank of Japan is destroying the functionality of markets.  The short end of the curve is frozen due to inability to price.  Traders are worried once normalization returns, then bankruptcies will occur by a huge multitude. This is causing the Japanese banks to lay off workers as they cannot earn a profit and traders are now reluctant to front run the B of J.

(courtesy zero hedge)

Japanese Traders Are Getting Angry: “The BOJ Is Destroying The Functioning Of The Market”

Back in the summer of 2014, when the ECB first unveiled NIRP, many were concerned that this submersion into the monetary policy twilight zone would first crush Europe’s money markets. However, at least until now, European MM funds have proven relatively resilient,

The story in Japan is different.

When the Bank of Japan announced they were instituting NIRP back in January, they intended to spur lending and push inflation up. As often is the case with central planners, their academic theory was much different than the economic reality.

Money market has fallen off a cliff in Japan, and the freeze in short-term credit markets can be solely attributed to the BOJ’s negative interest rate policy. So far, in a contrast to the financial crisis, activity is frozen simply because brokers are having a hard time pricing and processing transactions as opposed to concern over counterparty risk (for now). Firms have capital to sustain this short-term freeze at the moment, but the break in this market is certainly something to keep a close eye on.

This sums up the sentiment in Japan: “Among central banks, the BOJ is the one that destroys functioning markets the most,” Izuru Kato, the president of Totan Research in Tokyo was quoted by Bloomberg.

Companies will slash staff and scale back operations where activity is grinding to a halt, exposing markets to spikes in rates when the time comes for normalization.”

What normalization?

As Bloomberg shows, the interbank call market hit a record low at the end of March.

As the BOJ continues to push on the NIRP string, the list of unintended consequences grows by the minute. Outside of the short term credit freeze and complete inability to set borrowing costs, there are more concerns starting to bubble up. Banks may be preparing to lay off workers due to the lull in transactions, which won’t help their wage and inflation issues. Traders are simply trying to front run BOJ asset purchases as a way to earn profits, as the rest of the “market” is eroding – which is spilling over to banks of course, as their inability to make money lending forces them to turn to a buy & sell to the BOJ model for profits.

We’re not sure what other unintended consequences will show themselves over the coming months, but one thing is certain: The BOJ losing control, or perhaps it already has.



An escalation, as Viet Nam seizes a Chinese boat carrying fuel.  The Chinese boat did enter territorial waters of Viet Nam and the captain states that the fuel was meant for Chinese vessels fishing in Viet Nam waters:

(courtesy zero hedge)

Vietnam Seizes Chinese Ship In Gulf Of Tonkin

The territorial scramble for various resource rich areas in the East/South China Sea and specifically the Spratly islands has been a major point of contention involving China and most of its regional neighbors, recently expanding to the US which is determined not to let China have the upper hand, for nearly two years now, with occasional episodes of escalation that threaten the regional peace. One such episode took place on Thursday of last week when the Vietnamese coast guard seized a Chinese vessel for intruding into its territorial waters, according to a local report Saturday.

As the Nikkei reports, in a rare move for Vietnamese authorities against a Chinese vessel, the coast guard in the northern port city of Haiphong seized the ship carrying diesel fuel in the infamous Gulf of Tonkin on Thursday.

The WSJ adds that Border Defense Force of Haiphong City found the vessel carrying 100,000 liters of diesel oil Thursday near Vietnam’s Bach Long Vi Island in the Gulf of Tonkin, reported the An Ninh Thu Do newspaper, which is run by Hanoi Police Department. After seizing it, the force towed the ship to the city.

The paper said Vietnamese authorities are investigating the case.

The captain of the Chinese ship admitted to the intrusion, telling Vietnamese officials the ship was carrying fuel for Chinese fishing boats operating in Vietnamese waters, according to the report.

This is the biggest territorial escalation between the two countries since 2014 when China towed an oil rig to disputed waters in the South China Sea in 2014, triggering dangerous boat ramming and anti-China riots in Vietnam.

Officials from Vietnam and China haven’t yet commented on the seizure.



We start off on Saturday, with Wikileaks revealing an IMF plan to “cause an credit event” in Greece prior to the British vote on leaving the EU:

the official release..

(courtesy zero hedge)

Wikileaks Reveals IMF Plan To “Cause A Credit Event In Greece And Destabilize Europe”

One of the recurring concerns involving Europe’s seemingly perpetual economic, financial and social crises, is that these have been largely predetermined, “scripted” and deliberate acts.

This is something the former head of the Bank of England admitted one month ago when Mervyn King said that Europe’s economic depression “is the result of “deliberate” policy choices made by EU elites.  It is also what AIG Banque strategist Bernard Connolly said back in 2008 when laying out “What Europe Wants

To use global issues as excuses to extend its power:

  • environmental issues: increase control over member countries; advance idea of global governance
  • terrorism: use excuse for greater control over police and judicial issues; increase extent of surveillance
  • global financial crisis: kill two birds (free market; Anglo-Saxon economies) with one stone (Europe-wide regulator; attempts at global financial governance)
  • EMU: create a crisis to force introduction of “European economic government”

This morning we got another confirmation of how supernational organizations “plan” European crises in advance to further their goals, when Wikileaks published the transcript of a teleconference that took place on March 19, 2016 between the top two IMF officials in charge of managing the Greek debt crisis – Poul Thomsen, the head of the IMF’s European Department, and Delia Velkouleskou, the IMF Mission Chief for Greece.

In the transcript, the IMF staffers are caught on tape planning to tell Germany the organization would abandon the troika if the IMF and the commission fail to reach an agreement on Greek debt relief.

More to the point, the IMF officials say that a threat of an imminent financial catastrophe as the Guardian puts it, is needed to force other players into accepting its measures such as cutting Greek pensions and working conditions, or as Bloomberg puts it, “considering a plan to cause a credit event in Greece and destabilize Europe.”

According to the leaked conversation, the IMF – which has been pushing for a debt haircut for Greece ever since last August’s 3rd Greek bailout – believes a credit event as only thing that could trigger a Greek deal; the “event” is hinted as taking place some time around the June 23 Brexit referendum.

As noted by Bloomberg, the leak shows officials linking Greek issue with U.K. referendum risking general political destabilization in Europe.

The leaked transcript reveals how the IMF plans to use Greece as a pawn in its ongoing negotiation with Germany’s chancelleor in order to achieve the desired Greek debt reduction which Germany has been pointedly against: in the leak we learn about the intention of IMF to threaten German Chancellor Angela Merkel to force her to accept the IMF’s demands at a critical point.

From the transcript:

THOMSEN: Well, I don’t know. But this is… I think about it differently. What is going to bring it all to a decision point? In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default. Right?


THOMSEN: And possibly this is what is going to happen again. In that case, it drags on until July, and clearly the Europeans are not going to have any discussions for a month before the Brexits and so, at some stage they will want to take a break and then they want to  start again after the European referendum.

VELKOULESKOU: That’s right.

THOMSEN: That is one possibility. Another possibility is one that I thought would have happened already and I am surprised that it has not happened, is that, because of the refugee situation, they take a decision… that they want to come to a conclusion. Ok? And the Germans raise the issue of the management… and basically we at that time say “Look, you Mrs. Merkel you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say ‘The IMF is not on board’? or to pick the debt relief that we think that Greece needs in order to keep us on board?” Right? That is really the issue.

* * *

VELKOULESKOU: I agree that we need an event, but I don’t know what that will be. But I think Dijsselbloem is trying not to generate an event, but to jump start this discussion somehow on debt, that essentially is about us being on board or not at the end of the day.

THOMSEN: Yeah, but you know, that discussion of the measures and the discussion of the debt can go on forever, until some high up.. until they hit the July payment or until the leaders decide that we need to come to an agreement. But there is nothing in there that otherwise is going to force a compromise. Right? It is going to go on forever.

The IMF is also shown as continuing to pull the strings of the Greek government which has so far refused to compromise on any major reforms, as has been the case since the first bailout.

As the Guardian notes, Greek finance minister Euclid Tsakalotos has accused the IMF of imposing draconian measures, including on pension reform. The transcript quotes Velculescu as saying: “What is interesting though is that [Greece] did give in … they did give a little bit on both the income tax reform and on the … both on the tax credit and the supplementary pensions”. Thomsen’s view was that the Greeks “are not even getting close [to coming] around to accept our views”. Velculescu argued that “if [the Greek government] get pressured enough, they would … But they don’t have any incentive and they know that the commission is willing to compromise, so that is the problem.”

Below is Paul mason’s summary of what is shaping up as the next political scandal.

The International Monetary Fund has been caught, red handed, plotting to stage a “credit event” that forces Greece to the edge of bankruptcy, using the pretext of the Brexit referendum.

No, this is not the plot of the next Bond movie. It is the transcript of a teleconference between the IMF’s chief negotiator, Poul Thomsen and Delia Velculescu, head of the IMF mission to Greece. 

Released by Wikileaks, the discussion took place in Athens just before the IMF walked out of talks aimed at giving Greece the green light for the next stage of its bailout.

The situation is: the IMF does not believe the numbers being used by both Greece and Europe to do the next stage of the deal. It does not want to take part in the bailout. Meanwhile the EU cannot do the deal without the IMF because the German parliament won’t allow it.

* * *

Let me decode. An “event” is a financial crisis bringing Greece close to default. Just like last year, when the banks closed, millions of people faced economic and psychological catastrophe.

Only this time, the IMF wants to inflict that catastrophe on a nation holding tens of thousands of refugees and tasked with one of the most complex and legally dubious international border policing missions in modern history.

The Greek government is furious: “we are not going to let the IMF play with fire,” a source told me.

But the issue is out of Greek hands. In the end, as Thomsen hints in the transcript, only the European Commission and above all the German government can decide to honour the terms of the deal it did to bail Greece out last July.

The transcript, though received with fury and incredulity in Greece, will drop like a bombshell into the Commission and the ECB. It is they who are holding E300bn+ of Greek debt. It is the whole of Europe, in other words, that the IMF is conspiring to hit with the shock doctrine.

The Greeks are understandably angry and confused; As Bloomberg reported earlier, “Greece wants to know whether WikiLeaks report regarding IMF anticipating a Greek default at about the time of the U.K. June 23 referendum on its EU membership is the fund’s official position” government spokeswoman Olga Gerovasili says Saturday in e-mailed statement.  For its part, an IMF spokesman in e-mail Saturday said it doesn’t “comment on leaks or supposed reports of internal discussions.”

Two side observations: i) has a “Snowden” leaker now emerged at the IMF; if so we can expect many more such bombshell accounts in the coming weeks; ii) it may be another turbulent summer in Europe.

The story is picked up by Bloomberg which offers their theory on the event:
(courtesy Bloomberg)

IMF Discussed Pressuring Germany on Greek Debt, WikiLeaks Says

April 2, 2016 — 10:50 AM EDT
  • Fund declined to comment on leak of alleged phone discussions
  • Greek government asks IMF to give explanations on leaked call

International Monetary Fund officials discussed the possibility of putting pressure on German Chancellor Angela Merkel to give Greece debt relief, or the IMF would withdraw from the country’s bailout program, according to a transcript of a purported conversation published by WikiLeaks.

Three officials said the refugee crisis, the U.K. “Brexit” referendum and Greece’s July deadline to repay about 2.3 billion euros ($2.6 billion) in principal on Greek bonds held by the European Central Bank were key events that could bring the issue to a head, according to the transcript on the WikiLeaks website. When asked about the account, an IMF spokesperson in an e-mail said the fund never discusses leaks or supposed reports of internal discussions.

The purported conversation underscores tensions that still divide Greece’s creditors after six years and three financial bailouts. IMF has been at loggerheads with auditors from the European Commission over the fiscal measures that the continent’s most indebted state must implement in order to meet its agreed budget targets, while Germany and other euro area countries have been insisting that the Fund will eventually have to get on board for the bailout to proceed.

Thomsen, Velculescu

“Look you, Mrs. Merkel, you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say ‘The IMF is not on board?’ or to pick the debt relief that we think that Greece needs in order to keep us on board? Right?” the IMF’s head of European Department, Poul Thomsen, who oversees the Greek bailout program, is quoted as saying in a transcript dated March 19. The IMF’s mission chief for Greece, Delia Velculescu, who is on the call, responds that she hopes the moment the fund raises this question will come sooner, “for the sake of the Greeks and everyone else,” according to WikiLeaks. The officials discussed the prospect of an “event” that will force stalled Greek bailout talks to a conclusion, according to the transcript.

Greek government spokeswoman Olga Gerovasili said in an e-mailed statement that the IMF must clarify whether it intended to create conditions of bankruptcy just before the U.K referendum, and that Prime Minister Alexis Tsipras will contact IMF head Christine Lagarde asking for explanations.

A Greek government official in a separate e-mail to reporters said the transcript proves that the IMF wanted to cause a credit event in order to force its euro-area partners to agree with its views, while the purported connection between the U.K referendum and the Greek bailout talks would risk widening the destabilization of the EU.

“While the IMF entered the Greek program from the beginning because it had the technical knowledge and could push in ways the EU member states couldn’t, the IMF played and still plays the bad-cop role,” said Aristides Hatzis, a professor of law and economics at the University of Athens.. “If it leaves, it will be much easier for Greece to end up with dead ends, as a negotiation with the Europeans would be a political one that doesn’t have rules.”

Thomsen, in a blog post on Feb. 11, said Greece will face renewed euro-exit fears unless its government and European creditors come up with a credible plan to make the country’s debt sustainable. Greece and its European partners will face politically difficult decisions in the coming months, he said in the post.

The IMF spokesperson, in the e-mail, said the fund has maintained that Greece needs a durable solution, which puts the nation on a path of sustainable growth supported by a credible set of reforms matched by debt relief from its European partner.

Greece seeks answers to the above. Tsipras sends a letter to Largarde:
(courtesy zero hedge)

Greece Demands Explanation From IMF Over Leaked Transcript

Greek Prime Minister Sends Angry Letter To Christine Lagarde Over IMF Leak

Today’s Wikileaks disclosure, in which two IMF officials hinted that the IMF may use a “credit event as a means to pressurize(sic) Greece” as it has been subsequently put by Greek officials, has elicited another round of widespread anger in Athens and could jeopardize the upcoming Greek debt negotiations.

The anger has been made more acute because Greece previously accused Poul Thomsen, one of the IMF staffers caught on the leak, of effectively sabotaging talks in the past when the IMF refused to compromise on Greek pension cuts after the government proposed alternatives with an equivalent fiscal impact.

As such, hoping to ride on the latest wave of populist anger, it was only a matter of time before the country’s prime minister Alexis Tsipras officially responded to the IMF.

His letter to the head of the IMF is below:

Dear Christine

I am writing to you to express my deep concern about publications on the position of IMF officials with key roles in the Greek program.

The first issue is, of course, whether their position reflects the official IMF view.Using a credit event as a means to pressurize Greece and the other member states is clearly beyond the bounds of the negotiation process as we understand it.

The second issue is whether Greece can trust, and continue negotiating in good faith with, IMF officials who express views such as those expressed in these publications. Particularly so as they seem to be threatening to delay the process in the belief that only a credit event will work to extract concessions. Successful negotiations are often difficult but they always require trust and credibility from all sides. I sincerely hope that the IMF position is to reach a quick, successful and sustainable conclusion of the review and I am sure you will take all necessary measures to ensure that the negotiation process will remain on track.

As always, I would be happy to talk to you any time on these issues, as I am sure your share my concern.

Yours Sincerely,

Alexis Tsipras

A snapshot of the letter:

While we expect that this latest scandal will quickly be forgotten, what we find most paradoxical about the situation is that the Greek ire is focused on the one entity that, while hardly innocent as per Lagarde’s previous comments, is actually is pushing for a Greek debt reduction over the refusal of European, and especially German, institutions. Granted, we also understand the Greek ire: being used as guniea pigs by the IMF in its policy battle with other NGOs is hardly pleasing and if anything, is a reflection of the Greek recent collapse into quasi-vassal status and ongoing ward of the ECB. Recall that Greece still has capital controls as its banking system is completely insolvent, and that this leverage Europe has over the country and the money of its savers will not change for a long time.

Lagarde views the use of a credit event as nonsense.  The IMF, which always play the bad cop in the negotiations, has now seen their relationship in the troika go sub frigade:
(courtesy zero  hedge)

IMF’s Lagarde Responds To Tsirpas: Calls Use Of Credit Event As Negotiating Tactic “Simply Nonsense”

After last night’s oddly drafted letter by the Greek PM Tsipras (which contained a combination of typed text and scribbles) to IMF head Lagarde in the wake of the Wikileaks revelation which was interpreted by many, the Greek government included, that the IMF would seek a “credit event” to facilitate its debt-reduction negotiations with Angela Merkel, it was only a matter of time before the IMF officially responded to the Greek premier and population. She did so moments ago.

The highlights:

  • … any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense
  • … if it were necessary to lower the fiscal targets to have a realistic chance of them being fully met, there would be an attendant need for more debt relief.
  • … this weekend’s incident has made me concerned as to whether we can indeed achieve progress in a climate of extreme sensitivity to statements of either side
  • … I have decided to allow our team to return to Athens to continue the discussions.
  • … it is critical that your authorities ensure an environment that respects the privacy of their internal discussions and take all necessary steps to guarantee their personal safety.
  • … the IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks

Full letter:

Dear Prime Minister,

Thank you for your letter of April 2, in which you ask about the IMF’s position regarding the program negotiations with Greece.

My view of the ongoing negotiations is that we are still a good distance away from having a coherent program that I can present to our Executive Board. I have on many occasions stressed that we can only support a program that is credible and based on realistic assumptions, and that delivers on its objective of setting Greece on a path of robust growth while gradually restoring debt sustainability.

Otherwise it would fail to re-establish confidence, with the implication, among others, that Greece would soon again be forced to adopt yet more measures. Of course, any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense.

As you and I have discussed several times, including recently on the telephone, I have been consistent in pointing out that, if it were necessary to lower the fiscal targets to have a realistic chance of them being fully met, there would be an attendant need for more debt relief. In the interest of the Greek people, we need to bring these negotiations to a speedy conclusion.

I agree with you that successful negotiations are built on mutual trust, and this weekend’s incident has made me concerned as to whether we can indeed achieve progress in a climate of extreme sensitivity to statements of either side. On reflection, however, I have decided to allow our team to return to Athens to continue the discussions.

The team consists of experienced staff who have my full confidence and personal backing. For them to be able to do their work, as you have invited us, it is critical that your authorities ensure an environment that respects the privacy of their internal discussions and take all necessary steps to guarantee their personal safety.

Finally, the IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks. To further enhance the transparency of our dialogue, I have therefore decided to release the text of this letter on our website at www.imf.org. I also look forward to any personal conversation with you on how to take the discussions forward.

Sincerely yours,

Christine Lagarde

And so once again conditions between Greece and the IMF (the only Troika agency that advocates more Greek debt cuts) are right back to their traditional sub-frigid place.  As to whether Greece can guarantee the personal safety of the IMF’s team, we shall find out imminently: the critical negotiations are set to begin in the next few days.


Germany To Greece: No Debt Relief For You

Whether or not the IMF intended to use a Greek credit event to destabilize Europe as the Greek government first alleged, or whether this was “nonsense” as Lagarde responded to Tsipras letter, is irrelevant – ultimately the underlying premise was whether or not Greece gets debt relief, something the IMF has been insisting on since the third bailout package. And as is well-known, it was Germany – not Greece – that stood in the IMF’s way.

So after a terse weekend in which relations between Greece and the IMF devolved once again to frigidly sub-zero levels, moments ago Germany chimed in with its position, which can be summed up in another familiar word: “nein”.

As Bloomberg reports, citing spokesman Martin Jaeger, “Greek debt relief isn’t on the agenda right now”, adding that the “priority is to put Greek budget on sustainable footing.” He also said that Greece already has historically low repayment costs on bailout loans, and that “we remain confident that we can achieve progress, though there’s still quite a bit of work to do.”

Finally, he said that we “don’t see why we can’t complete review before Orthodox Easter.”

Additionally, the German chief govt spokesman Steffen Seibert said in response to reporter’s question whether they discussed IMF-Greece relations Merkel, that Tsipras spoke by phone on Sunday to discuss “a variety of issues.” He made it clear that Merkel government position on IMF participation in Greek aid program and debt relief hasn’t changed.

Elsewhere, as we first noted in our summary of the Greek reaction to the leaked IMF letter, Bloomberg writes that “Greece could again face the threat of being pushed into default and out of the euro area if its current bailout review drags on into June and July, according to European officials monitoring the slow progress of Prime Minister Alexis Tsipras’s negotiations with creditors.”

Greece still hasn’t cut a deal on pensions, tax administration or its fiscal gap, and other issues like non-performing loans and a proposed privatization fund continue to slow the talks, said the European officials, who asked not to be named because discussions are ongoing. The International Monetary Fund presents another obstacle, they said.

The IMF, for its part, disagrees with the euro area on how Greece needs to cut its budget. With Germany insisting that the fund will eventually have to get on board for the bailout to proceed, officials from the IMF are trying to find ways to pressure Chancellor Angela Merkel to give Greece debt relief, according to a transcript of a purported conversation published by WikiLeaks April 2.

At the end of the day, it will be up to the Greek people, and how they react to this latest scandal although with their assets held under the protective “capital controls” buffer which needs the ECB’s continued blessing, we doubt the fireworks of last summer will repeat.



The following is a big story.  It seems that Russia never left Syria. Instead it is building up military supplies as they plan to first take Aleppo and then move onto Raqqa.  The USA seems to counter that move, as they will send troops to Iraq in an attempt to take MOSUL and then move onto RAQQA.  The big question is this:  who will arrive first.

an important read..

(courtesy zero hedge)

U.S. To “Greatly Increase” Special Forces Deployed In Syria

Last week, Reuters reported a development which should have surprised precisely nobody: while the Kremlin announced one month ago that it would begin withdrawing military forces from Syria at once, Putin was doing the opposite.

As Reuters explained “when Vladimir Putin announced the withdrawal of most of Russia’s military contingent from Syria there was an expectation that the Yauza, a Russian naval icebreaker and one of the mission’s main supply vessels, would return home to its Arctic Ocean port. Instead, three days after Putin’s March 14 declaration, the Yauza, part of the “Syrian Express”, the nickname given to the ships that have kept Russian forces supplied, left the Russian Black Sea port of Novorossiysk for Tartous, Russia’s naval facility in Syria. Whatever it was carrying was heavy; it sat so low in the water that its load line was barely visible.”

Its movements and those of other Russian ships in the two weeks since Putin’s announcement of a partial withdrawal suggest Moscow has in fact shipped more equipment and supplies to Syria than it has brought back in the same period, a Reuters analysis shows. It is not known what the ships were carrying or how much equipment has been flown out in giant cargo planes accompanying returning war planes.

But the movements – while only a partial snapshot – suggest Russia is working intensively to maintain its military infrastructure in Syria and to supply the Syrian army so that it can scale up again swiftly if need be.Putin has not detailed what would prompt such a move, but any perceived threat to Russia’s bases in Syria or any sign that President Bashar al-Assad, Moscow’s closest Middle East ally, was in peril would be likely to trigger a powerful return.

As part of our rhetorical conclusion to an article which suggested a Russian Iskander ballistic missile may have been spotted in Syria for the first time, we asked “how will John Kerry, the state department, and allied forces react once it becomes clear that not only did Putin not withdraw forces from Syria but may have added nuclear-capable ballistic missiles to the Russian arsenal in Syria?”

We now have the answer: according to a follow up report by Reutersthe U.S. administration is considering a plan to greatly increase the number of American special operations forces deployed to Syria “as it looks to accelerate recent gains against Islamic State.”

According to Reuters, this troop expansion would leave the U.S. special operations contingentmany times larger than the around 50 troops currently in Syria, where they operate largely as advisors away from the front lines.

In other words, while Russia has been hinting at de-escalation while in reality it was building up a military presence, now it is the US’ turn.

The proposal is among the military options being prepared for President Barack Obama, who is also weighing an increase in the number of American troops in Iraq. A White House spokeswoman declined comment.

The proposal appears to be the latest sign of growing confidence in the ability of U.S.-backed forces inside Syria and Iraq to claw back territory from the hardline Sunni Islamist group.

As documented before, ISIS, which still controls the cities of Mosul in Iraq and Raqqa in Syria has been rapidly losing momentum in Iraq and Syria, where the tide of war has shifted against Islamic State. U.S. officials say the group is losing a battle to forces arrayed against it from many sides in the vast region it controls. In Iraq, the group has been pulling back since December when it lost Ramadi, the capital of the western province of Anbar. In Syria, the jihadist fighters have been pushed out of the strategic city of Palmyra by Russian-backed Syrian government forces.

U.S. forces have also had increased success in eliminating top ISIS leaders. Air strikes in recent weeks killed a top official called Abd al-Rahman Mustafa al-Qaduli, and an Islamic State commander described as the group’s “minister of war” — Abu Omar al-Shishani, or Omar the Chechen.

To be sure, now that the world is far more focused on ISIS’ Turkish source of funds, while Russian air strikes have decimated ISIS oil supply routes to Turkey, suddenly the money feeding the ISIS state has slowed to a crawl.

Nonetheless, the ISIS-controlled cities remain potent threat abroad, claiming credit for major attacks in Paris in November and Brussels in March.

As such, as we have written on previous occasions, there appears to be a scramble between Russia and US forces to be the first to gain control over these two cities. Here Reuters notes that the dozens of U.S. special operations forces now in Syria are working closely with a collection of Syrian Arab groups within an alliance that is still dominated by Kurdish forces. The United States has been supplying Arabs in the thousands-strong alliance with ammunition since October.

While the strategy is showing results so far, U.S. officials and Kurdish leaders agree that a predominately Arab force is needed to take Raqqa, a majority Arab city whose residents would consider Kurds as occupiers.

That is unless the Syrian army, supported by Russia, isn’t able to liberate the city first.

Meanwhile, in a separate report, the Daily Beast reports that there while there are currently only 5,000 U.S. troops in Iraq—about what a colonel usually commands. But for this ISIS war, as many as 21 generals have been deployed (to a war the US denies fighting). More:

In the war against the self-proclaimed Islamic State, the U.S. military is notably short on soldiers, but apparently not on generals.

There are at least 12 U.S. generals in Iraq, a stunningly high number for a war that, if you believe the White House talking points, doesn’t involve American troops in combat. And that number is, if anything, a conservative estimate, not taking into account the flag officers running the U.S. air war, the admirals helping wage the war from the sea, or their superiors back at the Pentagon.

At U.S. headquarters inside Baghdad’s fortified Green Zone, even majors and colonels frequently find themselves saluting superiors at a pace that outranks the Pentagon and certainly any normal military installation. With about 5,000 troops deployed to Iraq and Syria ISIS war, that means there’s a general for every 416 troops, give or take. To compare, there are some captains in the U.S. Army in charge of that many people.

* * *

But if the U.S. footprint is so small, why does the war demand so many generals?

Why so many generals to so few troops? Perhaps because, just like the Syrian “special forces” reinforcements, the U.S. troops are about to be deployed in Iraq as well where they will have more than enough generals to guide them.

Which begs the question: as the ongoing proxy war in the Middle East has been gradually pushed back from the front pages, are all these stealthy reinforcements indicative that something far bigger is about to be unleashed in the region.



Award winning author William Engdahl on his thoughts as to how Syria will be broken up

a must read…

(courtesy William Engdahl)



Kurd Autonomy: Is it Kerry’s Plan B or Putin’s Plan A?

456456555On March 17 delegates representing different ethnicities and nationalities–Kurds, Arabs, Assyrians, Syriacs, Turkomans, Armenians, Circassians and Chechen–along with representatives from the Syrian People’s Defense Units or YPG, and the YPJ womens’ defense units, declared a formal Federation of Northern Syria which would incorporate 250 miles of mostly Kurdish-held territory along the Syria-Turkey border. On March 15, two days earlier, Russian President Putin surprised much of the world by announcing “Mission Accomplished” in Syria, ordering Russian jets and personnel to begin withdrawal. The two events are intimately connected.

Combined and Conflicting Goals

Both Russia’s beginning of withdrawal and the Kurds declaration of an autonomous federal region within Syria are linked, but not in the manner most western media report. A distinctly different phase in the long-standing US State Department blueprint for a new Greater Middle East Project, first announced by Condoleezza Rice in 2003 after the US invasion of Iraq, has begun.

What is the exact nature of the surprising Obama Administration apparent cooperation with Putin’s Russia to redraw the political map of Syria to pre-Sykes-Picot borders, or at least a modern-day imitation of that? Will Russian support for the newly proclaimed federal Kurdish-dominated Federation of Northern Syria lead soon to a Greater Kurdistan that united Kurds from Turkey, Syria, Iraq and Iran? And what is the significance of US Defense Secretary going to Syria in recent days praising the military successes of the Syrian Kurds?

There is clearly a very big, a tectonic shift underway in the geopolitical landscape of the Middle East. The question is to what end?

Five Hundred Years of War

The ethnic Kurd populations, as a result of the deliberate Anglo-French carving up the map of the collapsed Ottoman Empire following the First World War, were deliberately denied a national sovereignty. Kurdish culture predates the birth of Islam and of Christianity, going back some 2,500 years. Ethnically Kurds are not Arab, not Turkic peoples. They are Kurds. Today they are predominantly Sunni Muslim, but ethnically Kurd peoples, numbering perhaps 35 million divided between four adjoining states.

Their struggles with the Turks, who invaded from the steppes of Central Asia during the Seljuk Dynasty in the mid- 12th century, have been long and volatile. In the 16th Century the Kurdish regions were the battlegrounds of wars between the Ottoman Turks and the Persian Empire. Kurds were the losers, much like the Poles over the past century or more. In 1514 the Turkish Sultan offered the Kurds wide-ranging freedoms and autonomy if they agreed to join the Ottoman Empire after the Ottoman defeated the Persian army. For the Ottomans the Kurds served as a buffer against possible future Persian invasion.

The peace between the Turkish Sultanate and the Kurdish people lasted into the 19th Century. Then, as the Turkish Sultan decided to force the Kurds of his empire to give up their autonomy in the early 19th Century, conflicts between Kurds and Turks began. Ottoman forces, advised by the Germans, including Helmut von Moltke, waged brutal wars to subjugate the independent Kurds. Kurd revolts against an increasingly bankrupt and brutal Turkish Ottoman Sultanate continued until the First World War, fighting for a separate Kurdish state independent of Constantinople.

In 1916 the secret Anglo-French agreement called Sykes-Picot called for the postwar carving up of Kurdistan. In Anatolia a traditional religious wing of the Kurdish people made an alliance with the Turkish leader, Mustafa Kemal, who later became Kemal Ataturk, in order to avoid domination by the Christian Europeans. Kemal went to the Kurdish tribal leaders to seek support in his war to liberate modern Turkey from the European colonial powers, notably the British and Greeks. The Kurds fought side-by-side with Kemal in the Turkish War of Independence to liberate occupied Anatolia, and create a Turkey independent from a British-Greek occupation in 1922. The Soviets supported Ataturk and the Kurds against the British-Greek alliance. In 1921 France had handed over another of the four Kurdish regions to Syria, then a French booty of the war of Sykes-Picot, along with Lebanon. In 1923 at the Peace Conference at Lausanne, the European powers formally recognized Ataturk’s Turkey, a tiny part of the pre-war Ottoman Empire and gave the largest Kurdish population in Anatolia to the new independent Turkey with no guarantees of autonomy or rights. Iranian Kurds lived in a state of constant conflict and dissidence with theShah’s government.

Finally, the fourth group of Kurds was in the newly-carved Sykes-Picot British domain called Iraq. There were known oil riches in and around Mosul and Kirkuk. The region was claimed by both Turkey and by Britain, while the Kurds demanded independence. In 1925 Britain managed to get a League of Nations Mandate over oil-rich Iraq with the Kurdish territories included. The British promised to allow the Kurds to establish an autonomous government, another British broken promise in the grim history of their colonial Middle East adventures. By the end of 1925 the country of the Kurds, known since the 12th Century as Kurdistan, had been carved up between Turkey, Iran, Iraq and Syria and for the first time in 2,500 years was deprived of its cultural autonomy.

Puzzling timing or shrewd move?

With such a history of betrayal and war to extinguish or suppress their people, it’s understandable that the Syrian Kurds today would try to take advantage of their very essential military role in fighting ISIS in northern Syria along the Turkish border. However, with the future of Bashar al Assad and a unified Syrian state very much in question, it seems reckless of the Syrian Kurds of Rojava to declare their autonomy and risk a two-front war against Damascus and against Erdogan’s military who are conducting a brutal war against their Kurdish cousins in Turkey across the border. Assad has not recognized the proclamation of Kurd autonomy and is reported very opposed to it. There are reports of clashes between the Kurd YPG People’s Defense Units and troop of the Syrian Arab Army of Assad.

Here we must come back to the surprise announcement by Vladimir Putin on March 15 to announce the drawdown of Russian military presence in Syria.

The declaration of an autonomous Kurdish-dominated territory along the Turkish border backed by Moscow is a major geopolitical shift in the Syrian situation

On February 7 of this year a curious event took place little noticed by western media. The Syrian Kurds, represented by the Democratic Unity Party (PYD), the main political organization, were welcomed by Russia to open their first foreign office in Moscow. The opening ceremony was attended by Russian foreign ministry officials. Little-known is the fact that Russia’s positive relations with the Kurds goes back more than two centuries. From 1804 forward, Kurds played important roles in Russia’s wars with Persia and Ottoman Turkey.

Turkey and Washington refused to invite the PYD to participate in the Syrian reconciliation talks now ongoing in Geneva, despite strong Russian insistence to include them as legitimate Syrian anti-ISIS opposition playing a decisive role in defeating the ISIS and other terrorist organizations in the north. On the other hand, Washington refuses to yield to Erdogan and Turkish demands that Washington break off any support to the Syrian Kurds. There is a Washington double game that Russia appears to have intervened in. Does this herald a Grand Design between Washington and Moscow over the “Bosnia Solution” for Syria?

At this point it rather looks like a shrewd judo by Putin, himself an old judo master, with a Judo 8th Dan and sitting as Honorary President of the European Judo Union. It looks like Russia, despite its air force drawdown and troop pull-back, has just established the first “No Fly” zone in Syria, the most-wanted aim of the US Pentagon and Turkey only five months ago, as the necessary step to topple Assad and the Syrian government and create a weak government presiding over a Balkanized Syria. Only the Russian no fly zone has a quite different aim–to protect the Syrian Kurds from a possible Turkish military attack.

The creation of the 250 mile long Kurdish-dominated Federation of Northern Syria autonomous region, seals the porous Turkish border where ISIS and other terrorist groups are constantly being reinforced by the Turkish armed forces and MIT intelligence to keep the ISIS war going. A Russian de facto no fly zone stops that. While Russia has withdrawn much of its air force planes in the last days, Moscow has made clear Russia will retain its long-standing naval base at Tarsus and Khmeimim airbase near Latakia, as well as its advanced S-400 anti-aircraft batteries to enforce any air attacks from Turkey or Saudi Arabia into the Kurd autonomous region of Syria. As well, Russia has not withdrawn her air-to-air fighters–SU-30SMs and SU-35 from Khmeimim. And as Russia demonstrated in the first weeks of Russian intervention quite impressively, its SU-34s are long-range strike aircraft and they can attack objectives in Syria by taking off from southern Russia if needed. As well Russian cruise missiles, they have a range of 1,500km (Kalibr) and 4,500km (X-101) and can be delivered from the Caspian.

The Kurdish PYD and its armed wing inside Syria have been aggressively expanding the amount of territory it controls along the Syrian-Turkish border. Ankara is alarmed to put it mildly. The PYD is a subsidiary of the Kurdistan Workers’ Party (Partiya Karkeren Kurdistane), or PKK, which is in a bloody war for survival against the Turkish military. Russia recognizes both the PKK, which it supported against NATO-member Turkey during the Cold War, and the Syrian PYD. The PKK was founded by a Turkish Kurd named Abdullah Öcalan in 1978, and was supported by Russia and the Soviet Union from the onset. Russian-Kurdish relations go back to the late 18th Century. During the 1980’s in the Cold War era Syria under Hafez al Assad, Bashar’s father, was a Soviet client state, and the PKK’s most vital supporter, providing the group safe basing inside Syria.

In Syria, the PYD’s armed wing has received Russian arms and Russian air support to aggressively expand the amount of territory it controls along the Syrian-Turkish border in recent months so it’s little surprise it was Moscow, not Washington, that the PYD chose to open its first foreign representative office.

Since Erdogan broke off earlier peace negotiations with the Kurds in Turkish Anatolia before elections in 2015 and began military operations against them, the PKK has resumed its insurgency against Ankara forces across the border from Syria’s newly-declared Kurd-dominated autonomous region. PKK activists have declared Kurdish self-rule in their own Anatolia region bordering Syria, and PKK fighters are holing up in cities, digging trenches and taking on Turkish security forces with everything from snipers and rocket propelled grenades to improvised explosive devices. The PKK took advantage of the collapse of the Saddam Hussein’s rule after 2003 to establish their headquarters in exile in the secure Qandil Mountains of northern Iraq in the Iraqi Kurdish region of that country.

The PKK and Russia have a strategic synergy. Since the Turkish shooting down of the Russian jet late last year in Syrian airspace, Russia has dramatically turned policy to isolate and contain Turkey. That has meant that today the PKK and its Syrian affiliate together with Moscow share common enemies in ISIS and in Turkey, while the US must walk on eggshells because Turkey is a strategically vital NATO member. Working with the Kurds, Moscow can advance the war against ISIS, which is not in the ceasefire agreement, hence fair target, and punish Turkey at the same time. That, in turn, allows Putin to outmaneuver the US once more in Syria and provoke a rift in Turkish-US relations, weakening NATO.

Israeli President meets Putin

Into this already highly complex geometry comes Israel.

Relations between Moscow and Tel Aviv in recent months are more open than those between Netanyahu’s government and the Obama Administration. Immediately after start of deployment of Russian forces to Syria in September last year, Netanyahu rushed to Moscow to create a coordination mechanism between the Russian forces in Syria and the Israeli military.

On March 15, the President of Israel, Reuven Rivlin, came to Moscow to meet Vladimir Putin and discuss Syria and the background to the Russian troop withdrawal. According to Israeli media, the two discussed continued coordination between Jerusalem and Moscow regarding military activities in Syria. In talks with Prime Minister Medvedev, Russia’s government also spoke of increasing imports of Israeli agriculture products to replace embargoed Turkish imports. Rivlin mentioned the bonds created as well by the one million Russian-origin citizens today in Israel. The Rivlin Moscow talks were sanctioned by Prime Minister Netanyahu who himself will soon meet Putin to discuss Syria and trade relations. An Israeli official told Israeli media that “over the last few months we had regular contact with the Russians at the highest level, and that will continue.”

A Russo-Israeli-Kurd Alliance?

As with the Iraqi Kurds, the Kurds of Syria are also in behind-the-scenes talks with the Netanyahu government to establish relations. According to Professor Ofra Bengio, head of the Kurdish studies program at Tel Aviv University, in an interview withThe Times of Israel, the Syrian Kurds are willing to have relations with Israel as well as with Russia. Bengio stated, referring to Syrian Kurd leaders, “I know some that some have been to Israel behind the scenes but do not publicize it.” She herself said she has made personal contacts with Syrian Kurds who would like to send the message that they are willing to have relations. “This is like the Kurds of Iraq behind the scenes. Once they feel stronger, they can think about taking relations into the open,” she said. In 2014, Netanyahu stated, “We should … support the Kurdish aspiration for independence,” adding that the Kurds are “a nation of fighters [who] have proved political commitment and are worthy of independence.”

When Iraqi Kurds defied Baghdad in 2015 and began direct sale of the oil in their Kurd region, Israel became the major buyer. The oil revenues allowed the Iraqi Kurds to finance their fight to expel ISIS from the region.

Clearly there is more going on between Moscow-Tel Aviv and the newly-declared autonomous Syrian Kurds than meets the ordinary garden variety eye. According to a report in a natural gas industry blog, Israel and Russia are about to agree upon a modus operandi in the East Mediterranean. Israel would agree to end talks with Turkey’s erratic Erdogan on sale of Israeli Leviathan natural gas to Turkey to displace Russian Gazprom gas which still supplies 60% of Turkish gas despite sanctions. The report states that the Israeli military establishment “prefers maintaining military cooperation with Russia over potential Israeli gas sales to Turkey if they hurt Russian interests and anger Putin.”

The Israel-Turkey negotiations of Israeli weapons and gas was backed by US Vice President Joe Biden on March 14, in a Tel Aviv meeting with Netanyahu. According to Israeli press reports, Biden pressed Netanyahu to reach an agreement with Turkey to end the six-year stand-off in Turkey-Israel relations. According to Haaretz, Biden told Netanyahu that Turkey’s president, Recep Tayyip Erdogan, was eager to conclude the reconciliation agreement with Israel and said he, Biden, was willing to assist “in any way possible” to get an agreement between the two allies of the US.

Kerry’s Plan B?

If in fact Putin now has managed to bring Netanyahu to cancel the Israeli-Turkish rapprochement negotiations in favor of closer cooperation with Russia in not-yet-disclosed areas, it would throw a gargantuan monkey wrench into US plans for Syria and the entire Middle East as well as US plans to isolate and weaken Russia.

On February 23, US Secretary of State John Kerry told the Senate Foreign Relations Committee in a schizophrenic testimony that Russia had played a vital role in getting the Geneva and other peace talks to happen, as well as getting Iran to agree the nuclear deal. Then, without hesitating, he added the curious statement, “There is a significant discussion taking place now about a Plan B in the event that we do not succeed at the [negotiating] table.” Kerry didn’t elaborate other than to hint it included the Balkanization of Syria into autonomous regions, stating that it could be “too late to keep as a whole Syria if we wait much longer.”

Kerry’s ‘Plan B’ is reportedly a Brookings Institution think-tank report authored several years ago by Michael O’Hanlon, who very recently repeated his plan in the US media. It calls for dividing Syria into a confederation of several sectors: “one largely Alawite (Assad’s own sect), along the Mediterranean coast; another Kurdish, along the north and northeast corridors near the Turkish border; a third primarily Druse, in the southwest; a fourth largely made up of Sunni Muslims; and then a central zone of intermixed groups in the country’s main population belt from Damascus to Aleppo. The last zone would likely be difficult to stabilize, but the others might not be so tough. Under such an arrangement, Assad would ultimately have to step down from power in Damascus. As a compromise, however, he could perhaps remain leader of the Alawite sector. A weak central government would replace him.”

When asked about Kerry’s reference to a US “Plan B” Putin’s spokesman, Dmitry Peskov replied that Russia is currently focusing on ‘Plan A’ in dealing with the situation in Syria.

Given the Janus-faced US policy of support and non-support for the autonomy of the Syrian Kurds, its talk about Plan B Bosnia-style Balkanization of Syria into a group of weak regions, its support for Erdogan’s reconciliation with Israel, the recent Russian moves raise more questions than answers. Is Russia ready to renege on its promised delivery of its advanced S-300 anti-aircraft systems to Iran and future relations with Teheran including integration into the China-Iran-Russia economic sphere within the Shanghai Cooperation Organization and the construction of the Eurasian New Economic Silk Road, in order to cut a deal with Israel against Turkey as some Israeli media suggest? If not, what is the real geopolitical strategy of Putin after the military draw-down in Syria, support for Kurdish autonomy, and the simultaneous talks with Rivlin? Is a huge trap being baited for Erdogan to go mad and invade the now autonomous Kurdish region along its border, to set the stage to force Turkey to cede autonomy also to Turkish PKK and other Kurds? Is that Washington’s intent?

What is clear is that all players in this great game for the energy riches of Syria and the entire Middle East are engaged in deception, all to everyone. Syria is nowhere near an honestly-negotiated peace.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.


The following article by Peter Diemeyer of Sprott Money gives a good account as to what is happening to the finances for Canada.  Prime Minister Trudeau went full Keynesian by increasing spending by a whopping 317 billion for 2016-2017.  Although Canada’s debt to GDP is the lowest among G7 at 1 trillion dollars and a GDP of 1.8 trillion making its Debt to GDP at 55%.  However debt by provinces must be included (In the USA the individual states cannot have a deficit), the total debt to GDP is 85.6%.

(courtesy Peter Diekmeyer/Sprott Money)

Canada Goes Full-Krugman, Jacks Up Borrowing And Spending, Confirms Gold Sale

Submitted by Peter Diekmeyer via Sprott Money

Bill Morneau took centre stage last week in the Canadian Parliament and didn’t disappoint. The new Liberal finance minister’s first budget jacked up program spending across the board, to be paid for by borrowing and, eventually, presumably, money printing. His rhetoric was coated with suggestions that “economic growth” would solve the country’s problems. The only folks left out were taxpayers and savers.

On the face of it, Morneau’s logic makes sense. With interest rates near zero and the Canadian government’s debts among the lowest in the G-7, why not borrow a bit and invest in infrastructure? Well, there are several reasons – and all of them augur well for the future of gold.

Canadian government debt at record levels

Morneau is technically right. The Canadian government’s debt is at low levels compared to that of other advanced economies. However, those numbers are shaky. For one, they include only federal debts, not provincial debts. If you include all Canadian government debts including the provinces (US states are not allowed to run deficits), things look far worse.

Furthermore, Morneau’s numbers don’t include huge debts that the former Conservative Harper Government never bothered to record as liabilities, such as deferred pension and healthcare costs, a policy Prime Minister Trudeau’s Liberal government is continuing. Canada’s Fraser Institute estimates that such unfunded liabilities totalled nearly $4.1 trillion in 2014. Those unrecorded debts alone are equal to more than 200% of Canada’s GDP. Worse, Canadians, whose household debt-to-disposable-income ratios are at record levels, are in no position to finance those additional government obligations.

Sell off gold, spend the cash

During the hours before Mr. Morneau tabled the budget, he wandered into the lock-up room, where reporters were poring over advance copies of the document. There I had a chance to ask him about reports that Canada has sold its last gold reserves, and whether that was prudent, given uncertainties in the world economy and the Bank of International Settlement’s recent warning that global NIRP/ZIRP/QE monetary policies weren’t working as expected.

Morneau didn’t bat an eye. Canada’s reserves were at an appropriate level, he responded. An hour or so later he walked over to Parliament Hill and announced that the new government’s total spending would explode by 6.9% to $317.1 billion during the 2016-2017 fiscal year. The increases would be partly funded by the cash from gold sales and by $30 billion in deficits.

In his youth, Morneau completed graduate studies at the London School of Economics and INSEAD in France, where, as Talleyrand would have said: “He learned nothing and forgot nothing.” The result, as might be expected, was a Canadian budget that was pure Keynes/ Krugman, with a bit of Larry Summers thrown in.

The hard money community, of course, won’t believe a word of it. But Canadians will be praying that Morneau is right.



Iran rejects the Saudi demand to freeze crude production

(courtesy zero hedge)

Iran Oil Minister Rejects Saudi Demand To Freeze Crude Production

In the aftermath of Bloomberg’s surprising Friday report, according to which Saudi Arabia flipflopped on its previous promise that it would freeze its oil output while allowing Iran to grow supply until it hit its pre-embargo peak, instead saying that it would only join the freeze curbe Iran – and all other OPEC member nations – also joined, crude tanked.

Today, what little hope there may have been that Iran will suddenly change its mind and join the production freeze evaporated on Sunday when Iran’s oil minister rejected a Saudi demand to stop throttling up its petroleum production. As the WSJ adds, this threatens what has become a farcical deal to “limit crude output and raise prices” when the major oil producers meet in Doha on April 17.

The follows Zanganeh’s admission that Iran’s oil and condensates exports surpassed 2mm b/d, a trend Iran will certainly not want to imperil.

Iranian Oil Minister Bijan Zanganeh

As the WSJ notes, Zanganeh’s remarks were his first comments since a report emerged last week that Saudi Arabia, the world’s largest crude exporter, would limit its production only if Iran followed suit.

The dueling positions by the Middle East’s two biggest rivals for power and economic might have set off a scramble among other oil-producing nations to salvage a deal to freeze their output and stop growth in the world’s petroleum supplies. Global oil production outpaces demand by almost two million barrels on any given day, sending prices to their lowest levels in over a decade.

Ironically, in advance of the Doha meeting which many thought had a chance of reaching some agreement, other OPEC members had pushed their oil production to the limit, flooding the market with even more excess supply. Most will find it virtually impossible to throttle production back.

As a reminder, Saudi Arabia and other members of the 13-nation Organization of the Petroleum Exporting Countries are set to meet with nonmembers like Russia on April 17 in Doha to hash out a production freeze.

The Bloomberg report on Friday. citing an interview with the kingdom’s Deputy Crown Prince Mohammed bin Salman, shocked Saudi Arabia’s Arab allies in the Persian Gulf.

Before the prince’s comments, Saudi Arabia had been signaling it would hold production steady, instead of increasing, even if Iran ramped up its output. Iran just received relief from Western sanctions that had crippled its oil industry and is increasing output to achieve presanctions levels.

As for Iran, it is merely sticking to what it has said before it would do: Zanganeh told Iran’s semiofficial Mehr News Agency that he still intended to bring Iran’s oil production to its presanctions level of four million barrels a day an increase of one million barrels a day compared with late 2015.

As noted above, Iran’s oil and gas condensate exports rose by 250,000 barrels a day in March to surpass two million barrels per day, the ministry’s Shana news service quoted Mr. Zanganeh as saying.

Even though Mr. Zanganeh told Mehr he would certainly attend the Doha meeting if “he had time,” his refusal to heed to Saudi demands that Iran freeze its output calls the success of the upcoming meeting into question.

With the Iran breaking ranks, Kuwait and Qatar are scrambling to reach Riyadh to salvage the prospective agreement, according to the WSJ. Kuwait’s acting oil minister Anas al-Saleh said cooperation between OPEC and nonmembers would “certainly help stabilize oil prices.”

“We believe that a common agreement on a positive stand will serve market stability,” the minister said.

Of course, Kuwait has already made it clear that without Iran there is no deal: as we reported on March 8, Kuwait’s oil minister said on Tuesday that his country’s participation in an output freeze would require all major oil producers. “I’ll go full power if there’s no agreement. Every barrel I produce I’ll sell,” Anas al-Saleh told reporters in Kuwait City last month.

He may now have no choice.

Oil prices have risen since Saudi Arabia and Russia met in Doha in February and first broached the idea of a freeze. Prices have climbed over $40 a barrel in recent weeks, after hitting lows of $27 a barrel in January. But prices fell on Friday after the Saudi prince’s comments were published. It remains to be seen if oil will revert back to its February lows now that any hope for a coordinated supply cut is no longer on the table.

Saudis now ban transport of Iranian crude in their territorial waters.  However what also happened over the weekend was Obama seems to be getting quite angry with Iran and they may cancel their agreement which will then remove much amounts of oil off the grid:
(courtesy zero hedge)

Saudis Retaliate To “Oil Freeze” Fallout: Ban Transport Of Iranian Crude In Territorial Waters

At first, when it announced the terms of its “oil freeze” agreement with Russia one month ago, Saudi Arabia seemed willing to grant Iran a temporary exemption from the supply freeze, at least until it recovers its pre-embargo production levels. That however changed on Friday when the country’s Deputy Crown Prince Mohammed bin Salman, shocked Saudi Arabia’s Arab allies in the Persian Gulf, telling Bloomberg his country would only join the freeze curbe Iran – and all other OPEC member nations – also joined.

Following the Friday announcement, yesterday Iran’s oil minister Zangadeh made it clear that the country rejects Saudi demands, and would continue ramping up production at will, in the process making the April 17 Doha meeting meaningless.

And then, in a new and unexpected retaliation by Saudi Arabia for Iran’s intransigence, moments ago theFT reported that Saudi Arabia has taken steps to slow Iran’s efforts at increasing oil exports, banning vessels that transport Iranian crude from entering their waters, according to traders and shipbrokers.

More details from FT:

Iranian vessels carrying the country’s crude are restricted from entering ports in Saudi Arabia and Bahrain, according to a circular sent by a shipping insurance company to its members in February.

The notice said ships that have called to Iran as one of its last three ports of entry will also require approval from the Saudi and Bahraini authorities before entering their waters. Shipbrokers and traders have relayed the same messages since.

Iranian oil executives have expressed their concern about the message circulating in the market, saying it is only adding to problems they face in selling their crude.

Saudi Aramco, the state oil company, and The National Shipping Company of Saudi Arabia (Bahri) did not respond to requests for comment.

It is not clear just how much of an impact this escalation will have because as shown in the map below, Saudi territorial waters are hardly a major factor in Gulf shipping lanes.

However, considering that Iran already faces insurance, financing and legal obstacles despite the lifting of sanctions linked to its oil industry in January, and considering the amount of clout the Saudis have with financial partners, its attempt to make Iran’s oil production more difficult will surely reap at least partial success.

Indeed, as the FT adds, oil tanker association Intertanko and other industry participants say no formal notice has been given by Saudi Arabia but uncertainty is making some charterers less willing to lift Iranian crude.

”It’s seen as an unknown risk,” said one shipbroker. “No one wants to disrupt their relationship with the Saudis.”

As a reminder, the amount of oil being stored at sea off the coast of Iran has risen by 10 per cent since the start of the year, data from maritime data and analytics company Windward show, and now stands at more than 50m barrels.

But what is perhaps far more troubling for Iran is that on Friday president Obama criticized Iranian leaders for undermining the “spirit” of last year’s historic nuclear agreement, even as they stick to the “letter” of the pact.

According to the Hill, in comments following the Nuclear Security Summit in Washington, Obama denied speculation that the United States would ease rules preventing dollars from being used in financial transactions with Iran, in order to boost the country’s engagement with the rest of the world.

Instead, Obama claimed, that Iran’s troubles even after the lifting of sanctions under the nuclear deal were due to its continued support of Hezbollah, ballistic missile tests and other aggressive behavior.

“Iran so far has followed the letter of the agreement, but the spirit of the agreement involves Iran also sending signals to the world community and businesses that it is not going to be engaging in a range of provocative actions that are going to scare businesses off,” Obama said at a press conference.

“When they launch ballistic missiles with slogans calling for the destruction of Israel, that makes businesses nervous.”

“Iran has to understand what every country in the world understands, which is businesses want to go where they feel safe, where they don’t see massive controversy, where they can be confident that transactions are going to operate normally,” he added. “And that’s an adjustment that Iran’s going to have to make as well.”

And so a new potential bullish catalyst for oil emerges: If Obama’s anger grows, and if the Iran agreement is ultimately unwound, that would mean that all of the excess oil brought on market by Iran, would promptly be taken off the market once more, in the process eliminating the supply glut overnight.

It remains to be seen if Obama is ready to sacrifice his foreign “legacy” just to boost the price of oil, and thus, gas at the pump. Then again, considering over the weekend Goldman made a huge U-turn on the “low oil is good for the economy”, and if Obama’s advisors start whipsering in his ear how higher oil prices are critical for US energy companies, that may be precisely what ends up happening.

French Bank, BNP Paribas sees oil revisting the year’s lows as fundamentals just do not add up:
(courtesy zero hedge/BNP)

Crude Loses Key Technical Support As BNP Sees Oil “Revisiting The Year’s Lows”

The early exuberance in oil has faded today as WTI tumble to fresh one-month lows…

…crucially losing the key 40-week moving average once again as the downtrend looks set to continue.

With BNP Paribas warning that WTI is set to revisit the lows of the year:

Ahead of a producer gathering in Doha on 17 April aiming to freeze output, recent comments by Saudi Arabia indicate that the Kingdom’s participation is conditional on that of other producers, including Iran. That effectively puts a nail in the coffin of the Feb-Mar oil price rally.Iran will not accept a freeze of its output until such time that lost market share, due to US and EU sanctions, is reclaimed.

In the meantime, key non-OPEC producers like Russia are posting new record highs in output. A production freeze from Russia will not help tighten global oil balances.

Global oil balances will witness sizeable implied inventory builds in H1’16, suggesting that the price of oil can easily revisit the lows seen earlier this year.

The time for redeterminations looms large over a sector that has been bid up once again on hope that this time it’s different. It’s not.. and the glut only got bigger during this short-squeeze.


Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings/MONDAY morning 7:00 am


USA/JAPAN YEN 111.65 UP 0.098 (Abe’s new negative interest rate (NIRP)a total bust/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP)


USA/CAN 1.3058 UP.0051

Early THIS MONDAY morning in Europe, the Euro FELL by 16 basis points, trading now WELL above the important 1.08 level RISING to 1.1102; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRPand NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Chinese yuan was DOWN in value (onshore) The USA/CNY UP in rate at closing last night: 6.4760 / (yuan DOWN /LAST WEEK CHINA RESPONDS IN KIND TO THE USA’S YELLEN’S MESSAGE NOT TO RAISE RATES  / 

In Japan Abe went BESERK with NEW ARROWS FOR HIS Abenomics WITH THIS TIME INITIATING NIRP . The yen now trades in a SOUTHBOUND trajectory RAMP as IT settled DOWN in Japan by 10 basis points and trading now well BELOW that all important 120 level to 111.66 yen to the dollar. NIRP POLICY IS A COMPLETE FAILURE AND ALL OF OUR YEN CARRY TRADERS HAVE BEEN BLOWN UP/SIGNALS TO THE MARKET THAT THEY MAY DO A U TURN ON  NIRP AND INCREASE NEGATIVITY

The pound was UP this morning by 11 basis points as it now trades WELL BELOW the 1.44 level at 1.4232.

The Canadian dollar is now trading DOWN 51 in basis points to 1.3058 to the dollar.


We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade (blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this MONDAY morning: closed DOWN 40.89 OR 0.25%

Trading from Europe and Asia:

2/ CHINESE BOURSES HOLIDAY/ : Hang Sang CLOSED . ,Shanghai CLOSED/ Australia BOURSE IN THE RED: /Nikkei (Japan)CLOSED/IN THE RED/India’s Sensex in the GREEN /

Gold very early morning trading: $1217.00


Early MONDAY morning USA 10 year bond yield: 1.77% !!! DOWN 1 in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.59 DOWN 2 in basis points from WEDNESDAY night.

USA dollar index early MONDAY morning: 94.77 UP 14 cents from FRIDAY’s close.(Now below resistance at a DXY of 100.)

This ends early morning numbers MONDAY MORNING



And now your closing MONDAY NUMBERS


Portuguese 10 year bond yield:  2.94% UP 2 in basis points from FRIDAY

JAPANESE BOND YIELD: -.074% DOWN 2in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD:1.46% UP 2 IN basis points from FRIDAY

ITALIAN 10 YR BOND YIELD: 1.24  UP 2 IN basis points from FRIDAY

the Italian 10 yr bond yield is trading 18 points lower than Spain.




Closing currency crosses for MONDAY night/USA dollar index/USA 10 yr bond: 2:30 pm

Euro/USA 1.1399 UP .0018 (Euro UP 18 basis points/still represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN

USA/Japan: 111.22 DOWN 0.335 (Yen UP 34 basis points) and  a major disappointment to our yen carry traders and Kuroda’s NIRP. They stated that  NIRP would continue.

Great Britain/USA 1.4277  UP .0057 Pound UP 57 basis points/(POOR ECONOMIC DATA/ Brexit concern.)

USA/Canada: 1.3066  UP  .0.0060 (Canadian dollar DOWN 60 basis points AS  oil WAS DOWN (WTI = $35.73)


This afternoon, the Euro was UP by 18 basis point to trade at 1.1399   as the markets STILL REACT TO YELLEN’S DOVISHNESS

The Yen ROSE to 111.22 for a GAIN of 34 basis pints as NIRP is a big failure for the Japanese central bank/also all our yen carry traders are being fried.

The pound was UP 57 basis points, trading at 1.4277 ( BREXIT CONCERNS/POOR ECONOMIC DATA)

The Canadian dollar FELL by 60 basis points to 1.3066,as the price of oil was down today (as WTI finished at $35.72 per barrel)

The USA/Yuan closed at 6.4776

the 10 yr Japanese bond yield closed at -.075% DOWN 2 BASIS  points in yield

Your closing 10 yr USA bond yield: DOWN 1 basis point from FRIDAY at 1.77% //trading well below the resistance level of 2.27-2.32%) HUGE policy error

USA 30 yr bond yield: 2.607 DOWN 3/10 in basis points on the day and will be worrisome as China/Emerging countries continues to liquidate USA treasuries ( HUGE POLICY ERROR)


Your closing USA dollar index, 94.50 DOWN 14 IN  cents on the day at 2:30 pm

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY

London:  CLOSED UP 18.67 POINTS OR 0.30%
German Dax :CLOSED UP 27.44 OR 0.28%
Paris Cac  CLOSED UP 22.987  OR 0.53%
Spain IBEX CLOSED DOWN 4.80 OR 0.06%
Italian MIB: CLOSED DOWN 137.58 OR 0.77%

The Dow was down 55.75 points or 0.31%

Nasdaq down 22.74 points or 0.46%
WTI Oil price; 35.80 at 2:30 pm;

Brent Oil: 37.76
USA dollar vs Russian Rouble dollar index: 68.51 (Rouble is DOWN 83 /100 roubles per dollar from yesterday)AS the price of Brent and WTI OIL FELL


This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:



BRENT: 37.52


USA DOLLAR INDEX:94.55 down 9 cents on the day



And now your more important USA stories which will influence the price of gold/silver

Trading Today in Graph form:

Dismal Data Deluge Deletes Dow Dead-Cat-Bounce

Nothing to see here, move along…


But but but the “great” jobs data… The dead-cat-bounce is over…


Trannies had a tough day…


But US equities are holding on to some of the gains from Friday’s exuberance…


Notably there was significant selling at VWAP (suggesting institutional derisking)…


Treasuries traded in a worryingly narrow illiquid range today ending very modesly lower in yield…


The US Dollar Index ended the day unchanged after weakening from overnight strength after the dismal slew of US data today…


Despite the “deadness” of the FX and bond markets, commodities had a volatile day with crude gettin smashed to one-month lows…


Finally, as a gentle reminder…


Charts: Bloomberg




The ISM NEW York manufacturing index drops to September lows as all components decline. The all important employment component plunges.  So much for the USA recovery

(courtesy NY ISM mfg/zero hedge)

ISM New York Drops To September Lows As All Components Decline; Employment Plunges

While last week’s Chicago’s PMI staged a strong bounce from its recent contraction and back into expansion, New York did not. ISM New York just printed at 50.4, just barely above the contraction point, and the lowest headline print since mid 2015.

The extremely noisy time series continues to swing, this time lower, with every single underlying component deteriorating in the month of March.

But the most troubling reading was the employment print, which after staging a strong rebound last month, collapsed to just 40.9, the second worst print in the current decade.

Then, later in the session we learn that factory orders plunge to 5 yr lows as the manufacturing recession within the USA deepens;
(courtesy zero hedge)

Manufacturing Recession Deepens: Factory Orders Drop To Five Year Low; 16 Consecutive Declines

In 60 years, the US economy has not suffered a 16-month continuous YoY drop in Factory orders without being in recession. Moments ago the Department of Commerce confirmed that this is precisely what the US economy did, when factory orders not only dropped for the 16th consecutive month Y/Y, after declining 1.7% from last month…

… but at $454 billion for the headline number, this was the lowest print since the summer of 2011.

Market reaction: stocks rebound on the news and are now well in the green.

Jim Quinn sets the record straight on the true state of the USA employment scene.
(courtesy Jim Quinn/Burning Platform)

The Boomer Retirement Meme: One Big Lie

By Jim Quinn of the Burning Platform

The Boomer Retirement Meme: One Big Lie

As the labor participation rate and employment to population ratio linger near three decade lows, the mouthpieces for the establishment continue to perpetuate the Big Lie this is solely due to the retirement of Boomers. It’s their storyline and they’ll stick to it, no matter what the facts show to be the truth. Even CNBC lackeys, government apparatchiks, and Ivy League educated Keynesian economists should be able to admit that people between the ages of 25 and 54 should be working, unless they are home raising children.

In the year 2000, at the height of the first Federal Reserve induced bubble, there were 120 million Americans between the ages of 25 and 54, with 78 million of them employed full-time. That equated to a 65% full-time participation rate. By the height of the second Federal Reserve induced bubble, there were 80 million full-time employed 25 to 54 year olds out of 126 million, a 63.5% participation rate. The full-time participation rate bottomed at 57% in 2010, and still lingers below 62% as we are at the height of a third Federal Reserve induced bubble.

Over the last 16 years the percentage of 25 to 54 full-time employed Americans has fallen from 65% to 62%. I guess people are retiring much younger, if you believe the MSM storyline. Over this same time period the total full-time employment to population ratio has fallen from 53% to 48.8%. The overall labor participation rate peaked in 2000 at 67.1% and stayed steady between 66% and 67% for the next eight years. But this disguised the ongoing decline in the participation rate of men.

In 1970, the labor participation rate of all men was 80%, while the participation rate of women was just below 43%. Then Nixon closed the gold window, setting in motion a further debasing of the currency, unleashing politicians to promise voters goodies without consequences, and giving Wall Street bankers and Madison Avenue free rein to use propaganda to bury Americans in debt, while convincing them trinkets and baubles were actually wealth.

The relentless inflation released by Nixon and the Federal Reserve, and perpetuated by Washington D.C. politicians, forced more women into the workforce over the next 30 years, as families could no longer make ends meet with just the husband working. Over the next 30 years the labor participation rate of women soared to 60%, with the expected negative consequences from having tens of millions of children raised by strangers rather than their mothers. The resultant decline in the family unit and kids being brainwashed by government public school indoctrination has left generations of non-critical thinking zombies, easily manipulated by emotional appeals and false storylines.

As women entered the workforce in great numbers, the participation rate of men gradually declined from 80% to 75% by the 2000. It then began a rapid descent and accelerated after the Federal Reserve created 2008 financial disaster. It now stands at 69.3%, just above its record low in 2015. In the 1950’s when 87% of men participated in the labor market, the country’s economy grew strongly, we produced rather than consumed, we saved before we spent, the family unit was strong, and men’s purpose in life was clear.

When over 30% of working age men aren’t participating in the labor force, trouble is brewing. It’s even worse when you consider the 25 to 54 year old male participation rate has declined from 97% in the 1950’s and 1960’s to below 88% today. Much of the anger building in this country is the result of men in their prime earning years seeing their jobs shipped overseas, outsourced, or taken by HB1 workers. The backlash against illegal immigrants is understandable.

Then there are the young men aged 16 to 24, who have seen their participation rate fall from over 70% in the early 1990’s to below 51% today. The 70% participation rate was consistent from the mid 1970’s through 2000. The precipitous decline is not due to mass enrollment in college, as college students worked when I was their age. There is nothing more volatile than millions of unemployed young men, an imploding economy, growing wealth inequality, and porous borders allowing millions of illegals to invade the country, taking jobs and straining the already bankrupt social welfare net.

The facts obliterate the false storyline of Boomers retiring as the primary cause for the labor participation rate plummeting to three decade low levels. In fact, the number of full-time workers over the age of 55 numbered only 11 million in 2000, representing 18.6% of the over 55 population. Today, over 21 million full-time employed over 55 year olds, represent close to 25% of the rapidly growing over 55 year old category.

The overall labor force participation rate of the over 55 population, which had lingered in the 30% range from the mid 1980’s until the mid 1990’s, now stands just above 40% at levels last seen in the early 1960’s. The Boomer retirement meme, peddled by the corporate media, is pure propaganda designed to obscure the fact millions of people, especially men, in their prime working years are not working. The fact is there are 253 million working age Americans and 102 million of them are not working.

Of the 151 million working Americans, only 123 million are employed full-time (now 35 hours, then 40 hours), 10 million are self-employed, 7 million work multiple jobs, and 21 million produce nothing as they work for the government. The strong and growing job market mantra being sold to the American people is a complete falsehood, and average Americans know it.

We know 10,000 Americans per day are turning 65 and will be for decades to come. Some of them are retiring as they had planned for the last 40 years to do. The fact is very few planned. They were sucked into the easy debt vortex sold by the establishment and lived in the present, never planning for the future. When 50% of all households over the age of 55 have $12,000 or less in retirement savings, they aren’t retiring. When even the over 55 households that did save only have $100,000 of retirement savings, they aren’t retiring. That will last them a couple years at most, when their life expectancy is 20 to 30 years. Very few households can survive on their Social Security pittance, as Yellen and her band of merry men provide 0.25% returns on savings and the cost of food, rent and healthcare surge ever higher.

Boomers aren’t retiring en mass because they can’t afford to retire. The labor participation rate of the younger generations is being negatively impacted by the non-retirement of Boomers. This is called the trickle down effect from unintended consequences. The establishment has strip mined the wealth of the country, leaving a barren wasteland in its wake, creating a seething populace, seeking perpetrators to blame. The populist uprising which propels Trump and Sanders has been spurred by the destruction of the working middle class as the corporate fascists, global elite, and banking cabal have pushed their game of financialization roulette to its limit.

The corporate mainstream media machine, whose job is to keep the establishment in power, scorns Trump when he references a true unemployment rate above 20%, while the BLS reports a beyond laughable rate of 5%. In fact, 24% of all Americans between the ages of 20 and 54 are not working. In fact, 18% of all American men between the ages of 20 and 54 are not working. What are these 13 million men doing on a daily basis? They aren’t retired. A large percentage have been screwed over by a system designed to enrich the few at the expense of the many. Of the 35 million 20 to 54 year old Americans not working, many have found they can suckle more from the welfare and disability systems than they can by working. This generates animosity between the middle and lower classes, to the delight of the ruling class, as it takes the focus off their never ending criminal activities.

The Big Lie can work for longer than rational people might think, but eventually the revelation of its falsehood leads to revolutionary change. The average person in middle America is waking up to the lies of the establishment. They know the unemployment rate is closer to 20% than 5%. They know their own personal inflation rate is 5% to 10%, and not the reported 1% to 2%. They know the banker bailout, TARP, ZIRP, QE, and trillion dollar budget deficits weren’t designed to benefit Main Street USA. They know the media is in the back pocket of the establishment. They are sick and tired of getting screwed by a system designed by a wealthy elitist class to shake them down at every opportunity. They are starting to get up out of their chairs and yelling:

JPM has just capped some ATM withdrawals!.  Is there some sort of run on the banks for cash?
(courtesy zero hedge/JPM)

Was There A Run On The Bank? JPM Caps Some ATM Withdrawals

Under the auspices of “protecting clients from criminal activity,” JPMorgan Chase has decided to impose capital controls on . As WSJ reports, following the bank’s ATM modification to enable $100-bills to be dispensed with no limit, some customers started pulling out tens of thousands of dollars at a time. This apparent bank run has prompted Jamie Dimon tocap ATM withdrawals at $1,000 per card daily for non-customers.

Most large U.S. banks, including Chase, Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. have been rolling out new ATMs, sometimes known as eATMs, which perform more services akin to tellers. That includes allowing customers to withdraw different dollar denominations than the usual $20, typically ranging from $1 to $100.


The efforts run counter to recent calls to phase out large bills such as the $100 bill or the €500 note ($569) to discourage corruption while putting up hurdles for tax evaders, terrorists, drug dealers and human traffickers.


The Wall Street Journal reported in February that the European Central Bank was considering eliminating its highest paper currency denomination, the €500 note. Former U.S. Treasury Secretary Lawrence H. Summers also has called for an agreement by monetary authorities to stop issuing notes worth more than $50 or $100.

This move appears to have backfired and created a ‘run’ of sorts on Chase…

A funny thing happened as J.P. Morgan Chase & Co. modified its ATMs to dispense hundred-dollar bills with no limit: Some customers started pulling out tens of thousands of dollars at a time.


While it was changing to newer ATM technology, J.P. Morgan found that some customers of banks in countries such as Russia and Ukraine had used Chase ATMs to withdraw tens of thousands of dollars in a single day, people familiar with the situation said. Chase had instances of people withdrawing $20,000 in one transaction, they added.

Remember Greece?


And, in what appears to the start of a war on cash in America, The Wall Street Journal reports,  the bank is cracking down, capping ATM withdrawals at $1,000 per card daily for noncustomers.

The bank run by Chairman and Chief Executive Jamie Dimon said there doesn’t appear to be fraud involved. But in part due to heightened regulatory scrutiny, banks are paying more attention to large cash transfers that could be a sign of money laundering or other types of shady activity.


The move by the largest bank in the country doesn’t affect J.P. Morgan Chase’s own customers, whose maximum daily withdrawals are set depending on the client’s account type.


J.P. Morgan Chase’s change last month affects roughly 18,000 automated teller machines nationwide and followed an interim step earlier this year limiting noncustomer cash removals at $1,000 per transaction. The earlier move was made as a temporary fix while the bank could make software changes to roll out the more stringent daily limit, said bank spokeswoman Patricia Wexler.

However, as we noted last night,

What the story is about is the nebulous world of offshore tax evasion and tax havens, which based on data from the World Bank, IMF, UN, and central banks,hide between $21 and $32 trillion, where registered incorporation agents and law firms in small Caribbean countries (and not so small US states) make the laundering of money and the “disappearance” of the super wealthy, into untracable numbers hidden behind shell companies, possible.

So, there is more than the total US GDP being laundered in offshore tax havens, but yes, let’s eliminate the $100 bill to cut down on corruption and money laundering.

Of course, we are sure this is just another ‘storm in a teacup’ as why should anyone question a fine upstanding and trustworthy bank withholding people’s money when they are assuredly tax evaders, terrorists, drug dealers and human traffickers.


It does not look good for Valeant as lenders demand a lot for coveant waivers and other covenant breaches
(courtesy zero hedge)

Valeant Tumbles As Lenders Demand Two Pounds Of Flesh For Covenant Waivers

Two weeks ago, the catalyst that pushed Valeant CDS to record wide levels implying a 55% probability of default over 5 years, while sending the company’s stock plunging, was news that Valeant was scrambling to engage its lenders to obtain a default waiver to its bank credit agreement to eliminate a technical default that arose when it didn’t file its 10-K before March 15.

As we reported then, “in anticipation of those meetings, owners of Valeant’s senior bank loans are reaching out to investment banks, including Barclays, who will help mediate the negotiations, the sources said. Barclays did not immediately respond for comment.”

As was explicitly warned, the lenders’ demands include higher interest payments and a pledge to pay a larger amount of the bank loans from the proceeds of any Valeant asset sales.

Since then the stock bounced modestly because apparently the algos forgot that when lenders smell blood and a potential default from a debtor without any other recourse, they will demand a pound of flesh. Or maybe two.

Well, moments ago the market got a harsh reminder that Valeant is effectively negotiating default compliance with a group of banks who realize they are dealing with a company that has a $9 billion market cap and can thus ask for anything and management and shareholders have no choice but to say yes unless that $9 billion to quickly go to $0.

According to Bloomberg, Valeant, just as predicted,  “is facing push back from some of its lenders as it seeks to waive a default and loosen restrictions on its debt, according to people with knowledge of the matter.”

The resistance may complicate Valeant’s efforts to win the support it needs before the Wednesday deadline for lenders to respond. The company, which has about $32 billion in total debt, must gain approval from more than half of the investors holding its more than $11 billion of secured loans. Those that are balking are demanding a higher interest rate and a better fee, said the people, who asked not to be identified because the discussions are private. They also want to impose some restrictions on the terms the company is offering on the proposal, they said.

Also known as a pound of flesh. Or maybe two.

Bloomberg reports that the initial Valeant “bid” is a 50 basis-point fee and a 0.5 percentage point boost on the interest it pays on its term loans, people with knowledge of the matter said at the time.  Banks, however, want more: “Some lenders might see it as an opportunity to extract better pricing or other terms,” Justin Forlenza, an analyst at independent credit-research firm Covenant Review, said in an interview. “They can meet at a certain point that lenders and the company can get comfortable with.”

Now this is only for the default waiver. Additionally, as a result of its collapsing business Valeant has to cure a key negative covenant limiting its interest coverage ratio to just 2.25x. Valeant’s coverage is about to jump to at least 3.00x and here again the banks want moar.

Under the current proposal, the drug maker is also seeking to loosen restrictions on its credit pact that govern a measure of earnings the company needs to maintain relative to its annual interest expense, Valeant said in a statement on March 30. The interest-coverage ratio was set to jump to three times from 2.25 times, with that level set to be tested before the end of June, according to its current agreement with lenders.


Asking lenders to relax loan covenants suggests Valeant may not be able to repay debt as quickly or generate projected earnings, according to Bloomberg Intelligence analyst Elizabeth Krutoholow.

The good news for the banks is that Valeant still has lots of spare cash to pay out, and more importantly zero leverage. And since there are virtually no recent comps for such covenant waiver deals, the banks know that they can demand anything they want and will get it, since management has no choice but to concede to any demand, as the alternative is an outright default and complete collapse in the equity value of the company.

This perhaps explains why after jumping into the $30 range last week, VRX stock is once again back just north of its multi year lows.


David Stockman takes on Yellen for his speech to the New York Empire club:

(an interesting read.)

(courtesy David Stockman/ContraCorner)

Yelling ‘Stay’ In A Burning Theater—–Yellen Ignites Another Robo-Trader Spasm

by  • April 2, 2016

Simple Janet has attained a new milestone as a public menace with her speech to the Economic Club of New York. It amounted to yelling “stay” in a burning theater!

The stock market has been desperately trying to correct for months now because even the casino regulars can read the tea leaves. That is, earnings are plunging, global trade and growth are swooning and central bank “wealth effects” pumping has not trickled down to the main street economy. Besides, there are too many hints of market-killing recessionary forces for even the gamblers to believe that the Fed has abolished the business cycle.

So by the sheer cowardice and risibility of her speech, Simple Janet has triggered still another robo-trader spasm in the casino. Yet this latest run at resistance points on a stock chart that has been rolling over for nearly a year now underscores how absurd and dangerous 87 months of ZIRP and wealth effects pumping have become.

As we have indicated repeatedly, S&P 500 earnings—–as measured by the honest GAAP accounting that the SEC demands on penalty of jail——-have now fallen 18.5% from their peak. The latter was registered in the LTM period ending in September 2014 and clocked in at $106 per share.

As is shown in the graph below, the index was trading at 1950 at that time. The valuation multiple at a sporty 18.4X, therefore, was already pushing the envelope given the extended age of the expansion.

Indeed, even back then there were plenty of headwinds becoming evident. These included global commodity deflation, a rapid slowdown in the pace of capital spending and the vast build-up of debt and structural barriers to growth throughout China and its EM supply train, as well as Japan, Europe and the US.

In the interim it has all been downhill on the profit and macroeconomic front. By the March 2015 LTM period, S&P reported profits had dropped to$99 per share and have just kept sliding, posting at only $86.44 per share for the December 2015 LTM period just completed.

So there you have it. The casino has actually been trying to mark-down the Bubble Finance inflated stock prices that the Fed’s wealth effects lunacy has generated since the great financial crisis. Yet our Keynesian school marm and her posse just keep finding one excuse after another to feed the algos.

Indeed, Yellen had barely ambled up to the rostrum, and they had the market back up to 2065. After Friday’s further bump to 2072, the math of that is a round 24X earnings.

That’s right. With ample evidence of financial risk and bubbles cropping up everywhere during the past 18 months, Simple Janet stood there at the New York Economics Club podium and threw the robo-traders a big sloppy wet one!
^SPX Chart

^SPX data by YCharts

Let’s cut to the chase. You can not get more clueless or irresponsible than that.

Even if you take the Humphrey-Hawkins mandate as literally and mechanically as the creationists read the scriptures, the Eccles Building should have declared “mission accomplished” long ago. After all, by the writ of the BLS itself, unemployment is at the historical 5.0% full-employment marker and core CPI is at 2.3% and rising.

But Simple Janet is willing to nit-pick even the phony Humphrey-Hawkins targets to the second decimal place because she apparently has no idea that a 38 bps money market rate is not a pump toggle on some giant bathtub of GDP; it’s an ignition fuse that is fueling the greatest speculative mania in modern history.

The longer the Fed perpetuates today’s massive 24X bubble with soporific open mouth interventions like Yellen’s pathetic speech last week, the more violent and traumatic the risk asset implosion will ultimately be. You would think our monetary politburo might at least notice that after trading in no man’s land between 1870 and 2130 on the S&P 500 for the past 700 days, the casino is positioned exactly where it stood in 2007 and 2000.


S&P 500

But Simple Janet is lost in a time warp. The 1960’s notion that the US economy is a closed bathtub in which inflation, unemployment and all of the other crude, ill-measured macro-variables on Janet’s dashboard can be mushed around by central bank injections of ethers called “aggregate demand” and  “financial accommodation” was not true even back then.

It was also never true that the financial market is merely a neutral transmission channel to the main street economy that can be used as a pumping device to manage GDP and the dual mandate variables embedded in it.

In fact, financial markets are the delicate mainspring of the entire capitalist economy. The nuances of pricing in the money and debt markets, the exact shape of the yield curve, the cost of carry and maturity transformations, the price of options and hedging insurance, capitalization rates on earnings and cash flows and much more are what actually enable sustainable growth, real wealth creation and financial stability.

But the blunderbuss Keynesians who have taken control of the Fed and other central banks lock, stock and barrel are clueless. Their massive, chronic, heavy-handed intrusions in financial markets have falsified all prices and turned the financial markets into incendiary gambling casinos. There is no true price discovery left—-just an endless cycle of speculation and front-running that eventually reaches a breaking point and implodes.

We are there now. Yellen and her band of Keynesian pettifoggers insist on perpetuating the bubble because they fear a hissy fit in the casino, but pretend to justify their dithering by reference to the “incoming data”.

Thus, in her New York speech Yellen mentioned three risks that purportedly justified the Fed’s decision to punt at the March meeting. The most preposterous was that growth in China is slowing and there is uncertainty about how it will handle the transition from exports to domestic sources of growth.

Is she kidding?

China is a madcap $30 trillion credit bubble waiting to fracture and bring the world economy down for the count with it. I have actually been in China for the last 10 days and the evidence that this giant construction site will soon grind to a stop is palpable. I will report more on this state made disaster next week.

But the very idea that the Fed would base a decision to delay normalization of money market rates after 87 months of ZIRP because the China credit binge is finally cratering speaks volumes. It proves that the Eccles Building is inhabited by monetary crackpots who cannot even recognize a giant Ponzi scheme when it is starring them in the face.

Likewise, Yellen unaccountably cited a second risk to the economic outlook that justifies deferral of rate normalization. Namely, that the potential for further commodity and especially oil price weakness could have “adverse” effects on the global economy.


Of course there is going to be much more carnage in the oil patch. After all, a decade of coordinated money printing by most of the world’s central bank eventually generated spectacular levels of excess capacity and malinvestment in the global oil and gas patch.

To wit, between 2004 and 2014 total debt of the global oil and gas industry nearly tripled, rising from $1.1 trillion to nearly $3 trillion. And that was not the free market at work, or proof that “drill baby drill” had anything to do with an upsurge of technological innovation and enterprenurial spirits.

Instead, the current massive overhang of surplus stocks and excess production capacity is owing to the drastic mispricing of capital and the temporary bubble in petroleum demand that pushed prices into an artificial and unsustainable triple digit range. Accordingly, the present oil price collapse is just getting started. It will be subtracting from CapEx and production levels in the US and around the world for years to come.

Finally, Yellen offered a third excuse, and it was a real whopper. In effect, she said that after nearly 100 months of “extraordinary” monetary policies the Fed dare not risk another recession because it stranded itself on the zero bound and has no dry powder remaining to counteract the next downturn.

Does this ship of fools domiciled in the Eccles building really believe they have abolished the business cycle? By the sound of the following, there is no other conclusion possible.

 I consider it appropriate for the committee to proceed cautiously in adjusting policy,” Yellen said Tuesday. “This caution is especially warranted because, with the federal funds rate so low, the FOMC’s ability to use conventional monetary policy to respond to economic disturbances is asymmetric.”

Yes, Yellen is not only guilty of yelling “stay” in a burning theater. Speaking to the Wall Street speculators assembled at the Economic Club of New York, she actually threatened to keep the carry trade gambles in free money until they finally blow the place sky high for the third time this century.


well that about does it for tonight

I will see you tomorrow night



One comment

  1. Panama Papers is a desperate attempt by Bush-Clinton-Rockefellers-Soros CRIMINAL syndicate to hide the IMF Leaks-European Union-BrExit-Greece blackmail scandal away out of the open scrutiny.


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