OCT 21/Almost 29 tonnes of gold standing in October: the highest ever recorded in history for the October delivery month/A MONSTROUS 16.61 TONNES OF GOLD WITHDRAWAL FROM GLD/A MONTROUS DEPOSIT OF 3.226 MILLION OZ INTO THE SLV/Huge devaluation for the Chinese yuan: China sends its message to the USA not to raise rates in December/A monstrous 78 billion USA FX leaves China in September/Canada walks out of the European trade talks and that should spell the end of TPP as well/ Heavily arms guards lining up outside the Ecuadorian embassy waiting for the word to capture/kill Assange!/

Gold $1265.90 up  $0.30

Silver 17.45 DOWN 5 cents

In the access market 5:15 pm

Gold: 1266.80

Silver: 17.55



The Shanghai fix is at 10:15 pm est and 2:15 am est

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

Shanghai morning fix OCT 21 (10:15 pm est last night): $  1267.78


Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1269.33


HUGE SPREAD TODAY!!  5 dollars


London Fix: OCT 21: 5:30 am est:  $1263.95   (NY: same time:  $1264.20:    5:30AM)

London Second fix OCT 20: 10 am est:  $1266.05  (NY same time: $1266.35 ,    10 AM)

Shanghai premium in silver over NY:  87 cents.

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.


For comex gold: 


For silver:

for the Oct contract month:  7 notices for 35,000 oz.


Let us have a look at the data for today



In silver, the total open interest ROSE by 925 contracts UP to 194,093. The open interest ROSE  EVEN as the silver price was DOWN  12 cents in yesterday’s trading .In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .973 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia &ex China).

In silver for October we had 7 notices served upon for 35,000 oz

In gold, the total comex gold ROSE by 412 contracts despite the FALL  in price of gold ($2.30 YESTERDAY) . The total gold OI stands at 504,027 contracts.


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



Total gold inventory rests tonight at: 953.56 tonnes of gold



THE SLV Inventory rests at: 366.366 million oz


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

1. Today, we had the open interest in silver ROSE by 925 contracts UP to 194,093 as the price of silver FELL by 12 cents with yesterday’s trading.The gold open interest ROSE by 412 contracts UP to 504,027 as the price of gold FELL $2.30 IN YESTERDAY’S TRADING.

(report Harvey).

2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

2c) COT report



i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 6.98 POINTS OR 0.21%/ /Hang Sang closed FOR HOLIDAY. The Nikkei closed DOWN 50.91 POINTS OR 0.30% Australia’s all ordinaires  CLOSED DOWN 0.22% /Chinese yuan (ONSHORE) closed DOWN at 6.7635/Oil ROSE to 50.83 dollars per barrel for WTI and 51.66 for Brent. Stocks in Europe: ALL MIXED   Offshore yuan trades  6.7740 yuan to the dollar vs 6.7635  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS HUGELY  AS MORE USA DOLLARS LEAVE CHINA’S SHORES



none today


none today


i)For the past 11 days we have seen the yuan weaken against the dollar.  Last night we witnessed a huge devaluation of .35% to 6.7635 with the off shore yuan falling to 6.7740.

It is now obvious that China is again sending a message to Janet that she must not raise rates in the December meeting.  She paid attention last time China threw a tantrum

( zero hedge)

ii)WOW!!  China is releasing a huge amount of USA treasuries.  Goldman Sachs states that Sept FX flows surged to 78 billion USA: total for the year so far a stunning 500 billion usa

( zero hedge)


Germany’s largest potash producer has just seen their bonds reduced to junk.  The problem of course is that the ECB has bought huge amount of their bonds and now European taxpayers are now on the hook for this junk debt

the fun begins..

( zero hedge)



i)David Rosenberg is calling for a massive multi trillion helicopter money stimulus by all parties to kick start the global economy:

( Rosenberg/Gluskin Sheff/zero hedge)

ii)Canada walks out of European trade talks known as CETA as they say the deal is impossible.  No doubt they will also walk way from the TPP

( zero hedge)


This should cause oil production to rise;  the rig counts spike to 8 months high

( zero hedge)


none today


iA great read from Koos Jansen this morning on physical gold demand

(courtesy Koos Jansen/GATA)

ii)A terrific commentary today from Alasdair Macleod as he does his exercise in determining the value of gold with the understanding of the huge amount of fiat currency released into the world.

( Alasdair Macleod)

iii)Costs to banks would triple according to new rules for long term funding of refiners of gold.  This would no doubt cause jewelry to be more costly

( Sanderson/London’s Financial times)

iv)The yuan’s inclusion in SDR has so far done nothing for the price the gold.  However China wants gold to be included as a 6th currency.  We are in lockdown mode waiting for the USA election

( GATA/Bll Murphy.Reluctant Preppers)


i)The new wikileaks emails confirm that the Democratic National Committee was behind the violence at all the Trump rallies.  No wonder he does not want to say that he would agree with the election results on November 8.

( zero hedge)

ii)And now on Nov 1, health premiums are set to skyrocket and this should blow up Obamacare

( Mish Shedlock/Mishtalk)
iii) This does not look too good:  heavily armed police are gathering outside the Ecuadorian Embassy in London.  They will no doubt go after Assange;

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 412 CONTRACTS to an OI level of 504,027 as the price of gold FELL $2.30 with YESTERDAY’S trading.

We are in the delivery month is October and here the OI GAINED 392 contracts UP to 693. We had 10 notices filed yesterday so we GAINED 402 contracts or 40,200 additional oz will  stand  for delivery.

The next delivery month is November and here the OI FELL by 116 contract(s) DOWN to 2745 contracts. This level is extremely elevated as generally November is a very poor delivery month.To give you an idea of size, on Oct 21 2015, we had an OI of only 266 contracts standing.The next contract month and the biggest of the year is December and here this month showed an increase of 26 contracts up to 372,238.

Today we had  618 notices filed for 61,800 oz of gold.

And now for the wild silver comex results.  Total silver OI ROSE BY 925 contracts from  193,168 up to 194,093 as the  price of silver FELL  to the tune of 12 cents yesterday.  We are moving  further from the all time record high for silver open interest set on Wednesday August 3:  (224,540).  The next non active delivery month is October and here the OI fell by 72 contracts down to 96. We had 85 notices filed yesterday so we gained 13 contracts or 65,000 additional oz will stand for delivery.The November contract month saw its OI LOSE 1 contract DOWN to 327.   The next major delivery month is December and here it FELL BY 105 contracts DOWN to 150,815.

we had 7 notices filed for 35,000 oz


Today the estimated volume was 109,834 contracts which is poor.

Yesterday, the confirmed volume was 149,287  which is also fair.

today we had 1 notice filed for 5,000 oz of silver:

INITIAL standings for OCTOBER
 Oct 21.
Withdrawals from Dealers Inventory in oz  NIL
Withdrawals from Customer Inventory in oz  nil
32.15 oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 66,456.117 oz
No of oz served (contracts) today
618 notices 
61,800 oz
No of oz to be served (notices)
75 contracts
Total monthly oz gold served (contracts) so far this month
9163 contracts
916,300 oz
28.500 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month    oz
Total accumulative withdrawal of gold from the Customer inventory this month    318,505.5 oz
Today we had 1 kilobar transactions,  
Today we had 0 deposit into the dealer:
total dealer deposits:  nil oz
We had zero dealer withdrawals:
total dealer withdrawals:  nil oz
We had 1 customer deposit;
i) Into Brinks:  66,456.117 oz
total customer deposits;66,456.117 oz
We had 1 customer withdrawal(s)
i) Out of MANFRA; 32.15 oz  (1 KILOBAR)
total customer withdrawal: 32.15  oz
We had 0 adjustment(s)
Total dealer inventor 2,236,180.879 or 69.559 tonnes
Total gold inventory (dealer and customer) =10,529,985.453. or 327.526 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 327.526 tonnes for a  gain of 25  tonnes over that period.  Since August 8 we have lost 26 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
For October:

Today, 0 notices were issued from JPMorgan dealer account and 0 notices were issued form their client or customer account. The total of all issuance by all participants equates to 618 contracts  of which 1 notices were stopped (received) by jPMorgan dealer and  82 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the Oct contract month, we take the total number of notices filed so far for the month (9163) x 100 oz or 916,300 oz, to which we add the difference between the open interest for the front month of OCT (693 contracts) minus the number of notices served upon today (618) x 100 oz per contract equals 916,300 oz, the number of ounces standing in this  NON active month of September.
Thus the INITIAL standings for gold for the SEPT contract month:
No of notices served so far (9163) x 100 oz  or ounces + {OI for the front month (693) minus the number of  notices served upon today (618) x 100 oz which equals 864,500 oz standing in this non active delivery month of Oct  (28.734 tonnes).
we GAINED additional 40,200 oz standing in this active delivery month of October and that is a record standing for any October from the beginning of time. To give you an idea of size from last yr, we had only a little over 2 tonnes standing at the conclusion of Oct 2015!
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 12 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for 2016:
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2015:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2015: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 28.734 tonnes so far.
total for the 10 months;  181.6869 tonnes
average 18.168 tonnes per month vs last yr 51 tonnes total for 12 months or 4.25 tonnes average per month.
Something big is going on inside the gold comex.
The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine
And now for silver
OCT INITIAL standings
 Oct 21. 2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
nil oz
Deposits to the Dealer Inventory
nil  OZ
Deposits to the Customer Inventory 
 600,955.410 oz
No of oz served today (contracts)
(35,000 OZ)
No of oz to be served (notices)
89 contracts
(445,000 oz)
Total monthly oz silver served (contracts) 448 contracts (2,240,000 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  5,191,804.6 oz
today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawals:
 total dealer withdrawals: nil oz
we had 0 customer withdrawals:
Total customer withdrawals: nil  oz
We had 1 customer deposits:
 i) Into Scotia: 600,955.410 oz
total customer deposits;  600,955.410 oz
 we had 0 adjustment(s) 
Today the estimated volume was 35,441 which is fair.
Yesterday the confirmed volume was 60,610 which is EXCELLENT
The total number of notices filed today for the Oct contract month is represented by 7 contract(s )for 35,000 oz. To calculate the number of silver ounces that will stand for delivery in OCT., we take the total number of notices filed for the month so far at  448 x 5,000 oz  = 2,240,000 oz to which we add the difference between the open interest for the front month of OCT (96) and the number of notices served upon today (7) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the OCT contract month:  448(notices served so far)x 5000 oz +(96) OI for front month of SEPT ) -number of notices served upon today (7)x 5000 oz  equals  2,685,000 oz  of silver standing for the OCT contract month. THIS IS STILL A HUGE SHOWING FOR SILVER AS OCTOBER IS GENERALLY A VERY WEAK DELIVERY MONTH.
We gained 65,000 additional silver ounces THAT WILL STAND.
Total dealer silver:  29.707 million (close to record low inventory  
Total number of dealer and customer silver:   174.638 million oz
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.
At 3:30 we receive the COT report which gives us position levels of our major players. Last week saw a huge covering of short positions by our commercials.
Let us see what these crooks did this week:
First: the gold COT
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
274,345 94,727 56,255 115,441 318,112 446,041 469,094
Change from Prior Reporting Period
-9,041 6,560 5,372 3,079 -15,449 -590 -3,517
177 116 88 50 54 277 213
  Small Speculators      
  Long Short Open Interest    
  51,020 27,967 497,061    
  -2,677 250 -3,267    
  non reportable positions Change from the previous reporting period  
COT Gold Report – Positions as of Tuesday, October 18, 2016

Our large speculators:

those large specs that have been long in gold pitched a huge 9,041 contracts from their long side.

those large specs that have been short in gold added 6560 contracts to their long side


Our commercials

those criminal banks that are long in gold added 3027 contracts to their long side

those banks that have been short in gold covered another whopping 15,449 contracts from their short side.


Our small specs;


Those small specs that have been long in gold pitched 2677 contracts from their long side

those small specs that have been short in gold added a small 250 contracts to their short side.

Conclusions; commercials go net long by another 12,422 contracts and that is bullish

However the regulators should never allow these crooks to play in this game in the first place.


And now for our silver COT



Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
94,230 34,944 14,570 53,771 128,682
-3,297 310 3,117 1,597 -1,127
103 49 42 35 38
Small Speculators Open Interest Total
Long Short 189,229 Long Short
26,658 11,033 162,571 178,196
343 -540 1,760 1,417 2,300
non reportable positions Positions as of: 158 112
  Tuesday, October 18, 2016   © SilverSeek

Our large speculators:

those large specs that have been long in silver pitched 3297 contracts from their long side.

those large specs that have been short in silver added a tiny 310 contracts to their short side.


Our commercials;

those commercials that have been long in silver added 3117 contracts to their long side

those commercials that have been short in silver added 1597 contracts to their short side.


Our small specs:

those small specs that have been long in silver pitched a huge 3575 contracts from their long side.

those small specs that have been short in silver covered a tiny 34 contracts from their short side.


Conclusions:  commercials go net long by 1520 contracts and they still are having trouble trying to cover their huge short position





And now the Gold inventory at the GLD
OCT 19/no change in gold inventory at the GLD inventory/inventory rests at 967.21 tonnes
OCT 13/a deposit of 2.67 tonnes of gold into the GLD/inventory rests  at 961.57 tonnes
Oct 12/No changes in inventory/inventory rests at 958.90 tonnes
Oct 11/ what!!! we had a gigantic 9.76 tonnes of inventory increase today/inventory rests at 958.90 tonnes.  (this was done with gold down?)
Oct 7:  949.14 tonnes
Oct 21/ Inventory rests tonight at 953.56 tonnes


Now the SLV Inventory
oCT 19/a good sized change at the SLV inventory: a deposit of 855,000 oz/rests at 363.140 million oz/
OCT 13/ NO CHANGES  in inventory at the SLV/Inventory rests at 361.147 million oz
Oct 12:NO CHANGES  in inventory at the SLV/Inventory rests at 361.147 million oz
Oct 11/ a withdrawal of 1.762 million oz of inventory from the SLV/Inventory rests at 361.147 million oz/
Oct 21.2016: Inventory 366.366 million oz

NPV for Sprott and Central Fund of Canada

Central fund data not available today.

1. Central Fund of Canada: traded at Negative 3.3 percent to NAV usa funds and Negative 3.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.9%
Percentage of fund in silver:38.1%
cash .+1.0%( Oct 21/2016).
2. Sprott silver fund (PSLV): Premium FALLS to +0.74%!!!! NAV (OCT 21/2016) 
3. Sprott gold fund (PHYS): premium to NAV  FALLS TO  0.99% to NAV  ( OCT 21/2016)
Note: Sprott silver trust back  into POSITIVE territory at 0.74% /Sprott physical gold trust is back into positive territory at 0.99%/Central fund of Canada’s is still in jail.


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

Trading in gold and silver overnight in Asia and Europe

US Mint Silver Eagle Demand – ‘Returned with a Vengeance’

GoldCore's picture

As gold and silver step back slightly to sit and wait for US economic data to be released later today we bring you news of the US Mint Silver Eagle demand that has ‘Returned with a Vengeance’ as reported by silverseek.com.

Last month it seemed some of the heat had come out of the US Mint Silver market when sales had failed to maintain the momentum seen in the first five months of the year when between 5.9m and 4 million coins had been sold each month.

But things have dramatically picked up. Sales of US Mint Silver Eagles in the month of October have reached 2,925,000, 75% higher than those seen in September when just 1,675,000 were sold, reports silverseek.com. Buyers have already bought more than the previous record month of June when they snapped up some 2,837,000. Given October’s buying patterns commentators now expect sales to touch 4,000,000 in total should the pace continue.

Silver Eagle sales this year lift the tally higher than all but five of the years in the last thirty.

Last year sales reached 47 million coins, and have reached over 35.35 million coins this year. At present the buying pace is not keeping up with the record year that was 2015, but it isn’t far off. We’re 80% through the year and sales are 71% of last year’s total.

The sales figures for October-to-date are not that surprising when you consider the 1 million coins that were shifted in 24 hours by the US Mint earlier this month as the price fell to $17.65/oz. source

One reason for the drop off over the summer may have been the silver price.  Last July, the sub $15/oz price of silver saw investors snapping up coins from authorised dealers, this year summer saw highs of over $20/oz prompting some buyers to draw a profit.

silverseeker.com also draws our attention to Gold Eagles which are also set to outperform September’s sales numbers of 94,000 compared to 84,000 this month to-date. If buying remains at pace, sales could reach 130,000 coins making this month the highest of 2016 beating the January record of 124,000.

Unlike Silver Eagles, Gold Eagles’ buying rate has outpaced that seen in 2014 and 2015. In the months from January to September, 692,000 ounces were sold, an increase from 670,000 in 2015 and 379,000 in 2014.

All of this is clearly positive news given Thomson Reuters (and the FT’s trumpet fare) reported that net sales volumes to retail investors in the US of gold and silver coins and bars fell 40 to 50 per cent in the third quarter.

Coining the landscape

Silver and gold coin sales have been an interesting indicator of economic and political sentiment, over the years but none more so since the financial crisis in 2008.

Between 1987- 2000, fifteen SilverEagles were sold for every 1oz Gold Eagle.  This nearly doubled between 2001 and 2007 when the ratio climbed to 29:1.  But post financial crisis in 2008 things really exploded. In the first six years (2008- 2014) the ratio averaged 49:1.

In March this year the ratio hit a huge 141.59 times more Silver Eagles sold than gold, this has gradually fallen and in August this year the ratio fell to just 25.61 Silver Eagles to every one Gold Eagle sold.

Given that global production of silver has recently only been about 8.5 times more than gold, you can see where we are going in terms of shortages.

As Goldcore reported, in 2015 the US Mint, Royal Canadian Mint and Perth Mint each set new records for silver coin sales. This has seemingly continued this year against a backdrop of increased political uncertainty as earlier this year the Royal Mint reported a ‘surge’ in demand for coins following the Bank of England’s decision to cut base rates to 0.25% in August.

Future for silver

Longer term, we expect silver to return to and surpass the nominal silver bullion high of $50/oz seen in 1980 and very nearly again in April 2011.

The fundamentals for the silver price remain strong, as they do for gold which many expect to see bottom out at $1,250/oz.

Countries continue to import silver for industrial and technological purposes and whilst mining companies are bringing up more silver than ever before their capital is low, which implies future shortages in both the gold and silver supply chains.

At present the US dollar’s strength is driven by the weakness of other currencies, this will remain the case as any other factors (namely a rate hike) are unlikely take effect prior to the US election.

This will no doubt impact gold and silver which look out over a horizon that includes Brexit, a tricky French election, Italian referendum (both of which may rock the Euro) and a struggling banking sector including RBS and Deutsche Bank which are both down this year.

So whilst the market is distracted by a seemingly strong dollar, its important to remember that the situation that is keeping it strong will remain after an election which will no doubt take its toll on it. This will only be good for gold and silver, and in the meantime why not take advantage of cheaper silver coins.

Read Silverseek’s piece here.

Gold and Silver Bullion – News and Commentary

Gold inches down as dollar firms, but set for weekly gain (FinancialExpress)

Gold futures mark first decline in 4 sessions (MarketWatch)

Wall Street dips as Verizon drags; AmEx curbs losses (Reuters)

ECB leaves door open to more stimulus, points to December meeting (Reuters)

Leading indicators point to moderate U.S. growth (MarketWatch)


Fed risks repeating Lehman blunder as US recession storm gathers (Telegraph)

Why are fund managers suddenly terrified (MoneyWeek)

Inflation is heading your way – here’s how to prepare your portfolio (MoneyWeek)

David Rosenberg Calls For A Multi-Trillion, “Helicopter Money” Stimulus Package (ZeroHedge)

SilverSeek (http://www.zerohedge.com/news/2016-10-20/david-rosenberg-calls-multi-trillion-helicopter-money-stimulus-package)

Gold Prices (LBMA AM)

21 Oct: USD 1,263.95, GBP 1,033.79 & EUR 1,160.69 per ounce
20 Oct: USD 1,269.20, GBP 1,034.65 & EUR 1,156.75 per ounce
19 Oct: USD 1,269.75, GBP 1,031.29 & EUR 1,154.97 per ounce
18 Oct: USD 1,261.65, GBP 1,031.15 & EUR 1,145.33 per ounce
17 Oct: USD 1,252.70, GBP 1,029.59 & EUR 1,139.58 per ounce
14 Oct: USD 1,256.15, GBP 1,028.79 & EUR 1,140.08 per ounce
13 Oct: USD 1,258.00, GBP 1,029.93 & EUR 1,141.76 per ounce

Silver Prices (LBMA)

21 Oct: USD 17.51, GBP 14.34 & EUR 16.08 per ounce
20 Oct: USD 17.60, GBP 14.35 & EUR 16.03 per ounce
19 Oct: USD 17.69, GBP 14.38 & EUR 16.11 per ounce
18 Oct: USD 17.65, GBP 14.37 & EUR 16.03 per ounce
17 Oct: USD 17.40, GBP 14.30 & EUR 15.83 per ounce
14 Oct: USD 17.47, GBP 14.28 & EUR 15.86 per ounce
13 Oct: USD 17.59, GBP 14.40 & EUR 15.95 per ounce

Recent Market Updates

– Cashless Society – War On Cash to Benefit Gold?
– “Higher Gold Prices” On Global Trade Slowdown – HSBC
– Euro “Will Collapse” As Is “House of Cards” Warns Architect of Euro
– Property Bubble In Ireland Developing Again
– “Gold Is A Great Hedge Against Politicians” – Goldman
– Sell Gold Now – Time To Liquidate Gold ETF, Pooled and Digital Gold
– Gold In GBP Up 43% YTD – “Massive Twin Deficits” To Impact UK Assets
– Ron Paul Says “Gold Going Up” Whether Trump Or Clinton Elected
– Gold Trading COT Report “Means Lower – Then Much Higher – Prices Coming”
– Currency Shock Sees Sterling Gold Surges 5% In One Minute “Flash Crash”
– Top Gold Forecaster: “As Quickly As Gold Fell” May “Rally Back” on Global Risks
– Gold Buying ‘Opportunity’ After Surprise 3.4% Drop
– Deutsche Bank “Is Probably Insolvent”





Lawrie Williams reports on SGE gold withdrawals. rose from 144 tonnes for the month of August to 170 tonnes for September.  In September the average was a very respectable 42.5 tonnes per week..  Lawrie states that gold withdrawals = demand is down from last year.

I believe they are down because China is having a little more difficulty in obtaining physical metal.

Demand is looking around 1800 tonnes.  The Indians bring in around 1200 tonnes and together.  The world produces ex China ex Russia, 2300 tonnes so it is still 700 tonnes above total annual gold supply

(courtesy Lawrie Williams/Sharp’s Pixley)


LAWRIE WILLIAMS: SGE gold withdrawals picking up but well down y-o-y


It’s taken a few days longer than usual for the Shanghai Gold Exchange (SGE) to report its eptember gold withdrawals figure – no doubt as an after-effect of the week long Golden Week holiday which meant the Exchange was closed for most of the first week of October. The latest figures did show though that withdrawals that month were comfortably higher than in August, but still well down on those for September 2015 – but 2015 was a huge record year for SGE withdrawals.

Shanghai Gold Exchange Monthly Gold Withdrawals (Tonnes)

Month 2016 2015 2014 % change 2015-2016 % change 2014-2016
January 225.08 255.42 246.00 – 11.8% -8.5%
February* 107.60 156.36 171.67 – 31.2% -37.3%
March 183.24 213.35 146.56 -14.1% +25.0%
April 171.40 195.45 129.59 -12.3% +32.2%
May 147.28 162.15 129.34 -9.2% +13.8%
June 138.51 195.67 128.03 – 29.2% +8.2%
July 117.58 285.50 137.53 – 58.8% -14.4%
August 144.44 265.27 161.95 – 45.6% -10.8%
September 170.90 259.98 202.43
October  176.29 201.11
November   202.71 212.49
December   228.21 235.66
Year to end September 1,406.03 1,989.15 1,250.67 -29.3% -1.0%
Full Year 2,596.37 2,102.36

Source: Shanghai Gold Exchange, Lawrieongold.com

As can be seen from the above table, SGE gold withdrawals for the first three quarters of the year are running around 29% lower than a year ago, but the figures still remain substantial in terms of overall global gold flows. Some equate SGE gold withdrawals to total Chinese gold demand – others suggest it may overstate the true picture, although known gold imports plus Chinese new mined gold production together with a relatively small recycling figure put total Chinese demand around the 2,000 plus tonne level – which corresponds much more closely with the SGE withdrawals totals and remains far higher than that of the mainstream analysts like GFMS and Metals Focus which put the figure at around half of that. But then, much depends on what is included in demand figures with the mainstream analysts tending to ignore ‘consumption’ by the Chinese banking sector for financial transaction purposes – and those figures can be substantial.

Regardless of the accuracy or otherwise of the SGE figures, they do at least tend to confirm that Chinese gold demand has been slipping so far this year, in line with virtually all recent analyses – but it does appear to be picking up, although still not to last years’ exceptionally high monthly levels at this time of year. Currently we are looking at a projected total for the year of around 1,875 tonnes, but with a possible build-up in demand ahead of the Chinese New Year, one can’t rule out another 2,000 tonne full year total – similar to 2014.

http://news.sharpspixley.com/article/lawrie- williams-sge-gold-withdrawals-picking-up-but-well-down-y-o- y/258234/


A great read from Koos Jansen this morning on physical gold demand

(courtesy Koos Jansen/GATA)

Koos Jansen: The great physical gold supply-and-demand illusion


8:24a ET Thursday, October 20, 2016

Dear Friend of GATA and Gold:

Gold researcher Koos Jansen writes today that the major companies providing analysis of demand for metals underestimate demand for gold because they treat it more as a commodity than a currency. Jansen’s commentary is headlined “The Great Physical Gold Supply-and-Demand Illusion” and it’s posted at Bullion Star here:


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




A terrific commentary today from Alasdair Macleod as he does his exercise in determining the value of gold with the understanding of the huge amount of fiat currency released into the world.

(courtesy Alasdair Macleod)


Alasdair Macleod: Fiat money and gold


By Alasdair Macleod
GoldMoney.com, St. Helier, Jersey, Channel Islands
Thursday, October 20, 2016

It is time to revisit the Fiat Money Quantity (FMQ), which totals US dollar money deposited in the banking system, the commercial banks’ money on deposit at the Fed and physical cash.

Besides alerting us to how the expansion of fiat money is progressing, an objective of this exercise is to give some guidance on the price relationship with gold. It is particularly appropriate at a time when banking analysts have turned generally bearish, believing that the rally in gold is now over.

The idea behind FMQ is to define the quantity of fiat money, which can then be compared with the value of monetary gold, which is some or all of the above-ground stocks of physical gold. …

… For the remainder of the report:






Costs to banks would triple according to new rules for long term funding of refiners of gold.  This would no doubt cause jewelry to be more costly

(courtesy Sanderson/London’s Financial times)

Consumers will be hit by capital rules on gold, refiners say


By Henry Sanderson
Financial Times, London
Thursday, October 20, 2016

Gold refiners are warning that regulators’ plans that forces banks to utilise longer-term funding against their holdings of the precious metal will ultimately make it more costly for consumers buying jewellery.

Banks lend gold to refiners, which typically use it to pay suppliers and customers, but under new rules proposed by the Basel Committee on Banking Supervision, the costs to banks could triple, according to the London Bullion Market Association.

“It will mean the banks will pass this cost on,” said Grant Angwin, president of Asahi Refining, a Salt Lake City-based refiner with operations in five countries. …

… For the remainder of the report:



The yuan’s inclusion in SDR has so far done nothing for the price the gold.  However China wants gold to be included as a 6th currency.  We are in lockdown mode waiting for the USA election

(courtesy GATA/Bll Murphy.Reluctant Preppers)

Yuan’s inclusion in SDR did nothing for gold, GATA chairman notes


12:33a ET Friday, October 21, 2016

Dear Friend of GATA and Gold:

Interviewed by Dunagan Kaiser for Reluctant Preppers, GATA Chairman Bill Murphy notes the failure of gold to respond positively to the Chinese yuan’s addition to the International Monetary Fund’s Special Drawing Rights. He adds that he expects that gold and silver will be as tightly controlled as ever in advance of the U.S. presidential election. The interview is 14 minutes long and can be heard at You Tube here:


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


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




2 Nikkei closed DOWN 50.91 OR 0.30%   /USA: YEN FALLS TO 103.76

3. Europe stocks opened ALL MIXED ( /USA dollar index UP to 98.53/Euro DOWN to 1.0889

3b Japan 10 year bond yield: RISES TO    -.052%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 103.76/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY.

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  50.83  and Brent:51.66

3f Gold UP /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

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

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS QUITE A BIT to +008%   

3j Greek 10 year bond yield RISES to  : 8.444%   

3k Gold at $1266.00/silver $17.52(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 WILL BE DEFENDED 

3l USA vs Russian rouble; (Russian rouble UP 5/100 in  roubles/dollar) 62.38-

3m oil into the 51 dollar handle for WTI and 52 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 HUGE DEVALUATION DOWNWARD 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 .9846 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0832 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 POSITIVE territory with the 10 year FALLS to  +.008%

/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 1.752% early this morning. Thirty year rate  at 2.494% /POLICY ERROR)

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

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


Futures Drop As ECB Confusion Persists, Dollar Rises To Seven Month High; Yuan Plunges

Asian stocks and S&P futures fall modestly and European shares are little changed as traders digested the surprising reticence from yesterday’s ECB meeting and weighed earnings reports from companies including Microsoft, which soared to all time highs after beating non-GAAP estimates, and Daimler. The dollar jumped to 7 month highs, pressuring EM currencies and pushing the euro to its weakest level since March and below the Brexit lows, after Mario Draghi shut down talk of tapering, while the Yuan dropped to the lowest since 2010 after the PBOC cut the fixing by most since August; commodities declined on speculation U.S. monetary policy will diverge from stimulus measures in Europe and Asia.

Top corporate stories include BAT’s offer to buy the remaining stake in Reynolds American for $47 billion and speculation AT&T is discussing a takeover of Time Warner; NBC is doubling in bet in BuzzFeed by investing another $200 million.

S&P 500 Index futures signaled U.S. equities will pare this week’s advance and European stocks fluctuated while Japanese shares fell after the nation was struck by an earthquake. A gauge of commodities fell for a second day. The Bloomberg Dollar Spot Index headed for a third weekly gain after European Central Bank President Mario Draghi said Thursday that the authority’s bond-buying program will likely be tapered before it is halted, a hint that there will be an extension beyond the scheduled end-date of March 2017. Despite today’s muted tone, global stocks were set for their first weekly gain in four weeks.

“Weaning markets off easy monetary policy will be a delicate exercise for the ECB, and we think the bank is unlikely to remove its stimulus until inflation is solidly on track to 2 percent,” Andrew Bosomworth, managing director and portfolio manager at PIMCO, said in a note. “We thus view tapering as a topic for 2017 and beyond.”

The euro fell to its lowest since March after Draghi’s guarded appearance on Thursday, and was trading just under $1.09 on Friday morning. Speaking after the Governing Council left its stimulus strategy unchanged, Draghi said that “sometimes it’s important to say what we did not discuss.” The topics deemed out of bounds included future rate cuts, extending bond-buying and tapering the program — or even whether those topics will be on the December agenda.

Prospects for more stimulus contrast with Federal Reserve policy as officials weigh the case for its first interest-rate hike since 2015. Fed Governor Daniel Tarullo and San Francisco Fed President John Williams are scheduled to speak today.

“Anybody who had positioned for the risk that Draghi would signal a hard taper took their chips off that particular table,” said Ned Rumpeltin, the head of European currency strategy at Toronto Dominion Bank in London. “This also put emphasis back on the dollar. And the calendar over the next few weeks look dollar friendly.”

More troubling than the move in the Euro was the latest plunge in the yuan, whose lower fixing to 6.7558, down 5.8% Y/Y, was the biggest daily move since August, pushing the Chinese currency beyond Bloomberg’s year-end forecast of 6.75, CNH hit 6.7666- close to weakest since trading began in 2010.

S&P 500 Index futures were down 0.3%. General Electric Co. and McDonald’s Corp. are among American companies reporting results on Friday. Microsoft Corp. surged as much as 6.2% in after-hours trading after first-quarter sales and earnings topped analysts’ estimates.

The Stoxx Europe 600 Index was little changed near a two-week high. Daimler AG fell 2 percent after the automaker reported a 10 percent increase in third-quarter earnings and SAP SE was up 2 percent following the announcement of sales that topped estimates. Ericsson AB slid 2.2 percent following its first loss in almost four years. British American Tobacco Plc paced gains among retailers, rising 2.7 percent after offering to buy the stake it doesn’t already own in Reynolds American Inc. for $47 billion.

Japan’s Topix index slid 0.4 percent and the yen strengthened after a magnitude-6.6 earthquake struck western Japan. The nation’s earnings season ramps up next week, with more than 350 members of the equity gauge set to report results.

The yield on benchmark U.S. Treasuries due in a decade fell one basis point to 1.74 percent. It touched a four-month high of 1.81 percent this week as higher oil prices spurred speculation inflation will gather pace. That may boost the case for the Fed to raise rates. China’s 10-year bond yield fell two basis points to a record 2.64 percent. Demand for sovereign debt firmed this week as data showed industrial output missed estimates last month and a weakening yuan spurred concern about capital outflows.

“It’s still a matter of debate whether economic fundamentals have turned better,” said Luo Yunfeng, a fixed-income analyst at Essence Securities Co. in Beijing. “It’s possible that, some time next year, the economy might show some sort of weakness again.”

* * *

Bulletin Headline Summary from RanSquawk

  • A rather uninspiring session so far in Europe with equities trading relatively flat as earnings continues to guide price action
  • USD bull theme is largely in play, though EUFt/USD losses through 1.0900 have been slow and steady
  • Looking ahead, highlights include Canadian CPI and Retail Sales, ECB’s Weidmann (Hawk) and Fed’s Tarullo (Voter, Dove) Speaks

Market Snapshot

  • S&P 500 futures down 0.3% to 2130
  • Stoxx 600 up less than 0.1% to 345
  • FTSE 100 up less than 0.1% to 7033
  • DAX up less than 0.1% to 10710
  • German 10Yr yield up less than 1bp to 0.01%
  • Italian 10Yr yield down less than 1bp to 1.36%
  • Spanish 10Yr yield up less than 1bp to 1.11%
  • S&P GSCI Index up less than 0.1% to 374.1
  • MSCI Asia Pacific down 0.3% to 140
  • Nikkei 225 down 0.3% to 17185
  • Hang Seng closed
  • Shanghai Composite up 0.2% to 3091
  • S&P/ASX 200 down 0.2% to 5430
  • US 10-yr yield down 1bp to 1.75%
  • Dollar Index up 0.25% to 98.56
  • WTI Crude futures up less than 0.1% to $50.67
  • Brent Futures up 0.3% to $51.51
  • Gold spot down less than 0.1% to $1,265
  • Silver spot down 0.3% to $17.49


  • BAT Offers to Buy Rest of Reynolds American for $47 Billion: Deal would create world’s largest publicly traded tobacco co.
  • AT&T Said to Discuss Takeover Idea in Time Warner Meetings: Executives said to have met in recent weeks for informal talks
  • Shell Sells $1 Billion of Western Canada Assets to Tourmaline: Oil major follows Conoco, EOG in shedding Canadian assets
  • Chesapeake Finds 4.5 Billion-Barrel Oil Field in Appalachia: Rome Trough field holds about 65 percent oil and gas liquids
  • JPMorgan Facing Criticism on Valuation of Complex Bonds It Sold: Bank ignored fees when determining values, consultant says
  • NBCUniversal Said to Near $200 Million Investment in BuzzFeed
  • Microsoft Jumps as Sales, Profit Top Estimates on Cloud Demand
  • PayPal’s Three-Year Forecast Eases Concern About Card Pacts
  • Volvo Profit Falls as North American Truck Orders Plunge
  • Daimler Quarterly Profit Rises 10% on Mercedes E-Class, SUVs
  • Schlumberger Beats Estimates as U.S. Shale Helps Lead Recovery
  • China to Surpass U.S. as World’s Largest Aviation Market by 2024

Asian stocks pared their biggest weekly advance in a month as health-care companies led losses and an earthquake in western Japan weighed on Tokyo equities. Hong Kong markets were shut due to a typhoon. Local markets traded in lackluster fashion following the weak US lead where declines in oil and losses in telecoms dragged sentiment lower. Nikkei 225 (-0.2%) was initially supported by a weaker JPY before reports of an earthquake in the region dragged the index into the red. ASX 200 (-0.2%) was held back by underperformance in healthcare after Healthscope warned of weaker revenue growth for hospitals, while oil and gold names were pressured by the declines in their respective commodities. Shanghai Comp. (+0.2%) traded choppy after property prices continued to soar which could increase the attractiveness of real asset investments over stocks, while a stronger PBoC liquidity injection and typhoon which kept Hong Kong markets closed for trade further added to the indecisiveness. 10yr JGBs saw uneventful trade with the BoJ absent from the market while Kuroda comments also failed to provide any new surprises. 9 out of 10 sectors fall with telcos, staples underperforming and materials, energy outperforming. “It’s likely the quake provided a reason for investors to sell ahead of the weekend,” with the index hovering around multi-month highs, said Shinichi Yamamoto, a senior strategist at Okasan Securities Co. in Tokyo. “Stocks appear to have managed to break out of their recent boxed-in range, and are likely to show solid performance next week as well.”

Top Asian News

  • Yuan Weakens Beyond Year-End Estimates as PBOC Lowers Fixing: Currency traded offshore declines close to record low
  • China Home Prices Rise in Fewer Cities Amid Tougher Curbs: Authorities in 21 cities have imposed curbs to cool prices
  • China Resources Pharma Said to Raise $1.8 Billion From IPO: Drugmaker prices first-time share sale below midpoint of range
  • Inflation Outlook Rises Everywhere But Japan in Test for BOJ: Japan’s 5-year inflation swap below 0.3%, versus 1.9% in U.S.
  • Duterte Goodbye to U.S. Swelling Costs on $42 Billion Bonds: Middle finger curse of EU also sped up outflows from peso debt
  • Hong Kong Cancels Stock Trading as Typhoon Haima Lashes City: Airport Authority says 689 flights canceled or delayed

In Europe, it has likewise been a rather uninspiring session so far with equities trading relatively flat as earnings continues to guide price action. IT names outperform this morning following Microsoft’s financial results beating expectations, consequently shares rose over 6% in after-market hours to surge past their dot.com peak, while European listed SAP are among the best performers after the tech giant upgraded their profit forecast. Elsewhere, British American Tobacco leads the FTSE 100 higher on the back of reports that they are to purchase the remaining stake in Reynold American for GBP 47BN. European stocks held on to their biggest weekly gain in a month amid deal activity and mixed earnings report after ECB chief yesterday pushed talks on bond-plan future to later meeting. 10 out of 19 Stoxx 600 sectors fall with autos, health care underperforming and basic resources, banks outperforming. 50% of Stoxx 600 members decline, 47% gain. The ECB “put a lot of pressure on themselves and on us for the December meeting,” said Holger Sandte, chief European analyst at Nordea Markets in Copenhagen. “Markets are pretty dependent on their drugs, so to get out is difficult. There’s a big communication challenge here.”

Top European News

  • Draghi’s ‘Did Not Discuss’ Leaves Investors Filling Blanks: ECB chief pushes talks on bond-plan future to later meeting.
  • Bombardier to Scrap 7,500 More Jobs as CEO Deepens Cost Cuts: Bellemare reduces employment for second time in eight months.
  • Nissan Confronts Post-Brexit Reality With SUV Plant Decision: Britain’s top auto producer weighing whether to keep Qashqai.
  • Deutsche Bank Shares Back to Level Before DOJ $14 Billion Demand: Shares traded at 13.10 euros before company confirmed request.
  • Daimler Sees Growth Stalling on North America Truck Market Woes: Weak North America demand burdens Daimler’s trucks division
  • Monte Paschi Heads for Best Week Ever With Fidentiis Skeptical: Monte Paschi climbs as much as 15%, extending this week’s rally to 54% as the Italian bank pressed ahead with plans to boost capital and sell non-performing loans.
  • UBS’s Currency Trading Volume Hit Record as Pound Crashed: ‘We processed our highest volume of trades in a minute’: Hall Fed move, other central bank policy changes to boost trading

In FX, the Bloomberg dollar gauge added 0.2 percent. South Korea’s won was the worst performer among major currencies, sliding 0.7 percent. The euro dropped 0.5 percent to $1.0880, falling for the first time through the low recorded on June 24, when the outcome of Britain’s vote to leave the European Union was announced. Draghi’s non-committal stance leaves traders waiting until at least December for news about policy changes. China’s yuan fell as much as 0.2 percent to 6.7605 per dollar in Shanghai, weakening beyond the 6.75 level that it was forecast to reach by year-end. The onshore yuan has declined in all but one session this month as the People’s Bank of China allowed a drop past the 6.7 level that was previously seen as its line in the sand. In offshore trading, the currency was within 0.5 percent of the weakest level recorded since trading began in 2010.

In commodities, the Bloomberg Commodity Index extended the first weekly decline in a month,falling 0.2 percent as dollar strength made raw materials more expensive to buy in other countries. Crude oil was little changed at $50.64 a barrel in New York, following Thursday’s retreat from a 15-month high. Rosneft PJSC Chief Executive Officer Igor Sechin said Russia is capable of a substantial boost to production less than two weeks after President Vladimir Putin pledged support for international efforts to limit output. Nigeria also said Thursday that it cut the price of every type of crude it sells in an effort to boost its global oil market share.  Nickel fell 0.8 percent to $10,045 a ton in London having earlier touched the lowest price in two weeks. The metal came under pressure after China’s top stainless steel producer said it plans to cut output. Aluminum climbed for the first time in six days in London, trimming this week’s loss to 3.5 percent. Gold fell for a second day, dropping 0.2 percent to $1,263.73 an ounce, near its 200-day average, a measure watched by traders and analysts who use chart patterns to make price predictions.

DB’s Jim Reid concludes the overnight wrap

At a period of time in the current cycle where every other word spoken by central bankers gets debated to the nth degree, we instead find ourselves sitting here this morning mulling over what Draghi didn’t say at the ECB press conference yesterday. In one of the more dull ECB meetings in recent memory, Draghi has instead passed the baton on to December. The main takeaway was that Draghi confirmed that the ECB has not discussed tapering or extending the asset purchase program. Indeed there was no intention of using up the option to completely rule out tapering, or to openly pre-signal a QE extension. That said we don’t know what’s going on behind the scenes and it’s more than possible that his refusal to pre-commit to an extension is because he is trying to build a consensus on the council and that therefore the topic is being actively discussed.

Our European economists don’t think that Draghi’s refusal to pre-commit in terms of extending QE and excluding a tapering should be read as the Governing Council thinking about a gradual termination of the QE programme from March 2017. Importantly they note that staff working groups have not yet completed their analysis on how to best tackle the bond scarcity issue were QE to be extended so pre-signalling at the meeting yesterday would have perhaps been premature. They also note that there was some room for an implicitly dovish signal towards the end of the press conference. Draghi seemed to dismiss the idea that markets are becoming too complacent in expecting QE to run indefinitely. One could see this as validating current market pricing of a further extension of QE. In summary, our economists continue to believe that the ECB will announce an extension of the €80bn QE programme in December. The key though to make it credible is how to resolve the eligible bond problem.

On that subject, with today’s calendar fairly bare one event worth keeping an eye on is Portugal’s sovereign rating review by DBRS today. Draghi yesterday confirmed that Portugal’s debt would no longer become eligible to buy under the current QE programme in the event of a downgrade to junk today with Moody’s, Fitch and S&P already there. Earlier this month Portugal’s Finance Minister claimed that DRBS had a more positive assessment of the country’s fiscal efforts so that has somewhat tempered concerns.

Markets were fairly choppy at and around the ECB. As Draghi spoke the Stoxx 600 dipped and touched an intraday low of -0.84%. However by the end of the press conference the index had pared all of that move lower and in fact as the session crept towards the close it had edged into positive territory (+0.19%) by the time the closing bell sounded. European Banks in particular seemed to enjoy the fact that there were no shocks with the Stoxx 600 Banks index ending +1.26% for its third successive daily gain. That index has quietly gone about climbing over +27% from the lows back in July which compares to a gain of ‘just’ +8% for the broader index. Meanwhile, the Euro (-0.41%) was under a bit of pressure and has touched the lowest level since March in trading this morning while sovereign bond yields – with the exception of Portugal (+1.5bps) – were 1-4bps lower across the board.

As we moved into the US session the focus moved on from the ECB and over towards earnings which were on the whole a bit more disappointing. Following the strong results from the Banks, it was the telecom and tech sectors which underwhelmed with earnings reports from Verizon (shares down -2.48%) and eBay (shares down -10.76%) disappointing. That overshadowed better than expected numbers from American Express which sent shares up over 9% and the most in seven years. The S&P 500 (-0.14%) ended with a modest decline.

Also not helping sentiment was a reversal in Oil prices. WTI (-2.30%) undid most of the move higher on Wednesday to close back below $51/bbl. The leg lower for Oil was blamed on comments from the CEO of Rosneft – the largest Oil company in Russia – who said that Russia has the capacity to add up to 4m barrels a day if there’s demand and conditions allow for it. Staying with Oil, yesterday Schlumberger became the first of the big Oil companies to report in the US. Q3 results were mixed with earnings beating but revenues a slight miss. The big names report next week.

Switching our focus over to Asia this morning where it’s been a fairly directionless session to conclude the week. While the Nikkei (+0.29%) is up, the Shanghai Comp (-0.36%) has reversed earlier gains into the midday break while the Kospi (-0.40%) and ASX (-0.14%) have also edged lower. Markets in Hong Kong are still closed in anticipation of Typhoon Haima drawing closer. Datawise in Asia the focus has been on China. The September property prices data is out and it showed that new home prices (excluding government subsided housing) rose in 63 of the 70 cities last month. That’s down from 64 cities in August while prices dropped in 6 cities versus 4 in August, suggesting a cooling off. It’s worth also highlighting the move in the Chinese Yuan this morning. It’s currently down -0.18% after the fix was set weaker with the current 6.757 level the weakest in six years. Since Golden Week two weeks ago, the Yuan has depreciated on 8 of the last 10 days. Elsewhere this morning US equity index futures are down slightly despite Microsoft reporting better than expected Q3 numbers which sent shares up over 6% in extended trading.

Staying with the micro focus briefly, in a report this morning, our European equity strategists highlight that many investors have been scratching their heads about the continued strength of the European mining sector, which has outperformed by 90% since January despite renewed USD strength and copper price weakness. An important driver of the outperformance is the fact that 75% of the sector is listed in the UK, making mining a key beneficiary of the plunge in Sterling. Yet, our strategists are cautious on the sector, as the recent USD strength and the fading Chinese credit impulse point to around 15% downside for metal prices. Given that Sterling only matters when it moves sharply, it would most likely take a renewed bout of political crisis in the UK to offset the impact of softening metal prices.

Wrapping up what was a broadly decent day for economic data in the US yesterday. Existing home sales rose a bumper +3.2% mom last month, well exceeding expectations for just a +0.4% rise. Elsewhere the Philly Fed survey did fall 3.1pts at the headline to 9.7 however the market was forecasting for a bigger drop to 5.0. Also the underlying details showed much more improvement than the modest decline in the headline suggested. New orders (16.3 vs. 1.4 in the prior month) and shipments (15.3 vs. -8.8) in particular stood out while the number of employees also improved. Our US economists noted that the six-month outlook for capex also bounced by 12.6pts this month to 21.2. Elsewhere, the Conference Board’s leading index was up +0.2% mom last month as expected. Initial jobless claims rose 13k last week to 260k but there was some suggestion that this was impacted by Hurricane Matthew.

The focus data wise in Europe was once again in the UK. The latest retail sales numbers came across as fairly soft with sales flat MoM both excluding and including fuel. That compared to expectations for a +0.2% and +0.3% increase respectively. Sterling was slightly weaker (-0.25%) although the move lower came a few hours after that data.

As we glance over today’s calendar, it looks set to be a much quieter end to the week today for data. In fact with no releases due in the US the only prints we’ll get today will be the UK public sector net borrowing data for September, due out this morning and the October consumer confidence print for the Euro area this afternoon. Away from that, the Fed’s Tarullo will speak this afternoon (3.15pm BST) followed by Williams (7.30pm BST) later this evening. The EU leaders will also continue on with the summit in Brussels while the Bundesbank’s Weidmann and Italy’s Padoan are due to speak this morning. Away from the macro, earnings wise we’ve got nine S&P 500 companies due to report including McDonald’s and General Electric (both prior to the open).


i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 6.98 POINTS OR 0.21%/ /Hang Sang closed FOR HOLIDAY. The Nikkei closed DOWN 50.91 POINTS OR 0.30% Australia’s all ordinaires  CLOSED DOWN 0.22% /Chinese yuan (ONSHORE) closed DOWN at 6.7635/Oil ROSE to 50.83 dollars per barrel for WTI and 51.66 for Brent. Stocks in Europe: ALL MIXED   Offshore yuan trades  6.7740 yuan to the dollar vs 6.7635  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS HUGELY  AS MORE USA DOLLARS LEAVE CHINA’S SHORES


none today


none today

c) Report on CHINA

For the past 11 days we have seen the yuan weaken against the dollar.  Last night we witnessed a huge devaluation of .35% to 6.7635 with the off shore yuan falling to 6.7740.

It is now obvious that China is again sending a message to Janet that she must not raise rates in the December meeting.  She paid attention last time China threw a tantrum

(courtesy zero hedge)

“Dear Janet”? – China Devalues Most Since August, Yuan Tumbles To Lowest Since Sept 2010

For the 10th day of the last 11, onshore yuan has weakened against the dollar. A 0.35% devaluation of the Yuan fix – the most since August – catching down to offshore Yuan’s weakness, suggests (for now) PBOC policy is ‘allowing’ the drop and perhaps sending yet another ‘turmoil-induing’ message to The Fed as their hawkishness grows.

Since the start of Golden Week, yuan has plunged…

Plunging Yuan back near pre-peg-break levels from Sept 2010…

Sending a message?





WOW!!  China is releasing a huge amount of USA treasuries.  Goldman Sachs states that Sept FX flows surged to 78 billion USA: total for the year so far a stunning 500 billion usa

(courtesy zero hedge)

If one looks at China’s reserve data released by the PBOC, one would be left with the impression that China’s capital outflows – the bogeyman that sent global risk assets tumbling in late 2015 and early 2016 –  have moderated notably in 2016 after the surge during the summer of 2015 and in early 2016. However, as we explained previously, the PBOC has a habit of hiding what is truly happening below the surface, using legitimate mechanisms such as forward contracts,as well as some less legitimate ones. So to get an accurate perspective of what is happening with China’s fund flows, one has to look at a monthly dataset provided by SAFE, which presents the capital flow data in a way that can’t be “fudged.”

As a reminder, according to PBOC official data, China’s currency reserves fell by $18.79 billion in September to $3.17 trillion. The drop was larger than the $11 billion fall estimated and followed a drop of $15.89 billion in August and was the largest monthly decline since May. However, in what will surely be a troubling sign to Yuan bulls, not to mention all those who believe another burst of Chinese capital outflows can destabilize the market (as China is forced to dump US denominated reserves), Goldman has found that the real outflow in September was vastly greater: more than 4 times the official number, and the highest since January, an indication that the capital outflows are once again picking up substantial pace.

As Goldman’s MK Tang writes in a note released overnight, his preferred gauge of FX flow (based on SAFE data) shows that FX outflows rose to US$78bn in September (from US$32bn in August). The particular gauge incorporates information on both onshore net FX demand by non-banks and cross-border RMB movements.

Here are the details from Goldman:”As in the last few months, we focus on two separate sets of SAFE data to gauge the underlying FX flow situation: one on onshore FX settlement, and the other on the cross-border movement of RMB.”

  • According to the first SAFE dataset on onshore FX settlement, net FX demand by non-banks onshore in September was US$33.3bn (vs. US$4.6bn in August). This is composed of US$22bn via net outright spot transactions, and US$11.2bn via net freshly-entered forward transactions.
  • The second SAFE dataset on cross-border RMB flows shows that net flow of RMB from onshore to offshore was large at US$44.7bn (vs. $27.7bn in August). As we have discussed previously, in our view, such cross-border flow of RMB could not be readily explained by market-driven factors and needs to be taken into account when measuring net FX flow.

As Goldman sums up its preferred gauge of underlying flow “indicates a net FX outflow of US$78bn in September (US$33bn from net FX demand onshore plus US$45bn in FX outflow routed through the CNH market).

FX outflow picked up to US$78bn in September

Source: SAFE, Goldman Sachs Global Investment Research

Observing the vast discrepancy noted above, Goldman adds that besides today’s data, the PBOC had earlier released two other related FX data points for September: “one is the widely-followed FX reserves data (out on Oct 7), which fell US$27bn, after adjusted for our estimate on currency valuation effect. Another one is PBOC’s “position for FX purchase” (out on Oct 18), which captures PBOC’s net sales/purchases of FX. A difference between this data and FX reserves is that it is net of any valuation effects. This data suggest that PBOC sold about US$50bn in September–it is the biggest fall since January this year, and signaled large underlying FX outflow in September (there may be special factors such as FX transfers to other financial institutions to support their one-belt-one-road initiatives–we await further information, e.g., PBOC balance sheet data, to have a clearer idea about the possible size of these factors).”

It then makes it clear that today’s SAFE data confirm this signal; and indeed the measure suggests even faster underlying outflow than indicated by the data on the PBOC FX sales.

Goldman also notes that the difference between the position for FX purchase data and the FX reserve drop after adjusted for estimated currency valuation effect was particularly large in September (US$23bn, vs. monthly average of about US$10bn for Jan-Sep this year).

Cumulatively since the beginning of the year, the gap between our measure of underlying FX outflows and what is suggested by data on PBOC’s FX reserves or position for FX purchase is significant. Year-to-date through September, FX outflow according to our measure totaled roughly US$500bn, while implied FX sales suggested by reserve data and position for FX purchase were approximately US$200bn and US$300bn, respectively. Exhibit 1 shows our FX flow gauge.

Considering that as a result of the suddenly resurgent dollar, which overnight hit a 7 month high, and in turn led to the biggest drop in the Yuan since August, and the weakest print in the CNH since 2010, we are confident the outflows will only accelerate in October, and the complacency surrounding the biggest threat to China’s economy will be promptly crushed, potentially resulting in another “late 2015” episode in which the only thing that mattered to global stocks was the daily Yuan fixing and the monthly reserve flow report.





Germany’s largest potash producer has just seen their bonds reduced to junk.  The problem of course is that the ECB has bought huge amount of their bonds and now European taxpayers are now on the hook for this junk debt

the fun begins..

(courtesy zero hedge)

European Taxpayers Now On The Hook For Junk Debt As ECB Bond-Buying Debacle Builds

Back on March 10, when the ECB stunned the world and announced it would monetize corporate debt, we laid out a snapshot of the total size of Europe’s Investment Grade bond market…

And added that “It is unclear what happens to those IG bonds that the ECB has purchased if and when they get downgraded to junk.”

We are about to find out.

“Picking winners” was never a good idea for policymakers – no matter what the economics textbooks say – and now the ‘market’ has given the ECB a big headache. Draghi’s corporate-bond-buying scheme has backfired as the European Central Bank finds itself holding junk bonds in its so-called ‘stimulus’ plan after K+S AG was downgraded by S&P (sending its price plunging).

As Bloomberg reports, S&P cut the debt of Europe’s biggest potash producer one step to a level below investment grade.

The downgrade means that the bonds have no investment-grade ratings that would make it eligible for the ECB’s asset-purchase program.


Before the buying began, the ECB said it wouldn’t have to automatically sell notes downgraded to junk, but it has also said it will take steps to manage risks in its holdings. The central bank has bought 34 billion euros ($37 billion) of investment-grade corporate bonds since starting its stimulus program in June.


“Hopefully the ECB was aware in advance that there’s a price to pay for putting so much money into the market in this way,” said Gordon Shannon, a money manager at TwentyFour Asset Management, which oversees about 7.3 billion pounds ($8.9 billion).


“If they’ve bought a bond from a company that goes bankrupt, for example, they might never get their money back. Investors expect them to hold onto these bonds for years, and if they don’t, the market will be shaken.”

The Kassel, Germany-based company has 1.5 billion euros of bonds
maturing in December 2018, December 2021 and June 2022, according to
data compiled by Bloomberg. The Frankfurt-based ECB has holdings in all three of K+S’s bonds, according to a list of notes from the central bank.


All the notes declined on Friday, led by the 2021 securities, which fell 1.5 cents on the euro to 111 cents, the lowest in almost a year.


An official at the ECB declined to comment on whether the central bank planned to sell its holdings of K+S.

Meanwhile, Greece remains outside of the ECB’s Sovereign bond-buying scheme?




The USA has encircled Mosul but left the west side open so the jihadists can exit freely to Raquaa.  Moscow is not thrilled with the antics of the uSA

(courtesy vaughan Famularo/the Duran.com)

US ‘Relocated’ ISIS Terrorists Out Of Iraq, Into Syria To Fight Assad

Submitted by Vaughan Famularo via TheDuran.com,

As the Iraqi military with US support closes in on Mosul it is becoming clear that the US plan is to transfer the ISIS troops defending the city to Syria as part of the regime change plan there.

The Russian news media RIA Novosti, has revealed that US and Saudi leaders have decided to allow the safe passage of 9000 ISIS terrorists to vacate Mosul in Iraq and, relocate into Syria.

The surprising information was leaked by an anonymous diplomatic source. It was also claimed that this decision was conditional on the terrorists agreeing to fight Syrian and Russian troops in Palmyra and Deir Ezzor.

In the past two weeks we have witnessed the chaotic musing within the US Political and diplomatic corps once their impotence was exposed in Syria due to the collapse of the ceasefire and, the resumption of hostilities in Aleppo.

The bedlam and frustration exhibited by Western leaders has been apparent to all with wild claims of possible shooting down of Russian jets in Syria and, the continued ache and longing for the implementation of their, No Fly Zone.

Despite the turbulent political rumblings and threats, Russia and the government of Syria have steadfastly worked to free eastern Aleppo from the remaining terrorists who are now surrounded there.

The decision to allow ISIS to flee safely into Syria once again reveals to the world the gloved hand that shepherds and steers these terrorists.

The bombing of Syrian Army soldiers in Deir Ezzor by US and coalition Jets now appear purposed and calculated rather than an accident claimed by the US.

To add to the controversy, what was generally unreported in the media was a further attack a few days later that destroyed the last two surviving bridges spanning the Euphrates River.

Their destruction, will isolate the Syrian forces stationed at Deir Ezzor and, make life more difficult for the Syrian people who are already wearing the burden of six years at war.

As the ISIS terrorists leave Mosul and travel into Syria their objectives are the recently freed city of Palmyra, and the brave city of Deir Ezzor. Whether their safe passage from Mosul includes US and Saudi cover into Syria remains a mystery.

Regardless their location in eastern Syria allows their masters the tactical advantage of mobilising these proxy forces at the time of their choosing in their ultimate goal of deposing Syrian President Assad.


David Rosenberg is calling for a massive multi trillion helicopter money stimulus by all parties to kick start the global economy:

(courtesy Rosenberg/Gluskin Sheff/zero hedge)

David Rosenberg Calls For A Multi-Trillion, “Helicopter Money” Stimulus Package

With the inherent weakness in US GDP and the rising probability of a recession (two weeks ago Bank of America modeled that the next recession would likely start roughly one year from now), Gluskin Sheff’s David Rosenberg thinks that with monetary options exhausted it will take a fiscal boost in the trillions of dollars to kickstart the economy. These issues were discussed in an extended interview with Real Vision TV, where the chief economist and strategist at Gluskin Sheff proposed some radical policies to engineer the growth needed in nominal income.

His ideas, some of which can be seen here in a clip of the interview, include helicopter money attached to a $2 trillion perpetual bond, massive infrastructure spending and measures to tackle the $1 trillion student debt load that has seriously hamstrung the economy.

Here are some of the interview highlights:

Doing the Same Thing Over Again and Expecting a Different Outcome

Whether the US will in fact experience the technical definition of a recession is a matter of fervent debate, with the odds something like 20%-30%, according to Rosenberg (60% according to Deutsche Bank), but with growth averaging around 1%, there is no doubt the economy is weak.

“There are some people saying a recession is here right now,” Rosenberg says, “I don’t think that we meet those conditions yet. But people say, well, look. Twelve months in a row of negative year on year industrial production, that’s never happened outside recession, check. We’ve had now going into six quarters of profit contraction, year over year. That’s only happened in the context of a recession, check. I mean, all that is true, but so much of this has been related to the oil shock that we had.

Rosenberg’s problem with monetary policy, now in its 7th year of unorthodox experimentation, is that it has become a weak antidote to structural problems in the economy (even if it is still quite potent at boosting financial asets). Fiscal policy on the other hand, if constructed right, could be the answer due to its very powerful multiplier impact. “I can’t say that I know for sure, but it’s the old Einstein adage about the definition of insanity,” Rosenberg said. “And we’re finding that we’re really– if we’re not hitting the wall on monetary policy, we’re certainly seeing classic economics 101 of the law of diminishing returns.”

In terms of infrastructure spending, he said that one lesson from recent history and the Great Recession is that you’ve got to have the credibility to convince people that this is going to be permanent and not temporary, in terms of the impact on the economy. “So it can’t be transitory. It’s got to be very big. With interest rates as low as they are, there’s certainly the capacity. I mean, you’ve got a lot of governments around the world issuing 50 or 100-year bonds. So this is a once in a lifetime opportunity to borrow money.”

A Couple of Trillion Dollars of Helicopter Money

While companies have been taking advantage of these conditions to borrow money, the funds have not been invested in the real economy. Share buybacks have become more popular, while personal savings rates have increased amid the economic uncertainty. This all boils down to a big case for government spending, with monetary policy joining forces with fiscal policy in the form of helicopter money.

“What you do with helicopter money is you finance it off the central bank’s balance sheet because we’re talking doing something very dramatic to reflate the economy,” Rosenberg said. “It’s not a few hundred billion dollars. It’s a couple of trillion…I know I’ll get accused of bailing out the sinners, but, my lord, we’ve already done that. I mean, nobody went to jail.”

One of the things holding the economy back is the $1 trillion student debt load, which he said has left35% of males aged 18 to 34 living with mom and dad, not getting jobs and not becoming first time home buyers. Employment growth for the 65s and over is 7%, meanwhile, as the aging boomers have to work longer because they didn’t save enough for retirement.

“Helicopter money is QE plus where, say, the treasury issues a perpetual– call it, like, a century bond, a $2 trillion bond on the Fed’s balance sheet. And so when that bond matures, it’s, like, we’re all dead in the long run at that point. And then the Treasury can use that money to stimulate growth.

The beauty of this idea, according to Rosenberg is that you don’t have to go through Congress, with such difficulty in achieving corporate or personal tax reform.  “It would lead to a permanent increase in the monetary base. Inflation expectations would go up, which means that real interest rates would go negative. And the theory is that that would provide a bigger thrust towards getting what we all want, which is sustainable and accelerating nominal income growth.

Real Risk of Fed Mistakes or Trump Trade War

Sustainable and accelerating nominal GDP is certainly what’s required while the risk persists that we could be shocked into recession, or the Fed could make a mistake in raising interest rates too aggressively.

“That’s what happened in December of last year. They raised rates 25 basis points, but the overall financial tightening, in terms of what it meant for the dollar or in credit spreads and the stock market, it was really, like, 75 basis points of tightening. And the next thing you know, the economy slows to stall speed.

Another concern for investors is the prospect of a Trump presidency, bringing with it the potential start of a trade war. That could provide the sort of exogenous shock to cause the economy to go into recession, Rosenberg stated, noting that historically all the recessions in the post war period have been created by the Fed.

The problem is that when you have the economy running on average 1% growth, or 1% plus, which is not a big cushion. And so, you know, it’s a complicated question to try and handicap a recession on us right now. There’s a lot of people out there that are convinced that a recession is coming.”

To watch the full interview with David Rosenberg, visit Real Vision TV.  You can access this and many more interviews with a free trial. 

* * *

Oh, if Rosenberg’s idea gets traction – and execution –  which it will eventually, as we have said since our first days in 2009, buy lots and lots of gold.

Canada walks out of European trade talks known as CETA as they say the deal is impossible.  No doubt they will also walk way from the TPP
(courtesy zero hedge)

Canada Walks Out Of European Trade Talks, “Deal Impossible”

With ‘trade’ at the center of any substantive differences between US presidential candidates, 1000s protesting ‘trade’ deals across Europe, ‘trade’ collapsing in China, and lame-duck Obama trying to push his ‘trade’ agenda, it is perhaps shocking that Canada’s trade minister walked out of talks to finalize a trade pact with the European Union, saying it now seems the bloc is incapable of reaching such agreements and that Canadian officials are returning home.

As Bloomberg reports, Chrystia Freeland spoke to reporters Friday after negotiations with the European Commission and the leadership of Wallonia collapsed. The French-speaking southern Belgian region is the holdout in approving the deal.

“It is evident to me, for Canada, the European Union is not capable right now to have an international agreement, even with a country that has European values like Canada,” Freeland told reporters in Namur, Belgium. Her spokesman, Alex Lawrence, confirmed by e-mail that she had walked out.

“Canada is disappointed. I am personally very disappointed. I worked very, very hard,” she said.

Freeland’s departure came as EU negotiators hastened across the Belgian countryside to quell domestic concerns over the pact as some EU leaders voiced skepticism about the likelihood of rescuing the agreement, which is backed by twenty-seven of the 28 EU nations.

At stake is an accord known as the Comprehensive Economic and Trade Agreement that the EU says would boost its economic output by about 12 billion euros ($13 billion) a year and expand EU-Canada trade by about a quarter. Any collapse of CETA, which took five years to negotiate, would take the steam out of a series of separate negotiations with the U.S., Japan and other countries as a wave of populist parties around the world challenge the benefits of free trade.

The breakdown threatens to scuttle the bloc’s first commercial accord with a fellow member of the Group of Seven leading industrialized countries. European Commission representatives were still huddling with Walloon diplomats in Namur after a leaders’ summit dispersed in Brussels where they discussed the deal, which requires unanimous support.

“All of us including the commission have been working hard on the Canada agreement,” European Commission President Jean-Claude Juncker said after the meeting in the Belgian capital. “I hope that we’ll be able to see an agreed settlement in a few days with the Walloons, our friends, because I believe this CETA agreement is the best agreement we have ever been able to negotiate to date.

Estonian Prime Minister Taavi Roivas said after the leaders’ meeting that the EU’s “credibility as a union is at stake” and signaled the collapse of CETA would bury the separate European negotiations with the U.S. on the Transatlantic Trade and Investment Partnership.

“If Europe fails with CETA, it’s very difficult to imagine we can be successful with TTIP,” Roivas said. “This is very serious.”

Looks like Obama’s ‘gold standard’ legacy is not going well. And it makes one wonder if Canada are ‘idiots’ like every mainstream economist and media muppet proclaimed of Donald trump when he dared to question ‘Free-Trade’ agreements?




This should cause oil production to rise;  the rig counts spike to 8 months high

(courtesy zero hedge)


US Oil Rig Count Spikes To 8-Month Highs

For the 21st week of the last 22, US oil rig counts rose – spiking by 11 (most in 2 months) to 8 month highs at 443. In the past 21 weeks, rigs have risen by a combined total of +149 (+40%) since hitting a low of just 404 in late May. Apparently $45/50 oil is high enough for shale producers to come storming back in.


For now it is not affecting production…


Oil prices are modestly lower on the print.



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


Euro/USA   1.0889 DOWN .0039/REACTING TO NO DECISION IN JAPAN AND USA + huge Deutsche bank problems 


GBP/USA 1.2208 DOWN.0046 (Brexit by March 201/pound clobbered)

USA/CAN 1.3242 UP .0015

Early THIS FRIDAY morning in Europe, the Euro FELL by 39 basis points, trading now JUST above the important 1.08 level FALLING to 1.0889; 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,  THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK / Last night the Shanghai composite CLOSED UP 6.48 OR   0.21%   / Hang Sang  CLOSED  FOR HOLIDAY     /AUSTRALIA IS LOWER BY 0.22% / EUROPEAN BOURSES MIXED

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 69.43 POINTS OR 0.30%

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


Gold very early morning trading: $1265.75


Early FRIDAY morning USA 10 year bond yield: 1.752% !!! UP 1/4 in basis points from THURSDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.494, DOWN 1/4 IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 98.53 UP 20 CENTS from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING



And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.19% DOWN 2 in basis point yield from THURSDAY  (does not buy the rally)

JAPANESE BOND YIELD: -.052% DOWN 2 in   basis point yield from THURSDAY

SPANISH 10 YR BOND YIELD:1.12%  UP 2 IN basis point yield from  THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.37 PAR  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 25 points HIGHER than Spain.





Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/2.00 PM

Euro/USA 1.0863 DOWN .0066 (Euro DOWN 66 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 103.85 DOWN: 0.262(Yen UP 26 basis points/POLICY ERROR ON BANK OF JAPAN

Great Britain/USA 1.2219 DOWN 0.0036( POUND DOWN 36 basis points

USA/Canada 1.3340 UP 0.0113(Canadian dollar DOWN 113 basis points AS OIL ROSE TO $50.73


This afternoon, the Euro was DOWN by 66 basis points to trade at 1.0863


The POUND FELL 36 basis points, trading at 1.2219/

The Canadian dollar FELL by 113 basis points to 1.3340, DESPITE WTI OIL AT:  $50.73


the 10 yr Japanese bond yield closed at -.052%  DOWN 2  IN BASIS POINTS / yield/ AND THIS IS BECOMING BOTHERSOME TO THE BANK OF JAPAN

Your closing 10 yr USA bond yield DOWN 1/2   IN basis points from THURSDAY at 1.743% //trading well below the resistance level of 2.27-2.32%) very problematicUSA 30 yr bond yield: 2.495 DOWN 1/5  in basis points on the day /


Your closing USA dollar index, 98.77 UP 44 CENTS  ON THE DAY/3 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 2:30 PM EST

London:  CLOSED DOWN 6.43 POINTS OR 0.09%
German Dax :CLOSED UP 9.34 OR  0.09%
Paris Cac  CLOSED DOWN 4.05 OR 0.09%
Spain IBEX CLOSED UP 39.20 OR 0.43%
Italian MIB: CLOSED UP 25.38 POINTS OR 0.15%

The Dow was DOWN 16.57 points or 0.09%  4 PM EST

NASDAQ  UP 15.57 points or 0.30%  4 PM EST
WTI Oil price;  50.73 at 3:00 pm; 

Brent Oil: 51.73   3:00 EST




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: $51.90

USA 10 YR BOND YIELD: 1.736%

USA DOLLAR INDEX: 98.66 UP 33  cents

The British pound at 5 pm: Great Britain Pound/USA: 1.2228 down .0031 or 31 basis pts.

German 10 yr bond yield at 5 pm: +006%



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


“It’s Really Broken” – Divergences & Decouplings Dominate Week In Stocks, Bonds, FX

Distracted much?


US Macro data dumped this week…


Something odd is going on… VIX is down 6 days in a row but stocks are not playing along…


Bond-Stock correlation collapsed this week…


Stocks and bonds decoupled last week on what appears to have been rate-locks ahead of the large Saudi issuance…


Yuan’s collapse overnight hasn’t quite rippled through yet… just like last week…


And today saw USD strength and stocks strength…


8 days in a row and the ubiquitous end of day ramp has not occurred (chatter about SEC probes of end of day ETF rebalancing shenanigans remain unconfirmed for now)…

We did warn…

Algos hoping to frontrun a 3:30pm ramp which may again not come



On the week, futures show the craziness, dips bought but lows retested…China session weakness (red arrows)


Trannies ended the week red,, but the rest (even The Dow) managed to scramble back into the green for the weekend…


The USD Index rose for the 3rd straight week led CAD weakness (and EUR)…


Pushing the USD to the highest sicne Feb 2nd and higher on the year…


Bonds rallied all week, with the same systemic pattern and a notable flattening of the curve…


Gold was the week’s winner among commodities with silver second, despite dollar strength, as copper and crude slipped…


Charts: Bloomberg





The new wikileaks emails confirm that the Democratic National Committee was behind the violence at all the Trump rallies.  No wonder he does not want to say that he would agree with the election results on November 8.

(courtesy zero hedge)

‘Smoking Gun’ Email Confirms DNC Involvement In Inciting Violence At Trump Rallies

Just a few days ago, Project Veritas released a bombshell video exposing coordinated efforts between the Hillary Clinton campaign, the Democratic National Committee, Democracy Partners (run by Robert Creamer) and The Foval Group (run by Scott Foval) to incite violence at Trump rallies across the country.  The Clinton campaign and the DNC have vehemently denied the validity of the Project Veritas video but new emails discovered from WikiLeaks’ previous “DNC Leaks” seem to confirm the DNC’s involvement.

Recall in the first Project Veritas video, that the following people made the following claims (video below):

“Aaron Black” (real name:  Aaron Minter)  (appears at 9 mins 10 secs):  “So, I’m basically deputy rapid response director for the DNC for all thing Trump on the ground.  Nobody is really supposed to know about me.  So the Chicago protest when they shut all that, that was us.  It was more him (Bob Creamer) than me, but non of this is supposed to come back to us, because we want it coming from people, we don’t want it to come from the party.”

Bob Creamer (appears at 10 mins 50 secs):  “We have a call with the campaign every day to go over the focuses that need to be undertaken.”

Zulema Rodrigues (appears at 10 mins 58 secs):  “I just had a call with the campaign and the DNC. Everyday at one o’clock.

Well, if the video is faked, then it is certainly odd that several of the comments above line up perfectly with the email below in which Bob Creamer reaches out to Luis Miranda, the Communications Director for the Democratic National Committee, to setup a conference call.  Here are a couple of the “coincidences”:

First, the call is titled the “Trump Rapid Response” call, which perfectly aligns with Aaron Black’s comment above that he is the “Rapid Response Director.”

Second, the call is scheduled for 1pm which is exactly when Zulema Rodriguez confirms that she has her daily call with the “campaign and the DNC.”

Creamer 1

And here is the video so you can easily confirm for yourself.

And, of course, Trump did speak at an NRA event on May 20, 2016…

And in New Jersey on May 19, 2016.

Remember that this is also the same Robert Creamer who was found to have visited the White House over 200 times during the Obama administration including 45 meetings with the President himself.  We wrote about that connection below.

* * *

Earlier today we wrote about a new Project Veritas undercover video that uncovered several democratic operatives openly discussing, in explicit detail, how to commit massive voter fraud.  One of the operatives was a person by the name of Robert Creamer who is a co-founder of a democratic consulting firm called Democracy Partners.  Within the video, an undercover journalist details a plan to register Hispanic voters illegally by having them work as contractors, to which Creamer can be heard offering support saying that “there are a couple of organizations that that’s their big trick” (see: “Rigging Elections For 50 Years” – Massive Voter Fraud Exposed By Project Veritas Part 2“).

Unfortunately, the embarrassing video caused Creamer to subsequently resign from consulting the Hillary campaign as he issued a statement saying that he was “stepping back from my responsibilities working the [Hillary] campaign” over fears that his continued assistance would be a distraction for the campaign.

But voter fraud isn’t Creamer’s only criminal specialty.  A quick look at Wikipedia reveals that Creamer spent 5 months in federal prison back in 2006 for a “$2.3 million bank fraud in relation to his operation of public interest groups in the 1990s.”

So, with that kind of history, you can imagine our surprise when we discovered that a Mr. Robert Creamer showed up on the White House visitor logs 340 times beginning in 2009 when Obama took office and culminating with his latest visit in June 2016.  Moreover, in 45 of those instances, Creamer was scheduled to meet with POTUS himself.  Perhaps this is just two old Chicago “community organizers” hanging out?

According to his website bio, Creamer has been a “political organizer and strategist for over four decades” and has been very involved with the Obama administration over the years.  He even“provided strategic advice” to Obama on the “Iran nuclear deal.”  Ironically, Creamer “began his organizing career in 1970 working with Chicago’s Citizen Action Program (CAP), which had been organized by Saul Alinsky’s Industrial Areas Foundation.”

Robert Creamer has been a political organizer and strategist for over four decades.

During that time he has worked with many of the country’s most significant issue campaigns. He was one of the major architects and organizers of the successful 2005 campaign to defeat the privatization of Social Security. He has been a consultant to the campaigns to end the war in Iraq, pass universal health care, hold Wall Street accountable, pass progressive budget priorities, and enact comprehensive immigration reform.

He is General Consultant to Americans United for Change where he helped coordinate the campaigns to pass President Obama’s landmark jobs and economic recovery legislation.

Creamer has provided strategic advice for a wide array of progressive causes ranging from the movement to stop gun violence, defending the Obama Administration’s Iran nuclear deal, raise the minimum wage and guarantee the right of collective bargaining.

During the 2008 and 2012 Presidential Elections he worked with the Democratic National Committee as a consultant to the Obama Presidential Campaign coordinating field based rapid response to Republican Presidential candidates.

During his career, Creamer has worked on hundreds of electoral campaigns at the local, state and national level.

Creamer began his organizing career in 1970 working with Chicago’s Citizen Action Program (CAP), which had been organized by Saul Alinsky’s Industrial Areas Foundation. CAP successfully campaigned to reduce the sulfur dioxide in Chicago’s air by almost two thirds.

In 1974 he founded the Illinois Public Action Council – later known as Illinois Citizen Action – which became the state’s largest consumer advocacy organization and progressive political coalition. He directed the organization for 23 years.

Creamer has been a full time political consultant since 1997 when he co-founded the Strategic Consulting Group, now a component part of Democracy Partners.

He graduated from Duke University and did graduate work at the University of Chicago.

He is a board member of the Midwest Academy organizer training institute and the Sentencing Project which is seeking to end mass incarceration and reform the nation’s sentencing laws.

Creamer is an author and regular contributor to the Huffington Post. He is married to Congresswoman Jan Schakowsky from Illinois. His recent book is titled, Stand Up Straight: How Progressives Can Win.

Finally, Creamer’s wife is none other that Jan Schakowsky, a U.S. Representative for Illinois’s 9th congressional district which she has served since 1999.


Just another plume of smoke?


Robert H send this for us as a reminder of the new taxes that will kick in, inside the USA:

Taxes do not stimulate economies

Here comes your 2016 tax “surprise”
Hillary will keep this, Trump will likely revise it downward.New Taxes This YearRemember this in November 2016

As a brief reminder for those who forgot or for many that didn’t know here is what happened, quietly, on January 1, 2016:

  • Medicare tax went from 1.45% to 2.35%
  • Top Income tax bracket went from 35% to 39.6%
  • Top Income payroll tax went from 37.4% to 52.2%
  • Capital Gains tax went from 15% to 28%
  • Dividend tax went from 15% to 39.6%
  • Estate tax went from 0% to 55%
  • A 3.5% Real Estate transaction tax was added.

Remember these facts: These taxes were all passed solely with Democrat votes.

Not a single Republican voted for these new taxes.  These taxes were all passed in the Affordable Care Act, aka Obamacare.

If you think that it is important that everyone in the U.S. know this, pass it on!  There are many millions who don’t know about it !

This does not look too good:  heavily armed police are gathering outside the Ecuadorian Embassy in London.  They will no doubt go after Assange;
(courtesy zero hedge)

WikiLeaks Tweets “Heavily Armed Police” Gathering Outside The Ecuadorian Embassy In London

As pressure from the Obama administration mounts on the Ecuadorian government and Assange to halt the flow of Hillary’s emails, Wikileaks just posted the following tweet revealing heavily armed “police” outside of the Ecuadorian Embassy in London.

PHOTO: Heavily armed ‘police’ appear outside Ecuadorian Embassy in London where Julian Assange has political asylum (photo, Tuesday morning)




The “police” presence apparently began to amass earlier this week just as Wikileaks confirmed that the Ecuadorian had agreed to cut Julian Assange’s internet access after a little political pressure from John Kerry…

We can confirm Ecuador cut off Assange’s internet access Saturday, 5pm GMT, shortly after publication of Clinton’s Goldman Sachs speechs.

BREAKING: Multiple US sources tell us John Kerry asked Ecuador to stop Assange from publishing Clinton docs during FARC peace negotiations.


…and as an allegedly bogus plot, with links to the Clinton campaign, was revealed that attempted to link Julian Assange to a pedophilia ring.


With just over 2 weeks left until the election, pressure definitely seems to be mounting on the WikiLeaks organization…one has to wonder whether a President Clinton could resist the urge to “just drone this guy.”

And now on Nov 1, health premiums are set to skyrocket and this should blow up Obamacare
(courtesy Mish Shedlock/Mistalk)

Obamacare Premiums Up 30% In TX, MS, KS; 50% In IL, AZ, PA; 93% In NM: When Does The Death Spiral Blow Up?


Let us close out the week with this offering from Greg hunter of USAWatchdog

(courtesy Greg Hunter/USAWatchdog)


MSM Lies for Hillary, Russia US Closer to War, Economic Update

By Greg Hunter On October 21, 2016 In Weekly News Wrap-Ups

The mainstream media (MSM) is totally lying to the public about everything from voter fraud to Wiki Leaks. There are many current examples of possible voter fraud such as the recent revelation by the Pew Center that 24 million U.S. voter registrations are “significantly inaccurate.” Pew Center also says there are 1.8 million dead people still on the voter rolls. The other part of the MSM lie is done by omission. The MSM is simply not covering major news stories that are negative to the Clinton campaign. I’ve said it before and I’ll say it again, this is pure fraud on shareholders and the public by so-called news organizations that are really functioning as Democrat propaganda shills.

The U.S. and Russia are moving closer to war. Now, it is reported that Russia is preparing 40 million of its people for nuclear war with training exercises. Russia is also threatening the U.S. with “painful” retaliation if tougher sanctions are imposed.

Another big-time money manager is warning of a stock market crash. Mohamed El-Erian is warning of “enormous risk” and says it’s better to be a seller of the stock market right now than a buyer.

Video Link

http://usawatchdog.com/weekly-news-wrap-up-10-21-16-greg- hunter/


See you all on Monday

Have a great and safe weekend



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