MAY 27/Newest data states that London imported 119 tonnes of gold in March and April!! Why? Because as Mylcreest suggests, they ran out of unallocated gold/With one day to go we have a huge 39,520 contracts stand for June gold delivery/May gold has a huge 6.889 tonnes of gold standing ! Janet suggests that the uSA must raise rates for ammo in case the economy falters and they then can cut rates! Odds of a rate rise increase dramatically but also indicates only one rise and then it ends/

Good evening Ladies and Gentlemen:

Gold:  $1,213.80 DOWN $6.60    (comex closing time)

Silver 16.25  down 9 cents

In the access market 5:15 pm

Gold $1213.00

silver:  16.22

i) the May gold contract is a non active contract.  Yet we started the month with 5.67 tonnes of gold standing and it has increased every single day (EXCEPT ON TWO DAYS)and today ends at 6.889 tonnes of gold standing:

The amount standing for gold at the comex in May is simply outstanding at 6.886 tonnes. The previous May 2015, we had only .08 tonnes standing so you can certainly witness the difference as the demand for gold by investors/sovereigns is on a torrid pace. This makes the excitement for June gold that much more intense as more players are refusing fiat and demanding only physical metal. I will be reporting daily as to how much is standing for delivery through the active month of June.  June is the second largest delivery month after December.

Despite the whacking of silver, it’s OI refused to decline like gold. Our bankers and the CFTC are “quite baffled” by this. We are now in our 6th year of high open interest in silver with a low price.  This has never happened before.

If I am a betting man, it looks to me like China is the long taking delivery in gold and they are the longs waiting patiently to strike in silver.

Let us have a look at the data for today


At the gold comex today we had a FAIR delivery day, registering 19 notices for 1900 ounces for gold,and for silver we had 552 notices for 2,760,000 oz for the non active May delivery month.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 263.13 tonnes for a loss of 39 tonnes over that period


In silver, the open interest FELL by 1563 contracts DOWN to 200,326 DESPITE THE FACT THAT THE PRICE OF SILVER WAS UP by  8 cents with respect to YESTERDAY’S trading..In ounces, the OI is still represented by just over 1 BILLION oz i.e. .1.002 BILLION TO BE EXACT or 143% of annual global silver production (ex Russia &ex China)

In silver we had 552 notices served upon for 2,760,000 oz.

In gold, the total comex gold OI fell by a CONSIDERABLE 17,134 contracts DOWN to 507,960 as the price of gold was DOWN $3.25 with yesterday’s trading(at comex closing). They certainly got the liquidation in gold but not silver. However what is surprising is the fact that we have still an extremely high OI for the front June contract month (active)



With respect to our two criminal funds, the GLD and the SLV:

We had no change in gold inventory at the GLD  The inventory rests at 868.66 tonnes. .

We had no change in silver inventory at the SLV/Inventory rests at 335.739 million oz


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

1. Today, we had the open interest in silver FALL by 1563 contracts DOWN to 200,326 as the price of silver was UP by 8 cents with YESTERDAY’S trading. The gold open interest FELL by 17,134 contracts as gold was down $3.20 yesterday. Somebody big is standing FOR SILVER and surrounding the comex with paper longs ready to ponce once called upon to take out physical silver.I also believe that for the first time we are witnessing players wishing to stand for real physical in gold.  Gold investors, in the May contract month, are refusing the tempting fiat offer as they want only physical. We ended the month with a huge 6.889 tones standing and it looks like we are going to have a dandy gold stand in June.

(report Harvey).


2 a) Gold trading overnight, Goldcore

(Mark OByrne/off today

2b)  Gold trading earlier this morning;

(Mark O’byrne)


i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed UP  BY 1.39 PTS OR 0.05%  /  Hang Sang closed UP 179.66 OR 0.88%. The Nikkei closed UP 62.38 POINTS OR 0.37% . Australia’s all ordinaires  CLOSED UP 0.33% Chinese yuan (ONSHORE) closed DOWN at 6.5605 .  Oil ROSE to 49.05 dollars per barrel for WTI and 48.97 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5686 yuan to the dollar vs 6.5605 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A BIT.



Japan was intent on forcing the G7 to warn of “global economic crisis” as they want to lower the value of the yen. The boys  even refused that. Another slap in the face of Japan

( zero hedge)


This think tank is stating that China’s credit fueled economy is spinning out of control:

( zero hedge/Richard Duncan/MacroWatch)


i)There has been a launch into the postal voting in Austria.  You will recall that the far right president candidate was winning in the regular vote but when they counted the  right in postal votes, surprisingly it shifted to the leader of the Green party.
Although a ceremonial job, obviously the criminal EU did not want an anti immigration President:
( zero hedge)

ii)An excellent commentary from Craig Roberts as he comments on how Greece has been looted by Germany and the rest of the EU gang.

( Paul Craig Roberts/

iii) The huge,  across -country labour strikes are having a devastating effect on the French economy

( zero hedge)


none today


none today


Rigs continue to decline.  Expect USA production to fall off the cliff in a time frame of 18 months

( zero hedge)


none today


i)India is now taking action against the parasites, the HFT trader

( zero hedge)

ii)We brought this to your attention but it is worth repeating. First Majestic Silver reports that it is dealing with silver mfgrs. directly as they seek dwindling supplies:

( First majestic Silver/GATA)

iii)After 7 months on their new scheme to monetize gold, the Indian banks have only succeeded in acquiring 2800 kg of gold:  (  90,000 oz  or 2.79 tonnes)

v)The following is a huge story.  For the first time ever England is importing gold from Switzerland!!  They imported 79 tonnes on gold in April following 40 tonnes in March.

Lawrie Williams believes that it may be GLD.

At the beginning of May we had 836 tonnes of gold

At the beginning of March we had 793 tonnes


Thus we added in the two months;  43 tonnes to the GLD

Gold imported from Switzerland in the two months:  119 tonnes

the gold coming from Switzerland is not entering the GLD!

Ladies and Gentlemen:


London ran out of unallocated gold


Two things:

1 it sure explains the turmoil inside the comex gold inventory

2 it sure sets up an interesting June delivery month

( Lawrie Williams/Sharp’s Pixley.)


i)First quarter GDP revision is slightly higher at .8%.  However expectations were thought to be around .9% to 1.0%.  Janet will not glean much from this.  They will not get any important directional indicators until Q2 data starts rolling in, but that will come at the end of July.

( zero hedge)

ii)The all important and impartial U. of Michigan confidence index falls. Inflation expectations tumbled to record lows.  Remember that the consumer is 70% of the USA GDP

( U. of Michigan Consumer Confidence Index./zero hedge)


iii)It does not look good for Hillary:

( Fox News/zero hedge)

iv)The clown, Janet Yellen states that a rate hike is needed “for ammo in case of a shock to the economy:  that sent all markets downward:

( zero hedge)

v)The bets of a rate hike rise.  However the yield curve flattens suggesting that most do not believe that this is the right move for the fed i.e. a policy error.

( zero hedge)
vi) Tonight’s wrap courtesy of Greg Hunter/USAWatchdog
(Greg Hunter)


Let us head over to the comex:


The total gold comex open interest FELL to an OI level of 507,960 for a CONSIDERABLE LOSS of 17,134 contracts AS THE PRICE OF GOLD WAS DOWN $3.25 with respect to YESTERDAY’S TRADING.  We have now finished the NON active delivery month of MAY. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses.IN  THE MONTH OF MAY IT SURE SEEMS THAT THE LATER HAS STOPPED. ACTUALLY WE HAVE WITNESSING A GRADUAL RISE IN AMOUNT STANDING THROUGH THE MONTH.  THE MONTH OF May had an OI of  18. We had 19 notices filed LAST NIGHT so we GAINED 1 gold contracts OR AN ADDITIONAL 100 OZ will stand for delivery in this non active delivery month of May. We have started the month with 5.6 tonnes and gained in ounces standing everyday but two which remained neutral. The next big active gold contract is June and here the OI FELL by 48,854 contracts DOWN to 39,520 as those paper players that wished to stay in the game rolled to August AND THE REST EITHER STAYED PUT FOR NOW OR LEFT PERMANENTLY. The amount standing is huge with one day to go.  The next on active month of July saw it’s OI fall by 1273 contracts down to 1316. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was excellent a345,168. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was EXCELLENT at 364,135 contracts if many rollovers. The comex is not in backwardation. We are one trading day away from first day notice,   the reading on Tuesday which in reality is Friday’s as we are always 24 hrs back.


Today we had 19 notices filed for 1900 oz in gold.


And now for the wild silver comex results. Silver OI FELL by1563 contracts from 201,889 DOWN to 200,326 despite the fact that the price of silver was UP BY 8 cents with YESTERDAY’S TRADING. For the first time in over 2 years, we have not witnessed a liquidation of open interest as we ENTERED first day notice .  The active contract month of May had 557 notices left to be served upon . We had 552  notices filed yesterday so we LOST 5 SILVER CONTRACTS OR AN ADDITIONAL 25,000 OZ WILL NOT  stand in this non-active delivery month of May. The next non active month of June saw its OI FALL by 24 contracts DOWN to 575 OI. The next big delivery month is July and here the OI fell by 2,110 contracts DOWN to 129,955. The volume on the comex today (just comex) came in at 40,960 which is  GOOD. The confirmed volume YESTERDAY (comex + globex) was VERY GOOD at 56,140. Silver is  in backwardation up to June AND AGAIN A LITTLE DEEPER. London is in backwardation for several months.
We had 552 notices filed for 2,760,000 oz.

MAY contract month:

FINAL standings for MAY

May 27.
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil  66,439.440 OZ



Deposits to the Dealer Inventory in oz 9645.000 OZ



Deposits to the Customer Inventory, in oz    280,275.469 oz




No of oz served (contracts) today 19 contracts
(1900 oz)
No of oz to be served (notices) OFF THE BOARD
Total monthly oz gold served (contracts) so far this month 2215 contracts (221,500 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month  432,393.8 OZ

Today we had 1 dealer deposits

i) into the dealer Brinks:  9645.000 oz 300 KILOBARS

total dealer deposit:  9645.000 0z  300 KILOBARS

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz


Today we had 3 customer deposits:

i) Into BRINKS: 5626.25 oz  or (175 kilobars)

ii) Into Scotia:  11,0-11.019 oz oz

iii) Inro HSBC: 263,638.200 oz

Total customer deposits;  280,275.469 OZ

Today we had 2 customer withdrawals:

i) Out of Brinks:  50,267.99 oz

ii) Out of Scotia: 16,075.00 oz

total customer withdrawals: 66,439.44 OZ

Today we had 2 adjustments:

Out of Brinks:

16,010.700 oz was adjusted into the customer account from the dealer account.

Out of Scotia:

596.09 oz was adjusted out of the dealer and back into the customer account and that I will deem a settlement  ( .0185 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 19 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 1 notice wAS stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the MAY contract month, we take the total number of notices filed so far for the month (2215) x 100 oz  or 221500 oz , to which we  add the difference between the open interest for the front month of MAY (19 CONTRACTS) minus the number of notices served upon today (19) x 100 oz   x 100 oz per contract equals 221,400 oz, the number of ounces standing in this non active month.  This number is huge for May.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND THAT IT WILL BRING MUCH EXCITEMENT TO JUNE ESPECIALLY WITH THE HIGH OI FOR JUNE RECORDED TODAY
Thus the FINAL standings for gold for the MAY. contract month:
No of notices served so far (2215) x 100 oz  or ounces + {OI for the front month (19) minus the number of  notices served upon today (19) x 100 oz which equals 221,500 oz standing in this non  active delivery month of MAY(6.889 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 6.889 tonnes of gold standing for MAY and 23.09 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 6.889 TONNES FOR MAY + 12.3917 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  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185   = 17.216 tonnes still standing against 22.311 tonnes available.
Total dealer inventor 742,363.513 tonnes or 23.09 tonnes
Total gold inventory (dealer and customer) =8,459,941.650 or 263.13 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 263.90 tonnes for a loss of 39 tonnes over that period. 
JPMorgan has only 22.79 tonnes of gold total (both dealer and customer)
JPMorgan now has only .900 tonnes left in its dealer account.
May is not a very good delivery month and yet 6.889 tonnes of gold is standing.  What is different from other months is that the bankers cannot offer any fiat to those standing. They want the real stuff. We are extremely close to the all time highs in both gold and silver OI.
And now for silver

MAY FINAL standings

 May 27.2016

Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory  50,905.710 oz


Deposits to the Dealer Inventory nil oz
Deposits to the Customer Inventory  nil
No of oz served today (contracts) 552 CONTRACTS 

2,760,000 OZ

No of oz to be served (notices) MAY MONTH OFF THE BOARD


Total monthly oz silver served (contracts) 2716 contracts (13,580,000 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  9,825,598.5 oz

today we had 0 deposit into the dealer account

total dealer deposit:nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil


we had 0 customer deposits:

Total customer deposits: nil oz.


We had 1 customer withdrawals

i) out of SCOTIA: 50,905.710 oz


total customer withdrawals:  50,705.710 oz



 we had 0 adjustments


The total number of notices filed today for the MAY contract month is represented by 19 contracts for 95,000 oz. To calculate the number of silver ounces that will stand for delivery in May., we take the total number of notices filed for the month so far at (2716) x 5,000 oz  = 13,580,000 oz to which we add the difference between the open interest for the front month of MAY (552) and the number of notices served upon today (552) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the MAY contract month:  2716 (notices served so far)x 5000 oz +{552 OI for front month of MAY ) -number of notices served upon today (552)x 5000 oz  equals 13,580,000 oz of silver standing for the MAY contract month.
Total dealer silver:  30.124 million
Total number of dealer and customer silver:   153.597 million oz
The open interest on silver is NOW AT CLOSE an all time high with the record of 207,394 being set May 18.2016. The registered silver (dealer silver) is close to multi year lows as silver is being drawn out and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
The reason for the raid today in both gold and silver is probably for the following 4 reasons:
2. the stranglehold on the May front gold contract month BEARS FRUIT .
2. the continued drama in high silver OI
4. potential problem for the bankers in June gold  as the OI with one day to go registers 39,520 contracts. Usually in the last day we have between 60 and 70% contraction in OI
Friday, we receive the COT report from our CME boys;

Let us first head over to the gold COT


Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
291,266 84,634 52,773 146,205 371,418 490,244 508,825
Change from Prior Reporting Period
-49,482 10,174 -26,364 23,728 -41,302 -52,118 -57,492
182 94 102 53 61 281 221
Small Speculators  
Long Short Open Interest  
52,714 34,133 542,958  
-1 5,373 -52,119  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, May 24, 2016
Our Large Specs:
Those large specs that have been long in gold got fleeced again by our criminal bankers by a whopping 49,482 contracts.
Those large specs that have been short in gold added 10,174 contracts to their short side.
Our criminal bankers (commercials)
Those commercials that have been long in gold added a whopping 23,728 contracts to their long side.
Those commercials that have been short in gold covered a monstrous 41,302 contracts from their short side.
(and the criminal game continues)
Our small specs:
Our small specs that have been long in gold pitched a tiny 1 contract from their long side
Those small specs that have been short in gold added 5373 contracts to their short side.
Conclusions:  especially after these past two two days gold will revert higher as the commercials covered a huge number of their shorts.
And now for our Silver COT:
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
97,242 31,358 20,457 59,097 137,390
-8,746 2,572 1,560 4,338 -7,264
103 61 43 37 42
Small Speculators Open Interest Total
Long Short 203,682 Long Short
26,886 14,477 176,796 189,205
-864 -580 -3,712 -2,848 -3,132
non reportable positions Positions as of: 161 128
Tuesday, May 24, 2016   © Sil
Our large specs:
Those large specs that have been long in silver pitched 8746 contracts from their long side
Those large specs that have been short in silver added 2572 contracts to their short side.
Our commercials;
Those commercials that have been long in silver added a huge 4338 contracts to their long side
Those commercials that have been short in silver covered 7264 contracts from their short side
Our small specs;
Those small specs that have been long in silver pitched 864 contracts from their long side
Those small specs that have been short in silver covered 580 contracts from their short side.
Conclusions: the commercials  went net long by 11,602 contracts and that should be sufficient for gold to rise starting Tuesday.
And now the Gold inventory at the GLD
May 27/no change in gold inventory at the GLD/Inventory rests at 868.66 tonnes
May 26./no change at the GLD/Inventory rests at 868.66 tonnes
May 25./no change in gold inventory at the GLD/Inventory rests at 868.66 tonnes
MAY 24/ a good sized withdrawal of 3.86 tonnes of paper gold from the GLD/Inventory rests at 868.66 tonnes
May 23./this is rather impossible: another huge deposit of 3.26 tonnes into the GLD with the price of gold down again today?/inventory rests at 872.52 tonnes
May 18 /no changes in inventory at the GLD/Inventory rests at 855.89 tonnes.
May 17/ we had a huge deposit of 4.76 tonnes of gold into the GLD/Inventory rests tonight at 855.89 tonnes/in the last two and 1/2 weeks we have added 50 tonnes of gold and this most likely was all paper gold addition..
May 16./ today we had no changes in inventory at the GLD/Inventory rests at 851.13 tonnes
May 13./another addition of 5.94 tonnes of gold into the GLD/Inventory rests at 851.13 tonnes
May 12/another huge deposit of 3.27 tonnes in gold inventory at the GLD/inventory rests at 845.19 tonnes
May 11/another huge deposit of 2.67 tonnes in gold inventory at the GLD/Inventory rests at 841.92 tonnes
May 10/Another huge deposit of 2.38 tonnes in gold inventory at the GLD/Inventory rests at 839.25 tonnes
May 9/Surprisingly we had another deposit of 2.68 tonnes of gold into the GLD with gold down!! Inventory 836.87 tonnes

May 27.:  inventory rests tonight at 868.52 tonnes


Now the SLV Inventory
May 27/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz/
May 26./ no change in silver inventory at the SLV/Inventory rests at 335.739 million oz
May 25./no change in silver inventory at the SLV/Inventory rests at 335.739
MAY 24/no change in inventory at the SLV/Inventory rests at 335.739 million oz
May 23./we had a small withdrawal of 285,000 oz and that generally means payment of fees.Inventory rests at 335.739 million oz
May 19/no changes in silver inventory at the SLV/Inventory rests at 335.073 million oz
May 18/no changes in silver inventory at the SLV/Inventory rests at 335.073 million oz/
May 17/no change in silver inventory at the SLV/Inventory rests at 335.073 million oz/
May 16./no changes in silver inventory at the SLV/Inventory rests at 335.073 million oz
May 13./no change in silver inventory at the SLV/inventory rests at 335.073 million oz
May 12/no change in silver inventory/rests tonight at 335.073 million oz/
 May 11.2016/no change in silver inventory/rests tonight at 335.073 million oz/
May 10.2016/we had a huge withdrawal of 1.046 million oz in silver leaving the SLV,no doubt for Shanghai which lately has been gobbling up whatever inventory it could lay its hands on/Inventory rests at 335.073 million oz.
May 9. no change in silver inventory/rests at 336.119 million oz.
May 27.2016: Inventory 335.739 million oz

NPV for Sprott and Central Fund of Canada

will update on this site later tonight/

1. Central Fund of Canada: traded at Negative 4.8 percent to NAV usa funds and Negative 4.8% to NAV for Cdn funds!!!!
Percentage of fund in gold 61.4%
Percentage of fund in silver:37.2%
cash .+1.4%( May 27/2016). /
2. Sprott silver fund (PSLV): Premium falls  to -0.84%!!!! NAV (MAY 27.2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises TO +0.24% to NAV  ( MAY 27.2016)
Note: Sprott silver trust back  into NEGATIVE territory at -84% /Sprott physical gold trust is back into positive territory at +0.24%/Central fund of Canada’s is still in jail.
It looks like Eric Sprott got on the nerves of our bankers as they lowered the premium in silver to -0.84%.  Remember that Eric is to get 75 million dollars worth of silver in a new offering.


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

Trading in gold and silver overnight in Asia and Europe
Mark O’Byrne (goldcore)

Global Financial Crisis Coming – Japan Warns of “Lehman-Scale” Crisis At G7

Japanese Prime Minister Shinzo Abe warned his Group of Seven counterparts today that the world may on the brink of a global financial crisis on the scale of Lehman Brothers.

GoldCore: Total Global Debt since 2007
The Japanese Prime Minister presented data yesterday at the G7 summit he is hosting, showing that commodities prices have fallen 55 percent since 2014, the same margin they fell during the global financial crisis, interpreting this as “warning of the re-emergence of a Lehman-scale crisis”.

The Japanese Prime Minister Shinzo Abe failed in his attempt to have the G7 leaders warn of the risk of a global economic crisis in a communique issued as their summit wrapped up today in Japan.

The final statement failed to address the scale of the financial crisis facing the world today and instead gave the impression that the worst is over with somewhat Orwellian language which declared that G-7 countries “have strengthened the resilience of our economies in order to avoid falling into another crisis.”

The communique gives the impression that there is little risk due to strengthened, resilient economies when the truth is that there are significant risks facing the global financial system and the global economy. Some of which include:

• The global economy remains vulnerable to recessions and new debt crises. There are fragile recoveries in the Eurozone, UK and U.S. while Japan remains in a recession
• Financial and banking systems remains vulnerable as seen in the very sharp falls in bank shares in recent weeks. Spanish, Italian, Greek and German banks have seen sell offs
• Geopolitical risk in the Middle East (Syria, Saudi, Iran etc.), increasing tensions amongst Russia, China and western powers and the increasing spectre of terrorism and war
• The Eurozone crisis is far from resolved and there is the risk of debt crises in China, the U.S., the Eurozone and indeed the UK

• BREXIT causes a short term risk but the real risk is the poor financial fundamentals of the UK economy – total debt to GDP ratio (public and private) is over 450% and completely unsustainable.

Japan had pressed G-7 leaders to note “the risk of the global economy exceeding the normal economic cycle and falling into a crisis if we did not take appropriate policy responses in a timely manner.” However, leaders again failed to take leadership and opted for spin and again lulling their electorates into a false sense of security about the financial and economic outlook.

Rather than doing the responsible thing in this regard, there appears to have been an attempt to focus on BREXIT and to scare UK voters into not voting for a UK exit from the EU. German Chancellor Angela Merkel went as far as to say that BREXIT had not even been discussed but that there was a consensus that they wanted the UK to stay in the EU.

Yet, a 32-page declaration putatively from the G7 leaders declared that “A UK exit from the EU would reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth.” Brexit was listed alongside geopolitical conflicts, terrorism and refugee flows as a potential shock of a “non-economic origin”.

Japan is right to be warning that there is a danger of the world economy careering into another financial crisis on the scale of the 2008 Lehman shock given the scale of the debt in the world today is much, much more than it was prior to the first financial crisis – see McKinsey Global Institute chart above.

Diversification remains the key to weathering the likely impact of the next financial crisis on financial markets and assets including deposits. Paper and digital assets, including digital gold, contain unappreciated risks such as bail-ins and inability to transact, be paid, liquidity etc.

Direct legal ownership of individually segregated and allocated gold coins and barswill again protect and grow wealth in the coming years.

Recent Market Updates
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Gold and Silver News
Silver Rises as U.S. Housing Reports Buoy Outlook for Demand – Bloomberg
Gold on track for 2.3% weekly fall – biggest decline in 9 weeks – Reuters
Gold Investors Await Yellen’s Signals After Another Losing Week – Bloomberg
G7 vows growth efforts as Japan’s Abe warns of global crisis – Reuters

Gross Shorting Bonds As Concerned New Crisis Coming – Bloomberg Video
G7 Summit: Brexit would be ‘serious risk to global growth’ – Irish Times
SPAIN threatens to tear EU apart as banks LOSE €1.4 BILLION in a day – Express
China wants to set prices for the world’s commodities – Bloomberg
Read More Here

Gold Prices (LBMA AM)
27 May: USD 1,221.25, EUR 1,092.16 and GBP 833.50 per ounce
26 May: USD 1,226.65, EUR 1,097.24 and GBP 834.37 per ounce
25 May: USD 1,220.75, EUR 1,094.77 and GBP 834.63 per ounce
24 May: USD 1,242.65, EUR 1,111.18 and GBP 852.71 per ounce
23 May: USD 1,250.40, EUR 1,115.84 and GBP 860.89 per ounce

Silver Prices (LBMA)
27 May: USD 16.30, EUR 14.58 and GBP 11.12 per ounce
26 May: USD 16.46, EUR 14.73 and GBP 11.20 per ounce
25 May: USD 16.21, EUR 14.54 and GBP 11.06 per ounce
24 May: USD 16.27, EUR 14.55 and GBP 11.14 per ounce
23 May: USD 16.31, EUR 14.55 and GBP 11.27 per ounce

Mark O’Byrne
Executive Director




India is now taking action against the parasites, the HFT trader

(courtesy zero hedge)

“We’re Moving To Tackle Systemic Risk” – India Cracks Down On HFT Scourge

While the corrupt and criminal US regulators are unable to do anything to stifle the market domination of algos which have totally destroyed the US equity market, and sucked up enough liquidity where neither buy nor sellsiders can generate a profit, India is already well on its way to crushing the parasitic – and perfectly legal – frontrunners of virtually ever trade. It will do so by increasing penalties on high-speed trading firms that flood exchanges with orders that don’t result into actual transactions, as part of steps aimed at strengthening its oversight of computerized trading.

According to Bloomberg, India’s regulator, the Securities & Exchange Board or SEBI, has also borrowed a page out of the IEX playbook and is considering checks on super fast strategies by using a fraction-of-a-second speed bump and minimum resting time to delay orders so that all participants see the market at the same speed, Chairman U. K. Sinha said in Mumbai on Wednesday.

In other words, what IEX wants to implement on its exchange, to unprecedented opposition from not only the HFT lobby but its muppet, the SEC, India will implement marketwide.

Why is India doing the right thing by cracking down on HFTs? The proposals came amid a growing chorus calling for the market regulator to take action against high-frequency traders gaining preferential access at the country’s biggest exchange. A report by one of SEBI’s own advisory panels recently called for a full investigation into claims of collusion between the National Stock Exchange of India Ltd. and a high-frequency trading firm. The report was the only example among major global markets to identify probable collusion between an exchange and a high-speed firm.

“We’re moving to tackle systemic risk as well as issues of unfair access in HFT trading,” Sinha said. “We’re also asking the exchanges to ensure that HFT traders don’t misuse the system.”

That’s odd: such collusion between exchanges (BATS) and HFT firms (Citadel) in the US are not only perfectly known to everyone, but are collusive in broad daylight.

And yet nobody will touch them. Or at least not in the banana republic that is the US. Because India’s market is about to become far more honest and trustworthy.

Among the proposals being considered include separation of co-location orders and adoption of auction system that blunts the edge of the fastest traders. Broadcast of order-book information is being looked into to ensure there’s no preferential treatment, Sinha said. The measures will be released in the next three to four months, he said.

“We need to see whether the changes ultimately bring a level-playing field or impede the market’s growth,” Manoj Nagpal, chief executive officer at Mumbai-based Outlook Asia Capital Pvt., an investment consulting and wealth management firm, said by phone. “Markets globally are grappling with ways to regulate HFT without disrupting the system.”

Actually, no. NOt in the US. Here every regulator is corrupt and purchased by the HFT lobby. Sorry.

Meanwhile, the US joke of a market continues: for every 27 orders placed on U.S. exchanges, about one is filled, data from the U.S. Securities and Exchange Commission show. In other words, approximately 96 percent of all orders sent to U.S. equity markets are canceled.

In India, quote stuffing is already penalized. India’s BSE Ltd. charges up to 0.1 rupee per order when a brokerage’s order-to-trade ratio falls between 250 and 500, according to the exchange’s website. “While SEBI is among the first regulators to have some kind of regulations in place on HFT, there is a need to make it more stronger,” he said.

India’s high-frequency and algorithmic transactions now account for 40 percent of total volumes, the highest proportion in the developing world and up from the low single digits five years ago, according to Danielle Tierney, senior analyst at Aite Group, a Boston-based consulting firm. SEBI, which issued broad guidelines on HFT in 2012 and 2013, said in December it’s considering new restrictions, but has so far taken no action.

It will soon, and when it does that 40% will promptly collapse to the single digits or 0, because once the quote stuffing and churning ecosystem of the algo parasites is interrupted, it disintergates.

Now if only the US regulator would pretend to do its job (even if that means permanently recusing Mary Jo White, one of Wall Street’s staunchest defenders) and at least feign some interest in how India is winning a war with HFTs that the US lost long ago, we would be content. Alas, that will never happen.

We brought this to your attention but it is worth repeating. First Majestic Silver reports that it is dealing with silver mfgrs. directly as they seek dwindling supplies:
(courtesy First majestic/GATA)

Miner sees silver price surging ninefold as global gadgets boom


By Natalie Obiko Pearson
Bloomberg News
Thursday, May 26, 2016…

A major Japanese electronics maker approached First Majestic Silver Corp. for the first time last month seeking to lock in future stock, a sign of supply concerns that could boost the metal’s price ninefold, according to the best-performing producer of the metal.

“For an electronics manufacturer to come directly to us — that tells me something is changing in the market,” said Keith Neumeyer, chief executive officer of First Majestic, the top stock in Canada and among its global peers this year. “I think we’ll see three-digit silver,” he said, predicting the metal could surge to $140 an ounce by as early as 2019.

That’s a bold forecast. While silver has rallied 19 percent this year to leapfrog gold as the best-performing precious metal, it settled lower Wednesday at $16.26 an ounce on the Comex in New York and reached a record of just under $50 in 2011. The highest projection among analysts surveyed by Bloomberg is $57 an ounce in 2019.”That seems aggressive,” Dan Denbow, a portfolio manager at the USAA Precious Metals & Minerals Fund in San Antonio, said by e-mail. “There has been a lack of investment in silver exploration, but with significantly higher prices you will get new supplies. The current cost curve wouldn’t support that price.”

Still, there are other optimistic signs for silver rising. Hedge funds expanded their bullish bets on the metal to an all-time high earlier this month.

Because the commodity holds appeal both as a store of value as well as for its multiple industrial uses, it surged earlier this year on speculation that the pace of U.S. interest-rate hikes will slow and that Chinese manufacturing may be improving.

First Majestic is the second-biggest silver producer in Mexico, which supplies more of the precious metal than any other country. As such, the company has been a primary beneficiary of the silver rally after choosing not to diversify into other metals like many of its peers. The company earns more than 63 percent of its sales from silver and its share price has more than tripled this year, more than any other company on the S&P/TSX Composite Index. The stock rose 2.2 percent to C$14.65 at 9:51 a.m. in Toronto, giving it a market value of C$2.36 billion ($1.82 billion).

While long coveted for use in jewelry, coins and utensils, silver is increasingly in demand for its industrial applications. Last year, about half of global silver consumption came from such use, including mobile phones, flat-panel TVs, solar panels and alloys and solders, according to data compiled by GFMS for the Washington-based Silver Institute.

“Silver is not a precious metal. It’s a strategic metal,” Neumeyer said in an interview in Vancouver, where the company is based. “Silver is the most electrically conductive material on the planet other than gold, and gold is too expensive to use in circuit boards, solar panels, electric cars. As we electrify the planet, we require more and more silver. There’s no substitute for it.”

Industrial demand is set to increase, driven by rising incomes and growing penetration of technology in populous, developing nations, as well as thanks to new uses being found for silver’s anti-bacterial and reflective properties in everything from hospital paints to Band-Aids to windows.

“Over the next 10 or 20 years, more and more people are going to be using these devices, and silver is a very limited commodity,” Neumeyer said. “There’s just not a lot of it around.”

Use of silver, including investment demand, coin sales and what goes into inventories to settle trades, has outstripped annual supply of the metal in every year since 2000, according to data from GFMS, a research unit of Thomson Reuters Corp. Still, not everyone agrees that the world is headed for a shortage of the metal.

“I would tend to disagree that silver is rarer than thought,” David Lennox, a resource analyst at Fat Prophets in Sydney. “Silver cannot be easily substituted but there’s been no need as it’s in abundance. I’d expect the search for silver would intensify and the search for substitutions would happen long before silver got to” $140 an ounce.

About 50 percent of global demand last year came from price-sensitive sources such as retail coins, jewelry and silverware, which would help curb price increases, said Erica Rannestad, a senior analyst at GFMS in Chicago. “Increased market penetration in emerging economies certainly will result in higher per-capita consumption of silver in industrial uses, but this is over the long run and would not happen overnight.”

Neumeyer said his company has no immediate plans for acquisitions, dividends or to take on any debt. The company raised C$57.5 million from a share sale earlier this month. It plans to use funds internally for development and exploration of its mines, which had suffered from underinvestment during the recent downturn. “The capital will be used to look internally,” he said.

Neumeyer acknowledges his forecasts aren’t always correct. First Majestic had estimated silver at $14 an ounce for this year’s budget. “I think I’ve been wrong every year for the past four or five years.”
Still, he’s unfazed by his past record.

“The silver rally is just beginning,” Neumeyer says. “What we’ve seen in the last two months is just the beginning of the next bull market.”

* * *

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India’s banks still dragging their feet with gold monetization scheme


By Sutanuka Ghosal
The Times of India, Mumbai
Friday, May 27, 2016…

KOLKATA, India — The Gold Monetisation Scheme remains a non-starter seven months after its introduction as most banks are yet to enter an agreement with collection centres and refiners, two players in the chain said. The scheme aims to unlock 22,000 tonnes of idle gold lying with Indian households and reduce the country’s dependence on imported gold. Banks are not yet ready with their board approvals and GMS software to operate this scheme.

In the earlier gold deposit scheme the government mint took 180 days to settle their refining account but with 0.5 percent interest payout at that time. Banks were not impacted by this delay.

“Under the present GMS, the interest payout begins after 30 days and that too at 3 percent, which may bleed banks in cases where the refining accounts are not settled within seven days’ refining time frame stipulated for refineries under GMS,” said James Jose, secretary of the Association of Gold Refineries and Mints.

The two operating agencies of the GMS — collection and purity testing centres — run by BIS-recognised hallmarking and gold refineries are sitting idle, waiting for better GMS offtake. The GMS has so far mobilised about 2,800 kg of gold, mostly from temples and institutions and this has gone to the Indian government mint.




And now an update on Steve’s previous report as he updates Q1 2016 silver sales at the Royal Canadian Mint:


(courtesy Steve St Angelo/SRSRocco report)


UPDATE: Q1 2016 Canadian Silver Maple Sales Surge To Highest Record Ever

SRSrocco Report

The Royal Canadian Mint just published its Q1 2016 Report, and the silver bullion coin sales figures were stunning to say the least.  Not only did sales of Canadian Silver Maple Leafs surpass its previous record during the third quarter last year, it did so by a wide margin.

Why is this such a big deal?  Because Q1 2016 sales of Silver Maples topped the Q3 2015 record, without surging demand and product shortages.  Last year, there was a huge spike in silver retail investment demand due to the supposed “Shemitah” or the collapse of the broader stock markets.  Investors piled into silver in a big way as they perceived a year-end market crash was inevitable.

During last August and September, some websites stated 2 month delivery wait times for certain products such as Silver Eagles and Silver Maples.  With the huge spike in demand, sales of Canadian Silver Maples reached 9.5 million oz (Moz) in Q3 2015.  Although, once investors became more relaxed as the broader markets turned around, demand for physical silver investment cooled down.  Thus, Silver Maple sales declined to 9.1 Moz in the last quarter of 2015.

However, something very interesting took place during the first quarter this year.  Sales of Silver Maples jumped to an all-time record high of 10.6 Moz:


Actually, I was quite stunned by the figures published in the recent Royal Canadian Mint Report.  Sales of Silver Maples jumped 1.1 Moz in Q1 2016 vs Q3 2015, with no real spike in overall retail investment demand.  Which means, investors bought more Silver Maples in Q1 2016 than any other quarter in history.

Furthermore, if Silver Maple sales continue to be this strong, the Royal Canadian Mint is on track to sell over 40 Moz compared to the 34.3 Moz in 2015.  If Silver Eagle sales also continue on their strong trend of 1 Moz per week, the U.S. Mint could sell over 50 Moz of these coins.  Together, these two official mints could sell over 90 Moz of Silver Eagles and Maples in just one year.

This goes to show investors who are frustrated by the short-term price moves of gold and silver, that the market continues to purchase record volumes of these official coins… regardless.

That being said, the precious metal community needs to focus on the Mid-Long Term fundamentals of buying and holding gold and silver.  Precious Metals analysts would serve our industry better if we forgo the HYPE and $50 Silver & $2,000 Gold This Year MANTRA.

I do believe the value of the precious metals will rise to levels much higher than we can imagine, but it will come when the Greatest Financial Paper Ponzi Scheme finally collapses.  So, it’s best to continue focusing on the fundamentals, rather than short-term price predictions.




The following is a huge story.  For the first time ever England is importing gold from Switzerland!!  They imported 79 tonnes on gold in April following 40 tonnes in March.

Lawrie Williams believes that it may be GLD.

At the beginning of May we had 836 tonnes of gold

At the beginning of March we had 793 tonnes

addition in the two months;  43 tonnes

Gold imported from Switzerland in the two months:  119 tonnes

Ladies and Gentlemen:

London ran out of unallocated gold

Two things:

1 it sure explains the turmoil inside the comex inventory

2 it sure sets up an interesting June delivery month


(courtesy Lawrie Williams/Sharp’s Pixley.)



Switzerland gold data raises new doubts about London’s gold stocks

May 27, 2016 lawrieongold

Article first published yesterday on

  • Switzerland exported 79 tonnes of gold to the UK in April following exports of over 40 tonnes in March. Historically it has been a net importer of gold from the UK.
  • Does this suggest that the UK’s vaults are running out of unallocated physical gold to meet the big demand by gold ETFs as some have surmised?
  • Switzerland also again exported more gold directly to mainland China than to Hong Kong demonstrating that Hong Kong’s net gold exports to China are no longer a proxy for total Chinese imports.

The latest figures for Swiss gold imports and exports raise some interesting questions. They confirm, for example, that Asian demand, as primarily represented by China and India, remains weak; that Hong Kong flows are no longer a proxy for total Chinese gold imports and; show a very big net export figure for gold going into the UK. While overall imports (146.2 tonnes) were virtually in balance with exports (146.7 tonnes) the sources of some of the imported gold will also raise questions about the state of the global gold market and where demand truly exists.

Swiss April gold IMPORTS. Source: Graphic from received

For example, the biggest exporter of gold into Switzerland in April was the United Arab Emirates – not exactly one of the world’s largest gold producers, and the second biggest was Hong Kong, which exported much more gold to Switzerland than it imported (it is usually a big net importer). But both are of course big gold trading centres and it may well be that traders were taking profits by selling in bulk to Switzerland given the rise in gold price so far this year and that weak demand may have meant they were carrying more in inventory than they deemed comfortable.

The Hong Kong and China export figures just serve to confirm a trend that has been apparent for some months now. Switzerland – probably the biggest known source of exported gold for China, is continuing to export more to the Chinese mainland than via Hong Kong which confirms our view that Hong Kong net export figures into the Chinese mainland are ever less an indicator of total Chinese gold imports. Time was the Hong Kong export figures for gold to China were by far the greatest proportion of total Chinese imports and were taken as a proxy for the total amount of gold going into China by analysts around the world. This is definitely no longer the case and any media reports still suggesting this should be totally ignored.

The import figures also confirmed reports that Venezuela shipped a further 12 tonnes of gold to Switzerland to help generate sufficient funds to meet its debt commitments.

But it is the export figures which raise some very interesting flags for this writer. The largest recipient of Swiss gold in April was the U.K. taking in a net figure of 75.4 tonnes (exports minus imports). This follows on from net exports to the U.K. of 41.8 tonnes in March. Historically the U.K. has exported more gold to Switzerland than it has imported back – very comfortably. The flow has been primarily for the re-refining of 350-430 troy ounce LBMA Good Delivery gold bars from the London vaults into the smaller sizes demanded by the main consuming markets in Asia.

Swiss April gold EXPORTS. Source: Graphic from received

But suddenly London is importing gold in significant quantities from Switzerland – presumably in good delivery bar weights (The April import figure alone will have been worth upwards of £2 billion which won’t please the UK government in trying to balance its books!). Now this may well be to satisfy demand from the big SPDR Gold Shares ETF demand. SPDR Gold Shares (GLD) are traded in North America but the gold is vaulted in London. This could suggest perhaps that there is very tight availability for physical gold in London as a number of analysts have been suggesting recently.

One particular piece of reserach on this stands out. Readers are directed to read some fascinating research from Paul Mylchreest of London brokerage ADSI. (Paul will be remembered as the erstwhile writer/publisher of the late lamented Thunder Road report.) In his research into London gold vault figures he came up with data suggesting that London could be down to extremely low levels, and even in default, on unallocated physical gold. You can read the full report as published in U.S. website, Zero Hedge, by clicking on “The Death Of The Gold Market” – Why One Analyst Thinks A Run On London Gold Vaults Is Imminent. It’s a 60 page report so you may need some time on your hands to read through it – but the conclusions are perhaps a little scary – or perhaps stimulating for the gold bulls among us considering the ramifications of its conclusions.

Mayb e I’m being naive here, but could this be why the U.K. is having to import gold from Switzerland in such large quantities?


Your early FRIDAY 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  DOWN to 6.5605 ( SLIGHT DEVALUATION  BUT TINY/CHINA CONTINUES TO FIRE SHOTS ACROSS THE USA BOW/OFFSHORE YUAN WIDENS TO 6.5686 ) / Shanghai bourse  CLOSED DOWN 1.39 OR 0.05%  / HANG SANG CLOSED UP 179.66 OR 0.88%

2 Nikkei closed UP 62.38 OR 0.37% /USA: YEN FALLS TO 109.64

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index UP to 95.27/Euro DOWN to 1.1175

3b Japan 10 year bond yield: FALLS   TO -.117%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.67

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  49.05  and Brent: 48.97

3f Gold DOWN  /Yen UP

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

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil 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 0.131%   German bunds in negative yields from 8 years out

 Greece  sees its 2 year rate FALL to 7.28%/: 

3j Greek 10 year bond yield RISE to  : 7.23%   (YIELD CURVE NOW FLAT)

3k Gold at $1219.00/silver $16.28(7:45 am est) BROKE RESISTANCE AT 16.52 

3l USA vs Russian rouble; (Russian rouble DOWN 13 in  roubles/dollar) 65.98-

3m oil into the 49 dollar handle for WTI and 48 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 .9909 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1067 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  + .131%

/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 1.831% early this morning. Thirty year rate  at 2.637% /POLICY ERROR)

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

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

All Eyes On Yellen: Global Markets Flat On Dreadful Volumes, Oil Slides

In a world where fundamentals don’t matter, everyone’s attention will be on Janet Yellen who speaks at 1:15pm today in Harvard, hoping to glean some more hints about the Fed’s intentions and next steps, including a possible rate hike in June or July. And with a long holiday in both the US and UK (US bond market closes at 2pm today), it is no surprise overnight trading volumes have been dreadful, helping keep global equities poised for the highest close in three weeks; this won’t change unless Yellen says something that would disrupt the calm that’s settled over financial markets.

Traders are now predicting a higher than 50% chance of an increase in July, so a misstep by Yellen risks upsetting a lull that has sent currency volatility to the lowest since January.

Looking at global markets, stocks were poised for the steepest weekly advance in more than a month on speculation financial risks around the world have eased. The dollar rose versus most peers, pushing oil lower with WTI falling below $49 after rising above $50 for the first time since NOvember yesterday. The British pound was the biggest gainer among major currencies this week on growing confidence the U.K. will remain in the European Union. As emerging markets rebounded, Russia and Qatar returned to international debt markets for the first time in at least three years.

Opinions about what Yellen would say varied from one extreme to the other.

“It will be a difficult task for Yellen,” said Ulrich Leutchmann, head of currency strategy at Commerzbank AG in Frankfurt. “The discussion today will center around her past achievements and not on actual monetary policy, but if she doesn’t give any hawkish signal, many in the market will interpret this as dovishness given recent hawkish comments” by other Fed officials.

Elsewhere, Ralf Zimmermann, a strategist at Bankhaus Lampe, said that “today certainly all investors’ eyes will be on Yellen,” said “The Fed is obviously willing to increase rates. But it is more a risk than a chance for stocks. I was surprised with the recent strength.”

Also chimed in Mark Lister, head of private wealth research at Craigs Investment Partners, who said that “wwe are still a little cautious. Yellen is likely to continue with the rhetoric of wanting to hike and that’s their plan. Equity markets still offer value on a medium-term basis and it’s certainly the only place where you’re getting any sort of yield. We’d welcome a pullback because that would give us a chance to do some buying at more reasonable prices.”

Others, most notably Jeff Gundlach, disagreed with expectations for a hawkish Yellen. The DoubleLine CEO said he expects a dovish speech from Yellen and predicts the Fed will refrain from raising interest rates in June unless traders in the futures market assign a probability of at least 50 percent to such a move.

In short: nobody has any clue as usual what happens next, and certainly not the Fed.

As nothed above, market moves have been subdued. The MSCI AC World Index rose 0.1% in early trading, leaving it up 2.1 percent for the week. The Stoxx Europe 600 Index slipped 0.2% trimming a third weekly advance, with trading volumes 37 percent below the 30-day average before holidays in the U.K. and U.S. on Monday. Futures on the S&P 500 rose 0.1%, with the index up 1.8% this week, its biggest increase in more than two months.

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2089
  • Stoxx 600 down less than 0.1% to 349
  • FTSE 100 up less than 0.1% to 6268
  • DAX down less than 0.1% to 10264
  • S&P GSCI Index down 0.7% to 368.9
  • MSCI Asia Pacific up 0.6% to 128
  • Nikkei 225 up 0.4% to 16835
  • Hang Seng up 0.9% to 20577
  • Shanghai Composite down less than 0.1% to 2821
  • S&P/ASX 200 up 0.3% to 5406
  • US 10-yr yield down less than 1bp to 1.83%
  • German 10Yr yield down 2bps to 0.12%
  • Italian 10Yr yield down 3bps to 1.34%
  • Spanish 10Yr yield down 2bps to 1.49%
  • Dollar Index up 0.14% to 95.3
  • WTI Crude futures down 1.3% to $48.86
  • Brent Futures down 1.6% to $48.78
  • Gold spot up less than 0.1% to $1,221
  • Silver spot down 0.2% to $16.29

Top Global News

  • KKR Buckles Up for Wild Ride Chasing Air-Bag Outcast Takata: Scope of recall creates ‘really high’ hurdle to sale: Aoki. Private equity bets in auto industry have had mixed success
  • Valeant Rejected Takeda-TPG Takeover Bid in Spring, WSJ Says: No acquisition talks under way for the drugmaker. Takeda-TPG approach made before new Valeant CEO Papa arrived
  • Axa Says U.K. Divestments to Generate Loss of EU400m: Co. will sell Sunlife to Phoenix Group
  • Abe Fails in Bid to Have G-7 Leaders Warn of Global Crisis Risk: Statement says G-7 has strengthened resilience to avoid crises. Brexit would be risk to global growth, communique says
  • Gundlach Says Yellen Remarks to Be Dovish as Treasury Bid Soars: Fed will hold off in June if odds below 50%, Gundlach says. Yellen to speak at Harvard University at 1:15pm local time

Looking at regional markets, we start in Asia where equities ignored yesterday’s flat US close to trade mostly higher, although China lagged following slower growth in industrial profits. Nikkei 225 (+0.4%) was underpinned by the latest set of reports (now the 3rd or 4th) PM Abe could delay the sales tax hike as soon as next week while a continued decline in CPI data further added to calls for BoJ action. ASX 200 (+0.5%) was also upbeat led by defensive stocks and climbed above the 5400 level. Elsewhere, Chinese markets bucked the trend with the Shanghai Comp (-0.1%) and Hang Seng (+0.9%) with the Shanghai composite in negative territory following a slowdown in industrial profits growth which tumbled from 11.1% to 4.2%. 10yr JGBs traded higher despite the increased risk-appetite in Japan, underpinned by the BoJ’s presence in the market for a total JPY 460b1n of government debt including inflation-linked bonds. Because there is nothing quite like free, central-bank free “markets.”

Top Asian News

  • Goldman Sees 0.2% China Bond Default Rate as Zombies Kept Alive: Global note default rate is 0.8% and U.S. 0.9%: Moody’s says
  • Terex Ends Chinese Suitor Talks, Proceeds With Konecranes Deal: Zoomlion had made an unsolicited offer at $30/share in Jan.
  • Abe to Decide on Japan Sales Tax Increase Before Summer Election: Abe says parallels between global economy and time of Lehman crisis
  • Japan CPI Falls 0.3%, Raising Pressure on BOJ for More Stimulus: Core inflation rate declines for 2nd month in April
  • Yuan Bears Once Compared to Soros in His Prime Now Look Subdued: Options, offshore trading show bears are reluctant to pile in

Like in Asia, European trading has been very light this morning as participants look towards the UK bank holiday and US Memorial Day, leading to very thin volumes. European equities initially traded in modest negative territory but have since pared this loses (Euro Stoxx 0.2%) with the IBEX (0.1%) yet again underperforming amid the extension of losses in Banco Popular shares, while the likes of Credit Agricole (-7%) and Natixis (-7.3%) weigh on French equities as they go ex-div. Elsewhere, the SMI notably outperforms led by Roche (+3.6%) in the wake of reports of a successful trial with their blood cancer drug.

Top European News

  • Axa Sells SunLife, Appoints Harlin CFO of Chief Buberl’s Team: Axa SA sold its SunLife unit in the U.K. to Phoenix Group Holdings and announced the top-management team
  • Philips Lighting Shares Soar After $839m Dutch IPO: Shares sold at EU20 each, near midpoint of marketed range. Spinoff underscores shift by Philips to health-care market
  • Barclays Said to Raise Severance Offer Again for Tokyo Employees: Bank asked about 100 equity staff to leave in January: people familiar. Original offer was below market standards, union says
  • Anglo Appoints Cleaver as De Beers CEO as Mellier Steps Down: Diamond producer resumes tradition of promoting from within. Bruce Cleaver has held strategy roles at Anglo, De Beers
  • Oil Price Surge Can Trigger Writebacks, Dong Energy CEO Says: Writebacks in energy sector are rare: Bloomberg Intelligence. Chairman says oil unit now worth keeping after sale dropped
  • Currency Traders Look Beyond the Pound to Combat Brexit Turmoil: Unigestion buys franc, krona options to hedge risk of EU exit. Aberdeen Asset Management sees euro as best sterling proxy

In FX, the BBG Dollar Spot Index climbed 0.2% after losing 0.2% in each of the last two trading sessions. The MSCI Emerging Markets Currency Index rose 0.3 percent this week, snapping a run of three weekly losses. Turkey’s lira and Russia’s ruble led gains, climbing more than 1 percent in the period. The currencies of oil-exporting nations pared their weekly advance on Friday as oil retreated. The Canadian dollar, Norwegian krone and the ruble weakened at least 0.3 percent. The pound strengthened 1 percent this week. A poll by former Conservative lawmaker Michael Ashcroft showed almost 65 percent of voters believe the U.K. will remain in the European Union after a June 23 referendum.

In commodities, oil trimmed its third weekly advance as Canadian energy producers moved to resume operations after wildfires eased. West Texas Intermediate dropped 1% to $49 a barrel, paring the weekly gain to 2.5 percent. Brent slid 1.6 percent to $48.84. Prices climbed above $50 a barrel on Thursday for the first time in more than six months as a decline in U.S. crude stockpiles and production accelerated. The Organization of Petroleum Exporting Countries may stick to its strategy of prioritizing market share over prices when it meets next week.

Iron ore futures in Dalian rebounded from the lowest level since February as authorities in China said there’s room to boost growth. Group of Seven leaders pledged to fix excess industrial capacity and a global glut of the metal caused by government subsidies and support. Industrial metals also advanced, with copper heading for its first weekly gain this month. The metal rose 0.7 percent, bringing the gain the week to 2.5 percent. Nickel climbed 0.7 percent and zinc advanced 1.1 percent. Gold was little changed at $1,221.77 an ounce. The precious metal is heading for the biggest monthly loss since November as investors anticipate higher borrowing costs in the U.S.

n the US event calendar, the focus will be on that aforementioned second revision to Q1 GDP and Core PCE, while there will also be some attention paid to the final May reading for the University of Michigan consumer sentiment data. The data comes before what may or may not be an important speech by Fed Chair Yellen this evening.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • This morning has been a rather light affair as participants look towards the UK bank holiday and US Memorial Day, with European equities initally trading in modest negative territory
  • FX markets have largely been in favour of the USD, and that of minor losses in commodities and stocks
  • Looking ahead, today will see data highlights in the form of the secondary US GDP reading and University of Michigan sentiment
  • Treasuries little changed in overnight trading as global equities rally and oil sells off; G-7 meeting ends “amid discord over the best policy mix of fiscal spending, monetary stimulus or structural reforms.”
  • U.S. fixed income markets early close today (2pm ET) and closed Monday for the Memorial Day holiday
  • FX, interest rate futures trading floors early close (1pm ET) and closed Monday
  • It’s one of the biggest dilemmas facing currency managers: how to protect against the fallout from the U.K. leaving the European Union without losing money should it vote to remain
  • Italian business and consumer confidence unexpectedly declined this month, signaling growing pessimism among executives and households over the strength of the recovery in the euro region’s third-biggest economy
  • Jeffrey Gundlach said he expects Janet Yellen will “be dovish” today and the Fed will refrain from raising interest rates in June unless traders in the futures market assign odds of at least 50% to the move
  • Japan’s consumer prices dropped for a second month as central bank Governor Haruhiko Kuroda struggles to spur inflation with record asset purchases and negative interest rates
  • Japanese PM Shinzo Abe is getting closer to a potential announcement on delaying an increase in the sales tax after his warning at a Group of Seven leaders meeting that the global economy faces significant risk of another crisis
  • Miami’s crop of new condo towers, built with big deposits from Latin American buyers and lots of marketing glitz, are opening with many owners heading for the exits. A third of the units in some newly built high-rises are back on the market
  • Sovereign 10Y yields mixed; European, Asian equities higher; U.S. equity-index futures rise; WTI crude oil, precious metals lower

US Event Calendar

  • 8:30am: GDP Annualized q/q, 1Q S, est. 0.9% (prior 0.5%)
    • Personal Consumption, 1Q S, est. 2.1% (prior 1.9%)
    • GDP Price Index, 1Q S, est. 0.7% (prior 0.7%)
    • Core PCE q/q, 1Q S, est. 2.1% (prior 2.1%)
  • 10:00am: U. of Mich. Sentiment, May F, est. 95.4 (prior 95.8)
    • Current Conditions, May F (prior 108.6)
    • Expectations, May F (prior 87.5)
    • 1 Yr Inflation, May F (prior 2.5%)
    • 5-10 Yr Inflation, May F (prior 2.6%)

Central Banks

  • 1:15pm: Fed’s Yellen speaks in Cambridge, Mass.

DB’s Jim Reid concludes the overnight wrap

Today would normally be very quiet given it’s the Friday before Memorial Day in the US and Bank Holiday Monday in the UK. Indeed the US bond market closes early today. However we do have Yellen speaking at Harvard University at 6.15pm BST (shortly after lunch in NY) so it’ll be slightly busier than it could have been. It’s not clear whether she’ll mention current policy but it will delay a few in the US from leaving early. That speech will aHer appearance a week on Monday June 6th when she is due to
address the World Affairs Council in Philadelphia has been billed as a
bigger event so that’s the more likely venue for her to validate her
FOMC colleagues’ recent hawkish bias or to put a more dovish spin on
future policy.
lso come with the added benefit of the May employment report which is the highlight of what’s set to be a busy calendar next week.

Before that though and also in focus today will be the second revision to Q1 GDP in the US due out this afternoon. Current expectations are for an upward revision from the first estimate of +0.5% qoq to +0.9%, while the Core PCE reading is expected to be unchanged at +2.1% qoq. We’ll also get a first sight at corporate profits which given recent weakness is an important sub complement. So something else to keep markets busy into the long weekend.

It was the data yesterday which was the main talking point for investors in what was a relatively lacklustre day of price action with the rally in risk assets coming to a stuttering halt. Indeed the S&P 500 (-0.02%) closed little changed by the end of play after failing to move with much conviction either way during the session. Markets in Europe had largely closed in positive territory (Stoxx 600 +0.10%, DAX +0.66%) although the rally for banks which had been driving moves this week abated somewhat. Spanish banks in particular were under the most pressure with Banco Popular slumping 26% and to the lowest in 26 years following the announcement of a rights issue plan to cover losses. Spanish equities (-0.50%) were the notable underperformers as a result and it was a reminder that the sector is still a long way from being out of the woods just yet.

With regards to that data it was bit of a mixed bag in the US, with the latest durable and capital goods orders in April getting most of the attention. Headline durable goods orders were up a bumper +3.4% mom last month, well exceeding the +0.5% consensus although that number was boosted by a huge rise in the volatile aircraft and parts orders series. Excluding transportation orders, durable goods orders rose more in line with expectations (+0.4% mom vs. +0.3% expected) although the concerning trend was in the core capex orders which declined -0.8% mom after expectations had been for a modest +0.3% rise. Our US economists noted that the three-month annualized change in core durable goods orders, which was slightly below +1% in March, plunged to -11% this month. That being said, the overall report was however enough for the Atlanta Fed to revise up their Q2 GDP forecast to 2.9% from 2.5% previously which is the highest forecast we’ve seen so far for the quarter.

Meanwhile, there was more bumper US housing market data to report with pending home sales in April rising a much better than expected +5.1% mom (vs. +0.7% expected). Elsewhere, initial jobless claims were down 10k last week to 268k and down for the second consecutive week following that huge spike up in the first week of the month. Finally the latest regional manufacturing data provided for further evidence of what’s been another difficult month for the sector. The Kansas City Fed’s manufacturing activity index was down 1pt this month to -5 after expectations had been for a modest 1pt rise. New orders extended their move lower into negative territory. Staying in the US we also heard from Fed Reserve Governor Powell (moderately hawkish usually) who said that a rate hike would be appropriate soon but that there is no reason ‘to be in a hurry’. Powell also echoed (Reuters) some of the comments from his colleagues in highlighting that the upcoming UK referendum vote is a reason for caution in tightening next month. It’s worth highlighting that we don’t hear from Powell too often so his comments are noteworthy.

Switching over to the latest in markets this morning where bourses in Asia are ending on a bit of a mixed note to finish the week. Leading the way is Japan where the Nikkei is +0.44%. That’s come after the April CPI report revealed a two-tenths of a percent drop in headline inflation to -0.3% yoy. While that was a little higher than expected (-0.4% expected) it still marks a move further into deflation for the second consecutive month. The ex-fresh food reading (-0.3% yoy vs. -0.4% expected) matched the headline and was unchanged from March. The so called core-core reading (ex food and energy) held steady at +0.7% yoy as expected. Nevertheless the data may have raised hopes that it could spark further action from the BoJ. Elsewhere we’ve also seen the ASX (+0.53%) gain overnight along with the Kospi (+0.32%), while the Hang Seng (-0.31%) and Shanghai Comp (-0.14%) are both lower. The latter perhaps on the back of the latest industrial profits data in China which showed profits of +4.2% yoy in April, down from the +11.1% yoy March reading. Elsewhere there was little interesting to report out of the conclusion of the G7 meeting in Japan this morning.

Meanwhile, there’s also been some interesting newsflow concerning Valeant overnight, with the WSJ reporting late last night that the pharma company rejected a takeover offer from Takeda and investment firm TPG in the spring. No price was quoted and the article states that there are no current talks, but it is another interesting twist in the long running saga for the company.

Moving on. Most of the interesting price action yesterday was reserved for rates markets where Treasuries in particular were well bid from the off. Indeed 10y yields ended the session just shy of 4bps lower in yield at 1.829% meaning they are lower now than where we closed last Friday. 2y yields were down even more (5bps lower) at 0.869% and much of the commentary is attributing this to another strong auction yesterday. Indeed such was the demand for investors at the 7y Treasury auction that primary dealers were left with just a 19% share of the allocation which is the second lowest on record. That actually follows a similar trend at 2y and 5y auctions earlier in the week with Bloomberg reporting that investors took down 80% of the $88bn across the three auctions. Despite the possibility of the Fed tightening as soon as this summer, the auctions are evidence that there’s still a decent hunt for yield in a world where global yields are so low.

Meanwhile, over in commodity markets it was Oil which had been generating the early headlines after WTI and Brent both broke through the $50/bbl level. Those moves faded however as the day wore on with both finishing below that at $49.48/bbl and $49.59/bbl respectively – a smidgen lower on the day although the moves were largely put down to some profit taking. It was a much better day for base metals though with Zinc (+2.32%), Copper (+0.15%) and Aluminium (+0.74%) all up, however the exception was Iron Ore which was down another couple of percent yesterday and tumbled back below $50/tn for the first time since February. It is now in fact nearly 30% off the highs for 2016 made just a month ago.

Looking at the day ahead, this morning in Europe the only data of note is the various confidence indicators which we’ll receive out of France and Italy. This afternoon in the US the focus will be on that aforementioned second revision to Q1 GDP and Core PCE, while there will also be some attention paid to the final May reading for the University of Michigan consumer sentiment data. The data comes before what may or may not be an important speech by Fed Chair Yellen this evening.




i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed UP  BY 1.39 PTS OR 0.05%  /  Hang Sang closed UP 179.66 OR 0.88%. The Nikkei closed UP 62.38 POINTS OR 0.37% . Australia’s all ordinaires  CLOSED UP 0.33% Chinese yuan (ONSHORE) closed DOWN at 6.5605 .  Oil ROSE to 49.05 dollars per barrel for WTI and 48.97 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5686 yuan to the dollar vs 6.5605 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A BIT.



Japan was intent on forcing the G7 to warn of “global economic crisis” as they want to lower the value of the yen. The boys  even refused that. Another slap in the face of Japan

(courtesy zero hedge)

G-7 Refuses To Warn Of “Global Economic Crisis” Over Fear “Sentiment Can Become Self-Fulfilling”

In order to press his individual agenda of preserving optionality to intervene in the FX market and push the Yen lower (using increasingly more desperate measures), Japan’s Prime Minister had just one task in the latest G-7 meeting: to have the Group of Seven leaders warn of the risk of a global economic crisis in the final communique issued as the summit wrapped earlier today in Japan.

He failed. In fact, the final statement went the other way and declared that G-7 countries “have strengthened the resilience of our economies in order to avoid falling into another crisis. The global recovery continues, but growth remains moderate and uneven, and since we last met downside risks to the global outlook have increased,” the statement says. “Weak demand and unaddressed structural problems are the key factors weighing on actual and potential growth.”

The communique urged a coordinated, albeit differentiated, response to storm clouds gathering over the global economy. Leaders pledged to use a mix of tools depending on their circumstances.

The G-7 statement compromised on the austerity-versus-stimulus debate by leaving each country’s road map open – saying they will take “into account country-specific circumstances” as they move to use “all policy tools, monetary, fiscal and structural, individually and collectively to strengthen global demand and address supply constraints while continuing our efforts to put debt on a sustainable path.”

As Bloomberg adds, Japan had pressed G-7 leaders to note “the risk of the global economy exceeding the normal economic cycle and falling into a crisis if we did not take appropriate policy responses in a timely manner.” On Thursday, Abe presented documents to the G-7 indicating there was a danger of the world economy careering into a crisis on the scale of the 2008 Lehman shock.

This is not surprising: this past weekend we wrote that following the G-7 meeting of finance ministers and central bankers which also took place in Japan, Japan ended up ‘humiliated” due to a “sharp rift over Yen intervention” with Jack Lew and the rest of the G-7 making it abundantly clear that Japan no longer has sole authority over its own monetary policy. The reason: fears that any unilateral action by Japan, such as the country’s still inexplicable descent into NIRP, would push China over the edge and lead to another uncontrolled round of global currency turmoil.

Meanwhile, the kindergarten that is Japan’s government finds itself increasingly the laughing stock of the world. As a reminder, Abe has frequently said he would proceed with a planned increase in Japan’s sales tax in April 2017 unless there is an event on the scale of Lehman or a major earthquake. He is expected to announce next week he is deferring the tax rise, Japanese media reported.

However, the lack of the G-7 endorsing his gloomy version of the world, has made the Japanese PM lose even more face with the global community because while Japan will certainly delay the sales tax increase, it now has lost its doomsday justification for doing so.

Abe can thank China for being relegated to the very bottom of the developed world scrap heap. According to Glenn Maguire, Asia-Pacific chief economist at Australia & New Zealand Banking Group, “Asia is feeling the brunt of the Chinese slowdown given its trade exposure, with a more marginal impact so far on the U.S. and Europe.”

“Hence it is not entirely surprising that a coordinated response to an unevenly felt dynamic could not be reached at the G-7 negotiating table,” Maguire said. “Moreover, the G-7 is obviously aware of the ‘announcement effect’ the official communique has,” he said. “In such a situation, warning of negative risks and sentiment can become self-fulfilling.

The biggest irony is that Abe is absolutely correct in asking for a warning, however just like in Europe’s relentless war against Grexit in the 2010-2014 period, the mere admission that this was a possibility would create a self-fulfilling prophecy that would accelerate the process.

We have now gotten to the point where the world’s leaders are too scared to admit the truth over fears it will merely accelerate its inevitable arrival.



This think tank is stating that China’s credit fueled economy is spinning out of control:

(courtesy zero hedge/Richard Duncan/MacroWatch)

China’s Credit-Fuelled Economy Is “Gyrating Like A Spinning-Top That’s Out Of Momentum”

China’s hard landing has already begun, warns economist Richard Duncan as the nation’s credit-fuelled economic boom ended in 2015 and a protracted slump lies ahead. He has published a series of videos explaining why China’s economic development model of export-led and investment-driven growth is now in crisis leaving “China’s economy resembles a spinning top that is running out of momentum. It is wobbling and gyrating erratically.”

A former Hong Kong-based banking analyst, Duncan has also worked as an analyst at the World Bank, and as global head of investment strategy at ABN AMRO Asset Management in London. He has authored three books on the global economic crisis, including The Dollar Crisis: Causes, Consequences, Cures. He is now chief economist at the Singapore-based hedge fund Blackhorse Asset Management. Duncan was also a speaker at last week’s Asian Leadership Forum in Seoul, South Korea. The South China Morning Post was a media partner to the event.He runs the blog Macro Watch, a subscription-based website providing analysis on global economic trends.

Source: The South China Morning Post



There has been a launch into the postal voting in Austria.  You will recall that the far right president candidate was winning in the regular vote but when they counted the  right in postal votes, surprisingly it shifted to the leader of the Green party.
Although a ceremonial job, obviously the criminal EU did not want an anti immigration President:
(courtesy zero hedge)

Austria Launches Probe Into Alleged Presidential Election Postal Vote Fraud

There was much surprise, as well as accusations of outright voter fraud, when on Monday the Austrian presidential race – which was set to be won by the candidate of the right wing Austria Freedom Party much to the humiliation of Brussels – Norbert Hofer, was handed to his competitor, Green party candidate Alexander Van der Bellen, with postal votes tipping the final result in the favor of the former despite Hofer winning the outright vote by a solid margin. In retrospect, there may have been reason for the skepticism.

According to Euronews, five voting districts are being investigated in Austria over postal vote irregularities in the close-run presidential election, the interior minister has announced. Allegations of fraud arose from the far-right Freedom party of defeated candidate Norbert Hofer, after the Green candidate Alexander Van der Bellen just scrapped ahead with 31,000 votes when the postal ballot was counted.

The Villach branch of FPO lodged a complaint with the country’s corruption prosecutor over the Carinthia council counting votes on Sunday and not Monday like in the rest of the country.

Speaking on Austrian TV, Freedom Party leader Heinz Christan Strache said, “The democratic result has to be respected. There are many hints from the people, these will be checked by lawyers, and independent people and we have to evaluate that.”

Meanwhile, Hofer himself showed he was not a bitter loser and urged his supporters to accept the defeat, saying there were no signs of electoral fraud. If elected, he would have become the first far-right leader of an EU country.

On the other hand, Hofer’s defeat appears to be merely tactical, as the candidate is simply biding his time for the far more important parliamentary elections to be held in 2018. According to Euronews, recent polls suggest his Freedom party would win if parliamentary elections were held now.

And while the Green-backed president elect has vowed to address the divisions which were highlighted by the close-run election, the Freedom Party’s current stance of being vehemently anti-immigration, anti-Muslim, and most importantly in opposition for the next two years may be just where it wants to be: just let the current rulers fail to address the ongoing structural demographic problems, and as public anger builds it will only help build even more support for the Freedom Party. As a reminder, the presidential post in Austria is mostly symbolic.

An excellent commentary from Craig Roberts as he comments on how Greece has been looted by Germany and the rest of the EU gang.
(courtesy Paul Craig Roberts/

The Looting Stage Of Capitalism Begins: Germany’s Assault On The IMF

Submitted by Paul Craig Roberts via,

Having successfully used the EU to conquer the Greek people by turning the Greek “leftwing” government into a pawn of Germany’s banks, Germany now finds the IMF in the way of its plan to loot Greece into oblivion.

The IMF’s rules prevent the organization from lending to countries that cannot repay the loan. The IMF has concluded on the basis of facts and analysis that Greece cannot repay. Therefore, the IMF is unwilling to lend Greece the money with which to repay the private banks.

The IMF says that Greece’s creditors, many of whom are not creditors but simply bought up Greek debt at a cheap price in hopes of profiting, must write off some of the Greek debt in order to lower the debt to an amount that the Greek economy can service.

The banks don’t want Greece to be able to service its debt, because the banks intend to use Greece’s inability to service the debt in order to loot Greece of its assets and resourcesand in order to roll back the social safety net put in place during the 20th century. Neoliberalism intends to reestablish feudalism—a few robber barons and many serfs: the One Percent and the 99 percent.

The way Germany sees it, the IMF is supposed to lend Greece the money with which to repay the private German banks.  Then the IMF is to be repaid by forcing Greece to reduce or abolish old age pensions, reduce public services and employment, and use the revenues saved to repay the IMF.

As these amounts will be insufficient, additional austerity measures are imposed that require Greece to sell its national assets, such as public water companies and ports and protected Greek islands to foreign investors, principallly the banks themselves or their major clients.

So far the so-called “creditors” have only pledged to some form of debt relief, not yet decided, beginning in 2 years.  By then the younger part of the Greek population will have emigrated and will have been replaced by immigrants fleeing Washington’s Middle Eastern and African wars who will have loaded up Greece’s unfunded welfare system.

In other words, Greece is being destroyed by the EU that it so foolishly joined and trusted.  The same thing is happening to Portugal and is also underway in Spain and Italy.  The looting has already devoured Ireland and Latvia (and a number of Latin American countries) and is underway in Ukraine.

The current newspaper headlines reporting an agreement being reached between the IMF and Germany about writing down the Greek debt to a level that could be serviced are false.  No “creditor” has yet agreed to write off one cent of the debt.  All that the IMF has been given by so-called “creditors” is unspecific “pledges” of an unspecified amount of debt writedown two years from now.

The newspaper headlines are nothing but fluff that provide cover for the IMF to succumb to presssure and violate its own rules. The cover lets the IMF say that a (future unspecified) debt writedown will enable Greece to service the remainder of its debt and, therefore, the IMF can lend Greece the money to pay the private banks.

In other words, the IMF is now another lawless Western institution whose charter means no more than the US Constitution or the word of the US government in Washington.

The media persists in calling the looting of Greece a “bailout.”

To call the looting of a country and its people a “bailout” is Orwellian.  The brainwashing is so successful that even the media and politicians of looted Greece call the financial imperialism that Greece is suffering a “bailout.”

Everywhere in the Western world a variety of measures, both corporate and governmental, have resulted in the stagnation of income growth. In order to continue to report profits, mega-banks and global corporations have turned to looting.  Social Security systems and public services are targeted for privatization, and indebtedness so accurately described by John Perkins in his book, Confessions of an Economic Hit Man, is used to set up entire countries to be looted.

We have entered the looting stage of capitalism. Desolation will be the result.

The huge,  across -country labour strikes are having a devastating effect on the French economy
(courtesy zero hedge)

“I’m Going To Stick With This Right To The End” – French President Hollande Threatens Union Protesters

French president Francois Hollande is not bending to pressure by labor unions trying to force the government to retract unpopular labor laws that were recently forced through parliament.Unions have gone on strike in order to shut down refineries, and have blocked fuel distribution with barricades and pickets in hopes that the economy will suffer enough to get the government to back off the reforms. In response, the government is now sending police in riot gear to break up the blockades.

The unions, as they intended, are certainly having an impact. Fuel shortages intensified as 30 percent of the country’s 12,200 stations across the country are short of fuel and Total SA, France’s largest oil company said that 346 out of it’s 2,200 French gas stations are completely out of stock, while 395 lack some fuels according to Bloomberg.

Walkouts at Electricite de France SA cut more than 5,000 megawatts of combined output at adozen nuclear reactors on Thursday (but have since returned to normal on Friday), and unions have gone on strike at all 8 French oil refineries, with Total reporting that five of its refineries have been completely halted.

In response to the actions, Prime Minister Manuel Valls told the unions that continued disruptions would be dealt with “extremely firmly”, and president Hollande has shown no signs of letting up on the new laws. Hollande warned protesters that he would not let them strangle the economy, perhaps taking comfort in the fact that consumer confidence surged to the highest level since 2007.

I’m going to stick with this because I think it’s a good reform. This is not a moment to endanger the French recovery.”

Hollande further addedWe can’t accept that there are unions that dictate the law. As head of state, I want this reform. It fits with everything we have done for four years. I want us to go right to the end.”

Indeed, it will be a bitter fight between Hollande and the unions to get this situation resolved. CTG union boss Philippe Martinez said the strikes will continue until the labor law is reformed.

We’ll see this through to the finish, to withdrawal of the labor law. This government which has turned its back on its promises and we are now seeing the consequences.”

In another important development, oil tankers at the country’s biggest oil port (the Fos-Lavera oil port in southern France) are still waiting to unload, and the backlog is growing. According to Reuters, 38 oil tankers are queued up waiting to unload at the port Friday, up from 12 the previous day. To make matters worse, members at the CIM oil terminal at the port of Le Havre which handles 40 percent of French crude imports voted to extend their strike until Monday.


As Reuters reports, at least some relief has come since police started to break up barricades. In the Seine Maritime region North of Paris, local government official Nicole Klein said the number of petrol stations without fuel had fallen significantly and rationing orders have been lifted.


In addition to the economic issues, there has been violence as well. As hundreds of thousands of protesters have taken to the streets, hundreds of police have been hurt and more than 1,300 arrested according to Reuters. Most recently, protesters attacked a police station and smashed bank windows on Thursday during rallies against the reform. According to the Interior Ministry, seventy seven people were arrested during the rally in which  more than 150,000 marched.

France is hosting the Euro 2016 soccer tournament in two weeks, and with already dwindling popularity, the last thing Hollande wants voters to draw upon during elections next year is such a huge event being a disaster because labor reforms were forced through parliament without a vote. It will be interesting to see which side blinks first in this standoff, but at the moment it appears that nobody is willing to budge.




Rigs continue to decline.  Expect USA production to fall off the cliff in a time frame of 18 months

(courtesy zero hedge)

Crude Traders Shrug As Oil Rig Count Resumes Decline

Following last week’s unchanged oil rig count – breaking a 21-week streak of declines – as the rig count inflected perfectly with lagged oil prices. However, despite a rise in lagged oil prices, the oil rig count declined 2 to 316 this week – new lows since Oct 2009. Total rig count dropped to 404 – a new record low. Crude traders appear to have left for the day as there was no visible reaction to this data.


Is production about to slump?


Charts: Bloomberg


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




USA/CAN 1.3032 UP .0059

Early THIS FRIDAY morning in Europe, the Euro FELL by 17 basis points, trading now WELL above the important 1.08 level FALLING to 1.1367; 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 NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED DOWN BY 1.39 PTS OR 0.05% / Hang Sang CLOSED UP 179.66 OR  0.88%   / AUSTRALIA IS HIGHER BY 0.33%(RESOURCE STOCKS DOING BETTER / ALL EUROPEAN BOURSES ARE IN THE GREEN  as they start their morning/

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 ( NIKKEI 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 FRIDAY morning: closed UP 62.38 OR 0.37% 

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 179.66 PTS OR 0.88% . ,Shanghai CLOSED DOWN 1.39 OR 0.05%/ Australia BOURSE IN THE GREEN: /Nikkei (Japan) CLOSED IN THE GREEN /India’s Sensex IN THE GREEN

Gold very early morning trading: $1220.25


Early FRIDAY morning USA 10 year bond yield: 1.831% !!! UP 1 in basis points from THURSDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.637 UP 1 in basis points from THURSDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early FRIDAY morning: 95.27 UP 10 CENTS from THURSDAY’s close.(Now below resistance at a DXY of 100.)

This ends early morning numbers FRIDAY MORNING


And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield:  3.04% UP 2 in basis points from THURSDAY

JAPANESE BOND YIELD: -0.1130% UP 3/4 in   basis points from THURSDAY

SPANISH 10 YR BOND YIELD:1.48%  DOWN 2 IN basis points from THURSDAY

ITALIAN 10 YR BOND YIELD: 1.35  DOWN 3 IN basis points from THURSDAY

the Italian 10 yr bond yield is trading 13 points lower than Spain.




Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

Euro/USA 1.1114 DOWN .0077 (Euro =DOWN 77 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 110.39 UP 0.688 (Yen DOWN 69 basis points )

Great Britain/USA 1.4609 down.0055 Pound down 55 basis points/

USA/Canada 1.3029 UP 0.00556 (Canadian dollar DOWN 55 basis points with OIL FALLING a BIT(WTI AT $49.38).


This afternoon, the Euro was DOWN by 77 basis points to trade at 1.1114

The Yen FELL to 110.39 for a LOSS of 69 basis points as NIRP is STILL a big failure for the Japanese central bank/

The pound was DOWN 55 basis points, trading at 1.4604 ( BREXIT FEARS)

The Canadian dollar FELL by 55 basis points to 1.3029, WITH WTI OIL AT:  $49.41

The USA/Yuan closed at 6.5607

the 10 yr Japanese bond yield closed at -.113% UP 1/2 IN BASIS  points in yield/

Your closing 10 yr USA bond yield: UP 3  IN basis points from THURSDAY at 1.85% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.646 UP 2 in basis points on the day ( HUGE POLICY ERROR)


Your closing USA dollar index, 95.71 UP 57 IN CENTS ON THE DAY/4 PM

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

London:  CLOSED UP 5.14 OR 0.08%
German Dax :CLOSED UP 13.60 OR 0.13%
Paris Cac  CLOSED UP 2.10  OR 0.05%
Spain IBEX CLOSED UP 28.10 OR 0.31%

The Dow was UP 44.93  points or 0.25%

NASDAQ UP 31.74 points or 0.65%
WTI Oil price; 49.50 at 4:30 pm;

Brent Oil: 49.96





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: 50.12

USA 10 YR BOND YIELD: 1.850%

USA DOLLAR INDEX: 95.73 UP 56 cents


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




First quarter GDP revision is slightly higher at .8%.  However expectations were thought to be around .9% to 1.0%.  Janet will not glean much from this.  They will not get any important directional indicators until Q2 data starts rolling in, but that will come at the end of July.

(courtesy zero hedge)


First Quarter GDP Revised Higher To 0.8%, Misses Expectations

Following the terrible initial Q1 GDP print of 0.5% released one month ago, there was some hope that following some subsequent favorable inventory and trade data, the number would be revised substantially higher, with the whisper estimate rising as high as 1% or more, above the consensus estimate of 0.9%. Moments ago the BEA reported that in its first revision of Q1 growth, the US economy grew at only 0.8% annualized, a modest rebound from the original GDP report, however still missing consensus estimates.


Looking at the components, there was virtually no improvement in the all important personal consumption print, it remained unchanged, rising at 1.9% Q/Q, while core personal spending category, which rose 2.1%, in line with expectations. Consumption contributed 1.29% of the total 0.82% GDP print, virtually unchanged from the 1.27% annualized contribution reported a month ago.

Fixed investment likewise did not provide any material bounce either, subtracting 0.25% from the bottom line print, practically unchanged from last month’s -0.27%.

Where there was improvement was in private inventories, which subtracted a more modest -0.20% from GDP growth, better than tha -0.33% originally expected.

Also contributing was net trade, which picked up modestly as well, if still negative, subtracting -0.22% from the annualized GDP print, an improvement on the -0.33% reported originally.

Government consumption was unchanged, and added 0.2% to the final print.

The full breakdown by component is charted below:

Overall, a report with little surprises.  What was, however, curious, is that in a quarter in which corporate profits imploded, the BEA reported that profits from current production (corporate profits with inventory valuation adjustment (IVA) and
capital consumption adjustment (CCAdj)) increased $6.5 billion in the first quarter, a 0.3% increase. This compares to a
decrease of $159.6 billion in the fourth, or a 7.8% plunge.

Broken down, any weakness the BEa saw was in the banks, which saw profits drop 0.5% after sliding 6% in Q4:

  • Profits of domestic financial corporations decreased $2.0 billion in the first quarter, compared
    with a decrease of $24.0 billion in the fourth.
  • Profits of domestic nonfinancial corporations increased
    $45.7 billion, in contrast to a decrease of $129.2 billion. The rest-of-the-world component of profits
    decreased $37.3 billion, compared with a decrease of $6.5 billion. This measure is calculated as the
    difference between receipts from the rest of the world and payments to the rest of the world. In the first
    quarter, receipts decreased $3.5 billion, and payments increased $33.8 billion.

In summary, a report of little significance, and one which will not provide much clarity on the direction of the US economy, at least until the Q2 GDP print which, however, will not come until late July, and after the July FOMC meeting, which means the Fed will be flying blind if it is indeed set on hiking rates in June or July.




The all important and impartial U. of Michigan confidence index falls. Inflation expectations tumbled to record lows.  Remember that the consumer is 70% of the USA GDP

(courtesy U. of Michigan Consumer Confidence Index./zero hedge)


UMich Consumer Confidence Fades From Early May Exuberance, Inflation Expectations Slump To Record Lows

Having spiked magnificently (and surprisingly) to 11-month highs (from 7-month lows) with May’s preliminary print at 95.8 (driven by a massive spike in ‘hope’), today’s final print of 94.7 (still an 11-month high) dropped from preliminary and missed forecasts. Expectations faded notably from 87.5 prelim to 84.9 final – still an 11-month high for ‘hope’. However, despite the hype in the hope, short- and long-term inflation expectations tumbled with 5-10Y outlook now at record lows.



So no higher highs in confidence and lower lows in inflation expectations… get back to work Ms. Yellen.


Charts: Bloomberg

The clown, Janet Yellen states that a rate hike is needed “for ammo in case of a shock to the economy:  that sent all markets downward:
(courtesy zero hedge)

Yellen Says Rate Hikes Soon As Need More Ammo “In Case Of Shock” – Live Feed

Dove, hawk, or nothing at all? That’s the question as Fed chief Janet Yellen speaks after she receives the Radcliffe Medal from Harvard University’s Radcliffe Institute for Advanced Study. There are no prepared remarks, but a scheduled 30-minute Q&A session with Greg Mankiw could give insight into Yellen’s thoughts on two key issues: whether she now has more faith that recent evidence of rising inflation is convincing, and the degree to which she feels overseas risks have receded. Most (including the market) expect Yellen to stick to the hawkish meme ascribed by the latest FOMC statement and numerous Fed speakers. Some, including DoubleLine’s Jeff Gundlach expect a dovish Yellen to re-appear. Still others believe she will say nothing at all – instead waiting for a more formal speech on June 6 to drop her tape bombs.

As SocGen notes, Fed Chair Yellen will be honoured at Harvard, with a conversation on her achievements at the ceremony. However, little emphasis on the monetary policy outlook is expected at this event. The appearance to look forward to will be the Chair’s speech in Philadelphia on June 6, the Monday following the May employment report and a day before entering the blackout period for the upcoming FOMC meeting.

Live Feed (The event started at 1030ET with Yellen is due to speak at 1315ET.. though it appears they are running late)…




And this happened…


And then she said…


And this happened…


And so admitting that The Fed needs to raise rates to be able to cut rates has sent stocks lower…



The bets of a rate hike rise.  However the yield curve flattens suggesting that most do not believe that this is the right move for the fed i.e. a policy error.
(courtesy zero hedge)

Stocks, Bonds Slide As Hawkish Yellen Sends July Rate-Hike Odds To Record Highs

Following Yellen’s uncharacteristicaly hawkish tone, the odds of a July rate-hike have shot higher – now higher than June or September have ever been – to record highs. This has sent short-term bond yields higher, the yield curve dramatically flatter, stocks lower, and gold down…

July Rate hike odds soar… (note these are the odds of a rate hike in that month – which suggests The Fed will be “one more and done”)


and the reaction in asset markets as bonds close early and correelations break down…


Big flattening in the yield curve suggest the market remains doubtful that this is the right move.

It does not look good for Hillary:
(courtesy Fox News/zero hedge)

Is There Ample Evidence To Indict Hillary? This Judge Thinks So

After the latest State Department announcement that Hillary Clinton violated government rules, Judge Andrew Napolitano definitively says there is now ample evidence to indict. Sadly, he is much less certain on whether or not the indictment will actually come.

Here is Napolitano’s case as he laid it out to Bill O’reilly:

“Today is a big deal for a couple of reasons. First, it directly refutes a statement she has made dozens of times, ‘it was allowed’, we now know that it was not allowed. She never even asked.

“She signed a two page statement under oath on her first day on the job which was given after she had a two hour tutorial by two FBI agents telling her about the proper care and legal obligations for state secrets. In that oath she swore that she had the obligation to know how to care for state secrets and to recognize them.”

“Here is what’s new in the report today. Her server in her house went down a couple of times, and when it went down the blackberry wouldn’t work. The state department IT people said ‘here use a state department blackberry’, and she said through her assistant Huma Abedin ‘no because we are concerned with the Freedom of Information Act’, so she went dark and she had documents verbally read to her rather than transmitted to her through the state department email system.”

When Bill O’reilly was surprised to hear about the fact that Clinton was concerned about having documents subject to FOIA, Napolitano hammers home the the point that now the FBI has intent.

Now what does this tell the FBI? This shows intent. You don’t have to prove intent when you’re talking about espionage, you can prove it by gross negligence, there’s ample evidence of gross negligence. But avoiding the transparency laws shows a consciousness of evading the requirements.”

On whether or not Napolitano believes, after all of the above, that Clinton will actually be indicted, the judge wasn’t so sure.

“I believe there’s ample evidence to indict her and the only way she wouldn’t be is if the president or the attorney general makes a political decision.”

And just as we said long ago, Napolitano also believes that one way or another, the FBI will get the evidence out to the public.

Whether she’s indicted or not I believe we’ll learn what it is. I believe it’ll happen before the Democratic National Convention in Philadelphia, that’s two months.”

* * *

Well then, based on Obama’s guarantee that there will be absolutely no political influence in the decision on whether or not the DOJ decides to indict, we should expect the indictment in the coming months… right?

Full Interview

Let us wrap up the week with this offering from Greg Hunter:
(courtesy Greg Hunter/USAWatchdog)

I will see you Tuesday night and prepare for some fireworks in June gold.

I think I need a little rest from my reporting




  1. Agnes · · Reply

    Have a good rest, Harvey. June looks strenuous!


  2. will molloy · · Reply

    enjoy tour break Harv


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