July 11/Trump Jr’s email sparks gold recovery as well as silver/Again massive volume in silver at the comex/huge movement of gold out of comex while huge movements into the silver comex/Russia expels 35 USA diplomats and seizes USA property in Moscow in retaliation against sanctions 6 months ago/

GOLD: $1215.60  UP $1.50

Silver: $15.78  UP 7  cent(s)

Closing access prices:

Gold $1217.50

silver: $15.87









Premium of Shanghai 2nd fix/NY:$10.80


LONDON FIRST GOLD FIX:  5:30 am est  $1211.90




For comex gold:




For silver:



1,445,000  OZ/

Total number of notices filed so far this month: 2612 for 13,060,000 oz



Let us have a look at the data for today



 In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.039 BILLION TO BE EXACT or 149% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold  ROSE BY 4,372 CONTRACTS WITH THE  RISE IN THE PRICE OF GOLD  ($3.50 with YESTERDAY’S TRADING). The total gold OI stands at 481,624 contracts.

we had 1 notice(s) filed upon for 100 oz of gold.


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


Strange!! had a huge  changes in tonnes of gold at the GLD/a withdrawal of 2.96 tonnes of gold with gold rises today??

Inventory rests tonight: 832.39 tonnes





Please note the difference between gold and silver with respect to the GLD and SLV inventory changes



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

1. Today, we had the open interest in silver  ROSE BY 6 contracts  UP TO 207,952 (AND now A LITTLE CLOSER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), DESPITE THE NICE RISE IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  (UP 28 CENTS ).We  SEEM TO HAVE LOST NOBODY AS  EVERYBODY remains firm and determined. 

(report Harvey)


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg


i)Late MONDAY night/TUESDAY morning: Shanghai closed DOWN 9.59 POINTS OR 0.30%   / /Hang Sang CLOSED UP 377.58 POINTS OR 1.48% The Nikkei closed UP 114.50 POINTS OR 0.57%/Australia’s all ordinaires CLOSED UP 0.10%/Chinese yuan (ONSHORE) closed UP at 6.8015/Oil DOWN to 43.91 dollars per barrel for WTI and 46.36 for Brent. Stocks in Europe OPENED  RED,,   Offshore yuan trades  6.8055 yuan to the dollar vs 6.8015 for onshore yuan. NOW THE OFFSHORE IS A TOUCH WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT  HAPPY TODAY






More regulation and tighter money has now put an end to China’s second housing bubble.  The first bubble burst in 2014 and now the second seems to have blown this market again

( Valentin Schmid/EpochTimes)



Russia’s patience with Trump has run out:  Russia is not set to expel 30 USA diplomats and seize USA assets in Russia

( zero hedge)




A huge scandal for Ukraine.  It seems that it was a big lie why the government nationalized the Ukraine’s largest private bank called PrivatBank.  They were doing OK when the government nationalized them.  The government funded the bank with worthless government banks and as such has been the financial scene in the Ukraine far worse
( John Mills/Mises Institute


I)Goldman Sachs warns that oil could plunge below 40 dollars per barrel.  The reasons are obvious as increasing supply from all avenues are just too great to handle the decreasing demand for oil

( zero hedge/Goldman Sachs)

ii)Down goes WTI back into the 43 dollar handle with news that the Saudis have breached their own OPEC agreement:

( zero hedge)

iii)Geopolitical events may cause the oversupply to under supply which could force oil to over 120 dollars per barrel.

(Nick Cunningham/OilPrice.com)


Sugar utopia in Venezuela

( zero hedge)


i)Seems that we may be having a civil war between two computer factions in Bitcoin and that is sending crypto currencies spiraling southbound.  The world is latching onto the ABX crypto system which is fully backed by gold and silver.

( zero hedge)

ii)A must read..the flash crash in silver was 100% orchestrated by government.  That is why the regulators refused to investigate the raid

( zero hedge)

iii)The new LME contract sees a lackluster launch due to the fact that the gold is unallocated.  The world is moving to the ABX system backed by real metal.


( zero hedge)


iv)Lynn Fisher correctly states that the flash crash in silver (twice) was meant to scare investors away from the precious metals and to hold only fiat.  It is not working:  gold and silver are deeply in backwardation in the physical markets in London

( zero hedge)

v)Jim Sinclair is not at all bothered by the actions of Tanzania.  The government wants its fair share of the revenue

( GATA/Tanzania Royalty)

vi)A must listen to audio from Andrew Maguire taped last week:


( Kingworldnews/Andrew Maguire

10. USA Stories

i)Soaring premiums has now resulted in at least 2 million Americans ditching their health coverage.  The biggest group of course is the 18 to 34 yr old group as there is really no need for them to fund the aging population


( zero hedge)

ii)Not good:  wholesale inventories rise but wholesales sales tumble for the third straight month as unsold inventories climb:

this will be a negative to GDP

( zero hedge)

iii)The reverse QE of the Fed will be very damaging according to Dimon and he is correct as all of those dealers that has bought bonds over these past several years will now become sellers

( zero hedge)

iv)Senate Republicans have canceled their first two weeks of their August recess to work on legislation.  They still will not come up with anything

( zerohedge)

v)A good commentary tonight from Dave Kranzler of IRD: it is not just Illinois that is on the brink..it is the whole country


( Dave Kranzler/IRD)

Let us head over to the comex:

The total gold comex open interest ROSE BY 4,372 CONTRACTS up to an OI level of 479,667 WITH THE  RISE IN THE PRICE OF GOLD ($3.50 with YESTERDAY’S trading). An open interest of around 390,000 to 400,000 is core and nothing will move these guys from their contracts. it sure looks like the supplier of the comex gold paper are the specs, and the purchasers going long are the commercials.

We are now in the contract month of JULY and it is one of the POORER delivery months  of the year. .

The non active July contract LOST 5 contract(s) to stand at 79 contracts. We had only 1 notices filed YESTERDAY morning, so we LOST 4 contracts or an additional 40o oz that will NOT  stand in this non active month of July.  Thus 4 EFP notices were given which gives the long holder a fiat bonus plus a futures contract for delivery and most likely these are London based forwards.  The contracts are private so we do not get to see all the particulars. The next big active month is August and here the OI LOST 9571 contracts DOWN to 272,047, as the bankers trying to keep this month down to manageable size. The next non active contract month is September and here they LOST another 26 contracts to stand at 430. The next active delivery month is October and here we gained 1343 contracts up to 20,033.  October is the poorest of the active gold delivery months as most players move right to December.

We had 1 notice(s) filed upon today for 300 oz

For those keeping score: in the upcoming front delivery month of August:

On July 11.2016:  open interest for the front month: 415,860 contracts compared to July 11.2017:   272,947.

However last yr at this time we had a record OI in gold at 655,000 contract for the entire complex.


We are now in the next big active month will be July and here the OI GAINED 135 contracts UP to 405. We had 61 notices served  yesterday so we  gained 196 notices or an additional  980,000 oz will stand at the comex, and 0 EFP contracts were issued which entitles them to receive a fiat bonus and a future delivery contract (which no doubt is a London based forward).

The month of August, a non active month gained 43 contracts to stand at 725.  The next big active delivery month for silver will be September and here the OI already LOST ANOTHER  501 contracts DOWN to 157,626.

The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  234,787.

As for the July contracts:

Initial amount that stood for silver for the July 2016 contract:  14.785 million  oz

Final standing JULY 2016:  12.370 million with the difference being EFP’s taking delivery in London.  Thus we are basically on par to what happened a year ago as to the total amount of silver ounces standing.

We had 292 notice(s) filed for 1445,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 94,993 contracts which is POOR/

Yesterday’s confirmed volume was 281,526 contracts  which is excellent

volumes on gold are STILL HIGHER THAN NORMAL!

Initial standings for JULY
 July 11/2017.
Inventory movements not available today due to the length of time to cook the books
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
12.344/488 oz
Deposits to the Dealer Inventory in oz NIL  oz
Deposits to the Customer Inventory, in oz 
NIL oz
No of oz served (contracts) today
1 notice(s)
100 OZ
No of oz to be served (notices)
78 contracts
7800 oz
Total monthly oz gold served (contracts) so far this month
63 notices
6300 oz
.1959 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   15,521.900 oz
Today we HAD  0 kilobar transaction(s)/ 
We had 0 deposit into the dealer:
total dealer deposits: NIL oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had no dealer deposits:
total dealer deposits:  nil oz
we had 0  customer deposit(s):
total customer deposits; NIL  oz
We had 2 customer withdrawal(s)
i) Out of Brinks:  12,242.578 oz

ii) Out of Delaware:  101.91 oz

total customer withdrawals;  12,344.488 oz
 we had 2 adjustment(s):
i) Out of Brinks:  31,999.279 oz leaves the dealer and enters the customer account of Brinks
ii) Out of Scotia; 23,034.683 oz leaves the dealer account and enters the customer account of Scotia
total leaving the dealer: 55,033.962 oz

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

To calculate the initial total number of gold ounces standing for the JULY. contract month, we take the total number of notices filed so far for the month (63) x 100 oz or 6,300 oz, to which we add the difference between the open interest for the front month of JUNE (79 contracts) minus the number of notices served upon today (1) x 100 oz per contract equals 14,500  oz, the number of ounces standing in this NON active month of JULY.
Thus the INITIAL standings for gold for the JULY contract month:
No of notices served so far (63) x 100 oz  or ounces + {(79)OI for the front month  minus the number of  notices served upon today (1) x 100 oz which equals 14,100 oz standing in this  active delivery month of JUNE  (0.4385 tonnes)
We LOST 4 contracts or AN ADDITIONAL 400 oz will NOT  stand and 4 EFP contracts were issued as described as above.
Total dealer inventory 772,088.497 or 24.01 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,530,229.121 or 265.32 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 265.32 tonnes for a  loss of 38  tonnes over that period.  Since August 8/2016 we have lost 89 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.
And now for silver
Again inventory levels not available today as the CME had extreme trouble cooking the books
JULY INITIAL standings
 July 11 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
20,013.82 oz
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
1,202,404.09 oz CNT
No of oz served today (contracts)
(1,445,000 OZ)
No of oz to be served (notices)
113 contracts
( 565,000 oz)
Total monthly oz silver served (contracts) 2612 contracts (13,060,000 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 512,483.4 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 1 customer withdrawal(s):
 i) Out of HSBC:  20,013.82 oz
We had 3 Customer deposit(s):
i) into CNT:  600,572.260 oz
ii) into Delaware:  994.500 oz
iii) Into JPMorgan: 600,837.330
***deposits into JPMorgan have now resumed again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: 1,202,404.09 oz
 we had n/a adjustment(s)
The total number of notices filed today for the JULY. contract month is represented by 289 contract(s) for 1445,000 oz. To calculate the number of silver ounces that will stand for delivery in JULY., we take the total number of notices filed for the month so far at 2612 x 5,000 oz  = 13,060,000 oz to which we add the difference between the open interest for the front month of JULY (405) and the number of notices served upon today (289) x 5000 oz equals the number of ounces standing


Thus the INITIAL standings for silver for the JULY contract month:  2612 (notices served so far)x 5000 oz  + OI for front month of JULY.(405 ) -number of notices served upon today (289)x 5000 oz  equals  13,625,000 oz  of silver standing for the JULY contract month.
Volumes: for silver comex
Today the estimated volume was 51,534 which is EXCELLENT
FRIDAY’s  confirmed volume was 133,313 contracts which is  HUGE
Total dealer silver:  38.502 million (close to record low inventory  
Total number of dealer and customer silver:   213.027 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 5.8 percent to NAV usa funds and Negative 5.90% to NAV for Cdn funds!!!! 
Percentage of fund in gold 63.3%
Percentage of fund in silver:36.6%
cash .+0.1%( July 11/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV  RISES TO +1.04% (July 11/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.91% to NAV  (July 11/2017 )
Note: Sprott silver trust back  into POSITIVE territory at +1.04/Sprott physical gold trust is back into NEGATIVE/ territory at -0.91%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

 Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017


Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.


And now the Gold inventory at the GLD

July 11/strange!@! we had a big withdrawal of 2.96 tonnes despite gold’s advance today/inventory rests tonight at 832.39 tonnes

July 10/no changes in gold inventory at the GLD/inventory rests at 835.35 tonnes

July 7/a massive withdrawal of 5.32 tonnes of paper gold were removed and this was used in the attack today/inventory rests at 835.35 tonnes

July 6/no changes in tonnage at the GLD/Inventory rests at 840.67 tonnes



June 30/no change in gold inventory at the GLD/Inventory rests at 853.66 tonnes

June 29/no change in inventory at the GLD/inventory rests at 853.66 tonnes

June 28/no change in inventory at the GLD/Inventory rests at 853.66 tonnes

June 27.2017/a deposit of 2.64 tonnes into the GLD/inventory rests at 853.66 tonnes

June 26/a withdrawal of 2.66 tonnes from the GLD and this gold no doubt was part of the raid/Inventory rests at 851.02

June 23/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 22/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 21/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 20/no  change in gold inventory at the GLD//Inventory rests at 853.68 tonnes


June 16/no changes in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 15/ a monstrous “paper” withdrawal of 13.32 tonnes/Inventory rests at 853.68 tonnes


June 13. No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 12/No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes


June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes


July 11 /2017/ Inventory rests tonight at 832.39 tonnes


Now the SLV Inventory

July 11/ANOTHER MASSIVE INCREASE OF 2.364 MILLION OZ into the SLV inventory/inventory rests at 347.026 million oz


July 7/Strange: no change in inventory (compare that with gold) Inventory rests at 341.731 million oz



July 3/strange! with the huge whacking of silver we got an increase of 379,000 oz into inventory.

June 30/no change in silver inventory at the SLV/Inventory rests at 339.226 million oz

June 29/no change in silver inventory at the SLV/Inventory rests at 339.226 million oz/

June 28/ a small withdrawal of 662,000 oz form the SLV/Inventory rests at 339.226 million oz/

June 27/no change in the silver inventory at the SLV/Inventory rests at 339.888 million oz/

June 26/no change in the silver inventory at the SLV/Inventory rests at 339.888 million oz/

June 23/no change in silver inventory at the SLV/Inventory rests at 339.888 million oz

June 22/ a big change; a huge deposit of 2.175 million oz into the SLV/Inventory rests at 339.888 million oz

June 21/no change in silver inventory at the SLV/inventory rests at 337.713 million oz

June 20/a deposit of 1.513 million oz/inventory rests at 337.713 million oz/.


June 16/no changes in inventory at the SLV/inventory rests at 336.200 million oz

June 15/ a massive “paper withdrawal” of 3.405 million oz of silver/Inventory rests at 336.200 million oz/


June 13/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz

June 12/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/


June 7/no change in inventory at the SLV/inventory rests at 339.605 million oz/

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/


July 11.2017:
 Inventory 347.026  million oz
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.12%
  • 12 Month MM GOFO
    + 1.42%
  • 30 day trend



Here is a review of the 3 latest comex waterfall (whacks) on gold and silver not including the current one we are undergoing.  I have taken the nadir of the gold price before it started to rise again and compared it to OI in both gold and silver with the OPEN INTEREST.  The OI readings are the following day but we are always one day behind so this compares exactly to the nadir price.
First waterfall ended Oct 6 2016/ Nadir price of gold at that date Oct 6 2016 : $1254.70 / OI for gold Oct 7/2016: 511,340//OI for silver/Oct 7.2016: 194,811
Second waterfall ended Dec 15.2016:Nadir Price of gold Dec 15.2016:      $1128.20              //OI for gold Dec 16/2016 401,798// OI for silver: Dec 16/16 161,570
Third waterfall ended May 10/2017: Nadir Price of gold May 10 2016:   $1220.95              //  OI for gold May 11: 425,252//  OI for silver May 11/17: 199,826
and for comparison while we are undergoing another waterfall these past several weeks
 Today’s price of gold $1217.00                                                                                                    OI for gold today: 479,667//Oi for silver  207,952
The first waterfall corresponds to a silver price of $17.30 on Oct 6
The second waterfall corresponds to a silver price of $15.90 on Dec 15
The third waterfall corresponds to a silver price of $17.37 on May 10
and today:  silver price of $15.81
Since the bottom of the second waterfall the price of gold at its nadir is about the same ($1220 and $1226), but the OI for gold is much higher along with silver OI also much higher. (425,252 and 477,641 OI for gold) accompanying  199,826 and 210,827 OI for silver)
It seems the data suggests power manipulation to control the price through paper!

Major gold/silver trading/commentaries for TUESDAY



“Silver’s Plunge Is Nearing Completion”

“Silver’s Plunge Is Nearing Completion”

 – Silver’s plunge is nearing completion – Bloomberg analyst
– Silver’s 10% sharp fall in seconds remains “mystery”
– Plunge despite anemic global supply and strong demand
– Total silver supply declined in ’16 – lowest level since ’13
– Silver mine production down in ’16, first time in 14 years
– Total silver supply decreased by 32.6 Mln Ozs in 2016
– Supply deficit in 2016- fourth consecutive year (see table)
– “Falling knife” caution but opportunity presenting itself

Silver has had a torrid time of late with a the “flash crash” seeing a massive $450 million silver futures sell order pushing silver 10% lower in seconds and follow through selling later Friday after the better than expected U.S. jobs number.

The electronic futures silver and gold exchanges continue to ‘wag the dog’ of the global silver and gold markets … for now.

If one had just looked at the short-term trends of silver at the end of 2016, you would have thought we would be mad to predict that 2017 would be a bearish year.

At the time it appeared as though silver was in a new bull market and in the early months of 2017 the price climbed by around 9%. But since April silver has handed back its gains and some and it is now down 3% for the year.

This has been counter intuitive to gold and silver investors alike who are looking at an economy filled with macroeconomic, geopolitical and indeed monetary uncertainty and central banks who appear increasingly fallible as the months go on.

Some were left wondering how much lower silver could go when last Wednesday it fell through the important $16 level for the first time in 2017.

In addition, the silver price weakness was given an extra push two days later when it collapsed by 10% in a matter of seconds. The reasons why this happened are still unknown, if it was a mistake then no-one is owning up to it and if it was a result of a desire to shift off $450 million worth of silver futures in minute then we will never know.

But their might be a (silver-powered) light at the end of the tunnel. Some silver market and industry experts are forecasting the silver plunge to be coming to an end.

A justified plunge ended by global yields

Bloomberg’s Michael Cudmore believes that the plunge in silver was justified

‘Gold and silver have a particularly strong correlation with real rates since the metals provide no yield, and hence demand is inversely related to the opportunity cost of speculation.

An environment in which global bond yields are rising in the absence of significant inflationary pressures is about as bad as it gets for speculative precious metals, so the move makes sense.’

But, Cudmore argues, it won’t stay like this forever.

 ‘If the rise in global yields persists, then severe spillover effects in other asset markets could prompt a bid for precious metal havens again. So we are approaching the point where both higher yields and lower yields have the potential to boost the asset class.’

New diversified industrial demand

But for many investors,  talk of very short term yield hikes are about as handy as a wet finger in the air. Is the picture still as bullish when you look at the basic fundamentals of physical silver demand and silver supply?

According to the Silver Institute around 55% of all silver consumed is for industrial use. The remainder is taken up by jewellery, coin, bullion and silverware. As a result of this dual demand, one can understandably get distracted by figures that suggest investment demand is down and therefore the price outlook is bearish.

But, on the other side of the demand coin things are not only looking positive but the face of industrial demand for silver is also changing. This is an indicator of a market which is able to be agile in the face of changing times. Something which cannot be said for other markets so involved in technology.

Bearish commentators like to refer to the falling in use for silver in the field of photography, once a big source of demand. However, the Silver Institute remind us that this has been the case for many years and is unlikely to be impacting upon demand figures now,

‘Photographic demand fell by just 3 percent in 2016 to 45.2 Moz, representing the lowest percentage decline since 2004, potentially indicating that the bulk of structural change in the photography market is over and that current fabrication volumes may be largely sustainable.’

In the meantime, bears would be wise to remember that there are several other applications for industrial silver and they are growing.

In the 2017 silver survey data showed new highs were recorded for silver’s growing use in the photovoltaic (solar energy) and ethylene oxide (essential ingredients in plastics) sectors. These are two major and growing sectors for industrial silver.

By way of example, photovoltaic demand climbed by another 34% in 2016, the strongest growth in six years thanks to a 49% increase in demand for solar panels. In all it appears that the physical demand for industrial use silver is still at a strong level.

Declining supply?

As readers know silver has a dual role: it is a precious metal and an industrial one. This means that when one might expect it to react to monetary events such as a rate hike, it doesn’t because other factors are also at the forefront of traders’ minds.

For silver the weak performance of both gold and base metals in the last few months has weighed down on the price, an almost double whammy if you will.

In 2016 the total demand for silver decreased marginally to 1.028 billion ounces, but declining supply meant that importantly 2016 was the fourth consecutive year with a supply deficit.

Scrap supply has been falling for some time and posted its lowest level since 1996. Meanwhile in 2016 global silver mine production recorded its  first decline since 2002. When added to declining silver scrap supply and a contraction in producer hedging, total silver supply decreased by 32.6 million ounces last year.

It does not appear as though the mining figures are set to improve. The Silver Survey 2017 report shows that the total silver mined in 2016 fell by 0.6% to 885.8 million oz. A large proportion of the drop was attributable to the lower output from the lead, zinc and gold sectors.

According to the Silver Institute 2017 survey, only 30% of the mined silver comes from mines whose primary metal is silver. 12% comes from primary gold mines and 23% is mined as part of primary copper deposit.

Given current gold and copper prices, it is not impossible to imagine further pressure on silver’s supply side given very few new mines will be developed in the current price environment.

“Falling knife” caution but buying opportunity presenting itself

The commentary space has generally been quiet about the price of silver. Instead, the behaviour of gold in relation to the geopolitical sphere has been the main topic of interest.

However, we appear to be close to a bottom in silver. This is in relation to both very positive supply demand fundamentals but also the likelihood of continuing robust investment demand as evidenced in robust silver ETF holdings.

In the short term, no one really knows where the price is headed to and silver looks vulnerable to further selling in the very short term.

During similar price falls over the years we have warned not  to “catch a falling knife” on many occasions and this was echoed by Cudmore in his Bloomberg piece (on the terminal) as published on Zero Hedge.

However, one thing is for sure, silver remains great value given the still very strong fundamentals and when compared to valuations in stock and bond markets.

Silver and gold buyers should use the most recent bout of “mystery” selling as an opportunity to stack up on silver coins and bars in order to get long term exposure and financial insurance at short-term, discounted prices.


News and Commentary

Gold inches lower as market awaits rate hike cues (Reuters.com)

Gold, Silver Stable After Recent Beatdown (LSE.co.uk)

U.S. Stocks Rise on Tech Bounce, Commodities Gain (Bloomberg.com)

LME launches bid for slice of $5 trillion London gold market (Reuters.com)

U.S. ready for unilateral sanctions against North Korea (MarketWatch.com)

Exclusive: Aztec golden wolf sacrifice yields rich trove in Mexico City (Reuters.com)

Why One Trader Thinks “Silver’s Plunge Is Nearing Completion” (ZeroHedge.com)

Silver Flash-Crash – “There’s No Such Thing As A Bad Tick” (ZeroHedge.com)

Recent gold decline means cusp of move higher (AveryBGoodMan.com)

Deutsche Bundesbank gold reserves shrink 45 tons over the past ten years (SmaulGLD.com)

Bankers’ Endgame and the Rise of Gold and Silver (GoldSeek.com)

Gold Prices (LBMA AM)

11 Jul: USD 1,211.90, GBP 938.98 & EUR 1,063.68 per ounce
10 Jul: USD 1,207.55, GBP 938.63 & EUR 1,060.11 per ounce
07 Jul: USD 1,220.40, GBP 944.47 & EUR 1,068.95 per ounce
06 Jul: USD 1,224.30, GBP 946.14 & EUR 1,077.51 per ounce
05 Jul: USD 1,221.90, GBP 945.87 & EUR 1,078.45 per ounce
04 Jul: USD 1,224.25, GBP 947.32 & EUR 1,078.81 per ounce
03 Jul: USD 1,235.20, GBP 952.09 & EUR 1,085.00 per ounce

Silver Prices (LBMA)

11 Jul: USD 15.51, GBP 12.02 & EUR 13.61 per ounce
10 Jul: USD 15.22, GBP 11.82 & EUR 13.36 per ounce
07 Jul: USD 15.84, GBP 12.29 & EUR 13.88 per ounce
06 Jul: USD 16.01, GBP 12.36 & EUR 14.09 per ounce
05 Jul: USD 15.95, GBP 12.36 & EUR 14.09 per ounce
04 Jul: USD 16.15, GBP 12.48 & EUR 14.23 per ounce
03 Jul: USD 16.48, GBP 12.72 & EUR 14.49 per ounce

Recent Market Updates

– China, Russia Alliance Deepens Against American Overstretch
– Silver Prices Bounce Higher After Futures Manipulated 7% Lower In Minute
– Precious Metals Are “Best Defence” Against Bail-ins In Economic Crisis
– Buy Gold Near $1,200 “As Insurance” – UBS Wealth
– UK House Prices ‘On Brink’ Of Massive 40% Collapse
– Gold Up 8% In First Half 2017; Builds On 8.5% Gain In 2016
– Pensions Timebomb In America – “National Crisis” Cometh
– London Property Bubble Bursting? UK In Unchartered Territory On Brexit and Election Mess
– Shrinkflation – Real Inflation Much Higher Than Reported
– Goldman, Citi Turn Positive On Gold – Despite “Mysterious” Flash Crash
– Worst Crash In Our Lifetime Coming – Jim Rogers
– Go for Gold – Win a beautiful Gold Sovereign coin
– Only Gold Lasts Forever



Seems that we may be having a civil war between two computer factions in Bitcoin and that is sending crypto currencies spiraling southbound.  The world is latching onto the ABX crypto system which is fully backed by gold and silver.

(courtesy zero hedge)

Looming Crypto ‘Civil War’ Sends Virtual Currencies Crashing, Ethereum Below $200

Chaos is back in cryptocurrencies with both Ethereum and Bitcoin collapsing in the last few hours as it appears concerns over the so-called ‘Bitcoin civil war’ are coming to a head.

As Bloomberg reports, it’s time for bitcoin traders to batten down the hatches.

The notoriously volatile cryptocurrency, whose 160 percent surge this year has captivated everyone from Wall Street bankers to Chinese grandmothers, could be headed for one of its most turbulent stretches yet.


Blame the bitcoin civil war. After two years of largely behind-the-scenes bickering, rival factions of computer whizzes who play key roles in bitcoin’s upkeep are poised to adopt two competing software updates at the end of the month. That has raised the possibility that bitcoin will split in two, an unprecedented event that would send shockwaves through the $41 billion market.


While both sides have big incentives to reach a consensus, bitcoin’s lack of a central authority has made compromise difficult. Even professional traders who’ve followed the dispute’s twists and turns aren’t sure how it will all pan out. Their advice: brace for volatility and be ready to act fast once a clear outcome emerges.


“It’s a high-stakes game of chicken,” said Arthur Hayes, a former market maker at Citigroup Inc. who now runs BitMEX, a bitcoin derivatives venue in Hong Kong. “If you’re a trader, there’s a lot of uncertainty as to what happens. Once there’s a definitive signal about what will be done, the price could move very quickly.”

All the largest market cap coins are getting slammed…


Ethereum plunged to as low as $189 before ripping back above $200…


Aside from Ether’s flash-crash, these are the lowest levels since May…


Bitcoin was battered below $2300 – its lowest since June 15th…


Bloomberg points out that behind the conflict is an ideological split about bitcoin’s rightful identity…

The community has bitterly argued whether the cryptocurrency should evolve to appeal to mainstream corporations and become more attractive to traditional capital, or fortify its position as a libertarian beacon;whether it should act more as an asset like gold, or as a payment system.


The seeds of the debate were planted years ago: To protect from cyber attacks, bitcoin by design caps the amount of information on its network, called the blockchain. That puts a ceiling on how many transactions it can process — the so-called block size limit — just as the currency’s growing popularity is boosting activity. As a result, transaction times and processing fees have soared to record levels this year, curtailing bitcoin’s ability to process payments with the same efficiency as services like Visa Inc.


To address this problem, two main schools of thought emerged.

  • On one side are miners, who deploy costly computers to verify transactions and act as the backbone of the blockchain. They’re proposing a straightforward increase to the block size limit.
  • On the other is Core, a group of developers instrumental in upholding bitcoin’s bug-proof software. They insist that to ease blockchain’s traffic jam, some of its data must be managed outside the main network. They claim that not only would it reduce congestion, but also allow other projects including smart contracts to be built on top of bitcoin.


But moving data off the blockchain effectively diminishes the influence of miners, the majority of whom are based in China and who have invested millions on giant server farms. Not surprisingly, Core’s proposal, called SegWit, has garnered resistance from miners, the most vocal being Wu Jihan, co-founder of the world’s largest mining organization Antpool.


“SegWit is itself a great technology, but the reason it hasn’t taken off is because its interest doesn’t align with miners,” Wu said.

Still, after previous counter-proposals championed by Wu fell through, miners last month agreed to compromise and support SegWit, in exchange for increasing the block size. Wu says the plan will alleviate short-to-medium term congestion and give Core enough time to flesh out a long-term solution. That proposal is what is known as SegWit2x, which implements SegWit and doubles the block size limit.

“You can think of the SegWit2x proposal as an olive branch,” said Wu.


Support for SegWit2x has reached levels unseen for previous solutions. About 85 percent of miners have signaled they are willing to run the software once it’s released on July 21, and some of bitcoin’s largest companies have also jumped on board. The unprecedented level of endorsement is partly prompted by anxiety of bitcoin losing its dominant status to ethereum, a newer cryptocurrency whose popularity has soared thanks to its ability to run smart contracts and its more corporate-friendly approach.

Below is an outline of the main events that could unify or divide bitcoin:

By July 21: SegWit2x software is released and supporters begin using it.

July 21 to July 31: The community monitors how many miners deploy SegWit2x:

If more than 80 percent deploy it consistently, that should signal community-wide adoption of SegWit and the avoidance of a split, at least for now.


But if a majority do not deploy, expect anxiety within the community to grow as the focus shifts to the Aug. 1 deadline.

Aug. 1: UASF is deployed by its supporters, who begin checking if bitcoin transactions are compliant with SegWit.

If a majority of miners still do not deploy SegWit2x or otherwise accept SegWit, and if UASF supporters do not back down, then two versions of bitcoin’s blockchain could come into existence: a UASF-backed one where only SegWit transactions are recognized, and another where all trades — SegWit and non-SegWit — are recognized.


If a split occurs, bitcoin will likely begin existing on both blockchains in parallel, resulting in two versions of the cryptocurrency. Expect traders to quickly re-price the value of both, likely leading to massive volatility.

“It’s moderates versus extremists,” said Atlanta-based Stephen Pair, chief executive officer of BitPay, one of the world’s largest bitcoin wallets. “It depends on how much a person values the majority of people staying on one chain at least for a little while longer, versus splitting and allowing each pursuing their own vision for scaling.”

As a reminder, investing legend Michgael Novogratz recently noted, that he’s looking to add more ether if it falls between $200 and $150… and more bitcoin if it falls to $2,000.



A must read..the flash crash in silver was 100% orchestrated by government.  That is why the regulators refused to investigate the raid

(courtesy zero hedge)

Last week’s flash crash in silver was a government operation, Turk tells KWN


1p ET Monday, July 10, 2017

Dear Friend of GATA and Gold:

Last week’s flash crash in silver was obviously a government operation, which is why market regulators have declined to track down its perpetrators, though they easily could do so, GoldMoney founder and GATA consultant James Turk tells King World News today.

Turk adds: “Why did this last so-called flash crash happen to occur the moment Tokyo opened? The timing was purposefully chosen. It was all paper. No physical metal traded. The manipulators couldn’t risk starting a flash crash during normal market hours when the physical market is trading because they did not want the risk of having to fill orders from buyers of physical metal during the flash crash. Whenever the manipulators fill orders, the risk is that they reduce their available inventory of physical metal.”

The objective of these flash crashes, Turk says, is to scare investors away from the monetary metals.

Turk’s interview is excerpted at KWN here:


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



The new LME contract sees a lackluster launch due to the fact that the gold is unallocated.  The world is moving to the ABX system backed by real metal.


(courtesy zero hedge)

New LME gold contract sees lackluster launch


By Henry Sanderson
Financial Times, London
Monday, July 10, 2017

An attempt by the London Metal Exchange and a group of banks including Goldman Sachs to grab a chunk of London’s $5 trillion-a-year gold market through a new futures contract got off to a lacklustre start today.

A total of $56 million worth of the yellow metal changed hands on the launch day, compared with $24 billion in the most active Comex gold futures contract in the United States, as the London Metals Exchange has yet to attract the big bullion banks JPMorgan and HSBC.

The two banks are supporting a rival initiative backed by the London Bullion Market Association to improve transparency following pressure from regulators. …

… For the remainder of the report:




Lynn Fisher correctly states that the flash crash in silver (twice) was meant to scare investors away from the precious metals and to hold only fiat.  It is not working:  gold and silver are deeply in backwardation in the physical markets in London


(courtesy zero hedge)


Lynn Fisher: Flash crash in silver was meant to scare investors


2:45p ET Monday, July 10, 2017

Dear Friend of GATA and Gold:

Lynn Fisher of Fisher Precious Metals in Deerfield Beach, Florida, writes today that last week’s flash crash in silver was clearly manipulation arising from the desperation of governments to discourage investment in the monetary metals. Fisher adds that “the bullion banks would not be cycling out of massive numbers of short positions if they thought the price was going to go down significantly.” Her commentary is headlined “Ongoing Flash Crash Speculation” and it’s posted at the company’s internet site here:


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




Jim Sinclair is not at all bothered by the actions of Tanzania.  The government wants its fair share of the revenue


(courtesy GATA/Tanzania Royalty)


Tanzania’s demands of mining industry don’t bother Sinclair


9:20p ET Monday, July 10, 2017

Dear Friend of GATA and Gold:

Tanzania’s demand for a greater share of revenue from mining operations in the country is causing alarm throughout the industry but it doesn’t bother Tanzanian Royalty Exploration Corp. and its executive chairman, James E. Sinclair.

In a statement last week Sinclair said: “The proposed changes appear to be an action to gain a fair share of the financial rewards for the people and nation of Tanzania while still providing incentives to the investors. The proposed legislation is not nationalization.”

Sinclair noted that his company already has granted a 45-percent interest to Tanzania’s state mining company.

Tanzania Royalty Exploration’s statement is posted at its internet site here:


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



A must listen to audio from Andrew Maguire taped last week:


(courtesy Kingworldnews/Andrew Maguire


KWN has also released the extremely important and timely audio interview with London metals trader Andrew Maguire and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.



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


1 Chinese yuan vs USA dollar/yuan  STRONGER 6.8015(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES  WEAKER TO ONSHORE AT   6.8044/ Shanghai bourse CLOSED DOWN 9.59 POINTS OR 0.30%  / HANG SANG CLOSED UP 377.58 POINTS OR 1.48% 

2. Nikkei closed UP 114.50 POINTS OR 0.57%   /USA: YEN RISES TO 114.34

3. Europe stocks OPENED MIXED TO RED      ( /USA dollar index RISES TO  96.11/Euro UP to 1.1397


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  43.91 and Brent: 46.36

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 DOWN for WTI and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.552%/Italian 10 yr bond yield UP  to 2.30%    

3j Greek 10 year bond yield FALLS to  : 5.399???  

3k Gold at $1210.05  silver at:15.53 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 63/100 in  roubles/dollar) 60.88-

3m oil into the 43 dollar handle for WTI and 46 handle for Brent/

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


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9684 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1038 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to  +0.552%

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 2.3890% early this morning. Thirty year rate  at 2.9391% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Bond Selloff Returns As EM Fears Rise; Oil Slides; BOJ Does Not Intervene

U.S. index futures point slightly lower open. Asian shares rose while stocks in Europe fell as energy producers got caught in a downdraft in oil prices and reversed an earlier gain after Goldman unexpectedly warned that WTI could slide below $40 absent “show and awe” from OPEC. The dollar rose, hitting a four-month high against the yen and bonds and top emerging market currencies were back under pressure on Tuesday, following last week’s hawkish rhetoric from central bankers.

Nonetheless, driven by expectations for solid earnings growth, MSCI’s 46-country All World share index was up for a third day running, although it started to slip as Europe’s bourses lost their footing early on. According to Bloomberg, the early European focus was on the overnight rally in USD/JPY toward 114.50 after tripping stops through 114.37 high from May; strong 5Y JGB auction also supports as curve steepens. The USD held small gains against G-10 through the European morning, GBP/USD pushes higher through 1.29 in thin liquidity; EMFX underperforms markedly. USTs sell off in tandem with the move in USD/JPY and see further pressure after bund and gilt futures open. European equity markets open higher before reversing; FTSE 100 underperforms with retail sector lagging after Marks and Spencer (-3.8%) trading update. Auto sector rallies after latest China vehicle sales numbers.

Overnight, all eyes were on the BOJ, and whether it would intervene again as it did on Friday for longer-term debt maturities, to stem the ongoing rise in JGB yields following a five-year bond auction. However, Kuroda was spared intervention for the second time in one week after the five-year bond auction saw a jump in buy side demand in the form of the highest bid-to-cover ratio since August 2014. Still, the Japanese currency dropped to 114.48 per dollar, its weakest level since mid-March. According to the Deutsche Bank Trade Weighted Index, the yen stands at its lowest since February 2016, a reflection of Japan’s monetary policy divergence versus other major central banks, according to traders in Europe. According to Bloomberg, while the yen’s haven status keeps it in vogue in the longer-term, as shown by risk reversals, the fact that the BOJ looks behind the curve compared to other major central banks in normalizing policy is sending the currency into defensive mode.

Also overnight, China’s central bank resumed its open-market operations for the first time in 13 days, ending the longest pause since April, offering 40 billion yuan in reverse repos. The net effect on the financial system was neutral, as the amount of injections matched maturities for the day. The PBOC hasn’t added cash on a net basis for 16 days in a row. The weighted average 7- day repo rate climbed 8 basis points to 2.80% as of 5:30 p.m. in Shanghai; the overnight cost rises 9 basis points to 2.62%. Japan’s Topix Index climbed 0.7 percent. Hong Kong’s Hang Seng Index strengthened 1.6 percent, heading for its first back-to-back gain in three weeks. The Hang Seng China Enterprises Index soared 2.1 percent, its biggest advance since March 16. The Shanghai Composite Index was down 0.3 percent after a short-lived advance mid-afternoon local time. Other indexes on the mainland were also lower.

Meanwhile, the bond selloff continued with bunds opening lower following Treasuries, as Germany’s 10-year yield edged up 2 basis points to 0.56% having more than doubled over the last few weeks, with losses extending as gilts slumped before the 2056 I/L syndication; bonds touched day’s low as bidding opened on the Netherlands 30y sale, before paring losses after the sale. Bund futures dipped to day’s low of 160.48 (46 ticks) as bidding opened on the Netherlands 01/2047. Long-end French bonds outperformed core, with OAT/bund spread tighter by 1-1.5bps across the curve. The outperforming 15-20y sector has previously been highlighted as the preferred spot for domestic real money investors.

Roger Webb, Head of European Credit at Aberdeen Asset Management said the slightly stronger-than-expected global growth numbers had boosted expectations of higher interest rates.

“I think the increased hawkishness we have seen from the central banks has led to a fear that we could see a mini-taper tantrum. I don’t think there is too much alarm. I think the move to slightly higher yields in Europe and the U.S., UK and elsewhere is probably understandable.”

The shift in sentiment was enough to propel the dollar higher against the basket of currencies including hitting a four-month high of 114.43 yen on the back of the past fortnight’s 25 basis-point rise in 10-year U.S. government bond yields. The pound added 0.3 percent to $1.2917 while the euro traded little changed. The New Zealand dollar fell to its lowest since June 23 meanwhile after an earthquake hit the country’s South Island. The Canadian dollar was down slightly too against its U.S. counterpart as investors awaited a Bank of Canada interest rate decision on Wednesday. The South African rand, Turkish lira and Russia rouble all dropped around 0.8 percent as the emerging market selling resumed too.

In commodities, crude oil slipped back after pushing higher overnight in Asia. Increased drilling activity in the United States and uncertainty over Libyan and Nigerian production cuts clouded the future supply outlook, leaving U.S. crude down a third of a dollar at $44.13 a barrel and Brent at $46.57.bearish Goldman note did not help.  Spot gold edged lower too, dipping to $1,212.13 an ounce and back near a four-month low touched in the previous session. Spring wheat rose 1.6 percent to $8.1250 a bushel on the Minneapolis Grain Exchange, surging 51% this year amid concerns drought in U.S. Northern Plains will curb output to a 15-year low.

More ominously, the one thing that has kept stocks near all time highs even as the global economic outlook has grown increasingly cloudly, corporate earnings appears to be turning over. Following recent mixed macro data and a drop in commodity prices, analysts have started to cut their forecasts for company earnings, raising concerns over elevated valuations and prices near all-time highs.

Bulletin Headline Summary from RanSquawk

  • Asian equities traded with little in the way of firm direction, filtering into European trade, with energy underperforming
  • FX markets saw USD/JPY continue its ascent, reaching 4-month highs as GBP position taking is evident ahead of delayed BoE speakers
  • Looking ahead, highlights include US JOLTS, APIs, BoE’s Haldane, Broadbent, ECB’s Coeure, Constancio, Fed’s Brainard and Kashkari

Market Snpashot

  • S&P 500 futures down 0.03% to 2,423.00
  • STOXX Europe 600 down 0.2% to 380.79
  • MXAP up 0.7% to 154.41
  • MXAPJ up 0.8% to 506.52
  • Nikkei up 0.6% to 20,195.48
  • Topix up 0.7% to 1,627.14
  • Hang Seng Index up 1.5% to 25,877.64
  • Shanghai Composite down 0.3% to 3,203.04
  • Sensex up 0.4% to 31,825.40
  • Australia S&P/ASX 200 up 0.08% to 5,728.93
  • Kospi up 0.6% to 2,396.00
  • US 10Y yield rose
  • German 10Y yield rose 2.0 bps to 0.56%
  • Euro down 0.03% to 1.1396 per US$
  • Italian 10Y yield fell 6.2 bps to 1.985%
  • Spanish 10Y yield rose 0.9 bps to 1.68%
  • Brent Futures down 0.6% to $46.59/bbl
  • Gold spot down 0.2% to $1,211.43
  • U.S. Dollar Index up 0.09% to 96.11

Top Overnight News

  • Trump will nominate Randal Quarles Fed vice chair of supervision
  • Trump Jr. was told before meeting of Kremlin effort to aid campaign: NYT
  • Oil erased earlier gains to trade near $44 a barrel in New York after Goldman warned it could drop below $40
  • F-35 Program Costs Jump to $406.5 Billion in Latest Estimate
  • Trump Will Nominate Quarles as Fed’s Top Wall Street Regulator
  • Trump’s FBI Pick Faces Questions on Independence Versus Loyalty
  • Trump’s Son Sucked Into Russia Probe After Meeting With Lawyer
  • U.K. June BRC like-for-like retail sales 1.2% vs 0.8% estimate
  • China should keep interest rates stable in 2H: Securities Journal
  • Australia June NAB business conditions index highest since 2008
  • Banks Heed Carney’s Call to Tackle Risks of Climate Change
  • Fed’s Williams says forecasts of one more 2017 rate hike seem reasonable
  • Sanofi to Buy U.S. Vaccine Maker for Up to $750 Million
  • Worldwide Semiconductor Revenue to Reach $400b in ’17: Gartner
  • BioMarin Hemophilia Therapy Reduces Bleeding in Phase 1/2 Study
  • Google-Backed Mobvoi Aiming for U.S. or HK IPO Within Two Years
  • Cigna Names Arthur Cozad as CEO of Zurich Insurance Middle East
  • Microsoft Funds Faster Internet for U.S. Heartland to Bridge Gap
  • Getty Realty Prices 4.1m Shares at $23.15 Each
  • Delta Cancels Flights Amid Air Traffic Control Center Evacuation
  • AAR Names Michael Milligan CFO, Succeeds Timothy Romenesko
  • Citrix Names Henshall CEO as Tatarinov Leaves; Reaffirms 2Q
  • Venezuelan Prosecutor Charges Two Over PDVSA Contracting
  • J.C. Penney Names Interim CFO After Edward Record Steps Down
  • Alexander & Baldwin Names James Mead CFO, Succeeds Paul Ito
  • Myokardia Files 9.2m- Share Shelf for Holder Third Rock Ventures
  • Cypress Semiconductor Says Director Resigned Over Disagreement

Asian equities saw a lack of firm direction overnight amid quiet newsflow. This was despite a resumption in the PBoC’s open market operations with a CNY 40bIn injection for the first time in 13 days (however, was net neutral with CNY 40bIn of prior injections maturing). The Nikkei 225 (+0.4%) failed to find any firm direction, while ASX 200 (-0.1%) was choppy and failed to hold on to the early material and energy led advances. Chinese bourses yet again traded in mixed fashion with broad based gains keeping the Hang Seng (+1.0%) afloat, while the Shanghai Comp (-0.2%) treaded water. In fixed income markets, the Japanese 10Y held around 0.1%, owing to last week’s pledge by the BoJ to buy unlimited amounts in the 10yr and cap yields. However, further upside in yields could test the BoJ’s tolerance, and a slight concession was seen in the Japanese 5Y, subsequently leading to its outperformance amid today’s auction. PBoC injected CNY 30bIn and CNY 10bIn through 7-day and 14-day reverse repos; first injection for 13 days. PBoC set the CNY mid-point at 6.7983 vs. Prey. 6.7964. Chinese vehicle sales rose 4.6% for June according to the Chinese Passenger Car Association

Top Asian News

  • China Hedge Funds Return 13% to Rank Near the Top Globally
  • Pakistan’s Key Stock Index Heads for Biggest Drop Since 2009
  • Foreign Banks Said to Seek Relief From India’s Derivatives Rule
  • China Likely to Extend Tax Exemption for Electric Cars: CAAM
  • China’s ‘Hottest Commodity’ Surges as Steel Seizes the Limelight
  • HSBC Upgrades China, Russia to Overweight, Cuts Turkey Exposure
  • China Is Likely to Extend Tax Break on Electric Cars, Group Says
  • Korea Aerospace Wins 641.2b Won Order From Boeing

The majority of European bourses trade lower, following a slightly higher open, with the materials sector the only Stoxx 600 sector trading in the green. M&S lag amid misses in its Q2 food, clothing and home LFL sales. However, positive broker moves for UK grocers/retailers; Tesco & Morrisons have provided some reprieve for the supermarket names, both trading up in early market trade. The Dax does trade in the green however, as ThyssenKrupp (TKA GY) leads, following a decision to reduce up to 2500 admin jobs in a move that could save EUR 400mln. European paper has grinded lower throughout the session, slowly chipping away at yesterday’s marginal games, with range bound trade evident, as participants await a week of speech, with Yellen the highlight tomorrow. News does remain light in markets, with the break of 0.50% bund yield seen last week now acting as support for the yield.

Top European News

  • Pearson to Sell 22% Stake in Penguin Random House to Bertelsmann
  • Italy’s Production Rises More Than Expected, Boosting Outlook
  • Italian Banks’ Big vs Small Divide to Widen, Goldman Sachs Says
  • Italy May Industrial Production +0.7% M/m; Est. +0.5%
  • M&S Quarterly Sales Dip in Setback to Rowe’s Turnaround Plan
  • Thyssenkrupp to Cut Up to 2,500 Staff to Help Meet Profit Target
  • BlueCrest Fund Manager Shorting U.K. Property Tips Spanish Peers
  • Glencore Is Said to Draw Liberty House Bid for Australian Mine

In currencies, FX markets have been subdued with all anticipation on central bank speech, with Yellen the headlight tomorrow and Kashkari and Brainard expected today. BoE speech will be the key risk event for the day, with a GBP bid being seen early in the session, as investors will await Haldane and Broadbent. Hawkish positioning, accompanied by hawkish speech, could potentially spark some direction into the GBP. GBP/USD has indicated a bearish trend of late, after the rejection of the 1.3140 area, however, clear bids at the bottom of the range (1.27 — 1.28) do indicate buyers in the market, a break through 1.3140 will indicate a change in direction in the pair and could push us toward august 2016 levels. Overnight, movement was seen in NZD, the widely touted ‘over-valued’ currency did lose some ground, NZD/USD was the main catalyst of the move, after selling renewed in NZD/USD, tripping stops through 0.7250. JPY also continued to lower against its major counterparts, as USD/JPY did trade through the key 114.38 level, now residing around this resistance level, as a mini bidders vs. sellers battle is clear. A risk tone has been clear in currencies, with a weaker JPY being joined by a weaker CHF. EUR has benefited, with EUR/JPY firmly through 130.00 and EUR/CHF finding some early buyers as it looks like the pair will see its 13th green day in two weeks, likely to test the 1.11 area seen in April 2016.

In commodities, oil continues to highlight the commodities sector, seeing selling pressure following the European open, once again WTI rejecting the USD 44.90 area, looking to retest USD 43.60. Fundamental factors do continue to weigh on oil, with supply continuing to pick up, as Nigeria and Libya are now producing an additional 1mIn BPD between them, a huge dent in the 1.8mln combined OPEC agreement. The countries may be asked to cap their oil output following the slowdown of rebel problems resulting in a ramp, however, with Nigeria and Libyan officials not potentially attending the meeting, this could pave difficult. Reports early in Asia did state that Libyan and Nigerian officials may attend the joint meeting between OPEC and non-OPEC nations later this month as oil producers look for ways to cap rising production, however, with Barkindo stating that further cuts will not be discussed, source reports did state this could be in November, the agenda does remain unclear. Precious metals have suffered throughout Asian and European trade, all down for the session, Gold grinds lower, looking increasingly bearish, a break below July’s low (1204.87) is likely to lead to a test of 1195.00. Copper has seen some slight reprieve, following hitting a two-week low being hit on an inventory rise and Chinese data yesterday. Metals suffered late yesterday, with small bounces clear, likely profit taking, as Aluminium also saw its biggest intra-day drop in over two months. Iran said it is currently producing 3.8mln bpd of oil, according to its Deputy Oil Minister.

Look at today’s events, it is another quiet day: we will only see the NFIB small business optimism number for June (103.8, below the 104.4 expected vs. 104.5 previous) followed by JOLTS job openings and final wholesale inventories data for May (no revision expected ). In terms of Fedspeak, we will hear from Williams and Brainard speak today. The calm before the potential storm with Yellen scheduled to speak over the next two days.

US Event Calendar

  • 6am: NFIB Small Business Optimism, est. 104.4, prior 104.5
  • 10am: JOLTS Job Openings, est. 5,950, prior 6,044
  • 10am: Wholesale Inventories MoM, est. 0.3%, prior 0.3%; Wholesale Trade Sales MoM, prior -0.4%
  • 12:30pm: Fed’s Brainard Speaks on Monetary Policy in New York

DB’s Jim Reid concludes the overnight wrap

After a very dull 24 hours I thought it might be an opportune moment to recap our bigger picture thoughts on government bond yields given the sell-off of the last two weeks. As we discussed in our Long-Term Study last September we think 2016 will likely be seen as the inflection point and the end of the 35 year bull market for bonds. It won’t be a straight line reversal and perhaps the issue will eventually be more for future real returns over nominal returns. The reason for picking out 2016 was that this was the year that 1) voters in the bottom half of the income scale effectively won two landmark national votes and 2) endless extreme monetary policy for the first time started to impact the plumbing of the financial system. The impact of the first point is that it likely means politicians now have to steer policy specifically to this poorer income group to ensure that their electoral chances are enhanced. This likely means more fiscal policy and less austerity. The recent UK election reinforces this theme here and we think the theme will slowly spread.

With regards to the second point, 2016 was the year that negative rates cascaded like wildfire along the government bond curve in Europe. The problem being that the correlation between falling yields and poor EU bank equity performance is very strong and the correlation between bank equity and bank lending suggests that had the trends of 2016 continued much further then the real economy could have actually suffered by the negative yields actually aimed to support growth. However the fact that the BoJ and ECB pulled back from full-on QE in the last 4 months of last year suggested they appreciated that monetary policy had perhaps gone too far for now and was having some negative consequences. As such a slow reversal of the ultra low yield environment should have and should continue to follow. The risk being that at some point a government spends big and yields start to rise faster. This could still be many quarters ahead but if and when it does happen central banks might have to intervene and cap nominal yields to avoid carnage in a heavily indebted world. Then we move towards helicopter money – a story for another day. The problem with this view is that it’s as much to do with gut feel, a change in the political wind, and second guessing policy makers as it is to do with spreadsheet based analysis of the current available facts. As such it makes it much more difficult to prove! Anyway this is likely to be a slow moving story for now but generally since last year we’ve thought the general bias on yields is higher.

Yesterday wasn’t the day for this trend to continue though as government bond markets saw some relief as yields dropped after the big sell-off over the past 2 weeks. US Treasuries (2Y: -1bp; 10Y: -1bp) and German Bunds (2Y: -1bp; 10Y -3bp) saw yields fall across all maturities. UK Gilts (2Y: -3bps; 10Y: -3bps), French OATs (2Y: -1bps; 10Y: -3bps) and Italian BTPs (2Y: -2bps; 10Y: -7bps) saw similar moves lower.

With limited newsflow and data yesterday, global risk markets exhibited a mild risk-on tone. Equity markets were broadly positive as the US (S&P500 +0.1%) and Europe (STOXX +0.4%) ticked up, with technology stocks among the top gainers in both indices. In the UK the FTSE gained +0.3% on the day, while German (DAX +0.5%), French (CAC +0.4%) and Italian (FTSE MIB +0.8%) equities posted even higher returns. Currencies, credit and commodities were fairly range bound. Asian equities are generally following the firmer picture, again on low volumes. The Hang Seng is 1.1%, the Nikkei +0.5% but with Chinese equities a little more mixed (Shanghai Comp -0.2%). Treasury yields are back up 1bps and pretty much where they were this time yesterday now.

Taking a look at yesterday’s calendar, it was a fairly quiet day in terms of data. In Europe we saw German trade numbers for May where both the current account surplus and trade surplus came in above expectations at 17.3bn (vs. 15.4bn expected) and 22bn (vs. 18.7bn expected). Both exports and imports grew more than expected at 1.4% (vs. 0.3% expected; 0.9% previous) and +1.2% (vs. 0.3% expected; 1.2% previous). Following that we saw some sentiment data with the latest Bank of France business sentiment reading that disappointed at 103 for June (vs. 106 expected) and the July Sentix investor confidence reading  for the Eurozone that clocked a tick above expectations at 28.3 (vs. 28.1 expected).

Over in the US it remained quiet post-payrolls with the only data of note being the June labour market conditions index that rose by 1.5 points in June but still disappointed relative to expectations of a 2.5 point increase. Consumer credit numbers were slightly higher than expected but didn’t really move the dial. Of more interest was Mr Trump’s intention to nominate Randal Quarles to be the banking watchdog at the Fed. This was anticipated but the feeling is that this will ease regulation for the sector.

Perhaps more interesting was the latest ECB CSPP data out yesterday. It was a strong week for the CSPP programme as purchases settled last week (€2.29bn) implied an average daily run rate of € 457mn, which  was well above the average since inception of €366mn. With PSPP purchases at a more lowly €14bn, the CSPP/PSPP ratio was 16.3% which is above the average of 13.6% in Q2 (post QE trimming) and well above the pre-April average of 11.6%. Further on this the average monthly run rate (assuming 21 business days per month) of CSPP since April 2017 (after QE was trimmed) has been €7.7bn (vs. €7.7bn before April). The numbers have been all over the place of late and the ECB may be front-loading and preparing for illiquid summer credit markets but at face value we now have to think about as to whether the CSPP has been tapered at all so far.

Today’s calendar is also very quiet with no major releases of note in Europe. Over in the US we will only see the NFIB small business optimism number for June (104.4 expected vs. 104.5 previous) followed by JOLTS job openings and final wholesale inventories data for May (no revision expected ). In terms of Fedspeak, we will hear from Williams and Brainard speak today. The calm before the potential storm with Yellen scheduled to speak over the next two days.



i)Late MONDAY night/TUESDAY morning: Shanghai closed DOWN 9.59 POINTS OR 0.30%   / /Hang Sang CLOSED UP 377.58 POINTS OR 1.48% The Nikkei closed UP 114.50 POINTS OR 0.57%/Australia’s all ordinaires CLOSED UP 0.10%/Chinese yuan (ONSHORE) closed UP at 6.8015/Oil DOWN to 43.91 dollars per barrel for WTI and 46.36 for Brent. Stocks in Europe OPENED  RED,,   Offshore yuan trades  6.8055 yuan to the dollar vs 6.8015 for onshore yuan. NOW THE OFFSHORE IS A TOUCH WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT  HAPPY TODAY






More regulation and tighter money has now put an end to China’s second housing bubble.  The first bubble burst in 2014 and now the second seems to have blown this market again

(courtesy Valentin Schmid/EpochTimes)




Russia’s patience with Trump has run out:  Russia is not set to expel 30 USA diplomats and seize USA assets in Russia

(courtesy zero hedge)


A huge scandal for Ukraine.  It seems that it was a big lie why the government nationalized the Ukraine’s largest private bank called PrivatBank.  They were doing OK when the government nationalized them.  The government funded the bank with worthless government banks and as such has been the financial scene in the Ukraine far worse
(courtesy John Mills/Mises Institute

Why Did Ukraine Nationalize Its Largest Private Bank?

Authored by John Mills via The Mises Institute,

In December 2016, the National Bank of Ukraine (NBU) nationalized Ukraine’s largest private bank for what we now know was an incorrect understanding of the facts. It remains unclear who benefitted from this expropriation…

But it wasn’t just a misunderstanding. The nationalization of PrivatBank very likely was the result of a still-unexplained refusal by the NBU to accept the financial reality of the situation.

This extraordinary government takeover has made the banking and economic situation in Ukraine much worse rather than better, and is an almost classic case of government overreach.

The NBU’s inappropriate and unnecessary nationalization has hurt the Ukrainian economy, stolen millions from PrivatBank’s owners and is forcing Ukraine’s taxpayers to bear a substantial additional burden.

The NBU took its action in large part because of what it said was an unacceptable level of related-party loans: 90 percent or more was the number it frequently used.

But Ernst & Young, the global “Big Four” accounting firm the NBU hired to undertake an audit of PrivatBank at the end of 2016, said the actual level of related-party loans at PrivatBank was merely 4.7 percent.

And that very low level (an astounding almost 95 percent less than what the NBU used to justify its nationalization) is itself lower than the level of related-party loans reported a year earlier in a separate audit conducted by yet another Big Four firm: PWC.

Perhaps to protect itself from what will undoubtedly be withering criticism, the NBU is now considering suspending PWC from auditing Ukrainian banks, has accused one of the most renowned and highly esteemed auditors in the world of being “unprofessional,” and is at least hinting that its audits contributed to the situation.

The NBU has claimed that PrivatBank siphoned a majority of its equity to related party loans to enrich the bank’s shareholders. Operating activities show that the cash flow for 2016 was 21 billion Ukrainian hryvnia to client funds, but not to the issuance of loans to related parties.

Similarly, the NBU made an arbitrary, erroneous and harmful decision to regard PrivatBank’s collateral as unacceptable even though a significant amount of the loans that were classified as “impaired” should have been acceptable under IFRS standards.

But it’s not just the NBU’s decision to nationalize PrivatBank that’s questionable; serious issues have now been raised about the way the NBU carried out the nationalization once it decided to move forward.

The NBU’s capitalization of PrivatBank after the nationalization was a transfer of government bonds, rather than cash, that effectively was worthless.

Up to then, the NBU always required the valuation of collateral from independent appraisers so that its value would be recorded appropriately on the balance sheet. But, as E&Y stated in its 2016 audit report, ten days after the nationalization, there was a sudden increase of investments in government bonds that were never valued. Who will buy those bonds now?

But the biggest issue is why the NBU ever thought that government control through nationalization of Ukraine’s largest privately owned bank was appropriate in the first place. PrivatBank had a strong vote of confidence from its customers with 40 percent of the country’s private deposits and serving 44% of corporate clients. It had a strong positive track record of supporting Ukraine’s economy and creating jobs. And, as a report by E&Y (the auditors chosen by the NBU) subsequently confirmed, according to IFRS standards its financials were far stronger than the NBU was charging.

All of this makes the NBU’s nationalization of PrivatBank more of an unnecessary expropriation – a taking by the government – than a good banking practice. That is the textbook definition of a scandal.



Goldman Sachs warns that oil could plunge below 40 dollars per barrel.  The reasons are obvious as increasing supply from all avenues are just too great to handle the decreasing demand for oil

(courtesy zero hedge/Goldman Sachs)

Goldman Warns Oil Could Plunge Below $40 Absent OPEC “Shock And Awe”

Goldman has done it again: less than two weeks after the bank said “oil prices have likely hit bottom of the price range, and look attractive” when it slashed its WTI price target from $55 to $47.50 (and every other Wall Street bank promptly followed), in a note released overnight by its analysts including Damien Courvalin and Jeffrey Currie, the central banker incubator has effectively thrown in the towel, and writes that while its 3 month base case price target remains$47.5, it warns that absent a “shock and awe” production cuts from OPEC, oil could tumble below $40/barrel.

First, Goldman explains that the market remains, gasp, volatile and could move down as well as well as up:

While US oil inventories posted a large draw last week, we find that high frequency oil data is not yet providing a clear signal for oil prices to move sharply out of their recent trading range. As a result, we see symmetrical risks of higher or lower moves in the short term as data volatility continues to impact sentiment. As we laid out last week, we believe that sustained trends in inventory draws and US rig count declines or evidence of further OPEC actions will be required for prices to rally, which remains our base case with our 3-mo WTI forecast at $47.5/bbl.

And then the punchline:

Given the recent rebound in net speculative length from its 18-month lows, we believe, however, that a failure for these shifts to materialize soon could push prices below $40/bbl as the market tests OPEC’s and shale’s reaction functions. Importantly, we wouldn’t expect such a move to be volatile, as it is not driven by storage concerns like last year (with available storage capacity given the 2017 draws) but the ongoing search for a new equilibrium.

Goldman specifically envisions the growing output from Libya and Nigeria, and warns that unless OPEC engages in further “shock and awe” cuts, the next stop is lower:

OPEC production and exports increased in June, driven by Libya and Nigeria which have sustained production above our expectations over the past few weeks. While OPEC has yet to address this increase in production, the group has invited both countries to participate in the next compliance committee meeting on July 24. We continue to believe that there is another opportunity for OPEC to increase the cuts, but that this should be done in a “shock and awe” manner, with little public announcement. This requires further patience in assessing the group’s response to higher aggregate production and lower prices.

The problem, as we discussed yesterday, is that deeper cuts are currently not on the agenda, according to OPEC Secretary-General Mohammad Barkindo. Still, the group and other nations have invited Libya and Nigeria to a July 24 meeting in St. Petersburg, Russia, on July 24 to discuss the stability of their production, according to Issam Almarzooq, Kuwait’s oil minister.

As to whether this means that the “suddenly” skeptical Goldman, which as we sarcastically pointed out was selling oil throughout its entire “bullish phase”, is now finally buying WTI, consider that Gartman remains bearish and do the math.

* * *

The balance of Goldman’s note below:

No signal yet for an oil price inflection

  • The decline in US inventories last week was both historically high and larger than expected. This decline helped US inventories return below their end of May level, with inventory data outside of the US pointing to continued normalization. In fact, the month of June featured larger than seasonal inventory declines for regions where we have weekly stock data (US, ARA ports in Europe, Japan and Singapore). Since the end of February, such high frequency inventories have declined by 55.2 mb vs. a seasonal pattern of an 27.1 mb build.
  • While encouraging, we believe however that the market’s cautious reaction to such draws is warranted given the increase in Libya and Nigeria production. Further, this week’s US data will likely feature smaller draws:
    • US oil inventories (excluding NGLs and SPR) tend to fall strongly in the week preceding July 4th, likely on pre-stocking ahead of the holiday (stocks held at the retail level are not counted in the EIA inventory data). Historically, the week including July 4th, for which the EIA will report data this coming Wednesday, sees much smaller draws, 5.65 mb less vs. the prior week.
    • Further, US SPR sales amounted to only 0.4 mb in last week’s EIA data. SPR data since then shows that sales from government into commercial stocks will be larger this week at 2.6 mb, further undermining the draws in Wednesday’s upcoming data release.
    • We remain optimistic on global oil demand growth this year. The weekly US demand data has remained ambiguous in June:
    • Last week’s data featured record high oil implied demand o but this was driven in large part by “other oil” with little read through to broader demand.
    • At the same time, we believe that the concerns over US gasoline demand are overdone, with the EIA weekly data offering an imperfect measure of consumption. As we showed earlier this year, weekly ethanol data offers a better measure of the final US monthly gasoline consumption data, and implies that US gasoline demand grew by 60 kb/d in June.
  • The US oil horizontal rig count rebounded last week after posting its only second decline this year the week prior, in hindsight potentially due to end-of-quarter deferrals:
    • The guts of the rig data show an only gradual deceleration in HY producer rig count, with private producers rig count rebounding and IG producers continuing to ramp up strongly. We believe the coming month will be key to testing whether producers are responding to the signal of $45/bbl WTI prices.
    • The US E&P earnings season which starts at the end of the month will also be important in assessing the US shale response to lower prices and the magnitude of the ongoing efficiency gains.
  • OPEC production and exports increased in June, driven by Libya and Nigeria which have sustained production above our expectations over the past few weeks. While OPEC has yet to address this increase in production, the group has invited both countries to participate in the next compliance committee meeting on July 24. We continue to believe that there is another opportunity for OPEC to increase the cuts, but that this should be done in a “shock and awe” manner, with little public announcement. This requires further patience in assessing the group’s response to higher aggregate production and lower prices.

Given that the market is now out of patience for large stock draws and increasingly concerned about next year’s balances, we believe that price upside will need to be front-end driven, coming from observable near-term physical tightness and signs of a US shale activity slowdown on a sustained basis in coming weeks.



Down goes WTI back into the 43 dollar handle with news that the Saudis have breached their own OPEC agreement:

(courtesy zero hedge)

WTI Tumbles Back To $43 Handle After Saudis Breach OPEC Agreement

Having v-shaped recovered yesterday after disappointing Russian comments (on no news whatsoever), crude prices are tumbling once again this morning, WTI back to $43 handle, after Saudi Arabia told OPEC it pumped 10.07 million barrels a day in June, a person with knowledge of the data said, exceeding its production limit for the first time since brokering a deal to curb global crude supply to counter a glut.

As Bloomberg reports, the world’s biggest oil exporter boosted output from 9.88 million barrels a day in May, surpassing the limit of 10.058 million it accepted in an agreement between OPEC and other major suppliers including Russia. Under the deal reached in December, Saudi Arabia agreed to reduce production by 486,000 barrels a day, the most of any country participating in the cuts. The person with knowledge of the June data asked not to be identified because the information isn’t public.

And the result is yet more downward pressure on cride prices…


Even OPEC sounds like it is losing hope. As Reuters reports, all global oil producers should help balance the market, OPEC’s Secretary General Mohammad Barkindo told reporters on Tuesday when asked what else the Organization of the Petroleum Exporting Countries could do to ease a global oil glut.

“It is beyond any group of stakeholders, it has to be a collective responsibility of all producers,” he told reporters on the sidelines of an industry conference in Istanbul.

At this rate, Goldman’s “below-$40” foreecast may happen this week…




Geopolitical events may cause the oversupply to under supply which could force oil to over 120 dollars per barrel.

(Nick Cunningham/OilPrice.com)

The Major Wildcard That Could Send Oil To $120

Authored by Nick Cunningham via OilPrice.com,

The latest rally in oil prices ran up against a wall yet again, and the same fears about oversupply have not receded in the slightest. The expectation from most oil analysts is that there is very little room on the upside for oil prices and that we will have to wait until 2018 at the earliest before the market gets closer to “balance.”

But the one major wildcard for oil prices is geopolitics, which, however unlikely given the degree of supply overhang that still exists, could send prices up. But how high? The latest blockade of Qatar, which has mushroomed into a regional political crisis in the Middle East, would have caused a severe spike in oil prices in the past, even though Qatar is a relatively minor producer. However, the simmering standoff not only failed to register, but occurred at a time of falling oil prices.

If a crisis involving heavyweight oil producers was shrugged off by the market, it is hard to imagine some other event causing a sharp price spike, even if more barrels were on the line.

But that is exactly what some analysts are afraid of, warning that the markets are overlooking some potentially massive geopolitical problems looming just over the horizon.

“Venezuela’s 2 million barrels of oil a day could literally go any day. Mexico looks poor. Azerbaijan’s in trouble. China’s own production is collapsing rapidly,” Neil Dwane, the chief investment officer of European equity at Allianz Global Investors, told CNBC last week.


“One only has to have one mistake and the only thing you’ll be talking about all morning is oil at $120.”

Herman Wang of S&P Global Platts agreed with that sentiment, although he expects the price spike to be less severe.

“There are plausible scenarios where you could see, perhaps not $120 a barrel, but an elevated oil price, say $70 to $80 on some of these geopolitical and some of the supply concerns. Venezuela certainly is a mess right now,” Wang told CNBC’s Squawk Box last week.

But there are a few reasons why some analysts would roll their eyes at the prospect of triple-digit oil prices in the near future. After all, oil inventories are still sky-high even if they are starting to come down; U.S. shale production has roared back, adding roughly 0.5 mb/d since late last year; and Libya and Nigeria have restored around 400,000 barrels per day of disrupted production. Not only that, but sharper gains are expected to be forthcoming from the U.S., Nigeria and Libya, while other long-term projects in Canada and Brazil are set to add production this year.

However, not all of that is guaranteed. The U.S. shale rally recently hit some bumps in the road. More importantly, the geopolitical uncertainty in unstable countries such as Libya and Nigeria could quickly knock production offline once again. For example, Reuters reported that heavy clashes took place in Libya on July 9, underscoring the fact that the country’s recent calm is highly fragile.

Also, the peace in the Niger Delta is also starting to look rocky. Former militants, according to Reuters, are unhappy with government promises, and have threatened a return to violence.

“This peace is a graveyard peace,” a local chief in the Niger Delta told Reuters. “Nobody can assure anybody that nothing will happen in the Delta.” Nigeria is aiming for 2 mb/d of production in August, which would be the highest total in a year and a half, and almost double the low point from last year.

There is also the vaguer and more uncertain variable of the recent ascendance of Saudi Crown Prince Mohammed bin Salman, who has brought a more hawkish approach to Saudi foreign policy. The escalation of confrontation against Qatar is one clear consequence of that. So is the war in Yemen. More conflicts could arise from a more belligerent Saudi government. “We contend that the region could be subject to more volatility and heightened risk,” as a result of Mohammed bin Salman taking over as crown prince, RBC wrote in a note last month.

But it is Venezuela that could be the mother of all black swan events. As Neil Dwane of Allianz Global Investors mentions, Venezuela has already seen the near total breakdown of society, and its oil production of 2 million barrels per day (mb/d) could unravel. It still seems unthinkable at this point, but becoming more likely by the day. Already, Venezuela’s oil production has eroded sharply, falling to 1.96 mb/d as of May 2017, down from 2.375 mb/d in 2015. Meanwhile, Venezuela’s refining industry is in shambles, forcing the country to increasingly import gasoline to avoid fuel shortages.

The street protests in the South American country just marked their 100th day, and show no sign of slowing down.

The oil market is rather depressed and subdued at the moment, but could awaken at moment’s notice if large volumes of oil production are disrupted from some unforeseen event.





Sugar utopia in Venezuela

(courtesy zero hedge)


Meanwhile In Venezuela, The Real Mad Max Emerges

While Silicon Valley seems obsessed by ‘blood boys’, its another part of the world that appears to have gone full Mad Max. As the following clip shows a gang of bikers chase down and attack a truck (with molotov cocktails) to steal its sugar payload

Not quite the “Guzzoline” or “Bullets” that Fury Road offers, but when all you have to eat is flamingoes or black stallions, sugar may be a good substitute worth risking your life over…

With each passing week, the situation in Venezuela keeps on getting worse.

Not quite the socialist utopia that Bernie Sanders longed for? Or more pointedly – this is exactly the dystopia one can expect from such policies of ‘redistribution’ and central planning.


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



GBP/USA 1.2912 UP .0033 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED



Early THIS TUESDAY morning in Europe, the Euro ROSE by 2 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1412; 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+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  DOWN 9.59 POINTS OR 0.30%     / Hang Sang  CLOSED UP 377.58 POINTS OR 1.48% /AUSTRALIA  CLOSED UP 0.10% / EUROPEAN BOURSES OPENED MOSTLY 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 TUESDAY morning CLOSED UP 114.50 POINTS OR 0.57%

Trading from Europe and Asia:
1. Europe stocks  OPENED   RED EXCEPT DAX

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 377.58 POINTS OR 1.48%  / SHANGHAI CLOSED DOWN 9.59 POINTS OR 0.30%   /Australia BOURSE CLOSED UP 0.10% /Nikkei (Japan)CLOSED UP 114.50 POINTS OR 0.57%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1210.25


Early TUESDAY morning USA 10 year bond yield: 2.389% !!! UP 1 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.9391, UP 1  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 96.11 UP 5  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING


And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.150%  UP 3 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.096%  UP 1/5  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.691% UP 2   IN basis point yield from MONDAY 

ITALIAN 10 YR BOND YIELD: 2.320 UP 4 POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 70 points HIGHER than Spain.





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

Euro/USA 1.1430 UP .0044 (Euro UP 44 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.94 UP  0.130 (Yen UP 13 basis points/ 

Great Britain/USA 1.2837 DOWN  0.0042( POUND DOWN 42 basis points) 

USA/Canada 1.2922 UP .0027 (Canadian dollar DOWN 27 basis points AS OIL FELL TO $44.40


This afternoon, the Euro was UP  by 44 basis points to trade at 1.1439


The POUND FELL BY 42  basis points, trading at 1.2837/ 

The Canadian dollar FELL by 27 basis points to 1.2922,  WITH WTI OIL RISING TO :  $44.40

The USA/Yuan closed at 6.8025/
the 10 yr Japanese bond yield closed at +.096%  UP 1/5  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 2 IN basis points from MONDAY at 2.3571% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.913  DOWN 1 in basis points on the day /

Your closing USA dollar index, 95.95  DOWN  1 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 TUESDAY: 1:00 PM EST

London:  CLOSED DOWN 40.27 POINTS OR 0.55%
German Dax :CLOSED DOWN 8.90 POINTS OR 0.07%
Paris Cac  CLOSED DOWN 25.04 POINTS OR 0.48% 

Italian MIB: CLOSED  DOWN 78.97 POINTS/OR 0.37%

The Dow closed UP 0.55 OR 0.00%

NASDAQ WAS closed UP 16.91 POINTS OR 0.27%  4.00 PM EST
WTI Oil price;  44.23 at 1:00 pm; 

Brent Oil: 46.99 1:00 EST




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

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


BRENT: $46.92


USA 30 YR BOND YIELD: 2.9281%


USA/JAPANESE YEN:114.07  up 0.221

USA DOLLAR INDEX: 96.05  up 4  cent(s) 

The British pound at 5 pm: Great Britain Pound/USA: 1.2879 : down 6 POINTS FROM FRIDAY NIGHT  

Canadian dollar: 1.2891 DOWN  31 BASIS pts 

German 10 yr bond yield at 5 pm: +0.550%


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


‘Junior’ Jangles Stock Market’s Nerves; Gold Gains As Dollar Slumps

The message very briefly today as Donald Trump Jr’s email was taken to confirm the campaign was aware of the Russian government’s desire to help elect his dad, was simple “you get nothing”…

But as Mitch McConnell held his GOP Senators back for summer school, hope re-emerged that healthcare and tax-cuts were coming sometime, maybe, kinda, sorta.

So that was a day that proved none of this is about ‘earnings’ per se, it’s about Trumptopia and hope for a tax cut – priced into all that ‘soft’ data… S&P (orange) was desperately pushed to green (but ended red, as The Dow), Trannies were ugly (led by weakness in airlines), and Small Caps and Nasdaq squeezed to solid gains…


VIX was clubbed like a baby seal back to a 10-handle in a desperate attempt to keep the S&P green…BUT FAILED


The post-Trump Jr. email response was immediate buying of Bonds and Bullion, selling of stocks, but the latter made it back…


FANG Stocks were bid again…back above the 50% retracement from June’s tech wreck…


SNAP was the talk of the day (away from Trump Jr.)…


And APRN was a bloodbath…


The Dollar Index was ugly and entirely decoupled from stocks…


Treasuries rallied on the Trump Jr. email (from +2bps to -2bps across the curve) but yields did not bounce back miraculously like stocks…


And while gold gained on the day – as the dollar tumbled…


Crude repeated its V-shaped panic-buying pattern of the last 4 days… pushing back above $45 head of tonight’s API data…





Trading today: this sent gold soaring!! “confirms” Russian involvement trying to help Trump win the election!!


Stocks Slammed As Trump Jr. Email ‘Confirms’ Russian Government Involvement

If marketwatchers thought that stocks were driven by ‘earnings’ and not the hype of Trump, they just got a very quick lesson. As headlines hit proclaiming to confirm that Trump Jr received an email showing that the “Russian government wanted to help Mr. Trump,” the market began to nosedive…

…The Crown prosecutor of Russia met with his father Aras this morning and in their meeting offered to provide the Trump campaign with some official documents and information that would incriminate Hillary and her dealings with Russia and would be very useful to your father.


This is obviously very high level and sensitive information but is part of Russia and its government’s support for Mr. Trump – helped along by Aras and Emin.

To which the market responded thusly…


The Dollar Index also tumbled…


And traders piled into bonds and bullion…

For now impeachment odds havent shifted.




Soaring premiums has now resulted in at least 2 million Americans ditching their health coverage.  The biggest group of course is the 18 to 34 yr old group as there is really no need for them to fund the aging population


(courtesy zero hedge)


Obamacare Death Spiral: At Least 2 Million Adults Ditch Coverage In 2017 Amid Soaring Premiums

As Democrats continue to defend an obviously failed Obamacare system, the effects of soaring rates and collapsing coverage options seem to be taking a toll on the number of people actually buying health insurance these days.  According to the “Gallup-Sharecare Well-Being Index,” the percentage of uninsured adults in the U.S. bottomed out at 10.9% in Q4 2016 but has since increased to 11.7% in just the first two quarters of 2017.


For those keeping track, there are roughly 250 million adults in the United States.  Therefore, 0.8% increase in the uninsured rate implies that roughly 2 million people have decided they’re simply not willing to continue absorbing Obamacare’s exorbitant annual premium increases. 

Not surprisingly, the biggest increases in the uninsured rate came from 18-34 year olds…you know, the people who don’t really need coverage but were forced to subsidize older, sicker people because of Obama’s view that “when you spread the wealth around it’s good for everybody”...apparently they’re no longer convinced that it was good for them.


Now, while Democrats will undoubtedly blame Trump for the sudden increase in the uninsured rates, we’re going to go out on a limb and suggest it might just have more to do with soaring premiums that increased over 100%, on average, in just 4 years.

Per the chart below from the Department of Health and Human Servicesthe average individual purchaser of health insurance across the United States saw their premiums increase from $232 per month in 2013 to $476 per month in 2017, a ‘modest’ increase of over 100% in just a few years.  To put that into perspective, that’s nearly $3,000 per year and roughly 9% of what the median American earns each year.


And while it will make zero difference to those intent upon blaming the Trump administration, recall that 2017 rates were set in the summer of 2016, a time when most viewed Trump as a long-shot for the White House.

Meanwhile, as if a 100% average increase isn’t bad enough, residents of many states incurred even more devastating increases of over 200%.


But sure, it’s all Trump’s fault.


Not good:  wholesale inventories rise but wholesales sales tumble for the third straight month as unsold inventories climb:

this will be a negative to GDP

(courtesy zero hedge)


Wholesale Sales Tumble For 3rd Straight Month, Inventories Build

Well they “built it”, but in May, “no one came.” Wholesale Inventories rose a better-than-expected 0.4% MoM but sales tumbled worse-than-expected 0.5% (the 3rd monthly decline in a row).

Inventories reversed April’s decline…

But sales keep falling… and accelerating…

Automotive inventories rose 0.7% MoM (against April’s 1.4% drop) but Automotive sales dropped 0.5% in April.

Wholesale Inventories are still marginally lower for Q2 so far (-0.13%) providing a modest drag on GDP, but sales are down 0.77% in Q2 wit hthe biggest 3-month decline since March 2016 (amid fears of global recession)


This divergence between inventories building and sales slumping pushed the inventories-to-sales ratio up for the first time since November…

(courtesy zero hedge)

“Reverse Schizophrenic” JOLTS Report: Job Openings Plunge As Hiring Soars

When we discussed last month’s JOLTS report – Janet Yellen’s favorite labor market indicator – we used one word to describe it: “schizophrenic“, because while the BLS reported that job openings in April soared to the highest on record, hiring crashed, confounding not only economists, but also the supervisors of BLS goalseekers who “came up” with the number. Fast forward to today, when moments ago the latest JOLTS report summarized, with its usual 2 month lag, the labor situation in the US. And, once again, we have one term to describe it, or rather two: “reverse schizophrenic”, because it was the inverse of everything that was an outlier in last month’s report: as job openings crashed by 301K from a downward revised 5.967MM (the original number was 6.044MM) to 5.666MM, far below the expected 5.950MM, and indicative of a job openings rate of 3.7% vs 3.9% last month…

...hiring exploded by 429,000 to 5.472MM, the second highest monthly print on record, following the lowest total hires number since April 2016.

Confirming the bizarre surge in hiring is the next chart which shows the Y/Y change in hiring. The 6.2% increase in new hires was the highest going back to March 2016, and was far above the recent trendline of no hiring growth observed over the past year.

Which leads to our favorite chart: hiring vs payrolls, and where after the previously noted stumble in hiring in April, the two series have miraculously converged once again, suggesting the labor market in terms of payrolls and net hiring (less separations), is now aligned.

Last but not least was that other key indicator, the “quits” rate, or the “take this job and shove it.” As a reminder, Americans only quit their jobs when they are confident they can find a better paying job elsewhere, and following April’s steep drop in quits, it would appear that US workers are once again confident, as the number of Quits in May surged by 177K to a new record high of 3.221 million, the biggest monthly increase since December 2015.

Overall, a mixed JOLTS reports, with several trading desks once again at a loss how to describe the inherent schizophrenia of plunging job openings and near record hiring; furthermore as a reminder, JOLTS tends to be goalseeked retroactively during major inflection points in the payrolls series. Which is why with the BLS recently reporting that job additions in recent months had declined substantially – at least until the June bounce – it may soon be time for the BLS to take a long, hard look at yet another downward JOLTS revision.


The reverse QE of the Fed will be very damaging according to Dimon and he is correct as all of those dealers that has bought bonds over these past several years will now become sellers

(courtesy zero hedge)

“The Tide Is Going Out” – JPMorgan’s Dimon Warns QE Unwind Could Be Far Worse Than Fed Hopes

Janet Yellen confidently stated at the last FOMC press conference that The Fed will start unwinding its massive balance sheet “relatively soon” and Patrick Harker, the Philadelphia Fed president, has said the process will be so dull that it is equivalent to watching paint dry.

Not everyone agrees…

Louis Crandall, an economist at Wrightson Icap, said at the time:

“When they [the Fed] launched QE, they were confident about the direction of the impact but cautious about projecting the precise magnitude. They should be even more cautious about estimating the impact of unwinding the portfolio, as they have even less control over the outcome.

The unwind will be lumpy for sure…

And today, none other than JPMorgan CEO Jamie Dimon poured some more cold water on The Fed’s complacency at this ‘storm in a teacup’. Speaking at a conference in Paris this morning, Bloomberg reports that Dimon warned…


“We’ve never have had QE like this before, we’ve never had unwinding like this before.”


“Obviously that should say something to you about the risk that might mean, because we’ve never lived with it before.”


“When [the unwind] happens of size or substance, it could be a little more disruptive than people think.”


“We act like we know exactly how it’s going to happen and we don’t.”

Central banks would like to provide certainty but “you cannot make things certain that are uncertain,” Dimon said. All the main buyers of sovereign debt over the last 10 years — financial institutions, central banks, foreign exchange managers — will become net sellers now, Dimon said. Investors are listening closely to policy makers to determine when and how central banks will start reducing their balance sheets. A global bond rout spilled over into equities last week on signs that central banks are taking a more aggressive stance.

“That is a very different world you have to operate in, that’s a big change in the tide,” he said. “The tide is going out.”

Will “the tide is going out” be the “the music stopped playing” quote of this collapse?





Senate Republicans have canceled their first two weeks of their August recess to work on legislation.  They still will not come up with anything

(courtesy zerohedge)

Senate Republicans Cancel First Two Weeks Of Recess To Work On Legislation

It just got serious.

With Trump buried in domestic scandals, it was virtually certain that in the handful of days left before Congress takes its summer recess, there was zero chance that either Obamacare repeal or Trump’s tax plan could make any headway in the Senate, prompting many to ask if the Senate would cancel or at least delay its summer break.

Moments ago, Senate GOP leader Mitch McConnell announced the latter, when he said that he would cancel the first two weeks of August recess, delaying it to the third week of August, to give more time to complete action on outstanding legislation.

“In order to provide more time to complete action on important legislative items and process nominees that have been stalled by a lack of cooperation from our friends across the aisle, the Senate will delay the start of the August recess until the third week of August,” Senate Majority Leader Mitch McConnell says in statement.

His full statement below.

Of course, even with the cancellation, it is not clear – and certainly not assured – that any legislation will pass a Senate that it not only hopelessly divided by partisan lines, but where the Republican party is increasingly more split.


A good commentary tonight from Dave Kranzler of IRD: it is not just Illinois that is on the brink..it is the whole country


(courtesy Dave Kranzler/IRD)

Illinois On The Brink? The Whole Country Is On The Brink

The biggest problem facing Illinois is the public pension fund problem.  I don’t care what the “official” number is for the degree to which it is underfunded.  I can guarantee that even without marking-to-real-market the illiquid investments like private equity funds, derivatives, commercial real estate trusts and other assets that do not have truly visible markets, collectively the public pension system in Illinois is at least 60-70% underfunded.   Then apply a realistic assumed actuarial rate of return on assets, which would be lower than the current assumption (likely 7.5% ad infinitum) and the underfunding goes to 80%. The problem is unsolvable without a complete and drastic restructuring.

I was in a Lyft ride today and the driver happened to be from the northwest suburban area of Chicago.  There’s a lot bad things happening in that State that are not reported in the mainstream media.  All road public road work has been halted except toll roads.  The gun violence has worked its way from the South Side up through downtown into the Gold Coast neighborhood and is winding its way north.

He said that his hold house at peak prices in northwest burbs was worth over $500k.   The current resident has it offered for $250k.   Housing and real estate prices are plunging.   He has a good friend who consults with Sears and the expectation is that SHLD could file bankruptcy any day (Short Seller Journal subscribers were shown this idea on April 2, 2017 at $11.49 – it’s been as low as $6.20 since then).

It’s not just Illinois.  The entire system is crumbling beneath the surface.  As long as the mainstream media isn’t reporting the truth, the “truth” can’t be that bad, can it?  The truth is worse than any of us can possibly know.

There’s a 1%/99% in this country that’s different than the assumed meaning for that term. For 99% of the population, economic reality and systemic truth has been covered up and kicked down the road for so long that this segment of the populace is willing to believe there may well be a such thing as a “free lunch.”  To 99%’ers, it’s inconceivable that the grim-reaper could or ever would show up to collect.  Of the 1%, a small percentage not part of the insider elite can see most of the truth and can imagine that the whole truth is far worse than what can be perceived from publicly available information.  The balance of the 1% are the insiders.

I stated in 2003, after watching the tech bubble collapse and the housing bubble inflate, that the inside elitists were going to keep the system propped up with printed money and easy credit until they had swept every last crumb of middle class wealth off the table and into their own pockets.  I also said that nation’s retirement assets would be last crumbs remaining.  Enabling pension underfunding is another form of credit debt used to confiscate wealth.  That’s why the catastrophic underfunding of pensions was allowed to persist.

For purposes of my analysis, anyone who does not have enough money in the form of cash in hand to buy a Federal politician or buy the direct phone number to the Oval Office is “middle class.”  There’s plenty of douche-bags running around with assets worth 8-figures but they don’t have enough spare change to buy their way in to the elitists’ card game.

We are at the point where the last crumbs are being swept off the table.  It looks like Illinois will be the first to fall but there will be several others that follow.  Part of the motivation by the Fed/Government to hold up the stock market like it has been doing is to keep the big State pension funds propped up for proper looting – like a prize-fighter being held up under the shoulders after passing out in order to take more punches to the face.

I suspect the time at which the system will be allowed to collapse is not too far off.  The only question for me is whether or not the “Mad Max” scenarios engulfs the country before the outbreak of World War 3…


I am going to leave you tonight with this fantastic commentary by Stewart Dougherty. he explains in simple language the fraud behind paper gold and paper silver.  He also explains why the gold/silver mining companies do nothing to stop this fraud


this is a must read…. (it is long so take your time)


I made some major revisions to the article.

I hope it still works for you.

Assuming you give it your blessing, I’m ready to roll with it.

Here goes and Cheers, Stew



By Stewart Dougherty

In 1980, the Financial Deep State realized that there existed an extraordinary opportunity for serial plunder and profiteering: the manipulation of the gold and silver markets. They immediately mobilized to exploit it.

During the subsequent 37+ years (we are now well into the 38th), the Deep State manipulators have criminally looted the gold and silver markets, pocketing astronomical profits for themselves in the process, all of which have come from real victims on the other sides of their fraudulent trades. While literally billions of people worldwide have been financially damaged by this crime, many severely, not one of the perpetrators has spent so much as ten seconds in jail for the global looting spree they have conducted. This is because precious metals price fraud is a state-sponsored crime.

While in this article we will concentrate on gold from here on, the exact dynamics we describe also apply to silver. The only difference between the two is that the price carnage in silver has been far worse than it has been in gold, on a percentage basis.

As a consequence of the unrelenting gold price manipulation, gold has been thrust into two severe bear markets that have lasted for more than 27 of the past 37 years, or more than 72% of the time.

The first bear market ran from 1980 until 2001, during which the gold price was savaged from $850 to $250 in nominal dollars, a plunge of 71%. Inflation-adjusted to today’s dollars, the carnage was even worse: it collapsed from $2,674 to $344, an 87% implosion.

In 2001, in the midst of unprecedented (at the time, but far worse now) economic, financial and monetary pressures, gold embarked on a ten year rise to a nominal (although not inflation-adjusted), all-time high of $1,925. The Financial Deep State had its hands full then with other, more pressing matters (such as keeping its global financial and monetary Ponzi schemes from disintegrating), and was forced to take its eyes off of the gold ball. It is impressive what gold can do when it is freed from the chains of greed, looting, and official corruption.

By 2011, after employing its signature techniques, including rampant counterfeiting and reporting fraud, the Deep State had returned the errant financial genies to their poison bottles, and was able once again to focus its attention on its favorite, most profitable crime: precious metals price rigging.

For the 6+ years since, gold has been slammed into a second major bear market, during which its price has been crushed from $1925 to $1050, a collapse of 45%. It has recovered somewhat to $1210 at the time of this writing.

During the entire 37+ year period, and particularly during the 27+ years of outright price annihilation, the major gold miners have done precisely nothing to expand the market for physical gold via advertising, direct marketing or any of the other proven demand-creation techniques. They have also done nothing to support gold’s price in any way, or to take action against the criminal price manipulators.

The industry’s sole innovative effort during this period was to have its association, the World Gold Council, get behind a gold ETF, GLD. The management of this ETF was placed in the hands of the Financial Deep State, the exact people who have manipulated the gold price for 37+ years. Worse, the

ETF was set up so that its physical reserves are immune to audit. Very few people, all of them members of the Financial Deep State, know what actually goes on behind the closed doors of the gold ETF.


GLD was supposed to open the floodgates of demand for physical gold, and resuscitate its price so that it would at least keep up with inflation, which, at the very least, is what gold is supposed to do. But this did not happen.


Inflation adjusted to today’s dollars, gold hit its all-time high of $2,674 in January, 1980. (We are using U.S. government inflation statistics, which are deliberately understated.) As of July 7, 2017, it was $1210, down 55%.


From its inflation adjusted high of $2095 in 2011, it is now down 42%.  (The reason we use the 1980 and 2011 gold price highs for these comparisons is that the market was relatively free from interference at those times, and the price was heading toward its natural level in both cases. According to more than one dozen objective metrics we could cite, the current gold price is a fraction of what it should be, which means that the referenced “high” prices are actually conservative.)


As we can see, GLD has failed to deliver on its promise, most likely because any gold that might be in its inventory is used by the Financial Deep State for multiple, conflicting purposes, such as leasing and hypothecation. Such machinations would further pressure the gold price. There are numerous additional problems with the ETF from a market development standpoint, but they are beyond the scope and purpose of this article. The simple fact is that the gold industry’s singular market development innovation in nearly 40 years has been a total flop, which is proven by the ceaseless and ongoing price decimation of gold. A flop is exactly what the Financial Deep State intended and designed the ETF to be.


As we pointed out in detail in a previous article (“The Traitors Aiding and Abetting the Deep State’s Dirty, Dying War on Gold”), gold is the world’s pre-eminent and most historic consumer product.


At the same time, gold is unique in the history of global consumer commerce in that its price is set neither by its producers nor its marketplace.


Instead, the price of gold is falsely concocted by a corrupt, criminal, immoral, conscienceless, thieving, money-addicted set of Wall Street, Washington, D.C., City of London and Basel, Switzerland central and commercial bank schemers, cheats, and parasites. In other words, by the lackeys and footmen of the Financial Deep State.


While the Fed and other Deep State puppets have floated subtle memes that there is a noble purpose behind the control of gold, such as to support the dollar and preserve confidence in their (disintegrating) financial and monetary systems, these are nothing but contrived and coagulated lies designed to cover up the biggest financial crime in history. (In a previous article, “Gold and Silver Price Manipulation: The Biggest Financial Crime in History,” we outlined how this multi-decade crime has netted its perpetrators more than $1 trillion in profits, while also resulting in trillions of dollars being stolen from billions of owners of gold and silver worldwide, the majority of whom are of humble means. (For example, Indian villagers whose savings are held in the form of gold and silver jewelry.) Extraordinarily rich people who steal from the humble and poor are particularly sick in the head, and this is the kind of theft we now see everywhere we look, thanks to the raging epidemic of state-orchestrated, totally non-prosecuted financial criminality.

All the while, the major mining executives have not publicly uttered a single complaint about or done one thing to stop this price fraud. They act as if everything is just fine. Of course they do: they receive exorbitant, structured, no-lose compensation packages, while their shareholders get screwed to the wall and the global holders of gold in all forms get robbed blind.

As Shakespeare’s King Lear pointedly said to his daughter Cordelia, “nothing will come of nothing.” That is exactly what the world has received in the way of support from the pompous, overpaid, senior executive bureaucrats and freeloaders of the mining industry, who have done nothing to defend their product as it has been systematically discredited and disgraced: Nothing.

The gold industry throughout the broadly-defined “west” is suffocating to death under the phony price compression. It is not just gold’s price that is dying; demand is, too. Who in their right mind wants to save or invest in an item whose price is maniacally tossed around like a rag doll, cannot even keep up with inflation year after year, is completely psychotic and unpredictable, and has been a total dog for nearly 40 years?

The Financial Deep State is, of course, delighted by its success in making a laughing stock of gold, particularly as compared with virtually every other asset class in the world, including baseball cards and vintage Herme’s handbags, all of which have soared in price. The destruction of gold sentiment has always been its main objective, from the very beginning. It is a required co-factor in the FDS’s most ambitious, corrupt, ruthless and money-hungry agenda of all time: its scheme to eliminate cash. The profits the “cashless society” scam will suck out of the people’s pockets will be so astronomical and mind-blowing that they will make the mere $1 trillion stolen from the precious metals market look in comparison like a noble act of FDS self-restraint, and a tip they toss to a caddy. We will see looting in the tens of trillions of dollars. It will completely restore feudal serfdom to the world and devastate mankind.

Many gold pundits would like us to believe that gold will always be the King of Money, no matter how devastated its price becomes. But the evidence proves otherwise. Over time, all manner of things have served as money, or currency: cows, sheep, camels, clam shells, cowrie shells, bronze ingots, copper replicas of cowrie shells, metal tools, deerskin, you name it. And all of them have faded away like Ozymandias, the one-time King of kings who is now just dust in sand. Today, in the United States, it is estimated that 99.5% of the citizens own no physical gold whatsoever in monetary or investment form. For that massive cohort, gold is already completely irrelevant. Though Europe’s numbers are somewhat better, the overall situation is similar throughout the west: mass non-ownership.

Of course, any real and talented, as opposed to fake and incompetent industry executive would contemplate that number with awe and excitement. It is virtually impossible to find today anywhere in the world a consumer market that is 99.5% non-penetrated. For any business executive who actually knows what he or she is doing, this is like having a license to shoot fish in a barrel. How can one miss?

Aristotle said that “nature abhors a vacuum,” and gold is the latest proof of it. Having completely failed its owners and supporters for years, people are now beginning to reject gold and embrace cryptocurrencies, or any other investment vehicle for that matter. This is accelerating the withering trend for gold. And while we firmly believe that gold has a vital, indispensable role to play, the market is increasingly saying, “No, it doesn’t, at least not for me.” Investors vote with their feet by simply walking away, and this is what they are doing when it comes to gold. (Our gold research with millennials is sobering beyond belief, but that is a different topic.) The point is that gold demand in the west is in deep trouble and literally a fraction of its potential, but actually doing the work to fix this problem is of no interest whatsoever to the lazy and visionless gold industry fixed-compensation-package executive opportunists.


Completely oblivious and inert to what is happening right in front of their faces, gold industry executives are demonstrating that they are in a massive state of dysfunction, delusion and denial.


Are we being stern? Yes. Why? Because this has been going on for 37+ years, and their free passes expired a very long time ago. Enough is enough.


To place the gold price-rigging farce into perspective, let’s ask our good friend Mr. Satire to help us draw a parallel.


Assume that the Financial Deep State’s greed is going exponential (which it is), and that the FDS is no longer satisfied with its “mere” multi-billion dollar annual theft from the gold pits . The ugly, insatiable beast wants more.  


So its denizens come up with a brilliant idea: how about we move into consumer electronics!


They have a chat with their friends at the Crimex, grease all the necessary palms in the “regulatory” community, and next thing, a new paper trading vehicle is announced: iPhones!!! Yes, the world can now trade iPhones on the Crimex, and to legitimize its new product, the Crimex announces that it has actually purchased, count ‘em, 10 iPhones which they have securely stored in their vault.


They are thrilled about the inauguration of this new money-making opportunity. And on the first day of trading, out of the blue and in a matter of seconds, they short 1 million paper iPhones, crushing the price from $850 to $250 dollars. Yet another $600 million criminally stolen from the markets, and stuffed into their already stuffed pockets.


The scheming traders want to cover their shorts, so they call Tim Cook and say to him, “We would like to order 1 million iPhones for $250 apiece.”


By the identical stupidity demonstrated for decades by the major gold miners, we are to believe that Tim Cook would reply, “Wow, that’s quite a price drop. I think we’re going to lose a bunch of money on this trade, or at best, break even. For sure, the shareholders are going to take it on the chin, because our profits will plunge if we sell iPhones for this amount. But hey, you Wall Street guys manipulate every other market on earth, why shouldn’t you be able to control the price of iPhones, too? So sure, I’ll call the people in Sales and authorize them to sell you a million iPhones at $250 each.”


The manipulators are in ecstasy. They are well on their way to solving their eternal riddle: how to create absolutely limitless wealth by doing next to nothing other than simply exploiting the hard work of others.


Emboldened, they head back to see their friends at the Crimex, with the bribed regulators in tow. And the following day, the Crimex makes another exciting announcement: they are now getting into automotive vehicles, too!


Specifically, the Crimex introduces a brand new exchange for paper GM Suburbans! And to prove the legitimacy of their new exchange, they announce that they have purchased 10 Suburbans, and stored them seven stories underground within the New York Fed’s vault. They needed to do this because they ran out of space in their own modest vault given that they had to squeeze all those 10 iPhones amongst the 35 ounces of physical gold they have on hand to support the 47,000,000 ounces currently shorted.

The first day of trading unfolds, and the Deep State decides to double down: they short 2 million paper Suburbans at 4 AM, East Coast time, on a holiday morning. As expected, the price plunges in 3 seconds from $50,000 to $25,000, giving the looters an instantaneous profit of $50 billion. Now that represents some serious Benjamins, and they’re on the phone with Mary Barra in a matter of minutes to seal the deal and protect their score. “We want to buy 2 million Suburbans for $25,000 apiece,” they announce.

Mary is floored by the demand. “Jeez, guys, how on earth are we supposed to make any money selling Suburbans for $25,000 each? Profits are going to plunge, and so is our stock price.”

The swindlers sharply reply, “Look, that’s not our problem. The price is the price, and you can go to your computer right now and clearly see that Suburbans are priced on the Crimex at $25,000. We want our Suburbans, and at that price. And as a head’s up, if you have a problem with this, then you’re going to have a problem with the FED, ECB, BIS and your Wall Street bankers, and you don’t really want that, do you?”

“Well, no, I certainly wouldn’t want to upset the FED, ECB, BIS or our Wall Street bankers,” Mary responds, ruefully. “And looking at my computer screen, I can see that you are absolutely correct: the Crimex price of Suburbans IS $25,000, so I guess there’s really nothing I can do but sell them to you for that amount. I’ll call the head of Operations and have him tell his people to start loading up the transport trucks.” She then calls Investor Relations and tells them to buckle-up. Their forward guidance was just blown to smithereens.

Does anyone reading this article really think that the executives at Apple and GM would be such complete pussies, jackasses and idiots as to roll over for a total scam like that, not just once, but thousands of times over nearly four DECADES??? Does anyone really think those corporations would give away their limited, hard-made products, for next to nothing, to a corrupt bunch of Wall Street thieves and pukes who were illegally trying to rig their market? Does anyone really think that real CEOs, as opposed to clueless mining industry morons, would sacrifice their customers and shareholders on such an altar of incompetence, stupidity, and cowardice?

Of course they wouldn’t just go along with such a shakedown. Apple and GM would hire the most talented and vicious lawyers on the planet, and they would rip the faces off the Wall Street con artists so blatantly attempting to swindle them and destroy their companies and industries. In the process, they would expose the Wall Street crooks for exactly who and what they are, once and for all.

Apple is renowned for its unprecedented stack of corporate cash, now totaling $246 billion. How did they amass so much money? By creating great products and then brilliantly marketing them at prices that would create robust profits for the corporation and its shareholders. They didn’t give anything away; they charged top dollar for what they offered, and their customers were glad to pay it, because they got good value in return.

The pathetic, mewling mining executives moan that gold is “just a commodity,” and that they have no pricing power over it. What an insult to people’s intelligence. Gold is the most beautiful form of money on earth. And virtually every human being on this planet has a need for and uses money. Far, far, far more people, in fact, than currently need or use Apple’s products. What a pitiful excuse for these overpaid freeloaders to concoct in a lame attempt to rationalize their complete lack of marketing vision, talent, and effort.


Here is a question for the Fed, Treasury, ECB, BIS, and Regulators: you people obviously condone and encourage the paper gold and silver price manipulation scam, because you’ve done absolutely nothing to stop it for nearly 40 years. Perhaps you even helped design it, in cahoots with your banker owners.


So the question is: if paper consumer products are such a great idea for society and you, why did you stop at gold and silver? Why don’t we have paper TVs, paper computers, paper houses, paper cars, paper wine, paper tires, paper mattresses, paper refrigerators, paper beds, paper pharmaceuticals, paper Huggies and paper toilet paper?  Why isn’t every single consumer product paper-tradeable on the Crimex, so that Wall Street, the City and all their brethren can profiteer on every single thing that human beings need and do in their daily lives?


As acolytes of the Financial Deep State, how could you Central Tankers be so remiss as to leave so much easy money on the table, and out of your masters’ pockets? With paper everything, you could loot the people into oblivion. And if this opportunity is properly exploited, it could take Central Tanking to a whole new level of expansiveness, criminality and destructiveness.


At first, we considered that the FDS might have stopped short of Paper Everything because it would be so blatantly illegal that it would embarrass even them. But we realized that can’t be it because they couldn’t care less about that. What do professional counterfeiters care about the law?


We suspect they stopped short because they are now singularly focused on their Master Plan: the elimination of cash. That’s the Big Kahuna for the Central Tankers and Financial Deep State; the giant Hoover in the Sky that will enable them to suck inconceivable sums of the people’s money down their Midas throats. Once they have eliminated cash and forced the people’s money into their digital concentration camps, the people are going to suffer an endless series of service fees, transaction fees, usage fees, maintenance fees, account access fees and the like. The proverbial death by a thousand cuts.


But those will just be the warm ups. A few years ago, an IMF document was leaked that spoke about the wonders, to the Deep State, of a 10% “capital levy” being imposed, without warning on a Sunday night when the banks are closed, upon the people’s assets, supposedly to create “debt sustainability.” We are not making this up; this is exactly how they presented it, so you can see the kind of predatory, sneaky schemers they really are. Please note: the IMF was not talking about a plan to pay down the sovereign debt; they were talking about being able to pay the interest on it. Their paper said not one word about governments reining themselves in to reduce their surging deficits. Therefore, it is clear that the 10% capital levy will be just be one of many, because the first one won’t fix a thing.


The citizens of the United States … no, not Yellen, Fischer or the Fed; not Draghi or the ECB; not Mnuchin or the Treasury; not Lagarde or the IMF; not the BIS or any of the other supra-national institutional central schemers of our world … the American People are said to own roughly 261 million ounces of gold. We happen to believe it is a near certainty that this gold is gone: leased, pledged, hypothecated or outright sold, and no longer owned by the people. But let’s say we’re wrong.


As we know, the U.S. federal government debt is now $20 trillion and climbing, with additional off balance sheet obligations totaling several trillion more. To this we must add the unfunded contingent liabilities, for such programs as Medicare, Medicaid, Social Security, federal government employee pensions, military pensions, veterans’ medical care and the like. This number is so gargantuan it is literally impossible to calculate, but we know for a fact that it is at least $150 trillion, net of all projected tax receipts. So the nation is in the hole by, at minimum, $175,000,000,000,000.00, aka $175 trillion.


If the price of gold increased by $10,000.00 per ounce this afternoon, the United States citizens’ supposed gold holding would increase in value by a mere $2.6 trillion, in other words, absolutely nothing compared to the country’s debt and obligations. This is just one example of why the current, criminally rigged $1,210 price of gold is not just a farce, but a reflection of the sheer, in-our-faces brazenness, smugness, and arrogance exhibited by the manipulating thieves. Their crime is absolutely blatant and they couldn’t care less, because they know that they will never be prosecuted. They are not above the law; they are the law. And then they have the gall to tell us they do “God’s work.”


What will spell the end of this colossal criminal conspiracy, we do not know. But we are strong believers in the saying: “If you keep on doing what you have been doing, you will keep on getting what you have been getting.” Unless there is a groundswell uprising by the people who have been victimized by this crime, we doubt that much will change. The Financial Deep State is certainly never going to willingly walk away from the price manipulation money machine they created and operate, and that has delivered to them such astounding profits. But we believe there are things every reader of this article can do to pull some weight. You are smart (you wouldn’t be interested in gold if you weren’t; it is the world’s most intellectually challenging and fascinating market), and we do not wish to suggest what you might do. You already know what’s right for you given your particular situation. We would urge you to do those things, and to assume that many others are taking action, too. If we do not rise up, none of this is ever going to change.


And not meaning to be too cosmic on this summer day, we sincerely believe that the battle for gold is, in fact, an epic war between Good and Evil, and one that is genuinely Biblical. Gold is only one letter away from God, and came from Him as a gift to His people. We doubt very much that He is pleased that it is now being so sullied by corruption, greed and gross criminality. Currently, Evil is winning the war hands down, and if it achieves a final victory, humanity can kiss its freedom goodbye as a vast new age of feudal serfdom and slavery begins. We can prevent that from happening, but only if we stand up and fight. The War on Gold is not trivial; it is a symbol of everything that is crucial to the sanctity of human kind. And it needs all of us to join in now, while we can.



Stewart Dougherty

July 11, 2017


Stewart Dougherty is the creator of Inferential Analytics, a forecasting method that applies to events proprietary, time-tested principles of human instinct, desire and action. In his view, forecasting methods not fundamentally based upon principles of human action are unlikely to be reliable over time. He is a graduate of Tufts University (BA) and Harvard Business School (MBA). He developed expertise in strategic analysis and planning during a 35+ year business career, has traveled to and conducted research in over 25 countries and has refined Inferential Analytics into a reliable predictive instrument over a period of 16+ years.




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