FEB 27/Raid on gold and silver in the access market/gold and silver equity shares clobbered/Strangely GLD and SLV inventories remain constant/Silver OI remains quite high with one day to go ( 17,360 contracts)/the EU now worried about their burgeoning target 2 imbalances/Trump seeks a monstrous 54 billion increase in spending on the military/FINAL DRAFT

Gold at (1:30 am est) $1257.40 down $.20

silver was : $18.35:  UP 1 CENT

Access market prices:

Gold: $1253.00

Silver: $18,29

For comex gold:

FEBRUARY/ 

NOTICES FILINGS FOR FEBRUARY CONTRACT MONTH:  65 NOTICE(S) FOR 6500 OZ.  TOTAL NOTICES SO FAR: 6023 FOR 602300 OZ    (18.7340 TONNES)

For silver:

 

For silver: FEBRUARY

13 NOTICES FILED FOR 65,000 OZ/

TOTAL NO OF NOTICES FILED: 614 FOR 3,070,000 OZ

This is options expiry week for both the silver and gold contracts.  First day notice is this Tuesday, Feb 28.2017.  Options  expired on the comex yesterday and on the OTC market in London they will expire early Tuesday morning.  For the first time comex has silver in backwardation February/March by 2 cents.  The open interest on the silver comex is now over 1 billion oz and no doubt that the London OTC is multiples of that.

The gold/silver equity shares again performed terribly  today.  We have seen gold/silver metal rise in the past 8 weeks but the silver/gold equity shares have been trampled upon by our crooks. Tomorrow, options expiry in the UK and OTC generally end in the morning so we should see some recovery in the price of the metals and hopefully the equity shares rise from their constant whacking.

Tomorrow is also first day notice for the active silver, and non active gold comex contract.

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest FELL by 2,797 contracts DOWN to 209,299 with respect to FRIDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  1.046 BILLION TO BE EXACT or 150% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH: THEY FILED: 13 NOTICE(S) FOR 65,000 OZ OF SILVER

In gold, the total comex gold ROSE BY ONLY 325 contracts WITH THE RISE IN  THE PRICE GOLD ($10.60 with FRIDAY’S trading ).The total gold OI stands at 452,365 contracts.

we had 65 notice(s) filed upon for 6500 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

We had no change in tonnes of gold at the GLD:

Inventory rests tonight: 841.17 tonnes

.

SLV

we had no changes in silver into the SLV:

THE SLV Inventory rests at: 335.281 million oz

end

.

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

1. Today, we had the open interest in silver FELL by 2,797 contracts DOWN to 209,299 DESPITE THE FACT THAT SILVER WAS UP 20 CENTS with FRIDAY’S trading.WE MUST HAVE HAD CONSIDERABLE SHORT COVERING AGAIN AS THE BANKERS MUST BE FRIGHTENED THAT WE CANNOT OBTAIN PHYSICAL SUPPLIES. The gold open interest ROSE by ONLY 325 contracts UP to 452,365 WITH THE RISE IN THE PRICE OF GOLD OF $10.60  (FRIDAY’S TRADING) AND AGAIN WE MUST HAVE HAD COSIDERABLE GOLD SHORT COVERING.

(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

2c) COT report

(Harvey)

3. ASIAN AFFAIRS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 24.77 POINTS OR .76%/ /Hang Sang CLOSED DOWN 40.65 POINTS OR 0.17% . The Nikkei closed DOWN 176.09 POINTS OR 0.91% /Australia’s all ordinaires  CLOSED DOWN 0.76%/Chinese yuan (ONSHORE) closed UP at 6.8695/Oil ROSE to 54.36 dollars per barrel for WTI and 56.48 for Brent. Stocks in Europe MOSTLY IN THE RED. Offshore yuan trades  6.8612 yuan to the dollar vs 6.8695  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS A BIT AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN WEAKER AS IS OFFSHORE YUAN COUPLED WITH THE WEAKER DOLLAR

3a)THAILAND/SOUTH KOREA/NORTH KOREA

North Korea executes 5 military officers for telling false news

(courtesy zero hedge)

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

i)EU/Target 2 imbalances

 

The following is a must read.  I have been highlighting to you over the past several years, the problems in Europe with the huge target 2 imbalances.  Because we have various countries using the same currency, it would bound to happen that one country would get surplus balances of euros and the poorer countries would accumulate deficits.  And that is what is happening:  Germany and Luxembourg have huge positive balances, with Germany at 795 billion euros and Luxembourg at 175 billion. Italy has the worse deficit at 357 billion euros followed by Spain’s 328/  Deficits occur when two things happen:

  1. trade goes one way i.e. Germany exports to Italy but Italy does not export to Germany.
  2. Citizens realize that their country’s finances’s are awful and they sell their Italian accounts and move them over to Germany etc.

ladies and gentlemen;  the European debt bomb (target 2) has been lit

( Mish Shedlock/Mishtalk)

ii)The Netherlands

The Netherlands are getting scared:  The Dutch Parliament is debating leaving the Eurozone:

( Mish Shedlock/Mishtalk)

iii)Germany/Greece
Sunday;  German deputy finance minister Jens Spahn in an interview claims that Greece must be not be granted a “bail in”.  In other words creditors must not take a haircut.  This would put Germany at odds with the iMF who wants all creditors to take a haircut on their debt.  The reason of course that Germany et al  cannot take a haircut as this would blow up Deutsche bank’s derivative mess:
( zero hedge)

 

iv)France

Fears of a French European exit mounts

( zero hedge)

v))IMF/Spain

More corruption prosecutions as former IMF head Rato sent to prison in the Bankia scandal

( Matt Agorust./ActivistPost.com)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Iran

This ought to get gold higher: Iran holds a massive naval drill:

( zero hedge)

ii)Russia

Strange!! six Russian diplomats have died in the last 60 days:

(courtesy zerohedge)

6.GLOBAL ISSUES

If Trump proposes tariffs especially on importing cars from Mexico, then the Mexicans will walk away from NAFTA

( zero hedge)

7. OIL ISSUES

none today

8. EMERGING MARKETS

none today

9.   PHYSICAL MARKETS

i)SUPER COMMENTARY TONIGHT FROM CHRIS POWELL, ON WHY CENTRAL BANKS LEASED GOLD AND HOW THEY ORCHESTRATED THAT POWER OVER VALUATIONS OF ALL CAPITAL, GOODS AND LABOUR

a must read.

( Chris Powell/GATA)

ii)Ralph Benko advocates a gold standard instead of using the USA dollar as the reserve currency

( Ralph Benko/ Forbes/GATA)

iii)How could this be possible?  The Royal Canadian Mint actually lost money last year despite the huge profit margins on the coins they make

( CBC/Toronto/GATA)

iv)Jan (Koos Jansen) has received his Freedom of information on the USA gold audit at the 4 sites including Fort Knox.  There is not doubt that the audit was handled by flunkees and there are serious holes in their report to him

( Koos Jansed/Bullionstar)

v)Bill Holter tackles how the gold reset might occur.  I believe he is correct

a must read..

(courtesy zero hedge)

vi)China is fearing another surge in inflation and as such they are launching another probe into commodity futures

( zero hedge)

10.USA STORIES

i)Durable goods orders tumbled last month, the most since June.

( zero hedge)

ii)Pending home sales falter to its lowest levels in a year and it is getting worse!

( zero hedge)

iii)Soft data, Dallas Fed soars for its 6th straight month and it is now at 11 year highs

( zero hedge)

iv)More confusion from the Trump administration:  Mnuchin states that tax reform will not be ready until August and what is good for gold/silver, he states that entitlements like social security and medicare will not be touched

( zero hedge)

v)More confusion from the Trump camp:  He is advocating huge increase in military spending but a drastic cut to domestic state department spending like the EPA

( zerohedge)

vi)This is big:  Trump seeks a monstrous 54 billion USA INCREASE in defense spending

( zero hedge)

vii)A terrific commentary from Wolf Richter on the USA restaurant business.  Flat sales are now a huge welcome as  USA citizens feel the bite of lower after tax wages coupled with higher inflation.  Restaurants have had to increase prices and this has caused their industry to tank

( Wolf Richter/WolfStreet)

viii)The following is a must view and read.  March 15 is coming and that is when the bloodbath begins as the debt ceiling well be frozen as of that debt.

a must read….

( Greg Hunter/USAWatchdog)

Let us head over to the comex:

The total gold comex open interest ROSE BY ONLY 325 CONTRACTS UP to an OI level of 452,365 DESPITE THE HUGE RISE IN THE  PRICE OF GOLD ( $10.60 with FRIDAY’S trading). We are now in the contract month of FEBRUARY and it is one of the better delivery months  of the year. In this next big active delivery month of February we had a LOSS of 637 contracts DOWN to 65.   We had 638 notice(s) served upon yesterday and therefore we GAINED 1 contracts or an additional 100 oz will NOT stand for delivery and  IT LOOKS LIKE THE CASH SETTLEMENTS HAVE NOW STOPPED AS WE ARE AT THE END OF THE DELIVERY CYCLE MONTH . The next non active contract month of March saw it’s OI FALL by 224 contracts DOWN TO 825. The next big active month is April and here the OI FELL by 1674 contracts DOWN to 292,321.

We had 65 notice(s) filed upon today for 6500 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
 And now for the wild silver comex results.  Total silver OI FELL by 2797 contracts FROM 212,096 DOWN TO 209,299   DESPITE THE FACT THAT THE PRICE OF SILVER ROSE TO THE TUNE OF 20 CENTS AND BROKE THROUGH CLEARLY THE 18 DOLLAR BARRIER with respect to FRIDAY’S trading. WE HAD CONSIDERABLE SHORT COVERING IN THE SILVER ARENA ON FRIDAY. We are moving CLOSER TO the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The closing price of silver that day: $20.44

The  active month of February saw the OI FALL BY 54  contract(s) DOWN TO 13.  We had 16 notice(s) served YESTERDAY so we LOST 41 CONTRACTS OR AN ADDITIONAL 205,000 WILL NOT STAND FOR DELIVERY AND THESE WERE CASH SETTLED FOR A FIAT BONUS.

The next big active delivery month is March and here the OI decrease by 15,164 contracts down to 17,360 contracts WITH 1 TRADING DAY LEFT BEFORE FIRST DAY NOTICE, TOMORROW. For comparison purposes last year on the same date only 11,876 contracts were standing.(WITH 1 TRADING DAY TO GO BEFORE FIRST DAY NOTICE)

For historical reference: on the first day notice for the March/2016 silver contract:  19,020,000 oz.

However the final amount standing at the end of March 2016:  6,755,000 oz as the banker boys were busy convincing holders of many silver contracts to cash settle.

We had 13 notice(s) filed for 65,0000 oz for the FEBRUARY contract.

VOLUMES: for the gold comex

Today the estimated volume was 182,945  contracts which is  fair.

Yesterday’s confirmed volume was 234,505 contracts  which is good

volumes on gold are getting higher!

FINAL standings for FEBRUARY
 Feb 27/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
201.25 OZ
Scotia
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
32,150.000 oz
JPMorgan
No of oz served (contracts) today
 
65 notice(s)
6500 oz
No of oz to be served (notices)
0 contracts
NIL oz
Total monthly oz gold served (contracts) so far this month
6023 notices
602300 oz
18.7340 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  319,409.1   oz
Today we HAD 0 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil oz
We had 1 customer withdrawal(s)
 i) Out of Scotia:  201.25 oz
total customer withdrawal: 201.25 oz
We had 0  adjustment(s)
For FEBRUARY:

Today, 0 notice(s) were issued from JPMorgan dealer account and 580 notices were issued from their client or customer account. The total of all issuance by all participants equates to 65 contract(s)  of which 18 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the FEBRUARY. contract month, we take the total number of notices filed so far for the month (6023) x 100 oz or 602,300 oz, to which we add the difference between the open interest for the front month of FEBRUARY (65 contracts) minus the number of notices served upon today (65) x 100 oz per contract equals 602,300 oz, the number of ounces standing in this  active month of FEBRUARY.
 
Thus the INITIAL standings for gold for the FEBRUARY contract month:
No of notices served so far (6023) x 100 oz  or ounces + {(65)OI for the front month  minus the number of  notices served upon today (65) x 100 oz which equals 602,300 oz standing in this non active delivery month of FEBRUARY  (18.734 tonnes)
 
 we GAINED 1 contracts or an additional 100 oz will  stand in this active delivery month. 
 
 
 
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On first day notice for FEB 2016, we had 20.124 tonnes of gold standing. At the conclusion of the month we had only 7.9876 tonnes standing. The data suggests that we had almost identical amounts standing in Feb ’16 and Feb 2017; however today’s totals already surpassed the final amt which eventually stood  in 2016.(already 18.7340 tonnes vs 7.9876 at the end of Feb/2016).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 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.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9004 tonnes
FEB/ 18.734 tonnes
total for the 14 months;  244.729 tonnes
average 17.480 tonnes per month vs last yr  59.51 tonnes total for 14 months or 4.250 tonnes average per month (last yr).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 1,418,640.029 or 44.125 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,942,235.978 or 278.140 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.140 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 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!

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 6 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE FEBRUARY DELIVERY MONTH
FEBRUARY FINAL standings
 feb 27. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
647.644.07 0z
 Brinks
CNT
Scotia
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 1,838,578.860 oz
Scotia
CNT
No of oz served today (contracts)
13 CONTRACT(S)
(65,000 OZ)
No of oz to be served (notices)
0 contracts
(NIL  oz)
Total monthly oz silver served (contracts) 614 contracts (3,070,000 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   7,889,816.3 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of Brinks:  22,974.57 oz
ii) Out of CNT: 619,885.400 oz
iii) Out of Scotia; 4,784.100 oz
TOTAL CUSTOMER WITHDRAWALS: 647.644.07 oz
 we had 2 customer deposit(s):
i) Into Scotia: 1,238,770.560  oz
ii) Into CNT: 599,808.300 oz
***deposits into JPMorgan have now stopped.
total customer deposits;  1,838,578.860  oz
 
 we had 1  adjustment(s)
i) out of CNT:  619,168.330 oz leaves the dealer and enters the customer account of CNT
The total number of notices filed today for the FEBRUARY. contract month is represented by 13 contract(s) for 65,000 oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at 614 x 5,000 oz  = 3,070,000 oz to which we add the difference between the open interest for the front month of feb (13) and the number of notices served upon today (13) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the FEBRUARY contract month:  614(notices served so far)x 5000 oz  + OI for front month of FEB.( 13 ) -number of notices served upon today (13)x 5000 oz  equals  3,070,000 oz  of silver standing for the Feb contract month. This is  huge for a non active delivery month in silver. 
We lost 41 contracts or an additional 205,000 oz will not stand for delivery as the banker boys used a fiat cash settlement because they could not find physical supplies. It is totally unheard of for longs waiting the entire month for physical and then they roll??
At first day notice for the FEB/2016 silver contract month we initially had 515,000 oz standing for delivery.  By the conclusion of the delivery month we had 835,000 oz stand as some of the bankers required immediate silver inventory.
END
Volumes: for silver comex
Today the estimated volume was 92,045 which is huge!!!
FRIDAY’S  confirmed volume was 138,817 contracts  which is totally unbelievable.
To give you an idea of volume today’s confirmed volume::  138,817 contracts equates to 694 million oz or 99.14% of ANNUAL GLOBAL PRODUCTION EX CHINA EX RUSSIA
 
Total dealer silver:  30.619 million (close to record low inventory  
Total number of dealer and customer silver:   185.276 million oz
The total open interest on silver is NOW CLOSER TO   its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD

feb 27/no change in gold inventory at the GLD/Inventory rests at 841.17 tonnes

Feb 24/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 23/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 22/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 21/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

feb 17/a withdrawal of 2.37 tonnes of gold from the GLD/Inventory rests at 841.17 tonnes

FEB 16/we had no changes in the GLD inventory today/Inventory rests at 843.54 tonnes

Feb 15./another deposit of 2.67 tonnes of gold into the GLD inventory despite another attempted whacking of gold/inventory rests at 843.54 tonnes

FEB 14/another deposit of 4.14 tonnes of gold into the GLD inventory/rests at  840.87 tonnes

FEB 13/another deposit of 4.15 tonnes of gold into the GLD/Inventory rests at 836.73 tonnes

Feb 10/no changes at the GLD/Inventory rests at 832.58 tonnes

feb 9/no changes at the GLD/Inventory rests at 832.58 tonnes

Feb 8/another “deposit” of 5.63 tonnes of gold into the GLD/The addition is a paper addition/total inventory: 832.58 tonnes

Feb 7/another huge fake deposit of 8.30 tonnes of gold into the GLD/the addition is a paper addition and no doubt not physical/ total inventory: 826.95 tonnes

FEB 6/a huge deposit of 7.43 tonnes of gold into the GLD/Inventory rests at 818.65 tonnes

FEB 3/no change in gold inventory at the GLD/Inventory rests at 811.22 tonnes

Feb 2/another huge deposit of 1.48 tonnes/inventory rests at 811.22 tonnes

Feb 1/a huge “deposit” of 10.67 tonnes of gold into the GLD/Inventory rests at 809.74 tonnes.  this should stop GLD from sending gold to Shanghai.

JAN 31/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

jan 30/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

Jan 27/no changes at the GLD/Inventory rests at 799.07 tonnes

Jan 26/no changes at the GLD/Inventory rests at 799.07 tonnes/

jan 25/another exactly the same withdrawal as yesterday: 5.04 tonnes and again this was used in the whacking of gold today/inventory rests at 799.07 tonnes

jan 24/a huge withdrawal of 5.04 tonnes and probably this was used today in the whacking of gold/inventory rests at 804.11 tonnes

Jan 23/a big change/this time a deposit of 1.19 tonnes of gold into the GLD/inventory rests at 809.15 tonnes.  The drainage of gold from the GLD to Shanghai has now stopped!

Jan 20/no changes in gold inventory a the GLD/Inventory rests at 807.96 tonnes

Jan 19/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 18/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 17/17/a deposit of 2.96 tonnes of gold/inventory at the GLD rests at 807.96 tonnes.  I guess there is no more gold inventory to sent to C+Shanghai

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Feb 24/2017/ Inventory rests tonight at 841.17 tonnes
*IN LAST 98 TRADING DAYS: 108.64 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 45 TRADING DAYS: A NET  16.57 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017:    42.10 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory
FEB 27/no change in inventory at the SLV/Inventory rests at 335.281 million oz/
FEB 24/no changes in inventory at the SLV/Inventory rests at 335.281 million oz.
FEB 23/no changes in inventory at the SLV/Inventory rests at 335.281 million oz
FEB 22/no changes in inventory at SLV/inventory rests at 335.281 million oz
FEB 21/a deposit of 568,000 oz into the SLV/Inventory rests at 335.281 million oz
feb 17/2017/again no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz/
FEB 16/we had no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz/
Feb 15./no changes in silver inventory at the SLV/inventory rests at 334.713 million oz
FEB 14/no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz
FEB 13/no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz
Feb 10/no change in silver inventory at the SLV/Inventory rests at 334.713 million oz
Feb 9/no changes in silver Inventory rests at 334.713 million oz
feb 8/No changes in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 7/no change in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 6/a we had no changes at the SLV/Inventory rests at 334.713 million oz
FEB3/ a tiny withdrawal of 136,000 oz to pay for fees etc/inventory rests at 334.713 million oz
Feb 2/no changes in silver inventory at the SLV/Inventory rests at 334.849 million oz
Feb 1/a withdrawal of 948,000 oz from the SLV/Inventory rests at 334.849 million oz
Jan 31.no change in inventory at the SLV/Inventory rests at 335.797 million oz
jan 30/no change in inventory at the SLV/Inventory rests at 335.797 million oz
Jan 27/we had a deposit of 758,000 oz into the SLV/Inventory rests at  335.797 million oz
Jan 26./ a huge withdrawal of 2.369 million oz from the SLV/Inventory rests at 335.039 million oz
Jan 25./another changes at the SLV/Inventory rests at 337.408 million oz
jan 24/ a withdrawal of 948,000 oz at the SLV/Inventory rests at 337.408 million oz
Jan 23/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 20/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
jan 19/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 18/no changes in silver inventory/inventory rests at 338.356 million oz/
Jan 17/no change in silver inventory at the SLV/Inventory rests at 338.356 million oz/
.
Feb 27.2017: Inventory 335.281  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 9.0 percent to NAV usa funds and Negative 8.5% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.1%
Percentage of fund in silver:39.7%
cash .+0.2%( feb 27/2017) 
.
2. Sprott silver fund (PSLV): Premium falls  to -.77%!!!! NAV (Feb 27/2017) 
3. Sprott gold fund (PHYS): premium to NAV falls to  – 0.30% to NAV  ( feb 27/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.77% /Sprott physical gold trust is back into NEGATIVE territory at -0.30%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE

Oscars Debacle – Movies More Costly As Dollar Devalued

  • Cost of Best Picture winners show very significant devaluation of the dollar
  • Average cost to make an Oscar winning film is over $43 million – in gold terms, this is over 106,000 ounces
  • Four $15 million films show nearly 100% difference when priced in gold ounces
  • Oscar fiasco was courtesy of error by accountants PWC
  • Whilst the price of the films remained the same, the cost in gold ounces fell from 11.53% of the cost to make the Departed, in 2009 to just 6.4% in 2012
  • In an error prone, irrational and volatile world, gold retains value over time …

snip20170227_4

The Oscars – the drama of the dollar

Oscars night seemingly sent Warren Beatty and Faye Dunaway a bit La La as they declared the wrong film the winner of the Best Picture Award at the Oscars, last night.

Instead of announcing ‘Moonlight’ as the winner of the industry’s highest accolade, they read out ‘La La Land’. Cue a few awkward moments, no doubt some heads rolling behind the scenes of the Dolby Theatre and a Daily Mail headline of ‘FAKE OSCARS FIASCO.’

Which it wasn’t really, just a bit odd after a very slick night.

Moonlight was the story of a man who grows up unsure and occasionally uncomfortable about who he is. La La Land is a musical love story about a couple trying to make it in LA – a city known for destroying hopes and throwing many hopefuls to the wayside. Both narratives are not unfamiliar to the world in which we find ourselves. Unfortunately our world is not a fantasy and will certainly not be done with our attentions in just over two hours.

When we wrote about the Oscars last week, we asked if they were Worth Their Weight in Gold and concluded that whilst we might dream in gold just like the glitterati, perhaps gold bullion would be a better investment for most of us. We showed that the price of gold has climbed 60 times ever since the first ceremony in 1929, a sobering example of the devaluation of fiat currencies in the last 88 years.

Whilst we think the devaluation of the dollar, and the maintained value of gold is the lesson to take away, there are a number of different lessons actors, directors and studios would like the critics and viewers to believe they can draw from their masterpieces. For some this is about the big bucks and box office numbers, and how they can make or break a film.

We agree, today there a few examples around that really show how little value the dollar carries.

Now that we are on the other side of the most 89th Academy Awards we take a look at what we can learn from last night’s behemoth that was the Oscars and the films that they work to honour.

Cost of making Best Picture

 In the last twenty years, the average cost to make an Oscar winning film is over $43 million. In gold terms it is over 106,000 ounces.

The above graph doesn’t mean very much though, just that the cost of films go up and down, no matter what currency you decide to price it in.

In the decade of the financial crisis, this has come down somewhat and the average is more like $27 million, or 29,600 ounces. This statistic alone shows you how the dollar is falling in real value. Whilst the average cost in US Dollars to make a winning film is 60% in the last decade, compared to the average in the last 20 years, it is just 27% of the 20 year average when priced in gold ounces.

When you rebase to 100, using 2007 as the base year, then you begin to see some interesting results. Conveniently, Martin Scorcese’s 2007 The Departed is the most expensive Best Picture film in the last decade, cost ing $90 million. This was equal to just over 150,000 ounces of gold. No film since then has cost as much. Lincoln was close, costing just 72% of the price of Scorcese’s epic gangster film, but interestingly when priced in gold it cost just 26% percent of the Departed’s gold budget, with 39,000 ounces needed to fund the biopic.

snip20170227_3

The $15 million question

Perhaps as a sign of the times, Best Picture winners have been getting cheaper in recent years. Moonlight cost just $5 million to make, the lowest price for a winning film in at least two decades. It was also the cheapest in terms of gold ounces, costing just 3,997 ounces.

It is when we look at years when films are significantly cheaper that we see real evidence of gold’s purchasing power in the land of stars. Between 2009 and 2012 each Best Picture winner cost $15 million. This is 17% of the cost to make The Departed. One unfamiliar with gold’s ability to hold value would probably think that it costs a similar amount in gold ounces, but unsurprisingly this is not the case.

Whilst the price of the films remained the same, the cost in gold ounces fell from 11.53% of the cost to make the Departed, in 2009 to to just 6.4% in 2012.

snip20170227_2

One can easily conclude that had film financiers bought gold at the start of the financial crisis then there films would have cost far less to make.

Does more money mean more gold?

One would assume that when we hear phrases such as ‘the highest grossing film of all time’, then it’s something Donald Trump would say and you would wonder if it was true or not…or in this day and age maybe you would believe that it is actually the highest grossing film of all time. But when you look at the box office takings in terms of real money, gold, then it tells a different story and this is a case of FAKE NEWS!

Really? Hollywood lied? Yes, we can prove it.

The King’s Speech made the most fiat money at the Box Office in the last ten years, nearly 29% more than the Departed (which comes in second). But it only made 63% of the Departed’s takings, when priced in gold. This means it made less in gold ounces, than the Departed, and yet fiat currencies would have us believe that it was nearly 30% more successful.

This year’s winner, Moonlight, was not only the cheapest film to win in the last decade, but also the lowest in terms of takings. This is true for both dollars and gold ounces. However the percentage difference is drastically different – by over 100%.

Moonlight made 7.4% of the amount the Departed made in 2007 when priced in USD. But when it comes to gold it made just 3.6% of the Departed’s takings.
snip20170227_1


Conclusion – Never trust the favourite…or an accountant … or fiat currencies …

For all of Reagan’s and now, Donald Trump’s talk about ‘draining the swamp’ it seems that maybe Hollywood needs to perhaps consider doing the same. The fault of the Oscar mishap was courtesy of big accountancy firm Price Waterhouse Coopers.

Just a few days ago Martha Ruiz and Brian Cullina, the two PWC bods responsible for handing the correct envelopes to the presenters were interviewed about their roles as the only individuals who know the results before the winners do.

Cullina told the Art and Science blog, “The producers decide what the order of the awards will be. We each have a full set. I have all 24 envelopes in my briefcase; Martha has all 24 in hers. We stand on opposite sides of the stage, right off-screen, for the entire evening, and we each hand the respective envelope to the presenter. It doesn’t sound very complicated, but you have to make sure you’re giving the presenter the right envelope.”

Turns out that it wasn’t as simple as they were hoping to be, hence three producers thanking wives and families for supporting them in making a film that it turned out didn’t win the most coveted Oscar.

The speeches of the losing side were all about how this shows that dreams really can come true. How ironic. It seems a good analogy for what we see today, false investment hopes and false monetary rewards that can ultimately be ripped away on a moments’ notice thanks to some silly administration error by a firm or bank who isn’t held accountable.

The difference with physical gold bullion bars and coins is that it can’t just be made to disappear. You don’t have to worry about a counter party making a mistake and vanishing your hard earned rewards and wealth into thin air.

But, this can be tough to believe when gold is consistently downplayed by the mainstream.

For the last three years the bookies’ favourite has failed to spark the interest of Academy voters when it comes to the Best Picture Award. Boyhood in 2015, The Revenant in 2016, and now La La Land have each been touted as winners but have been left disappointed on the night.

This is very much reflective of the mainstream’s approach to gold. It is consistently dismissed as something that is a bit too kooky to do well and one shouldn’t focus on it in the long-term, instead we should look at stock markets and big tech companies and definitely save in fiat currencies like the dollar, the pound and the euro.

But, as our analysis shows, gold has been the consistent winner alongside all of those Big Picture winners, underdogs or not.

Billion of dollars are ploughed into these films, whether they are huge A-list casts or made up of Indie newbies. While the dollar cost of movies has been falling in recent years – in real terms – in gold terms the cost is rising.

Movie producers, companies and investors should consider owning physical gold in order to hedge the declining value of the dollar and other fiat currencies.

Whilst the price of gold, like any tradeable asset or currency does fluctuate, analyses such as ours above shows that gold retains value over the long term.

end

 

SUPER COMMENTARY TONIGHT FROM CHRIS POWELL, ON WHY CENTRAL BANKS LEASED GOLD AND HOW THEY ORCHESTRATED THAT POWER OVER VALUATIONS OF ALL CAPITAL, GOODS AND LABOUR

 

a must read.

 

(courtesy Chris Powell/GATA)

Central banks may have been evil with gold but not stupid

Section:

10:27a ET Saturday, February 25, 2017

Dear Friend of GATA and Gold:

In commentary yesterday headlined “Will the Fed Tell Every American to Buy Gold Before It Destroys the Dollar?,” Swiss gold fund manager Egon von Greyerz mocked Western central banks for selling so much of their gold at market lows between 1999 and 2004:

https://goldswitzerland.com/will-the-fed-tell-every-american-to-buy-gold…

Von Greyerz suggests that this was errant stupidity by the central banks. But there is a more plausible scenario, a scenario in which the gold sales by Western central banks made perfect sense from their perspective.

..

That is, at the turn of the century Western central banks long had been leasing their gold to financial houses that also operated as bullion banks, purportedly to earn a little interest on a supposedly dead asset. But as Federal Reserve Chairman Alan Greenspan disclosed, perhaps inadvertently, in testimony to Congress in July 1998, the purpose of gold leasing was actually to suppress the price of the monetary metal, which is a competitor to government currencies and a determinant of government bond prices:

https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

Greenspan meant his testimony to discourage Congress from trying to regulate derivatives in the commodity markets — probably because central banks were already manipulating those markets surreptitiously using derivatives and intermediaries, as was indicated years later by reports filed by commodity-exchange operator CME Group with the U.S. Commodity Futures Trading Commission and Securities and Exchange Commission:

http://www.gata.org/node/14385

http://www.gata.org/node/14411

Any serious regulation of commodity derivatives as contemplated by Congress would have risked exposing this market intervention by central banks.

In regard to gold, Greenspan testified: “Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.”

That is, Greenspan was telling Congress not to worry about the market-manipulating potential of derivatives, and especially not to worry about manipulation of the gold market, because central banks themselves already were using derivatives to keep the commodity markets under control.

The British economist Peter Warburton picked up on this three years later in his essay “The Debasement of World Currency — It Is Inflation, But Not as We Know It”:

http://www.gata.org/node/8303

Warburton wrote that central banks easily could use big financial houses as intermediaries to control the commodity markets with derivatives and thereby prevent monetary inflation from showing up in consumer prices. For an effective hedge against inflation, Warburton wrote, investors would have to find commodities free of futures markets and thus free of the price-suppressive influence of the derivatives trading inspired and underwritten by central banks.

As it turned out, by the year 2000 gold leasing by central banks and the gold carry trade it supported had gone a little too far.

Financial houses had borrowed central bank gold at negligible interest rates, sold it for cash, and invested the cash in government bonds, collecting a handsome spread while helping Western governments support their currencies and bonds. This trade was risk-free trade as long as the financial houses had assurance that central banks would always inject more gold into the market as necessary. But the dishoarding of gold by central banks through the gold carry trade eventually drove the monetary metal’s price so far below the cost of production that production declined, shortages developed, and the market started to reverse upward.

At that point central banks could not recover their leased gold from the financial houses without worsening the shortage, exploding the gold price, and ruining the financial houses. So the central banks began selling gold — or, rather, every few weeks they announced that they were selling gold.

But actually the central banks were only arranging cash settlement of their gold leases and not requiring the gold’s return. This rescued the financial houses the central banks had used as cover for their interventions in the gold market.

Why is this a better explanation of the central bank gold sales that von Greyerz mocks as simple stupidity?

Because during the years in question, even as every few weeks brought another announcement of a central bank gold sale, the gold price nevertheless rose steadily by 60 percent, from roughly $250 to $400:

http://www.infomine.com/investment/metal-prices/gold/all/

The price would not have risen steadily if the gold whose sales were being announced was actually hitting the market.

But the price would have risen steadily if the gold in the purported sales had been leased and sold into the market long before and if the sales being announced were actually just the cancellation of leases on terms favorable to the financial houses.

Yes, Western central banks must have lost a lot of gold in this operation. But they bought themselves and their allied financial houses a couple of decades of supreme power over international politics and markets. And since the central banks retain the power to create infinite money, if they ever run out of the real metal necessary for market rigging, they can create as much money as necessary to repurchase it, run its price up, devalue their currencies to erase the immense and unpayable public debts that have been created by Western governments, and thereby avert a catastrophic debt deflation, as the Scottish economist Peter Millar noted a decade ago they have to do periodically:

http://www.gata.org/node/4843

Then they can renew their gold price suppression scheme for another half century at a more sustainable level and maintain their control over markets.

Western central banks may be the corrupt and even evil instruments of the financial class, and to preserve their power they may be prepared to do any amount of damage to the world, particularly by destroying markets, the engines of humanity’s economic progress.

But stupid? Not when central banks have gained and kept control of the world’s money and thus control of the valuation of all capital, labor, goods, and services in the world. What’s stupid is any society that doesn’t rise up against them or at least demand disclosure of their surreptitious operations.

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

 

END

 

Ralph Benko advocates a gold standard instead of using the USA dollar as the reserve currency

(courtesy Ralph Benko/ Forbes/GATA)

Ralph Benko: Trump should make a beachhead for gold at the Fed

Section:

2:10p ET Saturday, February 25, 2017

Dear Friend of GATA and Gold:

Ralph Benko of the Committee to Unleash Prosperity today describes how President Trump should create a “beachhead” of gold standard advocates on the Federal Reserve Board in pursuit of making America great again. Benko’s commentary is headlined “President Trump: Replace the Dollar with Gold as the Global Currency to Make America Great Again” and it’s posted at Forbes.com here:

https://www.forbes.com/sites/ralphbenko/2017/02/25/president-trump-repla…

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

 

END

How could this be possible?  The Royal Canadian Mint actually lost money last year despite the huge profit margins on the coins they make

(courtesy CBC/Toronto/GATA)

Royal Canadian Mint struggles to make money, documents show

Section:

By Dean Beeby
Canadian Broadcasting Corp. News, Toronto
Saturday, February 25, 2017

The Royal Canadian Mint just isn’t making the money it used to.

Revenue is down sharply, jobs have been chopped, morale is in the tank, and formerly successful lines of business are being shut down — even as the mint spends millions of dollars on new executive offices.

Once a cash cow, the mint — which actually lost money in 2015 — is struggling financially.

Latest figures for the third-quarter of 2016 show that revenues were down by $208 million, or about 27 percent, and profits were down by $6.5 million, or 61 percent.

The weak financials mean the mint’s 1,200 employees likely won’t get their general annual bonus, which is based on meeting corporate profit targets. In April 2016 each worker took home an average of $8,204 in bonuses. …

… For the remainder of the report:

http://www.cbc.ca/news/politics/royal-canadian-mint-coins-silver-bullion…

 

END

 

Art Cashin correctly states that he is worried about central bank interference in the USA markets:

(courtesy Kingworldnews/Art Cashin)

 

Cashin tells KWN he’s worried about central bank interference in the markets

Section:

6:15p ET Sunday, February 26, 2017

Dear Friend of GATA and Gold:

Art Cashin, director of floor operations for UBS at the New York Stock Exchange and a commentator for CNBC, tells King World News today that he is concerned about interference in the markets by central banks. Cashin’s interview is excerpted at KWN here:

http://kingworldnews.com/alert-legend-art-cashin-just-issued-a-dire-warn…

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

 

END

 

Jan (Koos Jansen) has received his Freedom of information on the USA gold audit at the 4 sites including Fort Knox.  There is not doubt that the audit was handled by flunkees and there are serious holes in their report to him

(courtesy Koos Jansed/Bullionstar)

U.S. Mint flunks Koos Jansen’s gold audit document request, refunds his fee

Section:

6:54p ET Sunday, February 26, 2017

Dear Friend of GATA and Gold:

Gold researcher Koos Jansen reports tonight that the U.S. Mint has provided him with some documents in response to his freedom-of-information request for documents related to audits of the U.S. gold reserve but the documents provided are incomplete, redacted, and hundreds of pages short of the number of pages he was told were involved for which he was charged, and so the Mint has refunded his payment.

As the money for his payment was raised by crowdfunding from his readers, Jansen is refunding their contributions.

This is more proof that something dishonest has been going on with the U.S. gold reserve.

Jansen’s report is headlined “U.S. Mint Releases New Fort Knox ‘Audit Documentation’ — the First Critical Observations” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/koos-jansen/us-mint-releases-new-fort-…

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

 

END

 

China is fearing another surge in inflation and as such they are launching another probe into commodity futures

(courtesy zero hedge)

 

Fearing A Surge In Inflation, China Launches Probe Into Commodity Futures, “Distorted” Prices

One and a half years after the Chinese government violently burst the stock market bubble, leading the massive losses among retail investors, and months after China’s third housing bubble since the financial crisis appeared to have peaked, also China has found itself with yet another hot-money funded bubble: commodities. And perhaps in hopes of intercepting this latest mania before it gets too big, overnight China’s top economic planner, the National Development & Reform Commission – not a market regulator, but the core agency behind China’s goalseeked economic data – announced it is investigating whether speculation has “distorted” commodity futures prices, due to concerns that the recent rally will drive inflation higher, according to Bloomberg.

In recent weeks, the NDRC has questioned futures brokers whether “price distortion” had occurred, which is a polite way of saying the buying mania has gone too far. The agency is worried over the potential impact on producer and consumer prices. China’s worries are understandable: with commodity prices surging, whether due to speculators or simply tight supply and rising demand, China’s producer prices soared in January by 6.9%, the highest level since the inflationary scare of 2011.

This is the second time China has intervened in the commodity market in the past year: Beijing tightened rules and raised fees on commodities trading last spring, as it sought to clamp down on a speculative frenzy that spurred a rapid run-up in prices and unprecedented volumes. As shown below, when it comes to commodities in China, traders periodically swarm any given asset class, sending it through the roof, only to pull back once the price starts to drop or when the government hints at an imminent crackdown on buyer euphoria.

Despite the government’s best efforts however, due to an overabundance of hot money, steel and iron ore futures have continued to rise on government stimulus, capacity cuts and a steadying in the economy of the world’s biggest metals consumer. Despite the occasional wipe out, most recently in December…

… the levitation in China’s commodity sector has continued. Steel reinforcement bar on the Shanghai Futures Exchange rose to its best level since Dec. 2013 on Monday, while iron ore on the Dalian Commodity Exchange was close to its May 2014 peak. However, trading in the contracts remains well below last year’s heady heights.

On Sunday, Fang Xinhai, vice chairman of market regulator, the China Securities Regulatory Commission, said that China doesn’t want inflated trading volumes, according to an online transcript.

Suggesting that yet another government intervention in the commodity market may be imminent, he said last year’s crackdown on speculation was “satisfactory” and that regulators will “stick to last year’s philosophy” when it comes to supervising futures. He added that the government will look at new measures to enhance pricing, such as attracting more industrial users to participate in the market.

The NDRC has also consulted with institutions including equity brokers on the outlook for commodity prices, according to Bloomberg’s sources. That’s about as close as Beijing gets to warning the country’s brokers that the Politburo is displeased with how high prices have risen. All else equal, the near-term price path for Chinese commodities is likely lower.

 

Bill Holter tackles how the gold reset might occur.  I believe he is correct

a must read..

(courtesy zero hedge)

“In The Name Of Fairness”, A Very Touchy Subject…

Posted February 25th, 2017 at 9:57 PM (CST) by & filed under Bill Holter.

When it comes to the latest US stance vis-a-vis China’s currency manipulation, the jury is out, and based on two recent statements it is more confused than ever.

Religion and politics, are both hot button issues no matter how you slice it, touchy subjects, if you will. Speaking, or writing about them, usually elicits rage, or anger …especially when they are mentioned together, or connected. Un-noticed by most is a ground shaking occurrence, whereby these two highly explosive issues are being joined at the hip. I do not want to anger anyone over their beliefs, so what I write below is entirely my observations of what is seemingly non-apparent to the financial community and to the public at large.

The issue at hand is a potential game changer; negotiations between the two largest holders of gold in the world; “a deal between china and the vatican”.

It was reported yesterday… the Pope has been in talks with China to advance, or bring into the open the Catholic Church’s presence in China; aka Christianity within the nation.

First, I highly doubt these talks are still in the preliminary stages. Rather, the reported negotiations are probably more of a “trial balloon” to a done deal, substantially already made. As you can see here, there is dissent and fear regarding any deal made. I deeply believe, that on the surface, the “public” side of the argument has far more meaning than meets the eye, maybe I am being too cynical, but I have given what I present here with considerable thought. I have a potential theory, if it is incorrect so be it, but the topic is certainly worth exploring in depth.

Some background; you may remember, that in the middle of last year we had a number of world leaders (including President Xi, Obama and the Pope) publicly mention a common refrain, about a “more equal and fair world, as well as a more equal distribution of wealth in the world”? BINGO!…I took these statements to be a veiled warning, of an upcoming “reset” among nations and peoples, whereby the rich, those country’s on the Dollar Standard, would lose wealth and purchasing power to those countries who’s standard of living suffered under Dollar Inflation (the poor). The most obvious way to accomplish this is seemingly a strategic move to reorganize the world trading standard, or even abolishing the dollar as the world’s reserve currency. This makes sense, as I view it, because the U.S. (West) has advantages when it comes to standard of living via borrowing or outright printing money to consume other countries productivity and natural resources. Please keep this thought in mind while reading further.

No matter what you hear or read about China being a “capitalistic” nation, their roots are Marxist, Socialist, or whatever term you would like to use. “Free market capitalists” they are not,

THESE ARE COMMAND ECONOMIES.

Judging from many statements by the Pope, he is also a socialist and as mentioned,…has also spoken of a “more equal and fair distribution of wealth in the world”. From a political ideology standpoint, the Vatican’s influence under a Jesuit Pope and China ruled by an appointed leader are in many ways very close in their world views, in my opinion.

So, what to make of all this? Is the Pope trying to spread Catholicism and China openly embracing it, or is this happening tied to something much, much deeper in fact? Let’s take a step back and look at a couple of commonalities they each hold. First, they each have, or reach, a huge population of over 1 billion people in some form or another. Combined, Catholics and Chinese represent roughly two of every seven people on the planet, or close to 30%. Let’s call this a huge base, for lack of a better term.

Secondly, and much more important, though not “official”, China is THE largest holder of gold on the planet …followed by none other than; The Vatican! Yes, you may tell me the U.S. is “THE” largest holder of gold, with 8,100 tons and you would be “officially” correct …but wrong in reality, as explained many times prior, as the Fed and Treasury continue to resist an audit of same. On the back of a napkin I can show China accumulating 20,000 tons or more. (You might also not agree the Vatican is a large holder of gold, I would ask, and how exactly were they paid during WWII to aid the travels and passports of refugees?) By the way, Franz Pick said before he died, The Vatican held more gold than anyone could imagine. I can “imagine”.

Do you see the dots connecting here, between China and The Vatican? My assumption is, there is now a joining of the world’s two economic giants, both in size and wealth, which the last I knew equals “power”! Seemingly this coming together by these powerful forces gives rise to the old axiom;

“He Who Has the Gold Makes the Rules.”

Now I have to venture, is this rapprochement between the Vatican and China part and parcel

of a New World Currency Order, whereby the yuan becomes the concentric world reserve currency, in some fashion, tied to the International Monetary funds Special Drawing Right (SDR)? Maybe, but who really wants that albatross around their neck? History has seen nation after nation assume world currency status only to be hollowed out financially and economically after years of abusing the privilege.

I theorize that China and The Vatican will revalue gold to levels unattainable by individuals and making it very difficult for sovereign treasuries and/or central banks to catch up. As the largest holders, they can effectively “make the price” … the higher they make it, the greater their wealth (and thus power)! I have to ask… What if China marks up gold but does not assume reserve currency responsibilities? What if they mark up gold and let the markets decide what each “currency” is worth …versus gold …based on how much gold held?

Please understand this…China has been financially abused by the West for centuries. Silver was devalued at the turn of the 20th century as a way to impoverish China as they were a Silver Nation. If the above is correct, or even close, and gold is revalued, then what will happen to the exchange ratio of silver to gold? Will the current 70-1 ratio hold or will silver be priced closer to God’s ratio of closer to 10-1?

As a side note, do you still wonder why President Trump has called China the “Grand master of currency manipulation”? Does he have a head’s up, or inkling, that a reset is in the works? I suspect he does.

If this theory is correct, at least we will have a true American as president and working on our behalf as opposed to a leader giving up the keys to the kingdom and throwing its people under the bus in the name of “fairness”? The “One World Government,” or “New World Order Types” as they identify themselves, are strongly opposed to the individual liberty movement rearing it’s head here there and everywhere. Seemingly, the “people” have thrown a monkey wrench into their plans for a One World Order; here and there and everywhere. Populism to them is like a rapidly spreading cancer, that must be stopped dead in it’s tracks. My assumption is; THE WORLD IS ABOUT TO BE HUNG ON A CROSS OF GOLD.

(aka, Wm. Jennings Bryan).

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com

 

END

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

 
 

1 Chinese yuan vs USA dollar/yuan WEAKER AT  6.8695(SMALL DEVALUATION SOUTHBOUND   /OFFSHORE YUAN WIDENS   TO 6.8612 / Shanghai bourse DOWN 24.77 POINTS OR .76%   / HANG SANG CLOSED DOWN 40.65 POINTS OR 0.12% 

2. Nikkei closed DOWN 176.07 POINTS OR 0.91%   /USA: YEN FALLS TO 112.08

3. Europe stocks opened MOSTLY IN THE RED     ( /USA dollar index FALLS TO  101.09/Euro UP to 1.0586

3b Japan 10 year bond yield: FALLS TO    +.054%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.27/ 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::  54.36  and Brent: 56.48

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.197%/Italian 10 yr bond yield DOWN  to 2.146%    

3j Greek 10 year bond yield FALLS to  : 7.11%   

3k Gold at $1255.20/silver $18.36(8:15 am est)   SILVER CLOSE TO RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 69/100 in  roubles/dollar) 57.71-

3m oil into the 54 dollar handle for WTI and 56 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 SMALL   DEVALUATION SOUTHBOUND   from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.27 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0072 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0662 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/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.197%

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 2.328% early this morning. Thirty year rate  at 2.955% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

Global Stocks Drop, Futures Flat; French Yields Slide As Political Jitters Subside

 In a quiet night for markets, in which the top highlight was the Oscar’s historic peddling of best picture “fake news” and where “millions” of Academy members seemingly voted illegally, European stocks were little changed after a selloff that pushed them to a two-week low, while the MSCI Asia index fells as Japan’s Topix dropped for third day. S&P futures were unchanged after hitting a a fresh all time high on Friday. Oil futures gained, with the dollar little changed against a basket of major currencies. Priceline, Albemarle and AES are among companies reporting earnings. Dallas Fed manufacturing activity, durable goods sales data due.

European politics once again drove sentiment, this time higher after French electoral polls boosted the country’s bonds and reports of a potential Scottish independence referendum sank the British pound. The dollar was little changed before a key speech from U.S. President Donald Trump.

French bonds gained for a fourth day, with the 10-year OAT yields hitting a one-month low on Monday, pushing other euro zone sovereign yields lower, while a more cautious mood hung over world stock markets and the dollar, both of which struggled for clear direction.

The fall in French bond yields came as polls (everyone knows how accurate those can be) showed centrist Emmanuel Macron would easily beat far-right candidate Marine Le Pen in May’s presidential election runoff, relieving some fears that have built up in recent weeks among investors. “Macron gained further support in the polls,” said DZ Bank rates strategist Rene Albrecht. “Another important point is that it looks like Hamon and Melenchon won’t merge, so there is less of a chance that we will have a left-wing candidate that could outpace Macron or Fillon.

Over the weekend, French press reported that Socialist lawmaker Christophe Caresche has announced that he will now back Macron, calling him the “only solution to counter effectively Marine Le Pen in the second round of the presidential election”. That follows the news of Francois Bayrou publicly announcing his backing of Macron last week and the latest polls from the weekend suggest a boost to Macron following that. An Odoxa Dentsu poll published yesterday showed Macron as gaining 25% in the first round compared to 19% for Fillon and 27% for Le Pen. The pollster highlighted that this is the first time Macron has taken a 6% lead over Fillon in the first round. In a second round runoff the poll showed Macron as defeating Le Pen by 61% to 39%. The other weekend poll is the Kantar Sofres poll for Le Figaro. It showed a similar trend with Le Pen at 27% in the first round ahead of Macron with 25% and Fillon with 20%. A second round between Le Pen and Macron has the latter coming out on top at 58% to 42%.

Following the latest polls, Oddschecker saw Macron gaining, with his victory odds rising above 42%, while Le Pen remained flat at just over a third.

As a result, France’s 10-year bond yield fell 2.5 basis points to a one-month low of 0.90%, outperforming euro zone peers. Safe-haven German bond yields DE10YT=TWEB edged higher, narrowing the gap between French peers to around 70 basis points, its tightest level in just over a week.

Furthermore, as discussed last night, sterling weakened against all its major peers after The Times reported Prime Minister Theresa May’s team is preparing for Scotland to potentially call for an independence referendum in March. European stocks fell, tracking a negative day across Asian equities.

It will be another week in which Trump can make or break the recent market euphoria. With elections taking place this year in France, the Netherlands and Germany against a backdrop of rising populism, and uncertainties around Trump’s policies, investors have been hanging on every word from central bank officials and politicians. The next focus is set to be the U.S. president’s speech to Congress on Tuesday, which will be parsed for details on spending and tax plans.

“We are concerned that the markets could be heading for a harsh reality check if the Trump administration fails to meet high expectations as reflected in strong equity gains, including risky assets,” Piotr Matys, currency strategist at Rabobank in London, wrote in a note to clients. “It seems to us that the markets are too optimistic, looking from the glass half full perspective and not pricing enough of the negatives.”

In Europe, the French-led fall in bond yields and tightening of spreads over Germany were the most notable moves at the start of a week in which U.S. President Donald Trump’s State of the Union address on Tuesday will loom large. Trump is expected to unveil some elements of his plans to cut taxes in his joint address to Congress.

It was also a mixed bag in stocks. Benchmark European markets were flat, Asian bourses fell and U.S. futures pointed to a slightly higher open on Wall Street. “This morning’s moves follow what was a fairly cautious end to the week on Friday for markets,” said Jim Reid, markets strategist at Deutsche Bank (see full note below). MSCI’s benchmark world stock index slipped 0.1 percent to 444.53 points on course for its first consecutive daily fall for three weeks. On Thursday, it hit a record high of 447.67 points.

The index of the leading 300 European stocks was flat on the day at 1,457 points. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, near the day’s lows and following Friday’s 0.7 percent fall. The Euro zone’s STOXX 600 index was down -0.3% at last check, at 369. Japan’s Nikkei closed 0.9 percent lower, hitting a 2-1/2 week low on concerns that a stronger yen would crimp corporate earnings.

Though U.S. stocks clawed their way to a higher close on Friday, major indices spent much of that day’s session in negative territory, suggesting increased caution. Yet it was the Dow’s 11th consecutive record high on Friday, which is the longest such run since 1987.

In currencies, the dollar was flat on an index basis. The euro was up 0.2 percent at $1.0580 EUR=, but the dollar was 0.1 percent higher against the yen at 112.30 yen and sterling was down 0.3 percent at $1.2430. In addition to Trump’s address to Congress, rates and the dollar will take their cue this week from Federal Reserve Chair Janet Yellen’s speech on Friday. “In order for the Fed to really have the option of hiking next month, Yellen will have to make a much stronger case relative to what’s been said recently,” Deutsche’s Reid said.

The 10-year U.S. Treasury yield rose 2 basis points to 2.335 percent. On Friday it hit a five-week low of 2.31 percent, and last week’s fall of nearly 11 basis points was the steepest weekly decline since July last year.

In commodities, Brent crude rose 1.15% to $56.62 per barrel while WTI was up 0.8% at $54.42 per barrel as a global supply glut appeared to ease.

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2,364.5
  • STOXX Europe 600 down 0.28% to 368.96
  • MXAP down 0.6% to 144.98
  • MXAPJ down 0.3% to 466.49
  • Nikkei down 0.9% to 19,107.47
  • Topix down 1% to 1,534.00
  • Hang Seng Index down 0.2% to 23,925.05
  • Shanghai Composite down 0.8% to 3,228.66
  • Sensex down 0.2% to 28,824.19
  • Australia S&P/ASX 200 down 0.3% to 5,724.18
  • Kospi down 0.4% to 2,085.52
  • German 10Y yield rose 1.5 bps to 0.201%
  • Euro up 0.2% to 1.0587 per US$
  • Brent Futures up 1.2% to $56.65/bbl
  • Italian 10Y yield fell 3.0 bps to 2.195%
  • Spanish 10Y yield fell 2.2 bps to 1.676%
  • Brent Futures up 1.2% to $56.65/bbl
  • Gold spot down 0.13% to $1,256
  • U.S. Dollar Index down 0.07% to 101.02

Top Overnight News from Bloomberg

  • Last-Minute ‘Moonlight’ Oscar Win Marks Black Film Milestone
  • Buffett Stings Hedge Funds Anew Over Their ‘Misbegotten’ Rewards
  • AbbVie Gets EMA Panel Nod for Shorter Chronic Hep C Combo Course
  • Chevron Says Gorgon Train 2 Resumed LNG Production on Sunday
  • Berkshire Hathaway 4Q Oper EPS $2,665, Est. $2,717
  • Blackstone, Prudential Said to Win in $16 Billion Loan Sale
  • Sasol First-Half Net Income Up 19% to 8.7 Billion Rand Y/Y
  • IMI’s Selway Tells FT U.K. Co. Seeking Acquisition Opportunities
  • Samsung SDI Supplies Batteries for Energy Storage System in U.S.
  • Fortescue, Apollo Said to Bid for $1.5 Billion Wesfarmers Mines
  • Proposed Trump Budget Said to Hike Defense Spending, Cut EPA

Asia equities shrugged off last week’s positive sentiment and traded with a negative tone despite Friday’s last minute record rally on Wall Street as most major bourses in the region traded lower. ASX 200 (-0.3%) was down following weakness in the commodity sector after energy shares were dampened by an initial decline in oil and declines from Friday in which WTI crude futures briefly dropped below USD 54/bbl, while Nikkei 225 (-0.9%) underperformed alongside a firmer JPY. Shanghai Comp. (-0.4%) and Hang Seng (-0.4%) were subdued with participants cautious following another weak PBoC liquidity injection and amid regulatory concerns after the CIRC banned Evergrande Life from stock trading for 1 year, while CSRC Chairman Liu also stated that China is ready for a greater number of IPOs and vowed stricter regulations. 10yr JGBs were higher as the risk averse tone and BoJ presence in the market supported demand for Japanese paper. Furthermore, 5yr yields fell to a 3-month low and the curve flattened amid outperformance in the super long-end.

Top Asian News

  • Hedge Fund Joins Tactical Crowd as Trump Clouds Dollar View
  • China Will Allow More IPOs to Lure Capital, Regulator Says
  • Japan Stocks to Watch: Toshiba, Panasonic, Sumitomo, Mitsubishi
  • GLP Committee in Talks With Shortlisted Parties on Proposals
  • Noble Group FY Net $8.7m Vs $1.7b Loss Y/y

The European Indices trade in the green this morning with the FTSE outperforming currently up 0.4%, being lent a helping hand by the softer GBP. The main headline grabber has been reports that the potential tie up between LSE and Deutsche Boerse could be off the cards. Insurance names have taken a hit in the UK after the UK chancellor changed the discount rate. Elsewhere in Europe, Intesa (+5%) and Generali (-4%) cancelled a possible merger between the two Co.’s which benefitted Intesa shares. Finally, Unilever trade higher amid shareholder pressure to break the company up. The German French spread has traded below 69bps for the first time in ten days after Macron increases his lead in the first round polls for the French election. Italian paper saw underperformance against that of Spain ahead of this morning’s auction and failed to regain any ground in the wake of the results.

Top European News

  • Euro-Area Economic Confidence Climbs to Highest Level Since 2011
  • LSE Says Deutsche Boerse Deal Unlikely After Year-Long Try
  • Deutsche Bank Cuts 2016 Bonus Pool by Almost 80%, FAS Reports
  • Macron Extends Lead Over Fillon, Nears Le Pen in French Race
  • VimpelCom Boosts Dividend After Italy Deal; to Become Veon
  • Agrokor’s Senior Notes Fall to Record Low After Serbian Dispute
  • GAM Shares Gain as Investor RBR Seeks Seats on Company’s Board
  • UniCredit Unexercised Rights Sold for About EU15.1m
  • Anglo Profit Surge Has Little to Do With Commodities Rally
  • BTPs Rally, Following OATs, as Italian Bank Stocks Gain Off Open
  • U.K. Insurers Fall After Government Cuts Ogden Discount Rate

In currencies, the British pound lost 0.3 percent to $1.2422 as of 10:58 a.m. in London after an overnight report from the Times of London that Theresa May was considering a second Scottish referendum. The euro gained 0.2 percent to $1.0582. The Bloomberg Dollar Spot Index was little changed. The gauge fell 0.4 percent last week, its first drop in three weeks. Thin market conditions as FX trading confined to relatively tight ranges. The early focus has been on GBP where talk of another Scottish referendum on independence — perhaps announced in tandem with the triggering of Article 50 – has once again reminded the market of the destabilising effect of Brexit. Cable has tested down through 1.2400 — both in London and Tokyo — but the selling has been well absorbed as yet. Month end flow pushing EUR/GBP higher has also played its part as the cross rate has pierced through 0.8500, but highs set around 0.8534/5 contain for now. In Europe, French election candidate Macron has made some modest gains in the polls (for the first round), and along with the EUR/GBP flow mentioned above has given EUR/USD as modest bid this morning (edging towards 1.0600). USD/JPY continues to hover above the 112.00 level, with the initial test below the figure finding some support. President Trump’s address to Congress tomorrow will put the USD trade ‘on hold’ for now, with UST yields also basing out for now at some key levels to further prop.

In commodities, WTI crude futures rose 0.7 percent to $54.37 a barrel, near the Feb. 23 closing price, which was the highest since July 2015. Gold was little changed at 1,256.21 an ounce. The metal jumped 1.8 percent last week for its fourth straight weekly advance. Gold continues to hold better levels as the USD remains pressured on the dip in yields. However, the flight to safety has also played its part, with the French (and Dutch) elections having also provide a catalyst for demand for the yellow metal. Elsewhere, hedge funds are said to be positioning for a break higher in Crude prices closer in on the curve. This has helped maintain WTI towards the upper end of the recent USD50-55 range, but the recent test through here was met with strong supply. In base metals, Copper prices stay comfortably below the USD2.70 mark, but finding some support on the session, but Nickel and Tin are showing the stronger gains on the day.

Looking at today’s key events, in the US we’ll get a first look at the January durable and capital goods orders data as well as pending home sales and the Dallas Fed manufacturing survey index.

US Event Calendar

  • 8:30am: U.S. durable goods orders, est. 1.7% (pr. -0.5%)
  • 10am: U.S. pending home sales m/m, est. 1%, (pr. 1.6%)
  • 10:30am: Dallas Fed manf. activity, est. 19.4 (pr. 22.1)

* * *

DB’s Jim Reid concludes the overnight wrap

Before we kick off properly this morning, tomorrow marks the 10 year anniversary of the EMR. To mark the occasion we’ll be doing a performance review of the whole period which hopefully will be interesting as the start of the publication coincided with what we think was the start of the global financial crisis given this was when the US subprime bond market was just starting to disintegrate. We’ll also republish the first ever edition from February 28th 2007 if for no other reason than to prevent the touts from trying to sell the first edition on eBay at an exorbitant price.

So 10 years from the origins of the crisis and the truth is that the ramifications are still front and centre in financial markets. Bunds capped a remarkable week by rallying -4.6bps to 0.181bps on Friday (10 years) and -11.7bps on the week. At the short end 2y Bund yields also rallied another -3.3bps to -0.965% on Friday (and a new record low) and so taking the weekly move to -13.4bps and the biggest rally since 2012. A combination of pricing in of political and redenomination risk and a collateral shortage seem to be growing themes. Our European FI strategists think the market is pricing in around a 5% risk of Bunds being redenominated back into DEM. It’s a strange market though as French OATs also rallied on Friday and more or less matched Bunds on the week (10yr -11.1bps) and European equities were fairly flat last week (notwithstanding a weak Friday session which we’ll touch on below) with inflows the highest in over a year in the week to Wednesday. So Bunds seem to be the magnet to any systemic fears at the moment with other markets barely recognising much additional risk.

The main news concerning the French election from the weekend is of another endorsement for Emmanuel Macron. French press are reporting that Socialist lawmaker Christophe Caresche has announced that he will now back Macron, calling him the “only solution to counter effectively Marine Le Pen in the second round of the presidential election”. That follows the news of Francois Bayrou publicly announcing his backing of Macron last week and the latest polls from the weekend suggest a boost to Macron following that. An Odoxa Dentsu poll published yesterday showed Macron as gaining 25% in the first round compared to 19% for Fillon and 27% for Le Pen. The pollster highlighted that this is the first time Macron has taken a 6% lead over Fillon in the first round. In a second round runoff the poll showed Macron as defeating Le Pen by 61% to 39%. The other weekend poll is the Kantar Sofres poll for Le Figaro. It showed a similar trend with Le Pen at 27% in the first round ahead of Macron with 25% and Fillon with 20%. A second round between Le Pen and Macron has the latter coming out on top at 58% to 42%.

The other notable weekend news concerns comments from Treasury Secretary Steven Mnuchin. Speaking on Fox News TV, Mnuchin said that at the much anticipated Trump speech this week to a joint session of Congress on Tuesday night the President will be using it to preview some of his sweeping plans to cut taxes and also simplify the tax system. Mnuchin hinted that the President’s budget will not touch social welfare programs such as Social Security and Medicare or cuts to any other big entitlement programs. The Treasury Secretary didn’t give much away on the proposed border tax, saying that he was “still studying very carefully” the proposal. Mnuchin added that “there are certain aspects that the president likes about the concept of a border adjusted tax” and that “there are certain aspects that he’s very concerned about”.

Trump’s speech is almost certainly the main event for markets this week although there’s still a relatively packed data docket to get through with the final PMI’s in Europe to be confirmed on Friday, a second reading of Q4 GDP in the US tomorrow and also an economic outlook speech by Fed Chair Yellen on Friday in Chicago. On that it’s worth noting that the March hike probability did steadily climb last week to 40% on Friday from 34% the week prior based on Bloomberg’s calculator but you’d imagine that in order for the Fed to really have the option of hiking next month, Yellen will have to make a much stronger case relative to what’s been said recently.

Ahead of that, this morning in Asia it’s been a relatively soft start to the week for markets. The Nikkei (-0.94%), Kospi (-0.36%) and ASX (-0.31%) in particular are all in the red while the Hang Seng and Shanghai Comp have also just turned negative after a more resilient start perhaps reflecting the news from China’s securities regulator that it is looking to allow for more IPO’s in China, suggesting increased confidence in the market’s recovery from the 2015 rout. Meanwhile the focus in FX this morning has been on Sterling which has fallen -0.32% after the UK Times reported that PM May is preparing for the Scottish government to call another independence referendum to coincide with the triggering of Article 50 next month. Elsewhere it’s been a fairly quiet start for commodities while Asia bond markets have generally echoed the strength from Friday.

This morning’s moves in Asia follow what was a fairly cautious end to the week on Friday for markets. With an uncertain political environment bubbling away the European session in particular was weak and that was evident through a -0.76% decline for the Stoxx 600 which was the sharpest fall since the end of January. The DAX also tumbled -1.20% while France’s CAC retreated -0.94%. Perhaps also reflecting some disappointment at the lack of details from Mnuchin’s interview on Thursday it had looked like US equity markets might follow a similar route before a late surge into the close helped both the S&P 500 (+0.15%) and Dow (+0.05%)  just about hold onto gains. Notably that is now the 11th consecutive record high for the Dow which is the longest such run since 1987. The fairly cautious mood though was still reflected in the strong rally for Gold (+0.61%) while base metals also generally rebounded from losses on Thursday. Like their European counterparts, US Treasuries also had a strong day with 10y yields finishing the day -6.0bps lower at 2.313% and the lowest closing yield since November.

Friday’s economic data didn’t really add much to proceedings. In the US we learned that new home sales in January rebounded a slightly less than expected +3.7% mom (vs. +6.4% expected). The University of Michigan’s consumer sentiment reading was meanwhile revised up 0.6pts to 96.3 in February albeit still a couple of points below its January reading. In France we learned that consumer confidence was stable in February while in the UK the BBA recorded a modest rise in home loans in January.

Before we wrap up, in a report published this morning Wolf von Rotberg on our European equity strategy team highlights the likely winners and losers among European corporates from a US tax reform that would see the introduction of a border tax adjustment in exchange for a lower corporate statutory rate. He finds that such a reform would reduce net profits for the 70 European companies most exposed to the US by an average of 5%, implying a net negative impact of around 1% on Stoxx 600 earnings overall. At the European sector level, he identifies that autos are the biggest losers, while earnings for health care equipment, construction materials and food retail could see a minor uplift.

On to this week’s calendar now. It’s a quiet start to the week in Europe this morning with just February confidence indicators for the Euro area due out. In the US this afternoon we’ll get a first look at the January durable and capital goods orders data as well as pending home sales and the Dallas Fed manufacturing survey index. Tuesday kicks off in Japan where the latest retail sales, housing starts and industrial production data are due. In the European session we’ll get France CPI, PPI and Q4 GDP and the February CPI estimate for the Euro area. Over in the US it’s all eyes on the second reading of Q4 GDP, while core PCE, wholesale inventories, advance goods trade balance, S&P/Case Shiller house price index, Chicago PMI and Richmond Fed manufacturing survey round out a busy day of releases. In Asia on Wednesday the early focus is on the official manufacturing and services PMI’s in China. Over in Europe we’ll then get the final February manufacturing PMI’s followed by CPI in Germany and UK credit and money aggregates data. In the US there is more important data in the form of the January core and deflator PCE readings, ISM manufacturing, construction spending, vehicles sales and the final manufacturing PMI. Thursday looks set to be quieter with just Euro area PPI due in the morning and initial jobless claims in the US. We end the week on Friday in Japan with CPI and the latest employment numbers. China will also release the Caixin services and composite prints. In Europe we get the remaining services and composite PMI revisions for February as well as Euro area retail sales. The final services and composites are  then due in the US alongside the ISM non-manufacturing print.

Away from the data the Fedspeak during the week consists of Kaplan today, Williams and Bullard on Tuesday, Kaplan and Brainard on Wednesday and then a bumper day on Friday headlined by Fed Chair Yellen when she gives an economic outlook speech in Chicago. Fischer, Powell, Evans, Lacker and Mester will also speak. Away from that, arguably the biggest event of the week is President Trump’s address to a joint session of Congress at 9pm ET in the US on Tuesday (early Wednesday morning in the UK). Also worth noting is the House of Lords debate on Brexit where talks are due to start about a more detail examination of the proposed bill.

3. ASIAN AFFAIRS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 24.77 POINTS OR .76%/ /Hang Sang CLOSED DOWN 40.65 POINTS OR 0.17% . The Nikkei closed DOWN 176.09 POINTS OR 0.91% /Australia’s all ordinaires  CLOSED DOWN 0.76%/Chinese yuan (ONSHORE) closed UP at 6.8695/Oil ROSE to 54.36 dollars per barrel for WTI and 56.48 for Brent. Stocks in Europe MOSTLY IN THE RED. Offshore yuan trades  6.8612 yuan to the dollar vs 6.8695  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS A BIT AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN WEAKER AS IS OFFSHORE YUAN COUPLED WITH THE WEAKER DOLLAR

3a)THAILAND/SOUTH KOREA/NORTH KOREA

The sooner he is removed, the better;

(courtesy zero hedge)

North Korea Executes Five Officials With Anti-Aircraft Guns

One week ago, following news that China had banned coal imports from North Korea in retaliation to Kim Jong Un’s latest ballistic missile test, we mused that North Korea’s regime appears to be in jeopardy, even though we had no explicit knowledge of tensions inside the top echelons of the country’s political system. It now appears that those concerns may have been justified.

According to AP, North Korea executed five senior security officials with anti-aircraft guns because they made false reports that “enraged” leader Kim Jong Un, South Korea’s spy agency said Monday.  The spy agency told lawmakers that five North Korean officials in the department of recently purged state security chief Kim Won Hong were executed by anti-aircraft guns because of the false reports to Kim, South Korean lawmaker Lee Cheol Woo said. It’s not clear what false reports they allegedly made, and the NIS didn’t say how it got its information as South Korean spies have a spotty record when reporting about high-level events in its authoritarian neighbor to the north.

North Korea fired Kim Won Hong in January, presumably over corruption, abuse of power and torture committed by his agency, Seoul said earlier this month. The fallen minister had been seen as close to Kim Jong Un. North Korea has not publicly said anything about Kim Won Hong or about the alleged executions in his department. Lee also cited the NIS as saying that Kim Won Hong’s dismissal was linked to those false reports, which “enraged” Kim Jong Un when they were discovered.

The comments by South Korea’s National Intelligence Service in a private briefing to lawmakers come as Malaysia investigates the poisoning death of Kim’s estranged elder half brother, Kim Jong Nam. That investigation is still going on, but South Korea says it believes Kim Jong Un ordered the assassination, which took place Feb. 13 at Kuala Lumpur’s airport. According to an earlier report by CNN, Kim Jong-un ordered two North Korean ministries to orchestrate the plot.

“The assassination of Kim Jong Nam was an act of systematic terror ordered by Kim Jong Un,” South Korean lawmaker Kim Byung-kee said in a televised address. “The operation was conducted with two assassination groups and one supporting group.” Kim Jong-nam was killed earlier this month in a Malaysian airport. Two women were seen on video smearing a substance, identified as VX nerve agent, on his face in the airport.

North Korea has said it was not involved in the murder of Kim Jong-nam and claimed South Korean media is putting out “fake news.” That said, since taking power in late 2011, Kim Jong Un has reportedly executed or purged a large number of high-level government officials in what rival Seoul has called a “reign of terror.”

Furthermore, this isn’t the first time Kim has resorted to such a dramatic form of execution: in May 2015, the country used an anti-aircraft gun to execute its defense minister who had been caught napping. That particular execution was witnessed by hundreds of people, and was meant to send a clear signal by the country’s ruler. It has been speculated that Kim Jong Un brings out the “heavy artillery”, so to speak any time he feels particularly threatened and uses this dramatic method of termination to subdue any perceived growing opposition. Which in light of recent events, would be understandable, and would suggest that the risk of a North Korean coup is substantially higher than some may think.

end

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

none today

4. EUROPEAN AFFAIRS

EU/Target 2 imbalances

 

The following is a must read.  I have been highlighting to you over the past several years, the problems in Europe with the huge target 2 imbalances.  Because we have various countries using the same currency, it would bound to happen that one country would get surplus balances of euros and the poorer countries would accumulate deficits.  And that is what is happening:  Germany and Luxembourg have huge positive balances, with Germany at 795 billion euros and Luxembourg at 175 billion. Italy has the worse deficit at 357 billion euros followed by Spain’s 328/  Deficits occur when two things happen:

  1. trade goes one way i.e. Germany exports to Italy but Italy does not export to Germany.
  2. Citizens realize that their country’s finances’s are awful and they sell their Italian accounts and move them over to Germany etc.

ladies and gentlemen;  the European debt bomb (target 2) has been lit

(courtesy Mish Shedlock/Mishtalk)

 

The European Debt Bomb Fuse Is Lit! Target2 Imbalances Hit Crisis Levels

Submitted by Mike Shedlock via MishTalk.com,

Eurozone Target2 imbalances have touched or exceeded the crisis levels hit in 2012 when Greece was on the verge of leaving the Eurozone. Others have noted the growing imbalances as well.

I had a couple of questions for the ECB regarding Target2, which they have answered, I believe disingenuously.

First, we will explain Target2, then we will take a look at various charts, viewpoints, and the email exchange with the ECB.

Target2 Background

Target2 stands for Trans-European Automated Real-time Gross Settlement System. It is a reflection of capital flight from the “Club-Med” countries in Southern Europe (Greece, Spain, and Italy) to banks in Northern Europe.

Pater Tenebrarum at the Acting Man blog provides this easy to understand example: “Spain imports German goods, but no Spanish goods or capital have been acquired by any private party in Germany in return. The only thing that has been ‘acquired’ is an IOU issued by the Spanish commercial bank to the Bank of Spain in return for funding the payment.

This is not the same as an auto loan from a dealer or a bank. In the case of Target2, central banks are guaranteeing the IOU.

Target2 also encompasses people yanking deposits from a bank in their country and parking them in a bank in another country. Greece is a nice example, and the result was capital controls.

If Italy or Greece (any country) were to leave the Eurozone and default on the target2 balance, the rest of the countries would have to make up the default according to their percentage weight in the Eurozone.

Target2 Imbalances

target2-2017-02-23

Those numbers are as of December 2016. A check of the Bundesbank Target2 Balance as of January 31, 2017 shows a new record high of €797 billion.

As of December 2016, if Italy were to exit the Eurozone, Italy would owe €356.6 billion to Germany, Luxembourg, and a couple other small creditors.

What’s the likelihood Italy could ever pay back €356.6 billion?

Unpayable debts

Ambrose Evans-Pritchard at the Telegraph notes the unpayable debts then asks Are Eurozone Central Banks Still Solvent?

Vast liabilities are being switched quietly from private banks and investment funds onto the shoulders of taxpayers across southern Europe. It is a variant of the tragic episode in Greece, but this time on a far larger scale, and with systemic global implications.

There has been no democratic decision by any parliament to take on these fiscal debts, rapidly approaching €1 trillion. They are the unintended side-effect of quantitative easing by the European Central Bank, which has degenerated into a conduit for capital flight from the Club Med bloc to Germany, Luxembourg, and The Netherlands.

This ‘socialization of risk’ is happening by stealth, a mechanical effect of the ECB’s Target2 payments system. If a political upset in France or Italy triggers an existential euro crisis over coming months, citizens from both the eurozone’s debtor and creditor countries will discover to their horror what has been done to them.

As always, the debt markets are the barometer of stress. Yields on two-year German debt fell to an all-time low of minus 0.92pc on Wednesday, a sign that something very strange is happening. “Alarm bells are starting to ring again. Our flow data is picking up serious capital flight into German safe-haven assets. It feels like the build-up to the eurozone crisis in 2011,” said Simon Derrick from BNY Mellon.

german-2-year-yield

The Target2 system is designed to adjust accounts automatically between the branches of the ECB’s family of central banks, self-correcting with each ebb and flow. In reality, it has become a cloak for chronic one-way capital outflows.

Private investors sell their holdings of Italian or Portuguese sovereign debt to the ECB at a profit, and rotate the proceeds into mutual funds Germany or Luxembourg. “What it basically shows is that monetary union is slowly disintegrating despite the best efforts of Mario Draghi,” said a former ECB governor.

The Banca d’Italia alone now owes a record €364bn to the ECB – 22pc of GDP – and the figure keeps rising.

Spain’s Target2 liabilities are €328bn, almost 30pc of GDP.  Portugal and Greece are both at €72bn. All are either insolvent or dangerously close if these debts are crystallized.

On the other side of the ledger, the German Bundesbank has built up Target2 credits of €796bn. Luxembourg has credits of €187bn, reflecting its role as a financial hub. This is roughly 350pc of the tiny Duchy’s GDP, and fourteen times the annual budget.

Mish Questions for the ECB – January 27, 2017

Many media reports suggest the growing target2 imbalance in Italy is a sign of capital flight. ECB president Mario Draghi said it was a function of ECB asset purchases. Can you explain why Draghi is right or wrong?

Please also explain the growing target2 imbalance at the ECB itself.

Thanks
Mish

ECB Response – February 15, 2017

Dear Mr. Shedlock,

Thank you for your email and please accept our apologies for the late reply.

The implementation of the APP affects TARGET balances through cross-border settlement of our purchases. For more information on this particular mechanism, please see ECB Economic Bulletin, Issue 7 / 2016 – Box 2: TARGET balances and the asset purchase programme (pages 21-24).

As regards the ECB’s own Target balance, when the ECB purchases securities under the APP, the ECB credits the account of the respective counterparty. Such counterparties are credit institutions, which cannot hold accounts with the ECB, but instead, hold accounts with national central banks. Therefore, payment for a security by the ECB automatically increases the ECB’s TARGET liability (but not necessarily the overall TARGET balance). This is discussed in the Bundesbank’s March 2016 Monthly Report (pages 53-55).

With best regards,

TARGET Hotline
EUROPEAN CENTRAL BANK

Disingenuous ECB Response

I have been talking about Target2 imbalances for years, and I do not accept ECB’s response straight up.

Euro intelligence also discussed this very question recently. They have it correct, as follows, emphasis mine:

One of the barometers of tension in the Eurozone is the number of articles in the German press questioning the euro’s advantages to the country. The publication of the latest Target2 imbalances is not helping soothe nerves. As of end January, the German surplus was at an all-time record of €796 billion, while Italy’s deficit was at a record €364 billion. The ECB argues that the reason for the gap is not the same as it was during the Eurozone crisis when the imbalances reflected capital flight.

Philip Plickert writes in FAZ that this argument does not tell the full story. It is true, of course, that international banks based in London sell bonds to the Bank of Italy from their Frankfurt-based branches – so that the asset purchases result in transfers of central bank money from Italy to Germany. But why do the sellers not replenish their portfolios with purchases of Italian bonds, shares or other assets? Instead, they take the money and invest in Germany. So this is still capital flight – except that it works indirectly through the asset purchase programme.

Simple Target2 Explanation

Reader Lars writes: “Target 2 is a settlement system. When imbalances arise it’s because transactions are not settled. For example, Luigi in Italy transfers his €1 million from his Monte dei Paschi (MdP) account to his new Deutsche Bank account. MdP does not have the €1 million and has to borrow it from Bank of Italy. The Bank of Italy has to borrow the €1 million from Bundesbank. So at the end of the day, Luigi gets the €1 million into his account in DB but the Bank of Italy now owes €1 million to Bundesbank.”

Do that long enough and this is what happens:

  1. The Banca d’Italia, Italy’s central bank, owes a record €364 billion to creditors, 22 percent of GDPand rising.
  2. The Banco de España, Spain’s central bank owes €328 billion to creditors, almost 30 percent of GDP.
  3. Other nations owe smaller amounts.

Pater Tenebrarum at the Acting Man blog commented via Email “I agree with the eurointelligence view that the steep Italian and Spanish deficits are still a testament to capital shunning various countries. To put it very simply: people managing large sums of Other People’s Money for institutions subject to fiduciary duty continue to have doubts about the euro’s survival, and rightly so.

Reader Lars replied: “It seems to me that the ECB is trying to complicate matters and kick the ball into the tall grass. In regards to the ECBs €160 billion Target2 deficit, it might be the case that the ECB has borrowed from Bundesbank and then lent the money to other national central banks (NCBs) because the Bundesbank has not been willing to do all the heavy lifting itself. Is the Bundesbank shunning risk at local NCBs?”

Rating Agencies Where Art Thou?

The rating agencies should be all over this issue but they are not. Here are two possible explanations.

  1. The rating agencies are in bed with central banks or creditors
  2. They do not understand Target2

Huge Insurmountable Problem

Target 2 is one of the least discussed and least understood problems in the Eurozone.

Jens Weidmann, Bundesbank president, allowed nearly €800 billion in credit to build on his watch. One has to wonder: Is Weidmann moving into illegal territory?

Egon von Greyerz, Founder & Managing Partner, Matterhorn Asset Management AG, made a comment similar to what I have stated many times: “Germany is in bigger trouble than Italy, Spain, or Portugal. Those countries can’t pay so Germany will have to foot the bill.

Alternatively, the Bundesbank and the ECB are going to print money to cover those losses!

Greece alone is unlikely to trigger a crisis now, but Italy, Spain, or France could.

Fuse is Lit

The fuse is lit, multiple fuses actually.

  1. Italy Increasingly Likely to Abandon the Euro
  2. “Italeave” Odds Increase: Rebellion in Italy, Matteo Renzi’s PD Party to Split
  3. French Elections: Another “Unthinkable” Result Coming Up?

Gold’s Reaction

Recent strength in gold is likely based on increasing doubts central banks are once again out of control.

Of course, central banks were never really in control, but appearances matter.

For further discussion, please consider Rate Hike Cycles vs. the US Dollar: Rate Hikes Bad for Gold?

 

 

end

 

The Netherlands

 

The Netherlands are getting scared:  The Dutch Parliament is debating leaving the Eurozone:

(courtesy Mish Shedlock/Mishtalk)

Nexit Looms – Dutch Parliament To Debate Leaving The Eurozone

Submitted by Michael Shedlock via MishTalk.com,

Potential Eurozone disruption possibilities keep compounding.

For example, the Netherlands Parliament will now debate leaving the Eurozone.

In long-winded wording for a potential “Nexit”, Reuters reports Dutch relations with euro up for debate after lawmakers commission probe

The Netherlands’ future relationship with the euro will be comprehensively debated by its parliament following elections in March after lawmakers commissioned a report on the currency’s future.

The motion approving the investigation by the Council of State, the government’s legal advisor, coincides with a rising tide of euroscepticism in Europe, which populist parties are hoping to tap into in a series of national elections this year also taking in eurozone powerhouses France and Germany.

The probe will examine whether it would be possible for the Dutch to withdraw from the single currency, and if so how, said lawmaker Pieter Omtzigt.

Omtzigt, of the opposition Christian Democrats, tabled the parliamentary motion calling for the investigation, which legislators passed unanimously late on Thursday.

It was prompted by concerns the ECB’s ultra-low interest rates are hurting Dutch savers, especially pensioners, and doubts as to whether its bond purchasing programs are legal, he said.

Its findings will be presented in several months, by which time the make-up of parliament will have changed dramatically.

While most Dutch voters say they favor retaining the euro, the eurosceptic far-right party of Geert Wilders is expected to book large gains though it is unlikely to win enough votes to form a government.

The most probable outcome of the March 15 vote is a new centrist coalition including some parties, such as Omtzigt’s Christian Democrats, that have been vocal in their opposition to current ECB policy.

“The problems with the euro have not been solved,” Omtzigt said. “This is a way for us to look at ways forward with no taboos.”

Analysis

Geert Wilders is likely to “win” the Dutch election. In this case, “win” means get more votes than any other political party.

However, the odds that Wilders can form a stable coalition with Wilders heading up the government is slim.

Netherlands Polls

dutch-elections-2017-02-24

The first line in the above table of Netherlands Polls is from the 2012 election, the rest of the lines are from February of this year.

History suggests those polls may be wildly inaccurate, but most of the parties ruled out a coalition with Wilders’ PVV.

In terms on “Nexit”, if Wilders can get 26% of the vote with another 24% agreeing, there just may be enough votes in parliament for the Netherlands to abandon the Euro, assuming the public would go along.

And ‘Nexit’ odds are increasing…

h/t @Schuldensuehner

 end
Germany/Greece
Sunday;  German deputy finance minister Jens Spahn in an interview claims that Greece must be not be granted a “bail in”.  In other words creditors must not take a haircut.  This would put Germany at odds with the iMF who wants all creditors to take a haircut on their debt.  The reason of course that Germany et al  cannot take a haircut as this would blow up Deutsche bank’s derivative mess:
(courtesy zero hedge)

“There Must Not Be A Bail In”: Germany Vows “No Debt Relief For Greece”

The standoff over the Greek debt crisis was nowhere closer to an amicable resolution on Sunday, when Germany’s deputy finance minister Jens Spahn said in an interview with German broadcaster Deutschlandfunk that Greece must not be granted a “bail in” that would involve creditors taking a loss on their loans, reiterating the German government’s opposition to debt relief for Athens, and confirming that when it comes to Europe’s recently adopted “bail-in” protocols, they “work” in theory, but certainly not in practice (see the latest taxpayer funded bailout of Monte Paschi for another recent example).

“There must not be a bail-in,” Jens Spahn said quoted by Reuters, adding that “we think it is very, very likely that we will come to an agreement with the International Monetary Fund that does not require a haircut,” he said, referring to losses that Greece’s creditors would have to take if debt was written off.

As everyone is aware by now, the IMF – which recently admitted its bailout policy vis-a-vis Greece has been a disaster perpetuating the Greek depression to unprecedented levels – has repeatedly called for Greece to be granted substantial debt relief, but this is opposed by both Germany, which makes the largest contribution to the budget of the European Stability Mechanism (ESM), the euro zone’s bailout fund, and the ECB, whose Greek bond holdings would be impaired should a haircut on official Greek bonds be implemented.

In a positive sign over the recent impasse, last Monday Greece and its creditors agreed to further reforms by Athens to ease a logjam in talks with creditors that has held up additional funding for the troubled euro zone country. As a result, inspectors from the Troika are due to return to Athens this week where they will hardly be greeted with a warm reception.

Spahn, a senior member of Chancellor Angela Merkel’s conservatives, said Greece’s problem was a lack of growth rather than debt and said that giving Athens debt relief would upset other euro zone countries such as Spain that had to deliver tough reforms.

“Our Spanish friends, for example, say: ‘Hang on – that wouldn’t be fair: we carry out reforms and get no haircut and now you’re talking about giving Greece one?!'”

Spahn said Germany was campaigning hard to keep the IMF on board in Greece’s bailout because of its expertise in helping countries that need to deliver reforms in return for aid.

Yet while Spahn is not wrong that Greece is in dire need of more growth, especially since “less” growth seems almost mathematically impossible at this point…

greece-great-depression

… the German has a clear political agenda in pushing for more Greek growth, which would likely be funded with even more debt, and against a haircut since the real problem facing Europe remains an insurmountable debt load. And as the third Greek bailout case study showed, Germany is willing to risk a Grexit rather than give a greenlight to the rest of Europe’s periphery that they, too, can come asking for debt haircuts and similar concessions.

Meanwhile, despite recent progress over stalled Greek bailout talks, Manfred Weber, who leads the conservative bloc in the European Parliament, said this month that if the IMF insisted on debt relief for Greece, it should no longer participate in the bailout, breaking ranks with Berlin’s official line that the program would end if the IMF pulled out.

A survey published on Friday showed around half of people in Germany are against granting debt relief to Greece.

Today’s news will hardly be welcome in Athens, where the increasingly more unpopular Syriza party has been promising a debt haircut, despite Germany making it abundantly clear such an action would not take place. In any event, we expect no real progress over the latest Greek “situation” for at least another 5 months, when Greece faces €6 billion in bond payments on July 17 and 20, at which point the can will once again be kicked, even if it means more unsustainable debt for the insolvent nation.

Finally, as laid out earlier this month, here is the timeline of near-term events for Greece, via Credit Suisse:

There is an immediate set of events (in February) that could resolve the issues and make the programme progress swiftly. If not in February, there are several intermediate dates that could still deliver an agreement, although at a later stage, most likely around the scheduled Eurogroup meetings – although an extraordinary gathering to approve the bailout happened in the past and cannot be discarded. July 17 – or 20 – would be the “hard” deadline, as Greece would be, same as in July 2015, unable to repay those amounts without additional support under the EU/IMF programme. There are earlier relatively large redemptions, notably in late February and in April – but we believe there is probably room in Greece’s public finances  to fulfill those commitments.

France

Fears of a French European exit mounts

(courtesy zero hedge)

Frexit Fears Mount As European ‘VIX’ Spike Signals No ‘Pre-Brexit Complacency’

The pre-Brexit complacency – echoed by the polls, the media, and the establishment – is absolutely not being repeated ahead of France’s looming election. While bond spreads have blown out, investor fear in the European equity options market is considerably worse than pre-Brexit.

As Bloomberg’s Tanvir Sandhu notes, the spread between April and May Europe stock volatility futures has climbed on French election risks…

And is starting to outstrip the rally seen in the equivalent contracts heading into the U.K.’s EU referendum.

The vol spread has risen to about 5 from below 1 at start of February; that compares to pre-Brexit vote high of 8. Howeever, as the chart below shows, ahead of Brexit, the spread started to ease as polls consistently showed Remain would win… before exploding higher on the actual vote.

That complacency is very much not in evidence this time as Frexit fears mount. The question is – are equity investors over-anxious or bond investors still too complacent…

Notably, investors fear that polls underestimate the risk of a Le Pen win following last year’s Trump and Brexit outcomes, although the French election may have a lower probability of surprise vs polls.

 

end

 

IMF/Spain

More corruption prosecutions as former IMF head Rato sent to prison in the Bankia scandal

(courtesy Matt Agorust./ActivistPost.com)

Former IMF Chief Sent To Jail As Spain Prosecutes 65 Elite Bankers In Enormous Corruption Scandal

 

Via Matt Agorist of ActivistPost.com,

In many other countries, excluding the United States, corrupt bankers are often brought to task by their respective governments. The most recent example of a corrupt banker being held accountable comes out of Spain, in which the former head of the International Monetary Fund (IMF), Rodrigo Rato was sentenced to four years and six months behind bars.

According to the AFP, Spain’s National Court, which deals with corruption and financial crime cases, said he had been found guilty of embezzlement when he headed up Caja Madrid and Bankia, at a time when both groups were having difficulties.

Rato, who is tied to a slew of other allegations was convicted and sentenced for misusing €12m between 2003 and 2012 — sometimes splashing out at the height of Spain’s economic crisis, according to the AFP.

The people of Spain were outraged over the scandal as it was discovered during the height of a severe financial crisis in which banks were receiving millions in taxpayer dollars. Bankia was eventually nationalized and given 22 billion in public money.

Although he was sentenced, Rato, who is also a former Spanish economy minister, remains at liberty pending a possible appeal because of highly connected elite status.

Rato was brought down in a massive effort by Spain to get rid of corruption within the banking system. The problem had gotten so bad, that Spain decided to clean house, and 65 people, include Rato, were brought to task.

According to the AFP, they were accused of having paid for personal expenses with credit cards put at their disposal by both Caja Madrid and Bankia, without ever justifying them or declaring them to tax authorities. These expenses included petrol for their cars, supermarket shopping, holidays, luxury bags or parties in nightclubs.

According to the indictment, Rato maintained the “corrupt system” established by his predecessor Miguel Blesa when he took the reins of Caja Madrid in 2010, reports the AFP. He then replicated the system when he took charge of Bankia, a group born in 2011 out of the merger of Caja Madrid with six other savings banks, prosecutors said.

According to the report:

Rato was economy minister and deputy prime minister in the conservative government of Jose Maria Aznar from 1996 to 2004, before going on to head up the IMF until 2007. His subsequent career as a banker was short-lived — from 2010 to 2012 — but apart from the credit cards case, it also led to another banking scandal considered the country’s biggest ever.

 

Thousands of small-scale investors lost their money after they were persuaded to convert their savings to shares ahead of the flotation of Bankia in 2011, with Rato at the reins. Less than a year later, he resigned as it became known that Bankia was in dire straits.

The state injected billions of euros but faced with the scale of Bankia’s losses and trouble at other banks, it asked the EU for a bailout for the banking sector and eventually received €41bn.

Rato and others were probed, accused of misleading small investors in the listing of Bankia, which has since paid out €1.2bn in compensation.

To highlight the utter corruption within the banking cartel that is the IMF, Rato is the third former chief to be ousted for illegal activity.

For those who don’t remember, Rato’s successor, Dominique Strauss-Kahn, was tried in 2015 on pimping charges in a lurid sex scandal. Naturally, he was acquitted — in spite of the fact that he admitted to engaging in illicit sex with prostitutes at a series of orgies that supposedly took place at the Hotel Carlton in the northern French city of Lille. The court sided with DSK and agreed that he had no idea the women he repeatedly filled the orgies with were being paid.

Christine Lagarde, who took over from Strauss-Kahn and is the current IMF chief, In December, was found guilty of “negligence” for approving a massive government payout to business tycoon Bernard Tapie during her tenure as French finance minister.

Despite being found guilty of corruption, Lagarde was not sentenced to a single day in jail. She has since been meeting with Trump’s Goldman Sachs-connected Treasury Secretary, Steven Mnuchin, noting that they’ve had “some very positive discussions.”

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Iran

This ought to get gold higher: Iran holds a massive naval drill:

(courtesy zero hedge)

Iran Holds Massive Naval Drill Over 2 Million Sq. Kilometer Area

With little active US presence in the region (see latest naval map below), on Sunday Iran launched a massive naval drill at the mouth of the Gulf and the Indian Ocean. Ships, submarines and helicopters will take part in the drills across an area of about 2 million square kilometers (772,000 square miles) and marines will showcase their skills along Iran’s southeastern coast, the state news agency IRNA said even as tensions with the United States continue to build after U.S President Donald Trump put Tehran “on notice”.

Iran’s annual exercises will be held in the Strait of Hormuz, the Gulf of Oman, the Bab el-Mandab and northern parts of the Indian Ocean, to train in the fight against terrorism and piracy, Rear Admiral Habibollah Sayyari said, quoted by Reuters. Today’s drill marks the last phase of war games that started in 2016, Iran’s Tasnim news agency reported. The exercise, codenamed ‘Velayat 95’, kicked off in Iran’s south following an order from Iranian Navy Commander Rear Admiral Habibollah Sayyari.

Apart from the main drills, Iran’s Navy commando units are conducting special operations in the southeastern Makran region. Last June, Sayyari said that Tehran was planning to carry out 20 military drills before March 2017. Iranian officials insist that the war games do not violate the Joint Comprehensive Plan of Action (JCPOA) – the nuclear deal between Iran and the Group 5+1 signed in January of 2016.

The UN nuclear watchdog said on Saturday that Iran has been found to be in full compliance with the nuclear deal, but the report comes against a backdrop of rising tensions between Tehran and Washington.

Earlier this month, then-US National Security Advisor Michael Flynn said that “Iran had been put formally on notice” after Tehran fired a ballistic missile. Later in February, President Trump tweeted that “Iran is playing with fire,” promising that he won’t be as “kind as [former President] Obama” and warned the Islamic Republic after its ballistic missile test on Jan. 29 that it was playing with fire and all U.S. options were on the table.

In response, Iran’s foreign minister, Mohammad Javad Zarif, blasted the US, saying Tehran remains “unmoved” by threats, but will use weapons “only in self-defense.” Last month, a US Navy destroyer fired warning shots at four Iranian military ships that were allegedly approaching them at high speed near the Strait of Hormuz.

The latest US naval deployment shows that while the South China Sea has been a recent focus of the US navy, the only US ship in the region is the LHD 8 Makin Island Amphibious Ready Group, although the George H.W. Bush aircraft carrier is currently headed for the region.

 

end

Russia

 

Strange!! six Russian diplomats have died in the last 60 days:

(courtesy zerohedge)

Deep State War? Russian Officials Keep Dying Unexpectedly

Six Russian diplomats have died in the last 60 days.As Axios notes, all but one died on foreign soil. Some were shot, while other causes of death are unknown. Note that a few deaths have been labeled “heart attacks” or “brief illnesses.”

1. You probably remember Russia’s Ambassador to Turkey, Andrei Karlov — he was assassinated by a police officer at a photo exhibit in Ankara on December 19.

 

2. On the same day, another diplomat, Peter Polshikov, was shot dead in his Moscow apartment. The gun was found under the bathroom sink but the circumstances of the death were under investigation. Polshikov served as a senior figure in the Latin American department of the Foreign Ministry.

 

3. Russia’s Ambassador to the United Nations, Vitaly Churkin, died in New York this past week. Churkin was rushed to the hospital from his office at Russia’s UN mission. Initial reports said he suffered a heart attack, and the medical examiner is investigating the death, according to CBS.

 

4. Russia’s Ambassador to India, Alexander Kadakin, died after a “brief illness January 27, which The Hindu said he had been suffering from for a few weeks.

 

5. Russian Consul in Athens, Greece, Andrei Malanin, was found dead in his apartment January 9. A Greek police official said there was “no evidence of a break-in.” But Malanin lived on a heavily guarded street. The cause of death needed further investigation, per an AFP report. Malanin served during a time of easing relations between Greece and Russia when Greece was increasingly critiqued by the EU and NATO.

 

6. Ex-KGB chief Oleg Erovinkin, who was suspected of helping draft the Trump dossier, was found dead in the back of his car December 26, according to The Telegraph. Erovinkin also was an aide to former deputy prime minister Igor Sechin, who now heads up state-owned Rosneft.

If we go back further than 60 days…

7. On the morning of U.S. Election Day, Russian diplomat Sergei Krivov was found unconscious at the Russian Consulate in New York and died on the scene. Initial reports said Krivov fell from the roof and had blunt force injuries, but Russian officials said he died from a heart attack. BuzzFeed reports Krivov may have been a Consular Duty Commander, which would have put him in charge of preventing sabotage or espionage.

 

8. In November 2015, a senior adviser to Putin, Mikhail Lesin, who was also the founder of the media company RT, was found dead in a Washington hotel room according to the NYT. The Russian media said it was a “heart attack,” but the medical examiner said it was “blunt force injuries.”

 

9. If you go back a few months prior in September 2016, Russian President Vladimir Putin’s driver was killed too in a freak car accident while driving the Russian President’s official black BMW  to add to the insanity.

If you include these three additional deaths that’s a total of nine Russian officials that have died over the past 2 years that WeAreChange.com’s Aaron Kesel knows of – he notes there could be more.

As Kesel explains, it’s worth noting that governments, specifically the CIA, have for long periods of time had chemical concoctions that can induce a full systematic shutdown of a person’s nervous system and in some cases cause someone’s’ heart to explode.

Former CIA employee Mary Embree discusses the infamous heart attack gun and how she was tasked with finding a chemical concoction that would cause a heart attack. The weapon was first made public during the Church Committee hearings in 1975 by former CIA director William Colby. It was said to be very lethal and untraceable, by using this weapon a murder is made to look natural while the poison dissolves in hours.

It seems highly unlikely and improbable to write off that six Russian officials would die in under 60 days in such an influx in various different mysterious ways without a catalyst. And let’s not forget RT founder and former Putin aide Mikhail Lesin was found dead in 2015 from a blunt weapon that was originally blamed on a heart attack so assassination can’t be taken off the table and ruled out in any of these cases. Turkey and Russia already accused NATO of a false flag attack killing Karlov the Russian-Turkish Ambassador. NATO also had a dead diplomat Yves Chandelon mysteriously die of a gunshot wound to the head in his car a week before the death of Karlov. Chandelon was the Chief Auditor in charge Of Counterterrorism funding.

“Turkey and Russia have the will not to be deceived by this false flag attack,” they said.

Don’t forget that on Christmas day, a Russian military jet went down over the Black Sea,killing 60 members of the Red Army choir and 33 others that just adds to the massive coincidence list.

On a final note, former acting director of the U.S. Central Intelligence Agency (CIA), Michael Morell openly conspired to “covertly” kill Russians and Iranians in Syria in an August 2016 interview with Charlie Rose. While Morell was talking about killing Russian and Iranian soldiers it is definitely a strange piece to add to this puzzle.

Are we witnessing a battle between the deep state and Russia in a spy versus spy plotline or is this all just a freak coincidence?

6.GLOBAL ISSUES

If Trump proposes tariffs especially on importing cars from Mexico, then the Mexicans will walk away from NAFTA

(courtesy zero hedge)

Mexico Threatens To End NAFTA Talks If Trump Proposes Tariffs

After months of tough talk from the Trump administration on NAFTA and border tariffs on goods imported from Mexico, among other issues, Mexico’s top trade negotiator, Economy Minister Ildefonso Guajardo, is now ratcheting up his own threats from south of the border.  Speaking to Bloomberg over the weekend, Guajardo said that Mexico will walk away from NAFTA if the U.S. insists on slapping duties or quotas on any products from Mexico.

“The moment that they say, ‘We’re going to put a 20 percent tariff on cars,’ I get up from the table,” Mexican Economy Minister Ildefonso Guajardo said in an interview. “Bye-bye.”

 

This doesn’t mean, Guajardo emphasized, that Mexico would be looking to scrap Nafta. But by saying it refuses to even discuss the kind of tariffs President Donald Trump has long trumpeted, the country is ratcheting up the pressure on U.S. negotiators and effectively daring them to pull out of the 23-year-old pact.

 

Mexican officials have said they expect official talks to start in June. And if they fail? “It wouldn’t be an absolute crisis,” said Guajardo, who headed the Nafta office of the Mexican embassy in the U.S. in the early 90s, when the pact was being written and implemented.

 

Of course, the increased rhetoric from Mexico comes after Trump has seemingly made a hobby of threatening border tariffs on auto imports since November 8th with tweets targeting pretty much every auto OEM from GM to Toyota.  Here is just one illustrative tweet storm from early December:

The U.S. is going to substantialy reduce taxes and regulations on businesses, but any business that leaves our country for another country,

fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. ……

without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies ……

wanting to sell their product, cars, A.C. units etc., back across the border. This tax will make leaving financially difficult, but…..

these companies are able to move between all 50 states, with no tax or tariff being charged. Please be forewarned prior to making a very …

 

Guajardo warned that, despite Trump’s vow to drain the swamp, opening up NAFTA to new duties would bring lines of lobbyists (a.k.a. swamp dwellers) from every industry imaginable all looking for a competitive edge.

Without Nafta, trade between Mexico and the U.S. would be ruled by World Trade Organization strictures limiting tariffs either country can impose on the other, with the average for Mexico at around 3 percent, according to the Mexico City-based political-risk advisory firm Empra. That “would take away some of our margin of competitiveness,” the minister said, but would be manageable.

 

Guajardo said part of the reason his country is unwilling to consider any new Nafta duties is because of a possible domino effect. “Opening the door to tariffs is very dangerous, because it’s like opening Pandora’s box — the lines of people asking for protectionism in Washington would reach to Maryland, and in Mexico City they’d reach to Puebla.”

 

The border-adjustment tax, he said, is something that’s squarely a domestic fiscal matter for the U.S. He also said it would be complicated to implement, and would no doubt result in mirror changes from other nations that would aim to level the playing field. Washington’s going that route “would require a crazy amount of control on the origin of merchandise and inputs.”

Meanwhile, as we’ve noted before, whether it’s simply negotiating rhetoric or not, Mexico is also publicly playing up potential trade deals with other South American countries that could fill the void created if NAFTA falls apart.

In Brazil in particular, Mexico sees what Guajardo called “very, very high potential” in areas including automobiles. “I’m not going to negotiate with Brazil for its pretty face. I’m going to negotiate with Brazil because they’re going to open their car-manufacturing market,” said the minister, who has overseen negotiations for the Trans-Pacific Partnership and is working to update the country’s free-trade agreement with the European Union.

 

Mexico is also seeking to have TPP members join the Pacific Alliance, which includes Chile, Peru and Colombia. TPP nations have been invited to participate in the Latin American group’s meeting in March, Guajardo said. In one of his first acts as president, Trump pulled the U.S. out of the Pacific trade deal, designed to knit together almost 40 percent of the global economy.

All of which should make for a very fun summer of 2017 complete 100’s of entertaining tweets and leaked phone call transcripts from the White House to Mexico.

 

 

END

 

7. OIL ISSUES

8. EMERGING MARKETS

none today

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

Euro/USA   1.0586 UP .0027/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP WINS THE ELECTION/USA READY TO GO ON A SPENDING BINGE WITH THE TRUMP VICTORY/ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/USA RAISING INTEREST RATE/EUROPE BOURSESm MOSTLY IN THE RED  

USA/JAPAN YEN 112.27 UP 0.321(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 1.2408 DOWN .0045 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT/LOWER HOUSE PASSES BILL TO BEGIN THE BREXIT PROCESS/AND NOW A NEW SCOTLAND REFERENDUM IS ON THE TABLE)

USA/CAN 1.3115 UP .0031 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS MONDAY morning in Europe, the Euro ROSE by 27 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0586; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ 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+ AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 24.77 POINTS OR 0.76%     / Hang Sang  CLOSED DOWN 40.65 POINTS OR 0.12%    /AUSTRALIA  CLOSED DOWN 0.76%  / EUROPEAN BOURSES MOSTLY IN THE RED 

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

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

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

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

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

The NIKKEI: this MONDAY morning CLOSED DOWN 176.07 POINTS OR 0.91% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 40.65 POINTS OR 0.12%       / SHANGHAI CLOSED DOWN 24.77   OR 0 .76%/Australia BOURSE CLOSED DOWN 0.76% /Nikkei (Japan)CLOSED DOWN 176.07 POINTS OR 0.91%  /  INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1254.90

silver:$18.36

Early MONDAY morning USA 10 year bond yield: 2.328% !!! UP 1 IN POINTS from FRIDAY 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  2.955, FLAT IN BASIS POINTS  from FRIDAY night.

USA dollar index early MONDAY morning: 101.09 DOWN 17 CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 3.879% DOWN 5  in basis point yield from FRIDAY 

JAPANESE BOND YIELD: +.054%  DOWN 1  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.659%  DOWN 4 IN basis point yield from  FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.134 DOWN 5 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 47 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.198% UP 1 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.0609 UP .0007 (Euro UP 51 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.21 UP: 0.269(Yen DOWN 27 basis points/ 

Great Britain/USA 1.24582 UP 0.0005( POUND UP 5 basis points)

USA/Canada 1.3103 UP 0.0019(Canadian dollar DOWN 19 basis points AS OIL ROSE TO $54.25

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This afternoon, the Euro was up by 51 basis points to trade at 1.0609

The Yen FELL to 112.21 for a LOSS of 27 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 ROSE 5  basis points, trading at 1.2458/

The Canadian dollar FELL  by 19 basis points to 1.3103,  WITH WTI OIL RISING TO :  $54.24

The USA/Yuan closed at 6.8674/
the 10 yr Japanese bond yield closed at +.054% DOWN 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2 IN basis points from FRIDAY at 2.345% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.971 UP 1/3  in basis points on the day /

Your closing USA dollar index, 100.82 DOWN 44 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 1:00 PM EST

London:  CLOSED DOWN 27.67 OR 0.38% 
German Dax :CLOSED DOWN 143.80 POINTS OR 1.20%
Paris Cac  CLOSED DOWN 46.05 OR 0.94%
Spain IBEX CLOSED DOWN 39.90 POINTS OR 0.42%
Italian MIB: CLOSED DOWN 222.83 POINTS OR 1.18%

The Dow closed UP 15.68 OR 0.08%

NASDAQ WAS closed up 16.59 POINTS OR 0.28%  4.00 PM EST
WTI Oil price;  54.24 at 1:00 pm; 

Brent Oil: 56.16  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.99 UP 41/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES TO +0.198%  FOR THE 10 YR BOND  1:30 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:$54.06

BRENT: $56.41

USA 10 YR BOND YIELD: 2.367%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.984%

EURO/USA DOLLAR CROSS:  1.0586 up .0028

USA/JAPANESE YEN:112.73   up 0.779

USA DOLLAR INDEX: 101.13  down 13  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2439 : down 15   BASIS POINTS.

German 10 yr bond yield at 5 pm: +.198%

END

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

TRADING IN GRAPH FORM

The Dow Has Never Had A Longer Streak Of Record Closes… Ever

Core Durables Goods and Shipments MISS, Pending Home Sales MISS, Dallas Fed ‘Survey’ BEAT

 

“Never gonna let you down”… 12th Record Dow Close In A Row.

 

One streak was broken today – after 6 straight days of Dow and Long Bond price rises, bonds dropped as stocks rose today…

 

But another streak reached a record highThe Dow has never had a longer streak of record closes than this in its 100-plus year history…

After Friday’s panic-bid melt-up, The Dow opened lower and VIX was immediately crushed back below 12.00

 

Small Caps were the big (squeeze) winner today…panic bid into the close as JPM noted more retail flows into ETFs sparks that manic lift.

 

Another big squeeze at the open…

 

Financials rallied on the day with BofA erasing Friday’s losses… (but Morgan Stanley still lagging)

 

Tesla Tumbled on Goldman’s downgrade…

 

Notably, it seems the Fed Funds futures market (rate hike odds) suddenly decided to catch up to stocks?

On very heavy volume.

 

Once again VIX was up and Stocks were up…

 

While bonds sold off on the day, yields remain lower (and the curve flatter) post-Fed Minutes…

 

Debt ceiling concerns rose…

 

After Kaplan spoke, the USD Index rallied back into the green – after weakness overnight…

 

As The USD rallied, so PMs dipped lower, oil ended unch, and copper slipped (but ended marginally green)…

 

And while the commodity was hit, Gold Miners were clubber like baby seals…

 

So to summarize – Hard real economic data notably disappointed and the odds of a March rate hike soared on extremely heavy volume in FF Futures, which seemed to be a positive thing for stocks but crushed PMs/Miners (but only nudged bond yields higher) – all very convenient.

 

end

Trading: swap spreads surge as debt ceiling day approaches:

(courtesy zero hedge)

Swap Spreads Surge To 5-Year Highs As Debt Ceiling Despair Strikes

It appears David Stockman’s warnings over the looming debt ceiling debacle has sparked some investors to face up to reality once again. The Treasury-Bill yield curve has inverted further and swap spreads soared to five-year highs.

The difference between 2-year swap rates and Treasury yields has widened back to 37.5 basis points which is the highest since March 2012. Societe Generale analysts led by Subadra Rajappa expect net bill issuance to drop by about $150 billion as Treasury shrinks its cash balance to $23 billion by the March 15 deadline.

And to make things even more clear, something odd is going on in the Treasury bill market..

Bloomberg notes that investors are willing to pay more for bills maturing in three weeks instead of two.

That’s because they don’t want to be caught empty handed while the Treasury slows debt sales to push its cash balance lower as part of the 2015 pact to suspend the debt ceiling. The spread between the March 9 and March 16 bills may get a “a little more noticeable” as Treasury cuts issuance and provides a “clearer sense of how long bill supply is going to be lower than normal” going into the March 15 deadline, Jefferies economist Thomas Simons said in a phone interview.

As Stockman warned over the weekend:

 

“I think what people are missing is this date, March 15th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash.  Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity.

end

  end

 

Durable goods orders tumbled last month, the most since June.

(courtesy zero hedge)

Core Durable Goods Orders Tumble Most Since June, Shipments Slump

While the headline durable goods orders print beat expectation (rising 1.8% MoM in Jan) – thanks to a considerable downward revision in December – the core orders and shipments disappointed markedly and declined in all cases.  Core durable Goods Orders fell most since June and Shipments fell most since July as it appears ‘hard’ data drastically disappoints relative to ‘soft’ data expectations.

Core Durable Goods Orders declined… (-0.2% MoM vs +0.5% Exp)

 

As once again the headline beat was all airplanes – military and civilian:

  • Defense aircraft and parts +59.9%
  • Non-defense aircraft and parts +69.9%

And Core Capital Goods Shipments tumbled… (-0.6% vs +0.2% exp)

Soft data, Dallas Fed soars for its 6th straight month and it is now at 11 year highs

(courtesy zero hedge)

Dallas Fed Soars For 6th Straight Month To 11-Year Highs

The Dallas Fed Manufacturing survey soared – for the 6th straight month – to 24.5 in February (smashing expectations of a modest dip to 19.4). This is the highest since April 2006.

This is a 4 standard deviation beat of analysts’ expectations, well north of even the highest forecast.

While the headline data soared, we note, however, that wages declined, workweek dropped, prices paid surged, and new orders tumbled.

Another soft survey ‘beat’ as hard data (core durable goods) misses.

As good as it gets

 

end

 

More confusion from the Trump administration:  Mnuchin states that tax reform will not be ready until August and what is good for gold/silver, he states that entitlements like social security and medicare will not be touched

(courtesy zero hedge)

Mnuchin Manages Expectations On Tax Reform; Warns Trump “Not Touching” Entitlements

‘Good cop’ Mnuchin appeared to play expectations-manager this morning in an interview with FOX’s Maria Bartiromo. After confirming the Trump administration is “not touching” entitlement programs, and having said this week that tax reform is expected by August,  he appeared to walk back that hype by saying that President Trump “will be touching on tax reform” during his speech to Congress this week, which Reuters notes, is not an official “State of the Union” address.

On Thursday, Mnuchin promised tax reform before August…

But speaking today to Fox’s Maria Bartiromo, he seemed less optimistic on the timeline…

The Trump administration is “not touching” entitlement programs such as Social Security and Medicare “for now,” Treasury Secretary Steven Mnuchin says.

“Don’t expect to see that as part of this budget, OK,” Mnuchin says of entitlements. “We are very focused on other aspects and that’s what’s very important to us. And that’s the president’s priority.”

Donald Trump “will be touching on tax reform” in Tuesday’s speech to Congress. “The President is very, very focused on us getting back to sustained, long-term economic growth,” Mnuchin says. As Reuters notes,

The plan will reduce the number of tax brackets for individuals and offer a “middle income tax cut,” Mnuchin said. On the business side, Trump wants to “create a level playing field for U.S. companies to be able to compete in the world.”

Mnuchin said Trump was looking at a “reciprocal tax” that would help create more parity with other countries. Trump administration officials have complained that many countries charge value-added taxes on imports while exempting exports from taxation. The United States mainly taxes corporate income.

But Mnuchin again said he was only studying a House Republican border tax adjustment plan that would levy a 20 percent tax on imports to encourage more U.S.-based production and exports. That plan aims to raise more than $1 trillion in revenue over a decade to offset lower tax rates for businesses.

“So let me just say this is something we are studying very carefully,” Mnuchin said. “There are certain aspects that the president likes about the concept of a border-adjusted tax, there are certain aspects that he’s very concerned about.”

He added that the Trump administration would work with the House of Representatives and Senate to craft “a combined plan that takes the best of all of this when we bring it forward.”

Mnuchin says the “absolute lower tax rate” favored by the Trump administration “doesn’t necessarily mean” a corresponding drop in revenues.

Mnuchin did not back off from the Obamacare plan as a priority over tax reform but stated “they are both big priorities” noting that “we need some more time to get tax reform done,” suggesting his more aggressive August deadline was perhaps a little optimistic.

As Barclays notes, this week’s first major policy speech should provide clarity on whether the US administration’s lack of detail on potential changes to trade and fiscal policies is a reflection of changing policy priorities. Elsewhere, growth outlooks in Europe and Japan remain positive.

US: distraction or policy choice?

The US administration appears to be in no hurry to introduce tariffs or other restrictive trade policies on China or Mexico; together, these countries account for about 30% of US imports. Likewise, on the other major policy items – the government’s public investment programme and tax reform – specificity is lacking. While there have been some hints about the type of corporate income tax reform that the administration might deliver – a broadening of the base and cuts to the tax rates – markets are still waiting for the 2017 key draft fiscal budget. Markets will be attentively watching next week’s State of the Union address (28 Feb). We think that the presentation to Congress will be a good opportunity for the President to more clearly flesh out his policy priorities and goals, especially on trade, taxes, and public investment.

We believe that the policy focus needs to move away from immigration and health care toward fiscal policies if the administration wants to deliver on tax and spending policies that could boost economic activity in the current calendar year. Absent any re-prioritisation of policy in the very near term, we believe investors should re-orient their view on tax reform to 2018. Delays in a possible fiscal boost would make the 2017 government’s growth target of c. 3% challenging (Barclays forecast: 2.5%). For now, our policy baseline remains a combination of anti-trade policies in the form of tariffs against Mexico and China and expansionary fiscal policy that provides a boost to economic activity later this year, but we acknowledge that the probability of our baseline materialising has fallen substantially in recent weeks.

 

END

 

More confusion from the Trump camp:  He is advocating huge increase in military spending but a drastic cut to domestic state department spending like the EPA

(courtesy zerohedge)

 

Trump Seeks Sharp Increases In Military Spending, “Drastic Cuts” To State Department, EPA

As part of his proposed budget, President Trump will instruct federal agencies on Monday to assemble a spending plan for the coming fiscal year that includes sharp increases in Defense Department spending and “drastic cuts” to domestic agencies such as the State Department, the EPA and other non-defense programs, so that he can keep his promise to leave Social Security and Medicare alone, according to four senior administration officials cited by the NYT. The budget outline will be the first move in a campaign this week to reset the narrative of Mr. Trump’s turmoil-tossed White House.

Coming one day before delivering his high-stakes “State of the Union” address on Tuesday to a joint session of Congress, Trump will demand a budget with tens of billions of dollars in reductions to the Environmental Protection Agency and State Department, administration officials reported. The NYT adds that social safety net programs, aside from the big entitlement programs for retirees, would also be hit hard. Treasury Secretary Steven Mnuchin, speaking on Fox News earlier on Sunday, said Trump’s budget would not seek cuts in federal social programs such as Social Security and Medicare.

While preliminary budget outlines tend to be little-noticed administrative exercises, the first step in negotiations between the White House and federal agencies that usually shave the sharpest edges off the initial request, this plan, a product of a collaboration between the Office of Management and Budget director, Mick Mulvaney; the National Economic Council director, Gary Cohn; and the White House chief strategist, Stephen Bannon, is intended to make a big splash for a president eager to show that he is a man of action.

Resistance from federal agencies could ease some of the deepest cuts in the initial plan before a final budget request is even sent to Congress. And Capitol Hill will have the last word. To meet Mr. Trump’s defense request, lawmakers in both parties would have to agree to raise or end statutory spending caps on defense and domestic programs that were imposed by the 2011 Budget Control Act.

As Reuters adds, one of the officials said Trump’s request for the Pentagon included more money for shipbuilding, military aircraft and establishing “a more robust presence in key international waterways and chokepoints” such as the Strait of Hormuz and South China Sea. Meanwhile, the State Department’s budget could be cut by as much as 30%, which would force a major restructuring of the department and elimination of programs.

Last Friday, speaking to conservative activists, Trump promised “one of the greatest military buildups in American history.”

Some defense experts have questioned the need for a large increase in U.S. military spending, which already stands at roughly $600 billion annually. By contrast, the United States spends about $50 billion annually on the State Department and foreign assistance. The amounts that Trump is proposing to add to the Pentagon budget and trim elsewhere are not yet publicly known.

Quoted by Reuters, John Czwartacki, a spokesman for the White House’s Office of Management and Budget, said the budget blueprint would be released in mid-March.

“It would be premature for us to comment – or anyone to report – on the specifics of this internal discussion before its publication,” he said in a statement. The budget plans that the White House is expected to send to departments and agencies on Monday are just one stage in a lengthy process.

The agencies can argue for more funding, and final spending plans must be approved by the U.S. Congress.

Pouring cold water on previous reports of optimistic economic projections, Trump’s budget assumes annual economic growth of “only” 2.4%, an official told Reuters. While campaigning for the presidency last year, Trump called for a “national goal” of 4 percent economic growth. For next year, the operating assumption is only slightly higher, “a sign that the budget process will not be too out of step with economic reality.”

Meanwhile, the NYT notes that Trump’s top advisers huddled in the White House this weekend to work on his Tuesday night prime-time address.

They focused on a single, often overlooked message amid the chaos of his first weeks in the White House: the assertion that the reality-show candidate is now a president determined to keep audacious campaign promises on immigration, the economy and the budget, no matter how sloppy or disruptive it looks from the outside.

“They might not agree with everything you do, but people will respect you for doing what you said you were going to do,” said Jason Miller, a top communications strategist on the Trump campaign who remains close to the White House. “He’s doing something first, and there’s time for talk later,” Mr. Miller added. “This is ultimately how he’s going to get people who didn’t vote, or people who didn’t vote for him, into the fold. Inside the Beltway and with the media, there’s this focus on the palace intrigue. Out in the rest of the country, they are seeing a guy who is focused on jobs and the economy.”

The budget plan, which will probably be substantially altered by House and Senate Republicans, and vociferously opposed by congressional Democrats, will be Mr. Trump’s first big step into a legislative fray he has largely avoided during the first 40 days of his administration.

Mayor Rahm Emanuel of Chicago, who was Mr. Obama’s first chief of staff, told the NYT in an interview Sunday night that Mr. Trump was trying to create a “sense of urgency, which most people aren’t feeling right now, which was a reality to us” in order to generate support for his unspecified economic agenda, including an infrastructure bill and a tax overhaul.

One West Wing official, who requested anonymity to speak candidly about strategy, said the administration craved the split-screen television images of Mr. Trump at round-table discussions with business executives every few days on one side, and the vehement protesters of his administration on the other. But his critics say such photo opportunities are all an act, a not-very-entertaining real-life rendition of “The Apprentice” by an ineffective rookie president.

“This man is not a doer,” said Representative Nancy Pelosi, the House minority leader, who will host a Monday “pre-buttal” of Mr. Trump’s Tuesday speech. “Oh, please. He has nothing to show for what he’s been doing in office for 40 days. It’s all been squandered.”

Other disagreed: “During his first month in office, President Trump has done exactly what he said he was going to do,” said Thomas Barrack Jr., a longtime friend of Mr. Trump’s who ran his inaugural committee. “No president has worked harder or accomplished as much, even with tremendous political resistance forcing him to operate with a small team of outsiders possessing little government experience.”

 

END

 

This is big:  Trump seeks a monstrous 54 billion USA INCREASE in defense spending

(courtesy zero hedge)

Trump Seeks “Historic” $54 Billion Increase To Defense Spending

As observed earlier in the day, as part of the leaked preliminary Trump budget, the president was set to unveil major spending increases for US defense offset by cuts to federal agencies, and other non-defense sectors. And on Monday morning, the first details emerged, including that the boost to defense spending is expected to be about 10%, or some $54 billion, and will be revenue neutral, offset by cuts in non-defense areas, and will not “add a dime to the deficit.” As Trump said, he is seeking a “historic increase” in military spending.

“This budget will be a public safety and national security budget,” Trump told state governors at the White House. “It will include an historic increase in defense spending to rebuild the depleted military of the United States of America at a time we most need it,” he said.

One of the officials cited by Reuters said Trump’s request for the Pentagon included more money for shipbuilding, military aircraft and establishing “a more robust presence in key international waterways and chokepoints” such as the Strait of Hormuz and South China Sea.

A second official said the State Department’s budget could be cut by as much as 30 percent, which would force a major restructuring of the department and elimination of programs.  Some defense experts have questioned the need for a large increase in U.S. military spending, which already stands at roughly $600 billion annually. By contrast, the United States spends about $50 billion annually on the State Department and foreign assistance.

The White House will send federal agencies their proposed 2018 budget allocations at noon Monday, according to an Office of Management and Budget official. The official provided no specific details during a call with reporters about the rest of the budget, including the baseline figure being used for the cuts or over what period they would be made. The initial blueprint of the president’s budget will be released in mid-March, and the administration’s entire fiscal proposal is expected later in the spring.

The outline due next month will include only targets for discretionary spending programs, which represent around one-third of total federal spending. The blueprint won’t include proposed changes on tax policy or mandatory spending.

To offset the defense spending increase, the White House is seeking corresponding cuts of $54 billion in non-defense categories, including “large spending cuts” to foreign aid, the EPA, the State Department and safety programs. The official also added that most agencies would see funding reductions.

“Most federal agencies will see a reduction as a result,” the official said, with cuts falling most heavily on “lower priority” programs as well as foreign aid. When asked where the extra $54 billion will be spent, the official said “predominantly it will go to the Pentagon,” but declined to name specific offices.

According to The Hill, the budget will fundamentally alter the spending rules known as the sequester brokered in a 2013 deal between President Obama and Congress. That agreement set a cap on discretionary spending across the federal government, which affected defense and non-defense spending equally.

The punchline: according to the White House, the budget, at least as it stands right now, won’t add a dime to the deficit, suggesting that if only for the time being, the dramatic debt-funded spending spree remains on hold.

According to the WSJ, the Trump administration said the funding request will show that Mr. Trump is following through on promises he made during his campaign to boost military spending and put “America First,” a campaign theme he sounded in his inaugural address last month. It isn’t clear how the offsetting cuts will allow him to also make good on promises to ramp up funds for border security, infrastructure and veterans’ health care.

For now we await more details. As the NY Times reported ovenright, Trump’s plan which is a collaboration between budget director, Mick Mulvaney; NEC director Gary Cohn; and Steve Bannon, is meant to make a “big splash” and has been carefully timed to come the day before the president’s address to Congress.

 

end

 

A terrific commentary from Wolf Richter on the USA restaurant business.  Flat sales are now a huge welcome as  USA citizens feel the bite of lower after tax wages coupled with higher inflation.  Restaurants have had to increase prices and this has caused their industry to tank

(courtesy Wolf Richter/WolfStreet)

 

Is The US Restaurant Recession Becoming Structural?

Submitted by Wolf Richter of WolfStreet.com

“Flat sales” are now a “welcome change.” The New Normal.

National restaurant data and anecdotal evidence has been piling up. “T Vogel,” a commenter on WOLF STREET, put it this way:

My wife and I make almost 30k more than the median family income in my town (northern CA) with no kids. Our rent just went up by 1k a month – landlord selling – starter houses are selling at 500k.

We are not spending a dime more than needed. I plan to skip our weekly night eating out now.

They’re not the only ones to skip restaurants. Costs are going up, not just of restaurant meals, but of life in general. Incomes are lagging behind. And consumers are adjusting…. That’s what a Reuters/Ipsos opinion poll of more than 4,200 U.S. adults confirmed today.

One-third of the respondents said they were eating in restaurants less often than three months ago. The poll was conducted in the second half of January. Of them, 62% cited cost as the primary reason.

Restaurant prices have been rising. The price index for “food away from home,” a subcategory in the Consumer Price Index, increased between 2% and 3% every year since 2012. In January, it rose 2.4% year-over-year. Those price increases are cumulative, and they add up after a while.

It’s not just that eating out is getting more expensive; it’s that stretched households are pushed by price increases elsewhere to divert some of their limited means from eating out to other expenditures.

Yet grocery stores aren’t reporting blockbuster numbers either, Bob Goldin, partner at food industry strategy firm Pentallect, told Reuters. “There’s more splintering of the food dollar, and the pie isn’t growing,” he said. “Where you spend has changed more than the amount you spend.”

The national averages, as seen from the restaurant’s point of view, bear that out.

In its most recent Restaurant Performance Index, the National Restaurant Association lamented “soft same-store sales and customer traffic readings” in December, which kept the Current Situation Index (tracking same-store sales, traffic, labor and capital expenditures) in contraction mode for the third month in a row:

  • 42% of operators said their same-store sales declined year-over-year.
  • 47% of operators said their customer traffic declined year-over-year.

This sort of data has been coming out for a while. It got to the point where TDn2K titled its most recent Restaurant Industry Snapshot: “Flat Sales, Welcome Change for Restaurant Industry in January.”

And more specifically:

While same-store sales growth was flat (zero percent) in January, it represented a welcome break from the ten consecutive months of negative sales growth experienced by the industry through the end of last year.

These flat sales were a function of slightly higher per-person average spending and fewer people going to restaurants: same store traffic was down 2.5% monthly and 4.1% on a rolling three-month basis. As the report put it: “Although still negative, this was the best month for the industry since last May.”

On a two-year basis, same-store sales were down 0.8% from January of 2015.

There were some winners in January, with growing same-store sales: Upscale casual, family dining, and quick service. Casual dining “was able to achieve flat results in January,” hallelujah, thus breaking a streak of 13 months in a row of falling same-store sales.

And there were some losers with same-store sales declines, according to the TDn2K report: fine dining and fast casual.

You get the idea: It’s been so tough out there for restaurants that any sort of flat spot or even a smaller down-tick in the averages is welcome news for the industry. And it looks like it’s becoming a structural feature of the US economy, though not nearly as bad as the downward spiral of brick-and-mortar retail.

This of course contradicts the theory or hopes that millennials – who are said to prefer splurging money on “experiences,” such as eating out, rather than on products, such as clothes – would pull the restaurant business out of its funk.

That said, you wouldn’t necessary know this by walking around San Francisco. Yelp lists nearly 8,000 eating establishments in the City, many of them recent creations, including 500 cafés and 3,000 delis. A lot of the places are packed. Some can be impossible to get into on a Friday or Saturday night without a reservation days or weeks in advance. Others are nearly impossible to get into no matter when or what.

But then other restaurants are nearly empty. There has been a slew of recent restaurant closures, amid talk of a big shakeout, including something called the “Mid-Market Massacre” in an area around Market St., where restaurant after restaurant closes, done in by exorbitant rents, not enough traffic, too much competition, a finicky public that might have lost interest, and insufficient sales. So yes, it’s tough out there, even in San Francisco, in what must be one of the toughest businesses on earth.

 

end

The Chair of House Intelligence committee seens no evidence of contact between Trump and his campaign team and Russia:

(courtesy zero hedge)

Chair Of House Intel Committee: No Evidence Of Contact Between Trump Campaign, Russia

In what will likely be a setback to the ongoing press campaign to portray the Trump administration and campaign as a Kremlin puppet, on Monday the chairman of the U.S. House of Representatives intelligence committee said he has seen no evidence of contact between Donald Trump’s campaign and the Russian government during the 2016 presidential election, Reuters reported.

Devin Nunes, head of the House Permanent Select Committee on Intelligence, said the panel is expanding an ongoing investigation into Russian activities to include Moscow’s efforts targeting the U.S. election. Nunes said he had been briefed on a transcript of a phone call that former Trump national security adviser Michael Flynn had with a Russian envoy after the election. He said he did not hear anything worrisome about that call.

During a press conference with reporters on Monday, Rep. Nunes downplayed claims that the White House had asked members of the CIA and FBI to squelch reports of contact between Russia and members of Trump’s presidential campaign, saying that there was “nothing wrong” with what he characterized as attempts to have a better working relationship with the press. He also said that the committee wanted evidence of any American citizens who may have talked to Russian officials, implicitly broadening the issue beyond the Trump campaign and administration. He characterized the FBI as being “very upfront” with his committee about what they know about Trump’s potential connections with Russia, although he admitted that he’d like to know more.

When asked if they have any evidence of contacts specifically from the Trump campaign, Nunes replied: “It’s been looked into and there’s no evidence of anything there. Obviously we’d like to know if there is.” He also dismissed concerns that Flynn had violated the Logan Act as “ridiculous” and said that they would not subpoena Trump’s tax returns, which puts him at odds with Senate Intelligence Committee member Susan Collins, R-Maine. Throughout the press conference, Nunes insisted that both he and the White House were simply trying to be “transparent” and claimed to be confused as to why the Trump administration providing his phone number to a reporter would be a news story. He also repeated his earlier statements about wanting to avoid “McCarthyism” and “witch hunts” based on reports that Americans may have connections to the Russian regime.

“This is almost like McCarthyism revisited,” Nunes told reporters at the California Republican Party’s spring convention on Saturday according to Politico. “We’re going to go on a witch hunt against, against innocent Americans?”

Nunes added: “At this point, there’s nothing there. Once we begin to look at all the evidence, and if we find any American that had any contact with Russian agents or anybody affiliated with the Russian government, then we’ll be glad to, at that point, you know, subpoena those people before the House and let the legislative branch do its oversight and then we would recommend it over to, you know, the appropriate people.”

Nunes concluded, saying, “we can’t go on a witch hunt against the American people, any American people who have not had any contact, just because they appeared in a news story.”

Also on Monday, while speaking to a gathering of health insurance executives he was meeting with at the White House, president Trump on Monday dismissed a question about his aides’ alleged ties to Russia by saying he hasn’t spoken to the country in a decade.

Q: Do you support a special prosecutor on Russia?

Trump: “I haven’t called Russia in 10 years.”

“I haven’t called Russia in 10 years,” he told a reporter who asked him whether a special prosecutor should carry out an investigation.

The following is a must view and read.  March 15 is coming and that is when the bloodbath begins as the debt ceiling well be frozen as of that debt.

a must read….

(courtesy Greg Hunter/USAWatchdog)

 

Giant Fiscal Bloodbath Coming Soon-David Stockman

Former Reagan Administration White House Budget Director David Stockman says financial pain is a mathematical certainty. Stockman explains, “I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus.  Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme.  People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America.  Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.”

So, can the Trump bump in the stock market keep going? Stockman, who wrote a book titled “Trumped” predicting a Trump victory in 2016, says, “I don’t think there is a snowball’s chance in the hot place that’s going to happen. This is delusional.  This is the greatest suckers’ rally of all time.  It is based on pure hopium and not any analysis at all as what it will take to push through a big tax cut.  Donald Trump is in a trap.  Today the debt is $20 trillion.  It’s 106% of GDP. . . .Trump is inheriting a built-in deficit of $10 trillion over the next decade under current policies that are built in.  Yet, he wants more defense spending, not less.  He wants drastic sweeping tax cuts for corporations and individuals.  He wants to spend more money on border security and law enforcement.  He’s going to do more for the veterans.  He wants this big trillion dollar infrastructure program.  You put all that together and it’s madness.  It doesn’t even begin to add up, and it won’t happen when you are struggling with the $10 trillion of debt that’s coming down the pike and the $20 trillion that’s already on the books.”

Then, Stockman drops this bomb and says, “I think what people are missing is this date, March 15th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash.  Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity.

Join Greg Hunter as he goes One-on-One with financial expert and best-selling author David Stockman.  The author of “Trumped!” The book that predicted Donald Trump’s 2016 victory.

After the Interview:

 

end

We will see you tomorrow night

Harvey

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