August 29/Basel III rules will force the Fed to never shrink its balance sheet!!/Gold and silver rise/Turkey fires on USA ally the Kurds in Syria/USA very angry/BIS continues to golds swaps which indicates huge tightness in the gold market/Holland will not release its bar codes and weights per bar/Apple to be hit by Europe with a huge tax bill: expect reciprocity from the USA/

Gold:1322.90 UP $1.40

Silver 18.76  UP 11 cents

In the access market 5:15 pm

Gold: 1322.90

Silver: 18.83


For the August gold contract month,  we had a good sized 45 notices served upon for 4500 ounces. The total number of notices filed so far for delivery:  14,145 for 1,414,500 oz or  tonnes or 43.996 tonnes.  The total amount of gold standing for August is  44.357 tonnes.

In silver we had 4 notices served upon for 20,000 oz. The total number of notices filed so far this month:  505 for 2,525,000 oz.  The amount standing in silver: 2,530,000 oz

Gold will remain subdued until Wednesday afternoon when the OTC/LBMA options expiry over in London.


Let us have a look at the data for today



In silver, the total open interest FELL BY 8,110 contracts DOWN to 193,747. The open interest fell PRETTY HARD   DESPITE THE FACT THAT THE SILVER PRICE WAS UP 17 CENTS IN FRIDAY’S TRADING .In ounces, the OI is still represented by just LESS THAN 1 BILLION oz i.e. .968 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia &ex China).

In silver we had 4 notices served upon for 20,000 oz

In gold, the total comex gold ROSE 5975 contracts as the price of gold ROSE BY $1.80 yon Friday . The total gold OI stands at 560,430 contracts


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


we had no changes  today at the GLD

Total gold inventory rest tonight at: 956.59 tonnes of gold


we had a small change at  the SLV, a deposit of 950,000 oz / THE SLV Inventory rests at: 357.844 million oz


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

1. Today, we had the open interest in silver fell by 8110 contracts down to 193,747 despite the fact that the price of silver rose by 17 cents with FRIDAY’S trading.The gold open interest ROSE 5,975 contracts UP to 560,430 as the price of gold ROSE $1.80 WITH FRIDAY’S TRADING.

(report Harvey).


2 a) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

2b) FRBNY gold report


i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 0.281 POINTS OR 0.01%/ /Hang Sang closed DOWN 88.20 points or 0.30%. The Nikkei closed UP 376.78 POINTS OR 2.30% Australia’s all ordinaires  CLOSED DOWN 0.84% Chinese yuan (ONSHORE) closed DOWN at 6.6810/Oil FELL to 47.00 dollars per barrel for WTI and 49.22 for Brent. Stocks in Europe: in the RED EXCEPT LONDON  Offshore yuan trades  6.6902 yuan to the dollar vs 6.6810 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS SLIGHTLY AS  MORE USA DOLLARS ATTEMPT  LEAVE CHINA’S SHORES  



With  the Friday Jackson Hole speech out of the way, UBS speculates that Kuroda will launch a huge stimulus massive shock to Japan to drive their inflation rate to 2%

( zero hedge)


 none today


i)I am glad this is happening.  The TTIP would be bad for everybody but the uSA

( zero hedge)


i)Chaos reigns supreme as Joe Biden’s visit ends in humiliation.  Erdogan continues to bomb USA allies (the Kurds) in Syria, while the  USA and NATO watch.  Meanwhile Erdogan slowly moves closer and closer to Russia;

(zero hedge)

ii)USA slams Turkey on the bombing of the Kurds, but as you will see it will have no effect on Erdogan.   He will continue in his assault on Syrian Kurds

( zero hedge)


none today


The glut will continue as oil falls back below 47 dollars. The short squeeze certainly had an effect on pricing

( zerohedge)


none today


i)We are now beginning to see renewed involvement in the gold market with respect to the BIS. You will note that by the end of 2015, their involvement was tiny and by the first quarter of 2016, gold swaps with the BIS fell to zero .  Now we see higher gold swaps indicating tightness in the gold market

( GATA/Robert Lambourne)

ii)The reason the Dutch central bank will not release bar numbers and codes is because they are afraid that their exact numbers etc will show up in various vaults around the world. The Dutch will have the real bars and everyone else who thinks that they have real bars will have fake paper gold.

( Koos Jansen)

iii)I wish Barrick all the luck int he world dealing with these clowns:

( Bloomberg/GATA)

iv)Central banks “could care less about gold” is totally wrong.  It is their mantra to care as they continually whack gold to suppress its price

( Chris Powell/

v)Bill Holter is interviewed by Sean of SGT on some a very important discussions

( Bill Holter/SGT report)

vi)A very important commentary from Craig Hemke today as he describes in detail exactly what happened on Friday.  When the world did not react “properly” to the Fed’s speech, they trotted out their second in command, Fischer, who promptly stated that the rate hike in September may be on. As you will see below, the Basel III implementation will cause the Fed never to reduce its balance sheet and thus make it almost impossible and nonsensical to raise rates

( Craig Hemkeg/GATA/TFMetals/


i)Is the next plan a huge increase in inflation policies enough to shock taxpayers to spend now? The Jackson Hole post mortem:

( zero hedge)


ii)Then this important commentary from zero hedge, where , due to new rules for the banking sector Basel III , it will now be impossible for the Fed to reduce its balance sheet. I cannot foresee the dollar strengthening with this on their head:

(zero hedge)

iii)As we indicated above, the confidence in the Fed is sinking fast and that will have ramifications for the dollar:

( Mish Shedlock/Mishtalk)

iv)The real math showing how the middle class in the USA is being destroyed by Obamacare:

( zero hedge)

v)The raising of the minimum wage has forced Ashley Furniture to clash 840 jobs in California as they move their operations to North Carolina and Wisconsin.

( zero hedge)

vi)The Dallas manufacturing index continues in contraction mode for the 20th straight month;

( zero hedge)

vii) Apple is being set to be hit with the “largest tax penalty ever recorded”

Expect the USA to reciprocate with money laundering charges against European banks:

( zero hedge)

viii)WOW!! just look at what the following Dallas Fed respondent stated about the economy right now. He also stated that the data will show that throughout 2016, the USA was in a recession.  Not the garbage fed by Yellen and Fischer

( Dallas Fed/zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 560,430 for a GAIN of 5,975 contracts as the price of gold ROSE by $1.80 with yesterday’s trading. We are now in the active month of August.  I wrote the following at the beginning of the month: ” 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. “

Tonight we saw another huge increase in the amount of gold ounces standing as somebody was in great need of gold.

The big active contract month of August saw it’s OI FELL by 45 contracts DOWN to 161.  We had 45 notices filed upon on Friday so we neither gained nor lost any ounces that will stand for delivery in August.  The next contract month of Sept saw it’s OI fall by 298 contracts down to 2899.  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 1292 contracts DOWN to 45,168.  The estimated volume today (which is just comex ales during regular business hours of 8:20 until 1:30 pm est) was FAIR at 159,290.  The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was HUGE at 329,634 contracts ( WITH ALL OF THOSE RAID CONTRACTS). The comex is not in backwardation.

Today we had  45 notices filed for  4500 oz of gold.

And now for the wild silver comex results.  Total silver OI fell by 8,110 contracts from 201,857 down to 193,747 despite the rise in price of silver to the tune of 17 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 remain at  5 for a loss of 0 contracts.  We had 0 notices served upon on Friday, so we neither gained nor lost any silver ounces that will stand for silver in this non active delivery month of August.  The next active month is September and here the OI fell by a huge 15,155 contracts down to 23,748. As usual, when we approach the first day notice of an active month we see total obliteration of the open interest  . We have 2 days left before first day notice.  The volume on the comex today (just comex) came in at 64,265 which is HUGE.  The confirmed volume yesterday (comex and globex) was also GIGANTIC  at  131,279 rollovers . Silver is not in backwardation.  London is in backwardation for several months.
we had 4 notices filed for 20,000 oz
INITIAL standings for AUGUST
 August 29.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
6800.127 oz
Deposits to the Dealer Inventory in oz NIL
Deposits to the Customer Inventory, in oz 
No of oz served (contracts) today
45 notices 
4500 oz
No of oz to be served (notices)
71 contracts
(7100 oz)
Total monthly oz gold served (contracts) so far this month
14,145 contracts (1,414,500 oz)
(43.999 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month    575,.535.9 OZ
Today:  tiny activity at the gold comex AND 0 KILOBAR ENTRIES//
Today we had 0 dealer DEPOSITS
total dealer deposit: nil    0z
Today we had  0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 0 customer deposit:
Total customer deposits: nil OZ
Today we had 1 CUSTOMER withdrawals
i) Out of Scotia; 6800.127 OZ
Total customer withdrawals  6800.127 OZ
Today we had 1 adjustment: AND A STRANGE ONE!~!
 i) Out of BRINKS:  4058.000 was adjusted out of the DEALER and this landed into the CUSTOMER account of BRINKS: .126 TONNES AND A DEEMED SETTLEMENT
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 at the comex will be compromised!
I also urge all of you do not place any option trades at the comex as these gangsters will gun you down.
If you are taking delivery of gold/silver please remove it from comex banks and place it in private vaults 
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 214 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 201 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 (14,145) x 100 oz  or 1,414,500 oz , to which we  add the difference between the open interest for the front month of AUGUST  (161 CONTRACTS) minus the number of notices served upon today (45) x 100 oz   x 100 oz per contract equals 1,426,100 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 (14,145) x 100 oz  or ounces + {OI for the front month (161) minus the number of  notices served upon today (45) x 100 oz which equals 1,426,100 oz standing in this non  active delivery month of AUGUST  (44.357 tonnes).
We neither gained nor lost any gold ounces standing 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 + 44.357 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, aug 23: .1756 tonnes/aug 25.2115/aug 26: 1.3530/ AUG 29 .126 TONNES/THEREFORE 91.536 tonnes still standing against 72.638 tonnes available.
 Total dealer inventor 2,335,320.0 oz or 72.638 tonnes
Total gold inventory (dealer and customer) =10,985,193.400 or 341.69 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 341.69 tonnes for a  gain of 39  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 29.2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
440,234.740 oz
Deposits to the Dealer Inventory
Deposits to the Customer Inventory
960,269.300 OZ
No of oz served today (contracts)
(20,000 OZ)
No of oz to be served (notices)
1 contracts
5,000 oz)
Total monthly oz silver served (contracts) 505 contracts (2,525,000 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  10,650,473.0 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:  140,180.54 oz
ii) Out of JPM; 300,046.200 oz
Total customer withdrawals: 440,234.74 oz
We had 2 customer deposit:
i) Into JPM: 316,556.500 oz
ii) Into Scotia:  643,712.800
total customer deposits:  960,269.300   oz
 we had 2 adjustments
i) Out of CNT:  613,244.180 oz was adjusted out of the dealer and into the customer account of CNT
ii) Out of Delaware:  760,861.643 oz was adjusted out of the dealer and this landed into the customer account of Delaware
The total number of notices filed today for the AUGUST contract month is represented by 4 contracts for 20,000 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 (505) x 5,000 oz  = 2,525,000 oz to which we add the difference between the open interest for the front month of AUGUST (5) and the number of notices served upon today (4) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the AUGUST contract month:  505(notices served so far)x 5000 oz +(5 OI for front month of AUGUST ) -number of notices served upon today (4)x 5000 oz  equals  2,530,000 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:  26.070 million (close to record low inventory  
Total number of dealer and customer silver:   161.348 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 29/no changes at the GLD/Inventory rests at 956.59 tonnes
August 26./no changes at the GLD/inventory rests at 956.59 tonnes
August 25/a withdrawal of 1.78 tonnes at the GLD/Inventory rests at 956.59 tones
August 24/NO CHANGE  in gold inventory at the GLD/inventory restsw at 958.37 tonnes
August 23/no change in gold inventory at the GLD/Inventory rests at 958.37 tonnes
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 29/ Inventory rests tonight at 956.59 tonnes


Now the SLV Inventory
August 29/we had a good sized deposit of 950,000 oz at the SLV/Inventory rests at 356.894 million oz/
August 26/no change in silver inventory at the SLV/Inventory rests at 356.894 million oz
August 25/a withdrawal of 1.899 million oz from the SLV/Inventory rests at 356.894 million oz
August 24/no change in silver inventory at the SLV/Inventory rests at 358.793 million oz
August 23/no change in silver inventory at the SLV/Inventory rests at 358.793 million oz.
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 29.2016: Inventory 357.844 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 4.5 percent to NAV usa funds and Negative 4.4% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 60.1%
Percentage of fund in silver:38.7%
cash .+1.2%( August 29/2016).
2. Sprott silver fund (PSLV): Premium falls to +0.23%!!!! NAV (august 29/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  0.32% to NAV  ( august 29/2016)
Note: Sprott silver trust back  into POSITIVE territory at +0.23% /Sprott physical gold trust is back into positive territory at 0.32%/Central fund of Canada’s is still in jail.


Federal Bank of New York/Earmarked gold report on how much gold leaves NY.

Reading last month:  7910.00 million dollars worth of gold at $42.22 oz

Reading this month:  7883 million dollars worth of gold at $42.22 per oz

Total amount of gold leaving the shores of NY;  27 million dollars worth at $42.22 per oz

In oz:  639,507 oz

In  tonnages:  19.89 tonnes

Last month: 30 tonnes

Since Germany is the only one official nation to ask for its gold back, you can safely say that it is this nation who is repatriating their gold to their shores.


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

Obama To Leave $20 Trillion Debt Crisis For Clinton Or Trump

President Obama is set to leave a massive near $20 trillion debt crisis for his successor – be that Hillary Clinton or Donald Trump.

The U.S. national debt reached $19.5 trillion last week and has been increasing by roughly $1 trillion a year during his Presidency and during the so called “recovery” as the U.S. government continues to spend money like a drunken sailor.

obamaPresident Obama gestures while speaking at Concord Community High School in Elkhart, Ind., on June 1, 2016. (Associated Press)

During Obama’s presidency, the total national debt has risen from $10.6 trillion to nearly $20 trillion – see Debt Clock here. There is also the not insignificant matter of the between $100 trillion and $150 trillion in unfunded liabilities – for medicare, medicaid and social security.

The U.S., like the EU and most western nations, is “kicking the can down the road.” Consequently, a U.S. and global debt crisis looks likely during the term of the next President if not sooner. The Washington Times reported last week:

With federal budget deficits on the rise again, the White House Wednesday officially kicked the problem down the road to the next president.

Asked about Congressional Budget Office projections that the federal deficit will spike 33 percent this year, White House press secretary Josh Earnest cited reasons including an aging population and Republican-sponsored tax cuts.

Then he added, “There’s certainly a lot of money that can be saved, and this will be a challenge that the next president and the next Congress will have to do.”

This and the fact that neither Presidential candidate has articulated concerns about the once again ballooning national debt and is it is not an issue in the campaign is leading to well founded concerns that a new debt crisis is looming right around the corner. From the Buffalo News:

When Clinton or Trump takes the oath of office on Jan. 20, he or she will owe those investors nearly $20 trillion. Right now, the debt amounts to $60,100 for every man, woman and child in the country.

We are supposed to be in an economic recovery. Yet the debt has more than doubled from what President Obama inherited from President George W. Bush, and many times what President Bill Clinton passed on to Bush in 2000.

The debt is not a forgettable thing, such as who won the men’s 1,500-meter race at Rio. It is a monster problem. It’s Jabba the Hutt looking for meat; it’s firewood smoldering in the cellar.

The situation is not sustainable – meaning the worst kind of crisis for everybody is looming around the corner.

Investors will continue to lend to us at low interest rates only as long as they can expect regular repayment.

In personal terms, the debt bill is larger than at any time in our history other than right after World War II.

This continuing surge in the U.S. national debt to the $20 trillion level means that the U.S. is now the largest debtor nation in the world – by a significant margin. Its total debt of over $120 trillion means it is the largest debtor nation the world has ever seen.

This profligacy will be paid back by the people of the U.S., and most likely by people in all indebted western nations, in the form of higher taxes, higher interest rates, inflation, currency wars involving devaluations and almost certainly a currency crisis involving the dollar and other leading fiat currencies.

Owning gold coins and bars in your possession and owning bullion in allocated and most importantly in segregated accounts will continue to protect and grow wealth in the coming years.

GoldCore: 7 Key Storage Must HavesDownload Guide

Gold and Silver Bullion – News and Commentary

Gold inches down on steady dollar, Fed rate hike remains on cards (CNBC)

Gold in Longest Stretch of Declines Since May as Fed Bets Climb (Bloomberg)

Gold pares gains as Fed stirs doubt over rate hike timing (Reuters)

Gold posts biggest weekly decline since mid-July (MarketWatch)

Weeks of Yellen Buildup and Gold Traders Still Guessing on Rates (Bloomberg)


“I can see gold breaking up to the upside” – Gartman (CNBC)

Welcome To The Third World – Pensions Overwhelm Public Services (Goldseek)

ohn Embry Warns The ‘Deep State’ Shadow Government Is Hard At Work In Financial Markets (KingWorldNews)

Fed jawboned Friday’s markets into submission  (TFMetalsReport)

The euro has destroyed the EU and led directly to Brexit (Telegraph)

Gold Prices (LBMA AM)

29Aug: Bank Holiday in UK
26Aug: USD 1,324.90, GBP 1,002.95 & EUR 1,173.33 per ounce
25Aug: USD 1,324.50, GBP 1,001.06 & EUR 1,172.98 per ounce
24Aug: USD 1,337.30, GBP 1,010.73 & EUR 1,185.38 per ounce
23Aug: USD 1,338.50, GBP 1,015.25 & EUR 1,181.09 per ounce
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

Silver Prices (LBMA)

29Aug: Bank Holiday in UK
26Aug: USD 18.67, GBP 14.15 & EUR 16.54 per ounce
25Aug: USD 18.50, GBP 14.02 & EUR 16.39 per ounce
24Aug: USD 18.84, GBP 14.23 & EUR 16.70 per ounce
23Aug: USD 18.98, GBP 14.40 & EUR 16.75 per ounce
22Aug: USD 18.91, GBP 14.45 & EUR 16.74 per ounce
19Aug: USD 19.42, GBP 14.80 & EUR 17.14 per ounce

Recent Market Updates

– Gold Bullion Averages Biggest Seasonal Gains in September Over Past 20 Years
– Gold Futures See Massive $1.5 Billion “Non Profit” Liquidation In “One Minute”
– Jim Grant Is “Very Bullish On Gold”
– Germans Warned To ‘Stockpile’ Cash In Case Of ‘War’
– Ireland’s Biggest Bank Charging Depositors – Negative Interest Rate Madness
– 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?

Mark O’Byrne
Executive Director



We are now beginning to see renewed involvement in the gold market with respect to the BIS. You will note that by the end of 2015, their involvement was tiny and by the first quarter of 2016, gold swaps with the BIS fell to zero .  Now we see higher gold swaps indicating tightness in the gold market

(courtesy GATA/Robert Lambourne)

Renewed use of gold swaps by BIS indicates strain on price suppression


By Robert Lambourne
Saturday, August 27, 2016

Recent disclosures in the monthly statement of accounts published by the Bank for International Settlements indicate the bank’s renewed use of a substantial quantity of gold swaps.

The annual report of the BIS for its financial year ended March 31, 2010, disclosed that 346 tonnes of gold were acquired through gold swaps from commercial bullion banks. A review of the previous use of gold derivatives by the BIS reveled that the transactions in 2009-10 were far more substantial than anything done in the bank’s recent history.

Yet in an article published in the Financial Times on July 29, 2010, BIS General Manager Jaime Caruana said the gold swaps were “regular commercial activities” for the bank. Here is a link to the FT article, which requires a subscription to access:

Here are excerpts from the article:

“Some analysts speculated that the swap deals were a surreptitious bailout of the European banking system ahead of last week’s publication of stress tests. But bankers and officials have described the transactions as ‘mutually beneficial.’ …

“‘The client approached us with the idea of buying some gold with the option to sell it back,’ said one European banker, referring to the BIS.

“Another banker said: ‘From time to time central banks or the BIS want to optimize the return on their currency holdings.'”

It is notable that none of these comments in the FT article focused on the gold market itself but implicitly accepted that gold was being used as collateral to support dollar loans to commercial banks.

An alternative explanation — that the swap transactions were initiated by the BIS to place more unallocated gold into the hands of certain central banks — seemed plausible, since the gold market was tight at the time.

The use of gold swaps by the BIS increased in the financial year ended March 31, 2011, with 409 tonnes of gold swaps reported by the bank. This was the peak amount reported by the bank:

2011: 409 tonnes.
2012: 355 tonnes.
2013: 404 tonnes.
2014: 236 tonnes.
2015: 47 tonnes.
2016: 0 tonnes.

As the table makes clear, the use of gold swaps by the BIS had reduced considerably leading to March 2016, when use of gold swaps stopped.

It is an interesting coincidence that the BIS has renewed its use of gold swaps just when gold market conditions again are considered tight, as they were in 2010 and 2011.

This link accesses the July 2016 statement of account by the BIS:

From the published information it is not possible to calculate an exact amount of gold swapped, in part because the BIS has probably continued its recent policy of selling a few tonnes of its own gold each year. The bank’s gold holdings have fallen from 120 tonnes in 2010 to 104 tonnes in 2016.

But it appears that the swapped by the BIS is in the range of 225 to 230 tonnes as of the end of July.

No doubt the BIS will comment at some point on its renewed use of gold swaps. But to those who consider the suppression of gold prices by central banks to be obvious, this is another sign that strain on the suppression scheme is growing.


Robert Lambourne is a business executive in the United Kingdom and a consultant to GATA.






The reason the Dutch central bank will not release bar numbers and codes is because they are afraid that their exact numbers etc will show up in various vaults around the world. The Dutch will have the real bars and everyone else who thinks that they have real bars will have fake paper gold.

(courtesy Koos Jansen)

Koos Jansen
Koos Jansen
Posted on 27 Aug 2016 by

Dutch Central Bank Refuses To Publish Gold Bar List For Dubious Reasons

My hunt for the gold bar list of the Dutch official gold reserves started in 2015. On September 26 of that year I visited a conference in Rotterdam, the Netherlands, called Reinvent Money. One of the speakers was Jacob De Haan from the Dutch central bank (DNB) Economics and Research Division – you can watch his presentation by clicking here.

In his presentation De Haan repeatedly talked about the importance of transparency in central banking. These statements raised my eyebrows, as I submitted a FOIA request at DNB in 2013 to ask for all correspondence between DNB and other central banks in the past 45 years with respect to its monetary gold, which was not honored. From my experience DNB was anything but transparent.

De Haan DNB 2015
Slide from is Jacob De Haan (DNB) at the Reinvent Money conference September 26, 2015. Red frame added by me.

After the presentation I approached De Haan and asked him, if transparency is so important to DNB, why has it never published its gold bar list? An act of transparency that could be accomplished within minutes. De Haan offered me he would look into that. He gave me his email address and we agreed to stay in touch. 

Jan de Haan dnb
September 26, 2015, at the Reinvent Money conference. On the left is Jacob De Haan, on the right in the orange sweater is me.

The next day I send De Haan an extensive email explicating my request at DNB to publish the gold bar list of the Dutch gold in excel sheet format. I wrote him it wouldn’t take DNB any effort, as I assumed the bar list was readily available.

De Haan never replied to my email, so I called his office in December 2015 to ask what the status was of my request. De Haan’s secretary answered my inquiry was not rejected but still being processed.

Weeks passed but I didn’t get any reply from De Haan.

On February 24, 2016, I decided to call DNB’s press department to ask about my inquiry. DNB’s spokesman, Martijn Pols, told me over the phone the subject was still being discussed internally, he even confirmed De Haan was involved in the decision making. DNB was considering releasing the document while carefully weighing al pros and cons, he said.

In the conversation Pols stated DNB was aware the German central bank (the Deutsche Bundesbank) released a bar list in October 2015 and there was a wish in Amsterdam to mutually harmonize this policy. I added that if DNB would go ahead with the publication their action would only be credible if the Dutch bar list would be complete (disclosing refinery brands, refinery bar numbers and year of manufacturing), in contrast to the incomplete list the Germans had published. Pols was aware of the format the Germans had chosen and took note of my comment. An ensuing question from my side what was holding back DNB in releasing the list could not be clearly answered.

Months passed without any news from DNB. On August 8, 2016 I decided to call Pols again for a status update. He said he would reply over email. A few days later I received an email from DNB Head of Commutations J.W. Stal.

His email to me, translated from Dutch to English, reads:

Dear Mr Jansen,

…. We can share the following information with respect to our gold reserves.

DNB is transparent about the amount (weight) and the value of our gold assets. This information can be found in our annual reports. Thereby, several media have visited the gold vault and video recordings have also been made. However, we do not intend to publish a gold bar list. This serves no additional monetary purpose to our aforementioned transparency policy, however it would incur administrative costs. 

If you have any further question please contacts us.

Kind regards,

J.W. Stal

Of course, in this day and age any gold bar list from a central banks should be readily available in excel sheet format, and releasing a sheet would not incur any administrative costs.

My response to Stal translated:

Dear Mr Stal,

If the sole reason not to publish the gold bar list is that such an action would incur administrative costs I must conclude DNB doesn’t have the list readily available. Or is my conclusion erroneous? Does DNB have a complete gold bar list readily available or not?

If not, this is worrying because the gold bar list forms one of the most important checks on the existence of the Dutch official gold reserves, which provide essential stability to our economy.

Is the list in your possession or not?

Kind regards,

Koos Jansen

Stal replied:

Dear Mr Jansen,

In response to your email of August 11, 2016, to De Nederlandsche Bank (DNB), we can inform you as follows on our gold reserves and the related gold bar list. DNB has internal gold bar lists, however the conversion of internal lists to documents for publication would create too many administrative burdens.

We maintain our previous email, in which we stated publishing a gold bar list serves no monetary purpose other than transparency. And as previously noted, there are other ways for DNB to transparently communicate about our gold stocks.

We trust to have informed you sufficiently.

Kind regards,

J.W. Stal 

If DNB has its gold bar list properly (digitally) archived there should be no administrative cost whatsoever for publication. The argument presented by Stal makes absolutely no sense to me. If one owns over 600 tonnes of gold, why not have the physical assets accurately inventoried? 

What could possibly be the problem to release the bar list of the Dutch gold located in Amsterdam, New York, Ottawa and London?


I would like to remind you that DNB is the only Western central bank that in recent years has successfully repatriated a significant amount of gold (122.5 tonnes) from the Federal Reserve Bank Of New York through a covertly executed operation. This underlines DNB is fully aware of the importance of its gold reserves in our current fragile financial climate. I think DNB does have the bar list readily available, but it chooses not to publish it for political reasons – think, tensions between its custodians in New York and London.

DNB claims to be transparent but in reality it’s not.

If you click this link you can see the most recent video recording made inside the DNB vault at the Frederiksplein in Amsterdam on April 26, 2016. The gold you see in the video aggregates to 189.9 tonnes and includes the 122.5 tonnes repatriated from the Federal Reserve Bank of New York in November 2014. Note, the gold at the Frederiksplein has been relocated to a different compartment inside the vault room after November 2014, due to the increased volume by the repatriation.

elianne DNB gold
Courtesy RTLZ. DNB vault room, Frederiksplein in Amsterdam on April 26, 2016.

A few noteworthy comments from the DNB employee in the video:

Gold is the ultimate insurance and anchor in monetary systems.

If there will ever be any financial instability we can use the gold to build a new monetary system and offer trust to the public.

Koos Jansen
E-mail Koos Jansen on:




I wish Barrick all the luck int he world dealing with these clowns:

(courtesy Bloomberg/GATA)

Barrick signs on to Venezuela gold push as oil sinks economy


By Danielle Bochove
Bloomberg News
Friday, August 26, 2016

Barrick Gold Corp. agreed to form a joint venture in Venezuela, according to state television, as President Nicolas Maduro turns to mining as a way to boost one of the fastest-shrinking economies in the world.

The world’s biggest producer of the precious metal was among several companies to sign letters of commitment for gold-mining ventures during a ceremony held at the presidential palace in Caracas on Friday. The government would take a 55 percent stake in the proposed Barrick venture, Maduro said.

“At the invitation of the government, we intend to review information pertaining to mining opportunities in the country,” Andy Lloyd, a spokesman for Toronto-based Barrick, wrote in an e-mailed response to questions. …

… For the remainder of the report:…





Central banks “could care less about gold” is totally wrong.  It is their mantra to care as they continually whack gold to suppress its price


(courtesy Chris Powell/

Stock touting may be a lot easier when ‘nobody knows anything’


11:27a ET Sunday, August 28, 2016

Dear Friend of GATA and Gold:

Mining stock promoter Bob Moriarty, proprietor of and author of the new book “Nobody Knows Anything,” was at least speaking for himself the other day when he claimed that central banks care a lot about interest rates but not at all about gold.

In commentary headlined “A Zombie Financial System, Black Swans, and a Gold Share Correction” —

— Moriarty wrote:

“As a measure of just how important gold is to the world financial system in comparison to interest rates, interest rate derivatives are about 1,300 times greater than gold derivatives. We have a lot of me-too parrot websites talking about manipulation and conspiracies but logic tells us central banks worry about interest rates and couldn’t care less about the price of gold.”

But central banks care about gold precisely because its price has a long historical correlation with interest rates and government bond prices, a correlation studied and documented by central bankers and economists alike, including, in their 1988 study, “Gibson’s Paradox and the Gold Standard,” Harvard economics professor Lawrence Summers, who went on to become U.S. treasury secretary, and University of Michigan economics professor Robert Barsky:

A few weeks ago another academic paper, written by a professor of accounting and finance at the University of Western Australia in Perth, Dirk Baur, confirmed that the relationship between interest rates and the gold price gives central banks a powerful incentive to influence interest rates by intervening surreptitiously in the gold market:

Baur even quoted from the transcript of the May 1993 meeting of the Federal Reserve’s Open Market Committee, which includes an exchange about gold and interest rates between Fed Chairman Alan Greenspan and Fed Board of Governors member Wayne D. Angell, comments that have been cited by GATA many times over the years.

Greenspan: There’s an interesting question here because if the gold price broke in that context, the thermometer would not be just a measuring tool. It would basically affect the underlying psychology. Now we don’t have the legal right to sell gold but I’m just frankly curious about what people’s views are on situations of this nature because something unusual is involved in policy here.”

Angell: We can hold the price of gold very easily. All we have to do is to cause the opportunity cost in terms of interest rates and U.S. Treasury bills to make it unprofitable to own gold. I don’t know how much change in the fed funds rate and the Treasury bill rate it takes to do that, but I’d sure like to find out.

And just yesterday GATA consultant Robert Lambourne reported that the Bank for International Settlements, the central bank of the central banks, recently jumped back into the gold swap business, apparently to relieve tight conditions in the gold market:

Indeed, three years ago the director of market operations for the Banque de France, Alexander Gautier, told the London Bullion Market Association meeting in Rome that the French central bank trades gold for its own account “nearly on a daily basis” and is “active in the gold market for other central banks and official institutions”:

If central banks “couldn’t care less about the price of gold,” why are they trading it “nearly on a daily basis” and why is the BIS arranging gold swaps?

Of course GATA has compiled an enormous amount of official documentation showing that central banks care desperatelyabout the gold price and about concealing their intervention in the gold market, and always will care as long as gold is considered money, a form of money competing with central bank currencies. A summary of that documentation can be found here:

Still more of it can be found here:

So why does Moriarty insist that there is nothing to this even as he fails to address even one document? Why does he constantly misinform his readers?

Is it because the stock-touting business is a lot easier when nobody knows anything?

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



Always popular:  Mike Maloney on “This is the Peak” with Dr Chris Martenson

(Mike Maloney/ Chris Martenson)

Mike Maloney: “This Is The Peak”

Submitted by Adam Taggart via,

Precious metals dealer and monetary historian Mike Maloney is quite confident the liquidity-driven ‘recovery’ created by the world’s central banks is now over. In his estimation, the path ahead is one of accelerating descent into inevitable currency destruction:

What the central banks are doing has never worked and they keep on trying – you just hit that nail a little bit harder each time because it isn’t working. They have these theories and they think that the theory is correct that this – and no matter what the results are they say well, we just didn’t do enough of it. Japan has been trying this for 30 years now and it hasn’t worked. These people are just absolutely dangerous. They are going to drag the entire world economy down. You talked about the helicopter money that is now happening in Europe and so on. That is going to be coming to the United States soon. Coming to a Central Bank near you.

It always has damaging results. They don’t look at this. It is a huge wealth transfer. The immorality of an entity and everywhere I go I take a look at – when I would go speak in Singapore or Australia, New Zealand, Malaysia, Colombia, Peru doesn’t matter – Russia – everywhere I go I take a look, I go on the websites of the central bank for that country and I start gathering information. I haven’t found a central bank that is part of the government. They are all private. Here is a private entity that is allowed to create currency and now they are buying bonds from corporations? They can buy stocks.  When they write a check and they buy something, currency is created and it enters circulation. A very large portion of it is Fanny Mae and Freddy Mac stuff. It is the mortgage backed securities. And so that means that they own real estate. This private corporation is able to counterfeit and purchase real estate legally. The morality of this is insane.

Keynesian economics isn’t even remotely plausible. But it’s what is taught all over the world. They don’t understand fundamental economics. This is the problem that we have: all economies on the planet are being run by economists that don’t understand economics.

The purchasing power that is contained in currency is basically the agreement that we have as a society that we are all going to use that currency and we trust that currency and we store hours of our lives. We trade hours of our lives for currency. We work. That is the purchasing power. Then that currency measures the goods and services in a society. The true wealth. They think that they can actually print wealth. When they print new units of currency, the only way it can get purchasing power is the moment that it is spent in the circulation — it has to steal it from somewhere else because it is empty when it comes into existence. There is no work that went into it. There are no hours of life traded for it. There is no product or service that it represents until it is spent in circulation and then it steals that purchasing power from all other units of currency. It is fraud. It is theft. They can’t actually stimulate an economy. All they can do is warp it. They can steal purchasing power from some areas of the economy and transfer it to another area of the economy pushing that area into a bubble. It is very, very disruptive.

Now we’ve got bubbles in stocks, real estate and bonds. This is going to be one hell of a crisis.

This is the peak – we have passed the peak of the bubble. It’s now deflating. There is usually a little tiny roll over and then a huge crash. And the little tiny roll over is just starting right now. We are seeing it first in the top end (like luxury real estate), where the currency that was created by the central banks went to that 0.1% first.

Within the next few years you are going to see probably the greatest crash in history.I have often said that the crisis of 2008 was just a speed bump on the way to the main event. We are in the process right now of seeing this unwind.

Click the play button below to listen to Chris’ interview with Mike Maloney (46m:37s).

Bill Holter is interviewed by Sean of SGT on some a very important discussions

(courtesy Bill Holter/SGT report)

WAKE UP CALL: Our Entire World is Going To Change — BILL HOLTER


The cartel hit gold hard again on Wednesday selling $1.5 BILLION is paper gold into the market in ONE MINUTE and as JS Mineset’s Bill Holter notes, “$1.5 Billion of gold is close to 2% of global production and to see that sold in one minute is laughable.”

Bill asks, “Who has that amount of gold to sell? And the answer of course is almost no one. And what trader would ever sell in that fashion? And the answer is no one wo would want to keep a job if they were selling for profit. So the sell was obviously to create price, a lower one.”

But as the bond market and rising LIBOR rates are telling us, the system is coming apart at the seams and the coming collapse will cause “our entire world to change.”

Help us spread the ANTIDOTE to corporate propaganda.

Please follow SGT Report on Twitter & help share the message.

Bill Holter:  public article

“Pure Liquidity” (public article)



The 2008 Great Financial Crisis came about because we began to hit “debt saturation” levels.  The crisis was one of solvency but was attended to with added liquidity.  Sovereign treasuries still had the ability to add debt to their balance sheets which was done in unprecedented amounts.  Now, we are again bumping up against debt saturation levels as sovereign treasuries by and large have little room left to add more debt in efforts to reflate.  The root problem of solvency was never addressed, only postponed to another day.  That “day” seems to be in sight.
  The Fed recently did a study concluding that a $4 trillion increase in their balance sheet should be enough to reverse a future recession.  I would ask several questions:  first, 2008 began as a downturn in real estate in the U.S. and quickly spread to financial asset prices and thus institutional balance sheets …  In no way did it begin as “normal” recessions in the past have.  It was not about inventory/sales until well into it.  Why has the Fed come out with this study now?  And why use average recessions as the potential boogeyman rather than the 2008 episode?  I would equate their study to relating the response and protocol to treating a head cold and sore throat versus when the patient is prone to stroke and heart attack.
  I have thought for quite some time, a good analogy for 2008 and the aftermath was like one giant “refinancing”.  Think of it as a “cash out” on a home mortgage where money is taken out against equity yet the monthly payment didn’t go up because your interest rate went down.  After closing, you feel pretty good because your payment did not go up and you have cash in hand to help you continue making payments.  This is exactly what happened but we are again at a point where the monthly payments are starting to “bite” again.  In technical terms, liquidity is again becoming very tight on a systemic basis.
  So here we are again, in the same situation we had in 2007-2008.  Too much debt with stretched valuation levels in equities and real estate …and stupid levels in the credit/bond markets as evidenced by “negative rates”.  Central banks are again being forced to look at expanded QE while fiscal stimulus is again being eyed with one caveat …the Fed wants you to believe they are going to raise rates!
  I ask you this, in a world where economic activity is clearly decelerating …and has more debt to GDP/equity than ever before, how can the Fed raise rates?  In the short term, raising rates would strengthen the dollar versus other fiat currencies (and tighten dollar liquidity).  Is this what the U.S./world needs?  And how exactly will the existing leverage affect the underlying asset pricings?  Will this be good for stocks or real estate not to mention the mathematics affecting bonds?  The big one (and an entire writing for another day) is the derivatives market.  How will these fare?  I cannot imagine having a put on a carry trade using dollars, higher rates and a higher dollar is a disaster waiting to happen.
  In my opinion, we are again at a point in time where “liquidity” is more important than anything else.  Whether for an individual, corporation, or state, “liquidity” will soon be ALL IMPORTANT!  Just as in 2008-2009, “counterparty risk” will take center stage and any hint of the lack of liquidity will attract sharks.
  What exactly is “liquidity” and why is it important.  Briefly, liquidity is the immediate availability of capital to run your business and pay current expenses and interest.  I am going to add a twist here because what some to believe to be liquid …may not be at the point in time it is most needed.  You see, what if you had a large cash/credit balance with a bank or institution that is forced to close either temporarily or permanently?  “Liquid” means it is available to you NO MATTER WHAT happens.  Or what if you had some sort of unencumbered bill/note/bond and the credit standing of the issuer came into question?  Would this be liquid?
  If you are bearish on where the world is financially, the above questions should have already entered your mind topped off with the question of “who” is your counterparty?  I would suggest the goal right now should be twofold, return OF capital and the ability to “use” it whenever you need to.  In other words, “pure liquidity“.
If for any reason whatsoever your capital may not be available to you, you do not have “pure liquidity”.
  Pointing out the obvious, the only “asset” on the planet that is pure liquidity is gold (and silver to a lesser extent).  You don’t believe me or want to argue with this?  First and most obviously, gold (silver) are no one else’s liability and thus cannot go “bankrupt”.  Yes they can and do fluctuate in value versus fiat currencies but in a world where solvency and liquidity has become primary concerns, do you believe gold will become less desirable versus the liabilities of nations?  If you still don’t believe me, Alan Greenspan explained the virtues of gold back in 1966 .  He went several steps further than liquidity and discussed gold as a medium of exchange, gold as money and a return to the gold standard.
  Never mind the supply and demand imbalances or the fact that gold is counterfeited on a daily basis where the supply gets diluted many times over, gold can ALWAYS be used to settle a transaction.  The key word here is “always”.  I say this because 24/7, 365 days per year, gold is liquid and thus available to settle any trade …if you are fortunate enough to own it in physical and unencumbered form.  Please note the bolded words, as long as you own real gold with no one or entity between you and your gold …you have pure liquidity rivaled by nothing man made.  Pure wealth to be sure but more importantly in a world where massive additions of liquidity have not been enough and showing signs of drying up …pure liquidity!
Standing watch,

A very important commentary from Craig Hemke today as he describes in detail exactly what happened on Friday.  When the world did not react “properly” to the Fed’s speech, they trotted out their second in command, Fischer, who promptly stated that the rate hike in September may be on. As you will see below, the Basel III implementation will cause the Fed never to reduce its balance sheet and thus make it almost impossible and nonsensical to raise rates


(courtesy Craig Hemkeg/GATA

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 376.78 OR 2.30% /USA: YEN RISES TO 102.17

3. Europe stocks opened  IN THE RED EXCEPT LONDON (     /USA dollar index UP to 95.65/Euro DWON to 1.1180

3b Japan 10 year bond yield: RISES TO  -.063%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 102.17

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.00  and Brent: 49.22

3f Gold UP  /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 -.044%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate RISE to 6.94%/: 

3j Greek 10 year bond yield FALL to  : 8.04%   (YIELD CURVE NOW  UPWARD SLOPING)

3k Gold at $1320.75-/silver $18.75(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 21/100 in  roubles/dollar) 64.83-

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 .9731 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0935 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  -0.044%

/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 1.616% early this morning. Thirty year rate  at 2.274% /POLICY ERROR)

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

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


Global Stocks Slide, Futs Flat; Commodities Down On Stronger Dollar As Hike Odds Reprice Higher

The dollar index rose to a two-week high on Monday, while bond yields jumped to their highest since June and global stocks sold off after senior Federal Reserve officials indicated a U.S. interest rate increase was on the cards in the near term. The Fed effect – and the stronger dollar – reverberated through markets, pressuring stocks in Europe and emerging markets, pushing oil below $47 and the commodity complex lower.

In the past few months, the Fed has been swaying back and forth on whether to raise rates this year, keeping investors across the globe on tenterhooks. But on Friday, at the Fed’s annual gathering for global central bankers in Jackson Hole, Wyoming, Fed Chair Janet Yellen gave one of the clearest indications that a rate hike was probably round the corner, Reuters reported.

As Bloomberg reports, stocks and currencies in developing economies sank to their lowest levels in at least three weeks after Federal Reserve officials once again spurred bets on a U.S. interest-rate increase in September. The Bloomberg Dollar Spot Index extended its biggest jump since June, while oil led declines in commodities. Japan’s Topix index of shares rose after central bank chief Haruhiko Kuroda reiterated a pledge to boost monetary stimulus if needed.

With hardly any rate hikes expected in 2016 just a few months ago, the prospect of a rate increase next month is now back on the table, with the probability rising to 42% from 22% in the space of a week.    December rate hike odds jumped to 65% after opening at 57% on Friday morning before Jackson Hole and Yellen and Fischer’s comments.

Fed Chair Janet Yellen said Friday in Jackson Hole the case for an increase is getting stronger, while Vice Chairman Stanley Fischer indicated a tightening is possible at the next review. Those comments will sharpen the focus on U.S. data this week including consumer spending Monday and the monthly payrolls report Friday to gauge whether the economy is strong enough to sustain higher borrowing costs.

“Fischer confirmed the broad view on the Fed Open Market Committee that the economy has strengthened of late and that interest rates should be raised gradually; possibly again next month if this week’s employment report supports a rate rise,” said Stewart Richardson, chief investment officer at RMG Wealth Management.

“Declines today have a lot to do with the aftermath of Jackson Hole,” said Samy Chaar of Lombard Odier. “If they manage to raise rates that will be relatively good news but it does entail a little bit more tightening in the system.”

Oil dropped not only on the back of a stronger dollar, but amid newly rising doubts producers will agree on deal to stabilize market when suppliers meet next month for informal talks. As we reported on Friday, Iran’s plan to continue boosting crude output until it regains pre-sanctions OPEC market share is dimming prospects of collective action, according to Patrick Allman-Ward, CEO of Dana Gas. “The likelihood of them actually agreeing to some kind of production freeze is relatively low,” Daniel Hynes, senior commodity strategist at ANZ Bank says in Bloomberg TV interview. “It’s certainly been so far a successful jawboning exercise.”

In equities, Asian stocks outside Japan fell after Fed’s Yellen said the case for raising interest rates is getting stronger; shares in Tokyo rallied as the yen weakened and the Bank of Japan’s governor vowed to add stimulus if needed “There will be some mild pressure on markets,” Michael McCarthy, chief market strategist in Sydney at CMC Markets, said by phone. “The Fed remains very much data dependent, and that gives you the next hurdle for global markets which is the U.S. non-farm payrolls on Friday. That now becomes crucial to the near-term direction of markets” 8 out of 10 sectors decline with consumer staples, utilities underperforming and consumer discretionary outperforming. Japan’s Nikkei bucked the trend in Asia, closing 2.3 percent higher, the biggest one-day gain in three weeks, as the yen weakened against the resurgent dollar.

In Europe, the Stoxx Europe 600 Index retreated 0.5 percent in early trading, down for the second session in three. A gauge of auto makers posted the biggest decline, while sliding oil prices dragged energy producers lower. The volume of shares changing hands today was 66 percent lower than the 30-day average as U.K. markets closed for a holiday. European equities have oscillated between weekly gains and losses all month, with the Stoxx 600 trading in a tight range and struggling to find a direction after a rebound of as much as 12 percent following the aftermath of Britain’s secession vote.

“Declines today have a lot to do with the aftermath of Jackson Hole and raised expectations of a rate hike this year, so that leads to a bit of adjustment in the market,” said Samy Chaar, a Geneva-based strategist at Lombard Odier, which manages about $170b. “If they manage to raise rates, that will be relatively good news but it does entail a little bit more tightening in the system.”

The dollar rose 0.5 percent to a three-week high of 102.39. That followed gains of 1.3 percent on Friday, its biggest one-day advance in almost seven weeks. The dollar index was up at 95.724 its highest in two weeks. Japanese stocks advanced as a weaker yen boosted the outlook for exporters. The Topix index climbed 2 percent as Toyota Motor Corp. and Mazda Motor Corp. jumped at least 4 percent.

Germany’s benchmark 10-year bund yield increased as much as four basis points to minus 0.035 percent, before being one basis point higher at minus 0.062 percent. The yield on similar-maturity French bonds was one basis point higher at 0.18 percent, having jumped earlier by four basis points. Euro-area bonds are also coming under pressure with Spain’s acting Prime Minister Mariano Rajoy set to face a confidence vote Tuesday, and governments set to reissue debt after a summer lull that saw Germany the sole issuer last week. Countries in the region may sell about €30 billion this week, according to Commerzbank AG.

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2168
  • Stoxx 600 down 0.3% to 343
  • DAX down 0.7% to 10515
  • German 10Yr yield up 2bps to -0.06%
  • Italian 10Yr yield up less than 1bp to 1.14%
  • Spanish 10Yr yield up less than 1bp to 0.95%
  • S&P GSCI Index down 0.8% to 360
  • MSCI Asia Pacific down 0.3% to 138
  • Nikkei 225 up 2.3% to 16737
  • Hang Seng down 0.4% to 22821
  • Shanghai Composite down less than 0.1% to 3070
  • S&P/ASX 200 down 0.8% to 5469
  • US 10-yr yield down 2bps to 1.61%
  • Dollar Index up 0.04% to 95.6
  • WTI Crude futures down 1.3% to $47.03
  • Brent Futures down 1.3% to $49.27
  • Gold spot down 0.1% to $1,320
  • Silver spot down 0.5% to $18.57

Top Global Headlines

  • Central Bankers Spurn Call for Radical Approach at Jackson Hole: Fed’s Yellen says more activist measures not being considered; BOJ, ECB ready to ease further if fiscal action falls short; Draghi Silence Puts Numbers in Spotlight Ahead of ECB Meeting
  • Fiat Chrysler CEO Calls Samsung a Potential Strategic Partner: Marchionne says Magneti Marelli parts unit has several suitors
  • GCL-Poly to Buy SunEdison’s Solar Materials Business for $150m; D.E. Shaw Said to Mull Bid for SunEdison’s TerraForm Stake: Reuters
  • Amazon Said to Be Near to Introducing Music Streaming, FT Says: Amazon may introduce subscription music streaming service as soon as next month
  • Icahn Buys More Herbalife, Denying Claim He’s Selling Stake: Icahn says he acquired 2.3 million additional Herbalife shares
  • Prada Shares Surge as Chairman Forecasts Improvement in 2017: forecasts co. will return to growth in sales and earnings next year, helped by cost-cutting and online expansion in Asia
  • GM, Ford, Fiat Workers Authorize Unifor to Start Strike Action
  • ‘Don’t Breathe,’ Sony’s $10 Million Horror Film, Opens at No. 1

Looking at regional markets, Asia stocks began the week mostly lower following a similar close in the US on Friday amid hawkish Fed commentary at the Jackson Hole symposium. ASX 200 (-0.8%) declined by around 1%, while Chinese markets were weighed by earnings from AgBank and Sinopec. However, Shanghai Comp. later recovered off its lows as the largest increase to Industrial Profits in 4 months helped stem losses. Nikkei 225 (+2.3%) advanced over 2% on JPY weakness and after BoJ Governor Kuroda stated that there is still ample room to ease including cutting rates deeper into negative territory. 10yr JGBs were higher despite the upbeat tone in Japanese stocks amid the dovish comments from BoJ’s Kuroda, while the central bank was also in the market under its massive buying program.BoJ Governor Kuroda said the central bank has ample room for further monetary easing and reiterated the BoJ could reduce interest rates deeper into negative territory.  The Shenzhen Stock Exchange has called on securities firms to finalise all preparation work for the Shenzhen-Hong Kong Stock Connect program by early November. Chinese industrial profits rose by 11% to CNY 523b1n in July, which was the fastest pace of growth in 4 months.

Asia Top News

  • China Stock Traders Feel Heat With 774 Probes in Two Months: exchanges intensify scrutiny of unusual market movements
  • BOJ May Prefer to Fund Rail, Sewers Over Helicopter Money: analysts see BOJ buying bonds in local govts., public corps
  • Yuan Trades Near Five-Week Low as Fed Signals Renew Pressure: PBOC’s fixing suggests it will defend currency, Natixis says
  • Typhoon Lionrock Set to Hit Japan, Prompting Early Abe Return: cyclone “large” and “very strong”
  • Rupee Bulls See Patel Surviving $20 Billion Outflow Baptism: Standard Chartered predicts rupee to rise to 66.25 by year- end
  • Hong Kong Stocks Decline as Fed Bets Sink Property Developers: currency peg makes Hong Kong vulnerable to Fed rates
  • Carlsberg, Heineken Fight for Vietnam’s Thriving Beer Market: Vietnam’s young beer-drinking culture beckons foreign brands
  • Most of China’s Electric-Car Startups Face Wipeout by New Rules: govt may limit makers to 10
  • Billionaire Packer Cuts Crown Resorts Stake in $338 Million Sale: sale part of ‘financing and capital management strategy’

European equities trade modestly in the red amid broad based losses, with much of the price action dictated by the stronger dollar after Jackson Hole in which hawkish commentary from Fed Vice Chair Fischer boosted rate hike expectations. Newsflow has been particularly quiet with UK participants away due to the bank holiday, while focus on the economic schedule is for the release of the US PCE figures at 1330BST. Bunds saw an initial spike lower by around 40 ticks after the Eurex open, before quickly retracing, with much of the price action stemming from the moves seen in T-notes on Friday which were hampered by the aforementioned hawkish commentary from Fed Vice Chair Fischer in which he stated that a rate hike or rate hikes may be possible this year. Additionally, the soft tone in Europe has led to Bunds paring some of its losses with prices breaking back above 167.00 while some of the moves could be somewhat exacerbated by the thin volumes given the UK bank holiday. Greece PM Tsipras is calling for Greece’s International creditors to honour pledges and implement specific measures by the end of 2016 to make the Greek debt load sustainable and support economic recovery.  Spain’s interim Prime Minister Rajoy has won support from the Centrist Party which will provide his party with 170 seats compared to 176 seats needed before this week’s parliamentary confidence vote. UK PM May will begin drawing up Britain’s blueprint for Brexit this week, with her cabinet split over the terms of European Union withdrawal. Senior Tories say UK Chancellor Hammond is resisting plans by other ministers to pull out of the EU single market.

European Top News

  • Statoil Trims $2.9b Off Sverdrup Cost as Output Boosted: sees output of 440,000 barrels a day in first phase; says total project investment could be as low as $17b
  • Italy Manufacturing, Consumer Trust Fall on Stagnant Economy: manufacturing gauge falls to the lowest since early 2015; Italy grappling with fallout from earthquake last week
  • UniCredit Rises, Driven by Pekao; Valuation, Sale in Spotlight: FT reported Aug. 28 Poland’s PZU confident of reaching Bank Pekao pact in Oct.
  • SCA Turned Down Bid for Forestry Part of Business, DN Reports: co. received bid for forestry part of business but declined it and decided to move forward with split instead

In FX, the Bloomberg Dollar Spot Index gained 0.2 percent, after surging 0.8 percent on Friday. The yen fell 0.4 percent, after sliding 1.3 percent in the last session, and the euro fell to a two-week low. The pound weakened 0.3 percent. The MSCI Emerging Markets Currency Index fell 0.7 percent, led by a 1 percent slide in South Korea’s won. Most of the central banks that are tracked by Bloomberg in both Asia and Europe have cut interest rates this year. South Africa’s rand weakened 0.4 percent, after a 5.9 percent weekly loss. The currency posted its steepest slide of the year last week on concern that a stand-off between South African Finance Minister Pravin Gordhan and the country’s police could lead to Gordhan’s ouster.

In commodities, the Bloomberg Commodity Index is down a fourth day, trimming a monthly advance as oil and precious metals fell. West Texas Intermediate crude slid 1.5 percent to $46.95 a barrel amid doubts producers will agree on a deal to stabilize the market when suppliers meet next month for informal talks. A similar proposal was made in February, but a meeting in April ended with no final accord. “The likelihood of them actually agreeing to some kind of production freeze is relatively low,” Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said in a Bloomberg television interview. Gold extended its longest losing run since May to a 7th day, falling as much as 0.5 percent after losing 1.5 percent last week. Silver touched the lowest price in almost two months.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities trade lower as participants digest the fallout of the hawkish Fed rhetoric from the Jackson Hole Symposium
  • Subsequently, the USD remains firm against its major counterparts with USD/JPY back above 102.00
  • Looking ahead, highlights include US Personal Income & Core PCE Price Index, UK markets are closed for a Bank Holiday
  • Treasuries rise during overnight trading while global sovereigns, equities, commodities fall; USTs opened weaker in Tokyo, was met with “decent buying from the lows” by banks, asset managers, Seaport Global managing director Tom di Galoma said in note.
  • Federal Reserve Chair Janet Yellen’s speech Friday was hawkish enough for Goldman Sachs to boost the odds of a September interest-rate increase, while Pimco said there was nothing of note in her remarks
  • After five weeks of silence, the ECB President Mario Draghi is leaving it largely to a raft of economic data to fine- tune policy expectations ahead of the Governing Council’s next meeting on Sept. 8
  • The BOJ could announce a “massive stimulus program” as the nation seeks to reach a 2 percent inflation target, according to UBS Wealth Management; Forget helicopter money. The Bank of Japan might next target financing a bit closer to the ground — trains, hospitals, power plants and sewers
  • Direct Match Holdings Inc., which aimed to be an alternative to bank dominance in the $13 trillion U.S. Treasury market, died before it arranged even one trade
  • Norway’s $890 billion sovereign wealth fund is acknowledging that rising withdrawals by the government could hamper its quest to manage more risk and generate greater returns as it takes on more and more negative yielding securities

DB’s Jim Reid concludes the overnight wrap

Given how dull this month had been even by historical August standards, it wasn’t going to take much from Jackson Hole to make markets exciting again. Our concern leading into Yellen’s speech was that she had not traditionally used the event as a vehicle to focus on policy guidance. Well the actual content that Yellen did provide on Friday afternoon was fairly bland, instead choosing to largely focus on past policy tools and mechanics. That being said, Yellen did provide the important assist to her Vice-Chair Fischer which had markets quickly scrambling to firm up tightening expectations.

Headlines were initially dominated by Yellen’s mention that the ‘rate hike case had strengthened in recent months’ given the continued solid performance of the labour market and also the Fed’s outlook for economic activity and inflation. As usual this was also balanced with the careful consideration of any decision depending ‘on the degree to which incoming data continues to confirm the Committee’s outlook’. Aside from that there were only really two other interesting components of her speech. The Fed Chair implicitly talked down the significance of the academic paper in which some observers had suggested changing the Fed’s inflation target. She also made a special mention of acknowledging the productivity problem which had been addressed by some of her colleagues recently.

If markets were a bit unsure as to how to react to Yellen’s comments, Fed Vice-Chair Fischer’s interview with CNBC quickly resolved that. When asked if we should be on the edge of our seats for a rate hike as soon as September and more than one hike this year, he answered ‘what the Chair said today was consistent with answering ‘yes’ to both of your questions’, before again going on to stress that the Fed remains data dependent. The comments finally got Treasuries moving with the 2y yield, which had traded as low as 0.762% intraday, rising nearly 8bps to close at 0.843% and the highest since June 2nd. The 10y yield also ended up nearly 6bps higher by the close at 1.630% while the USD index rallied +0.84% on the day but had an intraday range of 1.43%. Risk assets weakened with the S&P 500 closing -0.16% but had the biggest high-to-low daily range (1.28%) since July 6th. Most notably, the probability of a Fed rate hike in September rose to 42% from 32% the day prior, while December is now at 65% from 57%.

It wasn’t just the Fed that was in focus over the weekend with many eyes also on the BoJ’s Kuroda. Speaking on Saturday, the BoJ Governor said that the Bank would ‘not hesitate to boost monetary stimulus if needed’ and that ‘there is no doubt that there is ample space for additional easing in each of the three dimensions’. He went on to say that ‘the bank will carefully consider how to make the best use of the policy scheme in order to achieve the price stability target’. A reminder that the BoJ next meet on the 20th and 21st September, which happens to also be the same days that the FOMC next meet.

Glancing at markets this morning the most notable moves have unsurprisingly come in Japan and particularly in equity markets where the Nikkei and Topix are currently +2.42% and +2.17% respectively. The Yen (-0.41%) is weaker while longer dated JGB yields have risen a few basis points. In other regional markets it’s a much more mixed start to the week. China bourses are a touch firmer (Shanghai Comp +0.10%) however the Hang Seng (-0.29%), Kospi (-0.21%) and ASX (-1.09%) are all in the red. Emerging market currencies are under pressure, albeit modestly so, while WTI (-1.15%) and Gold (-0.30%) have continued to pullback.

Moving on. With the common denominator from Fed speakers on Friday and the weekend being one of the Fed still very much data dependent, this week’s packed diary should keep things interesting. As you’ll see in the week ahead at the end the highlight is this Friday when we get the August employment report and the important payrolls print where market expectations are currently sitting at 180k (vs. 255k in July). We’ll have a full preview of that closer to Friday. It’s also worth highlighting though that we’ll get the personal income and spending report, consumer confidence, ISM services and manufacturing readings and also trade data this week. So plenty to get through and there’s also some more Fedspeak for us to digest which should keep us busy.

While we’re on the subject of data, on Friday we got the second reading of Q2 GDP in the US which didn’t offer any surprises after being revised down one-tenth to +1.1% qoq, in line with the consensus. A big focus was on the corporate profits data and as expected it was weak. Corporate profits declined -1.2% qoq in Q2 and are now -4.9% yoy which is the fifth consecutive decline and the worst such streak since mid-2009. As our US economists previously noted the danger is that this could eventually weigh on employment and wage growth so it’s worth keeping an eye on.

Also released in the US on Friday was the advance goods trade balance reading which revealed a narrowing in the deficit to $59.3bn from $64.5bn owing to a +2.4% mom increase in exports. Elsewhere wholesale inventories (0.0% mom vs. +0.1% mom expected) were unchanged in July and the final headline reading for the University of Michigan consumer sentiment reading in August was revised down 0.6pts to 89.8 (vs. 90.8 expected). The expectations index was however revised up to 107.0 (+0.9pts) although that is still a full 2pts below where it was in July.

Prior to all this in Europe consumer confidence reports in both Germany (+0.2pts to 10.2) and France (+1pt to 97) rose unexpectedly. Meanwhile the UK and France confirmed growth of +0.6% qoq and 0.0% qoq respectively in Q2 while the ECB reported a surprising slowdown in the rate of M3 growth to +4.8% yoy last month from +5.0%. For completeness European equities nudged up on Friday (Stoxx 600 +0.50%) although this failed to capture the fallout from Fischer’s comments just after markets closed.

Away from the data we’re due to hear from the Fed’s Rosengren, Evans and Kashkari on Wednesday, Mester on Thursday and then Lacker on Friday. The ECB’s Villeroy will also speak on Wednesday. It’s worth also keeping an eye on Spain’s confidence vote this week on Wednesday for PM Rajoy with a possible second vote scheduled for Friday.



i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 0.281 POINTS OR 0.01%/ /Hang Sang closed DOWN 88.20 points or 0.30%. The Nikkei closed UP 376.78 POINTS OR 2.30% Australia’s all ordinaires  CLOSED DOWN 0.84% Chinese yuan (ONSHORE) closed DOWN at 6.6810/Oil FELL to 47.00 dollars per barrel for WTI and 49.22 for Brent. Stocks in Europe: in the RED EXCEPT LONDON  Offshore yuan trades  6.6902 yuan to the dollar vs 6.6810 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS SLIGHTLY AS  MORE USA DOLLARS ATTEMPT  LEAVE CHINA’S SHORES  



With  the Friday Jackson Hole speech out of the way, UBS speculates that Kuroda will launch a huge stimulus massive shock to Japan to drive their inflation rate to 2%

(courtesy zero hedge)

“Massive Shock” Looms In Japan As Kuroda Is In “Jeopardy”, According To $2 Trillion Investor

Yesterday, in our post-mortem on the Jackson Hole symposium, we found one particular highlight most notable:according to Princeton University economist Christopher Sims, “policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future.” And, as has been customary over the past year, the place where this “shock therapy” will be tested first, will be the same place where 30 years of unconventional monetary policy has so far failed: Japan.

That is the scenario envisioned by Mark Haefele, global chief investment officer at UBS Wealth Management who oversees the investment policy and strategy for about $2 trillion in invested assets.

In a Bloomberg Television interview, on Monday, Haegele said that the BOJ could announce a “massive stimulus program” as the nation desperately seeks to reach a 2% inflation target.

It is how much they do, and whether they can create that kind of shock and awe at this point in the cycle,” said Haefele, adding “they could announce a massive stimulus program both on the monetary and fiscal side or they could end up reducing their inflation targets. Right now, it looks like they are going to use more stimulus.

Indeed it does, the question is whether doing even more will lead to a different result: after all the BOJ already owns a third of all JGBs, and is rapidly nationalizing the entire stock market.

During his Jackson Hole appearance, BOJ Governor Haruhiko Kuroda said that the central bank won’t hesitate to boost monetary stimulus if needed, and there is ample space for additional easing. He also said that the central bank will carefully consider how to best use policy to achieve its price stability target.

As Bloomberg adds, consumer prices excluding fresh food — the BOJ’s benchmark inflation gauge — fell 0.5 percent in July from a year earlier, government data earlier this month showed. That was the steepest drop since March 2013, the month before Kuroda launched unprecedented stimulus. 

It is Japan’s inability to achieve its inflation goals has “put that country and that central bank into some kind of jeopardy that they are going to have to work their way out of,” Haefele said.

The BOJ is currently undertaking a review of its monetary policy ahead of its next meeting Sept. 20-21. Whether the central bank adopts more stimulus with the yen at its current level or waits to see if it strengthens more is “an open question,” he said.

“It is hard to say that any one move is going to be enough given the history of stimulus in Japan has been erratic,” Haefele said. “But everybody is hoping that they will give it another try because clearly Japan, despite reaffirming their inflation targets, has not been able to hit them.

By “everybody” he mostly meant corporations and shareholders; for everyone else another sharp plunge in the Yen will mean a surge in imported inflation, a drop in purchasing power, even more negative savings rates, deteriorating economic fundamentals, and a general decline in the standards of living. However, since Japan is now all in, its only option remains to double down, and when that fails, to double down again until its entire financial system finally cracks.



I am glad this is happening.  The TTIP would be bad for everybody but the uSA

(courtesy zero hedge)

German Economy Minister: “TTIP Talks Have Failed”

In the latest blow for Obama’s global trade agenda, German Vice Chancellor and Economy Minister Sigmar Gabriel said that free trade talks between the European Union and the United States have failed, citing a lack of progress on any of the major sections of the long-running negotiations. “In my opinion the negotiations with the United States have de facto failed, even though nobody is really admitting it” ZDF quoted the minister, according to a written transcript of the interview to be aired on Sunday. “[They] have failed because we Europeans did not want to subject ourselves to American demands.

He added that in 14 rounds of talks, the two sides haven’t agreed on a single common item out of 27 chapters being discussed. Among the stumbling blocks is a US objection to opening public tenders to European companies. “For me, that goes against free trade,” Gabriel previously commented regarding the issue.

But more than just disagreement on general principles, Gabriel singled out the US as the party making strong demands with no concessions: “We mustn’t submit to the American proposals,” said Gabriel, who is also the head of Germany’s center-left Social Democratic Party.

Gabriel accused Washington of being “angry” about the deal that the EU struck with Canada, known as CETA, because it contains elements the U.S. doesn’t want to see in the TTIP.

Despite strong misgivings among many EU member states over the Trans-Atlantic Trade and Investment Partnership, or TTIP, especially by farmers in the European block, both Washington and Brussels had pushed for a deal by the end of the year. As AP reports, Sigmar Gabriel compared the TTIP negotiations unfavorably with a free trade deal forged between the 28-nation EU and Canada, which he said was fairer for both sides.

As AP adds, Gabriel’s ministry isn’t directly involved in the negotiations with Washington because trade agreements are negotiated at the EU level. But such a damning verdict from a leading official in Europe’s biggest economy is likely to make further talks between the EU executive and the Obama administration harder. Surprisingly, Gabriel’s comments contrast with those of Chancellor Angela Merkel, who said last month that TTIP was “absolutely in Europe’s interest.”

European critics of the TTIP have claimed that the treaty is dangerous as it could place the interest of international corporations above those of the nations they operate in, and undermine European standards for labor and environmental protections. Germany, where support for the TIIP has plunged over the past year, has seen a number of popular protests demanding that the TTIP never be implemented.

A recent survey, conducted by YouGov for the Bertelsmann Foundation, showed that only 17 percent of Germans believe the Transatlantic Trade and Investment Partnership is a good thing, down from 55 percent two years ago.

Even in the US, support for Obama’s trade agenda has tumbled, with only 18% supporting the deal compared to 53 percent in 2014.


The European public has been unhappy with TTIP as the contents of the deal remain largely secret. However, recent leaks suggest that it will affect food safety laws, environmental legislation, banking regulations and open the EU for GM crops. Opponents of the deal have been staging protests in a number of European cities. The most recent one took place in Berlin last weekend, with activists calling for a nationwide demonstration on September 17.

With Gabriel saying the TTIP is effectively dead, Germany joins France, whose president Hollande said in early May that the “TTIP is doomed” adding that France “will never accept” challenges to its farming and culture in exchange for better access to U.S. markets. “That’s why at this stage, France says no,” the Socialist leader said at a conference on left-wing politics. French Trade Minister Matthias Fekl then said that negotiations “are totally blocked” and that a halt to talks “is the most probable option.”

“Europe is giving a lot … but receiving very little in return,” he concluded. Which, incidentally, is precisely how the US wanted it. It remains to be seen if the US will offer concessions to Europe now that the TTIP debate is all but finished, or if the US will demand strict adherence to rules that now clearly benefit mostly US corporations.



Chaos reigns supreme as Joe Biden’s visit ends in humiliation.  Erdogan continues to bomb USA allies (the Kurds) in Syria, while the  USA and NATO watch.  Meanwhile Erdogan slowly moves closer and closer to Russia;

(courtesy zero hedge)

Joe Biden Humiliated In Turkish “Appeasement” As Erdogan Bombs US Allies In Syria

The last time U.S. Vice President Joe Biden flew to Turkey, in January, he had a stern message for President Erdogan: his model of Islamic democracy was setting a bad example by intimidating media and threatening academics. However, his tone was markedly different when he arrived in Ankara on Wednesday, just weeks after a failed coup in Turkey that has strained relations between the two countries, and on the same day that Turkey launched a full-blown incursion into northern Syria “to halt ISIS.” With Turkey making very clear, and very open overtures toward Russia, Biden was in full blown diplomatic damage-limitation mode.

The dramatic shift in dplomatic posture by Biden comes as the U.S.-Turkish alliance has been dealt several blows in recent weeks, to the point where the US vice president’s arrival in Ankara shows just how concerned the US, which is counting on continued support from Turkey – NATO’s second-biggest military – has become.  American worries have been compounded by Erdogan restoring ties with Russia – the Turkish president’s first diplomatic meeting after the failed coup was with Putin in St. Petersburg, as a result of which Turkey has been discussing military cooperation with the Kremlin.

Meeting with Erdogan and Turkey’s prime minister in Ankara on Wednesday, Biden delivered a message of alliance and conciliation.   “Let me say it for one last time: The American people stand with you … Barack Obama was one of the first people you called. But I do apologize. I wish I could have been here earlier,” Biden said.

But he wasn’t.

And while Biden’s pathetic attempt at appeasement may have come and gone, reinforcing just how much the American people stand with a person whose pre-arranged purge of political opponents has resulted in over 100,000 Turkish citizens fired or arrested, Turkey’s diplomatic humiliation of the US continued, when far from attacking ISIS in Syria, the stated objective behind the invasion, Turkish forces and rebels supported by Erdogan continued their deadly attacks on Kurdish-backed forces in north Syria on Saturday. The same Kurdish-backed forces which are also backed by the US.

And it’s not as if Turkey is even hiding it: Turkey’s government, which is fighting a Kurdish insurgency at home, has said the Syrian campaign it opened this week is as much about targeting Islamic State as it is about preventing Kurdish forces filling the vacuum left when Islamists withdraw. Turkey wants to stop Kurdish forces gaining control of a continuous stretch of Syrian territory on its frontier, which Ankara fears could be used to support the Kurdish militant group PKK as it wages its three-decade insurgency on Turkish soil.

According to Reuters, Turkish security sources said two F-16 jets bombed a site controlled by the Kurdish YPG militia, which is part of the broader U.S.-backed Syrian Democratic Forces (SDF) coalition.

Meanwhile, the US-backed Kurds are fighting back,  and according to military sources, one Turkish soldier was killed and three others wounded when a tank was hit by a rocket that they said was fired from territory held by the Kurdish YPG. The sources said the army shelled the area in response.

At that point the chaos that is the Syrian conflict, with so many competing elements, many of whom supported by the US, was on full display.  Case in point: Syrian rebels opposed to Ankara’s incursion said Turkish forces had targeted forces allied to the YPG and no Kurdish forces were in the area. On the ground, Turkish-backed Syrian rebels fought forces aligned with the SDF near the frontier town of Jarablus. Forces opposed to Ankara said Turkish tanks were deployed, a charge denied by Turkey’s rebel allies.

As a result, the narrative is now split in two: one “confirming” the Turkish explanation, the other justifying the actions of the YPG, just in case the US decides to flip after all, and support its “lesser” allies:

he Jarablus Military Council, part of the SDF, had said earlier on Saturday that Turkish planes hit the village of al-Amarna south of Jarablus, causing civilian casualties. It called the action “a dangerous escalation”.

The Kurdish-led administration that controls parts of northern Syria said Turkish tanks advanced on al-Amarna and clashed with forces of the Jarablus Military Council. But the Kurdish administration said no Kurdish forces were involved.

However, the leader of one Turkey-backed rebel group gave a rival account. He told Reuters the rebels battled the Kurdish YPG around al-Amarna and denied any Turkish tanks took part.

Turkish security forces simply said Turkish-backed forces had extended their control to five villages beyond Jarablus.

In short, chaos and a full-blown media propaganda war; however, as Reuters notes, one thing is clear: any action against Kurdish forces in Syria puts Turkey further at odds with its NATO ally the United States, which backs the SDF and YPG, “seeing them as the most reliable and effective ally in the fight against Islamic State in Syria.”

However, just like Biden’s arrival in Ankara was a tacit admission that the US will fully ignore Erdogan’s unprecedented crackdown on human rights in post-coup Turkey as the president purges even the remotest political opponent, so the YPG, which has been “backed” by the US, is about to realize just how little such backing really means when the US has bigger fish to fry, in this case desperately trying to keep Turkey on its good side, and away from Putin’s circle of influence, all the while providing countless concessions to Turkey as the country continues to openly defy western norms and put away dissidents, while arresting members of the press, and education system, as Erdogan nationalizes private corporations alleged to have ties with the notorious “coup plotter” Fethulah Gullen.

In doing so, the Obama administration has once again revealed the true extent of its hypocricy, as it turns a blind eye toward the trampling of human rights in Turkey, while screaming bloody murder when something similar takes place in any other part of the world.

Meanwhile, Turkey’s humiliation of its “partner”, the US, will continue, and much to the amusement of Vladimir Putin, there is absolutely nothing Obama will do about it.


USA slams Turkey on the bombing of the Kurds, but as you will see it will have no effect on Erdogan.   He will continue in his assault on Syrian Kurds

(courtesy zero hedge)

US Slams Turkish Bombing Of American Coalition Partners As “Unacceptable And A Source Of Deep Concern”

Things are turning increasingly sour for the US, which is barely able to keep track of which feuding factions it supports in the escalating Syrian war.

Recall that over the weekend we reported how “Joe Biden Was Humiliated In Turkish “Appeasement” As Erdogan Bombs US Allies In Syria.” Concerned by Turkey’s recent overtures toward Russia, which even hinted at military cooperation between Moscow and Ankara, Biden arrived in Turkey last Wednesday, just as Turkey sent tanks into northern Syria, with nothing but appeasement for the Turkish president whose unprecedented crackdown on human rights has left over 100,000 Turks arrested, terminated, or otherwise “purged” without anything more than an occasional verbal rebuke by the western “democratic” powers.

Meeting with Erdogan and Turkey’s prime minister in Ankara, Biden delivered a message of alliance and conciliation: “Let me say it for one last time: The American people stand with you … Barack Obama was one of the first people you called. But I do apologize. I wish I could have been here earlier,” Biden said.

That is all Erdogan needed to hear as he then proceeded to launch a bombing campaign not against Islamic State holdouts in proximity to the Turkish border – the stated reason for the Turkish incursion – but against his legacy foes, the Kurdish militia, the YPG, which problematically for the US, is part of the broader U.S.-backed Syrian Democratic Forces (SDF) coalition.

So, less than a week after Biden’s attempt to appease Erdogan, earlier today the United States, now finding itself in the paradoxical position of directly supporting two warring factions, criticized clashes between Turkish forces and some opposition groups in northern Syria as “unacceptable,” calling on all armed actors in the fighting to stand down and focus on battling ISIS.

Cited by NBC, Brett McGurk, the special presidential envoy for the coalition to counter ISIS, said on his official Twitter account that according to the DOD “we want to make clear that we find these clashes — in areas where [ISIS] is not located — unacceptable and a source of deep concern.”

 “We call on all armed actors to stand down… the U.S. is actively engaged to facilitate such deconfliction and unity of focus on [ISIS], which remains a lethal and common threat,” he added.

At the start of Turkey’s now almost week-long cross-border offensive, Turkish tanks, artillery and warplanes provided Syrian rebel allies the firepower to capture swiftly the Syrian frontier town of Jarablus from ISIS militants. Since then, Turkish forces have mainly pushed into areas controlled
by forces aligned to the Syrian Democratic Forces (SDF), a coalition
that encompasses the Kurdish YPG militia and which has been backed by
Washington to fight the jihadists.

NATO member Turkey justifies its attack on the US coalition member by claiming that YPG is an extension
of the outlawed Kurdistan Workers Party (PKK), which has waged a
three-decade insurgency in Turkey’s largely Kurdish southeast. As we previously reported, a group monitoring the tangled, five-year-old conflict in Syria said 41 people were killed by Turkish air strikes as Turkish forces pushed south on Sunday. Turkey denied there were any civilian deaths, saying 25 Kurdish militants were killed.

Turkish officials say their goal in Syria is to drive out ISIS but also to ensure Kurdish militia fighters do not expand the territory they already control along Turkey’s border.

As a result of today’s verbal condemnation by the US, we expect Erdogan – who continues to hold all the Trump cards over Europe’s future with some 2 million Syrian refugees housed within its borders, and which can be released into Europe on a moment’s notice – to unleash another verbal assault on the US and its western allies, coupled with another Russian pivot threat, to show the Obama administration who is and remains in charge of the latest escalation in the 5 year old Syrian conflict.

Meanwhile, the US will find itself increasingly pressed by its “coalition partners” who will demand justification why some allies remain more equal than other allies, and just how the administration decides why and who gets preferential treatment.




The glut will continue as oil falls back below 47 dollars. The short squeeze certainly had an effect on pricing

(courtesy zerohedge)

Oil Extends Losses As ‘Short-Squeeze’ Ammo Is Now Exhausted

WTI Crude is now down 6% from last week’s highs, back below $47 as supply concerns (Abu Dhabi production rise and ConocoPhilips’ CEO comments) and OPEC freeze talks doubts have combined with the biggest collapse in speculative short positions in history (following the Saudi statement) – removing the last ‘short-squeeze’ leg of support from this dead-cat-bounce.

From record short positioning, hedge funds have suffered the biggest squeeze cover in history over the past 2 weeks since Saudi Arabia made a statement hopeful of OPEC freeze talks…

Longs have surged though – now near 2-year highs – as shorts covered…

With net positioning now exploding to the long side…

h/t @JKempEnergy

But the extreme positioning power driving crude prices appears to have broken as prices fell despite the net increase in longs…

As fundamentals perhaps play a role in price action…

And Abu Dhabi is upping production capacity…

Abu Dhabi National Oil Company aims to reach oil production capacity of 3.5m barrels per day by the end of 2018, Reuters reports, citing Salem Al Matroushi, Adnoc manager for exploration and production planning.

Says “main challenge is really to sustain the 3.5 million barrels a day for the next 25 years”

Says co. has goal to reach recovery rate of over 70%, which has already been reached in “some of our projects”

And ConocoPhilips CEO had some less than exuberant news…

Conocophillips ceo says believes oil market oversupply will extend into 2017

Conocophillips ceo says cost cutting in oil industry to continue

And the glut remains…

But the real test wil be the next spurious unsourced headline and its reaction by the algos.


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



GBP/USA 1.3086 DOWN .0032 

USA/CAN 1.3006 UP .0030

Early THIS MONDAY morning in Europe, the Euro FELL by 13 basis points, trading now well above the important 1.08 level RISING to 1.1180; 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 0.282 POINTS OR 0.01%    / Hang Sang CLOSED DOWN 88.20 POINTS OR 0.30%     /AUSTRALIA IS LOWER BY .84% / EUROPEAN BOURSES ALL  IN THE RED EXCEPT LONDON 

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

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

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

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

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

The NIKKEI: this FRIDAY morning CLOSED UP 376.78 POINTS OR 2.30%  

Trading from Europe and Asia:


Gold very early morning trading: $1320.00


Early MONDAY morning USA 10 year bond yield: 1.616% !!! DOWN 2  in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS SLIGHTLY BY  2 BASIS POINTS to 2.274   from FRIDAY night. 

USA dollar index early MONDAY morning: 95.65 UP 17 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%  DOWN 1 in basis point yield from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.083% DOWN 1 in   basis point yield from FRIDAY

SPANISH 10 YR BOND YIELD:0.936% DOWN 1 IN basis point yield from FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.12  DOWN 1 in basis point yield from FRIDAY 

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





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

Euro/USA 1.1162 DOWN .0031 (Euro DOWN 31 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 102.20 UP .423(Yen DOWN 42 basis points/


USA/Canada 1.3039 UP 0.0063 (Canadian dollar DOWN 63 basis points AS OIL ROSE(WTI AT $47.08). Canada keeps rate at 0.5% and does not cut!


This afternoon, the Euro was DOWN by 31 basis points to trade at 1.1162

The Yen FELL to 102.20 for a LOSS of 42 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED 


The Canadian dollar FELL by 63 basis points to 1.30001, WITH WTI OIL AT:  $47.08


The USA/Yuan closed at 6.678

the 10 yr Japanese bond yield closed at -.063% UP 1 IN BASIS POINTS / yield/

Your closing 10 yr USA bond yield:DOWN 7 IN basis points from FRIDAY at 1.566% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.218 DOWN 7 in basis points on the day /


Your closing USA dollar index, 95.57  UP 5 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

German Dax :CLOSED DOWN 43.33 OR  0.41%
Paris Cac  CLOSED DOWN 17.62  OR 0.40%
Spain IBEX CLOSED DOWN 43.10 OR 0.50%
Italian MIB: CLOSED DOWN 188.77 POINTS OR 1.12%

The Dow was up 107.59 points or 0.58%

NASDAQ UP  13.41 points or 0.26%
WTI Oil price; 47.18 at 4:30 pm;

Brent Oil: 49.11




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: 49.24

USA 10 YR BOND YIELD: 1.561% 

USA DOLLAR INDEX: 95.57 UP 9 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3101 down .0021 or 21 basis pts.

German 10 yr bond yield at 5 pm: -0.083%


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


Risk-Parity Panic Looms As Bonds, Stocks, Gold Rally; Reject Fed Hawkish Chatter

 The market’s message to The Fed…


Rate hike hopes from Friday were rapidly unwound today in Fed Funds Futures…


Volume for this ramp was a fraction of the volume during Friday’s dump…


This was the lowest volume day of the year… as low as New Year’s Eve….


On the day, equities were all higher…


But rolled from the Fischer cliff…


Note that from Yellen’s statement, stocks managed to get green…


VIX tested up to 14.5 overnight but was pressured down a 12 handle briefly to get us back to Fischer ledge…


AAPL tried to hold it’s “announcement” gains but the Irish tax pain weighed on it by the close…


Bond and stocks are now fully correlated (rising and falling together on easing/tightening headlines) as opposed to the norm anti-correlated regime…  The last time this happened create havoc among the risk-parity funds.


In fact – this is the most correlated US equities and bonds have been since right before the last rate hike… which ended very badly for stocks…


Bonds all rallied on the day…led by the long-end… (note 2Y +2bps and 30Y -5bps post Yellen)


Collapsing the yield curve to the lowest since Dec 2007… not that financials cared…


The USD Index started the day well but as the US equity market opened, selling pressure hit and all the majors rallied systemically against the USD…


Despite USD gains, Silver and Gold gained as Crude slid lower (despite a major shut-in in The Gulf due to storms)…


Charts: Bloomberg

Bonus Chart: Cross-Asset Class Correlation continues to soar…



Is the next plan a huge increase in inflation policies enough to shock taxpayers to spend now? The Jackson Hole post mortem:

(courtesy zero hedge

“It May Take A Massive Program, Large Enough To Shock Taxpayers” – The Jackson Hole Post-Mortem

On Saturday, the 2016 edition of the Fed’s Jackson Hole two-day symposium came to an end, and as many expected, following long bouts of rhetoric, circular statements and hollow bluster, much of it contradictory, both the participants and markets remain as confused as ever.

In addition to Friday’s Yellen-Fischer one-two knock out punch, below are some of the key quotes, courtesy of Dow Jones:

“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months.”

– Federal Reserve Chairwoman Janet Yellen, Friday, in a keynote speech at the conference:

When asked whether the Fed could raise rates at its meeting next month and again before the end of the year, he said Ms. Yellen’s speech “was consistent with answering yes to both of your questions, but these are not things we know until we see the data.”

– Fed Vice Chairman Stanley Fischer, Friday, in a CNBC interview:

“We should be on a program of gradual rate increases,” though he added, “We can afford to be patient” when it comes to acting.

-Fed governor Jerome Powell, in a Bloomberg television interview Friday:

“If the economy in the next few weeks performs consistent with my sense of the economy, then I think we ought to have a serious discussion at the September meeting” about raising rates.

– Atlanta Fed President Dennis Lockhart, Saturday, in a WSJ interview:

“If we had a lot of good news and we got into the September meeting and other people wanted to go, I could support that–but again I’m talking about one increase and no planned increases after that.”  (Harvey:   bULLARDTURNING DOVISH)

– St. Louis Fed President James Bullard, Saturday, in a WSJ interview:

“The case for raising rates in the near term “has been strengthened.”

– Dallas Fed President Robert Kaplan, in a Bloomberg television interview Friday:

“I see a gradual…upward pace in interest rates as being appropriate.” As to when the Fed might raise rates next, she said, “I go into every meeting with an open mind.”

– Cleveland Fed President Loretta Mester, in an interview with CNBC Friday:

“We will act decisively as we move on… The bank will carefully consider how to make the best use of the policy scheme in order to achieve the price stability target. The “zero lower bound is no longer insurmountable” as a policy constraint “in practice”; “It is natural to assume another lower bound exists,” and the current rate is “still far from such a lower bound

– Bank of Japan Gov. Haruhiko Kuroda said at the conference Saturday:

Bank of Japan Gov. Haruhiko Kuroda said at the conference Saturday:

“Negative rates work and are nothing extraordinary or immoral or absurd.”

Harvey: ???

– European Central Bank executive board member Benoit Coeure, at the conference Friday:

A Fed rate increase “might trigger some reactions from our side, but we will also respond to other determinants of inflation.”

– Bank of Mexico Gov. Agustin Carstens, in a WSJ interview Friday:

* * *

But while Wall Street has been busy trying to decipher what all these statements mean for the probability of a future rate hike, and whether one would take place in September, or December, or both, the real message that emerged was one noted previously: a common plea to their colleagues in the rest of government: “please help” as Reuters put it.

In other words, the push for a transition from monetary to fiscal policy was the true agenda behind this year’s Jackson Hole.

To be sure, while fiscal policy was not on the formal agenda for the conference, it was a steady part of the dialogue as policymakers thought through policies for a post-crisis world. One of the central worries is that households and businesses have become so cautious and set in their outlooks – expecting little growth and little inflation – that they do not respond in expected ways to the efforts central banks have made.

Or, as the WSJ unexpectedly reported a day before the Jackson Hole start, central banks are now failing, and as even Hilsenrath blasted “years of Fed missteps” have led to populism, and disillusion with the system. The result has been a historic collapse in confidence that the Fed “will do the right thing for the economy.

As Reuters’ Howard Schneider summarized in his Jackson Hole post-mortem,  “mired in a world of low growth, low inflation and low interest rates, officials from the Federal Reserve, Bank of Japan and the European Central Bank said their efforts to bolster the economy through monetary policy may falter unless elected leaders stepped forward with bold measures. These would range from immigration reform in Japan to structural changes to boost productivity and growth in the U.S. and Europe.”

Without that, they said, it would be hard to convince markets and households that things will get better, and encourage the shift in mood many economists feel are needed to improve economic performance worldwide.

During a Saturday session at the symposium, such a slump in expectations about inflation and about other aspects of the economy was cited as a central problem complicating central banks’ efforts to reach inflation targets and dimming prospects in Japan and Europe.

The ECB – currently waging a silent war with Deutsche Bank and Germany over the fate of NIRP – was perhaps the most vocal, after its executive board member Benoit Coeure said the bank was working hard to prevent public expectations about inflation from becoming entrenched “on either side” – neither too high nor too low. But the slow pace of economic reform among European governments, he said, was damaging the effort. “What we have seen since 2007 is half-baked and half-hearted structural reforms. That does not help supporting inflation expectations. That has helped entertain disinflationary expectations,” Coeure said.

What Coeure did not acknowledge is that it is the ECB’s role in keeping rates at record low levels as a result of its government (and now corporate) debt monetization that has allowed Europe’s government to completely ignore structural reforms. After all, if the market no longer signals a reaction to governmen policies, either favorable or otherwise, what is the point of putting one’s political career at risk if interest rates won’t budge.

Bank of Japan governor Haruhiko Kuroda followed a similar path and said he is in regular talks with Japanese Prime Minister Shinzo Abe about opening Japan to more immigration and other politically sensitive changes needed to improve potential growth, currently estimated at only around one percent annually. As noted before, Fed Chair Janet Yellen devoted the final page of her keynote talk on possible monetary policy reforms to a list of fiscal and structural policies she feels would help the economy.

Kuroda came very close to also admitting defeat, acknowledging that household expectations have not moved, and said the BOJ was prepared to continue its battle to figure out how to shift them. Essentially, the BOJ will double down on what is now no longer working, but is effectively hurting both the Japanese banks and the economy.

“Japanese inflation dynamics remain vulnerable,” Kuroda said. “It could be that long-term inflation expectations are yet to be anchored in Japan” at the bank’s 2 percent target.

This, despite, “flooding the financial system with cash, and voicing a steady commitment to their inflation targets” in an effort to make people believe they will be met.  The conclusion one can draw is that while central banks retain some credibility among markets, at least inasmuch as rising asset prices are concerned, the general public now openly ignores any central bank forecasts, and why not: with Fed interest rate “forecasts” such as this one, it is clear that not even the Fed has any idea what is coming.


Where does all this confusion leave us?  According to one economist, what happens next may put the past 7 years of simple “financial repression” and central bank failure to shame: in a lunch address by Princeton University economist Christopher Sims, “policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future.”

“Fiscal expansion can replace ineffective monetary policy at the zero lower bound,” Sims said. “It requires deficits aimed at, and conditioned on, generating inflation. The deficits must be seen as financed by future inflation, not future taxes or spending cuts.”

(Harvey: this means helicopter money)

In other words, openly monetizing the debt with the intent of generating runaway inflation: think helicopter money on steroids, a strategy that ultimately risks the dollar’s status as a global reserve currency.

* * *

Is a “shock” fiscal stimulus on the table? As Reuters concludes, “it was not clear whether such ideas will catch on. But there was a broad sense here that the other side of government may need to up its game.”

And as central bank policies continue failing, it will. As Deutsche Bank’s Dominic Konstam said over the weekend, “we are inclined to expect persistent financial repression with low real rates at least until as and when the US economy slows enough to provoke a reactionary fiscal response.

So there it is: all it will take for central banks to get their wish – world governments shocking “taxpayers into an inflationary view of the future – is for the economy to collapse. Because if the Lehman bankruptcy launched the greatest wealth transfer in history from the middle class to the world’s wealthiest, so the next US recession





Then this important commentary from zero hedge, where , due to new rules for the banking sector Basel III , it will now be impossible for the Fed to reduce its balance sheet. I cannot foresee the dollar strengthening with this on their head:

Why The Fed Will Never Reduce Its $4.5 Trillion Balance Sheet Again

Back in early April, one of the foremost experts on the practical applications of QE (there are many more “experts” on the discredited theoretical framework of QE, most of whom are career economists), Credit Suisse’s Zoltan Pozsar wrote a note titled “What Excess Reserves”, in which the former NY Fed analyst made a very clear case for why the Fed’s balance sheet will never shrink again (particularly in the context of the broken Fed Funds market). Some of the note’s highlights:

Instead of asking when the Fed will shrink its balance sheet, it’s about time the market gets used to the idea that we are witnessing a structural shift in the amount of reserves the U.S. banks will be required to hold, where reserves replace bonds as the primary source of banks’ liquidity. And that this shift will underwrite demand for a large Fed balance sheet.

Back in April, ge also laid out the role of the Fed’s massively expanded balance sheet in the context of the prime money fund shrinkage as a result of the October 14 money market reform deadline:

[W]e are witnessing a structural shift in the amount of reserves held by foreign banks as well. Gone are the days when foreign banks settled their Eurodollar transactions with deposits held at correspondent money center banks in New York. Under the new rules, interbank deposits do not count as HQLA, and foreign banks are increasingly settling Eurodollar transactions with reserve balances at the Fed. Foreign banks’ demand for reserves as HQLA to back Eurodollar deposits and as ultimate means of settlement for Eurodollar transactions will underwrite the need for a large Fed balance sheet as  well. Prime money fund reform is a very important yet grossly under-appreciated aspect of this, one with geo-strategic relevance for the United States.

Prime money funds have been providing the overwhelming portion of funding for foreign banks’ reserve balances. If the prime money fund complex shrinks dramatically after the October 14th reform deadline, funding these reserve balances will become structurally more expensive. This in turn means that for foreign banks across the globe running Eurodollar businesses – lending Eurodollars and taking Eurodollar deposits – will become structurally more expensive. Why? Because if the LCR requires banks to hold more reserves as the preferred medium for settling Eurodollar transactions and the funding ofthese balances become more expensive, funding the liquidity portfolio corresponding to Eurodollar books may become a negative trade. Will that somewhat diminish the dollar’s pre-eminence as the global reserve currency and play into China’s hand? You bet

Naturally, the loss of the dollar’s reserve status has to be avoided. But Pozsar’s conclusion was simple: the size of the Fed’s balance sheet isn’t going down, and the Fed will have to accept and admit it:

with the private sector’s ability to issue money market claims sharply limited by Basel III, money can only find a home on the sovereign’s balance sheet: either through the Treasury bill market or through the Fed’s o/n RRP facility. Either option will mean that demand for a large Fed balance sheet will remain: reserves will not be eliminated, but swapped into other liabilities – larger cash balances for the U.S. Treasury (and on the flipside more bills for institutional cash pools) and more o/n RRPs for money funds (and on the flipside safer money funds for institutional cash pools).

Oddly, however, the Fed keeps emphasizing that the o/n RRP is not there for the long haul or to meet money funds’ demand for safe assets, but to put a floor under interest rates.

We disagree. Quantities matter again, in ways the Fed has yet to appreciate.

Well, after this weekend’s Jackson Hole symposium it is clear that quite a few of the Fed members have read the Pozsar piece and are now appreciating that it is very unlikely that the Fed’s balance sheet will ever shrink again.

To be sure, that’s not quite framed as policy just yet. In a presentation by the head of the NY Fed’s capital markets head, Simon Potter, he projected that the Fed’s SOMA Holdings of domestic securities would begin declining between 2018 and 2020. Granted, this is long after the December 2014 forecast, which anticipated that the Fed’s balance sheet would have declined substantially by now.  It did not.

The head of the PPT then said the following prepared remarks:

Today, many advanced economy central banks find themselves in a situation where their policy rate is at or close to zero, and policy accommodation is being added or maintained by asset purchases and forward guidance. For example, the FOMC has indicated that it will continue reinvestment of principal payments on its portfolio until normalization of the fed funds rate is well underway. As can be seen in Figure 7, market estimates of when the SOMA portfolio will start to normalize have moved out from the end 2015 to the middle of 2018 or even later.

In retrospect, this appears to be merely padding to a Fed which realizes it will never be able to unwind its balance sheet again.  As Reuters commented overnight, “policymakers think new tools might be needed in an era of slower economic growth and a potentially giant and long-lasting trove of assets held by the Fed. And they are convinced the time to vet them is now, while rates look to be heading up.”

“Central banking is in a brave new world,” Atlanta Fed President Dennis Lockhart said in an interview on the sidelines of the conference.

At the center of the Fed’s discussions is its $4.5 trillion balance sheet, built up by bond-buying sprees to combat the 2007-09 recession but which has been criticized by many lawmakers.

 While policymakers have maintained the Fed should eventually reduce its bond holdings, Lockhart said some officials were closer to accepting that they needed to learn to live with them.  “I suspect there are colleagues who are contemplating at least maybe a statically large balance sheet is just going to be a fact of life and be central to the toolkit,” he said.

So far the official narrative has been that the balance sheet will shrink only very slowly, a process that would take years and would not begin until interest rate increases are well underway. Progress could be made only in a very long-lived economic expansion. “I am sure everyone in the audience would be happy if this were the reality. I certainly would be,” Simon Potter, the New York Fed’s markets chief, said during the conference.

Instead of expecting balance sheet shrinkage, think more QE: Yellen, in her speech on Friday, said balance sheets would likely swell again in future recessions as the Fed snaps up assets to stimulate the economy.

But whether or not the Fed’s balance sheet ever srhinks again (it won’t), there are bigger issues, as noted earlier: the conference presented a menu of more exotic proposals. This included a Fed takeover of short-term debt markets and abolishing cash in order to charge negative interest rates.

Many of the more radical proposals, including one to abandon monetary policy altogether and focus on urging runaway deficit-spending, were seen as ivory tower musings. Most policymakers, including Yellen, said it was likely the tools the Fed used to fight the last crisis, including rate cuts, bond purchases and jawboning on rate expectations, will be adequate.

Still, she said, “future policymakers might choose to consider some additional tools that have been employed by other central banks,” including buying a wider range of assets or raising the inflation target. She also cited the possibility of targeting the average level of prices in the economy rather than their rate of change.

Her laundry list of possible tools did not include negative rates, an idea that has been nearly universally panned by Fed officials. She said the Fed is not actively considering additional policy tools but participants at the conference suggested the process is already well underway. “You are seeing an exploration of how are we going to operate in a quite different world than before the crisis,”Lockhart said.

A world, incidentally, where the Fed’s $4.5 trillion holdings of government debt are seen as perfectly normal. Which is why our advice for anyone who is asking how the Fed continues to spin the current monetary policy as tightening when it still is pregnant with trillions in debt which will never be reduced (and can barely muster a 25 bps rate

is to stop asking silly questions and move on.




As we indicated above, the confidence in the Fed is sinking fast and that will have ramifications for the dollar:


(courtesy Mish Shedlock/Mishtalk)

Confidence In The Fed Is Sinking Fast

Once-revered central bank heads failed to foresee the housing bubble and the great financial crisis that followed. As a result, faith in the Fed has plunged.

People had high confidence in Alan Greenspan for much of his tenure, but that confidence tailed off towards the end. Confidence in Ben Bernanke declined further, and confidence in Yellen is at or near record lows.

The following chart shows the shift in confidence under the last three Fed chairs.

Shift in Confidence

Fed Confidence

The above chart from the Wall Street Journal article Years of Fed Missteps Fueled Disillusion With the Economy and Washington.

Bernanke had more negative marks than Yellen, but more positive marks as well.

In the early 2000s, confidence in Chairman Alan Greenspan often exceeded 70%. An April Gallup poll found 38% of Americans had a great deal or fair amount of confidence in Ms. Yellen, while 35% had little or none.

How much confidence do you have in Janet Yellen?

12%Only a Little
4%Fair Amount
5%Great Deal

Note that St. Louis Fed president Bullard is worried about confidence in the Fed: Bullard Warns Yellen on Credibility, Sticks with Forecast “1 Hike in Next 2.5 Years”





The real math showing how the middle class in the USA is being destroyed by Obamacare:

(courtesy zero hedge)

How Obamacare Destroyed The Middle Class In One Chart

Ever wonder how politicians and bureaucrats can go out and deliver the same misleading propaganda to various media outlets each day and keep a straight face while doing it?  Are these folks so detached from the real world that they go back to the “safe space” of their offices in Washington D.C. and pat themselves on the back thinking they’ve actually duped the American people into believing some alternate set of facts that have no basis in reality?  Or, are they so immersed in the false narratives day in and day out that they actually start to believe their own rhetoric?

No matter the reason, one narrative we’ve found particularly misleading this week comes to us courtesy of Marjorie Connolly, of the Department of Health and Human Services, who has the brutally difficult job of defending the “success” of Obamacare as it literally on the verge of collapse from soaring premiums and declining insurer participation.  While we certainly don’t envy the position of Connolly, we do find some of her comments to the press “slightly” misinformed.

Just to provide an illustrative sample:

Reuters (8/2/16) – “Consumers coming back to shop for 2017 will continue to have a robust set of choices.

New York Times (8/19/16) – “A number of steps remain before the full picture of marketplace competition and prices are known. Regardless, we remain confident that themajority of marketplace consumers will have multiple choices and will be able to select a plan for less than $75 per month when Open Enrollment begins Nov. 1.”

The Tennessean (8/25/16) – “Consumers in Tennessee will continue to have affordable coverage options in 2017. Last year, the average monthly premium for people with Marketplace coverage getting tax credits increased just $2, from $102 to $104 per month, despite headlines suggesting double digit increases.”

As you can see, the chosen narrative of Connolly is to focus on the premiums paid by the overwhelming minority of healthcare consumers that actually receive subsidized rates under Obamacare.  While this may be the only “convenient” fact that Connolly could find to peddle, it ignores the skyrocketing rates that the other 95% of people, mostly middle-class Americans, have to pay.

So, here’s the real math.  There are roughly 320mm people in the United States.  120mm people are covered under Medicare and Medicaid which leaves 200mm to be covered by “private” health insurance plans.  In 2016, roughly 11.1mm people signed up for “private” health insurance through one of the Obamacare federal or state exchanges.  Of those people, it is estimated that roughly 85%, or ~9.5mm people, received some level of “need-based” subsidy .  News flash Department of Health and Human Services, 9.5mm people is less than 5% of the 200mm people seeking private health insurance.  The other 95% is America’s middle class and they’re getting crushed.

As for Connolly’s suggestion that consumers will continue to have “robust” choices in 2017…we’re not sure that people in the majority of the Southeast and Midwest with only 1 “option” for 2017 would agree.

Obamacare Carriers

And, as for premiums…we’re not sure that a 21% YoY median increase is necessarily “affordable.”

2017 Obamacare Premiums

The fact is, the overwhelming majority of the 95% we mention above is comprised of middle-class consumers who are bearing the brunt of the burden of rising health insurance costs.  In fact, a June Brookings Institution study found that middle-income households now devote the largest share of their spending to health care ever, 8.9%, a rise of more than three percentage points from 1984 to 2014.  Per the Wall Street Journal, since 2007 middle-class families have been forced to increase the share of their overall spending on healthcare by nearly 25% while cutting back massively on other necessities to cover the difference.

So here in one simple chart is why President Obama’s Affordable Care Tax is crushing the middle-class more than any other social strata…

Middle Class Spending on Healthcare

So, for those wondering why the “recovery” from the “great recession” has been so muted perhaps you need to look no further than the massive healthcare tax imposed on the middle class by Obamacare.




The raising of the minimum wage has forced Ashley Furniture to clash 840 jobs in California as they move their operations to North Carolina and Wisconsin.

(courtesy zero hedge)

Minimum Wage Claims Its Latest Victims – Ashley Furniture Slashes 840 Jobs In California


The following is not good: USA person spending growth slows as savings rate rises.

(courtesy zero hedge)

US Personal Spending Growth Slows As Savings Rate Jumps Most Since March

A broadly in-line-with-expectations print in US income and spending data (+0.4% MoM and +0.3% MoM respectively) hides a bigger problem for the consumption-driven US economy. For the first time since March, the savings rate increased as US consumers dared not spend above their means (up from 5.5% to 5.7%).

Year-over-year, US spending growth is slowing once again, despite a bounce in incomes…

Is this some oddly conservative behavior?

Pushing the savings rate higher for the first time since March…

This does not bode well for Q3 GDP for now with July off to a less exuberant start.





The Dallas manufacturing index continues in contraction mode for the 20th straight month;

(courtesy zero hedge)

Dallas Fed Dead-Cat-Bounce Dies – Economy Contracts For 20th Month In A Row

Having jumped miraculously from -18 to -1.3 in July, August’s Dallas Fed plunged back to -6.2 – contracting for the 20th month in a row. The worse than expected headline data came despite a rise in new orders as the number of employees, average workweek, and capex all plunged into contraction. Hope also tumbled from 18.4 to 7.0 with inventories and new orders expected to slow.

Despite the surge in oil prices, the Dallas economy continues to contract…

Charts: Bloomberg


Apple is being set to be hit with the “largest tax penalty ever recorded”


Expect the USA to reciprocate with money laundering charges against European banks:

(courtesy zero hedge)


Jack Lew Furious After Europe Set To Hit Apple With “Largest Tax Penalty Ever”


WOW!! just look at what the following Dallas Fed respondent stated about the economy right now. He also stated that the data will show that throughout 2016, the USA was in a recession.  Not the garbage fed by Yellen and Fischer

(courtesy Dallas Fed/zero hedge)

Dallas Fed Respondent: “Sometime After The Election, Data Will Show That In 2016 The U.S. Was In Recession”

When the Dallas Fed released its latest manufacturing outlook survey, it revealed that when it comes to the state which during the shale boom was responsible for the bulk of highly-paid job creation in the U.S., things remain bad: as we reported earlier, after unexpectedly surging from -18 to -1.3 in July, August’s Dallas Fed plunged back to -6.2, contracting for the 20th month in a row.

However, it wasn’t the notoriously volatile data that attracted our attention, but rather the sampling of traditionally outspoken, well-formulated responses said as part of the survey. Here are some selected highlights:

  • The global economies and the U.S. economy are very weak and uncertain.
  • U.S. manufacturing is suffering because of the high dollar value.
  • A good indication of business outlook is how many calls we get from truckers looking for freight business. On one day we received four calls. It was probably more calls than orders we received for the day.
  • Refinery margins continue under pressure and the level of spending on equipment is being reduced significantly. I believe that the continued low level of spending will result in several providers going out of business. The market is getting very tough.
  • Pricing has deteriorated to win bids, and many projects seem to be on hold. Owners are reevaluating capital expenditures priorities or deferring them all together.
  • Despite some “hoopla” about construction metrics being strong, we seem to be on a plateau. Business is up and down some month to month, but no real growth year to year.
  • Our increases are new product orders and not from existing products. Demand for existing products ranges from no change to worse.
  • We are very busy right now, which is normal for this time of year. We are not sure how the next six months will pan out. We are very worried about persistent slowness of our customers, which does not bode well for us down the road unless things pick up soon for them.

The following analysis could have been penned by any econobserver who has not been captured by the system quite yet:

  • Department of Labor rules and regulations are slowing growth and reducing hiring due to increased management time spent on compliance and higher costs of labor. Current efforts to bring foreign production to the U.S. are significantly reduced due to labor costs and because worker productivity remains low, especially for entry-level or unskilled workers.Taxes, costs and inefficiencies of exporting are reducing competitiveness in overseas markets. The lack of local support for foreign trade zones is causing our company to consider alternatives, including relocating and growing elsewhere that offers them. Growth and improvement for our company is primarily by product innovation overcoming a worsening business climate.

And finally, the punchline:

  • Sometime after the election, historical data will show that in 2016 the U.S. was in recession.

Please bookmark this post because we are confident that whoever made this prediction will be proven correct in under a year.

Source: Dallas Fed

Well that about does it for tonight

I will see you tomorrow night


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