NOV 22/Yesterday Reg Howe/Today Avery Goodman: a must read../Bill Holter and the huge amount of contracts standing for delivery for the December contract month/The Feud between Donald Trump and the media continue/

Gold closed at $1211.0 UP $1.40

silver closed at $16.62:  UP $0.11

Access market prices:

Gold: 1212.70

Silver: 16.68

THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON

.

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 Nov 22 (10:15 pm est last night): $  1232.32

NY ACCESS PRICE: $1217.50 (AT THE EXACT SAME TIME)/premium $14.82 

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Shanghai afternoon fix:  2: 15 am est (second fix/early  morning):$   1235.43

NY ACCESS PRICE: 1215.10 (AT THE EXACT SAME TIME/2:15 am)

HUGE SPREAD 2ND FIX TODAY!!:  $20.33 

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Fix: Nov 22: 5:30 am est:  $1217.55   (NY: same time:  $1218.10    5:30AM)

London Second fix Nov 22: 10 am est:  $1212.25 (NY same time: $1213.10,    10 AM)

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.

end

For comex gold: 

 NOTICES FILINGS FOR NOVEMBER CONTRACT MONTH:  0 NOTICE(S) FOR nil OZ  TONNES

For silver:

 NOTICES FOR NOVEMBER CONTRACT MONTH FOR SILVER: 0 NOTICE(s) OR nil  OZ

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I wrote the following yesterday afternoon in my blog to you.

“A little warning for you tonight.  Tomorrow is options expiry for the comex contract. The OTC and LBMA  options expiry on the 30th of November.  Thus we are in options expiry week and the crooks will always raid.  Today the silver price lagged behind the gold price so that is their signal to attack tomorrow. It is my opinion that the bankers are desperately trying to cover their shorts ahead of the Trump inauguration on the 20th of January. The threat of a possible gold standard and an audit of the Fed  which will expose all of the criminal hypothecation and leasing of gold by the bullion banks is forcing them into action.”

 

Our banker friends did not disappoint me as early in the comex session they knocked gold down to $1206.  However physical forces were just too strong for our bankers are gold reverted to positive by the end of the comex session. However we still have an entire week to worry about with OTC and LBMA options expiry on Wednesday the 30th of November.

 

Let us have a look at the data for today

.

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In silver, the total open interest FELL by 1025 contracts DOWN to 168,952 with YESTERDAY’S trading.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. .844 BILLION TO BE EXACT or 120% of annual global silver production (ex Russia & ex China).

In November, in silver, 0 notice(s) filings: FOR NIL  OZ

In gold, the total comex gold FELL by 8,408 contracts DESPITE THE RISE IN THE PRICE OF GOLD ($1.10 with yesterday’s trading ).The total gold OI stands at 482,719 contracts.

In gold: we had 0 notice(s) filed for nil oz

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

GLD:  

We had no changes in tonnes of gold at the GLD

Inventory rests tonight: 908.76 tonnes

.

SLV

we HAD NO CHANGES at the SLV/. 

THE SLV Inventory rests at: 350.182million oz

.

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

1. Today, we had the open interest in silver FELL  by 1025 contracts DOWN to 168,952 as price of silver FELL by $0.10 with YESTERDAY’S trading.  The gold open interest FELL by 8,408 contracts DOWN to 482,719 as the price of gold ROSE BY  $1.10 WITH YESTERDAY’S TRADING.

(report Harvey).

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 30.20 POINTS OR 0.94%/ /Hang Sang closed UP 320.29  OR 1.43%. The Nikkei closed UP 56.92 points or 0.31%/Australia’s all ordinaires  CLOSED UP 1.13% /Chinese yuan (ONSHORE) closed UP at 6.8850/Oil ROSE to 48.38 dollars per barrel for WTI and 48.93 for Brent. Stocks in Europe: ALL IN THE GREEN     Offshore yuan trades  6.9114 yuan to the dollar vs 6.8850  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS DEEPLY AS MORE USA DOLLARS   LEAVE CHINA’S SHORES / CHINA SENDS A CLEAR MESSAGE TO THE USA AND JANET  TO NOT RAISE RATES IN DECEMBER.

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

none today

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

i)This is annoying Obama to no end: With the death of TPP, Asian nations are saluting their new free trade leader: China!

( zero hedge)

ii) the following is an extremely important commentary from Dr Steve Hanke of John Hopkins University.  He states categorically that Trump’s policies will no doubt result in a huge trade war with China. He is probably right

( Dr Steven Hanke)

4 EUROPEAN AFFAIRS

i)Strange! Markets are up everywhere yet the German 10 yr bund is heading southbound! Something brewing?

( zero hedge)

ii)These guys ought to know:  DB warns that “the plate spinning era” is over

( Deutsche bank/zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

My goodness, it is starting in Canada.  A large stock brokerage firm is charging negative .75% on all foreign cash balances save the USA dollar

( zero hedge)

7. OIL ISSUES

i)You knew that this was coming: Oil slides after Iran, and Iraq has reservations about a proposed production cut as does Indonesia

( zerohedge)

ii)Here are the two scenarios laid out as to what the oil price will go if a production cut or no production cut:

( zero hedge)

iii)Who would have thought that this was in jeopardy?

( zero hedge)

iv)The farce continues:

( zero hedge)

v)Then at the end of the day, oil slides a bit after a much bigger than expected gasoline inventory build

( zero hedge)

8. EMERGING MARKETS

i)The currency in Venezuela is trading on the black market at 2022 to one USA dollar as hyperinflation is starting to take grip on this nation:

( zero hedge)

ib)I do not know about you, but I will put my money on JPMorgan that the money was not deposited in the bank to pay interest on those sovereign oil bonds of Venezuela

( zero hedge)

ii)The higher USA dollar is also killing emerging markets especially their bond market as yields rise.  This has causes a huge outflow of funds from that market

( zero hedge)

iii)No wonder the Indians are going to gold in big numbers as they lose confidence in paper money:

( Dhillon/Syndey Morning Herald)

9.   PHYSICAL MARKETS

i)James Turk keeps reminding us on the huge demand for gold throughout the world. Shanghai on Friday reported 80 tonnes of gold delivered upon with a total open interest of 800 tonnes. (comex: 1530 tonnes of open interest). Also we are witnessing a huge increase in demand for physical gold at the comex each and every month

( James Turk/Kingworldnews)

ii)The following kind of shows you that the Chinese are serious about gold.  They overbid to win half of Barrick’s key Australian open pit mine, the Kalgoorlie Super Pit

( Gavey/ The Australian from Syndey)

iii)Ronan Manly describes the gold market perfectly:  where transparency means the opposite: i.e. secrecy

( Ronan Manly/Bullionstar)

iv)Wow!! what a commentary.  Avery Goodman, a securities lawyers puts in words what I have been trying to describe to you what is going on in the gold business.

I agree 100% of what he states

If he is correct, and I strongly believe so, then the bankers and many agents in the know may be charged with treason as the only way that monetary gold can be sold is through an act of Congress and they did not obtain one.

( Avery Goodman/)

v)Bill Holter describes in words what I have outlined to you with respect to the huge amount of gold contracts standing so far for delivery in December as well as the huge amount of gold that have stood for gold this year.

a very important read.. THE ELEPHANT IN THE ROOM

(courtesy Bill Holter/Holter-Sinclair collaboration)

10.USA STORIES

i)USA trading:  with the Dow rising by 50 points this morning, the USA treasury yield curve crashes to 6 week lows.  How is this possible?

( zero hedge)

ii)Trump invites key executives and TV anchors to his Manhattan apartment. The media thought it was a meeting for gaining access to the President elect.  Instead it was a firing squad..

( zero hedge)

iii)Then this: the feud between the New York Times and President elect Trump continues:

( zero hedge)

iv)Now the meeting is back on;

( zero hedge)

v)Trump will issue an executive order on his first ay in office withdrawing the USA from the TPP plus other stuff

( zero hedge)

vi)Home sales surge trying to beat the huge spike in mortgage rates:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL by 8,408 CONTRACTS to an OI level of 482,719 DESPITE THE FACT THAT GOLD ROSE $1.10 with YESTERDAY’S trading. In the front month of November we had 17 notices standing for a LOSS of 536 contracts.  We had 536 notices served YESTERDAY so we NEITHER GAINED NOR LOST ANY GOLD OZ THAT WILL STAND FOR DELIVERY IN NOVEMBER.  The next contract month and the biggest of the year is December and here this month showed a DECREASE of 17,839 contracts DOWN to 199,751. The December contract month is still highly elevated compared to a year ago.  On Monday Nov 23/2015 comex reading day, we had a total of 133,160 contracts standing ( a loss of 27,109 contracts from Nov 20/2015 AND YES IT WAS A RAID DAY) It certainly emphasizes the huge demand for physical gold. THIS SHOULD EXPLAIN TO YOU WHY THE BANKERS ARE CONSTANTLY WHACKING OF GOLD (AND SILVER): THE HIGH OI FOR DECEMBER  AND THE HIGH PROBABILITY THAT MANY WILL TAKE DELIVERY.

Today, we had 0 notice(s) filed for NIL oz of gold.
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And now for the wild silver comex results.  Total silver OI FELL by 1025 contracts from 169,977 DOWN TO 168,952 as the price of silver FELL BY $0.10 with YESTERDAY’S trading. We are moving  further from the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The front month of November had an OI of 4 and thus a GAIN of 3 contracts. We had 0 notice(s) filed yesterday so we gained 3 contracts or an additional 15,000 oz will stand for delivery in this non active month of November.  The next major delivery month is December and here it FELL BY 8,921 contracts DOWN to 56,352. The December contract month is about even compared to a year ago.  On Nov 23/2015 reporting day, we had a level of 55,544 contracts having lost 5,508 contracts on the day).

In silver had 0 notice(s) filed for NIL oz

Eventually at the end of December 2015: 6.4512 tonnes of gold stood for delivery

Eventually at the end of December 2015: 18.84 million oz of silver stood for delivery.

VOLUMES: for the gold comex

Today the estimated volume was 117,182  contracts which is POOR.

Friday’s confirmed volume was 199,563 contracts  which is fair

INITIAL standings for NOVEMBER
 Nov 22.
Gold Ounces
Withdrawals from Dealers Inventory in oz  NIL
Withdrawals from Customer Inventory in oz  nil
NIL
 64.30 oz
(2 kilobars)
Brinks
Deposits to the Dealer Inventory in oz nil oz

 

Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
0 notice(s) 
NIL oz
No of oz to be served (notices)
17 contracts
 1700
oz
Total monthly oz gold served (contracts) so far this month
2655 contracts
265,500 oz
8.2581 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil oz
Total accumulative withdrawal of gold from the Customer inventory this month     630,593.9 oz
Today we had 1 kilobar transaction and a tiny 2 kilobars leave the comex vaults.
Today we had 0 deposits into the dealer:
total dealer deposits:  nil  oz
We had zero dealer withdrawals:
total dealer withdrawals:  nil oz
.
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i) Out of brinks:  64.30 oz (2 kilobars)
total customer withdrawal: 64.30  oz
We had 1  adjustment(s)
 i) Out of Brinks:
54,497.800 oz was removed from Brinks dealer and this landed into the customer account of Brinks.
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Total dealer inventor 2,079,098.416 or 64.668 tonnes
Total gold inventory (dealer and customer) =9,905,616.953 or 308.10 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 308.10 tonnes for a  gain of 5  tonnes over that period.  Since August 8 we have lost 46 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!
For November:

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

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To calculate the initial total number of gold ounces standing for the NOV. contract month, we take the total number of notices filed so far for the month (2655) x 100 oz or 265,500 oz, to which we add the difference between the open interest for the front month of NOV (17 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 267,200 oz, the number of ounces standing in this non  active month of November.
 
Thus the INITIAL standings for gold for the Nov contract month:
No of notices served so far (2655) x 100 oz  or ounces + {OI for the front month (17) minus the number of  notices served upon today (0) x 100 oz which equals 267,200 oz standing in this non active delivery month of Nov  (8.311 tonnes).
We neither gained nor lost any gold ounces standing in this non active delivery month of November.
Last yr at the conclusion of November we had .6656 tonnes of gold eventually stand
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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; 30.407 tonnes complete.
Nov.    8.311 tonnes.
total for the 11 months;  191.75 tonnes
average 17.432 tonnes per month vs last yr 51 tonnes total for 12 months or 4.25 tonnes average per month. From May 2016 until Nov 2016 we have had: 168.89 tonnes per the 7 months or 24.12 tonnes per month (which includes the non delivery months of May, June and Sept).  In essence the demand for gold is skyrocketing.
Something big is going on inside the gold comex.
Just take a look at Nov 2016 deliveries at 8.311 tonnes compared to last yr 0.6656 tonnes
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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 at MF Global.
 
IN THE LAST TWO MONTHS  46 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
 
NOV INITIAL standings
 Nov 22. 2016
Silver Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
1,110,682.95 oz
SCOTIA
BRINKS
HSBC
Deposits to the Dealer Inventory
nil  OZ
Deposits to the Customer Inventory 
 108,381.490 oz
Brinks
Delaware
No of oz served today (contracts)
0 CONTRACT(S)
(nil OZ)
No of oz to be served (notices)
4 contracts
(20,000  oz)
Total monthly oz silver served (contracts) 465 contracts (2,325,000 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  6,691,169.8 oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawals:
 total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
 i) out of SCOTIA:  30,189.380 oz
ii) out of Brinks: 30,216.67 oz
iii) Out of HSBC: 1,041,276.910
Total customer withdrawals: 1,110,682.95  oz
 We had 2 customer deposits:
i) Into Brinks: 107,384.64 0z
ii) Out of Delaware:  996.85 oz
total customer deposits; 108,381.490  oz
 
 
 we had 0 adjustment(s)
.
Volumes: for silver comex
Today the estimated volume was 34,425 which is POOR
FRIDAY’S  confirmed volume was 76,514 contracts  which is huge
The total number of notices filed today for the Nov. contract month is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in Nov., we take the total number of notices filed for the month so far at  465 x 5,000 oz  = 2,325,000 oz to which we add the difference between the open interest for the front month of NOV (4) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the NOV contract month:  465(notices served so far)x 5000 oz +(4) OI for front month of NOV. ) -number of notices served upon today (0)x 5000 oz  equals  2,345,000 oz  of silver standing for the NOV contract month.
we gained 3 contracts or an additional 15,000 oz will stand for delivery in this non active delivery month of November.
Last yr at the conclusion of November 2015, we had only 405,000 oz of silver stand for delivery.
 
Total dealer silver:  30.905 million (close to record low inventory  
Total number of dealer and customer silver:   177.194 million oz
The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD
NOV 22/no changes at the GLD/Inventory rests at 908.76 tonnes
Nov 21/A MASSIVE 11.87 TONNES OF PAPER GOLD WERE SUPPLIED BY THE CROOKS TO SUPPRESS THE PRICE OF GOLD/INVENTORY RESTS AT 908.76 TONNES/ AND GOLD RISES???
Nov 18/no changes at the GLD/Inventory rests at 920.63 tonnes
Nov 17/ A HUGE WITHDRAWAL OF 5.63 TONNES FROM THE GLD/INVENTORY RESTS AT 920.643 TONNES
Nov 16/ changes in gold inventory at the GLD/Inventory rests at 927.45 tonnes
NOV 15/  we had 2 monstrous withdrawal of 5.63 tonnes of gold from the GLD in the morning and another 1.48 tonnes this afternoon/Inventory rests at 927.45 tonnes
Nov 14/another monstrous withdrawal of 7.12 tonnes of gold from the GLD/Inventory rests at 934.56 tonnes
Nov 11/A  MONSTROUS WITHDRAWAL OF 13.35 TONNES OF PAPER GOLD AND THIS GOLD WAS USED IN THE COMEX WHACKING TODAY.
Nov 10/ A HUGE ADDITION OF 5.34 TONNES OF GOLD  (WITH GOLD WHACKED??)/INVENTORY RESTS AT 955.03 TONES
Nov 9/no change in gold inventory at the GLD/Inventory rests tonight at 949.69 tonnes
Nov 8/no change in gold inventory at the GLD/Inventory rests tonight at 949.69 tonnes
Nov 7/no changes in the gold inventory at the GLD/Inventory rests  tonight at 949.69 tonnes.
Nov 4/NO CHANGES IN THE GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 949.69 TONNES/
NOV 3/ a huge deposit of 4.43 tonnes of gold into the GLD/Inventory rests at 949.69 tonnes
NOV 2/ A DEPOSIT OF 2.67 TONNES OF GOLD INTO GLD/INVENTORY RESTS AT 945.26 TONNES
Nov 1/no change in gold inventory at the GLD/inventory rests at 942.59 tonnes
Oct 31/no changes at the GLD/Inventory rests at 942.59 tonnes
Oct 28/no changes at the GLD/Inventory remains at 942.59 tonnes
OCT 27/NO CHANGES AT THE GLD/INVENTORY REMAINS AT 942.59 TONNES
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Nov 22/ Inventory rests tonight at 908.76 tonnes
*IN LAST 36 TRADING DAYS: 40.24 TONNES REMOVED FROM THE GLD

end

Now the SLV Inventory
NOV 22/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 350.182 MILLION OZ
Nov 21/a MASSIVE 6.071 MILLION OZ OF SILVER WITHDRAWN FROM THE SLV VAULTS/INVENTORY RESTS AT 350.182 MILLION OZ/AND SILVER HOLDS IN PRICE???
Nov 18/no changes in silver inventory at the SLV/Inventory rests at 356/253 million oz
Nov 17/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 356.253 MILLION OZ/
Nov 16.no change in silver inventory at the SLV/Inventory rests at 356.253 million oz/
NOV 15/a withdrawal of 474,000 oz (.474 million oz) from the SLV inventory/inventory rests at 356.253
Nov 14/a withdrawal of 1.329 million oz from the SLV/Inventory rests at 356.727 million oz
Nov 11/a withdrawal of 1.379 million oz from the SLV/Inventory rests at 358.056 million oz
Nov 10/an addition of 949,000 oz added into the SLV/Inventory rests at 359.435 million oz
Nov 9/no change in silver inventory at the SLV/Inventory rests at 359.435 million oz/
Nov 8/no changes in silver inventory at the SLV/inventory rests at 358.435 million oz
Nov 7/no changes in silver inventory at the SLV/Inventory rests at 358.435 million oz
Nov 4/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 358.435 MILLION OZ
NOV 3/ a huge withdrawal of 2.807 million oz leaves the SLV: somebody was badly in need of silver/inventory rests at 358.435 million oz
NOV 2/ A DEPOSIT OF 569,000 OZ INTO THE SLV/INVENTORY RESTS AT 361.242
Nov 1/no change in silver inventory at the SLV/inventory rests at 360.673 million oz/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 360.673 million oz/
Oct 28/NO CHANGE IN SILVER INVENTORY AT THE SLV/iNVENTORY RESTS AT 360.673 MILLION OZ
OCT 27/A MONSTROUS WITHDRAWAL OF 5.987 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 360.673 MILLION OZ  (AND YET NO CHANGE IN THE SILVER PRICE???)
.
Nov 22.2016: Inventory 350.182 million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 8.5 percent to NAV usa funds and Negative 8.8% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.2%
Percentage of fund in silver:38.3%
cash .+0.5%( Nov 22/2016)
.
2. Sprott silver fund (PSLV): Premium RISES to +.41%!!!! NAV (Nov 22/2016) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO – 0.70% to NAV  ( Nov 22/2016)
Note: Sprott silver trust back  into POSITIVE territory at 0+.41% /Sprott physical gold trust is back into NEGATIVE territory at -0.70%/Central fund of Canada’s is still in jail.
 

END

Major gold/silver stories for TUESDAY

Early morning gold TRADING

Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards

David McWilliams interviewed Jim Rickards at Kilkenomics for TV3’s Agenda and the short ten minute interview is a must watch.

mcwilliamsMcWilliams Rickards interview here (from 34:16)

Key points covered are

  • We are already in global currency wars
  • End of the dollar as the benchmark global reserve currency coming
  • Higher inflationary – “all the currencies will fall against hard assets”
  • Massive financial crisis coming – complexity theory, behavioral economics shows this
  • “Allowing system to get larger and larger and we do not understand risk”
  • “In 1998, Wall Street bailed out a hedge fund; in 2008, the  central banks bailed out Wall Street; in the next financial crisis which could be tomorrow or could be in 2018, who is going to bail out the central banks?”
  • Best description of financial panic – “everybody wants their money back at same time …”
  • “Money in the bank is not money – it is an unsecured liability of an occasional insolvent financial institution..”
  • In a panic, everyone seeks to get their money “which is gold, silver or cash…”

Ireland’s Pensions Timebomb – Source: Irish Independent

  • Next financial crisis will be so great that dollar will fall sharply – be very inflationary
  • Prepare now with physical gold – “recommend 10%” allocation
  • Gold, silver, property, land, natural resources, fine art will do well in coming inflation
  • Stocks, bonds, pension funds “will be wiped out…”
  • Don’t trust financial institutions as they do not understand risks in system themselves …
  • “Blind leading the blind …”

Jim Rickards is editor of Strategic Intelligence for Agora Financial as well as the founder of the James Rickards Project: an inquiry into complex dynamics of geopolitics and capital. He is also the author of New York Times bestsellers The New Case for Gold, Currency Wars: The Making of the Next Global Crisis and The Death of Money: The Coming Collapse of the International Financial System. Jim’s newest book, The Road to Ruin was published November 15.

David McWilliams is co-founder of Kilkenomics and one of Ireland’s leading economic commentators. He was one of the very few to accurately predict that the boom was a bubble that would all end in a monumental crash with bank failures, negative equity, rising unemployment and emigration. He is an economist, broadcaster and bestselling author and writes columns for the Sunday Business Post and Irish Independent. David also runs an daily economic bulletin called 360 Macro.

See McWilliams Rickards full TV3 interview from 34:16 here

Gold and Silver Bullion – News and Commentary

Gold logs modest rebound from 9-month low (MarketWatch.com)

Gold Climbs from 9-Month Low; US Bullion Coins Advance (CoinNews.net)

Gold rises for second day on a weaker dollar (Investing.com)

Bidding far more than expected, Chinese firm wins Barrick’s half of big Australian mine (Gata.org)

Randgold CEO says gold is ready to go higher (CNBC.com)

7RealRisksBlogBanner

Gold desperately oversold, time to correct (FXStreet.com)

I’ve just bought some platinum – here’s why (CapitalAndConflict.com)

How Much Gold is Left on Earth? (WestCoastPlacer.com)

This Is The Real Reason Why The Public Is Broke And The Middle Class Is Being Destroyed (KingWorldNews.com)

The public sector strikes are really about housing (DavidMCWilliams.com)

Gold Prices (LBMA AM)

22 Nov: USD 1,217.55, GBP 997.89 & EUR 1,144.98 per ounce
21 Nov: USD 1,214.95, GBP 984.72 & EUR 1,143.39 per ounce
18 Nov: USD 1,206.10, GBP 971.15 & EUR 1,135.54 per ounce
17 Nov: USD 1,232.00, GBP 988.19 & EUR 1,148.10 per ounce
16 Nov: USD 1,225.70, GBP 984.36 & EUR 1,144.68 per ounce
15 Nov: USD 1,228.90, GBP 988.65 & EUR 1,138.70 per ounce
14 Nov: USD 1,222.60, GBP 978.08 & EUR 1,136.53 per ounce
11 Nov: USD 1,255.65, GBP 991.96 & EUR 1,154.45 per ounce

Silver Prices (LBMA)

22 Nov: USD 16.76, GBP 13.46 & EUR 15.77 per ounce
21 Nov: USD 16.68, GBP 13.47 & EUR 15.69 per ounce
18 Nov: USD 16.51, GBP 13.30 & EUR 15.54 per ounce
17 Nov: USD 17.04, GBP 13.65 & EUR 15.87 per ounce
16 Nov: USD 16.95, GBP 13.64 & EUR 15.85 per ounce
15 Nov: USD 17.00, GBP 13.68 & EUR 15.80 per ounce
14 Nov: USD 17.20, GBP 13.73 & EUR 15.95 per ounce
11 Nov: USD 18.59, GBP 14.73 & EUR 17.09 per ounce


Recent Market Updates

– Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
– Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
– Islamic Gold – Vital New Dynamic In Physical Gold Market
– Peak Gold Globally – “Bullish For Gold”
– Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
– President Trump – Why Market Loves Him and Experts Wrong
– ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise
– Central Bank Gold Demand continues in Q3
– Trump Victory Sends Gold Surging 5%
– An uncertain election outcome looks good for gold
– Ignore past elections, this one’s too uncertain
– Gold may be the only winner in US elections
– The London Gold Market – ripe for take-over by China?

Mark O’Byrne
Executive Director

 

 

END-

 

James Turk keeps reminding us on the huge demand for gold throughout the world. Shanghai on Friday reported 80 tonnes of gold delivered upon with a total open interest of 800 tonnes. (comex: 1530 tonnes of open interest). Also we are witnessing a huge increase in demand for physical gold at the comex each and every month

(courtesy James Turk/Kingworldnews)

Gold demand is strong as currencies keep sinking, Turk tells KWN

Section:

8:27p ET Monday, November 21, 2016

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk tells King World News today gold prices are in backwardation and stabilizing amid strong physical demand, even as government currencies are doing terribly. Even the U.S. dollar, adjusted for long-term inflation, is falling sharply and taking U.S. living standards down with it, Turk says. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/this-is-the-real-reason-why-the-public-is-broke…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

end

 

The following kind of shows you that the Chinese are serious about gold.  They overbid to win half of Barrick’s key Australian open pit mine, the Kalgoorlie Super Pit

(courtesy Gavey/ The Australian from Syndey)

Bidding far more than expected, Chinese firm wins Barrick’s half of big Australian mine

Section:

Chinese Make a Gold Rush for Super Pit Stake

By Paul Garvey
The Australian, Sydney
Monday, November 21, 2016

Half of Australia’s most famous gold mine will fall into Chinese hands after a little-known group blew Australian bidders out of the water with a $1.3 billion-plus bid for a stake in Kalgoorlie’s Super Pit.

In what is shaping as another stern test for the Foreign Investment Review Board, Minjar Gold — a subsidiary of Shanghai-listed property group Shandong Tyan Home — will buy the 50 percent Super Pit stake owned by North American mining giant Barrick Gold.

The deal, which is expected to be announced today, is conditional on FIRB approval and will give Minjar a half share of the 800,000 ounces of gold produced from the Super Pit each year. …

Minjar is understood to have beaten a rival bid from Australia’s biggest gold producer, Newcrest Mining. A successful offer from Newcrest would have returned the Super Pit into Australian hands for the first time since 2002.

The US$1bn (A$1.36 billion) price comfortably eclipses market expectations for the sale. Analysts had predicted the Barrick stake, which was put on the market in August, would fetch up to US800 million. …

… For the remainder of the report:

http://www.theaustralian.com.au/business/mining-energy/chinese-make-a-go…

 

 

end

 

Ronan Manly describes the gold market perfectly:  where transparency means the opposite: i.e. secrecy

(courtesy Ronan Manly/Bullionstar)

Ronan Manly: The gold market — where transparency means secrecy

Section:

10:35p ET Sunday, November 20, 2016

Dear Friend of GATA and Gold:

Speaking at the monetary metals seminar October 19 at Bullion Star’s office in Singapore, gold researcher Ronan Manly elaborated on his September 2 commentary about the secrecy of official institutions operating in the gold market, conveyed to you by GATA here:

http://www.gata.org/node/16722

Manly’s presentation at the conference was titled “The Gold Market — Where Transparency Means Secrecy” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/bullionstar/the-gold-market-where-tran…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

end

 

Wow!! what a commentary.  Avery Goodman, a securities lawyers puts in words what I have been trying to describe to you what is going on in the gold business.

I agree 100% of what he states

If he is correct, and I strongly believe so, then the bankers and many agents in the know may be charged with treason as the only way that monetary gold can be sold is through an act of Congress and they did not obtain one.

 

(courtesy Avery Goodman/)

 

Understanding Elections, Gold & The US Dollar Via Market Manipulation

Written by:   Avery B. Goodman

Recently, almost all prognosticators were predicting that Donald Trump would lose the 2016 election and that Hillary Clinton would be our new President. If by some miracle Trump happened to win, they said the price of gold would soar. When Mr. Trump defied all their expectations and did win, it did soar, but only for a few hours. After that, it was downhill all the way. Many people are perplexed. Even though most now realize that the price of gold is rigged, they still don’t fully grasp what that means.

It is amazing what you can learn about the world around you, simply by carefully watching the machinations of the market manipulators. They can tell you amazing things. For example, those of us who look closely at the manipulation of gold prices already knew that Donald Trump would be the 45th President of the United States many days before the election. We already told our friends about it. We’d already said it didn’t matter what the polls were reporting. We knew the public polls were lying. We had much more reliable pollsters working for us. And, because the banksters paid for those pollsters, it didn’t even cost us one red cent!

To benefit from what I am about to share with you, cleanse your mind of all the preconceptions you came in with. Forget about the money supply, market sentiment, exchange rates, inflation, and inflationary expectations. Forget about the quaint notion that supply vs. demand (in the short to medium run) has anything to do with the price of gold. Most importantly, forget about technical analysis. Fibonacci is as worthless as an Elliott wave when the manipulators paint the tape. It’s all rubbish.

The pricing factors I’ve just rattled off, in the preceding paragraph, do affect gold prices at specific points of time. But, in determining the near-term price of gold, they pale to insignificance compared to market manipulation. A lack of supply, for example, will eventually cause the price of gold to rise over the very long term. However, it happens mainly because western central planners have a limited supply of gold and want to conserve it. Accordingly, they may obey a political decision to slow down the hemorrhage of yellow metal from their vaults. That causes prices to rise. It’s probably the reason gold prices rose dramatically from 2001 to 2011.

Here is the bottom line: the pricing factors that pundits like to talk about eventually matter. They just don’t matter now. They will matter when the official gold reserves of the United States are exhausted or entirely closed off for political reasons. Their closure, as a matter of fact, is about to happen next year, so you won’t have to wait very long. But, in the meantime, until Mr. Barack Obama actually leaves the White House, what matters most is what the market manipulators do. It’s that plain and simple.

Gold is under-supplied and over-demanded, and this has been true for a very long time. Since the Crash of 2008, this problem has grown exponentially. The gap between supply and demand is now enormous. As I pointed out, way back, at the end of the summer of 2015, the deficiency of supply meant that a minimum of 606 tons had to be pumped in to meet demand in 2015. By 2016, if they had not allowed prices to rise, someone would have had to supply something like 1,345 tons, in 2016, to keep prices below $1,200 per ounce.

Soon after I wrote the article, Goldman Sachs began buying physical gold like it was going out of style, even as they were telling everyone else to sell. About 6 months after they stocked up, prices began to soar. Asset prices often tend to move on that approximate timetable when Goldman is involved. But, the key thing to remember is that physical gold (unlike electronic futures contracts) cannot be conjured out of the thin air. The hard yellow metal must come from somewhere. The most likely origin for the massive tonnage of gold that has backstopped market manipulation, for the last 5 years, is the United States Gold Reserve.

The Obama administration appears to have agreed to guaranty the banksters’ downside gold manipulations with “location swaps”. In a “location swap”, a lien is placed on bars of gold stored in an inconvenient location in exchange for bars of gold stored in a convenient location. The liens are assigned to a bank that has possession of easily deliverable bars of gold. It is highly likely that the Federal Reserve and Bank of England, which hold great quantities of gold on behalf of foreign governments, were assigned liens against US Treasury gold held at Fort Knox. Once in possession of the liens, the Fed and BofE delivered the gold bars from their vaults into the market via J.P. Morgan and other banks.

Can I prove this scenario with the required level of certainty in a court of law. No. It would be impossible. No private attorney could ever succeed in proving it. To prove it to a formal legal standard, you need the power to send agents to seize documents and things before the banks could destroy them. Only a determined US prosecuting attorney, or the Attorney General of the United States has that kind of power. Yet, the conclusions are so logical and so deeply supported by both the circumstantial evidence and common sense, that they are almost certain to be true.

The CEOs of all of the major international banking houses that deal in gold paid a visit to the White House, at 11:00 am, the day before the biggest price attack in history was launched against gold in April, 2013. They didn’t go there to play checkers. Nor were they there to commiserate with Obama about the banking industry as the media reported at the time. The latter claim is just a cover story. The CEOs went there to talk about gold, and to urge Obama to release enough of it to silence the “canary in the coal mine” (gold price increases) because it was loudly chirping that his policies, which they supported, were failing.

In short, American government has been supplying physical gold to back up gold price manipulation. I am not talking about merely supplying what is required to back up .4% of the futures contract buyers at COMEX who demand physical delivery.  I am talking about backing up the gap amounting to hundreds and even well over a thousand tons of the stuff every year. This is metal that must be delivered by the banks all over the globe — to China, India, South America, Europe and the Middle East.

For example, when gold was selling for less than $1,200 per ounce, some entity (whom I nicknamed the “gold supplier of last resort) supplied a minimum of 606 tons of gold (probably a lot more) in 2015. By 2016, that same entity would have had to deliver 1,345 tons more to keep prices at 2015 levels. If the supply gap had not been filled prices would have returned quickly to a minimum of $1,500 – $1,600 range where supply and demand converged back in 2012.

Let’s fast forward to late 2016. The price of gold had already dramatically risen since I’d written those articles about the shortfalls. As the prices rose, of course, physical demand fell. However, physical demand has never fallen low enough to completely relieve the pressure on US gold reserves. Higher prices simply reduced the pressure, but did not eliminate it. Had Clinton won the Presidential election, things would have continued the way the manipulators planned. They were slowly allowing prices to normalize toward an equalization of supply & demand, making a few million in profits along the way.

But, as the beginning of November began to unfold, the banksters got shocked by a surprise. The person “annointed” by them, to be the next President, was going to lose the election. They’d used their campaign contributions to control the Presidency for decades! But, in 2016, for the first time perhaps in history, hundreds of millions of dollars have been wasted. In spite of all the money they poured into the Hillary Clinton campaign, Donald J. Trump was going to win.

The public pollsters who work for the likes of the NY Times, CNN, NBC, et. al. weren’t about to let the American public know that, of course. But, the banksters knew better. They have their own private pollsters. Unlike the public polling companies that work for the mainstream media, the results delivered by these private pollsters are not contaminated by political distortion. The bankster’s private polling agencies are entirely impartial and accurate. They have to be. Billions of dollars in depositor cash were riding on it, all at risk inside the derivatives casino the banksters have created.

The key manipulators knew the truth… and it showed… several days before the election. Because they knew the truth, those of us who follow their antics also knew. All you had to do was watch what they were doing to the price of gold, toward the end of the week that preceded election day. Their actions clearly broadcast that Donald J. Trump would win the Presidency on November 8th.

Our new President-elect has often expressed an affinity for the yellow metal and even the gold standard. He is almost certain to reverse the executive orders, signed by Obama, that secretly gave the banksters unfettered access to pissing away America’s treasure. That’s why when they found out he was almost certain to win, they had to change their strategy dramatically. A Trump win meant that their use of US government’s gold was about to end, and they need that gold in order to carry out profitable price manipulations in the futures markets.

Just like they did prior to the British Brexit vote, the banksters acted ahead of time. They began attacking gold prices toward the end of the week before the election. Yet, no one can be 100% sure their pollsters are correct. Not even independent polls without bias can provide 100% certainty. Therefore, the manipulations of the week prior to the election seem relatively small-scale. I believe that they were primarily geared toward assisting individual banksters address private portfolios with an expectation about what they would do with public money afterward. The main part of the upcoming manipulation would be saved until after the election result was certain.

As news of Trump’s win became known to the general public, non-connected traders, who innocently believed that real market factors drive gold prices, believed that prices would rise if Trump became President. They began to pour assets into the gold futures market. That sent gold prices soaring. It was also music to the ears of the manipulators. It allowed them to take a lot of transient short positions at the highest possible prices. Having done that, they proceeded to attack the long buyers by bombarding the COMEX (where world gold prices are set) with a huge tonnage of paper gold futures contracts. Prices began to tumble in response to this wave of transient short selling.

Remember, to create gold futures contracts, you don’t need to possess any real gold. All you need are U.S. dollars to put down as so-called “performance bonds”. The well financed banksters have access to a virtually unlimited amount of dollars simply by tapping the Federal Reserve’s so-called “loan windows”. They stepped down hard, putting the pedal to the metal. They used their cash to back up performance bonds on thousands of tons of theoretical (nonexistent except on paper) gold bullion, targeting pre-existing stop-loss orders placed by the over-leveraged non-connected futures long buying crowd.

As always, they succeeded in triggering involuntary liquidation, which in turn triggered lower prices, triggering more stop loss orders, more involuntary liquidation and eventually triggering margin calls. The over-leveraged non-connected hedge fund managers did what they always do. They began panicking. The connected banksters continued to attack, eliciting more and more pain and panic, and it continued, as it always does, until the computerized algorithms determined that the process was no longer effective.

Then, in the midst of the shell-shocked “market” the banksters again did what they always do. They carefully and quietly coordinated with each other to cover both the transient short positions that induced the panic, and the longer term short positions they had been aiming to get rid of. The process of market manipulation, using futures markets, is not that difficult to understand, but a full description does require more space than this article allows. For a better understanding of how banksters induce artificial long and short “squeezes”, for fun and profit, read the novel “The Synod”.

Donald J. Trump is now President-elect. When he takes office on January 20th, the banksters will lose access to the US gold reserve. Without those thousands of tons of gold to offset ongoing supply shortages, the price of gold will rise dramatically. The banksters now need to escape from as many short positions as they can before that happens. To do it, they must induce involuntary liquidation and panic selling. That is what they have been doing.

Manipulators also want to escape from long positions in the US dollar. The non-connected hedge fund managers, innocent though they may be, were on to something. Under the Trump administration, the price of gold will rise sharply, and the US dollar will eventually fall. It just won’t happen for the reasons they believed or on the timetable that they assumed. The banksters are only slightly less concerned about escaping long positions in the US dollar as short positions in gold. So, they’ve induced the same type of involuntary liquidation and panic covering by short dollar speculators as with long gold speculators. In gold, they engineered a “long squeeze”. In the dollar, it’s a short squeeze… the exact opposite.

Since a rise in the dollar puts some pressure on gold prices, the two squeezes have a great deal of synergy. Each assists the other in accomplishing the ultimate goal, which is to assist the banksters and the connected hedge funds they control to shift their portfolio positioning, maximizing future profits while minimizing losses. It is even easier to panic dollar short position holders than gold long buyers. All you really have to do is hold up the specter of a Federal Reserve interest rate hike. Best of all, you don’t even have to worry about meeting delivery demand even for paper, let alone hard real metal. The dollar is now nothing more than 95% electronic digital notations on a banking ledger.

Like the long gold buyers, dollar short sellers are dramatically over-leveraged and under-capitalized, and cannot hold out against the slightest rise in exchange value of the dollar.  Price movement in the US dollar is even easier when you can warn that the incoming Trump administration will induce the repatriation of hundreds of billions of US dollars by American corporations overseas. The incoming President has promised a tax holiday to companies that bring money back to America from overseas. Uninformed hedge fund managers assume that the repatriation of dollars from abroad must result in a rise in the exchange value of the dollar. They would be right if the dollars were now being stored in the form of Euros or Pounds Sterling. But, they are not.

A vast majority of the funds that will be repatriated to the United States are already in the form of dollar deposits. The dollars are inside foreign banks but don’t need to be converted. For example, euro-dollar deposits can be easily transferred from Barclays branches in the U.K. and J.P. Morgan branches in Germany to those in the United States. All it takes is an electronic notation that says the money is now assigned to a branch in America rather than abroad. No currency conversion required. The dollars will even remain available for foreigners to borrow! In short, the net effect, other than the propaganda value in convincing non-connected hedge fund managers that the move is meaningful to markets, is meaningless.

The history of dollar repatriation further supports the fact that dollar repatriation has almost no significant impact on exchange rates. The last amnesty occurred during the Bush administration during the period 2004-05. At that time, multinational corporations transferred about $345 billion to the USA. The 2017 transfer will probably be bigger but it still won’t matter much because a vast majority of the funds are already dollar denominated. In 2004-05, the US dollar’s exchange value went up only very slightly for a very short time. Mostly, like now, it happened before the law became effective. Then, as will happen again, the dollar declined.

Historical facts don’t matter, however, because gamblers are not historians and generally pay no attention to history. They make decisions on the basis of technical analysis and their gut emotions. That’s what the manipulators count on. The process of moving asset prices up and down for fun and profit is all about inducing irrationality, panic and, on occasion, euphoria. It is certainly not about explaining real facts. The over-leveraged non-connected hedge fund managers do not understand the facts. But, you may… so here they are — our new President-elect has promised to bring manufacturing jobs back to a hollowed out US economy.  It will be very difficult to do that with a soaring US dollar. Trump’s new Treasury Secretary will not allow the dollar to soar, regardless of what the market gamblers now believe. A lot of non-connected hedge fund managers are about to lose a lot of money for their investors.

Watching the gold market carefully is particularly helpful in providing accurate predictions on both when a manipulation is likely to begin and when it will end. Typically, the gold “market” is subjected to heavy manipulation late in every month prior to major futures contract maturity dates. Since December is always the biggest gold delivery month of the year, it makes perfect sense that a lot of manipulation would take place leading up to it, especially given the election factor described above. Market manipulations will usually continue into the first part of the delivery month itself ending somewhere in the early to middle part.

Let’s use December as our illustration of the process. December futures options expire late in November. Huge sums of money are at stake if options expire “in the money”. Therefore, like at any other casino, the banksters change the odds inside the slot machines. The big derivatives writing banks appear to manipulate underlying futures prices to insure that the price, on expiration, results in a minimum payout. If the balance of the options purchases show that too many people will get paid at a certain price, they won’t allow the price to hit that level on the day of expiration. If minimizing payouts and maximizing profits requires upward manipulation, the price will go up. If it requires downward action, the price will go down. By the time they are finished, almost every time, the manipulators will have insured that their sponsoring banks pay the least amount possible to the gamblers who own the options.

Controlling the gold market, however, as previously noted, is more difficult than controlling a purely paper or electronic notation-based market, like that for a fiat currency. Control is limited by the willingness of the government to guaranty the delivery of physical gold necessary to back up the manipulations. The extent to which President Obama and his Treasury Secretary have allowed or restricted utilization of the U.S. Treasury-owned gold has determined its price for at least five years. That’s how we know that, once access to the reserves is cut off, the price of gold must go up.

Typically, downward (or upward on rare occasions) gold manipulation does not end with the options expiration date. Banks also need to make large deliveries of real gold during big futures maturity months. They want to pay as little as possible for that gold. They are buying a lot of it, indirectly, from the US gold reserve, but that doesn’t matter. Wherever it comes from, they always seem to have an eye on manipulating the prices to wherever they need to be in order to maximize profits. The December gold delivery month is usually the largest of the year, so the incentive to manipulate before and into December is always very strong, even without an incoming new President.

By now, you may be wondering how and when, if ever, the price manipulation will end? When will gold prices do what they are supposed to do?  When will they be allowed to rise? The answer is simple and I will repeat it, once more. President Donald J. Trump will take office on January 20th. After that, the banksters will be cut off from the US gold reserve. Gold prices may rise somewhat earlier than that, but they will certainly shoot up starting in January 2017. It is likely that the  price appreciation in 2017 will be significant.

Gold prices must rise to at least $1,500 – $1,600 per ounce, because that was the point at which, during 2012, supply approximately equaled demand, without injections from the US gold reserve. We might already be there, but for the US Presidential elections. We will now have to wait a bit longer but the payoff will probably be greater. Because the demand for gold is higher than in 2012, and the supply is lower, however, the two may no longer balance at $1,600. The price may have to shoot considerably further than that. It is a good idea to take advantage of the the current market manipulation to buy gold or related metals at a favorable price.

The dollar is a bit trickier. Its future course is no longer as easy to predict as the price of gold. So long as the Federal Reserve keeps its loan windows open, it will continue to be easily manipulated by banksters, regardless of who holds the White House. Also, it has been and will probably continue to be underpinned (somewhat) by weakness in competing fiat currencies such as the Euro. Nevertheless, the hedge fund managers who are buying it now, in the belief that it will rise dramatically above the current level, are going to lose a lot of money. The incoming President will not allow the dollar to soar, because it would destroy American exports.

Nothing I’ve discussed in this article addresses the thorniest issue of all. The Obama administration, working in conjunction with other western leaders and the major central banks, have created what is probably the biggest financial bubble the world has ever known. Even if the new President’s policies are as successful as they can possibly be, it is hard to imagine how he can prevent the implosion of this unstable situation. If the bubble implodes, then all bets are off as to how high gold prices can soar.

Buy SynodThe Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

 

END

 

Bill Holter describes in words what I have outlined to you with respect to the huge amount of gold contracts standing so far for delivery in December as well as the huge amount of gold that have stood for gold this year.

a very important read..

(courtesy Bill Holter/Holter-Sinclair collaboration)

 

THE ELEPHANT IN THE ROOM

 

Posted November 22nd, 2016 at 2:11 PM (CST) by & filed under Bill Holter.

Here we are again, just six days away from a major COMEX gold (and silver) delivery month with a huge outsized amount of contracts outstanding versus deliverable inventory. For a background, COMEX holds 2,083,000 (nearly 65 tons) of registered gold. This amount is much higher than it was last December when it stood at a miniscule 152,000 ounces (4.7 tons).

Since May of this year, something has drastically changed in the monthly amounts delivered. For all of 2015, only 51 tons were delivered which amounted to about 4.25 tons per month. If you recall, many months would arrive at first notice day with a huge amount of contracts open, only to see the contracts evaporate before the close of the delivery period. I postulated then and still believe, contract holders were offered premiums to “just go away” and not take delivery. I cannot prove this but you must ask, why someone would FULLY FUND their account to take delivery and then not follow through. It makes no sense other than if they were enticed not to take delivery after placing the full amount of funds in their accounts to settle delivery.

So far this year, 191 tons have stood for delivery, 168 of those tons since May. The average delivery since May has been over 24 tons per month with only two of the seven months being a traditional delivery month. June and August amounted to nearly 93 tons alone. The change since May has been astonishing. Rather than contracts being “bled down” each month (enticed by premiums offered?), nearly every single month has had more standing by the end of the month than were at the beginning of the month (nearly double in some cases). Another big change is, previously, the bulk of deliveries would be withheld until just before the end of the delivery period. Now, massive deliveries are being made on the 2nd, 3rd and 4th delivery days of the month. Please remember, it makes no sense to “wait” to make a delivery as storage fees add up for each day …it seems to me that it is now known that many contract owners cannot be enticed with premiums!

So why has this begun to happen, why are more contracts demanding delivery and why are they jumping queue and opening more contracts during expiration? I believe it is simply because there is either a greater “need or desire” for gold. If I had to guess, I believe the new and different demand is in large part a function of the Shanghai Gold Exchange opening in September. Immediately after opening, we saw close to $4 premiums for gold (versus COMEX and LBMA pricing) and around .50 cent premiums for silver. These premiums are now recently much higher! For the last few weeks these premiums have grown to the $10-$12 range for gold and over $1 for silver. The premiums shot up on Monday to $20.33 for gold and $1.35 for silver. This is obviously more than generous enough to allow massive arbitrage to occur.

As a side note, I have been asked why we are not seeing arbitrage en masse? Simply put, I believe there is a great risk here where you sell something for delivery without knowing positively you will be delivered on the buy side. Should the game end, an arbitrager might be contracted to deliver something (sell side) they cannot attain in a runaway upside market (because of the failure to deliver on the buy side). Curious that these large premiums exist as they should never exist …unless the players do see risk in a supposedly risk free trade! The premiums are now getting to large to ignore and look more like the elephant in the room.

So where are we now for December expiration? Currently with only six trading days left before FND (first notice day), 217,000 contracts representing 21.7 million ounces versus 2.08 million registered to deliver. At the very same day last year, there were only 133,000 contracts outstanding or a difference of 84,000 contracts (8.4 million ounces).

While we certainly cannot say the COMEX will default and not be able to deliver for December, we can say the numbers are much larger …AND so is the pressure (via arbitrage)! To again put this in perspective for you, the entire registered category holds well less than $2.5 billion worth of gold. I would ask you this, “how many $2.5 billion events have occurred”? The answer of course is too many to count and they happen every single day in many markets, and all over the world. The spread in silver is getting close to a 10% number, how long will the spread be allowed? The problem of course is this, when the arbs do come in to close the gap it will create buying. The buying will require delivery as the sell side in Shanghai will demand metal for their purchase. This poses the problem, COMEX inventories cannot meet Chinese demand.

To finish, please keep in mind that the global credit markets are now experiencing extreme liquidity tightness. Previous “credit events” were ugly and all ended the same way …with more debt and more currency units issued. As we have seen in India, as gold has not been available since their recent kamikaze currency move, gold was changing hands at $2,900 per ounce on Friday and $3,600 over the weekend due to lack of supply. Ask yourself, at what dollar price will gold be available should someone (or collectively) put up $2.5 billion to clean out COMEX? Yes I know, COMEX is not the only market in the world. But a run on COMEX will be a run everywhere and will result in finding available gold nowhere. A “run” can start for any number of reasons. It can be “intentional” or not. The problem from a visual standpoint is this, the amount of physical gold behind the paper gold edifice is like a “BB” in relation to the financial Earth. If you don’t believe the global debt can ever be paid back in current currency values …dig into this one as it’s even more lopsided, paper gold can never be delivered by the real thing as the real gold simply does not exist!

That will do it for this holiday week as I plan to take a little time off. Unless something really big breaks, Jim and I do not plan on our weekly interview and will resume next week. We wish you and your families a Happy Thanksgiving!

Standing watch,

Bill Holter

Holter-Sinclair collaboration

 

end

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

 
 

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1 Chinese yuan vs USA dollar/yuan DOWN to 6.8850(SMALL DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.9115 / Shanghai bourse CLOSED UP 30.20 POINTS OR 0.94%   / HANG SANG CLOSED UP 320.29 OR 1/43%

2. Nikkei closed UP 56.92 points or 0.31%  /USA: YEN RISES TO 110.85

3. Europe stocks opened ALL IN THE GREEN    ( /USA dollar index RISES TO  100.90/Euro DOWN to 1.0623

3b Japan 10 year bond yield: RISES TO    +.033%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.65/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  48.38  and Brent:48.98

3f Gold UP /Yen DOWN

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS TO +.232%   

3j Greek 10 year bond yield FALLS to  : 6.90%   

3k Gold at $1215.90/silver $16.78(7:45 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 12/100 in  roubles/dollar) 64.09-

3m oil into the 48 dollar handle for WTI and 48 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT a SMALL  DEVALUATION DOWNWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.85 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.010 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0737 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.232%

/German 9+ year rate BASICALLY  negative%!!!

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

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.292% early this morning. Thirty year rate  at 2/962% /POLICY ERROR)

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

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

HELICOPTER MONEY STILL ON THE TABLE FOR THE FUTURE/JAPANESE STIMULUS PLAN DISAPPOINTS

S&P Set To Open At All Time High, Boosted By Rising Crude On More “OPEC Deal Optimism”

European and Asian stocks rose after the early scare from the latest Fukushima quake dissipated when all Tsunami warnings were cancelled. The global risk on mood was spurred by another jump in crude, which was up 1% in early trading, with the commodity complex now enjoying its biggest three-day rally since May, after Nigeria signaled optimism that OPEC will agree a supply-cut deal next week in Vienna. S&P futures are up 0.3%, with the cash index set to open at new record highs.

With OPEC jawboning having become a daily fixture ahead of the cartel’s now almost monthly summits, today was no exception, and earlier in the session, a Nigerian OPEC delegate said he expects details of the Vienna accord to be finalized Tuesday (and if they are not, this will just serve as a basis for a similar headline tomorrow, and then day after, and so on).

Everyone is on board,” delegate Ibrahim Waya said in Vienna, where OPEC members are meeting to discuss output quotas ahead of the November 30 summit. Brent and WTI both extended gains following the headlines, pushing index futures higher with them.

The commodity story – on hopes of a global fiscal stimulus push – dominated as miners led the MSCI All-Country World Index higher while S&P500 futures on the S&P 500 Index advanced 0.3 percent. On Monday, the American gauge reached a record for the first time since Aug. 15, just as the Dow Jones Industrial Average, Russell 2000 Index and Nasdaq Composite Index hit fresh all-time highs.

Oil reached the strongest level in more than three weeks. Copper headed for its highest close since July 2015. Euro-area bonds rose on optimism the region’s central bank will extend stimulus.

American shares have been buoyed as companies ended a five-quarter profit slump and Donald Trump’s election to the U.S. presidency fueled speculation of a boost to manufacturing and infrastructure spending. Goldman Sachs Group Inc. said Monday that a renewed acceleration of global factory activity suggests commodity markets are entering a cyclically stronger environment. JPM echoed as much saying in a note that “our regional (U.S., Europe, EM) business cycle indicators are all showing either recovery or expansion phases of the intra-cycle. Across regions, our strongest style conviction for both these phases is overweight Value.”

“The market is a lot more sure of itself now,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn, Germany. He predicts the S&P 500 will rise another 9.2 percent by the end of 2017. “Stocks are no longer stuck in that frustrating range and we’ve finally broken through to new records. We can move on to pricing in the improving outlook: there are strong signs that the U.S. economy is in good shape and that bodes well for corporate earnings.”

The Stoxx Europe 600 Index added 0.5 percent. A gauge of miners extended its highest level since June 2015, while energy producers advanced with oil on optimism OPEC will agree to reduce output. Enel SpA led an advance in utilities after announcing a plan to cut costs and dispose assets of about 3 billion euros ($3.2 billion). Swiss stocks were lower after Swatch Group lost 2.6% and Richemont fell 2.6% as Swiss watch exports plunged the most in seven years. Banco de Sabadell SA dropped 4.3 percent as its largest shareholder reduced its stake in Spain’s fifth-largest lender. French ophthalmology company Essilor International SA sank 6.8 percent after cutting its 2016 revenue target. The MSCI Emerging Markets Index rose 1.2 percent, trimming this month’s slide to 5.3 percent. The Hang Seng China Enterprises Index gained 2.2 percent to a two-week high, while the Philippine benchmark gauge sank 2.5 percent to the lowest since March 1.

According to Bloomberg, global funds sold about $11 billion of equities and bonds in Asia’s emerging markets after Trump’s victory as Treasury yields climbed, spurring the dollar’s strongest rally in eight years. India suffered the biggest outflows between Nov. 9 and Nov. 18, followed by Thailand, according to calculations by Bloomberg using official data.

Meanwhile Trumpflation took a breather, with both bond yields and the dollar declining for the second consecutive day. Sovereign debt securities advanced across the euro area, with the yield on Italian 10-year bonds sliding eight basis points to 1.99 percent. Yields on similar-maturity Spanish bonds fell six basis points to 1.55 percent, set for the biggest decline since Nov. 2. The region’s highest-rated bonds also advanced as European Central Bank officials have sought in recent speeches to reassure investors that policy divergence with the Fed will be maintained as U.S. interest rates begin to rise. Benchmark German 10-year bonds fell three basis points to 0.24 percent.

Demand for collateral also boosted demand for shorter-dated securities, with the German two-year note yield down three basis points to minus 0.71 percent. The securities do not qualify for purchase under QE because they yield less than the ECB’s deposit rate, which is currently at minus 0.4 percent.

Treasuries advanced for a second day, pushing the 10-year yield down two basis points to 2.29 percent, after sliding four basis points on Monday. Two-year notes declined before a sale of $13 billion of floating notes with that maturity, and $28 billion in five-year securities. That will be followed Wednesday by an offering of $34 billion in seven-year debt securities. the Bloomberg Dollar Spot Index dropped 0.1%, adding to Monday’s 0.4 percent slide, paring an advance that has still left it about 4 percent stronger since the Nov. 8 election. The dollar was little changed at 110.78 yen, after falling earlier by as much as 0.5 percent as a magnitude 7.4 earthquake struck Japan, boosting demand for the nation’s currency as a haven.

* * *

Bulletin Headline Summary from RanSquawk

  • European equities buoyed by the all-time highs posted in US indices, alongside the upside in oil prices.
  • FX markets dictated by the corrective moves observed in the USD-index which has been testing yesterday’s low.
  • Looking ahead, highlights include Canadian Retail Sales and the latest API Crude Oil Inventory Report

Market Snapshot

  • S&P 500 futures up 0.3% to 2200
  • Stoxx 600 up 0.3% to 341
  • FTSE 100 up 0.9% to 6838
  • DAX up 0.4% to 10723
  • German 10Yr yield down 3bps to 0.24%
  • Italian 10Yr yield down 10bps to 1.97%
  • Spanish 10Yr yield down 8bps to 1.54%
  • S&P GSCI Index up 1.3% to 375.3
  • MSCI Asia Pacific up 0.9% to 136
  • Nikkei 225 up 0.3% to 18163
  • Hang Seng up 1.4% to 22678
  • Shanghai Composite up 0.9% to 3248
  • S&P/ASX 200 up 1.2% to 5413
  • US 10-yr yield down 2bps to 2.29%
  • Dollar Index down 0.3% to 100.75
  • WTI Crude futures up 1.8% to $49.11
  • Brent Futures up 2% to $49.90
  • Gold spot up 0.3% to $1,218
  • Silver spot up 1.6% to $16.86

Global Top News

  • KKR to Purchase Nissan-Backed Calsonic Kansei for $4.5 Billion: 1,860 yen/share a 28% premium to last closing price
  • Oil Extends Gains as OPEC Shows Signs of Progress on Output Deal: Goldman Sachs ‘tactically bullish’ on oil in short- term
  • Fed Hike Is Certainty for Bond Traders as Market Odds Reach 100%: Easy for Fed to raise rates as stocks are gaining: Kuriki
  • Bank of America, Bain Said to Consider Bids for Popular Assets: Popular said to eye EU1b, non-performing asset sale
  • Disney Adding ’Frozen’ in $1.4 Billion Hong Kong Expansion: Construction will begin 2018 and will be six-year project
  • Credit Suisse Said to Face Tax Probe Over Undeclared Accounts: U.S. asks why bank didn’t reveal ‘toxic’ assets
  • South Africa Slows Nuclear Plans as Rating Assessments Loom: Energy plan ‘base case’ sees first new nuclear power in 2037

Looking at regional markets, Asia stocks traded higher across the board again following momentum from Wall Street where all 3 major US indices printed fresh-record highs. ASX 200 (+1.2%) was led by gains in the energy and materials sectors after WTI surged 4% amid increased optimism regarding the finalization of OPEC freeze deal, while Nikkei 225 (+0.3%) lagged as JPY strength was seen in early Asia trade following an initial 7.3 magnitude earthquake in Japan that resulted in a tsunami warning. Elsewhere, Shanghai Comp (+1%) and Hang Seng both (+1.6%) conformed to the heightened risk appetite after a firm PBoC liquidity injection and gains in commodities which saw Dalian iron ore futures hit limit up. Finally, 10yr JGBs traded marginally higher with support seen following an enhanced liquidity auction which showed a significant increase of allotted bids at the highest spread, while the BoJ also commented that they will continue with fixed-rate operations when needed. A magnitude 7.3 quake rattled Fukushima in Japan and resulted to a Tsunami warning issued. However, the tsunami warning and alerts were later lifted and Japanese finance minister Aso stated that no major damage was observed from the earthquake.

Top Asian News

  • All Tsunami Alerts Lifted After Earthquake Rocks Northern Japan: Cooling system briefly knocked offline at Fukushima plant
  • China Tells Trump That Ties With U.S. Are ‘Too Big to Fail’: Communist Party’s top newspaper emphasizes mutual benefits
  • Taiwan Airline TransAsia to Shut Down After Suffering Losses: Unable to repay convertible bonds due Nov. 29, carrier says
  • Chinese-Made $100B City Near Singapore ’Scares Everybody’: Planeloads of buyers fly in as condos rise from the sea
  • Anbang Said Near $2.3 Billion Property Deal With Blackstone: Chinese insurer bids on Japan residential property assets
  • China Formally Arrests Crown Staff Amid Gambling Crackdown: Employees to be held for initial two months for investigations
  • Chow Tai Fook Profit Falls 22% as Chinese Jewelry Slump Eases: Net income dropped to HK$1.22b for six months ended Sept.
  • China Selfie App Said in Talks for $5 Billion Valuation in IPO: International, Chinese investors split over proper value
  • Singapore Says Private Banks Should Reveal Rebates on Bond Sales: Firms defaulted on S$1.1b of bonds in past 12 months

In Europe, rhe FTSE 100 (+0.9%) is Europe’s top performing stock index as mining stocks continue to climb, with the top performer in the index Anglo American, up 5%. Elsewhere equities are broadly in the green, but the SMI is the lone loser in the wake of the biggest fall in Swiss watch export data for 7 years and with Swatch (-3.7%) the worst performer. In fixed income markets, Bunds trade higher this morning amid light volumes and as participants react to the comments seen from ECB’s Draghi yesterday afternoon. Analysts at Informa note that some are interpreting the comments as a firm hint that there could be an extension to QE at the Dec 8th meeting.

Top European News

  • Banco Sabadell Drops as Largest Shareholder Gilinski Cuts Stake: Gilinski sold 168.4m shares at 1.20 euros each
  • U.K. Government Sells Shares in Lloyds; Stake Below 8 Percent: Latest sale raised the total amount recovered to GBP17b
  • Air Berlin Said to Seek Funding Via Etihad Stake in Niki Arm: Transaction would precede merger of Austrian unit with TUIfly
  • Swiss Watch Exports Have Biggest Monthly Drop in Seven Years: Thirteen of top 15 markets for timepieces were negative
  • VW to Make E-Cars in North America in Post-Crisis Recovery Push: Production in that region will start in 2021
  • Enel Jumps Most Since June on Share Buyback, Strategic Plan: Enel increases 2017 dividend to 65 percent of net income
  • Daimler Removes China Truck Executive After Parking Lot Argument: Says dispute was unbecoming and prejudicial to name
  • Julius Baer Said to Hire Singapore Private Bankers From BSI: Singapore withdrew BSI’s local licence in May for 1MDB links

In currencies, the Bloomberg Dollar Spot Index dropped 0.1%, adding to Monday’s 0.4 percent slide, paring an advance that has still left it about 4 percent stronger since the Nov. 8 election. The dollar was little changed at 110.78 yen, after falling earlier by as much as 0.5 percent as a magnitude 7.4 earthquake struck Japan, boosting demand for the nation’s currency as a haven. South Africa’s rand led currencies higher in the developing world on Tuesday, climbing 1.2 percent. The government delayed plans to build nuclear power plants for a nuclear program estimated to cost $37 billion to $100 billion. South Korea’s won advanced 0.9 percent, the second-biggest gain, followed by the Mexican peso and Russian rubble.

In commodities copper added another 1.6% to $5,650 a ton on the London Metal Exchange. All non-ferrous metals rose, while iron ore and steel in China surged limit up. Anglo American Plc and Vedanta Resources Plc led mining shares higher. Oil advanced for a third day on signs OPEC members have made progress toward finalizing a deal to cut output. January futures rose as much as 1.5 percent in New York after the December contract expired 3.9 percent higher Monday. Silver led precious metals higher, climbing 1.5 percent to $16.83 an ounce. Investors have continued paring holdings in bullion-backed funds in anticipation of a rate increase by the Federal Reserve next month. West Texas Intermediate crude for January delivery rose 1.5 percent to $48.95 a barrel on the New York Mercantile Exchange. Gold added 0.3 percent.

Looking at the day ahead, the focus in the US will be on the October existing home sales data, while the Richmond Fed’s manufacturing survey is also due out for this month. Away from the data the latest central banker to speak will be the BoE’s Forbes who is scheduled to address an audience this morning in London.

* * *

DB’s Jim Reid concludes the overnight wrap

As you mull over that with your morning coffee, markets have certainly started the week on a brighter note. Risk assets can thank the moves in Oil for that after WTI surged +3.94% yesterday to close at $47.49/bbl and to the highest price this month. It’s up another +0.89% this morning too. As the clock ticks down to the OPEC meeting on November 30th the latest fresh round of jawboning appears to have gotten the market excited again that the finer production freeze details will be agreed upon. Indeed comments from two of OPEC’s more reluctant members, namely Iran and Iraq, were seen as fuelling yesterday’s rally with Iran’s oil minister in particular saying that ‘it’s highly probably’ that OPEC will reach a consensus.

It was unsurprisingly then that the energy sector led the way with the end result being a fairly remarkable statistic for US equity markets in that we saw the S&P 500 (+0.75%), Dow (+0.47%), Nasdaq (+0.89%) and Russell 2000 (+0.50%) indices all simultaneously reach fresh all time highs for the first time since 1999. CDX HY spreads were also some 8bps tighter by the close while the relentless selloff for US Treasuries also finally abated with the 10y yield finishing nearly 4bps lower at 2.316%. That is only the second time in two and a bit weeks that yields have fallen during the course of a day. Meanwhile in Europe the Stoxx 600 edged up +0.25% with gains for the energy complex also a feature. In France the CAC returned +0.56% following the surprising weekend primary results. A bit more on that shortly.

Onto the latest this morning where the positive momentum has continued into the Asia session. The Hang Seng (+1.35%), Shanghai Comp (+0.73%), Kospi (+0.81%) and ASX (+1.18%) are all trading with decent gains in the early going. The Nikkei (+0.19%) is back in positive territory and has wiped out earlier losses following the news that a 7.4 magnitude earthquake had struck just off the coast of Fukushima. That sparked a typhoon warning for the region but all tsunami alerts have since been lifted. The Yen was fairly choppy in and around the headlines but it’s currently little changed. Elsewhere credit indices in Asia-Pacific are also generally trading with a better tone with indices around 2bps tighter. There’s also some focus on a video message released by President-elect Trump last night in which he outlined that he intends for the US to quit the TPP trade deal on his first day in the White House, and so following through on one of his campaign promises.

Moving on. Back to France and following the surprise margin of victory in the first-round centre-right primary for ex-PM Filllon, our European economists now note (in their report titled France:Centre-right primaries, published yesterday) that Fillon is the favourite to win the centre-right primary. In terms of the implications for the Presidential race they go on to highlight that the latest polls (from September) showed that Fillon had a c.20% lead over Le Pen. That puts him in the middle of the implied lead for Juppe (c.30%) and Sarkozy (c.10%) over Le Pen. Significantly however, with Sarkozy now out of the race, Le Pen’s chances have probably declined somewhat. Still, we’d be hesitant to fully rely on polls given the events of this year, but it does seem that the risk of a Le Pen victory is pretty low.

Staying with politics, there was an interesting article which caught our eye in the WSJ yesterday. It was a report centred on the Dutch general election due in March next year which is shaping up to be another intriguing event. The report suggests that in an increasingly fragmented Dutch political landscape, the most likely election outcome is a coalition of four-to-five centre right and left parties. However, the article goes on the suggest that the real risk to the EU comes ‘from a new generation of Dutch euroskeptics who are less divisive and concerned about immigration but more focused on questions of sovereignty and utterly committed to the destruction of the EU’. In particular the article talks about two leading figures, Thierry Baudet and Jan Roos, who in 2015 persuaded the Dutch parliament to adopt a law requiring the government to hold a referendum on any law should 300k citizens request one. This was put into practice when they secured a vote rejecting the EU’s proposed trade and economic pact with the Ukraine. This potentially throws open questions marks about any legalisation which is aimed at deepening European integration or stabilizing the eurozone in the future, particularly in the event of a fragmented government. Another to keep on the radar.

Meanwhile, yesterday we also got the latest ECB CSPP holdings data. It showed that the ECB had total holdings as at November 18th of €44.322bn. This implied net purchases settled last week of €2.166bn or an average daily run rate of €433m which compares to the €385m since the program started. Interestingly then there was no slowdown post the volatility created by the US election and instead suggests a possible ramping-up ahead of the quieter holiday season ahead next month.

Staying with the ECB, President Draghi spoke again yesterday although his comments weren’t hugely different to those made last week. Draghi reiterated that ‘the return of inflation toward our objective still relies on the continuation of the current, unprecedented level of monetary support, in spite of the gradual closing of the output gap’. He also said that fiscal policies ‘should also support the economic recovery, while remaining in compliance with the fiscal rules of the EU’.

Away from this it was super quiet on the data front yesterday. The sole release came from across the pond where the Chicago Fed national activity index improved to -0.08 last month from -0.20. We also got comments from Fed Vice-Chair Fischer who said that the US economy ‘has moved back to the vicinity of employment and inflation targets’ and so ‘suggesting that the cyclical drag on the economy has been greatly reduced, if not largely eliminated’. Fischer also echoed comments similar to those of Yellen last week in saying that ‘some combination of improved public infrastructure, better education, more encouragement for private investment, and more effective regulation are all likely to have a role to play in promoting faster growth of productivity and living standards’. He also warned however that ‘we don’t have a lot of room to increase the deficit without adverse consequences down the road’.

Looking at the day ahead, we’ve got another fairly light calendar on the cards for today. This morning in Europe the sole release comes from the UK where the October public finances data gets released and then shortly after the CBI distributive trends data for November is out. Later this afternoon we also get the flash consumer confidence reading for the Euro area. Meanwhile the focus in the US will likely be on the October existing home sales data, while the Richmond Fed’s manufacturing survey is also due out for this month. Away from the data the latest central banker to speak will be the BoE’s Forbes who is scheduled to address an audience this morning in London.

3.REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 30.20 POINTS OR 0.94%/ /Hang Sang closed UP 320.29  OR 1.43%. The Nikkei closed UP 56.92 points or 0.31%/Australia’s all ordinaires  CLOSED UP 1.13% /Chinese yuan (ONSHORE) closed UP at 6.8850/Oil ROSE to 48.38 dollars per barrel for WTI and 48.93 for Brent. Stocks in Europe: ALL IN THE GREEN     Offshore yuan trades  6.9114 yuan to the dollar vs 6.8850  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS DEEPLY AS MORE USA DOLLARS   LEAVE CHINA’S SHORES / CHINA SENDS A CLEAR MESSAGE TO THE USA AND JANET  TO NOT RAISE RATES IN DECEMBER.

3a)THAILAND/SOUTH KOREA/:

b) REPORT ON JAPAN

c) Report on CHINA

This is annoying Obama to no end: With the death of TPP, Asian nations are saluting their new free trade leader: China!

(courtesy zero hedge)

As TPP Dies, Asian Nations Salute Their New “Free Trade” Leader: China

Over the weekend we reported that as Obama was speaking at the APEC summit in Peru, hoping to salvage his global trade legacy, the TPP, China’s President Xi Jinping officially called for the launch of the Free Trade Area of Asia-Pacific for “institutional guarantee of open economy”, a move many had expected would take place as China was eager to fill in the void left by the US in any trans-Pacific trade treaty.

As we previously reported, in his speech in LIma, Xi Jinping sought to position himself as a leader in global commerce, vowing to support trade. The attendees signaled “deepening economic integration and opposing trade protectionism,” the Foreign Ministry spokesman said on Tuesday.

Then, overnight, China got a present when Trump announced in a brief video statement that his first executive order upon becoming president would be to remove the US from the TPP. That’s all Beijing needed to hear and this morning China said it hoped to conclude an Asia-wide trade pact as soon as possible, in what the WSJ dubbed was “a sign of Beijing’s intent to broaden its regional influence amid the apparent collapse of the U.S.-backed Trans-Pacific Partnership.”

A Chinese Foreign Ministry spokesman said on Tuesday that Asian leaders are pressing ahead with talks for the 10-nation Regional Comprehensive Economic Partnership that China has backed as an alternative to the U.S.-led deal, and “hope that such negotiations can achieve early results.”

As a result, the shift in regional support has been abrupt: Singapore’s Prime Minister Lee Hsien Loong, a TPP booster, is now calling on Asian Pacific nations to boost trade by backing the China-led pact and other initiatives. “There are still other pathways to free trade in the Asia-Pacific,” Mr. Lee said this past weekend.

Other also promptly shifted their focus from a US to a China-led trade agreement: both Vietnam and Malaysia, TPP members, said they were shifting their focus to the China-backed group, according to their respective trade ministers, with Malaysia’s, Datuk Seri Mustapa Mohamed, citing an “uncertain international economic situation.”

Most viewed the apparent shift as a victory for China… especially China “TPP has been a containment strategy by the Obama administration,” said Zou Zhengfang, an economics professor at Renmin University. “This is a good opportunity for China to be more powerful on the global stage starting with economics, and to gain a larger voice.”

What is notable is the eagerness – and ease – by most TPP member states (except Japan) to shift their allegiences from Washington to D.C. What is also notable is just how critical free trade is to most Asian countries, whose economies are heavily export-oriented, as opposed to rising calls for protectionism in much less trade-dependent (and much more debt-reliant) America and Europe. It also signals, as the WSJ writes, the unraveling of Mr. Obama’s vision to make the TPP accord an economic anchor for U.S. strategic engagement in a region being transformed by China’s growing economic might and expansionist aims.

In short, China wins by materially expanding its sphere of influence through a “free-trade” agreement, whose terms it will define from day one. Indeed, the TPP would cut or reduce some 18,000 tariffs for a group of Pacific Rim nations in the Americas, Asia and Oceania—an area accounting for 40% of the global economy. The China-led pact is less ambitious in reducing tariffs; it will likely be far more ambitious on setting terms that benefit its own companies that engage in trade. As for China’s counterparts? Since China is the dominant power, they have to accept the terms or be “nudged” out of the Regional Comprehensive Economic Partnership, and into the cold, protectionist world outside.

However, while most Pacific Rim countries welcome their new global trade overlord, one fervent supporter of a US-led trade pact still refuses to admit that TPP is dead, and that it will have no choice but to bow down to Beijing: Japan.

“The TPP would be meaningless without the United States,” Abe said, shortly before Trump crushed his hopes with his statement yesterday.

The WSJ adds that a spokeswoman for Japan’s Foreign Ministry said Japan still held hope the deal will be revived in some form and that Prime Minister Shinzo Abe planned to continue to try to change Mr. Trump’s thinking on its merits.

As for Trump’s plans to remake U.S. trade relationships once he takes office remains unclear. Withdrawing from the TPP may be the opening shot in a broader effort to redo other deals he has criticized as well, such as the North American Free Trade Agreement.

“We still don’t know how far the Trump administration is going,” said Derek Scissors, a resident scholar at the American Enterprise Institute who focuses on China. ‘What matters is if this becomes a pattern of just disrupting trade relationships, without getting to something positive.”

Judging by the S&P which is trading at 2,200, either the answer is obvious, or the market has been completely removed from actual economic fundamentals for years (hint: the latter).

 

END

 

the following is an extremely important commentary from Dr Steve Hanke of John Hopkins University.  He states categorically that Trump’s policies will no doubt result in a huge trade war with China. He is probably right

(courtesy Dr Steven Hanke)

 

The Simple Analytics of Why President-Elect Trump’s Policies Will Probably Result in a Trade War with China

4 EUROPEAN AFFAIRS

Strange! Markets are up everywhere yet the German 10 yr bund is heading southbound! Something brewing?

(courtesy zero hedge)

German Bund Yields Diverge and Head Lower Again Amidst Market Jubilation

Are the Germans being penalized for losing their leadership status, in light of the Le Pen surge in recent polls or are yields dropping again as a sign of risk off?

With markets ripping to new record highs, this is a curious divergence and worthy of inspection.

img_5685

U.S. 10yr has soared from 1.75% to 2.30% since Election Day.

img_5687

Content originally generated at iBankCoin.

 

end

 

These guys ought to know:  DB warns that the plate spinning era is over

(courtesy Deutsche bank/zero hedge)

 

Deutsche Bank Warns “The Plate-Spinning Era” Is Over

Deutsche Bank’s long-held analogy of “plate-spinning” central bankers acting like the old popular circus act where the performers would spin plates on numerous poles and run between them in order to re-spin before they came crashing down to the ground, has held perfectly for several years. Over the years more plates have been added and central bankers have had to run faster and faster between them to stop gravity taking over. 

But now Deutsche Bank is concerned:

Up to this year we’ve felt confident that they could continue this art for the foreseeable future and thus keep asset prices elevated as a result. We accepted that such policy wasn’t conducive for growth and prevented reform/creative destruction, but was positive in the short-term for most assets tied to monetary policy in some valuation form or another.

 

However 2016 has been a landmark year as we seem to have reached a point where the faster the plates are spun the more the unintended short-term consequences. The banking sector – especially in Europe and Japan – has been severely constrained by negative rates and flatter curves. If the sector was healthier they could withstand such an attack on their profitability but with inherent underlying weakness and with a need to build better regulatory defenses, monetary policy has started to be a sizeable negative. Given how important banks are to the wider economy then it’s no longer a win-win when central banks ease policy further. In fact in some cases the opposite outcome could materialise.

And assets are starting to misbehave…

Figure 9 shows the Stoxx 600 bank index against 10 year Bunds and then against bank loans to non-financial corporates (with the bank index lagged by 12m). 2016’s decline in Euro Stoxx bank equity (down –14% YTD, -36% at the YTD lows on 6 July 2016) does not bode well for 2017 bank lending on this measure. However the reversal seen since the lows is perhaps offering some hope and reflects a view that policy makers are appreciating that a change is needed. Since September 2016 we’ve seen the BoJ target the yield curve more than targeting a specific volume of QE, and more recently the US election result brings hopes of a shift in policy emphasis. The ECB is going to find it the hardest to shift policy but even here it’s becoming more evident that there is great resistance to cutting rates any further or expanding QE.

 

 

The risk is that some damage to the European economy has already been done by the woes of the banking sector in 2016. The rightmost chart of Figure 9 perhaps backs this up by looking at the ECB’s Euro area bank lending survey for Q3 (published on 18 October 2016) which showed the first expectations of tighter standards for lending to corporates in nearly 3 years. At this stage it is a small subtle shift and to put things in perspective, the previous quarter saw 95% of reporting banks expecting to leave standards for lending to enterprises unchanged over the next 3 months, 3% to ease somewhat and only 2% to tighten somewhat. In Q3 2016, the corresponding numbers were 90%, 3% and 7%.

 

Is this another small sign that monetary policy is becoming counterproductive for the economy?Although standards are still expected to be net eased to households for both consumer credit and house purchases over the next quarter, the rate of easing was less than in Q2 and getting closer to zero.

The unintended consequences of central bank actions are starting to become clearer…

It is not clear that the ECB has any inclination to change direction regardless of the US election result but it feels increasingly unlikely that they can ease further without causing collateral damage. The path of monetary policy is becoming more and more complicated. So it seems highly unlikely that the ECB will increase QE or cut rates further in 2017. Although we think they’ll struggle to taper in numerical terms in 2017, we think that they will announce a ‘soft taper’ at their December 2016 meeting where they will remove the deposit rate floor and thus allow them to open up more shorter dated securities for purchase which would reduce the average duration of their portfolio.

 

Alongside recent events in the US, this may ensure that both yields and the yield curve have already hit their low/flattest levels for this cycle in Europe and thus provide some relief for banks and the economy. It could even be that we’ll never again see the lows in yield we saw in late September 2016. These were lows never previously seen through hundreds of years of history. Even with the respite, given the lag in the correlation seen in the middle chart of Figure 9, we have to be wary that some damage may have already been done to lending in 2017.

 

A proper taper will be difficult when the ECB have yet to meet their economic objectives but at the same time the removal of the depo floor may only give the ECB an extra 6 months of being able to buy German Bunds out to January 2018 before they run into constraints. So unless we see radical policy change in December 2016, this theme will continue to be a focus over the next 12 months with tapering speculation never far off the agenda especially with the potential change in policy mix in the US. It sounds like a recipe for increased volatility and higher risk premiums.

 

With regards to the BoJ, they have at first glance moved towards tapering as they have shifted away from a specific volume of monthly purchases and are instead targeting the yield curve and vowing to keep 10 year JGB yields close to zero. Our Japanese strategists estimate that this could reduce the annual purchases from 80 trillion to around 60 trillion Yen and Kuroda has also openly suggested that a reduction of purchases is likely. However following the outcome of the US elections, the BoJ’s policy could be tested if yields continue to rise on a global basis. Will they (i) defend the zero percent 10 year JGB yield and buy more bonds than they and the market expected when the new policy was announced or (ii) will they amend policy? Again the uncertainty is high and will likely have big implications for global bond yields and asset prices generally.

 

What’s more certain is that central banks will still be significant buyers of assets next year, just not as much as in 2016. This may be slightly more positive for bank related risk but might be slightly less positive for other assets previously propelled by asset purchases. For example our US rate strategists believe the new BoJ policy could be worth 20-25bps in terms of higher US yields and the anticipated changes from the ECB might add a further 10bps all other things being equal. President-Elect Trump’s spending plans add another 40bps according to their model. So since September the fair value level of yields have started to rise even though QE still remains at high levels around the world.

 

Figure 10 shows the YoY USD change in global central bank assets across nine major economies. 2016 will likely be seen as a local peak for aggressive monetary policy with the risks to this graph perhaps on the downside as the ECB is more likely to taper than add to QE.

 

 

2017 won’t represent a radical shift in central bank policy around the globe but the momentum and sentiment shift away from peak QE / negative rates may be greater than that simply implied by the numerical shift, especially with the new US political administration.

So while hopeful that we’re starting to break free from the previous policy regime, Deutsche Bank reminds readers that…

…the global financial system remains broken and extremely fragile. Secular stagnation trends are everywhere. The world has too big a debt burden for the current growth environment.

 

We would feel far more comfortable if the world went through a huge creative destruction periodwhere zombie, inefficient debt was allowed to default – thus ‘right-sizing’ the ratio between debt and GDP. However we’ve long accepted that this is highly unlikely to happen outside of perhaps a future break-up of the Euro.

 

The debt is too systemic for policymakers to be able to let it default without a big negative feedback loop on growth that could easily lead to a depression. The problem with current policy – which at a global level has become more and more extreme on the monetary side – is that it simply props up the failed system without offering much in terms of nominal growth stimulus.

 

So you actually prolong the ‘zombie economy’ with the added problem of the weaker banking systems (e.g. European) starting to buckle under the weight of negative yields and QE in extremis. So monetary only policy was starting to risk the health of the system it was trying to prop up. Not a positive development for growth.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

My goodness, it is starting in Canada.  A large stock brokerage firm is charging negative .75% on all foreign cash balances save the USA dollar

(courtesy zero hedge)

Canadian Bank Starts Charging Negative 0.75% Rate On Most Foreign Cash Balances

Despite speculation over the past year that Canada may join Japan and Europe in the NIRP club and launch negative interest rates, so far the BOC has stood its ground. However, starting on December 22, for the broker dealer clients of one of Canada’s most reputable financial institutions, BMO Nesbitt Burns, it will be as if the Canadian bank has cut its deposit rate on most currencies, to match the deposit rate of Switzerland.

In an internal letter sent today from management, the bank explains that its current policy with respect to cash balances of foreign currencies held in client accounts – excluding U.S. dollars – has been that it “does not pay or charge clients interest on these balances.” As a result, the bank writes, clients have traditionally tended not to hold non-U.S. dollar foreign currencies in a BMO Nesbitt Burns account for any extended period. However, the notice continues, “given the current global interest rate environment, which has extended much longer than anticipated, we have seen an increase in foreign currency cash reserves across accounts; indicating clients are, in fact, moving these funds into their BMO Nesbitt Burns account in order to avoid negative interest charges on cash holdings in other accounts they maintain.

Welcome to the age of connected monetary vessels, where globally fungible money allows savers to bypass their own domestic “financial repression” and negative interest rates, by shifting their funds to offshore bank accounts. Or at least it did for clients using BMO Nesbitt Burns as a custodian of offshore money. Because as the bank adds, it has become necessary for the bank to update its current policy and selectively implement negative rates to avoid precisely this global interconnection. To wit:

Effective December 22, 2016, we will begin charging clients a market-rate negative interest charge of 75 basis points on cash balances of all foreign currencies held in their account(s), excluding U.S. dollars. Interest is calculated on the average daily balance during the interest period. The first negative interest charge will cover the period of December 22, 2016 to January 21, 2017, and will be charged to all applicable client accounts on January 23, 2017.

How long will BMO continue this unprecedented financial repression of its foreign clients? Simple: as long as NIRP in other nations forces funds to be parked in banks like the Bank of Montreal.

This rate will be regularly reviewed to ensure it remains competitive and will continue until to be charged until such time as foreign interest rate policies negate the need to apply this charge to client accounts. Please note that negative monthly interest charges below $5.00 will not be charged to client accounts.

What happens then? Well, if BMO depositors (of whom we wonder just what percentage are Chinese) take their money to another Canadian bank, that bank will promptly follow suit and implement a similar “negative rate” provision for foreign clients, until eventually every single bank, and not just in Canada, has a bifurcated deposit rate policy: one for account held in Canadian and US Dollars, and another for all other currencies, which will demand an annual fee of 0.75% for the privilege of holding their funds.

What is BMO Nesbitt Burns’ advice to advisors with clients that have any foreign, non-U.S. dollar foreign currencies on deposit? They are encouraged to contact these clients and advise them that they may wish to consider purchasing an alternative short-term investment denominated in the foreign currency, or another available product, as otherwise there is no evading the -0.75% fee.

7.OIL ISSUES

You knew that this was coming: Oil slides after Iran, and Iraq has reservations about a proposed production cut as does Indonesia

(courtesy zerohedge)

Oil Slides After Iran, Iraq, Indonesia Said To Have “Reservations” About Proposed 4.5% Production Cut

Update: oil has slid to LOD following headlines that just one week before the Vienna deal, one which according to the Nigerian oil minister was supposed to be finalized today, more discord has emerged, as a result of Iran, Iraq and Indonesia expressing “reservations” about the proposed 4.5% output cut which exempts only LIbya and Nigeria.

  • OPEC EXPERTS RECOMMEND MINISTERS DEBATE NEXT WEEK AN OIL OUTPUT CUT OF 4.0-4.5 PCT FOR EACH MEMBER EXCEPT LIBYA, NIGERIA – RTRS
  • OPEC SOURCES SAY IRAN, IRAQ, INDONESIA HAVE RESERVATIONS REGARDING PROPOSED 4.5 PCT CUT

It also means that contrary to constant media representations, Iran was in fact not to be exempt from a production cut, and suggesting that there was never a real agreement to begin with.

* * *

After the last few days melt-up in WTI because “an OPEC deal is certain,” it seems Iraq is ready to spoil the party once again. Sending WTI (Jan17) tumbling from over $49 to a $47 handle, Reuters reports, Iraqi Foreign Minister Ibrahim al-Jafari told reporters, “it would not be fair for us to cut oil output.”

OPEC should allow Iraq to continue raising output with no restrictions, Foreign Minister Ibrahim al-Jafari told reporters in Budapest on Tuesday, commenting on a plan by the organization to limit supply in order to support prices.

“We think we should increase output. Iraq is in a special situation …we are at war,” he said, referring to the ongoing military campaign to defeat Islamic State.

And the reaction is a pullback in WTI’s panic bid…

 end
Here are the two scenarios laid out as to what the oil price will go if a production cut or no production cut:
(courtesy zero hedge)

The OPEC “Vienna Matrix” – If 1MM Cut, Oil To $59; If No Cut, Oil To $40

While the market has taken the latest round of “optimistic” jawboning by OPEC members in stride, sending crude higher by 4% ahead of next week’s OPEC meeting in Vienna where the terms of the OPEC production cut are expected to be finalized, the reality is that a favorable outcome may be problematic.

As Bloomberg’s Julian Lee explained overnight, “OPEC says it’s close to a deal to cut oil output for the first time since 2008, a move that may halt a 2 1/2-year price slump. The actions of individual member states tell a different story. The simple math supporting cuts looked solid at OPEC’s meetings in June and December. Prices then were way below most members’ fiscal break-even points. An output cut now of 1.5 million barrels a day, or 5 percent, would need to boost the oil price by only $2.50 a barrel for OPEC nations collectively to be better off. A $5 price increase would boost the value of what they pump by about $100 million a day.”

There are various nuances as to why a deal, one in which Saudi Arabia would bear the brunt of total production cuts, but as Lee notes, while OPEC Secretary-General Mohammed Barkindo has been touring member nations to shore up support for an agreement before the Nov. 30 meeting, culminating with a trip to Doha for talks last week, “the meeting didn’t resolve much. It certainly didn’t tackle any of the thorniest questions that OPEC must still overcome if coordinated measures are to happen.”

“The road from the OPEC agreement in Algiers to the next official OPEC meeting in Vienna is long and bumpy,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA in London.

Meanwhile, OPEC production continues to surge, hitting new all time highes just this month, effectively leaving the cartel little option but to reduct supply, however even with a cut it would only bring down production to a level seen as recently as May of this year. As a result, as Bank of America notes, downward oil price pressures are now coming mostly from within the cartel itself. “Will OPEC decide to end the price war or not? For starters, it is important to note that the cartel is running with very limited spare production capacity. As a result, we would argue that it makes good economic sense to end the price war, or at least declare a truce, at this stage.”

Which brings us to the 4 possible outcomes from the Vienna meeting and how they would impact the price of oil.  Here is how Bank of America lays out the possibilities:

  • First, we see only a slim chance that OPEC does not announce an oil supply cut deal on November 30, an outcome that could send oil prices temporarily below $40/bbl, in our view.
  • Most likely, OPEC will go with a 500 thousand b/d or 1 million b/d supply cut announcement, in our view. Should OPEC just deliver a half a million barrel deal, we see prices staying around the current levels.
  • For prices to firmly break over $50/bbl, OPEC would have to deliver a 1 mn b/d cut.
  • If the cut comes with firm quotas and a tight control mechanism, we see WTI prices averaging $59/bbl in 2017, while a looser deal would probably shave $5 off this number.

Some more detail on the two most likely outcomes:

OPEC agrees to 1 million cut:

Historically, Saudi production has fluctuated quite extensively to follow price (or demand) trends (Chart 15), in turn allowing for a steady and well managed inventory cycle. While BofA is not expecting a return to the old regime where Saudi micromanaged global oil stocks, it does project OPEC crude supply to drop sequentially (Chart 16). Under this scenario, BofA’s base case, WTI crude oil prices will average $55/bbl in 1H17 and $59/bbl over the course of the year. The cut would enable a fast rebalancing of global crude markets and possibly a shift into backwardation. Moreover, the deal would likely incorporate a production freeze from Russia.

Oil may drop to $40/bbl if the cartel cannot agree to cut:

A 1million b/d swing in global oil supplies impacts prices, on average, by about $17/bbl (Chart 19). With non-OPEC supply stabilizing and OPEC adding more barrels to the market in recent months, a price recovery is looking less likely. If OPEC does not come to a deal on supply, we see the oil market surplus extending through 3Q17 (Chart 20) and oil prices facing a renewed slump. In some ways it is OPEC’s moment of truth, or maybe just a moment of truce. After all, the ongoing price war is driven by technology. Even if the cartel puts a 12 month supply cut deal together, technological advances will likely keep pressing down shale oil cost structures.

 

end

 

Who would have thought that this was in jeopardy?

(courtesy zero hedge)

Oil Slides: OPEC “Deal” Suddenly In Jeopardy

Earlier today, oil spiked and pushed stocks to new all time highs, after the Nigerian OPEC delegate Ibrahim Waya said that not only is “everyone on board” ahead of the November 30 Vienna cartel summit, but that he expected details of the output accord would be finalized today.

That, however, was put in question later in the morning when OPEC members said that Iran, Iraq and Indonesia were all said to have “reservations” about a proposed 4.5% production cut. Worse, according to the news, it appeared as if Iran would not be part of the exempt from production cuts group at all, contrary to the Algiers agreement, suggesting that Saudi Arabia had changed its mind once again.

And now, moments ago, oil tumbled to intrday lows on the latest batch of headlines according to which the OPEC Vienna “deal” is now suddenly in jeopardy when Bloomberg reported that the OPEC committee is said to defer the issue of Iran and Iraq – the second and third largest producers in OPEC – to the November 30 meeting altogether, confirming what the skeptics knew all along – that not only will a deal not be finalized today, but that a deal may not even happen next week in Vienna, as the rift between what Saudi Arabia is willing to “cut” to reach a deal and what it demands from its key competitors in a jockeying for market share, remains as wide as ever.

Oil promptly dropped to day’s lows on the news.

As a reminder, earlier today we showed a matrix of probabilities laying out what would happen to the price of oil should OPEC fail to reach an agreement: according to BofA, failure to agree on a production cut next week would mean oil tumbles to $40 (or lower according to Goldman) where, as a result of excess OPEC production of 34mmbpd or higher, it would remain for most of 2017 as the equilibrium in the oil market would be once again delayed indefinitely

end

 

The farce continues:

(courtesy zero hedge)

WTI Jumps Back Above $48 After OPEC Meeting Said To End “Successfully”

This is just becoming farce now…

1154ET – *OPEC COMMITTEE SAID TO DEFER ISSUE OF IRAN, IRAQ CUTS TO NOV 30

1436ET – *OPEC TECHNICAL MEETING ENDS, WAS SUCCESSFUL: OPEC STATEMENT

1436ET – *IRAQ GOV. SAYS `WE ARE AGREED AND HAPPY’ AFTER OPEC CMTE MTG

Having earlier seen half of OPEC say “no deal” or “unfair”, OPEC sources now say that the meeting has ended “successfully”… Whatever that means…

 

end
Then at the end of the day, oil slides a bit after a much bigger than expected gasoline inventory build
(courtesy zero hedge)

Oil Slides After Bigger Than Expected Gasoline Build

After a day of frenetic OPEC headlines being all that matters, oil traders may briefly focus on fundamentals as API reports an unexpectedly large build in gasoline inventories ( +2.68mm vs 900k exp). Overall crude, cushing, and distillates saw inventory draws which left wti slightly lower post-data.

 

API

  • Crude -1.28mm (+1mm exp)
  • Cushing -140k (-100k exp)
  • Gasoline +2.68mm (+900k exp)
  • Distillates -350k

After last week’s across the complex builds, it was ony gasoline that saw a build this week (which fits seasonally)

 

A rollercoaster day in WTI thanks to OPEC headlines

 

Rather notably, as Bloomberg points out, the prompt WTI M1-M2 spread widened to -90c today, the biggest discount since April. “There’s plenty of supply around,” Zahir say, adding that adeepening contango encouraging more oil to go into storage.

8.EMERGING MARKETS

The currency in Venezuela is trading on the black market at 2022 to one USA dollar as hyperinflation is starting to take grip on this nation:

(courtesy zero hedge)

As Maduro Seeks “Best Relations” With Trump, Meet Venezuela’s Currency Crisis’ Arch-Nemesis

The value of the Venezuelan Bolivar has crashed by 50% in the last two months, breaking above 2000/$ on the black market today for the first time ever. We know this thanks to Gustavo Díaz, a Home Depot employee in central Alabama, who runs one of Venezuela’s most popular and insurgent websites, DolarToday.com,which provides a benchmark exchange rate used by his compatriots to buy and sell black-market dollars.

Hyperinflation is escalating as since Sept 22nd, the black market value of a Bolivar has collapsed from 1010/$ to 2021/$…

While the Black Market Bolivar has crashed 15% since the election, as El-Nacional reports, President Nicolas Maduro said he was committed to have the best possible relations with the newly elected US president, Donald Trump.

President Nicolas Maduro pledged to work to have the best possible relations with the elected US president (USA), Donald Trump.

“We hope to have the best relations with the people of the US and President – elect Donald Trump, and so mistakes as those committed by former eying George Bush are exceeded. All we want is to stop interventionism,” said the Venezuelan president in the 73rd edition of his program Contact With Maduro , on Sunday.

The head of state and Trump congratulated for winning the elections this November 8th. However, on several occasions he demonstrated their dissatisfaction with both the republican and his then opponent, Hilary Clinton.

But, while the west in general are scapegoated as the reason for the economic collapse of his nation (not socialism), as The Wall Street Journal reports,Public Enemy No. 1 of Venezuela’s revolutionary government is Gustavo Díaz, a Home Depot Inc. employee in central Alabama.

How? He is president of one of Venezuela’s most popular and insurgent websites, DolarToday.com, which provides a benchmark exchange rate used by his compatriots to buy and sell black-market dollars. That allows them to bypass some of the world’s most rigid currency controls.

Socialist President Nicolás Maduro has accused DolarToday of leading an “economic war” against his embattled government and vowed to jail Mr. Díaz and his two partners, also Venezuelan expatriates in the U.S. The Venezuelan central bank unsuccessfully filed suit against the website twice in U.S. courts. The government has also turned to hackers to launch constant attacks, Mr. Díaz said, forcing the site to use sophisticated defenses.

“DolarToday is the Empire’s strategy to push down the currency and overthrow Maduro,” Vice President Aristóbulo Istúriz said earlier this year, asserting that the U.S.—“The Empire” to the Venezuelan government—was orchestrating the site’s work. “DolarToday is the enemy of the people.” The U.S. State Department declined to comment.

The alleged mastermind of the plot likes to sport a red University of Alabama baseball cap and answers questions at his day job from do-it-yourselfers on what kinds of screws they should use to hang shelves.

Mr. Díaz is a U.S.-trained retired colonel, and he indeed tried to overthrow Mr. Maduro’s predecessor, Hugo Chávez, by participating in a short-lived coup in 2002. Mr. Díaz, who had been deputy security chief to the businessman who briefly took power in the ill-fated overthrow, said his conspiring days are over.

Now, he said, he is fighting for economic freedom and for Venezuelans’ access to information in a country that makes financial and other data secret. Venezuela is undergoing a brutal recession that has made it hard for most of the country’s 30 million people to find enough food and medicine.

“It’s ironic that with DolarToday in Alabama, I do more damage to the government than I did as a military man in Venezuela,” said Mr. Díaz, a short, soft-spoken man with a gray mane.

He moved in 2005 to Alabama, where a brother and sister were already living, and after being granted political asylum became a citizen.

And finally, as we noted previously, while Venezuela waits for the latest disappointment out of OPEC, Reuters reports that the country’s massively unpopular president, Nicolas Maduro, who presided over Venezuela’s terminal collapse and is only in power thanks to the army’s support, is now trying his hand at salsa music to cheer up his broke countrymen.

According to Reuters, Maduro, a music aficionado who used to play in a rock band, debuted “Salsa Hour” this month and has broadcast four episodes from a radio booth specially installed in the Miraflores presidential palace, with each episode lasting several hours.

“This is a program full of energy and joy,” said Maduro, 53, in one show, headphones on as he drummed his fingers and spun classics of the Caribbean rhythm. “I would do it every day … to sing about our lives, anxieties, pains and dreams.”

Surely singing about the “anxieties and pains” provides countless hours of content for the wannabe dictator. During the shows, sometimes also shown on TV, Maduro has danced with his wife, explained the history of salsa and devoted a program to Puerto Rican singer Ismael Rivera.

Politics have crept in too. He dedicated the song “You’re crazy, crazy, but I’m cool” to arch-foe and National Assembly President Henry Ramos and the song “Vagrant” to opposition leader Henrique Capriles.

Though Venezuela’s 30 million people adore music, especially salsa, Maduro’s show has fueled criticism that he is disconnected from reality in a country where millions are skipping meals amid shortages and rising prices. “Maduro’s program is like a mockery,” said Capriles, who narrowly lost to him in the 2013 presidential vote and has championed a drive for a referendum to recall Maduro.

“He should have a bit more respect for the Venezuelan people. He is not an entertainer.”

end

 

I do not know about you, but I will put my money on JPMorgan that the money was not deposited in the bank to pay interest on those sovereign oil bonds of Venezuela

(courtesy zero hedge)

 

Venezuelan President Threatens Legal Action Over JPMorgan’s “Campaign Of Terror”

Following last night’s news that Venezuela’s state-owned oil company PDVSA had missed payments on several bond coupons, the company has categorically rejected the false accounts published in the media arguing that the payments were “in effect, sent to Citibank and then JPMorgan comes out with that totally false information this afternoon.” Del Pino raged that Citibank deliberately delayed payments from PDVSA as part of a “campaign of terror” against the company and Venezuelan President Maduro is looking into legal action against JPMorgan over their report.

As we detailed overnight, PDVSA in October swapped $2.8 billion in bonds due in 2017 for new bonds maturing in 2020... but that bounce is now dead…

As Bloomberg reports, PDVSA has activated a 30-day grace period after not meeting the full coupon payments on its 2021, 2024 and 2035 bonds that were due last week. About $400 million was due on those bonds, while PDVSA did pay $135 million due on its 2026 debt last week, JPMorgan’s Javier Zorrilla writes, citing information from the paying agent on the bonds.

“We still believe PDVSA will make these payments during the grace period,” Zorrilla wrote in the report.

“However, this highlights the cash difficulties and mismanagement of PDVSA with regards to its liabilities.”

But, as Bloomberg reports this morning, Venezuela’s state-owned oil company Petroleos de Venezuela SA denied that it missed coupon payments on bonds.

JPMorgan Chase & Co. said in a report published Monday that the company, which last month persuaded investors to accept a debt exchange as it struggles to fend off default, hadn’t fully paid coupons on bonds due 2021, 2024 and 2035. JPMorgan said it still expected the payments to be made within the grace period and that the delay wouldn’t amount to a default.

PDVSA paid the interest on its 2021 and 2024 bonds and the interest on its 2035 bonds was in the process of being paid, the company said in a statement posted by PDVSA’s chairman and Venezuelan oil minister Eulogio Del Pino on his Twitter account late Monday. The company said it categorically rejected the false accounts published in the media.

“It was, in effect, sent to Citibank and then JPMorgan comes out with that totally false information this afternoon, which became a trending topic on Twitter,” Del Pino said on late-night television talk show Zurda Conducta.

Del Pino suggested that bondholders should call Citigroup Inc. and complain about the late payment.

Citibank deliberately delayed payments from PDVSA as part of a “campaign of terror” against the company, he said.

Furthermore, Reuters reports that:

  • VENEZUELA PRESIDENT MADURO SAYS PDVSA HAD DEPOSITED MONEY FOR BOND PAYMENT IN CITIBANK ON TIME
  • VENEZUELA PRESIDENT MADURO SAYS HAS ASKED PDVSA PRESIDENT TO LOOK INTO POTENTIAL LEGAL ACTION AGAINST JPMORGAN OVER BOND REPORT
  • VENEZUELA PRESIDENT SAYS U.S. TREASURY DEPARTMENT SUPPORTING CAMPAIGN AGAINST PDVSA
 end

 

 

The higher USA dollar is also killing emerging markets especially their bond market as yields rise.  This has causes a huge outflow of funds from that market

(courtesy zero hedge)

‘Trader Tantrump’ Sparks Biggest Ever Emerging Market Bond Outflows As Dollar Soars

The Emerging Market Bond Bloodbath has left a painful trail as investors pulled a record $546 million from the largest EM Bond ETF last week. As the US Dollar surges on the intermingled themes of Trumponomics’ inflation and higher rates, EM and Asian FX rates are collapsing to Lehman crisis lows as the rest of the world suffers despite US equity gains.

US Equities are the only winners…

After having bounced a little through the summer, Asian (and EM) FX has collapsed to new cycle lows relative to the US Dollar since Donald Trump’s win at the election…

This implicit tightening of financial conditions world-wide

Sparked the largest exodus from EM bonds ever…

Coming just a fe short months after a record inflow to EM debt funds ($4.9bn)…

Leaving the largest EM Bond ETF ‘stable’ at a critical support level…

But it seems fear is back in EM land…so as a reminder, Goldman summarizes in a heat map, the EM nations with greatest potential for the upcoming Fed hike to cause a major disruption.

 END
No wonder the Indians are going to gold in big numbers as they lose confidence in paper money:
(courtesy Dhillon/Syndey Morning Herald)

India’s War On Cash Is Forcing The Rich To Beg The Poor For Help

Authored by Amrit Dhillon, originally posted at The Sydney Morniong Herald,

Driver Rahul Sharma, 25, remembers the exact day when his employer turned from a wolf into a lamb. It was November 9 when his employer called him  beta  – Hindi for “dear” – for the first time. The maid was asked to give him a cup of tea, for the first time.

“I was shocked at his sudden niceness. It went on for two days,” said Sharma. For the past three years, his New Delhi-based employer has been abusive, bad-tempered, and imperious, often demanding that he turn up for work at 6am after finishing work at midnight.

“He didn’t even bother to remember my name. When he wanted to summon me, he’d call out ‘driver!’,” Sharma said.

“On the third day, the penny dropped. He asked me to deposit 250,000 rupees ($4900) in my bank account on his behalf so that he could get rid of his black money.”

An Indian woman shows discontinued Indian currency notes and a photocopied ID card as she queues outside Reserve Bank of ...

An Indian woman shows discontinued Indian currency notes and a photocopied ID card as she queues outside Reserve Bank of india. Photo: AP

Maids, drivers, nannies, and cooks in India are experiencing unusual politeness from their employers. Beyond the work they do every day, they suddenly have another use – to launder the undeclared cash which the rich have been hoarding in steel wardrobes, under the mattress and in under-bed storage.

This sudden outbreak of niceness is the outcome of India’s current crackdown on “black money” – income in the form of cash that has not been declared to the tax authorities. On November 8, the day before Sharma’s employer became a lamb, Indian Prime Minister Narendra Modi scrapped 500 and 1000-rupee notes to root out corruption and force more Indians into the tax net.

In one fell swoop, the tens of millions of rupees that the rich kept at home in these denominations became worthless. If they deposit the money in the bank tax officials will pounce, imposing staggering penalties and taxes.

However until December 30, each Indian is allowed to deposit a smallish sum of 250,000 rupees in such defunct notes in their bank accounts without questions being asked. That is why the rich need the service of the poor.

A presswallah who irons the clothes in the Indian capital says he was asked by three clients to deposit 200,000 rupees ...

A presswallah who irons the clothes in the Indian capital says he was asked by three clients to deposit 200,000 rupees in his account in return for a payment of 10,000. Photo: Amrit Dhillon

Sharma and others like him have been implored by suddenly humble employers to deposit the amount in their accounts by the deadline – to be returned to their employers later.

“I refused him. I don’t want to get into trouble later if someone asks me how I got this money when I’m only a driver,” Sharma said.

Coconut water seller Mohan Kishore says the cash crisis has made it hard for him to pay his suppliers but he feels the ...

Coconut water seller Mohan Kishore says the cash crisis has made it hard for him to pay his suppliers but he feels the hardship is worth it for the “punishment” of the rich. Photo: Amrit Dhillon

Domestic staff and factory employees are going around with big grins, delighting in the panic and anxiety etched on the faces of the fat cats who never showed them any consideration, not to mention the delicious irony of being beseeched by their now squirming masters.

Modi’s message in a recent speech – “see how I make the powerful suffer with you” – has resonated powerfully. “For once the rich are as troubled as we poor Indians are every day,” said Akash Atwal, a driver with a New Delhi car rental firm.

Greengrocer Bittu Bharati in Lajpat Nagar, south Delhi, has been offered payment in advance for the fruit his clients ...

Greengrocer Bittu Bharati in Lajpat Nagar, south Delhi, has been offered payment in advance for the fruit his clients will buy over the next year. Photo: Amrit Dhillon

In return for depositing the scrapped notes, domestic staff and others are being offered 10 to 25 per cent as commission. Some have accepted, happy to pocket an unexpected windfall; others, fearing trouble, have refused; and others have refused out of the principle that, if some big fish have been caught, leave them wriggling at the end of the line.

In their desperation to get rid of their ill-gotten money, rich Indians are dumping sacks of notes into the River Jamuna in New Delhi. Some have made a bonfire of their cash at some deserted place before running away to avoid identification. Police have stopped cars filled with suitcases stuffed with 1000-rupee notes, their drivers rushing to distant relatives they haven’t seen for years to ask them to deposit their cash.

Rupee withdrawal: customers wait in line to exchange discontinued rupee banknotes at a Bank of Baroda branch in Dadri, ...

Rupee withdrawal: customers wait in line to exchange discontinued rupee banknotes at a Bank of Baroda branch in Dadri, Uttar Pradesh, India. Photo: Bloomberg

“Some families who buy fruit from me regularly wanted to get rid of 100,000 ($1900) worth of notes by paying me in advance for the fruit they will buy over the next year” said Bittu Bharati, who runs a fruit stall with his uncle in Lajpat Nagar.

Others who are usually paid in cash – florists, beauticians, personal trainers and “presswallahs’ who iron clothes in neighbourhoods – have also been told they can have their services paid for two years in advance, just so that affluent families can dispose of their expired cash. Then it’s up to them to exchange the money at the bank.

Indians stand in a queue to deposit and exchange discontinued currency notes outside a bank in Allahabad, India.

Indians stand in a queue to deposit and exchange discontinued currency notes outside a bank in Allahabad, India. Photo: AP

Some Indians are being too clever by half. A divorced man who had defied the courts by refusing alimony to his wife was seized with a new respect for the law and offered to pay her the arrears – in the banned currency notes. The judge threw him in jail until he paid in the new notes.

Domestic staff have been chuckling while exchanging stories of what’s been happening in the homes of their employers: sudden palpitations, wailing wives, altercations over how to get rid of the banned notes, profuse sweating and pure despair.

Chemists have reported a spike in the sale of sleeping tablets. Mumbai hospitals have reported a surge in panic attacks. But some doctors are feeling queasy themselves – it’s estimated that about 40 per cent of doctors are paid in cash.

“I’m an ordinary man and I’m suffering hardship too. I was in a long queue on Saturday. But it’s worth it. The rich need to be punished for being greedy. I am savouring the moment,” said a smiling Mohan Kishore, who sells fresh coconut water on a South Delhi street.

END

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

 

Euro/USA   1.0623 DOWN .0013/REACTING TO  + huge Deutsche bank problems + USA election:Clinton LOSES/TRUMP WINS THE ELECTION/USA READY TO GO ON A SPENDING BINGE WITH THE TRUMP VICTORY/

USA/JAPAN YEN 110.85  UP 0.203(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2451 DOWN.0039 (Brexit by March 201/UK government loses case/parliament must vote)

USA/CAN 1.3400 DOWN .0009 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION)

Early THIS TUESDAY morning in Europe, the Euro FELL by 13 basis points, trading now WELL BELOW the important 1.08 level FALLING to 1.0623; 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 + THE ELECTION OF TRUMP IN THE USA / Last night the Shanghai composite CLOSED UP 30.20 0R .94%     / Hang Sang  CLOSED UP 320.29 POINTS OR 1.43%   /AUSTRALIA IS HIGHER BY 1.13% EUROPEAN BOURSES ALL IN THE GREEN 

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 TUESDAY morning CLOSED UP 56.92 POINTS OR 0.31% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 320.29 OR 1.43%   ,Shanghai CLOSED UP 30.20 POINTS OR 0.94%   / Australia BOURSE IN THE GREEN /Nikkei (Japan)CLOSED IN THE GREEN/  INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1217.00

silver:$16.78

Early TUESDAY morning USA 10 year bond yield: 2.292% !!! DOWN 4 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  2.962, DOWN 4 IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 100.90 UP 2 CENTS from THURSDAY’s close.

This ends early morning numbers TUESDAY MORNING

END

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.63% DOWN 8  in basis point yield from MONDAY  (does not buy the rally)

JAPANESE BOND YIELD: +.033% UP 1/3  in   basis point yield from  MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.528%  DOWN 8 IN basis point yield from  MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.025  DOWN 5  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 50 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.221% DOWN 5 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/2:15 PM

Euro/USA 1.0618 DOWN .0018 (Euro DOWN 18 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.13 UP: 0.488(Yen DOWN 49 basis points/ 

Great Britain/USA 1.2405 DOWN 0.0085( POUND DOWN 85 basis points

USA/Canada 1.3450 UP 0.0041(Canadian dollar up 41 basis points AS OIL FELL TO $47.54

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 18 basis points to trade at 1.0618 

The Yen FELL to 111.13 for a LOSS of 49 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL 85 basis points, trading at 1.2405/

The Canadian dollar FELL by 41 basis points to 1.3450, AS WTI OIL FELL TO :  $47.54

The USA/Yuan closed at 6.888

the 10 yr Japanese bond yield closed at +.033% UP 1/3 POINTS  IN BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 2   IN basis points from MONDAY at 2.31% //trading well below the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.002 DOWN 1/5   in basis points on the day /

Your closing USA dollar index, 101.08 UP 20 CENTS  ON THE DAY/2.30 PM 

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

London:  CLOSED UP 41.76 POINTS OR 0.62%
German Dax :CLOSED UP 28.72 POINTS OR .27%
Paris Cac  CLOSED UP 18.77 OR .41%
Spain IBEX CLOSED UP 36.90 POINTS OR 0.43%
Italian MIB: CLOSED UP 222.63 POINTS OR 1.37%

The Dow was UP 67.18 points or 0.35%  4 PM EST

NASDAQ  UP 17.49  points or 0.33%  4.00 PM EST
WTI Oil price;  47.54 at 2:30 pm; 

Brent Oil: 48.80   2:30 EST

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  63.88 (UP 8/100 roubles from YESTERDAY)

TODAY THE GERMAN YIELD FALLS  TO +0.221%  FOR THE 10 YR BOND  2:30 EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:$47.49

BRENT: $49.00

USA 10 YR BOND YIELD: 2.314%

USA DOLLAR INDEX: 100.88 DOWN 53  cents

The British pound at 5 pm: Great Britain Pound/USA: 1.24820 UP .0162 or 162 basis pts.

German 10 yr bond yield at 5 pm: +.221%

END

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

TRADING IN GRAPH FORM

Dow Tops 19,000 As Small Caps Panic-Squeeze To Longest Winning Streak In 20 Years

So to summarize: stocks are at all time highs on a Trump plans that nobody has any clue what it will be like; and oil is surging on an OPEC deal that earlier today was not happening, but which Iraq is now happy about, implying it won’t have to cut and Saudi Arabia will throw up  over everything

On the day, stocks opened higher then rolled over into the European close before surging higher for the rest of the day… and then Complete and Utter panic buying in the last few minutes of today…

Dow 19k…

S&P 2,200…

VIX was pushed lower once again to try to ensure the big figures for the Dow and S&P…

Russell 2000 up 13 days in a row – the longest streak since February 1996… (so much for the random walk)

For those thinking about “valuations” – silly-billies…

And the less aggressive EV/EBITDA shows Small Caps trading at double their ‘norm’ valuation…

The last time all the major indices closed at record highs on the same day (apart from yesterday)…

Which deserves its very own video…

 

“Most Shorted” stocks have now risen for 12 of the last 13 days – the biggest short squeeze since the March 2009 lows…

 

While The Dow is doing great post-election, we note that Goldman Sachs alone accounts for 27% of all the gains…

 

Small Caps don’t seem to care that their cost of funding has surged…

 

HYG (HY Bond ETF) rallied to a crucial intersection of 50- and 100-DMA…

 

The long-end continues to outperform…

 

The Treasury Curve steepened modestly today after plunging for 10 days…

 

Not flashing the same bullish signal that bank stocks believe in…

 

US Financials credit risk pushed on to one-month highs… desite the exuberance of shareholders…

 

The Dollar Index declined for the 2nd day in a row…

 

Gold, Silver, Copper, and Crude are all higher on the week…

 

The crude complex was complete chaos today as OPEC headlines were all that mattered ahead of tonight’s API data…

 

 

end

 

USA trading:  with the Dow rising by 50 points this morning, the USA treasury yield curve crashes to 6 week lows.  How is this possible?

(courtesy zero hedge)

Banks Shrug As US Treasury Yield Curve Crashes To 6-Week Lows

If everything is so awesome, with a growth/inflation miracle just around the corner, then why is the US treasury yield curve collapsing in a dismal-growth-outlook-implying manner?

Followingthe kneejerk spike on the election, 5s30s have crashed to 6 week lows…

Nowhere is this decoupling from reality narrative more obvious than in the banks as NIM is a spread not an absolute…

And, as we asked last night, if bank stocks are so great and bank business looks so shiny… why is bank credit risk now at its highest in a month?

Probably bonds and credit are wrong and stocks have it right, right?

end

Trump invites key executives and TV anchors to his Manhattan apartment. The media thought it was a meeting for gaining access to the President elect.  Instead it was a firing squad..

(courtesy zero hedge)

Trump “Exploded” At Media Execs During Off-The-Record Meeting: “It Was A F–king Firing Squad”

Earlier today we reported that in a “summit” organized by Trump’s campaign manager Kellyanne Conway, executives and anchors from the major US media outlets, including CNN president Jeff Zucker, ABC News president James Goldston, Fox News co-presidents Bill Shine and Jack Abernethy, and NBC News president Deborah Turness, visited Donald Trump at his Trump Tower penthouse for an off the record meeting.

Courtesy of the Post, we have a complete list of the participants at the Trump media meeting: the hour-long powwow included top execs from network and cable news channels. Among the attendees were NBC’s Deborah Turness, Lester Holt and Chuck Todd, ABC’s James Goldston, George Stephanopoulos, David Muir and Martha Raddatz, CBS’ Norah O’Donnell John Dickerson, Charlie Rose, Christopher Isham and Gayle King, Fox News’ Bill Shine, Jack Abernethy, Jay Wallace, Suzanne Scott, MSNBC’s Phil Griffin and CNN’s Jeff Zucker and Erin Burnett.

The contents of what was discussed were initially unclear.

Wolf Blitzer

Now, according to the Post and Politico, we learn that the President-elect “exploded at media bigs in an off-the-record Trump Tower powow on Monday.”

It was like a f—ing firing squad,” one source told the Post.

According to the Post’s recound of the conversation, “Trump started with Jeff Zucker and said I hate your network, everyone at CNN is a liar and you should be ashamed….”


Jeff Zucker (left)

“The meeting was a total disaster. The TV execs and anchors went in there thinking they would be discussing the access they would get to the Trump administration, but instead they got a Trump-style dressing down,” the source added. A second source confirmed the encounter.

The Post adds that “the meeting took place in a big board room and there were about 30 or 40 people, including the big news anchors from all the networks…”

“Trump kept saying, ‘We’re in a room of liars, the deceitful dishonest media who got it all wrong. He addressed everyone in the room calling the media dishonest, deceitful liars. He called out Jeff Zucker by name and said everyone at CNN was a liar, and CNN was network of liars.

“Trump didn’t say Katy Tur by name, but talked about an NBC female correspondent who got it wrong, then he referred to a horrible network correspondent who cried when Hillary lost who hosted a debate – which was Martha Raddatz who was also in the room.

“Gayle did not stand up, but asked some question, ‘How do you propose we the media work with you?’ Chuck Todd asked some pretty pointed questions. David Muir asked how are you going to cope living in DC while your family is in NYC? It was a horrible meeting.”

Politico adds further details, according to which “Trump complained about photos of himself that NBC used that he found unflattering, the source said. Trump turned to NBC News President Deborah Turness at one point, the source said, and told her the network won’t run a nice picture of him, instead choosing “this picture of me,” as he made a face with a double chin. Turness replied that they had a “very nice” picture of him on their website at the moment.”

Amusingly, since the meeting was off the record, meaning the participants agreed not to talk about the substance of the conversations, it means they will most likely be unable to confirm or deny the Post’s report.

Politco’s recollection of events was slightly less dramatic:

The New York Post on Monday afternoon portrayed a much more heated meeting, including a quote from one source who said the encounter was “like a f–ing firing squad.” The Post also said Trump called CNN journalists “liars” and that they should be “ashamed.” The source who spoke with POLITICO characterized the meeting as less intense, and said the discussion included Trump expressing the possibility of a “reset” of the tumultuous relationship between the president-elect and the media and that all he wants is “fairness.”

Asked how he defines fairness by a network executive, Trump said simply, “The truth.” But aside from the few moments of contention in the beginning, the source said the meeting was largely substantive.

Politico also adds that Trump, flanked by chief of staff Reince Priebus and campaign manager Kellyanne Conway at the table, also expressed annoyance at the protective press pool and the complaints over him ditching the press when he went out to dinner last week with his family after reporters were advised he was in for the night. But Priebus assured the attendees that the protective press pool will be taken care of and it would all work out.

Other attendees at the meeting from Trump’s team included chief strategist Stephen Bannon, Trump’s son-in-law Jared Kushner, spokesman Jason Miller, and Republican National Committee chief strategist and communications director Sean Spicer.

Asked for comment, Miller referred POLITICO to Conway’s comments to reporters after the meeting, in which she echoed the sentiments made in the meeting about turning over a new leaf with the media.

“There was no need to mend fences,” Conway said. “It was very cordial, very genial. But it was very candid and very honest. From my own perspective, it’s great to hit the reset button.”

Conway later on Monday hit back at the New York Post report. “He did not explode in anger,” she said.

While one can have a subjective interpretuation of the nuances at the meating, one thing was clear: Trump’s attempt at a ‘reset’ will be frowned at by the media which is not used to this kind of treatment, even if the “kindler, gentler” version of events as reported by Politico is accurate.

It also means that what has already been a conventional war between the various US media organizations and Trump, is likely about to go nuclear.

 

 

end

 

Then this: the feud between the New York Times and President elect Trump continues:

(courtesy zero hedge)

Trump Continues To Blast Media – Cancels Meeting With “Failing New York Times”

Just one day after calling a summit of the major mainstream media executives and anchors at Trump Tower in which he referred to everyone as “dishonest, deceitful liars,” Trump this morning has continued his feud with the media by cancelling a planned meeting with the “failing New York Times.”  A tweet sent by Trump this morning indicated that the meeting was cancelled after the New York Times tried to change the “terms and conditions” of the meeting which Trump found to be “not nice.”

I cancelled today’s meeting with the failing @nytimes when the terms and conditions of the meeting were changed at the last moment. Not nice

Trump also took shots at the NYT’s for their “nasty tone,” “inaccurate” coverage and record-high complaints.

Perhaps a new meeting will be set up with the @nytimes. In the meantime they continue to cover me inaccurately and with a nasty tone!

The failing @nytimes just announced that complaints about them are at a 15 year high. I can fully understand that – but why announce?

Meanwhile, the New York Times released a statement saying that they never tried to change the rules but refused Trump’s request to squash an on-the-record session.

NYT spox says paper didn’t change ground rules of Trump meeting, though his side pushed yesterday for only off the record component:

While Trump has never had a great relationship with the New York Times, it turned nuclear back in October when they obtained and published a copy of his 1995 tax return along with a baseless headline implying that he hadn’t paid taxes in 20 years.  In reality, the tax return merely revealed Trump’s usage of net operating losses to offset ordinary income which is a fairly common practice employed by many business owners.

In its leading Sunday story, the New York Times reports that “Trump Tax Records Obtained by The Times Reveal He Could Have Avoided Paying Taxes for Nearly Two Decades.” Specifically, it reports that according to a previously undisclosed 1995 tax filing, Trump reported a $916 million loss on his income tax returns that year which could have allowed him to legally avoid paying any federal income tax for up to 18 years. As it explains, “the 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.”

Certainly the early posturing seems to indicate that Trump will continue to have a fairly contentious relationship with the media for the next four years….and we suspect his supporters are just fine with that.

end

Now the meeting is back on;

(courtesy zero hedge)

Trump Meeting With “Failing New York Times” Back On After Being Cancelled Just Hours Ago

end

Trump will issue an executive order on his first ay in office withdrawing the USA from the TPP plus other stuff

(courtesy zero hedge)

Trump Says He Will Issue Executive Order On First Day In Office Withdrawing U.S. From TPP

In a video message released moments ago by Donald Trump, the President-Elect announced that he has asked his team to develop a list of executive actions for his first day as president and announced that he would issue an executive order on his first day of office, withdrawing the US from the Trans Pacific Partnership, and would issue a notification of intent to withdraw from the TPP, voiding Obama’s “free-trade legacy.”

Trump stated that his agenda “will be based on a simple core principle, putting America first… whether it’s producing steel, building cars, or curing disease, I want the next generation of production and innovation to happen right her on our great homeland.”

He added that he would issue a rule, along the lines of what he proposed during his Gettysburg address, that for every new government regulation, two existing regulations must be eliminated, and said that he will direct the labor department to investigate abuses of visa programs.

  • TRADE – Withdraw from TPP and negotiate bilateral trade deals in America’s favor
  • ENERGY – Cancel job-killing restrictions on American energy industry (including shale energy and clean coal)
  • REGULATION – For each new regulation, 2 old rules must be eliminated
  • NATIONAL SECURITY – Develop a plan to protect America’s vital infrastructure from cyber-attacks and all other forms of attack
  • IMMIGRATION – Direct Department of Labor to investigate all abuses of visa programs
  • ETHICS REFORM – Drain the swamp by imposing a 5-year ban on executive officials becoming lobbyist after they leave the administration (and a lifetime ban on lobbying for foreign governments)

end

Home sales surge trying to beat the huge spike in mortgage rates:

(courtesy zero hedge)

Existing Home Sales Surge To Feb 2007 Highs Before Yuuge Spike In Mortgage Rates

October saw exisitng home sales (SAAR) surge to 5.60mm (handily better than the 5.44mm expectation). These are deals essentially done in August and September – weeks before mortgage rates exploded higher – and with median home prices hitting new highs as the cost of funding spikes, it is hard to se how this is sustainable.

What happens next?

The 2013 taper tantrum spike in mortgage rates created a 10% plunge in existing home sales in the following 4 months.

Lawrence Yun, NAR chief economist, says the wave of sales activity the last two months represents a convincing autumn revival for the housing market.

“October’s strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply,” he said. “Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.

“The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.

“The ramp-up in housing starts in October is a hopeful sign that overall supply can steadily increase enough to provide more choices for buyers and also moderate price growth,” said Yun. “A prolonged continuation of the robust single-family starts pace seen last month (869,000) would go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe.”

Well those “low mortgage rates” just evaporated!!!

 

end

Well that about does it for tonight

I urge you all to read both Avery Goodman and Bill Holter’s commentaries tonight. They are dandies

 

Just a little heads up for you: I will not do a commentary on Thursday.(USA thanksgiving)

The Friday commentary, would probably be done on Saturday.

If not, then only the comex data etc would be done on Sunday night.

 

all the best

 

Harvey

 

 

 

 

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