July 8/Massive upside-outside day reversals in both gold and silver and thus extremely bullish/July gold standing rises to over 16 tonnes/Huge bank in German : Bremen Landesbank about to fail/Gold finishes at $1366 in access and silver at $20.27

Good evening Ladies and Gentlemen:

Gold:  $1,356/.60 DOWN $3.50    (comex closing time)

Silver 20.06  UP 26 cents

In the access market 5:15 pm

Gold: 1366.10

Silver: 20.28

.

And now for the July contract month

For the July gold contract month,  we had 4 notices served upon for 400 ounces.  The total number of notices filed so far for delivery:  4047 for 404,700 oz or 12.587 tonnes

In silver we had 117 notices served upon for 585,000 oz.  The total number of notices filed so far this month for delivery:  1055 for 5,275,000 oz

 

Today was an unbelievable day as we had two upside, outside day reversals in both gold and silver.  The “good guys” were waiting for the attack immediately after the jobs report and after gold was pistol wiped down to 1338.00, it then rebounded all the way to $1370.00

At that point the battle was on as the bankers supplied a massive amount of non backed paper gold and they were crushed badly today.  The open interest for Monday will be gigantic but the bankers are trapped as they cannot orchestrate a drop in the price of the precious metals.  They tried today with a phony jobs report but the bond traders saw into the numbers immediately as yields instead of rising, it fell.

Expect a wild Monday with gold and silver up considerably!

 

 

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 296.777 tonnes for a loss of 6 tonnes over that period

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest fell by a TINY 176 contracts down to 209,279, AND STILL CLOSE TO AN  ALL TIME RECORD. THE OI FELL DESPITE THE FACT THAT THE  PRICE OF SILVER FELL BY 36 CENTS IN FRIDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.047 BILLION TO BE EXACT or 149% of annual global silver production (ex Russia &ex China).

In silver we had 117 notices served upon for 585,000 oz.

In gold, the total comex gold FELL BY A SMALL 1149 contracts with gold’s FALL in price YESTERDAY to the tune of $4.60. The total gold OI stands at 654,853 contracts, CLOSE TO THE all time record SET YESTERDAY.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

we had A GOOD SIZED DEPOSIT OF 2.91 TONNES in gold inventory./

Total gold inventory rest tonight at: 981.20 tonnes

do not worry! this was nothing but a paper entry (A PAPER DEPOSIT)

SLV

 NO CHANGE IN SILVER INVENTORY TO THE SLV

Inventory rests at 341.453 million oz.

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

1. Today, we had the open interest in silver fell by 176 contracts DOWN to 209,276 despite the fact that the price of silver FELL BY 36 cents with THURSDAY’S trading. The gold open interest FELL by a TINY 1149 contracts DOWN to 654,853 DESPITE  the price of gold FALLING by $4.60  YESTERDAY. The comex gold OI is near the all time record level set yesterday.

(report Harvey).

 

2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge

2c) COT report

(Harvey)

3. ASIAN AFFAIRS

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 28.75 POINTS OR 0.95%/ /Hang Sang closed DOWN 142.75 OR 1.19%. The Nikkei closed DOWN 169.26 POINTS OR 1.11% Australia’s all ordinaires  CLOSED UP 0.09% Chinese yuan (ONSHORE) closed UP at 6.6855 /Oil ROSE to 45.59 dollars per barrel for WTI and 46.89 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.6980 yuan to the dollar vs 6.68550 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHLTY AS MORE USA DOLLARS LEAVES CHINAS SHORES.

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

none today

b) REPORT ON CHINA

NONE TODAY

4 EUROPEAN AFFAIRS

i)Such a great reason for the gold to be down this evening: Bremen Landesbank on the verge of failure!! They will need a bailout.

( zero hedge)

ii)Our good friends in Holland have a proud distinction of joining the NIRP club

( zero hedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

none today

7.OIL ISSUES

i)Oil immediately plunges to the 44 dollar handle early in the session:

( zero hedge)

ii)Then he hear that the USA rig count rises by the most in a year as oil rose into the high 40’s

(courtesy zero hedge)

8.EMERGING MARKETS

none today

9. PHYSICAL STORIES

i)Gold soars on the low bond yields! right after the jobs report!

(courtesy zero hedge)

ii)Ted Butlers’ important paper today:

(courtesy Ted Butler)

Turning of the Tide?

iii)This is something that I have been pounding the table on!  China is devaluing faster than expected and this is sending a huge deflation shock throughout the globe

( Ambrose Evans Pritchard/UKTelegraph)

iv)Alasdair Macleod on how to  use gold as money

( Alasdair Macleod)

v)China resumes its 15.55 tonnes of monthly “addition of gold”

( Bloomberg)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Zero hedge’s version of the employment report:  287,000 job gain

( zero hedge)

 

ii)And here is where the jobs went: in a nutshell mostly minimum wage jobs

( zero hedge

 

iii)And now for the real story:  90% of the job gains went to our seniors:

( zero hedge)

iv)And now the real truth behind the jobs report: a loss of 119,000 jobs

( David rosenberg/Gluskin Sheff/

v)Consumer credit jumps up by 19 billion USA courtesy of our favourite: student and auto loans:

( zero hedge

vi)A Massive crime scene in Dallas as 5 police officers killed

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL TO AN OI level of 654,853 for a small loss of 1149 contracts DESPITE THE FACT THAT THE PRICE OF GOLD CONSIDERABLY FELL BY $4.80 with respect to THURSDAY’S TRADING. We are now in the non active month of July. Somebody big is continually standing for the gold metal as July is generally a poor delivery month. The open interest for the front July contract stands at 1201 for a GAIN of 116 contracts. We had 4 notices filed yesterday night for today’s delivery, so we gained 120 contracts or an additional 12,000 oz will stand for delivery in this non active month of July. We  are again witnessing the same scenario as in May and June whereby the front delivery month increases in OI standing for metal or a slight contraction.  The next big active contract month is August and here the OI fell by only 9,483 contracts down to 427,890  as this month starts its wind down until first day notice for the August contract, Friday,July 29/2016: less than 3 weeks away.  The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was GIGANTIC (OUT OF THIS WORLD) at 574,583. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was very good at 240,078 contracts. The comex is not in backwardation.
Today, we had 4 notices filed for 400 oz in gold

And now for the wild silver comex results. Total silver OI FELL by A TINY 176 contracts from 209,455 DOWN to 209279.  We are still close to the new all time record high for silver open interest set on June 24.     The front active delivery month is July and here the OI fell BY 78 contracts down to 1399. We had 91 notices served on yesterday so we gained 13 contracts or 65,000 additional silver ounces that will stand for delivery.The next non active month of August saw it’s OI FALL by 3 contracts DOWN to 410. The next big active month is September and here the OI FELL by 671 contracts DOWN to 152,857.   The volume on the comex today (just comex) came in at 77,811 which is excellent. The confirmed volume YESTERDAY (comex + globex) was EXCELLENT at 74,178. Silver is not in backwardation . London is in backwardation for several months.
 We had 117 notices filed for 455,000 oz. in silver JULY contract month:INITIAL standings for JULY

July 8.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
 1,378.67 oz
BRINKS
Deposits to the Dealer Inventory in oz NIL
Deposits to the Customer Inventory, in oz 
NIL
No of oz served (contracts) today
4 notices 
400 oz
No of oz to be served (notices)
1197 contracts
119,700 oz
Total monthly oz gold served (contracts) so far this month
4047 contracts (404,700 oz)
(12.587 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month   35,253.3 OZ

 STRANGE!! WITH ALL THAT ACTIVITY IN GOLD WE HAD HARDLY GOLD ENTER OR LEAVE THE COMEX

Today we had 0 dealer DEPOSIT
total dealer deposit:  NIL   0z
Today we had 0 dealer withdrawals:
total dealer withdrawals:  nil oz
Today we had 0 customer deposits:
Total customer deposits; NIL   OZ
Today we had 1 customer withdrawal:
i) Out of BRINKS: 1,378.67 oz
Total customer withdrawals: 1,378.67  oz
Today we had 0  adjustments:
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 4 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 3 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the JULY contract month, we take the total number of notices filed so far for the month (4047) x 100 oz  or 404,700 oz , to which we  add the difference between the open interest for the front month of JULY (1201 CONTRACTS) minus the number of notices served upon today (4) x 100 oz   x 100 oz per contract equals 524,400 oz, the number of ounces standing in this active month. 
 
Thus the INITIAL standings for gold for the JULY. contract month:
No of notices served so far (4047) x 100 oz  or ounces + {OI for the front month (1201) minus the number of  notices served upon today (4) x 100 oz which equals xxx oz standing in this non   active delivery month of JULY  (16.311 tonnes).
We gained 120 CONTRACTS or an additional 12,000 oz of gold  stand for delivery in this non active month of July.
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 now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 49.09 TONNES FOR JUNE +  15.888 TONNES FOR JULY + 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 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 / June 22:0.48 tonnes /June 23: 0489 tonnes, June 24..018; june 29 .036 tonnes; JUNE 30 2.49 /july 1 17.78 tonnes = 4Y6.194 tonnes still standing against 46.009 tonnes available.
 Total dealer inventor 1,479,207.322 tonnes or 46.009 tonnes
Total gold inventory (dealer and customer) =9,539,972.918 or 296.733 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 296.733 tonnes for a loss of 6 tonnes over that period. 
 

THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD AND FRAUDULENT!!

 

 
 end
GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX
And now for silver
 
JULY INITIAL standings
 July 8.2016
Silver
Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 2,292,442.98 OZ
CNT, JPM
BRINKS, HSBC
SCOTIA
Deposits to the Dealer Inventory
NIL
Deposits to the Customer Inventory
 NIL
No of oz served today (contracts)
117 CONTRACTS 
(585,000 OZ)
No of oz to be served (notices)
1282 contracts
(6,430,000 oz)
Total monthly oz silver served (contracts) 1055 contracts (5,275,000 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  3,005,413.9 oz
today we had 0 deposit into the dealer account
total dealer deposit :NIL oz
we had 0 dealer withdrawal:
:
total dealer withdrawals:  NIL oz
we had 0 customer deposit:
Total customer deposit: NIL oz
We had 5 customer withdrawals
i) Out of CNT: 649,930.240 oz
ii) Out of BRINKS: 904,393.710 oz
iii) Out of HSBC: 200,226.100 oz
iv) out of JPM: 279,169.100 oz
v) out of Scotia; 258,723.93 oz
:
total customer withdrawals:  2,292,442.980  oz
 
 
 
 we had 0 adjustment
The total number of notices filed today for the JULY contract month is represented by 117 contracts for 585,000  oz. To calculate the number of silver ounces that will stand for delivery in JULY., we take the total number of notices filed for the month so far at (1055) x 5,000 oz  = 5,275,000 oz to which we add the difference between the open interest for the front month of JULY (1399) and the number of notices served upon today (117) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JULY contract month:  1055 (notices served so far)x 5000 oz +{1399 OI for front month of JULY ) -number of notices served upon today (117)x 5000 oz  equals  11,685,000 oz  of silver standing for the JULY contract month.
We gained 13 contracts or 65,000 oz that will  stand for delivery in this active month of July.
 
Total dealer silver:  25.061 million (close to record low inventory  
Total number of dealer and customer silver:   150.43 million oz (close to a record low)
The total open interest on silver is NOW NEAR its all time high with the record of 218,979 being set June 24.2016.  The registered silver (dealer silver) is NOW NEAR  multi year lows as silver is being drawn out at both dealer and customer levels 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.
END
And now the Gold inventory at the GLD
JULY 8/ A  good sized deposit of 2.91 tonnes into the GLD/Inventory rests at 981.20
July 7/a good sized withdrawal of 4.15 tonnes from the GLD/Inventory rests at 978.29 tonnes (this was nothing but a paper entry/no physical moved)
JULY 6/WHAT A FRAUD!! A MASSIVE 28.53 TONNES OF PAPER GOLD ADDED INTO THE GLD
July 5/no change in inventory/rests tonight at 982.44
July 1/a huge change in the gold inventory/ a deposit of 3.86 tonnes/rests tonight at 953.91 tonnes
JUNE 30/no change in gold inventory /inventory rests tonight at 950.05 tonnes
June 29/ a good sized deposit of 2.67 tonnes/inventory rests at 950.05 tonnes
June 28/ a huge deposit of 13.067 tonnes into inventory/new inventory rests so far at 947.38 tonnes.  This was a paper addition
June 27/a huge deposit of 18.415 tonnes into the GLD inventory/the new inventory rests at 934.313 tonnes.  The addition was a paper addition and not physical
june 24./strange!! no additions to gold with its huge 58 dollar advance??
june 23/no change in gold inventory tonight/rests at 915.90 tonnese
June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes
June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes
June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory.
rests at 908.77 tonnes.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
July 8 / Inventory rests tonight at 981.20 tonnes

end

Now the SLV Inventory
JULY 8/no change in silver inventory/rests tonight at 341.453 million oz
July 7./no change in silver inventory/inventory rests at 341.453 million oz
JULY 6/AND ANOTHER FRAUD!! A MASSIVE 7.909 MILLION OZ ADDED INTO THE SLV/INVENTORY RESTS AT 341.453 MILLION OZ
july 5/no change in silver inventory/inventory rests at 333.554 milllion oz
july 1/no change in silver inventory/inventory rests at 333.544 million oz
JUNE 30/no changes in silver inventory/inventory rests at 333.544 million oz
June 29/ a small deposit of 760,000 oz/Inventory rests tonight at 333.544 million oz/
June 28/no change in silver inventory/rests tonight at 332.784 million oz
June 27/ a small deposit of 570,000 oz in the SLV inventory/Inventory rests at 332.784 million oz
June 24/This makes no sense!! 855,000 oz of silver leaves the SLV headed straight to Shanghai/Inventory rests at 332.214 million oz
June 23/ no change in silver inventory/rests tonight at 333.069 million oz
June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/
June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz
June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495
.
July 8.2016: Inventory 341.453 million oz
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 0.6 percent to NAV usa funds and Negative 1.1% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 59.6%
Percentage of fund in silver:39.2%
cash .+1.2%( July 8/2016). 
2. Sprott silver fund (PSLV): Premium falls  to +1.05%!!!! NAV (July 8/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  0.59% to NAV  ( July 8/2016)
Note: Sprott silver trust back  into POSITIVE territory at +1.05% /Sprott physical gold trust is back into positive territory at +0.59%/Central fund of Canada’s is still in jail.
 
 
 

END

 

At 3:30 pm we get the COT report:

 

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
389,590 73,627 88,857 123,735 463,942 602,182 626,426
Change from Prior Reporting Period
16,462 2,419 24,493 -3,434 10,452 37,521 37,364
Traders
201 82 91 57 62 304 201
 
Small Speculators  
Long Short Open Interest  
50,789 26,545 652,971  
1,658 1,815 39,179  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, July 05, 2016

Our large specs:

 

Those large specs that have been long in gold added a whopping 16,492 contracts to their long side

Those large specs that have been short in gold added 2419 contracts to their short side

And now our famous crooks: the Commercials:

 

Those commercials that have been long in gold pitched a large 3434 contracts from their long side.

Those commercials that have been short in gold added a large 10,452 contracts to their short side.

 

Our small specs;
Those small specs that have been long in gold added 1658 contracts to their long side

Those small specs that have been short in gold added 1815 contracts to their short side.

 

Conclusions;

Our commercials go net short by 13,886 contracts.

The boat is loaded on one side with the specs and on the other side a huge shortfall for the commercials.  Something has got to give! Looks to me like we are close to a commercial failure.

 

And now for our silver COT:

 

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
111,348 25,594 18,408 55,718 154,486
3,793 1,700 -3,866 -953 2,614
Traders
114 58 42 43 42
Small Speculators Open Interest Total
Long Short 211,347 Long Short
25,873 12,859 185,474 198,488
977 -497 -49 -1,026 448
non reportable positions Positions as of: 177 126
Tuesday, July 05, 2016   © SilverSeek.com

Our large specs:

Those large specs that have been long in silver added 3783 contracts to their long side

Those large specs that have been short in silver added 1700 contracts to their long side.

 

Our commercials;

Those commercials that have been long in silver pitched 953 contracts from their long side

Those commercials that have been short in silver added only 2604 contracts to their short side.

Our small specs;

Those small specs that have been long in silver added 3669 contracts to their long side

Those smalls specs that have been short in silver added 1924 contracts to their short side.

Conclusions; Commercials go net short by only 3557 contracts.  These guy are getting blasted as they cannot offer any more short paper because they are already behind the 8 ball.

 

end

 

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/David Russell (Goldcore)
China adds 15.55 tonnes to its reserves

China Resumes Monthly Gold Buying in Bid to Diversify Reserves

GoldCore's picture

Against the backdrop of ongoing geopolitical and financial market uncertainty the Chinese central bank has continued to add to their gold holdings in an effort diversify the reserves further.

As reported by Bloomberg, China, the world’s biggest producer and consumer of gold, added about 500,000 ounces to central bank reserves in June, restarting monthly purchases to diversify holdings after taking a breather in May.

A Chinese national flag flutters outside the headquarters of the People's Bank of China, the Chinese central bank, in Beijing, April 3, 2014. REUTERS/Petar Kujundzic/File Photo

The People’s Bank of China increased assets to 58.62 million ounces, or about 1,823 metric tons, from 58.14 million ounces in May when they were unchanged, according to data on the central bank’s website. The country has boosted its hoard in 11 out of the past 12 months after announcing a 57 percent increase to 53.32 million ounces since 2009.

China bought gold during a month when global prices climbed 8.8 percent, boosted by the U.K. vote to leave the European Union and a further scaling back of expectations for a rise in U.S. interest rates. Bullion has surged 29 percent this year as investors sought a shelter from market turbulence and increasing global economic and political risks. Assets in exchange-traded funds jumped 37 percent in 2016 to more than 2,000 metric tons.

The full report can be read here 

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Gold and Silver News

Read More Here

Gold Prices (LBMA AM)
08 July: USD 1,356.10, EUR 1,224.83 & GBP 1,047.45 per ounce
07 July: USD 1,367.10, EUR 1,233.40 & GBP 1,052.80 per ounce
06 July: USD 1,370.00, EUR 1,239.71 & GBP 1,059.01 per ounce
05 July: USD 1,344.75, EUR 1,207.05 & GBP 1,023.89 per ounce
04 July: USD 1,348.75, EUR 1,213.07 & GBP 1,016.42 per ounce
01 July: USD 1,331.75, EUR 1,199.51 & GBP 1,001.34 per ounce
30 June: USD 1,317.00, EUR 1,183.59 & GBP 976.82 per ounce

Silver Prices (LBMA)
08 July: USD 19.72, EUR 17.82 & GBP 15.20 per ounce
07 July: USD 19.95, EUR 18.00 & GBP 15.31 per ounce
06 July: USD 20.43, EUR 18.46 & GBP 15.75 per ounce
05 July: USD 19.73, EUR 17.69 & GBP 14.99 per ounce
04 July: USD 20.36, EUR 18.31 & GBP 15.36 per ounce
01 July: USD 19.24, EUR 17.29 & GBP 14.48 per ounce
30 June: USD 18.36, EUR 16.48 & GBP 13.61 per ounce

Recent Market Updates

– Property Fund Turmoil in the UK has Eerie Echoes of Bear Stearns
– “In Gold We Trust” Annual Report – New Bull Market “Emerging”
– 3 Charts Show “How Precious Brexit Is” for Gold and Silver Bullion
– Gold, Silver Best Performing Assets In H1, 2016 – Up 26% & 38%
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED

– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
–  Martin Wolf: There Will Be Another “Huge” Financial Crisis

 

end

 

Gold soars on the low bond yields!

(courtesy zero hedge)

 

Gold, Yen, Bonds Soar

Gold surged back over $1370, USDJPY plunged to 100, Silver broke above $20, and bond yields are tumbling…

click image for large legible version

 

Leaving bonds, stocks, and gold green post-payrolls…

 

end

 

Ted Butlers’ important paper today:

(courtesy Ted Butler)

 

 

Turning of the Tide?

Theodore Butler

|

July 7, 2016 – 11:08am

 

The price fireworks over the July 4 holiday, particularly in silver, were met with an outpouring of commentary and renewed interest. Not only have precious metals prices soared to levels not seen in a couple of years, it’s hard for me to recall a time with more input from different voices. It’s also hard to believe that it was only six months ago that gold and silver were locked in nearly the opposite situation. So the obvious questions are what happened and, more importantly, what is likely to occur from here?

I continue to believe that the main price driver for gold and silver was the historic positioning changes in COMEX futures over the past six months. Year to date, the now $300+ rally in gold and $6+ rally in silver, were driven by more than 30 million oz of paper gold and 325 million oz of paper silver on the COMEX, bought principally by managed money technical funds and sold by commercials (mostly banks).

In addition, the price rally in gold, in particular, set off significant buying in ETFs and other investment vehicles in which massive amounts of physical gold were purchased and deposited. In six months, nearly 20 million oz of physical gold were deposited into ETFs and COMEX warehouses (11 million oz in GLD alone), further cementing the gold rally. In dollar terms, that comes to $25 billion. The physical flows into silver have been much smaller in dollar terms as less than $1 billion worth of silver (40 million oz) has been deposited in silver ETFs, although there are recent signs that may be changing.

The purchase of so much physical gold has apparently thwarted the usual outcome of an extremely bearish COT market structure causing a big price selloff, or at least so far. Physical metal demand is understandable because it is near impossible to construct a fundamental bear case for gold or silver. I don’t think many would disagree over what occurred these past six months, namely, historic COMEX positioning, coupled with massive physical buying in gold ETFs. Now what?

In contemplating what occurs next, it comes down to will the commercial traders succeed in turning price lower and triggering off technical fund selling on the COMEX and, at the same time, cool off ETF demand for physical metal? Up until very recently, history favored the commercials succeeding for the simple reason that they had never lost. Stated differently, the commercials as a whole and particularly the largest commercial traders had never been forced to buy back short contracts in COMEX gold and silver on rising prices.

I’ve tried to characterize the circumstance in black and white terms in that either the commercials would prevail as usual and drive prices lower or would fail for the very first time. The chance for failure was predicated on the unusually large financial risk the commercials had found themselves in as a result of historically large and concentrated short positions in COMEX gold and silver. Further, the possibility of commercial failure was augmented by a potential double cross by JPMorgan, which has accumulated half a billion ounces of physical silver and perhaps a large physical gold position as well.

To be fair, either outcome, a price selloff or surge, must be considered possible, but recent developments have raised the odds of a commercial failure in which prices surge, especially for silver. I’m still of the mind that we will go straight up or jiggle down one more time before then moving straight up, but it’s more important to focus on the facts and figures and the reasoning behind the increased odds of something that has never happened before. It has to do with the money game on the COMEX.

Through yesterday (July 5), the commercials had never been this deep ($2.1 billion) in the hole before in combined gold and silver losses; so in the truest sense of the word, these losses are unprecedented. Since futures trading is a zero sum game, meaning that what the shorts lose, the longs gain (and vice versa), the open profits for the managed money technical funds longs have also never been larger.  These large open losses to the commercial shorts makes them both more vulnerable to further losses and more desperate to turn prices down.

Make no mistake – whether the commercials succeed or not is what will determine which way gold and silver prices move in the immediate future. Even if the commercials prevail yet again, and that is far from certain, the tide seems to be turning on the whole COMEX game that has existed for decades. I believe there are a number of factors pointing to changes in the usual business of setting gold and silver prices.

For one thing, it’s hard to characterize the current extreme set up in COMEX market structure as being deliberately constructed by the commercials in its current form. After all, who would knowingly dig themselves into the deep hole the commercials find themselves in? What’s most unprecedented about current circumstances is that never in the past have gold and silver prices rallied strongly after historic commercial short positions had been established. Yet, for the very first time, prices have so rallied.

It’s not possible the commercials intended to be billions of dollars in the hole and the most plausible explanation for why they are so deep in the red is simple miscalculation. And if the commercials have miscalculated to this point, that would seem to increase the odds of continued miscalculation, leading to a total failure which I would define as aggressive short covering on escalating prices. I don’t think anyone could conclude that the commercials have the technical funds exactly where the commercials want them to be. At this point, given the positions and overall price levels, the best the commercials could hope for would be to rig prices low enough to recoup their sizable open losses and get out of this jam without being decimated. It’s almost impossible to imagine that the commercials deliberately put themselves in a $2 billion hole in order to score billions of dollars of profits in the end.

Along those same lines, it doesn’t seem plausible that the phenomenal demand for physical gold in world ETFs was fully anticipated by the commercials. There was no evidence, for example, at the start of the year that the commercials held vast amounts of physical gold that they were seeking to unload. To the contrary, commercial net short positions in COMEX gold (and silver) were at extreme lows. If the commercials were expecting big physical buying in gold, they wouldn’t have rushed onto the short side so early and aggressively.

I believe the massive and, largely, unanticipated demand for physical gold this year not only adds to the premise of commercial miscalculation, but holds special potential significance for silver. As I indicated earlier, surging physical ETF investment demand has largely been confined to gold, but could and may be developing in silver, based upon price and volume patterns in silver ETFs, including the largest, SLV.

It’s kind of remarkable that $25 billion worth of gold has come into world ETFs over the past six months, while less than a billion dollars’ worth of physical silver has come into the world’s silver ETFs. Not that gold isn’t the larger market, but there are other instances where the dollar demand for silver comes close and sometimes exceeds the dollar demand for gold, like in sales of Eagles from the US Mint. While gold did outperform silver pricewise earlier in the year, more recently silver has outpaced gold in the performance department. I can’t help but think that if silver is doing so well despite the lack of physical demand compared to gold this year, what the heck will silver do when physical investment demand kicks in, as is almost certain at some point.

In fact, that’s always been the prime component for my investment case in silver – the likelihood of a physical shortage.  Now, more than ever, does the potential for a physical silver shortage exist. And while I have been amazed at the quantity of physical gold that has flowed into the ETFs this year, to this point the lack of big deposits in SLV and other silver ETFs leaves intact the possibility that no big quantities of physical silver are available to the market near current prices.

Since it has been a while, let me outline the silver shortage premise. First off, I am referring to a coming shortage in the form of silver that matters most – 1000 oz bars. Shortages in supplies of Silver Eagles or smaller bars of silver have gotten to be somewhat of a regular affair over the past few years, but do not directly impact the wholesale price of silver. The wholesale price of silver is determined by 1000 oz bars, because they are the industry and investment standard.

Apparently overlooked by many, is the tiny quantity of 1000 oz bars of silver in existence. The entire world supply of verifiable 1000 oz bars in existence (including ETF and COMEX inventories)  is just under 900 million oz, to which I would add 500 or 600 million oz in unrecorded 1000 oz bars (of which I believe JPMorgan holds the majority). Let’s call it 1.5 billion oz, worth around $30 billion, compared to known gold in all forms of 5.5 billion oz, worth $7.5 trillion. In dollar terms, there is more than 250 times more gold than silver in the world. Common sense would suggest if there is going to be a shortage, it would likely occur in a commodity where inventories are small to begin with.

But like most investment assets, including gold, very little of what exists is truly available for sale at any point in time. That’s because relatively few sellers exist at any time in any asset or investment, usually amounting to no more than 5% or 10% of the total of any asset and sometimes much less. In silver, the 1.5 billion oz in the form of 1000 oz bars, probably has an actual availability of no more than 100 million oz. In other words, no more than $2 billion worth of silver could be bought at any time (say over a month or so). I noted earlier that less than $1 billion of silver in 1000 oz bar form had been bought by ETFs over the past six months.

But we live in an investment era when many billions of dollars could flow or change direction at any time, almost instantly. Should the smallest amount of money get directed towards silver, say 10% of what flowed into gold ETFs over the past six months or $2 billion, it would likely absorb and exceed the amount of metal available. In addition to sending prices higher, sudden investment demand would disrupt the entire silver supply chain and lead to the “doomsday” effect in silver – an industrial user inventory buying panic.

It would work like this. Investment demand for 1000 oz bars of silver, either through ETF demand or COMEX deliveries, triggered by higher prices (silver is up more than any other commodity or asset this year), triggers further investment buying until the supply of available 1000 oz bars are temporarily exhausted. But because 90% of silver demand is earmarked to industrial or total fabrication demand, the investment buying surge will result in growing delays in delivery of 1000 oz bars to users. This will cause those users denied timely delivery to behave like any industrial consumer when faced with the shortage of any vital commodity, namely, to not only buy, but buy more than usual, adding to the physical shortage.

Certainly, regular readers know I have held this industrial user buying panic premise from the beginning and while we came close to physical shortage in early 2011, my premise has yet to fully blossom. Not only do I see my premise playing out, I believe the first stage, investment buying, may have begun or, at a minimum, is set to begin, based upon recent buying in SLV. The recurring image in my mind is that the coming silver user buying panic is like the great white shark lurking just off the beach. It doesn’t matter until you cross its path, but when, not if, investment buying depletes the available supply of 1000 oz bars, industrial users will bite the silver market like never seen.

In fact, this is the main difference between gold and silver. Gold is not an industrial commodity. Because silver is an industrial commodity, both world inventories and current production have been and are reduced by industrial demand. Very few recognize just how much this has depleted world silver inventories and available current production. World silver inventories are down more than 90% from 75 years ago and only 10% (100 million oz) are available from current production for investment in 1000 oz bars. It will take much higher prices to balance supply once investment and user demand kicks in. This is the case for $100 and higher silver. Not the end of the world as we know it, just the ignition of investment demand and user inventory buying.

That’s what makes the current set up so intriguing and dramatic. At precisely the same time 8 commercials have never been short so much silver on the COMEX (nearly 500 million oz), higher prices have put those traders more deeply underwater (in combination with gold) than ever, while those same rising prices threaten to ignite an investment stampede. It’s as if one were deliberately chumming the waters off shore to excite the great white shark of user inventory buying.

Even more stunning is the quickness in which the commercial losses developed. Only five weeks ago, the commercials were net-net ahead for the year by around $1.5 billion, meaning there has been a turnaround in the collective commercial position in COMEX gold and silver of close to $4 billion.

These are big numbers in any event, but when you distribute the turnaround and assign losses by the actual number of commercial traders holding short positions, the numbers become quite dramatic. COT data indicates only 8 traders hold the entire commercial net short position in silver (nearly 500 million oz) and 8 traders in COMEX gold hold 86% (28 million oz) of the 33 million oz total commercial record net short position. The $4 billion turnaround in commercial financial results over the past 5 weeks comes to many hundreds of millions of dollars per trader. Not all of the $4 billion collective commercial negative turnaround needed to be deposited as additional margin, but at least half did.

I’ve removed JPMorgan from my calculations of ongoing commercial losses, as I believe the bank holds so much physical silver and perhaps enough gold to offset losses on COMEX short positions. Here’s an interesting thought – at current silver prices, JPMorgan is now close to even on the 500 million oz of physical silver I claim that it started buying 5 years ago and above $30 an ounce. Previously, I calculated that JPM had an average price of around $20 an ounce and I think I remember dismissing concerns that the bank may be underwater by as much as $6 per ounce or $3 billion back when silver traded at $14.  Perhaps the real lesson is that if an average price of $20 is good enough for JPMorgan, it should be good enough for anyone.

The circumstances surrounding JPMorgan are very much different from that of the other commercials. Because JPM holds so much physical metal, it is immune from damage to the upside. That cannot be said of the other commercials who appear to be taking it in the teeth. And, of course, it is the difference at the core of the double cross premise. Should JPMorgan not join in with the other commercials as short sellers of last resort, it’s hard for me to see how the commercial short selling scam in COMEX silver and gold doesn’t unwind.

Considering the price volatility in silver, I’m surprised that the CME hasn’t raised margin requirements yet. I think I know why the CME hasn’t raised silver margins and that’s because as prices are rising (as has been the case in silver) any increase in margin requirements hurts the shorts and not the longs. That’s because longs profit as prices rise and silver has risen enough that longs have enough open profit to meet any additional margin requirements without having to deposit additional funds. Those same rising prices have been causing the shorts to come up with additional margin on a daily basis and any increase in exchange margin requirements would force the shorts to put up even more.  Since the commercial shorts are of more concern to the CME than the longs, the exchange has dragged its heels in raising margins.

What the crooks at the CME prefer to do is to wait for a turn in prices lower and then raise margins so that the shorts can use developing equity from falling prices to cover any increase in posted margins and the longs are the ones who have to come up with more money and not the shorts. It’s an old dirty trick last employed in the great silver smack down of May 2011. The remarkable feature is that the CME hasn’t been able to employ this trick yet because silver prices hadn’t made a turn down through today’s close. But expect these crooks to do so as soon as they can.

Ted Butler

 

end

 

This is something that I have been pounding the table on!  China is devaluing faster than expected and this is sending a huge deflation shock throughout the globe

(courtesy Ambrose Evans Pritchard/UKTelegraph)

 

Ambrose Evans-Pritchard: World faces deflation shock as China devalues faster

Section:

By Ambrose Evans-Pritchard
The Telegraph, London
Thursday, July 7, 2016

China has abandoned a solemn pledge to keep its exchange rate stable and is carrying out a systematic devaluation of the yuan, sending a powerful deflationary impulse through a global economy already caught in a 1930s trap.

The country’s currency basket has been sliding at an annual pace of 12pc since the start of the year. This has picked up sharply since the Brexit vote, suggesting that the People’s Bank may be taking advantage of the distraction to push through a sharper devaluation.

“This makes a mockery of the PBOC’s suggestion that its policy is to keep the currency’s value stable,” said Mark Williams, chief China economist at Capital Economics. “Markets will not take PBOC policy statements at face value in the future.”

Mr Williams said it is unclear whether Beijing intended to deceive investors all along when it gave categorical assurances earlier this year, or whether it is feeding on events. …

… For the remainder of the report:

http://www.telegraph.co.uk/business/2016/07/07/world-faces-deflation-sho…

 

 

end

 

Alasdair Macleod on how to  use gold as money

(courtesy Alasdair Macleod)

 

Alasdair Macleod: GoldMoney debit card proves gold remains money and provides choice

Section:

Using GoldMoney’s Pre-loaded Cards

By Alasdair Macleod
GoldMoney, St. Helier, Jersey, Channel Islands
Thursday, July 7, 2016

At Goldmoney we have noticed that account holders sell gold to preload their Goldmoney cards when gold rises.

This makes sense. People are using their accounts as money, which is exactly what they should be doing.

A Goldmoney payments account compliments a fiat currency account and gives people options. Everyone who has a Goldmoney account also has a conventional debit or credit card, both of which they can use for day-to-day payments. By running a Goldmoney account alongside a conventional bank card, you give yourself added payment flexibility.

Let’s assume you plan to take someone out to dinner. Beforehand you look at the price of gold. If it is up, measured in your normal currency, preloading your card to pay for your dinner will make it less costly than using your normal bank card, compared with yesterday. If the gold price is down, you just use your bank card.
In other words, you use the money that gives you the best deal.

This is the point about money. It is not an investment, so computing what you initially paid for gold and your profit or loss on it is not the point. You have to look at it as a competing form of money, which can give you an economic benefit.

I don’t think any analysts have adequately described the benefits of being able to use two different forms of money for daily purchases, because this facility has been rarely available until now. …

… For the remainder of the report:

https://www.goldmoney.com/research/goldmoney-insights/using-goldmoneys-p…

end

China resumes its 15.55 tonnes of monthly “addition of gold”

(courtesy Bloomberg)

 

China resumes monthly gold buying to diversify reserves

Section:

From Bloomberg News
Thursday, July 7, 2016

China, the world’s biggest producer and consumer of gold, added about 500,000 ounces to central bank reserves in June, restarting monthly purchases to diversify holdings after taking a breather in May.

The People’s Bank of China increased assets to 58.62 million ounces, or about 1,823 metric tons, from 58.14 million ounces in May when they were unchanged, according to data on the central bank’s website. The country has boosted its hoard in 11 out of the past 12 months after announcing a 57 percent increase to 53.32 million ounces since 2009. …

… For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-07-07/china-resumes-monthly-…

end

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  UP to 6.68550 (  DEVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.6980) / Shanghai bourse  DOWN 28.75 OR 0.95%   / HANG SANG CLOSED DOWN 142.75 OR 1.19% 

2 Nikkei closed DOWN 169.26 OR 1.19% /USA: YEN FALLS TO 100.49

3. Europe stocks opened ALL IN THE GREEN   /USA dollar index DOWN to 96.10/Euro UP to 1.1065

3b Japan 10 year bond yield: FALLS  TO -.282%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 101.04

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  45.89  and Brent: 46.89

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 UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to -.175%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate RISE to 7.70%/: 

3j Greek 10 year bond yield RISE to  : 7.95%   (YIELD CURVE NOW SLIGHTLY INVERTED TO FLAT)

3k Gold at $1356.80/silver $19.74(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 57/100 in  roubles/dollar) 64.02-

3m oil into the 45 dollar handle for WTI and 47 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/GOT a LARGE DEvaluation DOWNWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 100.49 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9798 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0878 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year RISES to  -.175%

/German 10+ year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

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 1.388% early this morning. Thirty year rate  at 2.13% /POLICY ERROR)

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

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

US Futures Rebound After Volatile Session, All Eyes On June Payrolls

ASIAN AFFAIRS

i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 28.75 POINTS OR 0.95%/ /Hang Sang closed DOWN 142.75 OR 1.19%. The Nikkei closed DOWN 169.26 POINTS OR 1.11% Australia’s all ordinaires  CLOSED UP 0.09% Chinese yuan (ONSHORE) closed UP at 6.6855 /Oil ROSE to 45.59 dollars per barrel for WTI and 46.89 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.6980 yuan to the dollar vs 6.68550 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHLTY AS MORE USA DOLLARS LEAVES CHINAS SHORES. 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

NONE TODAY

b) REPORT ON CHINA

NONE TODAY

4. EUROPEAN AFFAIRS

Such a great reason for the gold to be down this evening: Bremen Landesbank on the verge of failure!! They will need a bailout.

(courtesy zero hedge)

Europe’s Bank Crisis Arrives In Germany: €29 Billion Bremen Landesbank On The Verge Of Failure

When most recently reporting on the latest European banking crisis, yesterday we observed a surprising development involving Deutsche Bank, namely the bank’s decision to quietly liquidate some of its shipping loans. As Reuters reported, “Deutsche Bank is looking to sell at least $1 billion of shipping loans to lighten its exposure to the sector whose lenders face closer scrutiny from the European Central Bank. 

“They are looking to lighten their portfolio and this includes toxic debt. It makes commercial sense to try and sell off some of their book,” one finance source said. Deutsche Bank, which has around $5 billion to $6 billion worth of total exposure to the shipping sector, declined to comment.”

This confirms what had long been speculated, if not confirmed, namely that German banks have been some of the biggest lenders to the shipping sector, a sector which has since found itself in significant trouble as a result of the ongoing slowdown in global trade.

And now, it appears that some shipping loans gone very bad could be the catalyst for Europe’s banking crisis to finally breach the most impenetrable border of all, that of Germany.

Because it is in Germany where we find what may be the next domino to fall as part of Europe’s latest banking crisis incarnation: Bremen Landesbank.

Several weeks ago, the FT reported that the German Landesbank NordLB was considering taking full control of its smaller peer Bremer Landesbank (BLB), which is struggling under the weight of a portfolio of bad shipping loans. BLB, in which NordLB already owns 54.8%, warned last week that it would have to take a €400m writedown on its shipping portfolio, and that as a result it was facing a “mid-triple-digit million loss” this year.

As the FT added, the admission prompted concerns about the health of the Bremen-based bank, which had €29bn in assets at the end of 2015, and BLB’s owners have since been holding talks on how to bolster the stricken lender’s capital position.

In a statement made one month ago, NordLB’s chief executive, Gunter Dunkel, and Bremen’s finance minister, Karoline Linnert, said that BLB’s owners — NordLB, the city of Bremen, and the savings banks association in Northrhine Westphalia — had agreed to keep BLB’s capital “intact at an appropriate level”. “The form and size of the capital increase are currently being intensively discussed,” NordLB and the city of Bremen said. “The necessary decisions will be carried out by the end of 2016.”

The market quickly read, and internalized the news, then promptly moved on: after all, with a bigger backer set to rescue the bank, there is nothing to worry about.

Just one problem: that may no longer be the case.

In an article released moments ago by Germany’s Handelsblatt titled a “Capital increase for ailing Landesbank is questionable“, the German paper writes that “shipping loans have brought Bremer LB into distress and the bank can not survive without government help, but a direct capital injection from Lower Saxony now looks unlikey.”

The punchline, and where the narrative veers dramatically from the smooth sailing scenario presented last month by the FT, is that according to “Lower Saxony’ President Stephen Weil, a capital increase by his state and Bremen for the ailing bank is currently not realistic. “The classic method, namely when partners provide the necessary capital, does not seem to work,” the Prime Minister said to the “Weser-Kurier”. But, he added, “we will make every effort to save the Bremer Landesbank.

Bremer LB’s sudden fall from bailout grace appears to be the latest result of political conflict, because as Handelsblatt notes, Weil was responding to remarks by his colleague Carsten Sieling (SPD), who excluded capital support for the BLB. In a scenario that Italy is all too familiar with, Sieling said that such an action would not be in line with EU requirements.

In other words, Germany may now find itself in the ironic situation that its own bailout intransigence will force it to engage in a bail in for one of its bigger banks.

To be sure, it is possible that a solution is found, and Merkel will need to concede to not only a Bremen LB bailout, but one of Italy as well, as the two would go hand in hand. On the other hand, it just may be the case that Germany refuses to save even one of its own.

And while the final outcome remains uncertain, the market quickly read between the lines and responded in preparation for a worst-case outcome: in intraday trading the bank’s “equity-like” 9.5% Contingent Convertible bond of 2049 has plunged by almost half from 120 to 73 in minutes, a move which has likewise spooked broader global markets.

 

end

 

Our good friends in Holland have a proud distinction of joining the NIRP club

(courtesy zero hedge)

 

Going Dutch? Netherlands Joins The 10Y NIRP Club

For the first time in Dutch history, 10Y government bond yields have turned negative (-0.001% intraday) closing at 0.00%…

 

 

Joining Switzerland, Japan, Germany, and Denmark…

 

Pushing Global NIRP bonds over the $13 trillion!

 

Chart: Bloomberg

OIL ISSUES

Oil immediately plunges to the 44 dollar handle:

(courtesy zero hedge)

 

WTI Plunges To $44 Handle As 2015 Redux Looms

After the quick post-payrolls exuberance, WTI Crude prices are plunging back to a $44 handle:

 

Tumbling to fresh 2 month lows.

 

As a repeat of the 2015 July swoon looks increasingly more likely:

 

But stocks are ignoring this for now.

end

Then he hear that the USA rig count rises by the most in a year as oil rose into the high 40’s
(courtesy zero hedge)

US Oil Rig Count Rises Most In A Year

Having bounced off their earlier tumble lows, crude prices extended gaines despite the US oil rig count rose by another 10 this week (11 last week) to 351 – perfectly tracking the lagged crude price. This is the biggest 2-week rise in rig counts since July 2015.

The Total rig count rose by 9 to 440.

  • *OIL RIGS IN PERMIAN UP BY 4 TO 158: BAKER HUGHES
  • *OIL RIGS IN WILLISTON UP BY 2 TO 28: BAKER HUGHES

 

And of course, oil rallies on this??

 

Chart: Bloomberg

 

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

Euro/USA   1.1065 UP .0003 (STILL  REACTING TO BREXIT)

USA/JAPAN YEN 100.49  DOWN 0.261 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.2991 UP .0085(MORE STIMULUS PLANNED)

USA/CAN 1.2992 DOWN .0006

Early THIS FRIDAY morning in Europe, the Euro ROSE by 3 basis points, trading now JUST above the important 1.08 level RISING to 1.1065; Europe is still reacting to BREXIT,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 28.75 POINTS OR 0.95%   / Hang Sang CLOSED DOWN 142.75 OR 1.19%/AUSTRALIA IS HIGHER BY 0.09%/ EUROPEAN BOURSES ARE ALL DEEPLY 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 DOWN 169.26 POINTS OR 1.11% 

Trading from Europe and Asia:
1. Europe stocks ALL DEEPLY IN THE GREEN AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 142.75 OR 1.19% ,Shanghai CLOSED DOWN  28.75 POINTS OR .95%  / Australia BOURSE IN THE GREEN: /Nikkei (Japan) CLOSED  IN THE RED/India’s Sensex IN THE GREEN  

Gold very early morning trading: $1356.80

silver:$19.74 

Early FRIDAY morning USA 10 year bond yield: 1.388% !!! UP 1/2 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 FALLS to 2.130 DOWN 1 in basis points from THURSDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early FRIDAY morning: 96.10 DOWN 16 CENTS from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

END

And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield:  3.08% PAR in basis points from THURSDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.285% DOWN 1  in   basis points from THURSDAY

SPANISH 10 YR BOND YIELD: 1.15%  DOWN 3 IN basis points from THURSDAY( this is totally nuts!!/AND THE MARKETS GO UP???)

ITALIAN 10 YR BOND YIELD: 1.19 DOWN 6 IN basis points from THURSDAY (again totally nuts/AND MARKETS GO UP???)

the Italian 10 yr bond yield is trading 4 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -.189% UP  2 IN  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

 

Euro/USA 1.1051 DOWN .0011 (Euro =DOWN 11 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 100.42 DOWN 0.327(Yen UP 33 basis points )

Great Britain/USA 1.2954 UP .0048 ( Pound UP 48 basis points/BREXIT DECISION AFFIRMATIVE/QE TO START AGAIN/UK DOWNGRADED

USA/Canada 1.3038-UP 0.0041 (Canadian dollar DOWN 41 basis points  AS OIL FELL  (WTI AT $45.17).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 11 basis points to trade at 1.1051

The Yen ROSE to 100.42 for a GAIN of 333 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was UP 48 basis points, trading at 1.2954

The Canadian dollar FELL by 41 basis points to 1.3038, WITH WTI OIL AT:  $45.12

The USA/Yuan closed at 6.6873

the 10 yr Japanese bond yield closed at -.285% DOWN 1  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 4 IN basis points from THURSDAY at 1.354% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.093 DOWN 6  in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 96.30 UP 5 CENTS  ON THE DAY/4 PM AND THE DOW RISES BY 200 + POINTS???

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

London:  CLOSED UP  56.85 OR 0.87%
German Dax :CLOSED UP 210.88 OR  2.24%
Paris Cac  CLOSED UP 72.83  OR 1.77%
Spain IBEX CLOSED UP 177.70 OR 2.22%
Italian MIB: CLOSED UP 430.22 OR 4.08%

The Dow was UP 250.86  points or 1.40%

NASDAQ UP 79.95 points or 1.64%
WTI Oil price; 45.12 at 4:30 pm;

Brent Oil: 46.57

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  63.93 (ROUBLE UP 67/100 ROUBLES PER DOLLAR FROM TUESDAY) 

TODAY THE GERMAN YIELD RISES TO -.189%  FOR THE 10 YR BOND

END

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:

WTI CRUDE OIL PRICE 5 PM:45.12

BRENT: 46.59

USA 10 YR BOND YIELD: 1.3533% 

USA DOLLAR INDEX: 96.30 UP 5 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.2938 UP .0033 or 33 basis pts.

German 10 yr bond yield at 5 pm: -.189%

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

Jobs Bounce Sends Stocks Soaring To Record High As Bond Yields Hit Record Lows

Well punk, “do you feel wealthy?”

 

First things first, there is this… (2130.82 record close, 2134.72 record intra high)

  • *S&P 500 RALLIES 1.6% TO 2,130.83, RISING ABOVE RECORD CLOSE

 

And then there is this… for 2016…

 

And since Brexit…

 

And today…

 

While on the topic – cash indices reached pre-Brexit levels…

 

Stocks went sideways after Europe closed…

 

And S&P Futures managed to run the stops above the Brexit peak…

 

But financials remain below pre-Brexit levels…

 

Despite the best efforts to mash VIX, S&P cash couldn’t hold above the record close…

 

Since June’s dismal payrolls print, Gold is the major outperformer…

 

But today’s “goldilocks” data meant buy everything…

 

Trannies rose most in 4 months today – having “death-crossed” on Wednesday…

 

VIX has dropped over 48% in the last two weeks… the biggest collapse in fear ever….

 

And stocks and oil decoupled…

 

Only short-dated yields rose on the day and week as the long-end continued to plunge..

 

2s30s has flattened for 6 straight days, crushing the yield curve by 28bps in the last 2 weeks – the biggest crash since the US downgrade in 2011

 

So curve is collapsing… BUY BANKS??!!

 

30Y Yields closed on the lows today… at an all-time record low…

 

Stocks-to-Bonds yield spread near 8 year highs…

 

On the day, the USD Index ended unchanged, despite some significant swings around the payrolls print…

 

Commodities were mixed with PMs gaining but crude and copper getting crushed…

  • Copper’s worst week in 6weeks
  • Crude’s worst week in 6 months

  • Gold up for the 6th straight week…longest streak since Aug 2011
  • Silver up for the 6th straight week…longest streak since April 2011

So – to summarize – Buy Stocks, Buy Bonds, Buy Gold, Fade the Dollar, Sell VIX… sounds an aweful lot like front-running QE4 trades.

Charts: Bloomberg

end

 

Zero hedge’s version of the employment report:  287,000 job gain

(courtesy zero hedge)

June Employment Soars By 287K, Smashing Expectations, Highest Since October

So much for that terrible May jobs report: one month after the BLS reported the worst jobs report since 2010, moments ago the BLS reported that in June jobs increased by a whopping 287K, above not only the 180K consensus, but also well above the highest estimate, the highest increase since the 295K reported in October 2015, despite a downward revision to last month’s 38K which is now up 11K.

The change in total nonfarm payroll employment for April was revised from +123,000 to +144,000, and the change for May was revised from +38,000 to +11,000. With these revisions, employment gains in April and May combined were 6,000 less, on net, than previously reported. Over the past 3 months, job gains have averaged 147,000 per month.

 

This payrolls print is a 4 standard deviation beat and well above even the highest economist estimate…

 

Curiously, while the Establishment survey was a blowout, according to the Household Survey, the number of unemployed actually soared by 347K to 7.783MM which meant that the unemployment rate jumped from 4.7% to 4.9%, while the number of employed rose by just 37K, indicating a substantial divergence between the Household and Establishment Surveys.

The number of persons employed part time for economic reasons, or involuntary part-time workers, decreased by 587,000 to 5.8 million in June, offsetting an increase in May. These individuals, who would have preferred full-time  employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

Also according to the household survey, there were 151.1MM people employed in June, an increase of 1.6% from a month ago.

As a result of the latest changes in the labor force, where the number of people not in the labor force declined by 191K, the participation rate rose modestly from 62.6% to 62.7%.

 

Additionally, while consensus had expected average hourly earnings to rise by 0.2% in June, wages managed only a 0.1% increase as most of the jobs added remained of very low quality, keeping the annual rate of increase at 2.6%, below the expected 2.7%.

 

More details from the full report:

Total nonfarm payroll employment increased by 287,000 in June, after changing little  in May (+11,000). In June, job growth occurred in leisure and hospitality, health  care and social assistance, and financial activities. Employment also rose in  information, largely reflecting the return of workers from a strike. (See table B-1.)

Leisure and hospitality added 59,000 jobs in June, following little employment change  in the prior month. In June, employment increased in performing arts and spectator sports (+14,000), after edging down in May. Employment in food services and drinking places changed little over the month (+22,000). Job gains in leisure and hospitality have averaged 27,000 per month thus far this year, down from an average of 37,000 in 2015, reflecting slower job growth in food services and drinking places.

Health care and social assistance added 58,000 jobs in June. Health care employment increased by 39,000 over the month. Job gains occurred in ambulatory health care services (+19,000) and hospitals (+15,000), about in line with average monthly gains over the prior 12 months in each industry. Within social assistance, child day care services added 15,000 jobs in June.

Employment in financial activities rose by 16,000 in June and has risen by 163,000 over the year.

Employment in information increased by 44,000 in June. Employment rose in telecommuni-cations (+28,000), largely reflecting the return of workers from a strike. Employment increased in motion picture and sound recording industries (+11,000), after a decrease of similar magnitude in May.

Employment in professional and business services continued to trend up in June (+38,000).Thus far this year, the industry has added an average of 30,000 jobs per month, compared with an average monthly gain of 52,000 in 2015.

Employment in retail trade edged up by 30,000 in June, after changing little over the prior 2 months. In June, job gains occurred in general merchandise stores (+9,000) and in health and personal care stores (+5,000). Retail trade has added 313,000 jobs over the year.

Employment in mining continued to trend down in June (-6,000). Since reaching a peak in September 2014, mining has lost 211,000 jobs.

Employment in other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, and government, showed little or no change in June.

In June, the average workweek for all employees on private nonfarm payrolls was 34.4 hours for the fifth consecutive month. The manufacturing workweek (40.7 hours) and manufacturing overtime (3.3 hours) were also unchanged over the month. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See tables B-2 and B-7.)

In June, average hourly earnings for all employees on private nonfarm payrolls edged up (+2 cents) to $25.61, following a 6-cent increase in May. Over the year, average hourly earnings have risen by 2.6 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.51 in June. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for April was revised from +123,000 to +144,000, and the change for May was revised from +38,000 to +11,000. With these revisions, employment gains in April and May combined were 6,000 less, on net, than previously reported. Over the past 3 months, job gains have averaged 147,000 per month.

 

 

And here is where the jobs went: in a nutshell mostly minimum wage jobs

(courtesy zero hedge)

Where The June Jobs Were

While the quantitative aspect of the June jobs report was stellar, so stellar in fact that not a single Wall Street forecaster expected it would happen, the next question is what was the qualitative component of this unprecedented Establishment Survey beat. Here are the details of the 287K jobs supposedly added:

  • Leisure and Hospitality added 59,000 minimum wage jobs
  • Education and Health also added 59,000 mostly minimum wage jobs
  • Retail Trade added 30,000 certainly minimum wage jobs

With more than half of job additions being minimum wage one can see why the June average hourly earnings increase was below the expected 0.2% (and 2.7% Y/Y), instead printing at 0.1% and 2.6%.

Where were the rest of the job increases: Infromation +44K, Professional Services (ex temps) +23K, Government +22K, Financial Services supposedly added 16K just dont tell all those recently laid off bankers, temp workers rose by 15K, and somehow even manufacturing added 14K despite the ADP report seeing the biggest drop in mfg employment since 2010.

Were there any job losses: yes, in mining and logging, which lost 5K jobs and transportation and warehousing which saw a 9.4K drop as the heavy trucking collapse hits home.

The full breakdow.

And now for the real story:  90% of the job gains went to our seniors:

 

(courtesy zero hedge)

90% Of June Job Gains Went To Workers 55 And Older

end

 

And now the real truth behind the jobs report: a loss of 119,000 jobs

(courtesy David rosenberg/Gluskin Sheff/

 

The Bearish David Rosenberg Reemerges: “What If I Told You Employment Actually Declined 119,000 In June”

After several years of trying to put a positive spin on economic data in an attempt to validate the success of Fed policies, which in light of recent events have clearly failed with bond yields today touching new all time lows and market-derived inflation expectations about as low as they have ever been while even CNBC now admits that the only policy target of the Yellen Fed is to keep stocks as high as possible (there it is clearly succeeding for now), it was somewhat surprising to see Rosie “the bull” vaporize, and be replaced by the bearish side of David Rosenberg in such vigorous fashion today after years of hibernation.

The metamorphosis took place in what was a rather scathing take on today’s jobs report, about which he said that “it makes little or no sense that the business sector would be so cautious over committing capital to the real economy and at the same time embark on a sustained hiring spree.”

We agree. Here are the highlights:

What if I told you that employment actually declined 119,000 in June and has been faltering now for three months in a row?  Yes, that is indeed the case.

 

Of course, the focus, as always is on the non-farm payroll report but keep in mind that while this is the data series that moves markets, it does not necessarily have the final word on how the labor market is truly faring.

 

Okay, so let’s get the pablum out of the way first. Nonfarm payrolls surprised yet again but this time to the upside — surging 287,000 in the best showing since last October and again making a mockery of the consensus economics community which penned in a 180,000 bounce…. when taking May and June together, they average out to be less than 150,000 versus the twelve-month average of 200,000 so even as the June data pulled a major upside surprise, the overall view that the pace of job creation is moderating remains fully intact.

 

It’s not as if the Household sector ratified the seemingly encouraging news contained in the payroll data as this survey showed a tepid 67,000 job gain last month and rather ominously, in fact, has completely stagnated since February.

 

Historians will tell you that at turning points in the economy, it is the Household survey that tends to get the story right.

 

* * *

 

The simple fact of the matter is that May and June were massive statistical anomalies. The broad trends tell the tale. Go back to June 2014 and the six-month trend in payrolls is running at a 2.2% annual rate and the three-month trend at 2.4%. A year ago, as of June 2015, the six-month pace was 1.9% and the three-month at 2.2%. Fast forward to today, and the six-month annualized rate is 1.4% and the three-month has slowed all the way down to a 1.2%. This is otherwise known as looking at the big picture.

But wait, Rosenberg said jobs actually declined? Here is his math:

When the Household survey is put on the same comparable footing as the payroll series (the payroll and population-concept adjusted number), employment fell 119,000 in June — again calling into question the veracity of the actual payroll report — and is down 517,000 through this span. The six-month trend has dipped below the zero-line and this has happened but two other times during this seven-year expansion.

See, it isn’t that difficult to have a critical eye on government data and refuse to drink the BLS Kool-Aid now.  His conclusion:

The Fed may well be breathing a sigh of relief, but we are not out of the woods yet. My advice is to simply ignore those pundits who may conclude that a rate hike is back on the table any time soon.

Actually, the market is already doing that for you David: with stocks at all time highs and bond yields at all time lows, the algos are quite confident that the Fed will not hike for a long, long time. As for the underlying economy, alas that has not matter for nearly a decade, something have said constantly and something which even Rosenberg once again admits.

Source: Gluskin Sheff

 

end

 

Consumer credit jumps up by 19 billion USA courtesy of our favourite: student and auto loans:

(courtesy zero hedge

 

Consumer Credit Jumps $19 Billion In May Thanks To New All Time Highs In Student And Auto Loans

The latest consumer credit report confirmed what we have now known for years: revolving credit remains stagnant at best, with just $2.3 billion in credit card debt added in May, a modest rebound from last month’s $1.4 billion but certainly nowhere near pre-crisis monthly increase levels. Why not? Because US consumers once again found a way to “fungibly” convert non-revolving credit, namely auto and mostly student loans, into purchasing power.

And sure enough, in May another $16.2 billion in non-credit card debt was added, bringing the total monthly increase to $18.55 billion, above the $16 billion consensus.

What this means is that for one more month Americans became even more encumbered by record amounts of student debt and car loans.

Finally, when it comes to the all too generous sources of consumer credit, one entity sticks out.

A Massive crime scene in Dallas as 5 police officers killed

(courtesy zero hedge)

Dallas Shooter, Army Vet Micah Johnson, “Wanted To Kill White People”

Well that about does it for tonight

I am sorry for being late but my computer crashed and I lost everything 5 minutes before publishing

So I had to redo the entire commentary.I was lucky I still retained my data.

all the best

h.

 

 

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3 comments

  1. Thanks for redoing it. I don’t know how we got so lucky to have your dedication for so long.

    Like

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