August 22/Huge increase in GLD (2.38 tonnes) and a huge 3.324 million oz gain in SLV/Raid today on our precious metals with the target being silver/Sabre rattling between Japan and China intensifies along with Russia and the USA/Hillary’s troubles also magnifies as the FBI finds 15,000 more work related emails/

Gold:1337.70 down $3.70

Silver 18.84  down 46 cents

In the access market 5:15 pm

Gold: 1339.30

Silver: 18.92


For the August gold contract month,  we had a good sized 46 notices served upon for 4600 ounces. The total number of notices filed so far for delivery:  13126 for 1,312,600 oz or  tonnes or 40.827 tonnes.  The total amount of gold standing for August is 42.777 tonnes.

In silver we had 0 notices served upon for nil oz. The total number of notices filed so far this month:  471 for 2,355,000 oz.


Today the raid orchestrated by the crooks was aimed at silver.  The relatively high OI for the new upcoming front month of September as well as huge numbers of options in the money is scaring our bankers and thus the need to raid.


Let us have a look at the data for today



In silver, the total open interest FELL BY 962 contracts DOWN to 205,116 AND MOVING AWAY FROM ITS AN ALL TIME RECORD. ALSO THE HIT ON SILVER WAS TINY COMPARED TO THE HUGE WHACK IN   THE  PRICE WHICH FELL  BY 42 CENTS WITH YESTERDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.025 BILLION TO BE EXACT or 146% of annual global silver production (ex Russia &ex China).

In silver we had 0 notices served upon for nil oz

In gold, the total comex gold FELL 5,319 contracts as the price of gold FELL BY $10.80 yesterday . The total gold OI stands at 574,502 contracts.


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


we had a huge change today at the GLD/ a deposit of 2.38 tonnes

Total gold inventory rest tonight at: 958.37 tonnes of gold


we had another huge change  into the SLV, a deposit of 3.324 million oz/   THE SLV/Inventory rests at: 358.793 million oz.

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

1. Today, we had the open interest in silver FELL by 962 contracts DOWN to 205,116 despite the fact that the price of silver FELL BY 42 cents with YESTERDAY’S trading.The gold open interest FELL 5,319 contracts DOWN to 574,502 as the price of gold FELL by $10.80 WITH YESTERDAY’S TRADING.

(report Harvey).


2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge



 i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 23.30 POINTS OR 0.13%/ /Hang Sang closed DOWN 85.94 points or 0.37%. The Nikkei closed UP 59.81 POINTS OR 0.75% Australia’s all ordinaires  CLOSED DOWN 0.21% Chinese yuan (ONSHORE) closed UP at 6.6544/Oil FELL to 47.16 dollars per barrel for WTI and 49.31 for Brent. Stocks in Europe: in the RED . Offshore yuan trades  6.6635 yuan to the dollar vs 6.6544 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHTLY AS  MORE USA DOLLARS  LEAVE CHINA’S SHORES  



More sabre rattling as Japan doubles its F 15 missile payload as escalation in the South China seas escalates:

(courtesy zero  hedge)


i)Hong Kong based Cathay Pacific earnings are totally crushed as corporate travel within China collapses as tourism into China falters terribly

( zero hedge).

ii)The following is a big story.  On Oct 1, China will finally see its yuan included in SDR’s. Now we see the IMF has allowed a new Chinese bond offering denominated in SDR’s with interest paid in yuan.  As China gets to issue more of these bonds there will be less use of dollars circulating the globe. The unwanted dollars would then return to the USA and inflation and quite possibly hyperinflation will be the inevitable


i)The vote for a BREXIT certainly did not cause Armageddon for Britain. However it is giving the country many opportunities to right itself in the face of no growth in Europe.  It is proposing to cut corporate taxes something that Sweden is against but cannot do anything about it.

It sure looks like Britain will be the clear winner with its Brexit with the clock set to start by April 2017:

( Mish Shedlock/)


none today


i)As we outlined to you on Friday, the Vancouver housing market is imploding as the new tax seems to have a devastating effect on the market.

( zero hedge)

ii)Jim Grant on the global economy:  the lack of growth and negative interest rates:

In his words:  “this will turn out to very bad for many people”

(Jim Grant/Christoph Gisiger/Finanz und Wirtschaft)


none today


none today


i)A very important commentary from Stephen Leeb.  He describes how gold will eventually land as the 6th component in the new SDR’s and with that, the only way the world can save itself

( Stephen Leeb/Kingworldnews)

ii)Join Chris Powell, Bill Murphy and all the gang for a gold conference in New Orleans:



i)Markets reaction to Fisher’s hawkish comments at Jackson Hole that a rate hike in 2016 may be in the offering:

( zerohedge)

ii)Looks like our good friend Hillary is in trouble with this:

New emails reveal Hillary Clinton provided special access to foundation donors.

The Clinton Foundation is nothing but a racket and Hilary lied about providing everything work related:

( zero hedge)

iii)And late this afternoon Hillary’s troubles continues as the FBI finds 15,000 more business related emails:

( zero hedge)


Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 574,502 for a LOSS of 5,319 contracts as the price of gold fell by $10.80 with Friday’s trading. We are now in the active month of August.  As I stated this month:”Somebody big is continually standing for the gold metal and continues to do so in August in the same manner as we have witnessed in May, June and July whereby the front delivery month increases in I standing for metal or a slight contraction.  We will no doubt see increases in amount standing in August and probably we will surpass the amount standing on first day notice. 

The big active contract month of August saw it’s OI fall by 165 contracts down to 673.  We had 157 notices filed upon Friday so we lost 8 gold contracts or an additional 800 oz will not stand for delivery in August and these guys no doubt were cash settled for a fiat bonus. The next contract month of Sept saw it’s OI fall by 42 contracts down to 4408.  The September contract still remains extremely elevated and we may have another of those high deliveries rare for a non active month. The next active delivery month is October and here the OI FELL by 277 contracts DOWN to 47,675.  The estimated volume today (which is just comex ales during regular business hours of 8:20 until 1:30 pm est) was POOR at 147,918.  The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was FAIR at 192,312 contracts. The comex is not in backwardation.

Today we had  46 notices filed for  4,600 oz of gold.

And now for the wild silver comex results.  Total silver OI fell by only 962 contracts from 206,725 down to 205,116 despite the HARD fall in the price of silver to the tune of 42 cents on Friday.  We are moving away from the all time record high for silver open interest set on Wednesday August 3:  (224,540). The non active month of August saw it’s OI fall by 78 contracts down to 16.  We had 78 notices served on Friday, so we neither gained nor lost any silver contracts (ounces) will stand for silver in this non active delivery month of August.  The next active month is September and here the OI fell by only 10,659 contracts down to 82,277.We have 7 days left before first day notice.  The volume on the comex today (just comex) came in at 121,295 which is ABSOLUTELY HUGE but many rollovers.  The confirmed volume yesterday (comex and globex) was also huge  at 107,389( with many rollovers). Silver is not in backwardation.  London is in backwardation for several months.
we had 0 notices filed for nil oz
INITIAL standings for AUGUST
 August 22.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
76,106.900 oz
Deposits to the Dealer Inventory in oz 1400.000 oz



Deposits to the Customer Inventory, in oz 
 64,302.000 oz
suppose to be 2,000 kilobars
got wrong weight
No of oz served (contracts) today
46 notices 
4600 oz
No of oz to be served (notices)
627 contracts
(62,700 oz)
Total monthly oz gold served (contracts) so far this month
13,126 contracts (1,312,600 oz)
(40.827 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month    538,.816.3 OZ
Today we had 1 dealer DEPOSIT
i) into Brinks:  another of those crazy and no doubt fraudulent deposits: 1400.000 oz
this is not divisible by 32.15 oz, therefore this is not a kilobar entry.
total dealer deposit: 1,400.0000    0z
Today we had  0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 1 customer deposit:
 i) Into HSBC:  64,302.000 oz***  (2000.06 kilobars)
** strange entry:  the correct weight for 2,000 kilobars:  64,150.000 oz
Total customer deposits: 64,302.000 OZ
Today we had 2 CUSTOMER withdrawals
 i) Out of SCOTIA:  1,607.500 OZ  (50 kilobars)
ii) OUT OF brinks  74,499.100 OZ  real oz leaving
Total customer withdrawals  76,106.900 OZ
Today we had 2 adjustment:
 i) Out of BRINKS:  1929.000 oz (60 KILOBARS) was adjusted out of the customer and this landed into the dealer account of BRINKS:
ii)Out of Delaware:  1319.149 oz was transferred out of the customer account and this landed into the dealer account of Delaware
Note: If anybody is holding any gold at the comex, you must be out of your mind!!!
since comex gold storage is unallocated , rest assured any gold stored will be compromised!
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 46 contracts of which 0 notice was stopped (received) by JPMorgan dealer and 34 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the AUGUST  contract month, we take the total number of notices filed so far for the month (13,126) x 100 oz  or 1,312,600 oz , to which we  add the difference between the open interest for the front month of AUGUST  (673 CONTRACTS) minus the number of notices served upon today (46) x 100 oz   x 100 oz per contract equals 1,375,300 oz, the number of ounces standing in this active month. 
Thus the INITIAL standings for gold for the AUGUST contract month:
No of notices served so far (13,126) x 100 oz  or ounces + {OI for the front month (673) minus the number of  notices served upon today (46) x 100 oz which equals 1,375,300 oz standing in this non  active delivery month of AUGUST  (42.777 tonnes).
We lost 8 contracts or an additional 800 oz will not stand for delivery in this  active delivery month of August.
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 +  21.452 TONNES FOR JULY + 12.3917 + 42.777 tonnes Aug +  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 1778 tonnes, JULY 28 .089 TONNES / JULY 29 .128 TONNES/ aUG 10// 0.219 TONNES/August 11: .3619 TONNES/ AUG 12/.05878/ aug 17. 6418 tonnes/THEREFORE 91.839 tonnes still standing against 72.900 tonnes available.
 Total dealer inventor 2,343,748.656 oz or 72.900 tonnes
Total gold inventory (dealer and customer) =11,016,512.858 or 342.659 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 342.659 tonnes for a  gain of 40  tonnes over that period. 


To me, the only thing that makes sense is the fact that “kilobars” are entries or hypothecated gold sent to other jurisdictions so that they will not be short in their derivatives like in England.  This would be similar to the gold used by Jon Corzine. If this is the case, this would be the greatest fraud perpetrated on USA soil.

And now for silver
 august 22.2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
1,125,195.400 OZ
Deposits to the Dealer Inventory
Deposits to the Customer Inventory
299,047.63 OZ
No of oz served today (contracts)
(nil OZ)
No of oz to be served (notices)
16 contracts
80,000 oz)
Total monthly oz silver served (contracts) 471 contracts (2,355,000 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  10,150,179.0 oz
today we had 0 deposit into the dealer account:
 Total dealer deposits;  NIL oz
we had 0 dealer withdrawal:
total dealer withdrawals:  NIL oz
we had 2 customer withdrawal:
i) Out of CNT:  1,074,893.410 OZ
ii) Out of Brinks:  50,301.990 oz
Total customer withdrawals: 1,125,195.400 oz
We had 1 customer deposit:
i) Into CNT;  299,047.630 oz
total customer deposits:  299,047.630  oz
 we had 0 adjustments
The total number of notices filed today for the AUGUST contract month is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at (471) x 5,000 oz  = 2,355,000 oz to which we add the difference between the open interest for the front month of AUGUST (16) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the AUGUST contract month:  471(notices served so far)x 5000 oz +(16 OI for front month of AUGUST ) -number of notices served upon today (0)x 5000 oz  equals  2,435,000 oz  of silver standing for the AUGUST contract month.
we neither gained nor lost any silver ounces that  will stand for silver metal in this non active delivery month of August.
Total dealer silver:  27.453 million (close to record low inventory  
Total number of dealer and customer silver:   156.634 million oz (close to a record low)
The total open interest on silver is NOW close to its all time high with the record of 224,540 being set AUGUST 3.2016.  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.

And now the Gold inventory at the GLD
August 22/ a deposit of 2.38 tonnes of gold into the GLD/Inventory rests at 958.37 tonnes
August 19/no changes at the GLD/inventory resets at 955.99 tonnes
August 18/a withdrawla of 6.24 tonnes of gold from the gLD/Inventory rests at 955.99 tonness
August 17/no change in gold inventory at the GLD/inventory rests at 962.23 tonnes
August 16/ a deposit of 1.78 tonnes of “paper gold” into the GLD/Inventory rests at 962.23 tonnes
August 15/what a farce!! a huge “paper gold’ withdrawal of 12.17 tonnes/inventory rests at 960.45 tonnes
August 12/no change in gold inventory at the GLD/Inventory rests at 972.62 tonnes
August 11/no changes in gold inventory at the GLD/Inventory rests at 972.62 tonnes
August 10/no changes in GLD/Inventory rests at 972.62 tonnes
August 9/we had a withdrawal of 1.18 tonnes of gold from the GLD inventory/inventory rests at 972.62 tonnes
August 8/a huge changes in the GLD/Inventory, a withdrawal of 6.54 tonnes of paper gold/ rests at 973.80 tonnes of gold/
August 5/ a huge deposit of 10.69 tonnes of gold (with gold down $22.40??)/GLD inventory rests at 980.34 tonnes
August 4/no change in inventory at the GLD/Inventory rests at 969.65 tonnes
August 3/a big deposit of 5.62 tonnes of paper gold/Inventory rests at 969.65 tonnes
August 2/no change in gold inventory at the GLD/Inventory rests at 964.03 tonnes
August 1/we had a huge paper deposit of 5.94 tonnes of gold into the GLD/Inventory rests at 964.03 tonnes
August 22/ Inventory rests tonight at 958.37 tonnes


Now the SLV Inventory
August 22/a huge addition of 3.324 million oz into the SLV/Inventory rests at 358.793 million oz
August 19/no change in silver SLV/Inventory rests at 355.469 million oz/
August 18/ a massive paper deposit of 2.185 million oz into the SLV/Inventory rests at 355.469 million oz
August 17/ we had a huge deposit of 1.519 million oz into the SLV/Inventory rests at 353.284 million oz/
August 16/no change in inventory/rests tonight at 351.765 million oz
August 15./amazing, we have a huge withdrawal in gold and yet nothing moves out of silver: no change in silver inventory at the SLV/Inventory rests at 351.765 million oz.
August 12/no change in silver inventory at the SLV/Inventory rests at 351.765 million oz
August 11/no change in silver inventory at the SLV/Inventory rests at 351.765 oz
August 10/no changes in silver inventory at the SLV/Inventory rests at 351.765 oz
August 9/a deposit of 950,000 oz into the SLV/Inventory rests at 351.765 oz
August 8/no change in silver inventory at the SLV/Inventory rests at 350.815 million oz.
August 4/no change in silver inventory at the SLV/inventory rests at 350.815 million oz
August 3/no change in silver inventory/inventory rests at 350.815 million oz
August 2/ we had a tiny withdrawal of 40,000 oz of silver/Inventory rests at 350.815 million oz
August 1/we had a huge paper deposit of 1.235 million oz into the SLV/Inventory rests at 350.955 million oz
August 22.2016: Inventory 358.793 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 3.6 percent to NAV usa funds and Negative 3.5% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 60.2%
Percentage of fund in silver:38.6%
cash .+1.2%( August 22/2016).
2. Sprott silver fund (PSLV): Premium rises to +1.29%!!!! NAV (august 22/2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises TO  1.05% to NAV  ( august 22/2016)
Note: Sprott silver trust back  into POSITIVE territory at +1.29% /Sprott physical gold trust is back into positive territory at 1.05%/Central fund of Canada’s is still in jail.


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

Trading in gold and silver overnight in Asia and Europe
Mark O’Byrne/David Russell

Ireland’s Biggest Bank Charging Depositors – Negative Interest Rate Madness

Deposits at Bank of Ireland are soon to face charges in the form of negative interest rates after it emerged on Friday that the bank is set to become the first Irish bank to charge customers for placing their cash on deposit with the bank.


This radical move was expected as the European Central Bank began charging large corporates and financial institutions 0.4% in March for depositing cash with them overnight.

Bank of Ireland is set to charge large companies for their deposits from October. The bank said it is to charge companies for company deposits worth over €10 million.

The bank was not clear regarding what the new negative interest rate will be but it is believed that a negative interest rate of 0.1 per cent will initially be charged to such deposits by Ireland’s biggest bank.

BOI recently failed the EU stress tests and is seen as one of the most vulnerable banks in the EU – along with Banca Monte dei Paschi di Siena (MPS), AIB and Ulster Bank’s parent RBS. All the banks clients, retail, SME and corporates are unsecured creditors of the bank and exposed to the new bail-in regime.


Only larger customers will be affected by the charge for now. The bank claims that it has no plans to levy a negative interest rate on either personal or SME customers but negative interest rates seem likely as long as the ECB continues with zero percent and negative interest rates. Indeed, they are already being seen in Germany where retail clients are being charged 0.4% to hold their cash in certain banks such as Raiffeisenbank Gmund am Tegernsee.

The news came days after it emerged that FBD, one of Ireland’s largest insurance companies, have been moving cash out of Irish bank deposits and into bonds. Fiona Muldoon, the FBD CEO cited extremely low returns on deposits and bail-ins as the reason they were withdrawing cash from Irish banks and diversifying into corporate and sovereign bonds. Muldoon said as reported by the Irish Independent that

“As they mature, and as the bank bail-in rules come into play, it’s no longer the case that for corporate investors depositing at a bank is risk free,” she added.
“To be honest, the return is abysmal now. We’ve gone back to a more typical investment portfolio for an insurance company.”

“You have to be paid for the risk you take,” she added. “You might entertain the bail-in risk if you were being properly paid. But if you’ve a bank trying to charge you for leaving your money with them, you’re not inclined to take any risk at all.”

The monetary policies being pursued by the ECB and other central banks is making deposits, banks and the banking system vulnerable. Central bank policies are contributing to individuals and companies withdrawing deposits from banks which is making already fragile banks even more fragile.

It is important to note that while there are “deposit guarantees” in place in most jurisdictions in the EU, these guarantees are only as good as the solvency of the nation providing them. Many nations in the EU remain insolvent or at least border line insolvent. Thus, the deposit guarantee level of €100,000 in many EU states and £75,000 in the UK is likely to be arbitrarily reduced to lower levels in the event of deposit “haircuts” in the next banking and financial crisis.

Prudent retail, SME and corporate clients are realising the increasing risks facing their deposits. They can no longer afford to simply leave their deposits in a single bank account or indeed even in a few bank accounts. Diversification into other assets, including an allocation to physical gold, is becoming an important way to hedge the risks posed by negative interest rates and bail-ins.

Protecting-Your-Savings-In-The-Coming-Bail-In-EraDownload Bail-in Guide

Gold and Silver Bullion – News and Commentary

Gold hits one-week low on U.S. rate hike prospects (Reuters)

Dollar Boosted by Hawkish Fed Comments as Oil Drops With Gold (Bloomberg)

Gold books largest daily decline in 2 weeks (MarketWatch)

Gold Lower, Weighed by Dollar, Fed Remarks (Nasdaq)

House prices forecast to fall after Brexit (Telegraph)

Let’s not crack open the post-Brexit champagne quite yet – Warner (Telegraph)

Technology revolution comes full circle (MoneyWeek)

Gold Spending in India Set to Get a Boost from Strong Monsoon Season – Holmes (GoldSeek)

Impossibility Of Helicopter Money And Why The Casino Will Crash – Stockman (ZeroHedge)

The Decade of Zero and its Chaotic Unwinding – Hussman (HussManFunds)


Gold Prices (LBMA AM)

22Aug: USD 1,334.30, GBP 1,018.20 & EUR 1,181.26 per ounce
19Aug: USD 1,346.85, GBP 1,026.30 & EUR 1,189.67 per ounce
18Aug: USD 1,347.10, GBP 1,023.93 & EUR 1,190.84 per ounce
17Aug: USD 1,342.75, GBP 1,031.23 & EUR 1,191.96 per ounce
16Aug: USD 1,349.10, GBP 1,039.89 & EUR 1,197.33 per ounce
15Aug: USD 1,339.20, GBP 1,037.21 & EUR 1,198.85 per ounce
12Aug: USD 1,336.70, GBP 1,032.60 & EUR 1,199.02 per ounce

Silver Prices (LBMA)

22Aug: USD 18.91, GBP 14.45 & EUR 16.74 per ounce
19Aug: USD 19.42, GBP 14.80 & EUR 17.14 per ounce
18Aug: USD 19.78, GBP 15.04 & EUR 17.47 per ounce
17Aug: USD 19.57, GBP 15.04 & EUR 17.37 per ounce
16Aug: USD 20.04, GBP 15.43 & EUR 17.77 per ounce
15Aug: USD 19.90, GBP 15.40 & EUR 17.81 per ounce
12Aug: USD 19.87, GBP 15.33 & EUR 17.81 per ounce

Recent Market Updates

– Rothchilds Buying Gold On “Greatest Experiment” With Money In “History of the World”
– Gold – “Mother of All Bull Markets Has Only Just Begun” – Grandich
– 45th Anniversary Of Nixon Ending The Gold Standard
– Gold In UK Pounds Collapses 38% Versus Gold and 56% Versus Silver Year To Date
– Will Ireland Be First Country In World To See Bail-in Regime?
– Money “Madness” Negative Interest Rates Sees Gold Buying Surge
– Gold Investment Demand Reaches Record In First Half 2016 On “Perfect Storm”
– Peak Gold – Did Gold Production Peak in 2015?
– Financial Times: “Victory For Gold Bulls Is Only Just Beginning”
– Irish Banks Most Vulnerable In Stress Tests – Banking Contagion In EU Cometh
– Gold In Sterling 2.2% Higher After Bank Of England Cuts To 0.25% and Expands QE
– Silver Kangaroo Coins – Sales Surge To Over 10 Million
– Trump, Clinton, “Ugliest” Election Coming – Gold’s “Summer Doldrums” Prior To Resumption of Bull Market

Mark O’Byrne
Executive Director



A very important commentary from Stephen Leeb.  He describes how gold will eventually land as the 6th component in the new SDR’s and with that, the only way the world can save itself

(courtesy Stephen Leeb/Kingworldnews)

Including yuan, gold in SDRs will launch gold’s strongest rise, Leeb says


8:27p ET Saturday, August 20, 2016

Dear Friend of GATA and Gold:

Fund manager Stephen Leeb tells King World News today that China will welcome the International Monetary Fund’s recomposition of its Special Drawing Rights with the yuan and gold, prompting the biggest bull market in history for the monetary metal. Leeb’s commentary is posted at KWN here:…

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



Join Chris Powell, Bill Murphy and all the gang for a gold conference in New Orleans:



Join GATA at the New Orleans conference because you can’t lose


12:15p ET Sunday, August 21, 2016

Dear Friend of GATA and Gold:

Will you join GATA Chairman Bill Murphy and your secretary/treasurer at the New Orleans Investment Conference in the last week of October?

Conference director Brien Lundin notes in the letter below that you really can’t lose. He guarantees that if, as a result of what you learn at the conference, you don’t at least quadruple your registration fee, your fee will be refunded.

Having participated in the conference for many years, GATA can say that nothing surpasses it for financial and political insight and, thanks to the city itself, plain old fun. I don’t mean the cliched honky-tonkiness of Bourbon Street. (Anyone in the monetary metals sector learns early how to drink plenty just staying home.) I mean the history, geography, culture, climate, and of course the restaurants of the city. At this conference there is always so much to learn inside — many of the speakers are GATA favorites — and to explore outside.

So please read Lundin’s letter below and if you’re persuaded to consider attending, use the link at the bottom of his letter to find out more about the conference and register for it. The conference has kindly offered GATA a commission for every GATA supporter who uses the link to register.

Hoping to see you there.

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

* * *

Your Guarantee that You Can’t Lose at the New Orleans Investment Conference

By Brien Lundin
New Orleans Investment Conference
Sunday, August 21, 2016

Gold and silver are soaring.

Negative interest rates are spreading across the world like a wildfire. The economy is slowing. Stocks are peaking while the presidential election promises to roil global markets.

This is the riskiest — and potentially most profitable — investment opportunity in decades.

And there’s only one way to play it that guarantees a four-for-one profit.

My message is simple: You can’t afford to miss this opportunity.

That’s because the best place to be in a gold bull market is the New Orleans Investment Conference.

More than four decades of history have proven this, time and time again.

It’s where the top metals and mining stock experts and most successful investors gather every year.

It’s where the most powerful investment strategies are detailed.

It’s where the hottest new opportunities are unveiled.

And as I said, the results speak for themselves: The stock picks given out at the New Orleans Conference often multiply five, 10, even 20 or more times over after the event.

How reliable and profitable are these results?

Enough so that we can guarantee you’ll quadruple your investment in the event … or get your entire registration fee back.

The only way you can lose is not attend.

And there are plenty of reasons to come.

With our amazing agenda this year, coupled with the remarkable turn the markets have made in our favor, you’re going to learn more, profit more, and just have more fun than you could anywhere else.

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




2 Nikkei closed UP 52.37 OR .32% /USA: YEN RISES TO 100.53

3. Europe stocks opened  IN THE RED,     /USA dollar index UP to 94.72/Euro DOWN to 1.12970

3b Japan 10 year bond yield: RISES TO  -.060%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 100.53

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.16  and Brent: 49.31

3f Gold DOWN  /Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” ON THE TABLE 

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 RISES to -.069%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 6.54%/: 

3j Greek 10 year bond yield FALL to  : 8.03%   (YIELD CURVE NOW  UPWARD SLOPING)

3k Gold at $1336.60-/silver $18.97(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 67/100 in  roubles/dollar) 64.57-

3m oil into the 47 dollar handle for WTI and 49 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 BIG DEVALUATION UPWARD 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 .9629 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0882 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now NEGATIVE territory with the 10 year RISES to  -0.069%

/German 10+ year rate BASICALLY  negative%!!!


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 1.581% early this morning. Thirty year rate  at 2.280% /POLICY ERROR)

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

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


US Futures Fall, European Stocks Rise As Stronger Dollar Sends Oil Lower

European stocks rose and US S&P futures fell after the dollar strengthened following the latest hawkish comments from Fed vice-chair Stanley Fischer signalled that a 2016 rate hike is still being considered and again boosted speculation that US rates will rise this year. The rising dollar pressured commodities and notably oil, which dropped 2% breaking a 7 days stretch of increases; emerging markets retreated. 

Top news stories include Pfizer reportedly nearing Medivation deal, ChemChina winning CFIUS approval for Syngenta acquisition, Renesas said to be in talks to buy Intersil.

Bloomberg’s dollar index climbed to a one-week high after Fed Vice Chairman Stanley Fischer said Sunday the U.S. economy is already close to meeting the central bank’s goals and that growth will pick up. On the other side of the Pacific, the Yen fell following comments from Kuroda that more September easing may be on the table. Emerging-market shares and currencies declined for a second day, oil fell below $48 a barrel and silver led losses among precious metals. European equities advanced after their biggest weekly slide in two months and government bonds rebounded. The chart below shows the USD’s reactions to just last week’s Fed jawboning.

Global markets have been buffeted over the past week by comments from Fed officials flagging the possibility of higher borrowing costs as early as next month, even though minutes of the central bank’s last meeting struck a more dovish tone. The focus will shift to Janet Yellen’s speech this week at a gathering of global central bankers in Jackson Hole, Wyoming. Futures traders on Friday assigned a 22 percent probability to a September rate increase by the Fed, up from 16 percent a week earlier.

Still, as we showed last night, being hawkish – or dovish – is nothing new for the Fed, which has seen it share of contradictory statements in the past several months, all largely market, and economy, dependent.

Responses were mixed: “The Fed is a bit all over the shop so it’s going to be Janet Yellen’s job this Friday to try to centralize all of these messages into a coherent message that markets can react to,” says Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney.

“We’ve had a full spectrum of messages in the past week or so,” said Josh O’Byrne, a currency strategist at Citigroup Inc. in London. The dollar will “probably hold if indeed she backs up Fischer,” he said. “ I think the consensus is that she will be a bit more dovish.”

While it remains to be seen if Yellen will announce anything truly market moving, the recent dollar strength has led to some early selling in crude oil, while dropped 2.0% to $47.28. Selling was accelerated after OPEC’s second-biggest producer, Iraq, said it will boost exports by about 5% in coming days. Another downside catalyst was the previously reported ceasefire announcement by the militant Niger Delta Avengers, as well as the record collapse in short WTI positions, which has led to speculation the short squeeze may be largely over. Oil had jumped 9.1% last week on speculation that OPEC talks next month could lead to an output freeze. U.S. drillers added rigs for an eighth week, the longest run since April 2014.

The stronger dollar also pressured previous metals with silver dropping as much as 3% to a seven-week low, while gold was down 0.6% amid the dollar’s advance.

The MSCI Emerging Markets Index slid 0.6 percent, with shares in Shanghai dropping 0.8 percent, the most in three weeks. Saudi Arabia’s Tadawul All Share Index led losses in Gulf stocks, sliding 1.5 percent.

In equity markets, Europe’s Stoxx 600 Index added 0.7%, with banks leading gains while trading volumes were about 40 percent lower than the 30-day average. Automakers advanced as the euro weakened, while miners were the only industry group to decline. Syngenta jumped 12 percent, the most in more than a year, as China National Chemical Corp. received approval from U.S. national security officials for its $43 billion takeover of the Swiss chemical company.

S&P 500 Index futures were down 0.2% after U.S. stocks slipped for the first time in three days on Friday, with a recent rally showing signs of tiring amid elevated valuations and rising speculation that borrowing costs will increase before year-end. Medivation Inc. jumped 21% in premarket New York trading after people familiar with the situation said Pfizer Inc. is close to an agreement to buy the biotechnology company for about $14 billion.

Market Snapshot

  • S&P 500 futures down 0.2% to 2181
  • Stoxx 600 up 0.8% to 343
  • MSCI Asia Pacific down 0.2% to 139
  • US 10-yr yield up 1bp to 1.59%
  • Dollar Index up 0.24% to 94.74
  • WTI Crude futures down 1.5% to $47.79
  • Brent Futures down 1.7% to $50.04
  • Gold spot down 0.6% to $1,334
  • Silver spot down 1.7% to $18.99

Top Global News

  • Fischer Signals 2016 Rate Hike With Economy Nearing Fed Goals: Fed vice chair talks days before Yellen’s Jackson Hole address
  • Pfizer Said Close to $14b Deal to Acquire Medivation: Deal may be announced as early as Monday, according to people familiar with the situation
  • ChemChina Clinches U.S. Security Nod for Syngenta Purchase: Deal would be biggest in record year of Chinese takeovers
  • Renesas Said to Be in Talks for $3b Intersil Acquisition: Discussions may not result in a deal, person familiar says
  • Nomura Back in Hiring Mode for U.S. Bankers After Cutting Costs: COO Ozaki sees “tremendous business opportunities for M&A”
  • ‘Ben-Hur’ Remake Stumbles to Fifth Place in Box-Office Debut: Warner Bros.’ ‘Suicide Squad’ holds onto No. 1 for third week
  • Marvell Said to Continue Steps Exploring Sale: DealReporter
  • China to Scrap Anti-Dumping Measures on EU, Japan Steel Tubes
  • Focus Financial Partners Said to File for IPO: WSJ
  • Former Travelers CEO Fishman Has Died, Dasburg to Be Chairman
  • Lockheed Martin Gets 10-Yr C-130J Air Force Contract for $10b

* * *

Looking at regional markets, Asian stocks began the week in a choppy fashion which followed Friday’s subdued US close, where market-thin trade and a pull-back in energy hindered sentiment. Nikkei 225 (+0.3%) outperformed its counterparts, underpinned by a weaker JPY after dovish comments from BoJ Governor Kuroda over the weekend, while trade in the ASX 200 (-0.2%) was flat after mixed earnings. Markets in China were also indecisive with both the Hang Seng (flat) and Shanghai Comp (-0.8%) swinging between gains & losses despite the PBoC increasing its liquidity injections, as debt concerns persisted. Price-action in 10yr JGBs was subdued amid the increased risk-appetite seen across Japanese equities, while participants look to tomorrow’s 20yr auction. BoJ Governor Kuroda commented that he wouldn’t rule out cutting rates deeper into negative territory and added that there is a sufficient possibility the BOJ will add to its easing programme in September. India picked RBI Deputy Governor Urjit Patel as the central bank’s next governor to succeed Governor Rajan when his term ends next month. Deputy Governor Patel is seen as a hawkish, continuity candidate to follow Rajan.  PBoC set CNY mid-point at 6.6652 (Prey. 6.6211) and injected CNY 110bIn via 7-day reverse repos.

Top Asian News

  • India’s New Central Banker Faces Nervy Markets After Rajan Rally: Patel’s inflation hawk reputation seen reducing rate- cut odds
  • Paul Singer’s Elliott Seizes on Bank of East Asia’s Profit Slide: Paul Singer’s fund gets more ammunition for shake-up campaign
  • China Overseas Land 1H Net HK$19.7b vs HK$16.3b Year Ago: Co. raises FY16 sales target by 17%

In Europe, the morning has seen a subdued start to a, so far, typical mid-August week, with a particularly light calendar for the day. European equities trade in positive territory across the board, with Syngenta (+11.8%) the notable outperformer after announcing US clearance for their USD 44b1n ChemChina deal. Elsewhere, material names drag on the FTSE, with the likes of Anglo-American (-3.2%), Glencore (-1.9%) and Rio Tinto (-2.5%) among the worst performers on the continent. Finally, fixed income markets have been particularly subdued this morning, with bunds trading in modest positive territory and above 167.00. In terms of going forward, participants will be looking ahead to the BoE 3-7yr Gilt purchases this afternoon.

Top European News

  • London Housing Boom to End in 2017 as Brexit Bites, Broker Says: Countrywide sees home values falling for first time since 2009
  • VW Restarts Talks as Supplier Feud Expands to Golf Production: Six factories face partial production halt beginning Monday
  • Getinge Ousts CEO After Less Than 18 Months as Views Differ: Surgical Workflows unit head Lindoff appointed acting CEO, shares fall
  • Europe Plans for Life After Brexit as Merkel Meets Allies at Sea: Renzi hosts Merkel, Hollande on Italian warship off Naples
  • Teleperformance to Buy LanguageLine Solutions for $1.52b: Co. sees deal accretive to EPS by ~10% on a pro forma basis for 2016
  • Sanofi Updates NDA on Diabetes Product; Pdufa Date Now in Nov.
  • Linde-Praxair Plan to Put Headquarters in Europe: Handelsblatt

In FX, the Bloomberg Dollar Spot Index rose 0.3% in early trading, after losing ground in each of the last two weeks. The yen dropped 0.5% to 100.75 per dollar. Bank of Japan Governor Haruhiko Kuroda Kuroda told the Sankei newspaper that the BOJ is conducting a comprehensive review of Japan’s economy and finances and said there is “sufficient chance” of more easing at next month’s policy meeting. Hedge funds and other large speculators raised net wagers for a weaker pound to a record in the week ended Aug. 16. That’s the seventh straight week of increases. The U.K currency gained 0.3 percent against the dollar to $1.3109. The MSCI Emerging Markets Currency Index dropped 0.3 percent. South Africa’s rand, South Korea’s won and the Taiwanese dollar posted the biggest declines among 16 major currencies measured against the greenback, sinking at least 0.5 percent. Turkey’s lira lost 0.6 percent. Fitch Ratings cut the outlook on the country’s investment grade credit to negative from stable after a failed coup attempt in July increased political risks. The rupee weakened 0.2 percent after India named Urjit Patel to take over from Raghuram Rajan as central bank governor from Sept. 4.

In commodities, the Bloomberg Commodity Index declined 0.8 percent, after slipping from a one-month high in the last session. Crude oil slid 2.0% to $47.65 a barrel in New York after Iraq, OPEC’s second-biggest producer, said it will boost exports by about 5 percent in coming days. The price jumped 9.1 percent last week on speculation that OPEC talks next month could lead to an output freeze. U.S. drillers added rigs for an eighth week, the longest run since April 2014, Baker Hughes Inc. data show. Silver dropped as much as 3 percent to a seven-week low, while gold was down 0.6 percent amid the dollar’s advance. Silver has rallied 37 percent this year while gold jumped 26 percent as the Fed refrained from tightening and other central banks embraced negative rates, benefiting bullion which doesn’t pay interest. Base metals fell, with aluminum declining for a third day and nickel sagging as much as 1.8 percent.

It’s a quiet start to the week today with only the Chicago Fed national activity index in the US this afternoon to note of

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities enter the North American crossover higher with the FTSE 100 the notable laggard amid softness in commodity names
  • JPY lost ground against the major overnight amid dovish rhetoric from Kuroda who hinted at further easing next month
  • Looking ahead, the calendar is particularly light with Chicago Fed National Activity at 1330BST
  • Treasuries dropped during Asia, European sessions after Fed Vice Chair Stanley Fischer said U.S. economy is close to the central bank’s goals; started paring drop toward end of overnight trading as European equities reversed gains.
  • Fed fund futures pricing 50/50 chance of rate hike in Dec. 2016; fully pricing next rate hike around June 2017, implied rate 62bp, near midpoint of 50-75bp target range
  • Pimco’s largest international bond fund and China are piling into negative-yielding Japanese debt, buying securities that pay out less than the purchase price. And there’s a way to turn a tidy profit off the trade
  • The world’s largest banks are racing to meet a deadline next month when billions of dollars in new collateral requirements will begin to hit the over-the-counter derivatives market
  • GDP is so 20th century. Whether compiled by production, income or expenditure approaches — GDP is increasingly struggling to keep up with the pace of economic change
  • The U.K. economy has shown some post-Brexit strength. All it needs now is stamina as the focus is on whether the economy can sustain the initial robust readings that came last week

US Event Calendar

  • 8:30am: Chicago Fed Nat Activity Index, July, est. 0.20 (prior 0.16)

DB’s Jim Reid concludes the overnight wrap

There won’t be much skiing this weekend at the Jackson Hole symposium but there will be focus on Yellen’s speech on Friday where we’ll see whether she brings the Fed’s message back on piste after a few recent moguls created by various Fed speakers over the last week.

Indeed the usually dovish NY Fed President Dudley caused the first bump when he said on Tuesday that a September hike was ‘possible’ and that ‘we’re edging closer towards the point in time where it will be appropriate to raise rates further’. Dudley also made the comment that he thought 10y Treasuries were ‘pretty low given the circumstances’. On the same day Atlanta Fed President Lockhart (a centrist) added that he thought at least one rate increase could be appropriate later this year. Late on Thursday we then heard from San Francisco Fed President Williams (also largely seen as a centrist) who said that every meeting should ‘be in play’, including September.

The latest addition to the debate over the weekend was Fed VC Stanley Fischer who suggested that the Fed “are close to their targets”. Although he didn’t comment on when they should hike it was a generally upbeat reflection on the US economy. The main theme of the speech though was the slowdown in productivity in recent years and how monetary policy wasn’t equipped to reverse the slump and that fiscal and regulatory policy were likely to be more effective. Although Fischer is known to be on the hawkish side (albeit moderately) and Yellen on the more dovish side, he probably wouldn’t want his comments in the week of the Jackson Hole get together to be interpreted in a manner completely different to his boss. So this sets up an interesting Friday.

In terms of Fed hike pricing, we went into last week with September and December probabilities of 16% and 42% respectively. Post Dudley’s comments we went to 22% and 51%. The FOMC minutes on Wednesday moderated things a little with September staying unchanged at 22% but December nudging down to 49%. Following Williams we ended the week back at 22% and 51% however.

Indeed the US Dollar also took heart from Williams’ comments late last week with the Dollar index finally closing up on Friday (+0.38%) for the first time in six sessions. It’s up a similar amount this morning too while US 2y and 10y Treasury yields, which closed up 4.4bps and 4.3bps respectively at 0.748% and 1.579% are also higher this morning (+2.8bps and +1.5bps respectively). Emerging market currencies were the biggest losers on Friday while US equity markets (S&P 500 -0.14%) and credit indices (CDX IG +0.9bps) ended a touch weaker.

Elsewhere this morning equity markets are off to another mixed start in Asia. A weaker sessions for the Yen (-0.55%) is providing some respite for the Nikkei (+0.24%) and Topix (+0.40%), while the ASX (+0.10%) is also up slightly. The Hang Seng (-0.45%), Shanghai Comp (-0.34%) and Kospi (-0.65%) all appear to be following the lead from the US on Friday however. US equity index futures are in the red by a similar amount this morning although there’s also been a bit of M&A focus over the weekend with the news that Pfizer is nearing a $14bn takeover of Medivation.

Moving on. Along with the various chatter out of the Fed, the relentless move higher for Oil last week was the other big focus for markets. Indeed WTI climbed +9.06% last week and even more impressively is up nearly 16% over the last 8 sessions. The prospect of some sort of coordinated major producers production freeze has been at the centre of the rally however our commodity strategists don’t think that a freeze would have much fundamental impact. Indeed they highlighted in their report on Friday that as before, the parameters of the proposed deal are likely to be very weak. They note that this is before we consider the impact of national oil companies who may try to ‘game’ the system by ramping up volume this month to set a high-water mark before the meeting on the sidelines of the International Energy Forum in Algeria on 26-28th September. They go on to note that since the terms of a deal are unlikely to pose upside constraints to Libya, Iraq or Nigeria, OPEC production could still exceed their 2017 assumption of 33.5mmb/d in the event of an agreement. Their fair value models currently suggest that oil is close to fair value of $46.6/bbl.

Elsewhere, it was a very quiet end to the week on Friday for economic data. There were no reports out in the US while in Europe the only data we got came in Germany, where PPI rose +0.2% mom (vs. +0.1% expected) in July, and also the UK where public finances (excluding bank groups) were in surplus to the tune of £1bn in July, boosted by a 3.4% rise in receipts. European equity markets actually ended the week on a bit of a sour note with the Stoxx 600 closing -0.81% as Italian equities (-2.18%) and Bank Stocks (-1.40%) struggled in particular.

Turning now to this week’s calendar. It’s a quiet start to the week today with only the Chicago Fed national activity index in the US this afternoon to note of. Tomorrow morning we kick off in Asia where we’ll get the flash manufacturing PMI reading for August in Japan and also the MNI business indicator out of China. During the European session we’ll get the August flash PMI’s for the Euro area, Germany and France (manufacturing, services and composites) along with CBI trends data for the UK. In the US we’ll also get the flash manufacturing PMI along with the Richmond Fed manufacturing index and new home sales for July. The Euro area consumer confidence reading for August will also get released in the afternoon. Turning to Wednesday the highlight of the morning session in Europe will likely be the final Q2 GDP revisions for Germany, along with the various subcomponent readings. The data in the US on Wednesday is focused on the housing market with existing home sales for July and the FHFA house price index reading due. With little in the way of data to note of in Asia on Thursday we’re starting in France where the August confidence indicators are due to be released. Shortly after that the IFO survey in Germany for August is due. There’s a number of important releases in the US on Thursday starting with the flash durable and capital goods order data for July, along with the remaining flash PMI’s (services and composite), initial jobless claims and the Kansas City Fed’s manufacturing index. The end of the week on Friday is a big one for data. In Japan we’ll get the July CPI report early on. German and France consumer confidence readings follow this, along with UK Q2 GDP. We then end the week in the US with the second reading of Q2 GDP and core PCE, the advance goods trade balance reading in July and the final University of Michigan consumer sentiment reading.

Away from the data the other big focus will be Fed Chair Yellen speaking at the Jackson Hole Policy Symposium on Friday. Another potentially interest event to keep an eye on is a meeting between Merkel, Hollande, Renzi and Tusk today in Italy where they are due to speak on Brexit



i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 23.30 POINTS OR 0.13%/ /Hang Sang closed DOWN 85.94 points or 0.37%. The Nikkei closed UP 59.81 POINTS OR 0.75% Australia’s all ordinaires  CLOSED DOWN 0.21% Chinese yuan (ONSHORE) closed UP at 6.6544/Oil FELL to 47.16 dollars per barrel for WTI and 49.31 for Brent. Stocks in Europe: in the RED . Offshore yuan trades  6.6635 yuan to the dollar vs 6.6544 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS SLIGHTLY AS  MORE USA DOLLARS  LEAVE CHINA’S SHORES  



More sabre rattling as Japan doubles its F 15 missile payload as escalation in the South China seas escalates:

(courtesy zero  hedge)

Japan To Double F-15 Missile Payload Ahead Of “China Confrontation” After Latest Chinese Threat

In the most recent escalation involving China’s latest foray into the East China Sea, we reported that Japan’s coast guard released a video of several hundred Chinese ships located near the disputed naval territory, among which 18 patrol vessels of which seven were equipped with what looked like machine guns. “Actions by the Chinese side like this, which will escalate the situation, are not tolerable,” the Japanese Coast Guard said in a statement.

This took place just days after Japan announced it would deploy land-to-sea missiles with a 300 km range to protect the nation’s isolated islands, including the Senkakus, with costs for the deployment borne by the defense ministry’s budgetary request for the March 2018 fiscal year, which means even more bonds for the BOJ to monetize.

China’s nationalist Global Times paper immediately responded, saying :”Japan’s decision to develop surface-to-sea missiles with a range of 300 kilometers to cover the disputed islands shows the country may be eyeing a shift to an offensive posture, analysts said. “Japan is trying to use the missile system to lock down the Miyako Strait and prevent Chinese forces from entering the Western Pacific Ocean,” Zhou Yongsheng, a professor at the Institute of International Relations of China Foreign Affairs University, told the Global Times.

And since neither side was willing to backtrack in this series of escalating threats, earlier today Japan’s Defense Ministry announced it wants its 200 F-15 fighter jets to carry twice as many air-to-air missiles as they do now, in preparation for a possible confrontation with Chinese Air Force around disputed East China Sea islands, RT reported. These upgrades would double the number of air-to-air missiles carried by ASDF F-15s, from eight to 16 per each aircraft. In addition, damaged wings and other parts of the fighter jets will be repaired to extend their lifespan.

Currently, the Japanese Air Force operates 200 F-15s in combat and trainer variants as well as roughly 90 Mitsubishi F-2 multirole fighters, a development of F-16 design. The 2017 military budget worth $51 billion will reportedly include a separate purchase of an undisclosed number of controversial fifth-generation F-35 stealth fighter jets, said to be deployed at the Misawa Airbase at the northern tip of Honshu, Japan’s main island.

Tokyo says China’s “assertive” actions near the disputed Senkaku Islands – or Diaoyu in Chinese – makes Japan’s military to respond with re-deploying forces closer to the troubled area and investing into strengthening combat capabilities. “As the cruising range of Chinese military aircraft has gotten longer, they are coming ever closer to our territories,” a Japanese Defense Ministry official was cited by Nikkei Asian Review.The ministry also added the ASDF has been scrambling fighter jets 199 times from April until June to intercept Chinese planes over the East China Sea, a 75 percent increase from the same period last year.

And while Japan is focusing on expanding its airborne presence in proximity to the disputed islands, China – which would not leave Tokyo have the final word – warned Tokyo of a harsh response if it ever crossed a “red line” in deciding to sail with US warships near disputed waters surrounding China’s artificially reclaimed islands under the pretext of the Freedom of Navigation principle, Japanese media reported.

Tokyo will “cross a red line” if Japan’s Self-Defense Forces sail with the Americans, Chinese Ambassador to Japan Cheng Yonghua allegedly told a Japanese official in Tokyo, Kyodo reported citing a source.

“Japan should not take part in a “joint military action with US forces that is aimed at excluding China in the South China Sea,” Cheng reportedly told Japanese officials late in June. “(China) will not concede on sovereignty issues and is not afraid of military provocations.

While Japan’s official reassured the ambassador that Japan had no plans to join the US sails, which have intensified lately by constant American warship maneuvering near artificial islands that China has built in the South China Sea, it is unlikely that Japan will hold to its word, especially since earlier this week, Japanese media reported that China continues to expand military infrastructure next to the disputed waters, erecting a military pier on Nanji Island, one of 52 islands in the Nanji chain that are part of China’s Zhejiang Province.

Furthermore, to counter the perceived Chinese threat, Tokyo is seeking a record defense budget of 5.16 trillion yen ($51 billion) for next year to strengthen the Japanese coast guard near the disputed waters with China. Part of the funding will also be spent on neutralizing the North Korean threat by deploying PAC-3 missile defense system and the joint Japanese-US production of the Block IIA version of the Standard Missile-3 system. Japan also seeks to purchase an upgraded version of the F-35 stealth fighter.

Meanwhile, Beijing has finished long-range combat drill in the Sea of Japan with its East China Sea Fleet by launching simulated attacks to improve the capability of continuous strikes at maximum range, CCTV reported. The exercise also included air force simulation of air-to-ship missile launches against enemy vessels. The Chinese navy called the drill “routine” and in accordance with international law.

Tensions in the area were heightened even further when four Chinese coastguard ships sailed into territorial waters surrounding the disputed islands in the East China Sea on Sunday morning. The Japanese foreign Ministry responded by issuing a note of protest against the “incursion” and the violation of Japanese sovereignty.

“Despite Japan’s repeated strong protests, the Chinese side has continued to take unilateral actions that raise tensions on the ground, and that is absolutely unacceptable,” the statement said.

As the sabrerattling continues, we anticipate that so will the escalations on both sides, and while these will not spill over into a full blown conflict between the two nations, may result in another collapse in trade between the two nations, in a repeat of events that took place in late 2013, when nationalistic tensions on both sides soared, leading to the boycott of many Japanese goods on mainland China. If this transpires, it will come at a very troubling time for China, which is now growing at a quarter of the pace it did three years ago, and will likely force Beijing to issue even more debt to compensate for the lack of growth, at a time when unofficial estimate calculate China’s total debt at a staggering 350%+ of GDP.


Hong Kong based Cathay Pacific earnings are totally crushed as corporate travel within China collapses as tourism into China falters terribly

(courtesy zero hedge).

Cathay Pacific Crushed As Chinese Corporate Travel Collapses

China Announces New Loan In International Reserve Asset Which May Affect Gold

By Chris Vermeulen of TheGoldAndOilGuy

Saturday, August 20, 2016 7:59 PM EDT

The People’s Bank of China (PBOC) has received approval from the World Bank allowing its issuance of bonds which are denominated in Special Drawing Rights (SDRs). The World Bank is the first entity to approve of it and consequently marks the launch of the SDR bond market of the worlds’ second- largest economy.

Jim Yong Kim, The World Bank Group President, said “This is a landmark development for China’s bond market and for the SDR as an international reserve asset. We are very pleased to support China’s growing role in global financial markets. World Bank issuance of SDR bonds in China will support the G-20’s objective of expanding the use of SDRs and help promote the development of China’s domestic capital market. It will also increase Chinese investors’ access to foreign currencies in the domestic bond market, while opening up new opportunities for international investors seeking high-quality investment products in the country.”

This new bond issuance is 2 billion SDRs which is equivalent to $2.8 billion. The bonds will be denominated in SDRs and payable in Chinese renminbi (RMB). The precise timing of issue and individual bond terms will be based on favorable market conditions, at the time of issuance.

The World Bank approval of China, as being the first issuer of SDR-denominated bonds, is a further step in the “internationalization” of the Chinese capital markets. It shows the vital role of the World Bank and how it assists in opening new markets as well as developing local capital markets. The World Bank SDR-denominated bonds in the Chinese market are a fantastic opportunity for Chinese investors to support the World Bank’s sustainable development activities via a new product. These bonds will also be attractive to international investors who are seeking SDR products to hedge SDR liabilities.

The World Bank raises $50-$60 billion, in the international capital markets, each year. The new SDR program in China is part of the World Bank’s strategy to open and support the development of new markets and will therefore expand World Bank’s product offerings which attract new domestic and international investors to World Bank bonds.

Officially, as of October 1st, 2016, the new mix of the SDR will include the Yuan. It now joins the dollar, euro, pound and yen in an exclusive club of currencies that have special drawing rights. The yuan will be weighted at 10.92%. This is the first change in the SDR basket since 1999. In the past, the IMF rejected the yuan in 2010.

For many in the markets, this has been the year of the yuan. When China suddenly devalued its’ currency, earlier this year, it sent the global markets into a tailspin. Currently, the yuan is depreciating even further since traders believe that the Chinese government will step down from its’ intervention in the currency. Being included in the exclusive club is a sign that the currency has ‘grown up’, in a manner of speaking.

This story began in 2009 with the global financial crisis. The People’s Bank of China said that the economic shocks were due to the financial system being overly reliant on a single currency – the US dollar. It has been pushing for inclusion ever since.

But what effect will this have on both the Chinese economy and other currencies in the basket? The Euro, for example, will surely be affected by this decision. The currency shared by 19 nations within the Eurozone has had a terrible decade and now it appears that things could get worse.

When it comes to this special basket, the weighting of the currency is the most important aspect. If a new currency is introduced, then all of the others have to give up their share. Therefore, the yuan will be weighted at 10.97%, which means that the share of the euro will drop from 37.4% to 30.93%.

As for China, this announcement is nothing but good news. This move by the IMF is more than just ‘symbolic’. Being counted as a reserve currency mainly means that the government has taken the right steps to free up its economy. It has reined in intervention and has allowed the currency to be more ‘free’ within the international markets.

Central Banks, around the world, which hold SDRs in reserve, have this new currency as an option to convert into. This means that a lot more Chinese bonds (maybe a trillion dollars’ worth) will now be able to find their way into the market.

Additionally, there is no indication that Central Banks have a lot of demand for the Yuan. This decision gives them the option to convert into the currency, but whether or not they will is a question yet to be answered. The US dollar is still the worlds’ reserve currency.

I question how the SDR will maintain any value if all of its’ underlying currencies, that it has been composed of, have become worthless.

If this is what does occur, then they will be forced to back these fiat currencies with a tangible asset in order to accept this standard. The only money that has lasted for over 5,000 years is gold. I would not be surprised to see a new gold standard set in some way, but that is still a long way away and some serious catastrophes have to happen first.

With that said, the markets tend to move before major events happen, so as things worsen globally, it only makes sense for precious metals (physical currency) to strengthen over time. announces-new-loan-in-international-reserve-asset-which-may- affect-gold?post=103953



The vote for a BREXIT certainly did not cause Armageddon for Britain. However it is giving the country many opportunities to right itself in the face of no growth in Europe.  It is proposing to cut corporate taxes something that Sweden is against but cannot do anything about it.

It sure looks like Britain will be the clear winner with its Brexit with the clock set to start by April 2017:

(courtesy Mish Shedlock/)

Brexit: Worst Case Scenario For EU; Armageddon Promise Now Exposed As Pack Of Lies

Submitted by Michael Shedlock via,

Project Fear predicted economic meltdown if Britain voted leave. Where are the devastated high streets, job losses and crashing markets?

In other Brexit news, Sweden warns the UK about cutting corporate taxes. How should the UK respond? Who is in control?

What Happened to Promised Armageddon?

The Guardian reports Brexit Armageddon was a Terrifying Vision – but it Simply Hasn’t Happened.

Unemployment would rocket. Tumbleweed would billow through deserted high streets. Share prices would crash. The government would struggle to find buyers for UK bonds. Financial markets would be in meltdown. Britain would be plunged instantly into another deep recession.

Remember all that? It was hard to avoid the doom and gloom, not just in the weeks leading up to the referendum, but in those immediately after it. Many of those who voted remain comforted themselves with the certain knowledge that those who had voted for Brexit would suffer a bad case of buyer’s remorse.

The financial markets are serene. Share prices are close to a record high, and fears that companies would find it difficult and expensive to borrow have proved wide of the mark. Far from dumping UK government gilts, pension funds and insurance companies have been keen to hold on to them.

City economists had predicted an immediate rise in the claimant count measure of unemployment in July. That hasn’t happened either. This week’s figures show that instead of a 9,000 rise, there was an 8,600 drop.

Pack of Lies Clearly Visible

Armageddon fears were purposely over-hyped from the beginning. Now reality has set in.

Project fear backfired. People can easily see what liars David Cameron and the nannycrats in Brussels were.

Project Remain: Where are the admissions “We were wrong?”

Worst Case Scenario for EU

That the UK has gone on as normal has to be one of the worst fears for the nannycrats in Brussels. There is life, not death after Brexit. What country will be next to figure that out?

Some rough times are likely ahead for the global economy, including the UK. But in the long run, Brexit will be a good thing for the UK, which means it will be a bad thing from the point of view of Brussels.

Sweden Warns U.K. Against Aggressive Tax Cuts Amid Brexit Talks

The nannycrats are now worried that the UK will do something smart, like lower corporate taxes again.

Today, Sweden Warns U.K. Against Aggressive Tax Cuts Amid Brexit Talks.

The U.K. should avoid any drastic steps to cut corporate taxes, or similar measures, as it prepares to start talks on leaving the European Union, Swedish Prime Minister Stefan Loefven said.

If the U.K. wants some time to think about the situation, this will also give EU countries some time,” Loefven told Bloomberg after giving a speech in Stockholm on Sunday. “On the other hand, you hear about plans in the U.K. to, for example, lower corporate taxes considerably. If they, during this time, begin that kind of race, that will of course make discussions more difficult.

Stellar Opportunity for UK to Set Example for the World

By all means the UK should precisely make things more difficult.

Everyone says, Brexit terms need to be negotiated. Actually, the UK can pick up its marbles and go home. Who could stop the UK from doing just that?

On July 11, I wrote Stellar Opportunity for UK to Set Example for the World.

In that post I proposed among other things a recommendation “The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.”

I was unaware at the time that UK chancellor George Osborne had already decided to cut taxes, but by a lesser amount than I suggested.

Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan

In a follow-up post I wrote Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan.

Michel Sapin Pisses and Moans


First Step in Training a Mule

There’s an old saying “The first step in training a mule is to hit it as hard as you can in the head with a stick.”

I don’t really advise that with mules, but it is the precise thing to do to EU nannycrats.

The first step in training EU mules is to hit them in the head as hard as you can with a stick. Osborne just smacked French and German mules

Reflections on Clearness

It’s clear that the UK can’t participate in the big decisions involving the EU’s future,” said Emmanuel Macron, France’s economy minister.

Well, it’s equally clear the EU cannot participate in big decisions involving the UK’s future.

And with his plan to cut corporate taxes, chancellor Osborne just hit nannycrat mules in Germany, France, and Belgium in the head with not a stick, but a brick.

Trade War the Right Way

The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.

Set Example for the World

Shed of inane EU rules and regulations coupled with the freedom to do anything it wants, the UK has a golden opportunity to embrace the benefits of genuine free trade and growth via low taxes.

I have often stated the first country that fully embraces free trade, regardless of what any other country does, will come out stunningly ahead.

The UK now has that chance.

Negotiation Progress

Sweden is pissing and moaning along with Germany and France about UK tax rates. I call this progress. Advantage UK in Negotiations.

I suggest the UK cram it straight down their throats by lowering taxes to 10% right now. This will set proper the negotiation tone  and inform the nannycrats in Brussels who calls the shots.

France and Germany threatened to make things difficult for the UK. But as I have stated all along, the UK, not the EU, has the upper hand in these negotiations.

Import/export math proves the point. The UK imports more from the the EU than it exports to them.

For details, please see “No Cherry Picking” Says Merkel; Risk of Global Trade Collapse says Mish.

The more the EU pisses and moans, the more successful Brexit will be for the UK.



Germans are not happy with the Bundesbank proposal that people must work until the age of 69 to collect a pension;

(courtesy zerohedge)

Germans Furious After Bundesbank Demands People Work Until Age 69

there’s something rotten in Denmark’s neighbor. Amid rising islamic terror incidents, Merkel denies any link to her immigration policies… but the government suggests the citizenry arm itself and stash 10 days worth of food and water “in case of attack or emergency,” and now, despite constant proclamations of Germany’s economy at the heart of European economic ‘strength’, the Bundesbank is calling for people to work until they are 69 (up from the current retirement age of 62)… and neither the government nor the people are happy.

As Germans live longer and lower birth rates mean fewer workers are available to replace retirees, the Bundesbank says people will need to work longer in order to meet pension demands. As The Local reported last week,

The German Federal Bank (Bundesbank) said in its monthly report on Monday that by 2060 Germany should increase the retirement age to 69 from the current 65.

The retirement age is already set to reach 67 by 2030, but the Bundesbank said that even with the current favourable financial situation and this increase, “further adjustments are inevitable”.

“At the same time, a longer working life will not be taboo,” said the report.

Because Germans are now living longer and having fewer children, the current system will not be enough to meet targets. Once the baby-boomers have all retired, there will be fewer new workers to fill the gaps and thus fewer contributors into the system – especially since Germany has been seeing lower birth rates in recent years.

A longer working life should be able to stabilize pension levels so that retirees would receive 44 percent of their average salary: maintaining the current plan could see pension levels fall to just over 40 percent.

And what the bank proposed to ensure stability of the pensions system is a further gradual increase in the legal retirement age, already set to go from 65 to 67 by 2029, to reach 69 years by 2060.

The proposal has sparked fury among Germans and federal government officials are speaking out against the central bank’s demands...

Economy Minister and Vice-Chancellor Sigmar Gabriel was swift to condemn it, saying: “A factory worker, a shop assistant, a nurse, a care-giver would find this idea nuts. So do I.”

Political parties, which are already warming up for general elections next year, are expected to make pensions a key theme of their campaigns.

With 20 million retirees eligible to vote, politicians will be seeking to win on issues ranging from the level of future pensions and the question of equalising pension payments in east and west Germany, to the amount of contributions to be levied on future working generations.

But no one expects to win votes by telling Germans they would have to work two years longer,as the issue is making many nervous, particularly at a time when many savers are seeing little gain from their long-term investments against the backdrop of the European Central Bank’s low interest rate expansionary policy.

“Working until 70 while others feast on canapes and some are unemployed,” huffed a reader on Spiegel Online.

Huether however argued that the Bundesbank’s suggestion was likely to be the “least damaging solution for everyone”.

But, German politicians’ refusal to address the issue on what comes after 2030 simply shows a “fear of confronting the truth,” said Boersch-Supan, an economist at the Max Planck institute, adding that “what the Bundesbank is talking about actually concerns those who are born after 1995, that means people who are only turning 20 now. It’s not about making someone who is working now retire only at 69 or 70.”

We suppose he meant this in some “wee it’s not so bad” way… but the bottom line is that under the surface of a market (bond, stock, credit) representing the manipulated view of the world is a Germany that is anything but stable…both socially and economically; and with the core of  the EU on such shaky ground ahead of elections, one can only add that brick to the wall of worry to climb when buying dips in the stock market.




none today


As we outlined to you on Friday, the Vancouver housing market is imploding as the new tax seems to have a devastating effect on the market.

(courtesy zero hedge)

As The Vancouver Housing Market Implodes, The “Smart Money” Is Rushing To Get Out Now



Jim Grant on the global economy:  the lack of growth and negative interest rates:

In his words:  “this will turn out to very bad for many people”

Jim Grant/Christoph Gisiger/Finanz und Wirtschaft)

Jim Grant: “This Will Turn Out To Very Bad For Many People”

Submitted by Christoph Gisiger via Finanz und Wirtschaft,

James Grant, Wall Street expert and editor of the investment newsletter «Grant’s Interest Rate Observer», warns of a crash in sovereign debt, is puzzled over the actions of the Swiss National Bank and bets on gold.

From multi-billion bond buying programs to negative interest rates and probably soon helicopter money: Around the globe, central bankers are experimenting with ever more extreme measures to stimulate the sluggish economy. This will end in tears, believes James Grant. The sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» is one of the most ardent critics when it comes to super easy monetary policy. Highly proficient in financial history, Mr. Grant warns of today’s reckless hunt for yield and spots one of the biggest risks in government debt. He’s also scratching his head over the massive investments which the Swiss National Bank undertakes in the US stock market.

Jim, for more than three decades Grant’s has been observing interest rates. Is there anything left to be observed with rates this low?

Interest rates may be almost invisible but there is still plenty to observe. I observe that they are shrinking and that the shrinkage is causing a lot of turmoil because people in need of income are in full hot pursuit of what little of yields remains.

What are the consequences of that?

It reminds me of the great Victorian English journalist Walter Bagehot. He once said that John Law can stand anything but he can’t stand 2%, meaning that very low interest rates induced speculation and reckless investing and misallocation of capital. So I think Bagehot’s epigraph is very timely today.

John Law was mainly responsible for the great Mississippi bubble which caused a chaotic economic collapse in France in the early 18th century. How is the story going to end this time?

It will turn out to be very bad for many people. If Swiss insurance and reinsurance executives are reading this right now they might be rolling their eyes and they might be frustrated to hear an American scolding from a distance of 3000 miles about the risk of chasing yield. After all, if you’re in the business of matching long term liabilities with long term assets you have little choice but to wish for a better, more sensible world. But you have to take the world as it is and today’s world is barren of interest income. The fact is, that these are very risk fraught times.

Where do you see the biggest risks?

Sovereign debt is my nomination for the number one overvalued market around the world. You are earning nothing or less than nothing for the privilege of lending your money to a government that has pledged to depreciate the currency that you’re investing in. The central banks of the world are striving to achieve a rate of inflation of 2% or more and you are lending certainly at much less than 2% and in many  cases at less than nominal 0%. The experience of losing money is common in investing. But where is the certitude of loss even before your check clears? That’s the situation with sovereign debt right now.

On a worldwide basis, more than a third of sovereign debt is already yielding less than zero percent.

There is not quite a bestseller, but a very substantial book called «The History of Interest Rates». It was written by Sidney Homer and Richard Sylla. Sidney Homer is no longer with us, but Richard Sylla is alive and well at New York University. So I called him and said: « Richard, I’ve read many pages but not every single page in your book which traces the history of interest rates from 3000 BC to the present. Have you ever come across negative bond yields?» He said no and I thought that would be kind of a major news scoop: For the first time in at least 5000 years we have driven interest rates below the zero marker. I thought that was an exceptional piece of intelligence. But I notice however that nobody seems to have picked up on it.

It’s now already two years ago since the ECB was the first major central bank to introduce negative rates.

There are some other historical settings: In Europe, ??Monte dei Paschi di Siena, this 500 and plus year old bank in Italy, is struggling and as broke as you can be without being legally broke. Monte dei Paschi has survived for half a millennium and now it is on the ropes. Meanwhile, the Bank of England is doing things today that it has never done in its history which is 300 plus years. So I suggest that these are at least interesting times and in many respects unprecedented ones.

So what’s the true meaning of all this?

In finance, mostly nothing is ever new. Human behavior doesn’t change and money is a very old institution and so are our markets. Of course, techniques evolve, but mostly nothing is really new.However, with respect to interest rates and monetary policy we are truly breaking new ground.

Now central bankers are even talking openly about helicopter money. Will they really go for it?

I already hear the telltale of beating rotor blades in the sky. I also hear the tom-toms of fiscal policy being pounded. There seems to be some kind of a growing consensus that monetary policy has done what it can do and that what me must do now – so say the «wise ones» – is to tax and spend and spend and spend. That seems to be the new big idea in policy. In any case, it is not good for bondholders.

Interestingly, nobody seems to be talking about the growing government debt anymore. Also, budget politics are just a side note in the ongoing presidential elections.

The trouble with this election is that somebody has to win it. I have no use for Donald Trump but I have equally no use for Hillary Clinton. The point is that one of those two is going to win. That is the tragedy! So we at Grant’s regret that one of them is going to win.

The financial crisis and the weak economic recovery likely have spurred the rise of Donald Trump. Why isn’t the US economy in better shape after all those monetary programs?

I wonder how it would have been if markets had been allowed to clear and if prices had been allowed to find their own level in real estate in 2008. Central banks have intervened to quell financial panics for at least 200 years. For instance, in 1825 the bank of England lent without stint and was not – as they said – overnice about the kind of collateral. That was a very dramatic intervention. So it’s not as if we have never before seen the lender of last resort at work. But what is new is the medication of markets through this opiate of quantitative easing year after year after year following the financial crisis. I think that this kind of intervention has not only not worked but it has been very harmful. Around the world, the economies are not responding despite radical monetary measures. To some degree, I believe,  they are not recovering because of radical monetary measures.

What’s exactly the problem with the US economy?

There is another side of what we are seeing now: In America certainly the Federal Reserve and bank regulators generally are very heavy handed in their interventions. I’m sure they have every good intention. But with their regulatory charges they are suppressing the recovery in credit that takes place  in a normal economic recovery and in this particular case after a depression or after a liquidation.

Then again, a revisit of the financial crisis would be catastrophic.

The new rules with respect to financial reform have absorbed not only forests worth of paper but also the time and attention of legions of lawyers. If you talk to a banking executive what you hear is that thebanks have been overwhelmed by the need to hire compliance and regulatory people. This is especially bearing on the smaller banks. I think that’s part of the story of the lackluster recovery:Monetary policy has been radically open in the creation of new credit. But it has been radically restrictive with regard to risk taking in the private world.

So what should be done to get the economy back on track?

There are guides in history on how to do this. For more than a hundred years in Britain, in the United States and probably as well in Switzerland, the owners of the equity of a bank themselves were responsible for the solvency of the bank. If the bank became impaired or insolvent they had to stump up more capital to pay off the liability holders, including the depositors. But over the past hundred years collective responsibility in banking has gradually replaced individual responsibility. The government, with the introduction of deposit insurance, new regulations and interventions has superseded the old doctrine of the responsibility of the owners of a property. That’s why I think we need to go away from government intervention and go more towards market oriented solutions such as the old doctrine of responsibility of the bank owners.

At least in the US, the Fed is trying to go back to a more normal monetary policy. Do you think Fed chief Janet Yellen will make the case for another rate hike at the Jackson Hole meeting next week?

Janet Yellen is by no means an impulsive person. According to the « Wall Street Journal», she arrives for a flight at the airport hours early – and that’s plural! So this is a most deliberative and risk averse person. Also, as a labor economist, she’s a most empathetic person. She believes what most interventionist minded economists believe: They have very little faith in the institution of markets and they don’t believe that the price mechanism is anything special. They want to normalize rates and yet they can always find an excuse for not doing so. We have been hearing for years now that the next time, the next quarter, the next fiscal year they will act. So I believe what I’m seeing: None of these days the Federal Funds Rate will go higher than 0.5%. I can’t see that happening.

Wall Street seems to think along the same lines. So far, many investors don’t take the renewed chatter of a rate hike too seriously.

The Fed is now hostage to Wall Street. If the stock market pulls back a few percent the Fed becomes frightened. In a way I suppose, the Fed is justified in that belief because it is responsible to a great degree for the elevation of financial asset values. Real estate cap rates are very low, price-earnings-ratios of stocks  are very high and interest rates are extremely low. One can’t be certain about cause and effect. But it seems to me that the central banks of the world are responsible for a great deal of this levitation in values. So perhaps they feel some responsibility for letting the world down easy in a bear market. It has come to a point where the Fed is virtually a hostage of the financial markets. When they sputter, let alone fall, the Fed frets and steps in.

Obviously, the financial markets like this cautious mindset of the Fed. Earlier this week, US stocks climbed to another record high.

Isn’t that a funny thing? The stock market is at record highs and the bond market is acting as if this were the Great Depression. Meanwhile, the Swiss National Bank is buying a great deal of American equity.

Indeed, according to the latest SEC filings the SNB’s portfolio of US stocks has grown to more than $60 billion.

Yes, they own a lot of everything. Let us consider how they get the money for that: They create Swiss francs from the thin alpine air where the Swiss money grows. Then they buy Euros and translate them into Dollars. So far nobody’s raised a sweat. All this is done with a tab of a computer key. And then the SNB calls its friendly broker – I guess UBS – and buys the ears off of the US stock exchange. All of it with money that didn’t exist. That too, is something a little bit new.

Other central banks, too, have become big buyers in the global securities markets. Basically, it all started with the QE-programs of the Federal Reserve.

It is a truism that central banks do this. They’ve done this of course for generations. But there is something especially vivid about the Swiss National Bank’s purchases of billions of Dollars of American equity. These are actual profit making, substantial corporations in the S&P 500. So the SNB is piling up big positions in them with money that really comes from nothing. That’s a little bit of an existential head scratcher, isn’t?

So what are investors supposed to do in these bizarre financial markets?

I’m very bullish on gold and I’m very bullish on gold mining shares. That’s because I think that the world will lose faith in the PhD standard in monetary management. Gold is by no means the best investment. Gold is money and money is sterile, as Aristotle would remind us. It does not pay dividends or earn income. So keep in mind that gold is not a conventional investment. That’s why I don’t want to suggest that it is the one and only thing that people should have their money in. But to me, gold is a very timely way to invest in monetary disorder.

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



GBP/USA 1.3089 UP .0020 

USA/CAN 1.2917 UP .0050

Early THIS MONDAY morning in Europe, the Euro ROSE by 20 basis points, trading now well above the important 1.08 level FALLING to 1.1287; Europe is still reacting to Gr Britain 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 23.30 POINTS OR 0.75%    / Hang Sang CLOSED UP 60.69 POINTS OR 0.26%     /AUSTRALIA IS LOWER BY .21% / EUROPEAN BOURSES ALL  IN THE RED

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 MONDAY morning CLOSED UP 52.37 POINTS OR 0.32%  

Trading from Europe and Asia:
1. Europe stocks ALL IN THE RED

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 60.69 POINTS OR 0.26%  ,Shanghai CLOSED DOWN 23.30  POINTS OR 0.75%    / Australia BOURSE IN THE RED: /Nikkei (Japan)CLOSED IN THE GREEN   /INDIA’S SENSEX IN THE RED 

Gold very early morning trading: $1336.40


Early MONDAY morning USA 10 year bond yield: 1.581% !!! PAR  in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES SLIGHTLY to 2.280 PAR in basis points from FRIDAY night. 

USA dollar index early MONDAY morning: 94.72 UP 12 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING


And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield:  3.03% UP 3 in basis points from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.06% UP 2 in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD:0.935% DOWN 2 IN basis points from FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.104  DOWN 3 in basis points from FRIDAY 

the Italian 10 yr bond yield is trading 16 points HIGHER than Spain.




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

Euro/USA 1.1321 UP .0003 (Euro UP 3 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 100.32 UP .193(Yen DOWN 19 basis points/


USA/Canada 1.2946 UP 0.0079 (Canadian dollar DOWN 79 basis points AS OIL FELL(WTI AT $47.06). Canada keeps rate at 0.5% and does not cut!


This afternoon, the Euro was UP by 3 basis points to trade at 1.1321

The Yen FELL to 100.32 for a LOSS of 19 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 


The Canadian dollar FELL by 79 basis points to 1.2946, WITH WTI OIL AT:  $47.05


The USA/Yuan closed at 6.6473

the 10 yr Japanese bond yield closed at -.06% UP 2 IN  points / yield/

Your closing 10 yr USA bond yield:DOWN 4 IN basis points from FRIDAY at 1.542% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.236 DOWN 5 in basis points on the day /


Your closing USA dollar index, 94.54  DOWN 6 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 MONDAY

London:  CLOSED DOWN 30.41 OR 0.44%
German Dax :CLOSED DOWN 50.01 OR  0.47%
Paris Cac  CLOSED DOWN 10.58  OR 0.24%
Spain IBEX CLOSED UP 17.40 OR 0.21%
Italian MIB: CLOSED UP 59.08 POINTS OR 0.36%

The Dow was DOWN 23.15 points or 0.12%

NASDAQ DOWN  6.22 points or 0.12%
WTI Oil price; 47.05 at 4:30 pm;

Brent Oil: 49.16




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: 49.16

USA 10 YR BOND YIELD: 1.542% 

USA DOLLAR INDEX: 94.54 DOWN 6 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3196 UP .0002 or 2 basis pts.

German 10 yr bond yield at 5 pm: -0.090%


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


“Orchestrated Chaos” – Stocks Rollercoaster Despite Oil, Dollar, Bond Yield Tumble

“Whatever the disease… The Fed is the cure…”


Today’s market action was up there for the “most fucking idiotically algo-driven ever” award…as equity indices and VIX were spanked at 930, 1030, 1130, 1230, 1330, and 1430 before the self-organization idiots figured out their own pattern and backed off… (NO, there was no headline catalysts for these moves)

This has the smell of major gamma in options markets with the flushes in VIX anchoring around 18500.Also note that the plunge in VIX after NYMEX closed had little to no effect on stocks.

As Nanex illustrated oh so well – this was algo-driven orchestrated chaos…

Which left stocks mixed on the day – Small Caps and Nasdaq gained (another squeezefest) and Trannies were the biggest loser…


“Most Shorted” stocks saw 5 squeeze attampts today…


Ironically, Fed Veep Fischer’s hawkish tone sparked some USDollar strength in Sunday trading and through Asian trading but early morning as USDJPY neared 101.00, the surge stalled and USD Index fell all day…


So stocks did what they did – in some manic-bipolar dance – but bonds, the dollar, and oil did not…


CAD was whacked today on weaker oil but cable rallied most of the majors offsetting Fischer’s hawkish tone on Sunday…leaving the USDollar index lower on the day..


Treasury yields all fell on the day (with 2Y underperforming)


Collapsing 2s30s to its post-Brexit lows…


Which financials no longer care about…


Commodities were all lower (despite the usd weakness) but gold outpeformed (silver slammed on the open after Fischer) as crude was crushed…


Nigeria’s Delta Avengers ceasefire chatter and increased supply from Iraq – along with early USD strength – sent crude lower…


Notably the gold/silver ratio keep surging – the last 2 days are the biggest gold outperformance since China’s devaluation in Aug 2015…


Charts: Bloomberg



Markets reaction to Fisher’s hawkish comments at Jackson Hole that a rate hike in 2016 may be in the offering:

(courtesy zerohedge)

VIX Surges As Market Confusion Reigns After Fischer’s J-Hole Comments

Market confusion remains following Fischer’s hawkish tone yesterday at J-Hole. Despite market-implied rate-hike odds have barely budged but the USDollar, stocks, VIX, bonds, and commodities are moving notably.

Rate-hike odds barely budged after Fischer – 16% chance of Sept hike (slight rise) and 32% of Dec (so a 48% cumulative chance of a 2016 cut)…

The Dollar is now falling – having risen after Fischer’s comments…

Bond yields are tumbling (even 2Y) – having risen after Fischer’s comments…

Stocks are fading fast – having risen after Fischer’s comments…

Oil’s drop is being driven by three main factors – Iraq boosting exports 5%, Niger Delta Avengers backing off, and the Fischer-effect on the USD.

And VIX is surging…

Charts: Bloomberg




Looks like our good friend Hillary is in trouble with this:

New emails reveal Hillary Clinton provided special access to foundation donors.

The Clinton Foundation is nothing but a racket and Hilary lied about providing everything work related:

(courtesy zero hedge)


From Soccer Stars To Bahrain Princes: New Emails Reveal Hillary Clinton Gave Special Access To Foundation Donors




And late this afternoon Hillary’s troubles continues as the FBI finds 15,000 more business related emails:

(courtesy zero hedge)


FBI Uncovers Over 15,000 More Emails In Clinton Probe

Updating our earlier note, it appears The State Department’s stalling has been disallowed… (as Bloomberg reports)

A judge ordered the State Department to expedite its review of almost 15,000 previously undisclosed documents recovered by the FBI from Hillary Clinton’s private e-mail servers.


U.S. District James Boasberg on Monday ordered the State Department to process those recovered records by Sept. 22 and report back to him that day. He didn’t set a schedule for public release. The department raised the possibility of a phased release starting Oct. 14, which left open how many would be disclosed before the Nov. 8 presidential election.

As we detailed earlier, in yet another incident pointing to Hillary’s ‘above the law’ persistent lies, WaPo reports The FBI’s year-long investigation of Hillary Clinton’s private email server uncovered tens of thousands more documents from her time as secretary of state that were not previously disclosed by her attorneys. Worse still, as Judicial Watch details, “it looks like the State Department is trying to slow roll the release of the records.”

Having suffered blowback from throwing Colin Powell under the bus over the weekend, The Clinton campaign is likely back in panic mode as The Washington Post reports the number of emails to be released is nearly 50 percent more than the 30,000-plus that Clinton’s lawyers deemed work-related and returned to the department in December 2014

The State Department is expected to discuss when and how it will release the emails Monday morning in federal court.


Monday’s hearing comes seven weeks after the Justice Department on July 7 closed a criminal investigation without charges into the handling of classified material in Clinton’s email set-up, which FBI Director James B. Comey Jr. called “extremely careless.”


The FBI on Aug. 5 completed transferring all of what Comey said were several thousand previously undisclosed work-related Clinton emails that the FBI found in its investigation for the State Department to review and make public. Government lawyers until now have given no details about how many emails the FBI found or when the full set would be released. It’s unclear how many of the 15,000 or so documents might be attachments, duplicates or exempt from release for various legal reasons.


Government lawyers disclosed last week that the FBI turned over six computer discs of information: one including e-mails and attachments that were sent directly to or from Clinton, or to or from her at some point in an e-mail chain, and not previously turned over by her lawyers; a second with classified documents; another with emails returned by Clinton; and three others containing materials from other individuals retrieved by the FBI.

Judicial Watch president Tom Fitton tweeted Monday morning that…

FBI found almost 15,000 new Clinton documents. When will State release them? Court hearing today.

Adding in an interview that “it looks like the State Department is trying to slow roll the release of the records. They’ve had them for at least a month, and we still don’t know when we’re going to get them.”

The roughly 15,000 documents at issue now come from the first disc, Fitton said.

Lawyers for the State Department and Judicial Watch, the legal group, said in an Aug. 12 court filingthat they intended to negotiate a plan for the release, part of a civil public records lawsuit before U.S. District Judge James E. Boasberg of Washington.

The pre-emptive excuse already being pitched by FBI Director Comey is just as disgusting as his previous statement that  investigators found no evidence that the emails it found “were intentionally deleted in an effort to conceal them.”

Clinton’s lawyers also may have deleted some of the emails as “personal,” Comey said, noting their review relied on header information and search terms, not a line-by-line reading as the FBI conducted.

We are sure this is “probably nothing” – just another factual falsehood from the Clintons and their establishment cronies.

Of course, as Bill Clinton has stated, this will all change

If [Hillary] is elected, we will immediately implement the following changes:


The Foundation will accept contributions only from U.S. citizens, permanent residents, and U.S.-based independent foundations, whose names we will continue to make public on a quarterly basis.


And we will change the official name from the Bill, Hillary & Chelsea Clinton Foundation to the Clinton Foundation.


While I will continue to support the work of the Foundation, I will step down from the Board and will no longer raise funds for it.

But – we presume – if she is not elected then the foreign bribes will continue?



Let us close with this must see video and discussion on the fraudulent comex courtesy of Craig Hemke and Greg Hunter


Fed Goons Will Not Raise Rates Until 2017-Craig HemkeBy Greg Hunter On August 21, 2016

By Greg Hunter’s (Early Sunday Release)

Financial writer and precious metals expert Craig Hemke says forget about new threats that the Federal Reserve is raising interest rates in September. Hemke explains, “They are trying to move things by talking, which is their primary policy. That’s why so many of these Fed goons, not Fed Governors, as we like to say, that’s why they seem to have conflicting messages all the time. They are always trying to get the markets to do what they want them to do. Rational human beings are telling you that they are not going to raise rates in September. Not only are they going to do it right before an election, that never happens, if you look at FOMC minutes, the expectations actually went down. . . . People see through the nonsense, and actually you’ve got to go all the way out to March of next year, seven months from now, before you at least have a 50/50 likelihood of a an interest rate hike.”

On gold, Hemke contends, “What people have to understand here is what you think of as a market, two rational people exchanging goods at a certain price that works for both of them, is not what happens here. The price is discovered for the paper derivative itself, and it is determined by electronic high-frequency trading. All this is machines taking ques from other things that seem totally unrelated. So, it sounds like these are markets that are broken. I think that is a safe assumption to make. . . . The speculators trading the paper derivative is what is allowed to set price, and that is absolutely breaking everything. For my specific purposes, it is going to break the derivative paper pricing scheme, as well. We can’t wait for that to come because the price is not going to be discovered to be $1,360 per ounce at that point. . . . I know how this is going to end. Tolstoy in ‘War and Peace’ said ‘time and patience are the greatest warriors,’ and that’s exactly right. I have time and patience on my side because I know how this ends.”

Hemke goes on to say, “One day, this unallocated, super-hypothecated system, where one ounce of gold is pledged to 100 different owners, that is going to stop when a couple of those owners show up at once wanting their ounce, and they are told they can’t have it. . . . They all tell you we’ve got your gold and as long as only one person shows up at a time wanting to make a withdrawal then everything is hunky-dory. But when everybody shows up at the Bailey Savings and Loan on George Bailey’s wedding day wanting their gold all at once, the thing just crumbles. It’s a confidence game. Negative interest rates are the greatest fundamental we have ever seen. This is physical demand that extracts gold from the banker’s system that will eventually lead to shortages, and lead to lack of confidence, lead to delivery failure, and finally, the paper derivative pricing scheme will fail.”


Join Greg Hunter as he goes One-on-One with Craig Hemke of

(There is much more in the video interview.)

After the Interview:

(There is much more in the video interview.) until-2017-craig-hemke/#more-17743


well that is all for today

I will see you tomorrow night

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