GOLD: $1259.00 UP $0.30
Silver: $16.27 DOWN 3 cent(s)
Closing access prices:
Gold $1258.00
silver: $16.29
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1263.73 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1258.81
PREMIUM FIRST FIX: $4.92
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1264.29
NY GOLD PRICE AT THE EXACT SAME TIME: $1258.15
Premium of Shanghai 2nd fix/NY:$6.14
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1258.10
NY PRICING AT THE EXACT SAME TIME: $1258.00
LONDON SECOND GOLD FIX 10 AM: $1257.55
NY PRICING AT THE EXACT SAME TIME. $1258.00
For comex gold:
AUGUST/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 73 NOTICE(S) FOR 730000 OZ.
TOTAL NOTICES SO FAR: 3319 FOR 331900 OZ (10.323 TONNES)
For silver:
AUGUST
1 NOTICES FILED TODAY FOR
5,000 OZ/
Total number of notices filed so far this month: 544 for 2,720,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
end
Let us have a look at the data for today
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
In silver, the total open interest SURPRISINGLY FELL BY ONLY 146 contracts from 204,833 DOWN TO 204,687 DESPITE THE HUGE FALL IN THE PRICE THAT SILVER TOOK WITH RESPECT TO FRIDAY’S TRADING (DOWN 34 CENT(S). SIMPLE EXPLANATION: THE BANKERS SUPPLIED THE NECESSARY PAPER BUT MORE NEWBIE SILVER LONGS ENTERED THE ARENA WITH THE REMAINING SILVER LONGS REMAINING STOIC AGAIN AND REFUSING TO BUDGE FROM THE SILVER TREE.
In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.025 BILLION TO BE EXACT or 146% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MAY MONTH/ THEY FILED: 1 NOTICE(S) FOR 5,000 OZ OF SILVER
In gold, the open interest FELL by A CONSIDERABLE 9,501 WITH the FALL in price of gold ($10.50 LOSS ON FRIDAY.) The new OI for the gold complex rests at 448,278. WITH THE RAID ON FRIDAY, THE BANKERS WERE SUCCESSFUL IN COVERING SOME OF THEIR SHORTFALL AS NEWBIE SPECS FLED FROM THE SCENE.
we had: 73 notice(s) filed upon for 7300 oz of gold.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
With respect to our two criminal funds, the GLD and the SLV:
GLD:
Today, no changes in gold inventory:
Inventory rests tonight: 787.14 tonnes
IN THE LAST 17 DAYS: GLD SHEDS 50.1 TONNES YET GOLD IS HIGHER BY $44.85 .
SLV
Today: : WE NO CHANGES IN SILVER INVENTORY TONIGHT:
INVENTORY RESTS AT 339.606 MILLION OZ
end
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FALL BY ONLY 146 contracts from 204,833 DOWN TO 204,687 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787). THE RISE IN OPEN INTEREST WAS ACCOMPANIED BY A HUGE LOSS IN PRICE FOR SILVER WITH RESPECT TO FRIDAY’S TRADING (DOWN 34 CENTS ). THE ONLY SENSIBLE EXPLANATION TO THE ABOVE IS THE BANKERS SUPPLIED THE NECESSARY PAPER AND NEWBIE SPECS ENTERED THE ARENA. THE STOIC SILVER LONGS WOULD NOT BUDGE FROM THEIR POSITIONS WHICH AGAIN ANNOYS OUR BANKER FRIENDS AND THUS THE CONTINUED PRESSURE ON SILVER.
(report Harvey)
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 17.38 POINTS OR 0.53% / /Hang Sang CLOSED UP 127.68 POINTS OR 0.46% The Nikkei closed UP 103.56 POINTS OR .52%/Australia’s all ordinaires CLOSED UP 0.89%/Chinese yuan (ONSHORE) closed UP at 6.7201/Oil DOWN to 49.05 dollars per barrel for WTI and 51.89 for Brent. Stocks in Europe OPENED IN THE RED , Offshore yuan trades 6.7307 yuan to the dollar vs 6.7201 for onshore yuan. NOW THE OFFSHORE IS 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 SLIGHTLY WEAKER DOLLAR. CHINA IS HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)NORTH KOREA//USA
USA preparing for a preventive war against North Korea( zerohedge)
( zero hedge)
iv)A marvelous reason for the crooks to whack gold and silver today: With new sanctions supplied on North Korea, Kim was furious as he refuses to negotiate and threatens a nuclear surprise( zerohedge)
b) REPORT ON JAPAN
c) REPORT ON CHINA
i)Although the USA seems to have backed off implementing a trade war with China because of China’s vote at the UN, they could cripple the west by holding onto its rare earths and not ship them westward
(courtesy Llewellyn King/InsideSources.com)
“how much money will China have to print to recapitalize its banking system?
Let’s be conservative and say that China’s non-performing loans are only half as bad as they were when it recapitalized its banks in the early 2000s. China ultimately confessed that 40% of its banking assets were non-performing loans that had built up in the wake of the 1997 Asian Financial Crisis. Let’s say it is only 20% today. It is probably more. Let’s also assume the most conservative estimates for shadow bank assets of USD 9 trillion. Along with USD 35 trillion of on-balance sheet assets (the Telegraph article says it is now $38 million), our conservative estimate equates to USD 8.8 trillion of loans in the Chinese banking system today that will effectively never be repaid and will need to be written off. Such an amount is equal to 84% of China’s GDP, more than enough to wipe out all the equity in its Chinese banking system twice over. If the banks were to write that debt down and recapitalize the banks with money printing, it would equate to 37% of its M2 money supply, all else equal a 37% currency devaluation. This is our best-case scenario for the inevitable devaluation of the China currency. It will likely be worse.”
and
“Here we enumerate the catalysts for the imminent bursting of the Chinese currency and credit bubble discussed herein and in our other work:
1. Fed credit tightening puts pressure on Chinese currency
2. China and Hong Kong is now flashing a banking crisis warning signal in BIS “credit-to-GDP gap” model
3. China’s connections to other countries also flashing warning signals of credit bubbles about to burst
4. Pressure from Chinese capital outflows
5. Threat of bank runs from Chinese masses
6. Housing prices on precipice of drop in China Tier 1 and Tier 2 cities from record price-to-rent levels and supply/demand imbalance
7. Ongoing poor and deteriorating fundamentals of China’s non-financial listed companies linked to unsustainable infrastructure investment binge
8. Dwindling, encumbered, and likely overstated foreign reserves
9. Imminent threat of US trade sanctions on China
10. Looming cresting of China’s workforce population
11. China credit bust already started to unfold in 2015, an early warning signal, but just a taste of what is to come, because the credit imbalances have only become more extreme
12. Widespread Wall Street complacency ahead of China NPC political elections in November”
4. EUROPEAN AFFAIRS
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)Oliver Stone slams the vast stupidity in sanctioning Russia
( Oliver Stone)
ii)Russia is to speed up its non dependence on the uSA and payment systems
zerohedge)
6 .GLOBAL ISSUES
7. OIL ISSUES
8. EMERGING MARKET
i)VENEZUELA
Venezuela removes state prosecutor Luisa Diaz from her job as Maduro solidifies his dictatorship
( zero hedge)
b)Foreign workers from Spain’s energy giant Repsol SA and Norway;s Statoil have removed foreign workers sensing danger in Venezuela. This will cause production to drop some more
9. PHYSICAL MARKETS
i)If you want to see what gold will trade at just look at Bitcoin
It rose to $3230.00 per coin
ib)Then 3400.00 for Bitcoin
( zero hedge)
( zero hedge)
ii)With gold price suppression continuing, we now witness South African gold operations are cutting jobs to the tune of around 16,000 workers and these guys work for pittance.
(Bloomberg/GATA)
iii)Ted Butler analyzes that London has only 600 million oz of silver with 400 million oz resting in the ETF’s. We are all of the opinion that JPMorgan hold 100 million oz of silver at the comex and 500 million oz in unverified accounts probably in London. JPMorgan did add a massive short position to which it covered in July with a profit. The question is: will the CFTC stop the manipulation. I personally doubt it.
( Ted Butler/GATA)
10. USA Stories
i)Mueller asks for more White House documents relating to Flynn’s dealing with a Turkish American business. The dealings between the two were meant to discredit Turkey’s arch enemy Gulen:
( zero hedge)
ii)A terrific commentary from David Stockman explaining how Trump is the set up guy who is going to take the fall with the stock market plummets. He indicates that the waterfall will start with the debt ceiling debate
( David Stockman/DailyReckoning)
iv)USA citizens in the latest report shows a huge increase in credit card debt (revolving credit). Student loans + auto loans also reach a record 2.8 trillion. With the removal last week of the total personal savings rate to zero, USA citizens are now relying more on their credit card in the daily routine.( zerohedge)
Let us head over to the comex:
The total gold comex open interest FELL BY A GOOD SIZED 9,501 CONTRACTS DOWN to an OI level of 448,278 WITH THE HUGE FALL IN THE PRICE OF GOLD ($10.50 with FRIDAY’S trading). NEWBIE LONGS WERE CRUSHED ON FRIDAY WITH THE BANKERS COVERING SOME OF THEIR SHORTFALL.
We are now in the contract month of August and it is the 3rd best of the delivery months after December and June.
The active August contract LOST 157 contract(s) to stand at 2571 contracts. We had 34 notices filed upon FRIDAY so we LOST 123 contracts or an additional 12,300 oz will NOT stand at the comex and 123 EFP’s were issued which entitles the long holder to a fiat bonus plus a futures contract and most probably that would be a London based forward.
The non active September contract month saw it’s OI LOSS by 164 contracts DOWN to 1849.
The next active contract month is Oct and here we saw a LOSS of 808 contracts DOWN to 47,726.
The very big active December contract month saw it’s OI FALL by 8520 contracts up to 344,305.
We had 73 notice(s) filed upon today for 7,300 oz
For those keeping score: in the upcoming front delivery month of August:
LAST YEAR WE HAD A MONSTROUS 44.7 TONNES OF GOLD INITIALLY. BY THE CONCLUSION OF THE AUGUST CONTRACT MONTH 44.358 TONNES STOOD FOR DELIVERY.
We are now in the next big non active silver contract month of August and here the OI FELL BY 131 contracts DOWN TO 78. We had 130 notices filed yesterday. Thus we LOST 1 contract(s) or an additional 5,000 oz will NOT stand for delivery in this non active month of August. THE RAID DID NOT SCARE ANYBODY FROM TAKING DELIVERY
The next active contract month is September (and the last active month until December) saw it’s OI fall by 2350 contacts down to 131,563. The next non active contract month for silver after September is October and here the OI gained 5 contacts up TO 26. After October, the big active contract month is December and here the OI gained by 2063 contracts up to 63,281 contracts.
We had 1 notice(s) filed for 5,000 oz for the AUGUST 2017 contract
VOLUMES: for the gold comex
Today the estimated volume was 69,339 contracts which is EXTREMELY POOR/
FRIDAY’S confirmed volume was 283,637 contracts which is EXCELLENT
volumes on gold are STILL HIGHER THAN NORMAL!
August 7/2017.
| Gold | Ounces |
| Withdrawals from Dealers Inventory in oz | nil |
| Withdrawals from Customer Inventory in oz |
nil oz
|
| Deposits to the Dealer Inventory in oz | oz |
| Deposits to the Customer Inventory, in oz |
nil oz
|
| No of oz served (contracts) today |
73 notice(s)
7300 OZ
|
| No of oz to be served (notices) |
2498 contracts
(249,800 oz)
|
| Total monthly oz gold served (contracts) so far this month |
3319 notices
331,900 oz
10.323 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 | 17,682.500 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 73 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 4 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
| Silver | Ounces |
| Withdrawals from Dealers Inventory | nil |
| Withdrawals from Customer Inventory |
863,223.840 oz
Brinks
Delaware
Scotia
|
| Deposits to the Dealer Inventory |
nil oz
|
| Deposits to the Customer Inventory |
nil
oz
|
| No of oz served today (contracts) |
1 CONTRACT(S)
(5,000 OZ)
|
| No of oz to be served (notices) |
77 contracts
( 385,000 oz)
|
| Total monthly oz silver served (contracts) | 544 contracts (2,720,000 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 | 1,172,725.0 oz |
NPV for Sprott and Central Fund of Canada
CANADIAN HOLIDAY
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
Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches
From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017
http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…
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.
end
And now the Gold inventory at the GLD
August 7/no changes in gold inventory at the GLD/Inventory rests at 787.14 tonnes
AUGUST 4/ANOTHER LOSS OF 4.48 TONNES OF GOLD FROM GLD INVENTORY/INVENTORY RESTS AT 787.14 TONNES.THIS IS A HUGE CRIME SCENE!!
August 3/no change in gold inventory at the GLD/Inventory rests at 791.88 tonnes
August 2/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
Aug 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
July 31/NO CHANGES AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
July 28/ANOTHER MASSIVE WITHDRAWAL OF 3.54 TONNES OF GOLD WITH GOLD UP $9.15/INVENTORY RESTS AT 791.88 TONNES
July 27/LATE LAST NIGHT, A HUGE WITHDRAWAL OF 5.03 TONNES WITH GOLD UP $10.45 ON THE DAY/INVENTORY RESTS AT 795.42 TONNES
July 26/NO CHANGE IN GLD INVENTORY WITH GOLD DOWN $2.55/INVENTORY RESTS AT 800.45 TONNES
July 25/A MASSIVE 9.17 TONNES OF GOLD WITHDRAWN FROM THE GLD/INVENTORY RESTS AT 800.45 TONNES
July 24/A massive 9.62 tonnes withdrawal and yet the price remains constant (down only 25 cents)..inventory drops to 809.62 tonnes
July 21/with gold up $8.75 again, we had no changes in gold inventory at the GLD/inventory rests at 816.13 tonnes
July 20/WITH GOLD UP AGAIN TODAY ($3.50) WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 816.13 TONNES
jULY 19/STRANGE!! AGAIN WITH GOLD UP $0.50 WE HAD ANOTHER HUGE 5.32 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 816.13 TONNES THIS GOLD IS HEADING TO SHANGHAI
July 18/STRANGE AGAIN/WITH GOLD UP $7.50 WE HAD ANOTHER HUGE 5.62 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 821.45 TONNES
July 17/strange again! with gold up $4.20 we had another huge withdrawal of 1.77 tonnes/inventory rests at 827.07 tonnes
July 14/strange@!!with gold up $12.00 today, we had a huge withdrawal of 3.55 tonnes/inventory rests at 828.84 tonnes
July 13/no change in gold inventory at the GLD/inventory rests at 832.39 tonnes
JULY 12/no change in gold inventory at the GLD/inventory rests at 832.39 tonnes
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
July 5/A MASSIVE 5.62 TONNES OF GOLD LEFT THE GLD AND NO DOUBT WAS USED IN THE RAID THIS MORNING/INVENTORY REST
July 3/ A MASSIVE 7.37 TONNES OF GOLD LEAVE THE GLD/INVENTORY RESTS AT 846.29 TONNES
end
Now the SLV Inventory
August 7/no change in silver inventory at the SLV/Inventory rests at 339.606 million oz
AUGUST 4/A WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 339.606 MILLION OZ
August 3/A WITHDRAWAL OF 1,181,000 OZ FROM THE SLV/INVENTOR RESTS AT 340.551 MILLION OZ/
August 2/NO CHANGES IN SILVER INVENTORY AT THE SLV
INVENTORY RESTS AT 341.732 MILLION OZ/
August 1/A HUGE WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 341.732 MILLION OZ/
July 31/no change in silver inventory at the SLV/inventory rests at 342.677 million oz
July 28/ A HUGE WITHDRAWAL OF 1.15 MILLION OZ OF SILVER LEAVES THE SLV DESPITE SILVER BEING UP 11 CENTS TODAY/INVENTORY RESTS AT 342.677 MILLION OZ
July 27/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ WITH SILVER UP 13 CENTS TODAY.
July 26/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ
July 25/A MASSIVE 3.309 MILLION OZ OF INVENTORY WITHDRAWN FROM THE SLV DESPITE SILVER’S 10 CENT RISE TODAY.
July 24/no change in silver inventory despite its 4 cent drop/inventory remains at 347.121 million oz
July 21/STRANGE! WITH SILVER UP AGAIN TODAY (11 CENTS), NO CHANGE IN SILVER INVENTORY AT THE SLV/inventory 347.121 million oz/
July 20/STRANGE! WITH SILVER UP AGAIN TODAY, THE SLV INVENTORY LOWERS BY 945,000 OZ/INVENTORY RESTS AT 347.121 MILLION OZ/
July 19/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.066 MILLION OZ
July 18/a huge 946,000 oz withdrawal from the SLV despite silver’s 16 cent gain!
Inventory rests at 348.066 million oz
July 17/no change in silver inventory at the SLV/Inventory rests at 349.012 million oz
July 14/no change in silver inventory/inventory rests at 349.012 million oz/
July 13/no change in silver inventory/inventory at the SLV rests at 349.012 million oz/
JULY 12/another massive 1.986 million oz of silver added into the SLV/inventory rests at 349.012 million oz/the last 3 days saw 7.281 million oz added into the SV
July 11/ANOTHER MASSIVE INCREASE OF 2.364 MILLION OZ into the SLV inventory/inventory rests at 347.026 million oz
July 10/ A HUGE INCREASE OF 2.931 MILLION OZ OF SILVER DESPITE THE EARLY HIT ON SILVER THIS MORNING/INVENTORY RESTS AT 344.662 MILLION OZ.
July 7/Strange: no change in inventory (compare that with gold) Inventory rests at 341.731 million oz
July 6/ANOTHER MASSIVE DEPOSIT OF 2.126 MILLION OZ INTO THE SLV INVENTORY/INVENTORY RESTS AT 341.731 MILLION OZ.
July 5/STRANGE! NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ
July 3/strange! with the huge whacking of silver we got an increase of 379,000 oz into inventory.
August 7.2017:
-
Indicative gold forward offer rate for a 6 month duration+ 1.26% -
+ 1.46%
end
END
Major gold/silver trading/commentaries for MONDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
OFF TODAY
end
If you want to see what gold will trade at just look at Bitcoin
It rose to $3230.00 per coin
(courtesy zero hedge)
Bitcoin Explodes Above $3000 To Record Highs
Despite the ongoing demise of Bitcoin Cash (down another 13% today) since the fork 4 days ago, cryptocurrencies are surging higher this morning with Bitcoin up 12% to a new record high at $3230.
CoinTelegraph reports that various experts and developers including Paxos principal architect Jimmy Song have noted earlier this week, Bitcoin price is likely rising due to the imminence of SegWit activation.
Since the mining community has already agreed to activate SegWit via Bitcoin Improvement Proposal BIP 91 and 141, the original SegWit proposal, SegWit is likely to be activated on the Bitcoin network by Aug. 14.
As the abovementioned date approaches, Bitcoin is expected to continuously increase in value, establishing new all-time highs.
And indeed it is…
Why is SegWit pushing Bitcoin price up? The debate between the mining community and Bitcoin developers regarding the activation of SegWit has delayed scaling in Bitcoin for years. The first attempt to scale the network which was presented at the Hong Kong roundtable consensus event failed and it took over a full year since then for the Bitcoin industry, mining community and developers to come to a consensus to activate SegWit. More importantly, the activation of SegWit marks the first major milestone in Bitcoin in terms of scaling, as Bitcoin has continuously operated within the 1 MB block size limit established by Bitcoin creator Satoshi Nakamoto upon its launch in 2009. SegWit will also establish the infrastructure necessary for two-layer solutions such as Lightning Network to operate. The implementation of Lightning Network and other solutions including TumbleBit will further scale the Bitcoin network by enabling micropayments and applications that were not possible before.
Notably the ‘value’ of Bitcoin Cash has collapsed relative to Bitcoin since its ‘birth’… (Bitcoin Cash is now trading near record lows)
Another driving factor of Bitcoin price is rising demand from institutional investors. This week, CBOE, the largest options exchange in the US announced that it will integrate Bitcoin futures contracts and options on its trading platform by partnering with regulated Bitcoin exchange Gemini.
Additionally, CoinTelegraph notes that the public’s interest in virtual currencies has sparked a boom for hedge funds with crypto exposure…
“Hedge funds with crypto exposure “exploding,” tweets economist and investor Tuur Demeester.
According to his quoting a related article, over 70 such funds are now being in the pipeline.
The linked article includes a comment by Arthur Bell manager Corey McLaughlin who says:
“I’ve been in the hedge fund space since 1998, and I’ve never seen anything like it in volume of launches in a particular area. It’s just crazy.”
The market will likely continue to call for increasing numbers as the funds continue to outperform other market spaces.
With the massive rise in values, hedge fund managers are seeing the need for new funds that link to cryptocurrencies and the public is calling for such funds. A recent revealed the number of such new funds, totaling nearly 70.
end
Then 3400.00 for Bitcoin
(courtesy zero hedge)
Bitcoin Buying Binge Continues, Tops $3400 For First Time As Fork Fears Subside
Bitcoin, and Bitcoin Cash, are both higher this morning as the former surges above $3400 for the first time.
Ethereum is also running higher as analysts predict a double for ether and $5000 Bitcoin price in 2018.
This morning’s surge follows news over the weekend of a mysterious trader ‘Spoofy’ manipulating Bitcoin prices.
It is clear that post-Fork fears have now been erased:
“The miner-orchestrated hard fork has had limited traction and will not impact the price or future development of bitcoin,” said Aurelien Menant, chief executive officer of Gatecoin Ltd., a cryptocurrency exchange in Hong Kong, referring to the split.
“The activation of SegWit is a significant milestone in bitcoin’s technological evolution.”
As CoinTelegraph reports, Standpoint Research founder and analyst Ronnie Moas has previously projected that the digital currency Bitcoin will reach a price of $5,000 per token in 2018 and $50,000 in 10 years.
In his most recent interview with CNBC, he also claimed that rival currency Ethereum is also likely to increase by twofold to reach $400 during the year.
In his report published in late July 2017, Moas claimed that the cryptocurrencies will sustain their solid performance and steal some shares of other assets like stocks, bonds, fiat currencies and other precious metals in the market.
“I think investors should take a shot on this and hold for a few years. If you lose a few bucks, at least you took a shot,” he said.
“In life, you miss every shot that you do not take. It will probably be more upsetting to watch it (from the sidelines) go up another 1,000 percent.”
Aside from the two leading virtual currencies, Moas also forecast that the price of the digital currency Litecoin will increase by twofold to $80 per coin.
However, Bitcoin’s teething troubles may not be over yet…
“The scaling debate is not over yet,” Menant added.
“The promised 2 MB block size increase due in November in accordance with the SegWit2x agreement may still be rejected by certain stakeholders.”
With gold price suppression continuing, we now witness South African gold operations are cutting jobs to the tune of around 16,000 workers and these guys work for pittance.
(courtesyBloomberg/GATA)
South African gold mine job cuts widen with 16,000 at risk
Submitted by cpowell on Fri, 2017-08-04 13:37. Section: Daily Dispatches
So why doesn’t the Reserve Bank of South Africa object to gold price suppression by other central banks?
* * *
By Kevin Crowley and Paul Burkhardt
Bloomberg News
Thursday, August 3, 2017
More than one in 10 gold mining jobs in South Africa may disappear after Sibanye Gold Ltd. announced that it is joining AngloGold Ashanti Ltd. in looking to close unprofitable shafts to stem losses.
Sibanye may cut 7,400 jobs as it prepares to close its Cooke and Beatrix West operations, which account for about 16 percent of its planned gold production, the Westonaria, South Africa-based company said today. Added to AngloGold’s planned 8,500 job cuts, that means about 14 percent of the country’s gold-mine workers are at risk.
South Africa produced more gold than any other country for a century until 2007, but depleted reserves and rising costs have meant production and jobs have tumbled since the industry’s heydays of the 1970s and 1980s. The country’s aging gold mines are the deepest in the world and generally rely on labor-intensive, low-tech extraction methods. …
… For the remainder of the report:
https://www.bloomberg.com/news/articles/2017-08-03/sibanye-may-cut-7-400
END
Ted Butler analyzes that London has only 600 million oz of silver with 400 million oz resting in the ETF’s. We are all of the opinion that JPMorgan hold 100 million oz of silver at the comex and 500 million oz in unverified accounts probably in London. JPMorgan did add a massive short position to which it covered in July with a profit. The question is: will the CFTC stop the manipulation. I personally doubt it.
(courtesy Ted Butler/GATA)
Ted Butler: The key test ahead in silver
Submitted by cpowell on Fri, 2017-08-04 14:15. Section: Daily Dispatches
10:15a ET Friday, August 4, 2017
Dear Friend of GATA and Gold:
Silver market analyst Ted Butler writes today that the London Bullion Market Association’s report this week on gold and silver bullion held in London-area vaults indicates that silver supplies are substantially lower than had been assumed. Butler adds that he is losing confidence in the new enforcement director of the U.S. Commodity Futures Trading Commission, James McDonald, as JPMorganChase continues its domination of the silver market. Butler’s analysis is headlined “The Key Test Ahead” and it’s posted at GoldSeek’s companion site, SilverSeek, here —
http://silverseek.com/commentary/key-test-ahead-16791
— and at 24hGold here:
http://www.24hgold.com/english/news-gold-silver-the-key-test-ahead.aspx?…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
The Key Test Ahead
|
August 4, 2017 – 9:15am
Before getting into the subject of today’s title, allow me to update a couple of topics previously discussed. Last Wednesday, I offered a review of world silver inventories in which I concluded that there were roughly one billion oz in fully documented inventories of metal in industry standard 1000 oz bars and perhaps another 500 million to one billion additional oz in unverified holdings; making a grand total of 1.5 to 2 billion oz for world silver inventories in, essentially, the only form that matters.
I went on to claim that JPMorgan owned a total of 600 million oz of that silver, including just over 100 million oz in its COMEX warehouse and 500 million in unverified holdings. In essence, I was claiming that JPMorgan held either all of the world’s unverified silver inventories or that there might be another 500 million oz out there that JPM didn’t own. I know this is a pretty outrageous claim, but I study this stuff closely and it is my firm conclusion that JPMorgan holds between 30% to 40% of all the 1000 oz bars in the world. Most outrageous of all, of course, is that JPMorgan bought all this silver over the past six years as it depressed the price by virtue of it also being the largest paper short seller on the COMEX.
When I wrote last week’s article, I knew full well that the LBMA was about to publish, for the first time ever, the quantities of gold and silver bullion held in London. To be frank, one reason I wrote the inventory article was to preempt the LBMA, because I was sure they would overstate world silver inventories. In the interest of full disclosure, please know that in terms of transparency and reasonable verification of its published statistics, I hold the LBMA in the lowest possible regard –almost to the point of disregarding everything they claim. I had every expectation that the LBMA would report that many billions of silver ounces resided in their affiliated vaults.
Therefore, it came as quite a bit of a shock to read that the LBMA reported that it held “only” one billion oz of silver, since it was much less than I would have expected it to report. I’m not going to get into the amount of gold (240 million oz) that the LBMA claims to have in its vaults, for the simple reason that no one argues that there isn’t roughly 5.6 billion oz of gold in all forms throughout the world and the amount said to be in the LBMA is less than 5% of the total gold in the world (even though it’s the second largest gold holding in the world, behind the US Government’s holdings). A key point I tried to make last Wednesday was that individual gold stockpiles were less critical because there was no dispute about how much total gold existed. There could be (and is) endless discussion about who really owns the world’s gold, but not that it exists in reasonably-known quantities.
It’s much different in silver than it is in gold because there is great question about how much silver exists in the world. That’s because we know that silver is a vital industrial commodity consumed in an incredibly wide variety of applications and because of that consumption, world silver inventories have been massively depleted – by 90% over the past 50 to 75 years. Therefore I was relieved that the LBMA published silver numbers that in no way disagreed with my take last week that there might be 500 million to one billion oz of silver in 1000 oz bar form in London in previously unverified holdings.
I would have let the matter slide and not even have brought it up today had I not received an email this morning from a subscriber who is a money manager in Switzerland. He included a private report from UBS to clients (that I cannot provide to you), but upon further investigation, I noticed that there was a separate link to a similar UBS report contained in the official LBMA link provided above. Here is that separate link –
http://www.lbma.org.uk/assets/blog/DemystifyingLondonvaultholdings.pdf
The bottom line is this – according to UBS, included in the one billion oz of silver the LBMA claims to be in London are the ETF holdings in London in SLV and SIVR, amounting to more than 400 million oz. Since I already included these holdings in the verified category of silver holdings, this amount must be subtracted from the LBMA’s count; meaning that ex-ETF holdings, there are only 600 million oz of newly reported silver in London, much closer to the lowest number of my 500 million to one billion oz estimate.
So, instead of the LBMA reporting billions of ounces of silver in previously unverified holdings, it is reporting only 600 million oz when all is said and done. You could have knocked me over with a feather on this news. And you can bet that JPMorgan owns nearly all of this newly reported silver. As you know, I no longer seek out new bullish surprises in silver, fearing my brain will explode if I add just one more. But despite my fears, the small amount of silver just reported by the LBMA, even without the mandatory reduction of ETF holdings, is really messing with my mind because it’s so bullish.
The other matter previously discussed involves the old issue of futures market positioning setting prices, not just in gold and silver, but other commodities as well. Just this week, for example, the price of copper rose to new two-year highs. I have written about the price of copper being depressed due to aggressive selling by the managed money technical funds on the COMEX, both late last year and as recently as May. Recent COT reports have indicated that the managed money technical funds have flipped completely to the long side and now hold their largest COMEX (gross) long position in history.
Simply put, copper prices only rose to new highs because of technical fund buying. Given the quantities of contracts bought by the technical funds (on the COMEX and LME) there can’t be any doubt as to what has propelled copper prices higher. My point is if a major market like copper (or gold), with annual world mine production worth some $150 billion, can have its price set by paper dealings on the COMEX, how hard would it be to set prices for a much smaller market like silver which is one-tenth the size of total copper production?
We are now approaching the four-month mark in how long the CFTC’s Enforcement Division Director, James McDonald, has been in his position. You’ll remember that I (and many of you) wrote to him back in April on both the occasion of his appointment and the largest and most concentrated commercial short position ever in COMEX silver futures.
http://silverseek.com/commentary/another-opportunity-16489
It has been a very interesting four months, to say the least. Apart from the contents of my letter of April 10, McDonald seems to have hit the road running, bringing at least four major enforcement cases involving price manipulation and spoofing with all but one of those cases involving COMEX silver and gold. If there were any such cases brought by the CFTC before McDonald’s arrival, I can’t remember them. On this basis alone, McDonald’s actions and words to date represent a potential sea change in CFTC market regulation.
There is much reason to be encouraged by McDonald to date, but the jury is still out concerning the most critical issue of all, namely, will he bring about the end of the COMEX silver manipulation? Of course, I’ve made it a lot more specific than that – will he allow JPMorgan to add to its COMEX silver short position on the next silver rally? That’s the test that lies ahead.
The way I see things – When I first wrote to McDonald, within a week, both the total commercial net short position, as well as the concentrated short position of the 4 largest shorts (led by JPMorgan) hit historical extremes. I warned McDonald that whenever these short positions were extremely large, a price selloff always unfolded. I also pointed out that JPMorgan had never taken a loss, only profits, whenever it added silver short positions for the past nine years, an impossibly perfect trading record. Within a month, into early May, we got the selloff in spades which featured an unprecedented 17 day consecutive decline and in which JPMorgan bought back a significant number of its short positions, all at a profit.
While this occurred during McDonald’s first month on the job, I can’t see how it would be fair to have expected him to intervene on such short notice (despite my description of the situation being crystal clear and somewhat prophetic). But, at the very least, it should have struck him that things turned out the way they did to that point. Where I would judge McDonald a little harsher is that on the ensuing price rally into early June, JPMorgan again added aggressively to its COMEX silver short position, causing silver prices to top out and then decline into early July; as JPM bought back all of its added shorts (at profits). Fool me once, shame on you; fool me twice (or more) and shame on McDonald.
Perhaps I’m being too hard on McDonald, but he can’t let JPMorgan add to its COMEX silver short positions again. If he does, then I will mentally wash my hands of him and consider the past four months as merely a mirage in the desert of dashed regulatory hopes. After all, how many killings should a lawman allow the serial killer (aka JPMorgan) to commit before an arrest? And maybe I’ll end up writing McDonald off, only to see him do the right thing eventually; but I (and you) have been at this too long to endure repeated delays. Besides, no real lawman needs to be reminded that justice delayed is justice denied. The COMEX silver manipulation is a crime in progress and, therefore, needs to be terminated first and prosecuted later.
Privately, I am told by someone (not at the CFTC) who knows him well that McDonald is as straight as they come and that it is inconceivable that he won’t do the right thing. I have no reason for any doubts on this, particularly considering McDonald’s background and actions to date; but I am also keenly aware of how big a deal this is and of the power and treachery of the super-crook and stone-cold manipulator that is JPMorgan. McDonald’s exemplary record to date points one way, but JPM’s record points quite a different way. Call it a tossup that, fortunately, should be decided in the near future.
Ted Butler
August 4, 2017
end
Your early MONDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight
1 Chinese yuan vs USA dollar/yuan STRONGER 6.7201(REVALUATION NORTHBOUND /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT 6.7307/ Shanghai bourse CLOSED UP 17.38 POINTS OR 0.53% / HANG SANG CLOSED UP 127.68 POINTS OR 0.46%
2. Nikkei closed UP 103.56 POINTS OR .52% /USA: YEN RISES TO 110.77
3. Europe stocks OPENED IN THE RED EXCEPT LONDON ( /USA dollar index FALLS TO 93.38/Euro UP to 1.1803
3b Japan 10 year bond yield: RISES TO +.072%/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.34/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 49.05 and Brent: 51.89
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 +.477%/Italian 10 yr bond yield UP to 2.007%
3j Greek 10 year bond yield FALLS to : 5.475???
3k Gold at $1256.90 silver at:16.16 (8:15 am est) SILVER BELOW RESISTANCE AT $18.50
3l USA vs Russian rouble; (Russian rouble DOWN 11/100 in roubles/dollar) 60.07-
3m oil into the 49 dollar handle for WTI and 51 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
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.77 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9724 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1478 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.477%
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 2.2637% early this morning. Thirty year rate at 2.8359% /POLICY ERROR)GETTING DANGEROUSLY HIGH
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
World Stocks Hit Another All-Time High As Crude, Treasurys Drop
World stocks hit a new record high on Monday, as U.S. index futures followed Asian stocks on better-than-expected company earnings and strong US jobs data deflected attention from the rising geopolitical tension over
North Korea’s nuclear program. European stocks traded near session lows while Crude oil prices fall. The Bloomberg Dollar Spot Index was little changed ahead of speeches by the Fed’s James Bullard and Neel Kashkari later Monday. Yields on U.S. and German Bunds rose off one-month lows hit at the end of last week, while the yield on China’s 10-year sovereign bonds climbs 3 bps to a two-month high of 3.67%, after Friday’s better-than-expected jobs data brightened investors’ outlook for the U.S. economy.
The Dow Jones recorded its eighth consecutive record high on Friday, with MSCI’s broadest index of Asia-Pacific shares outside Japan adding 0.5% on Monday. Helping global stocks hit record highs, of the nearly 1000 companies in the MSCI world index that have reported, 67% have beaten expectations, according to Reuters data. Of the MSCI Europe companies having reported, 61% have either met or beat expectations. But focusing on industrial firms – of which many depend on exports, and are sensitive to a stronger euro – the beat ratio is just 37%. Also the U.S. dollar dipped slightly but held on to much of Friday’s gains – its biggest daily rise this year – after data showed the United States created more jobs than forecast last month. As a result, the MSCI World index rose above a peak breached late last month, setting a new all-time high of 480.09 on Monday.
“The US made the most noise last week … At the start of the new week, risk sentiment improved in Asia with investors continuing to show a certain degree of risk affinity,” DZ Bank strategist Rene Albrecht said.
For some analysts, Monday’s pull back in the dollar backs some views in markets that Friday’s rally may not have legs. The dollar index, which tracks the greenback against a basket of six global peers, inched back 0.2 percent to 93.361. It rallied 0.76 percent on Friday, its biggest one-day gain this year. The dollar slipped 0.2 percent against the euro to $1.1796 per euro, after surging 0.8 percent on Friday.
“The most logical view here is the moves on Friday were clearly just a sizeable covering of USD shorts, from what was one of the biggest net short positions held against the USD for many years,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note. For the dollar rally to gain momentum, the market needs to change its interest rate pricing, Weston added.
Despite another drain in liquidity by the PBOC overnight. which soaked up another CNY60 billion in net reverse repos, Chinese industrial commodity metal soared, led by aluminum futures while steel rebar surged as much as 6.4% higher, before closing up 3.0% as iron ore closed up 6.5%.
In the overnight FX session, kiwi slod 0.6% against greenback to 0.7368 while the euro rose as much as 0.2% to $1.1814, approaching its highest since early 2015, despite an unexpected drop in German industrial production in June. Output fell 1.1% in June after rising 1.2% in May, far below the estimated 0.2% increase and the first drop in six months. Production was up 2.4 percent from a year earlier. Still, with strong orders pointing to a likely pickup in manufacturing, the report is unlikely to mark a turning point for the German economy. Meanwhile, business confidence is at a record high and the Bundesbank sees growth continuing, even as momentum at the start of the third quarter lagged behind that of France, Italy and Spain for the first time in more than 12 years.

The common currency rebounded following a slump against the greenback in the wake of U.S. jobs data on Friday. With EUR-USD parity now long forgotten, the next “big thing” on FX traders’ minds is whether and when EUR-GBP parity may be achieved (with some penciling in the end of the year).
“I’m maxing on the euro at $1.20 at the moment, and I’m happy for it to be poodling along for a little while until something new and different comes long,” David Bloom, global head of currency strategy at HSBC said in an interview with Bloomberg TV. “It could be tax reform in the U.S.”
As Bloomberg writes, “the euro’s continued resilience is a testament to growing investor confidence in the growth story of the European Union amid disappointment over U.S. President Donald Trump’s failure get tax reform and infrastructure spending plans off the ground.” Monday’s report from Germany is unlikely to mark a turning point for either the nation’s economy or the wider bloc, which has successfully navigated a series of political challenges while expansion accelerates.
Meanwhile, European stocks slumped near session lows after rising 1% on Friday, the most since July 12, thanks to the drop in the Euro. The STOXX Europe 600 Price Index declined 0.3%, led by drop in IT, travel and real-estate shares, offsetting advances for ArcelorMittal, BHP Billiton Plc and Anglo American Plc after iron ore and steel prices climbed. Travel and leisure shares fall 0.6%, tech retreats 0.5%’ Basic resources surged 1.1%. Germany’s DAX Index sank 0.2 percent.
Earlier, Japan’s Topix index ended at a two-year high, boosted by earnings at Toyota Motor Corp., while benchmarks in Australia, South Korea and Hong Kong also gained. Toyota jumped 2 percent after it beat first-quarter profit estimates and raised its full-year forecast on Friday. Australia’s ASX 200 (+0.9%) was led higher by commodity names after an early surge in Chinese Iron Ore futures, and as strong Australian Construction PMI (60.5 vs. Prey. 56.0) further contributed to the sector’s positivity. Nikkei 225 (+0.5%) was boosted by JPY weakness. South Korea’s Kospi index gained 0.1 percent. In Hong Kong, the Hang Seng Index rose 0.4 percent. The MSCI Asia-Pacific Index added 0.5 percent to trade near to its highest since December 2007. The Japanese yen decreased 0.1 percent to 110.80 per dollar.
Aside from a slight weakening in the Korean won, there was little financial market reaction to the news over the weekend that the U.N. Security Council unanimously imposed new sanctions on North Korea aimed at pressuring Pyongyang to end its nuclear program. Late on Sunday, Donald Trump tweeted that South Korean President Moon Jae-in agreed in a telephone call on Monday to apply maximum pressure and sanctions on North Korea, while China expressed hope that North and South Korea could resume contact soon.
Elsewhere, Sir Simon Fraser has warned that Brexit negotiations have not begun well blaming the Government’s failure so state clearly its position. The Telegraph reported that the UK is prepared to pay for a Brexit separation bill of as much as €40bln in which it is likely to offer 3 annual payments of €10bn, then finalise the total alongside trade discussions, according to sources. However, later source reports in The Guardian dismissed this as inaccurate speculation.
West Texas Crude futures fell away from nine-week highs hit after the strong job data bolstered hopes for growing energy demand, and dropped below $49 a barrel as producers gathered in Abu Dhabi to discuss why some of them are falling behind in pledges to reduce output. Gold fell 0.1 percent to $1,257.80 an ounce, the weakest in a week. Copper declined less than 0.05 percent to $2.88 a pound.
In rates, the yield on 10-year Treasuries advanced one basis point to 2.27%. Germany’s 10-year yield climbed one basis point to 0.48%. Britain’s 10-year yield declined less than one basis point to 1.174%.
Among the key events this week, OPEC and non-member nations will meet in Abu Dhabi today to discuss supply cut compliance, which fell to 86% in July. It’s a week of industrial data in Europe. U.K. factory output for June is due Thursday. After Monday’s industrial production for Germany, Italy is on Wednesday and France on Friday. Among a number of Fed speakers this week, keep a keen ear out for comments by New York Fed boss Bill Dudley on Thursday. South African President Jacob Zuma faces a no-confidence vote. Dutch Prime Minister Mark Rutte resumes talks to form a coalition government on Wednesday. The Fed’s inflation puzzle means Friday’s CPI data will get close attention. Economists estimate that headline picked up in July to 1.8% from 1.6%, while core stayed at 1.7%. Argentina, Mexico, New Zealand, Peru, the Philippines, Serbia and Zambia set monetary policy.
Bulletin Headline Summary
- Most major currencies nursed some of their post-NFP losses against the greenback, in which EUR/USD attempted to reclaim 1.1800
- Brexit Back In Focus With Contradicting Reports
- Looking ahead, highlights include Fed’s Bullard and Kashkari
Global Market Snapshot
- S&P 500 futures up 0.1% to 2,474
- STOXX Europe 600 down 0.1% to 382.15
- MSCI Asia up 0.5% to 161.18
- MSCI Asia ex-Japan up 0.5% to 530.95
- Nikkei up 0.5% to 20,055.89
- Topix up 0.5% to 1,639.27
- Hang Seng Index up 0.5% to 27,690.36
- Shanghai Composite up 0.5% to 3,279.46
- Sensex down 0.06% to 32,305.24
- Australia S&P/ASX 200 up 0.9% to 5,773.56
- Kospi up 0.1% to 2,398.75
- German 10Y yield rose 0.6 bps to 0.474%
- Euro up 0.3% to 1.1803 per US$
- Italian 10Y yield rose 3.3 bps to 1.73%
- Spanish 10Y yield fell 0.5 bps to 1.478%
- Brent Futures down 0.7% to $52.05/bbl
- Gold spot down 0.08% to $1,257.89
- U.S. Dollar Index down 0.2% to 93.37
Top Overnight News
- North Korea condemned the latest round of United Nations sanctions and reiterated that it wouldn’t negotiate its nuclear deterrence until the U.S. ceases “hostile” policies
- Theresa May’s office dismissed as speculation a report that the U.K. is prepared to pay a 40 billion-euro ($47 billion) bill to leave the European Union, while leading Brexit supporters pushed back against paying anything at all
- German industrial production unexpectedly slipped in June as manufacturing and construction caused a temporary blip in the growth spurt of Europe’s largest economy
- New Chief of Staff Kelly Moves Quickly to Tame Trump’s Tweets
- Senate Chairman Demanding Answers Ramps Up Trump Russia Probe
- United Technologies Is Said to Weigh Rockwell Collins Deal
- Sprint Is Said to Resume Preliminary Talks on T- Mobile Merger
- BlackRock Real Assets Acquires Magacela Solar Project Bond
- Berkshire Second Quarter Operating EPS Misses Lowest Estimate
- Berkshire Filing Shows Further Reduction in Buffett’s IBM Stake
- Uber Engineer Told Kalanick of Alibi for Downloaded Files
- Boeing, U.S. Have Deal for Air Force One Planes Russia Abandoned
- Eros Said in Talks to Sell Content Library to Apple for $1B: ET
- SoftBank Talks Were Said to Value Uber at $45b: The Information
- JPMorgan to Announce Warsaw Office Investment in Sept.: Puls
Asian equity markets traded mostly higher following Friday’s gains on Wall Street and as the region took its first opportunity to react to the better than expected NFP release. ASX 200 (+1.0%) was led higher by commodity names after an early surge in Chinese Iron Ore futures, and as strong Australian Construction PMI (60.5 vs. Prey. 56.0) further contributed to the sector’s positivity. Nikkei 225 (+0.6%) was boosted by JPY weakness, Shanghai Comp (+0.2%) was the underperformer despite a substantial liquidity injection by the PBoC, as this still amounted to a daily net outflow of CNY 60bn after expiring prior operations were accounted for. Finally, 10yr JGBs were flat with demand dampened by the upbeat tone in the region and a lack of BoJ Rinban announcement. Shanghai Stock Exchange is to increase scrutiny of M&A, transfer of control deals and other corporate actions that could lead to financial risk in the market. PBoC injected CNY 130b1n in 7-day reverse repos and CNY 120bln in 14-day reverse repos. PBoC set CNY mid-point at 6.7228 (Prey. 6.7132). Chinese FX Reserves (Monthly) (Jul) 3.081T vs. Exp. 3.069T (Prey. 3.057T) China Q2 prelim current account USD 52.9bln vs. Prev. USD 18.4bln
Top Asian News
- Correction May Loom for India Bank Stocks, Hedge Fund Warns
- China’s Foreign Reserves Rise a Sixth Month on Yuan Strength
- As Results Loom, Noble Group Won’t Reply to Latest Iceberg Barbs
- North Korea Condemns Latest UN Nuclear Sanctions, Vows Response
- SoftBank Profit Tops Estimates Amid Shift Into Deals, Investing
European bourses trade rangebound following Friday’s NFP volatility, and do maintain their highs. European bourses trade mixed, however marginally so, with Stoxx 600 sector seeing any movement greater than 1%. A large position liquidation in the German bund sparked some morning volatility, in otherwise quiet conditions. The future contract came off session highs, however, did manage to find support at the 163.00 handle.
Top European News
- London Home Rents Fall Again After Almost Decade of Growth Halts
- U.K. House-Price Growth Slows to Weakest Pace in Four Years
- U.K. Economy Takes a Hit as Consumer Spending Slumps Further
- German Industrial Output Unexpectedly Falls First Time This Year
- Euro Climbs to Fresh Day High as Demand on Crosses Supports
- Paris Aims to Overtake Frankfurt in Race for Brexit Bank Jobs
- Taking a Long Shot on Cancer, AstraZeneca Defies the Odds
- Linde Forms Holding Company for Merger With Praxair: Welt
In currencies, the EUR saw some early buying pressure this morning, coinciding with the Bund liquidation, as EUR pairs popped through overnight levels. No fundamental factors sparked the movement, with EUR/CHF seeing the main bullish pressure, yet resistance was found at 1.15 and we now trade at largely pre-announced levels. GBP was unmoved following contradicting reports in UK press over reports on Brexit costs and remains comfortably above 1.30. The Telegraph noted that the UK is prepared to pay EUR 40b1n for Brexit divorce bill, however source reports in the Guardian dismissed this as inaccurate speculation.
In commodities, copper prices traded choppy with initial upside seen as Dalian Iron Ore and Rebar futures surged at the open of China metals trade, which was due to reduced stockpiles and firm demand. However, copper then failed to hold onto the gains and retreated amid a cautious risk tone in China. WTI futures failed to test the USD 50.00/bbl level and ran into some resistance around USD 49.60 on Friday, following the latest Baker Hughes Rig Count. Oil does continue to trade in this August; 48.50 — 50.00 range, as we are set to see an OPEC compliance meeting this week. Global demand has seemingly picked up of late however, with China now overtaking the United States as the world’s largest importer of crude importing an average 8.55m1n BPD in the first half of 2017, above the 8.12mln BPD. WTI has been softer this morning, down 1.20% as we have broken through 49.00/bbl. Libya’s Sharara oil field (largest in the country), is said to face stoppage due to protests, according to press reports.
Looking at the day ahead, today starts with Germany’s industrial production figures for June in early morning, followed by UK’s July Halifax house price index and then US’s consumer credit stats for July. Also today we have speeches from the Fed’s Bullard and the Fed’s Kashkari, followed by the OPEC/Non-OPEC joint technical committee meeting in Abu Dhabi.
US Event Calendar
- 3pm: Consumer Credit, est. $15.3b, prior $18.4b
- 10:45am: Fed’s Bullard Speaks on U.S. Economy in Nashville, TN
- 1:25pm: Fed’s Kashkari Speaks in Bloomington, MN
DB’s Jim Reid concludes the overnight wrap
In theory we should now be at the start of the real summer lull that will likely last until the Jackson Hole build-up. The event starts on August 24th so we should now get two weeks of calm. If that statement is not enough to encourage a violent bout of volatility then I don’t know what will! I’m hoping I’ll be still here to report on the lull as my wife was 33 weeks pregnant yesterday and the consultant last week advised delivery at around 36 weeks. However she has some doubts as to whether we’ll get that far though and the average pregnancy length for identical twins is 35 weeks and 2 days. So I’m on standby to panic at any moment. I was desperately hoping we could hold on into September (I say we but….) so they would have an extra year before they start school. All the evidence is that autumn children do better at school and sports than summer children. However I now accept that the mother and twin’s health is more important than me being proud that my boys are the best at sport in their year by virtue of being the oldest and biggest!!
Back to the summer lull. The week post payrolls is normally quiet anyway but this week could be extra so. There’s only really one obvious observable candidate to create a little noise this week and that’s the US CPI numbers on Friday (PPI on Thursday). Friday’s slightly stronger than expected payroll number and hint of stronger wages (more detail below) did have an impact on markets as we’ll see below. Inflation data is probably where the market is most sensitive to a surprise at the moment. Our economists expect gasoline prices to cause headline CPI (+0.1% vs. Unch,) to round down, while core CPI inflation (+0.2% vs. +0.1%) should finally snap its streak of four consecutive monthly misses which could be important. Our economists also remind us that as recent Fed statements have emphasized, policymakers will be monitoring near-term inflation trends closely. Hence, an in line print would provide tentative evidence that the recent downshift in core inflation may be behind us.
What we also might hear about this week is the 10-year anniversary of BNP Paribas announcing that they were closing down three hedge funds specialising in US mortgages. This happened on August 9th 2007 and was the catalyst for the inter-bank market to fully shut down as no-one trusted anyone anymore which in turn set off a course of events that led to the bank run on Northern Rock just over a month later and the other nasty events culminating in the Lehman default 12 months down the line. It seems like only yesterday. Also in quieter times its fascinating to see that President Macron’s approval rating has dipped sharply and as you can see from the graph in today’s PDF, its now not much higher than President Trump’s in the US. Our DB Europe economist Marc de Muizon published a note on Friday analysing the implications of Macron’s recent drop in popularity. He notes that while it is common for freshly elected presidents to see their popularity fall post-election, Macron’s drop is still relatively large and early by historical standards. With the growth momentum in the euro-area and in France picking up, and given his electoral success, Macron now needs to avoid further controversies to ensure his reform agenda can be pushed through to the end. There could be some wider market interest in this story after the summer ends.
Onto markets and the week is generally starting on the front foot in Asia with the Nikkei +0.6%, the Hang Seng +0.4% and Kospi +0.4% all higher as we type. The Shanghai Comp is actually slightly lower (-0.2%). There’s not been a lot of fresh news flow and sentiment is following the lead from Friday.
Indeed Friday was a strong day for global equity markets (especially in Europe) that capped off an otherwise flat week. Over in the US the S&P 500 ticked up +0.2% following the better than expected payrolls data, with financials leading the way with gains of +0.7% on the day. The S&P 500 has now seen 12 successive closes of less than 0.3% in either direction which is a record with daily data going back to 1927. So quite remarkable really.
The Dow (+0.3%) also continued to trade to new highs (+1.2% on the week but creeping up fractions every day!). European markets saw even stronger performance on Friday as the STOXX 600 rallied +1% as every sector ended the day in positive territory. The STOXX Banks index was also up +1.2% on the day. Regional indices also posted strong gains, with the DAX (+1.2%), CAC (+1.4%), FTSE (+0.5%) and FTSE MIB (+0.7%) all up on the day.
Over in government bond markets the strong payrolls number led to US treasuries selling off across the curve (2Y +1bps; 10Y +4bps). Over in Europe Bunds yields also ticked up at all maturities beyond the 5Y point (10Y +2bps). Gilt yields rose across all maturities (2Y +3bps; 10Y +3bps) to retrace part of the rally that followed the BoE meeting on Thursday, but 10Y Gilt yields were still lower by -4bps on the week. Elsewhere OATs (10Y +3bps) and BTPs (10Y +3bps) were higher across maturities.
Turning to FX markets, the US dollar index (+0.8%) rallied following the strong employment report to end the week higher by +0.4%. On the other side of these moves, EUR (-0.8%) and GBP (-0.8%) both posted losses to end the week roughly flat and down -0.8% respectively. Over in commodity markets the energy sector saw oil pick up gains of about +1.0% on Friday, although it ended the week lower by -0.3% due to bigger losses earlier in the week. Precious Metals were lower on Friday with Gold and Silver down -0.7% and -2.0% respectively, while the industrial metals complex saw copper flat while aluminum dropped by -0.5%. Agricultural commodities were fairly mixed on the day as Cotton (+0.4%) and Corn (+0.8%) while other segments were flat (wheat, soybeans, coffee) to lower (sugar -1.2%).
Friday was a fairly quiet data day over in Europe and most of the equity rally came after payrolls. The only data points of note were German factory orders which held steady at +1.0% (vs. +0.5% expected) followed by Italian retail sales that ticked up by +0.6% in June (vs. +0.1% mom expected) following no growth the month before. However the key market moving data was over in the US with the July employment report. Payrolls beat expectations at 209k (vs. 180k expected) while June’s number was revised up to 231k (from 222k). The unemployment rate ticked down one-tenth as expected to 4.3%, while monthly average hourly earnings also came in line with expectations at +0.3% mom but the YoY growth rate was a tenth higher than expected at 2.5%. Finally we also got US trade balance data for June where the trade deficit narrowed more than expected to – $43.6b (vs. -$44.5b expected; -$46.5b previous).
To the week ahead now. Today starts with Germany’s industrial production figures for June in early morning, followed by UK’s July Halifax house price index and then US’s consumer credit stats for July. Onto Tuesday, Japan’s balance of payments and trade balance figures for June will be out in early morning. Then Germany’s June trade balance, current account, export and import stats are due. France will also report its June trade balance and current account figures. Over in the US, there is the NFIB small business optimism index for July. Turning to Wednesday, China’s CPI and PPI for July will be out in early morning. Later on, Italy’s June industrial production figures and Bank of France’s business sentiment indicator are also due. Over in the US, there is the 2Q nonfarm productivity and unit labour costs data, June wholesale inventories as well as the MBA mortgage applications. For Thursday, the June industrial production and manufacturing production figures for UK and France will be out. Further, June trade balance stats for UK and Italy are also due. Over in the US, we have the July PPI data, the monthly budget statement as well as the initial jobless claims and continuing claims figures. On Friday, the final CPI figures for Germany, France and Italy will be released. Over in the US, CPI stats for July are also due.
Onto other events, today starts with speeches from the Fed’s Bullard and the Fed’s Kashkari, followed by the OPEC/Non-OPEC joint technical committee meeting in Abu Dhabi. Then on Thursday, the Fed’s Dudley will speak. Onto Friday, the Fed’s Kaplan and Fed’s Kashkari will also speak. Finally we’ll still have earnings season continuing on both sides of the Atlantic but we’re now past the peak.
3. ASIAN AFFAIRS
i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 17.38 POINTS OR 0.53% / /Hang Sang CLOSED UP 127.68 POINTS OR 0.46% The Nikkei closed UP 103.56 POINTS OR .52%/Australia’s all ordinaires CLOSED UP 0.89%/Chinese yuan (ONSHORE) closed UP at 6.7201/Oil DOWN to 49.05 dollars per barrel for WTI and 51.89 for Brent. Stocks in Europe OPENED IN THE RED , Offshore yuan trades 6.7307 yuan to the dollar vs 6.7201 for onshore yuan. NOW THE OFFSHORE IS 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 SLIGHTLY WEAKER DOLLAR. CHINA IS HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
NORTH KOREA/USA
USA preparing for a preventive war against North Korea
(courtesy zerohedge)
McMaster: U.S. Preparing For “Preventive War” With North Korea
The United States is preparing for all options to counter the growing threat from North Korea, including launching a “preventive war,” national security adviser H.R. McMaster said in an interview that aired Saturday on MSNBC. The comments come after North Korea carried out two tests of intercontinental ballistic missiles in the past month and after the president said he has been clear he will not tolerate North Korea’s threats to attack the U.S. with nuclear weapons.
The key excerpts (full transcript):
H.H.: Let me switch if I can to North Korea, which is really pressing. And– and remind our audience, at the Aspen Institute ten days ago, Chairman of the Joint Chiefs, Joe Dunford, said, “There’s always a military– option. It would be horrific.” Lindsey Graham on Today Show earlier this week said– “We need to destroy the regime and their deterrent.” Secretary of State Rex Tillerson said on Tuesday, I believe, to North Korea, “You are leaving us no choice but to protect ourselves.” And then the Chairman of the Chief of Staff of the Army said, “Just because every choice is a bad choice doesn’t mean you don’t have to choose.” Are we looking at a preemptive strike? Are you trying to prepare us, you being collectively, the administration and people like Lindsey Graham and Tom Cotton for a first strike North Korea?
H.R.M. Well, we really, what you’re asking is– is are we preparing plans for a preventive war, right? A war that would prevent North Korea from threatening the United States with a nuclear weapon. And the president’s been very clear about it. He said, “He’s not gonna tolerate North Korea being able to threaten the United States” if they have nuclear weapons that can threaten the United States; It’s intolerable from the president’s perspective. So of course, we have to provide all options to do that. And that includes a military option.
Now, would we like to resolve it short of what would be a very costly war, in terms of– in terms of the suffering of mainly the South Korean people? The– the ability of– of that North– North Korean regime to hold the South hostage to conventional fire’s capabilities, artillery and so forth, Seoul being so close. We’re cognizant of all of that. And so what we have to do is– is everything we can to– to pressure this regime, to pressure Kim Jong-un and those around him such that they conclude, it is in their interest to denuclearize. And there are really I think three critical things, came out of the president’s very successful summit with– President Xi of China that were different– that were different from past efforts to work with China, which has always been, you know, the– the desire, right, to work with China– on the– on the North Korean problem.
How many casualties will there be:
HH: In 1994, when the first North Korean deal with signed, the people who executed it, Gallucci, Dan Poneman, Joe Wit wrote a book. And they quoted a general saying, “If there is a conflict,” called Going Critical, “there will be a million casualties.” A million casualties. Is that still a good estimate of what happens if– preemptive strike unfolds in North Korea, General?
HRM: You know, one thing about war. It’s impossible oftentimes to predict. It’s always impossible to predict the future course of events. Because war is a continuous interaction of opposites, a continuous interaction between your forces and those of the enemy. It involves not just the capability to use force, but also intentions and things that are just unknowable at the outset. And so I think it’s important to– to look at– range of estimates of what could happen, because it’s clear that at war, it’s unpredictable. And so you always have to ask the question, “What happens next? What are the risks? How do you mitigate those risks?” And– and obviously, you know, war is– is– is the most serious decision any leader has to make. And so what can we do to make sure we exhaust our possibilities and exhaust our other opportunities to accomplish this very clear objective of denuclearization of the peninsula short of war?
Should Americans be concerned:
HH: How concerned should the American people be that we are actually on the brink of a war with North Korea?
HRM: Well, I think it’s impossible to overstate the danger associated with this. Right, the, so I think it’s impossible to overstate the danger associated with a rogue, brutal regime, I mean, who murdered his own brother with nerve agent in an airport. “I mean, think about what he’s done in terms of his own brutal repression of not only members of his regime but his own family,” McMaster added.
On Tuesday, Sen. Lindsey Graham said that the president told him there would be a war with North Korea if the regime continues to try to hit America with an ICBM. Appearing on the Today Show, the South Carolina Republican Senator said that President Trump has indicated to him that the administration is prepared to strike North Korea to prevent an attack against the U.S. Pushed on by Matt Lauer on whether a viable military option exists in the region, Graham responded: “They’re wrong. There is a military option to destroy North Korea’s program and North Korea itself.”
The Hwasong-14 ICBM seen during its test in this undated photo released by
North Korea’s Korean Central News Agency (KCNA) in Pyongyang, July 5 2017.
As reported last Friday, North Korea claimed that its latest missiles can now strike anywhere in the United States, delivering nuclear warheads. Experts have said that the country’s missile program has greatly accelerated in recent months putting it far ahead of previous predictions about when it could launch reliable long-range missiles. Speaking to Newsweek in recent days, several experts said that an attack would be the deadliest the U.S. has ever received and potentially kill more than 100,000 people if it struck in large population centers like New York City or Los Angeles.
“I’m not going to confirm [whether the latest ICBM could reach anywhere in the U.S.] but whether it could reach San Francisco or Pittsburgh or Washington, I mean how much does that matter? It’s a grave threat,” McMaster said.
He added: “It’s impossible to overstate the danger associated with a rogue, brutal regime.”
McMaster cautioned that he was aware of the fact that any strike against North Korea could bring about a “very costly war” that would cause immense “suffering of mainly the South Korean people.”
Last month, CIA Director Mike Pompeo floated another option for dealing with the North Korea threat, saying that he was “hopeful we will find a way to separate that regime from this system.” North Korea responded by threatening swift and brutal consequences for any attempt to topple Kim.
“Should the U.S. dare to show even the slightest sign of an attempt to remove our supreme leadership, we will strike a merciless blow at the heart of the U.S. with our powerful nuclear hammer, honed and hardened over time,” a foreign ministry spokesman said.
Still, McMaster did not rule out such an attempt when asked whether it could be a legitimate tool. “I think it depends on the legal justifications for that. And this goes back to just war theory. And what is the nature of the risk? And does that risk justify acting in defense of your people and your vital interests?”
Last week, the local press reported that South Korea’s military is preparing a “surgical strike” scenario that could wipe out NOrth Korean command and missile and nuclear facilities following an order by S.Korea’s president Moon Jae-In.
end
Nom de Plume writer Jeremiah Johnson, a retired Green Beret warns us of North Korea’s capabilities of launching an EMP against the USA
(courtesy zero hedge)
Retired Green Beret Warns: “North Korea Can Deliver An EMP Weapon Dead Center Over America”
Most are aware by now that North Korea has tested (successfully) another ICBM missile, and its nuclear ambitions are more concrete by the day. The mainstream media and the Obama administration are the creators of the public’s skepticism and denial regarding North Korea’s capabilities. The Obama administration consistently and deliberately downplayed the true strengths and capabilities of North Korea over an eight-year period. Such a downplay was further enabled by key press conferences in which members of the U.S. military’s command structure (specifically those serving in the Pentagon) were made to parrot the administration’s denial.
By “pulling Pentagon officials out” and having them categorically deny North Korea’s capabilities, it set the tempo to create a false narrative that Obama and his minions would champion throughout the eight years. Pentagon officials (Admirals and Four-star Generals) were periodically “rotated” into these press pools to downplay the abilities of North Korea to launch a nuclear missile against the United States.
This obfuscation, orchestrated by Obama and parroted by those general officers who were about to retire in a couple of years was a precise and deliberate weakening of the United States’ defensive stance against a nation that declared its intentions to strike her.
All the experts on the subject were marginalized and labeled either as “crackpots,” or just scoffed at with their opinions relegated to page A-14, just above a coupon for “Captain Crunch” and at the bottom of the page of the newspaper. The public bought it. They swallowed the pill offered by the government-media complex, and in their own narcissistic hubris, discounted the efforts of a “backwards” country such as North Korea to send a nuke to the U.S.
Not anymore.
Now the media is grudgingly, painfully admitting what cannot be hidden: North Korea has more than enough capability to hit the United States. All of it. The North Korean ICBM test on Friday, July 29 proves they can strike the U.S. anywhere. Here you go:
“Looks like it pretty much can get to New York, Boston, and probably falls just short of Washington [DC]. If those numbers are correct, the missile flown on a standard trajectory, the missile would have a range of 10,400 km (6,500 miles), not taking into account the Earth’s rotation. However, the rotation of the Earth increases the range of missiles fired eastward, depending on their direction. It is important to keep in mind that we do not know the mass of the payload the missile carried on this test.”
-David Wright, Senior Scientist, Global Security Program, Union of Concerned Scientists to CNBC
Keep this sentence in mind from the excerpt: “However, the rotation of the Earth increases the range of missiles fired eastward, depending on their direction.”
Such proves they have at least enough “juice” to deliver a warhead containing an EMP weapon dead center over the continental United States, and can strike the U.S. anywhere.
Dr. Peter V. Pry, formerly an analyst with the CIA, and now the head of the Committee to Assess EMP (Electromagnetic Pulse) Threats against the U.S., is the foremost expert on such threats and briefs Congress on them annually. Dr. Pry has assured Congress countless times that North Korea not only has miniaturization capabilities regarding nuclear warheads, but also has that capability regarding the deployment of an EMP weapon. I strongly urge you to read his writings and articles.
Now-retired Congressman Roscoe Bartlett (R, MD) practically hopped up and down during both the Bush Jr. and Obama administrations to try and initiate action by the government to protect the grid and infrastructure from an EMP attack. To no avail, all his pleadings… substantiated by piles of research documents and assessments – pure evidence – fell on deaf ears, and he has since retired and withdrawn from mainstream society. Several general officers over the past years (such as General Curtis Scapparotti, for example) went “against the grain” during the Obama years and declared that North Korea did indeed possess EMP weapons, miniaturization capabilities, and ICBM’s. Their declarations also went unheeded.
Now, just as Obama planned it, we are “behind the power curve,” and vulnerable: North Korea has had years to prepare, in the face of mere “sanctions” or other “paper-tiger” rumblings. Through our complacency, they have been enabled to strike the U.S. Along with the mothballing of TARS (Tethered Aerostat Radar System), the string of radar-equipped balloons along the Gulf Coast to add about ten minutes early warning time to our missile tracking capabilities. As SHTF Planreported, TARS was taken out in 2013, at Obama’s direction. North Korea has two satellites in orbit that each cross over the U.S. several times daily at 300 km, the optimal height for an EMP strike.
Just as Obama planned it.
The United States, South Korea, and Japan all equally assessed the North Korean launch on July 29th with the same capabilities. President Trump said that he would take all necessary steps to ensure the security of the U.S. and its allies. The nations (the U.S. included) have all declared the intention of more sanctions against North Korea. More nonsense. These two excerpts came from a Dailymail.com article by Cheyenne Roundtree and Gareth Davis for Mailonline that are interesting, if not “amusing” (from a cynical perspective). Here’s the first, with the main point underlined:
“[President] Donald Trump released a statement yesterday after the missile launch, saying: ‘North Korea’s test launch yesterday of another intercontinental ballistic missile – the second such test in less than a month – is only the latest reckless and dangerous action by the North Korean regime.”
Yes, there you have it from the mouth of the President of the United States, confirming it was indeed and intercontinental ballistic missile (ICBM), and was indeed the second one that is confirmed. Here is the second excerpt:
“Washington and its allies have watched with growing concern as Pyongyang has made significant progress toward its goal of having all of the US within range of its missiles to counter what it labels as US aggression. While there are hurdles, including building nuclear warheads to fit on those missiles and ensuring reliability, many analysts have been surprised by how quickly Kim Jong-Un has developed North Korea’s nuclear and missile programs.”
Well, along with interesting and amusing, let’s add infuriating to the list to describe these words from the excerpt:
“Many analysts have been surprised.”
“Significant progress toward its goal”
Do you think those analysts will be surprised when, suddenly, all the lights and air conditioning in their offices go out and they’re in the dark on the 30th floor? Or if not that, perhaps they’ll be surprised when they look out of their windows and see a nice blinding flash of light and a mushroom cloud? Do you think either an EMP and/or a mushroom cloud over what was once an American city will prove that North Korea has made significant progress toward its goal?
Sometimes valuable information comes from sources that might normally never see the light of day. I found this comment on Steve Quayle’s website that may place things into perspective from a “grass roots” level. Obviously, it is written by a mother of someone in the service, probably the U.S. Army. Here it is, along with its citation:
“Angel says: Comment ID: 3722746 August 1, 2017 at 1:22 am
“Wanted to give a heads up that the upcoming fight with North Korea is very real. My child is a Combat Engineer stationed at the DMZ currently and they are readying for a fight. They are doing things in that area that haven’t been done in 50 years. Such as clearing mine fields. They are awaiting orders to attack. Get prepared now if you’re not already. I have someone on the front line and I can tell you it’s getting bad.”
Sometimes information from the average person will give you insights on things you will not hear in the mainstream media. This woman’s comment is both simplistic and unsolicited, and anyone with more information who is in the area? Your comments would be greatly appreciated. Such comments can reveal (at least in part) what is taking place over there and is valuable, because there is no such thing as “grass roots” journalism anymore. There are no more reporters to interview the “man on the street” or to cover things happening in foreign countries. We must rely on what information we bring to one another and our wits to be able to recognize the valuable parts…pieces to the overall puzzle that present the big picture.
Let’s once more examine the “flip” side of things. We have a President who has not been able to accomplish much, and thus far has been railroaded by Congress and members of his own political party every day since being sworn in. His popularity ratings are falling, and the midterm election campaigning is right around the corner. What is the solution? Why, the same as it was for Bush Jr. back in 2003. War. Waris the solution, either false flagged/orchestrated by the U.S., or allowed to be initiated by North Korea. War is the vehicle to create a cohesive bond and gain the support of the populace: nothing new here with this method.
The cost, however, will be sustained by the population and not by those who initiated the conflict, whether North Koreans, Americans, or others. The ones who initiate the hostilities will be safe in underground bunkers with food, water, medical supplies, and armed guards…funded by their “host” populations, who will be busily engaged in being vaporized and incinerated on the surface. I close with the point that I have stood by all along, and exhort you to make the best possible choices and take actions for you and your family, while there’s still time to do so, in whatever way you can. Now is the time to act, and not “one second after,” so to speak:
The next world war will be initiated by an EMP weapon detonated over the United States, followed by a nuclear exchange and a war between conventional forces.
Unexpected North Korea Breakthrough Delays Trump Trade War With China (For Now)
A global punitive campaign on North Korea propelled by sharp new U.N. sanctions – amounting to a $1 billion ban on North Korea exports – received a welcome, and unexpected, boost on Sunday from China, the North’s economic lifeline, when Beijing slammed its neighbor for its ongoing missile and nuclear tests.
The Saturday sanctions agreed to unanimously in a 15-0 Security Council vote are aimed at cutting North Korean exports by about $1 billion a year, a move that would hit laborers and fishermen. Existing joint ventures would be prevented from expanding their operations. The new sanctions could cut off roughly one-third of North Korea’s estimated $3 billion in annual exports, ostensibly denying the nation of funds for its weapons programs. All countries are now banned from importing North Korean coal, iron, lead and seafood products, and from letting in more North Korean laborers whose remittances help fund Kim Jong Un’s regime.

U.N. Security Council members vote on toughening sanctions on
North Korea in New York, on Aug. 5.
However, what was most remarkable about the vote is that both China and Russia backed it, siding – for the first time in a long while – with the US on matters of foreign policy.
And, as Bloomberg summarizes, just days after geopolitical events looked bleak at the start of last week when leaders of the world’s biggest economies appeared set on collision course after North Korea’s second ICBM text in a matter of weeks prompted Trump to lash out at China on Twitter, followed by reports that his administration was getting ready to take steps that could lead to a trade war, all that changed with the “breakthrough” vote at the United Nations on Saturday.
“It’s enough to give the administration some new hope that it can work with China on North Korea and trade,” said former senior director for Asia at the National Security Council, Dennis Wilder. Additioanlly, the move would “almost certainly” defuse rising tensions of an imminent trade war, and stop the U.S. from imposing secondary sanctions on China, and may delay a planned investigation into intellectual property theft.
President Trump was delighted, tweeting on Saturday afternoon that “The United Nations Security Council just voted 15-0 to sanction North Korea. China and Russia voted with us. Very big financial impact!”
Even, one of Trump’s most vocal critics, former US ambassador to Russia, Michael McFaul congratulated Trump on his “genuine foreign policy achievement”:
That said, some remained skeptical: as AP adds, the Trump administration cautiously embraced China’s apparent newfound cooperation, while putting it on notice that the U.S. would be watching closely to ensure it didn’t ease up on North Korea if and when the world’s attention is diverted elsewhere. But there were no signs the U.S. would acquiesce to China’s call for a quick return to negotiations. Though Beijing repeated its call for the United States and North Korea to resume talks, the U.S. said that was still premature, and rejected yet again a Chinese call for the U.S. to freeze joint military exercises with South Korea in exchange for the North halting nuclear development. Pyongyang views the military exercises as rehearsals for an invasion.
The U.S. also warned it planned to rigorously monitor China’s compliance with the new penalties. Susan Thornton, the top U.S. diplomat for Asia, said Beijing had historically cooperated with sanctions after flagrant North Korean violations but then slipped back over time.
“We want to make sure China is continuing to implement fully the sanctions regime,” Thornton told reporters in Manila. “Not this kind of episodic back and forth that we’ve seen.”
Far from going above and beyond, China – North Korea’s main ally and trading partner – has been regularly accused of failing to fully implement previous UN resolutions. After North Korea’s second ICBM test on July 27, the U.S. called China and Russia “economic enablers” of Kim’s regime. China has sought to cool tensions on the Korean Peninsula, particularly as Trump administration officials warn that war is possible to stop Kim from acquiring the ability to hit the U.S. mainland with a nuclear weapon. China sees the collapse of Kim’s regime as a greater strategic threat that could lead to a refugee crisis and U.S. troops on its border.
Caveats aside, for the U.S., it was a long-awaited sign of progress for Trump’s strategy of trying to enlist Beijing’s help to squeeze North Korea diplomatically and economically.
Meanwhile, Chinese Foreign Minister Wang Yi, urged the North to “maintain calm” despite the U.N. vote.
At a meeting on Sunday in Manila, where top diplomats from more than 20 countries are gathering, China’s Wang made clear that the goal of the sanctions was to push North Korea toward dialogue. He met separately with both North Korean Foreign Minister Ri Yong-ho and U.S. Secretary of State Rex Tillerson, urging both to reduce tensions.
Address North Korea, in an unusually direct admonition Wang said “Do not violate the U.N.’s decision or provoke international society’s goodwill by conducting missile launching or nuclear tests,” Wang also urged North Korea on Sunday to make a “smart decision”:
“It will help the DPRK to make the right and smart decision,” Wang told reporters, after discussing the sanctions with North Korean Foreign Minister Ri Hong-Yo ahead of a regional security forum in the Philippine capital Manila.
However, Wang also emphasised that negotiations were the only way to solve the issue, after the United States had left open the possibility of military action against Kim Jong-Un’s regime. Wang called for a resumption of the stalled six-nation talks – hosted by China and including the United States, Japan, Russia as well as the two Koreas – aimed at curtailing the North’s atomic ambitions.
“It’s not that easy but it is a direction we need to work together towards,” Wang said of the six-nation talks. “Only dialogue and negotiation is the correct way out to address the Korean peninsula issue.”
Wang said he also spoke with Tillerson about the need to work together to make Trump’s upcoming visit to China maintain “the momentum of healthy development” and help shape Sino-U.S. relations over the next 50 years. China has repeatedly proposed that North Korea halt further nuclear and missile tests in return for the U.S. and its allies suspending military exercises in the region – a so-called freeze-for-freeze. The U.S. rejects this, saying that Kim must be prepared to give up his nuclear weapons entirely – a prospect that many analysts view as unlikely since Kim sees them as essential to his survival.
* * *
Still, while the Chinese Foreign Minister Wang expressed confidence on Sunday that the sanctions would bring Kim Jong Un back to the negotiating table, many North Korea watchers are skeptical that he’ll give up his quest for an ICBM that can hit the U.S. with a nuclear weapon. China will still be providing Kim’s regime with food and fuel, and North Korea’s nuclear weapons program is already in an advanced stage.
“The new sanctions alone are probably insufficient to alter North Korean behavior,” said Wilder, who was also a former Chinese military analyst at the CIA. “But if Beijing quietly imposes more unilateral sanctions, such as on fuel shipments to North Korea, the North Koreans would be forced to reconsider further ICBM testing.”
“The situation is now in a deadlock because of the U.S. mindset,” said Shi Yuanhua, a professor who researches Korea at Fudan University in Shanghai. The sanctions are more “a gesture of condemnation rather than an effective tool to solve the real problem.”
As for Xi and Trump, this is just “the latest twist in a relationship that lurches from good to bad seemingly in the time it takes to write a 140-character tweet”, as Bloomberg colorfully puts it. In other words, concerns about an imminent trade war appear put on the back burner thanks to China’s UNSC vote on Saturday…. for now.
“The Trump administration has made it explicit that there is a constant trade-off between trade issues and North Korea,” said John Delury, an associate professor of Chinese studies at Yonsei University in Seoul. “It would appear President Trump is happy with Xi Jinping now, but it wouldn’t be surprising in a matter of weeks for a tweet to say now he’s disappointed again.”
Meanwhile, the best single indicator whether North Korean has taken the Chinese – and UN – hint, will be whether it refrains from any more ICBM launches. Naturally, the next time Pyongyang launches something, Trump will be there, ready and tweeting, as the specter of trade war between China and the US comes back with a bang.
end
A marvelous reason for the crooks to whack gold and silver today: With new sanctions supplied on North Korea, Kim was furious as he refuses to negotiate and threatens a nuclear surprise
(courtesy zerohedge)
North Korea Refuses To Negotiate, Threatens US With “Severe Nuclear Lesson”
For all the hope that this weekend’s UN breakthrough, in which the Security Council voted unanimously 15-0 to impose $1 billion in sanctions on North Korea exports, that saw both China and Russia side with the US, it appears that North Korea refuses to even contemplate a negotiation or a cooling of tensions. As the following headlines suggest, a retaliation remains a real possibility.
- NORTH KOREAN FOREIGN MINISTER: PYONGYANG WILL ‘UNDER NO CIRCUMSTANCES’ NEGOTIATE ON ITS NUCLEAR WEAPONS
- NORTH KOREA SAYS IT’S READY TO TEACH U.S. ‘SEVERE LESSON’ WITH NUCLEAR STRATEGIC FORCE IF IT TAKES MILITARY ACTION
- NORTH KOREA TOP DIPLOMAT SAYS NO NEGOTIATIONS ON ITS NUCLEAR & MISSILE PROGRAM UNLESS U.S. GIVES UP HOSTILE POLICY TOWARD PYONGYANG:
This was North Korea’s first official response to the fresh sanctions voted through by the UN security council.
As Reuters elaborates, North Korea is ready to give the United States a “severe lesson” with its strategic nuclear force if it takes military action against it, and will not put its nuclear program or its missiles on the negotiating table, it said in a statement to a regional meeting on Monday.
In a transcript of a statement by Foreign Minister Ri Yong-ho, which was distributed to media in Manila, Pyongyang called new U.N. sanctions “fabricated” and warned there would be “strong follow-up measures” and acts of justice. It said the resolution showed the United Nations had abused its authority.
As quoted by Bloomberg, North Korea asked Asean and participants in regional forum in Manila to “take impartial and practical stand and attitude” on its nuclear weapons, which it says it has no intention of using against any other country except U.S. and those that will join America.
“We take great pride and self-conceit in the fact that we can contribute to decisively reducing the danger of war on the Korean Peninsula, Northeast Asia and in the Asia Pacific by possessing a strong nuclear deterrence,” North Korean Foreign Minister Ri Yong Ho says in statement at Asean Regional Forum, a copy of which was distributed to reporters in Manila
North Korea expects forum and Asean “will distinguish the essence of the nuclear issue of the Korean peninsula and the danger of the ‘America First’ policy” as foreign ministers showing great deal of interest in situation in Korean peninsula. The foreign minister also accused Japan, South Korean authorities of “kowtowing blindly to U.S.”
He said that North Korea seeks to convince UN to withdraw sanctions and to persuade U.S. to drop its hostile policy:
“Had it not been the hostile policy enforced by the U.S. for more than 70 years against North Korea since the first day if its founding and had the policy not been intensified with an undisguised nuclear blackmail and threat, the nuclear issue of the Korean Peninsula would not have come into being from the beginning.”
North Korea also said its intercontinental ballistic missile tests in July proved that the entire United States was in its firing range, and those missiles were a legitimate means of self-defense.
On Sunday night Donald Trump tweeted that he had “Just completed call with President Moon of South Korea. Very happy and impressed with 15-0 United Nations vote on North Korea sanctions.”
While Trump, who is on “working vacation” for the next two weeks, is up early, tweeting up another firestorm this morning, he has yet to respond to the latest rebuttal from North Korea.
end
b) REPORT ON JAPAN
end
c) REPORT ON CHINA
Although the USA seems to have backed off implementing a trade war with China because of China’s vote at the UN, they could cripple the west by holding onto its rare earths and not ship them westward
(courtesy Llewellyn King/InsideSources.com)
Rare Earths Are China’s Most Potent Weapon In A Trade War
Authored by Llewellyn King via InsideSources.com,
In October 1973, the world shuddered when the Arab members of the Organization of Petroleum Exporting Countries imposed an oil embargo on the United States and other nations that provided military aid to Israel in the Yom Kippur war. At the same time, they ramped up prices.
The United States realized it was dependent on imported oil — and much of that came from the Middle East, with Saudi Arabia the big swing producer. It shook the nation. How had a few foreign powers put a noose around the neck of the world’s largest economy?
Well, it could happen again and very soon. The commodity that could bring us to our knees isn’t oil, but rather a group of elements known as rare earths, falling between 21 and 71 on the periodic table.
This time, just one country is holding the noose: China.
China controls the world’s production and distribution of rare earths. It produces more than 92 percent of them and holds the world in its hand when it comes to the future of almost anything in high technology.
Rare earths are great multipliers and the heaviest are the most valuable. They make the things we take for granted, from the small motors in automobiles to the wind turbines that are revolutionizing the production of electricity, many times more efficient. For example, rare earths increase a conventional magnet’s power by at least fivefold. They are the new oil.
Rare earths are also at work in cell phones and computers. Fighter jets and smart weapons, like cruise missiles, rely on them. In national defense, there is no substitute and no other supply source available.
Like so much else, the use of rare earths as an enhancer was a U.S. discovery: General Motors, in fact. In 1982, General Motors research scientist John Croat created the world’s strongest permanent magnet using rare earths. He formed a company, called Magnequench.
In 1992, the company and Croat’s patents were sold to a Chinese company.
From that time on it became national policy for China to be not just the supplier of rare earths, but to control the whole supply chain.
For example, it didn’t just want to supply the rare earths for wind turbines; it insisted that major suppliers, such as Siemens, move some of their manufacturing to China. Soon Chinese companies, fortified with international expertise, went into wind turbine manufacture themselves.
“Now China is the major manufacturer of wind turbines,” says Jim Kennedy, a St. Louis-based consultant who is devoted to raising the alarm over rare earths vulnerability.
A new and important book, “Sellout” by Victoria Bruce, details the way the world handed control of its technological future to China and Kennedy’s struggle to alert the United States.
At present, the rare earths threat from China is serious but not critical. If President Donald Trump — apparently encouraged by his trade adviser Peter Navarro, and his policy adviser Steve Bannon — is contemplating a trade war with China, rare earths are China’s most potent weapon.
A trade war moves the rare earths threat from existential to immediate.
In a strange regulatory twist the United States, and most of the world, won’t be able to open rare earths mines without legislation and an international treaty modification. Rare earths are often found in conjunction with thorium, a mildly radioactive metal, which occurs in nature and doesn’t represent any kind of threat.
However, it’s a large regulatory problem. The Nuclear Regulatory Commission and the International Atomic Energy Agency have defined thorium as a nuclear “source material” that requires special disposition. Until these classifications, thorium was disposed of along with other mine tailings. Now it has to be separated and collected. Essentially until a new regime for thorium is found, including thorium-powered reactors, the mining of rare earths will be uneconomic in the United States and other nuclear non-proliferation treaty countries.
Congress needs to look into this urgently, ideally before Trump’s trade war gets going, according to several sources familiar with the crisis. A thorium reactor was developed in the 1960s at the Oak Ridge National Laboratory in Tennessee. While it’s regarded by many nuclear scientists as a superior technology, only Canada and China are pursuing it at present.
Meanwhile, future disruptions from China won’t necessarily be in the markets. It could be in the obscure but vital commodities known as rare earths: China’s not quite secret weapon.
end
“how much money will China have to print to recapitalize its banking system?
Let’s be conservative and say that China’s non-performing loans are only half as bad as they were when it recapitalized its banks in the early 2000s. China ultimately confessed that 40% of its banking assets were non-performing loans that had built up in the wake of the 1997 Asian Financial Crisis. Let’s say it is only 20% today. It is probably more. Let’s also assume the most conservative estimates for shadow bank assets of USD 9 trillion. Along with USD 35 trillion of on-balance sheet assets (the Telegraph article says it is now $38 million), our conservative estimate equates to USD 8.8 trillion of loans in the Chinese banking system today that will effectively never be repaid and will need to be written off. Such an amount is equal to 84% of China’s GDP, more than enough to wipe out all the equity in its Chinese banking system twice over. If the banks were to write that debt down and recapitalize the banks with money printing, it would equate to 37% of its M2 money supply, all else equal a 37% currency devaluation. This is our best-case scenario for the inevitable devaluation of the China currency. It will likely be worse.”
and
“Here we enumerate the catalysts for the imminent bursting of the Chinese currency and credit bubble discussed herein and in our other work:
1. Fed credit tightening puts pressure on Chinese currency
2. China and Hong Kong is now flashing a banking crisis warning signal in BIS “credit-to-GDP gap” model
3. China’s connections to other countries also flashing warning signals of credit bubbles about to burst
4. Pressure from Chinese capital outflows
5. Threat of bank runs from Chinese masses
6. Housing prices on precipice of drop in China Tier 1 and Tier 2 cities from record price-to-rent levels and supply/demand imbalance
7. Ongoing poor and deteriorating fundamentals of China’s non-financial listed companies linked to unsustainable infrastructure investment binge
8. Dwindling, encumbered, and likely overstated foreign reserves
9. Imminent threat of US trade sanctions on China
10. Looming cresting of China’s workforce population
11. China credit bust already started to unfold in 2015, an early warning signal, but just a taste of what is to come, because the credit imbalances have only become more extreme
12. Widespread Wall Street complacency ahead of China NPC political elections in November”
(courtesy Kevin Smith, T. Costa and Nils Jensen/Cresat Capital)
China’s Minsky Moment Is Imminent
China’s Reserves Continue To Decline As Capital Outflows Accelerate, “Outbound Travel Spending” Surges
The confusion over the direction of Chinese capital flows continues to grow.
On one hand, overnight the PBOC reported that China’s foreign-exchange reserves “posted a sixth straight monthly increase” as the yuan strengthened and economic growth remained robust, Bloomberg reported. Specifically, Beijing said that China’s foreign currency stockpile rose $23.9 billion to $3.081 trillion in July, higher than the $3.075 trillion estimate. The narrative was ready to go: as Bloomberg stated, “solid economic data and the presence of curbs on moving money abroad have helped restore confidence in the currency and ease outflow pressure. The foundation for steadier cross-border capital flows has become more solid, the State Administration of Foreign Exchange said last month.”
Of course, Bloomberg was merely going off what the PBOC reported, which showed continued increases in official reserves:

Economist responses were quick to praise this ongoing shift in the recent outflow regime:
- “Capital outflows have eased markedly since the start of the year and are now mostly offset by the trade surplus,” said Julian Evans-Pritchard, a China economist at Capital Economics Ltd. in Singapore. “This shift should prove supportive of the renminbi, which we think will strengthen against the U.S. dollar during the next couple of years.”
- “Depreciation expectations in the market have definitely abated, and outflow pressure has eased,” said Zhu Qibing, chief macro-economy analyst at BOC International China Ltd. in Beijing. He expects reserves to hover around the current level for the rest of the year.
- “This is enough to change market expectations from yuan depreciation to appreciation,” said Iris Pang, an analyst at ING Groep NV in Hong Kong. “The pressure on capital outflows has eased a lot, but I don’t think regulators will relax curbs.”
- “Today’s data on FX reserves perfectly fits the latest change of mood regarding the Chinese currency,” Frederik Kunze, chief China economist at German lender NordLB in Hanover, said in an email. “Fears with respect to a pronounced depreciation of the RMB against the USD have receded substantially. Attention will likely start to focus on more liberalization measures.”
On the other hand, there was just one problem with the above assessments of China’s inflows: they are all completely incorrect.
While those, such as the “experts” listed above may be left with the impression that China has managed to put a lid on its relentless capital outflow pressure, using a separate gauge compiled by China’s SAFE which tracks onshore FX settlement as well as cross-border RMB flows, shows something vastly different: as calculated by Goldman, China has not had a single month of FX inflows since its mid-2015 Yuan devaluation as shown in the chart below.

And while we have yet to get the July SAFE data, even a simple assessment of the latest release shows that outflows continued for yet another month. As Goldman calculates this morning, while the PBOC’s FX reserves “increased” by US$24bn in July to US$3.081tn, after adjusting for currency valuation effects, reported reserves actually decreased by US$10bn, to wit:
We estimate currency valuation effects at about +US$34bn in July. Excluding such estimated effects, reported FX reserves would have fallen US$10bn (vs. –US$8bn in June). However, because of various technical factors (including noisy valuation effect estimates), we have been instead relying on other PBOC and SAFE data (listed below) for a better sense of the underlying flow picture.
As usual, watch for subsequently released PBOC and SAFE flow data to confirm that Beijing has been fibbing just a little about the underlying FX flow, which at least on the surface suggest 6 months of inflows when in reality it is merely tracking the weakness in the dollar.
There’s more: as Goldman notes, monthly outbound travel spending by Chinese residents jumped 47% yoy (to US$29bn) in June. SAFE has subsequently brought forward the implementation of required reporting of large-sized bank card transactions overseas (from Sep 1 to Aug 21).
Exhibit 1: Outbound travel spending surged in June:
Some more commentary on this curious development:
Service trade data released last week shows a significant jump in Chinese residents’ outbound travel spending in June (Exhibit 1), which increased 47% yoy (or about US$9bn in sequential seasonally adjusted terms). Note that SAFE first announced in early June that it would tighten the reporting requirement on bank cards’ overseas usage (banks will need to report any card transactions overseas that involve more than RMB 1,000, or about US$150), with implementation on Sep 1. The subsequent rise in outbound travel spending might partly reflect attempts to front-run the rule implementation (especially as some of the outbound travel spending could be disguised capital outflow). But in SAFE’s most recent communication late last week regarding the new reporting requirement, the implementation date has now been brought forward, to Aug 21. Overall, the authorities have remained vigilant in using various macro-prudential measures to discourage undesired outflows, which should continue to mitigate the near-term need for the authorities to sell FX to support the currency
As a reminder, to get confirmation of the ongoing outflows, on August 16 SAFE will release additional data which will detail: i) PBOC FX position (spot; net of valuation effects): around mid-Aug; ii) Goldman’s preferred measure of underlying FX flow (based on SAFE data on FX settlement onshore and cross-border RMB flow): Aug 16; and iii) PBOC’s reported forward position: end-Aug.
4. EUROPEAN AFFAIRS
end
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
Oliver Stone slams the vast stupidity in sanctioning Russia
(courtesy Oliver Stone)
.
Oliver Stone Slams “Exceptional” America’s “Vast Stupidity” In Sanctioning Russia
In a scathing Facebook post entitled “Mid Summer Anger,” movie director (and infamous Putin interviewer), Oliver Stone lashes out at Washington’s passage of the Russia sanctions bill, suggesting that US intelligence agencies aren’t doing their job and are misleading the public in the “false-flag war” against Moscow.
Congress passed its beloved Russia sanctions last week by a vote of 419-3! The Senate followed with a vote of 98-2!!
I guess ‘American Exceptionalism’ includes the vast stupidity inherent in having two giant oceans to distance us from the rest of humanity.
With all the Apples and Microsofts and computer geniuses we have in our country, can we not even accept the possibility that perhaps our intelligence agencies are not doing their job, and maybe, just maybe, are deliberately misleading us to continue their false-flag war against Russia? Or for that matter, that Russia itself may not be that invested in screwing up our vaunted democracy with such sloppy malware as claimed? Especially in view of the strong statement put out by Veteran Intelligence Professionals for Sanity, a group of reform-minded veterans throwing a dose of acid on the infamous ‘Brennan-Clapper Report’ of January 6, 2017. With this report alone, much less the overt lying and leaking that’s been going on, both James Clapper (‘We don’t do surveillance on our own citizens’) and John Brennan (‘Drones and torture? None of our business’) should be investigated as thoroughly as Michael Flynn, Jared Kushner, Trump’s son, etc.
What’s happened to Elizabeth Warren, Barbara Lee, or any of the people who’ve displayed some independent thinking in the past? Have they actually read this report? Somebody out there in DC, please explain to me this omission of common sense. Are the Washington Post and the New York Times so powerful that no one bothers to read or think beyond them? It seems the TV stations in this country take their copy from them.
I accept the US decline. That’s a given — after all, compare our broken-down New York subway system with Moscow’s, as well as many other cities’ pristine and impeccable services. These sanctions, which I pray Europe can independently judge and discard, are as dumb as giving out medals to Generals who keep losing wars.
I still have this image burned in my brain of Petraeus with his 11/12(?) rows of ribbons, many looking like Boy Scout badges, surrounded by adoring Congressmen as he lied his way through his foreign policy testimony.
Never mind that any moment now a Dr. Strangelove-type incident can occur — with less reaction time, say 15 minutes, compared to the 1960s 2/3 hours. We are truly at the edge as Mr. P pointed out in the documentary I made. Such Roman arrogance, such blindness, calls out for another Vietnam, another Iraq. We’re screaming for some Karmic Boot up the ass. Destroying our pride would be a favor that the gods could do us.
I can go on — but I’m angry as you can tell. So what’s the point of going to the windows and screaming, even if I were on television? Read the report below from Sanity Inc. and pray another August (1914) passes without the war Congress, Media, and the Military-Industrial Complex are literally dying for.
I now fully realize how World War I started. People in power never really thought it would happen, and when it did, thought it’d be over in weeks.
You should know the rest of that history. It doesn’t end well.
This, of course, is not the first time Stone has pointed out the fallacies behind US foreign policy and it appears his prophetic McCarthyism on steroids perspective from December has apparently come true…
I remember well in the 1950s when the Russians were supposed to be in our schools, Congress, State Department — and according to many Eisenhower/Nixon supporters — about to take over our country without serious opposition (and they call me paranoid!).
It was this same media who insisted on our need to go to Vietnam to defend our freedoms against the communists 6,000 miles away. And after the Red Scare finally went away for good in 1991, let us remind ourselves that It never ended. It became Hussein of Iraq with his weapons of mass destruction, and talk of the ‘mushroom cloud.’ It became a Demon, as real as any Salem Witch Trial. It was Gaddafi of Libya, and then it was Assad of Syria. In other words, as in an Orwellian prophesy, it never ended, and I can guarantee you it never will — unless we the people who can still think for ourselves in this existential matter, can say “Enough” to this demon act. “Enough,’ “go away” — laugh in their faces.
end
Russia is to speed up its non dependence on the uSA and payment systems
(courtesy zerohedge)
Russia To Cut Dependence On U.S. Dollar, Payment Systems
Russia will speed up work on reducing its dependence on U.S. payment systems and the dollar as a settling currency in response to U.S. sanctions, Deputy Foreign Minister Sergei Ryabkov said on Monday.
Quoted by Reuters, Ryabkov said that “we will of course intensify work related to import substitution, reduction of dependence on U.S. payment systems, on the dollar as a settling currency and so on. It is becoming a vital need.” The reason for that is that “the US is using its dominating role in the monetary and financial system to impose pressure on foreign business, including Russian companies.”
As a reminder, three years ago the MasterCard payment system stopped serving clients of seven Russian banks without warning after Washington imposed its first set of sanctions on Moscow in 2014. In response, the Russian government ordered the creation of a national payment system. With the support of the country’s banking system, the Mir charge card was introduced in 2015, although there is no information on what its adoption rate has been in the following years.
As we discussed previously, as part of the latest set of Russian sanctions the US has imposed new restrictions on the Russian banking and energy sectors: the ban targets already sanctioned Russian firms, limiting the financing period for them to 14 and 60 days. Additionally, the new law will punish individuals for investing more than $5 million a year or $1 million at a time in Russian energy export pipeline projects or providing such enterprises with services, technology or information support, a provision that has drawn strong condemnation from Washington’s European allies.
US energy companies criticized the tightening of already existing sanctions as damaging for business. At the same time, the European Union expressed concerns the new penalties may undermine the bloc’s energy security. European Commission head Jean-Claude Juncker pledged to prepare an “adequate” response and “within days” if the measure hurt the interests of European companies. So far Europe has to elaborate on what, if any, retaliation to the sanctions it will unveil.
6 .GLOBAL ISSUES
7. OIL ISSUES
8. EMERGING MARKET
VENEZUELA
Venezuela removes state prosecutor Luisa Diaz from her job as Maduro solidifies his dictatorship
(courtesy zero hedge)
In Maduro’s Latest Crackdown, Venezuela’s Assembly Removes Dissident Prosecutor
In Venezuela’s latest crackdown on all opposition voices, on Saturday the country’s newly convened pro-government constituent assembly removed dissident state prosecutor Luisa Ortega Diaz – the highest-ranking member of President Nicolas Maduro’s administration to break ranks with the dictator – from her job in what critics said was a blatant example of Maduro’s new dictatorship flexing its muscles. The assembly voted on Saturday to permanently remove Diaz, 59, from her post after the Supreme Court ruled on Friday evening to suspend her and send her to trial.
Since the opposition launched near daily protests in April, Ortega had become Maduro’s main challenger from within the ruling socialist movement, accusing him of human rights abuses, however until today her insolence had been tolerated by the socialist tyrant. Today that ended, when the new constituent assembly, which Ortega said was fraudulently elected last weekend, unanimously decided to remove her in its first session on Saturday. Ortega was replaced with “human rights ombudsman” Tarek Saab, a Maduro supporter.
National Guard officers had earlier surrounded Ortega Diaz’s Caracas offices. She posted photographs of the uniformed guards outside the building on her Twitter account and labeled it a “siege.”
The Public Ministry’s Twitter account said the guards were not allowing workers to enter or leave. Eventually, amid the chaos, she escaped on a motor bike.
Since the newly created legislative body has no checks on its powers, the decision to remove Ortega has been widely panned as an ominous sign of Maduro swerving into full-blown dictatorship, which should come as no surprise to anyone following the fast moving events in the near-insolvent country whose currency lost almost 50% of its value in the past 4 days.

“The constituent assembly is solving Maduro’s political problems, handing out quotas, and lynching institutions,” said opposition lawmaker Jose Manuel Olivares after news of Ortega’s removal.
The “blank check” assembly – which was installed on July 30 despite opposition street protests in which more than 120 people died – also has the right to re-write the constitution, re-arrange state institutions and allow Maduro to rule by decree. Assembly members had said they would fire Ortega the first chance they got, according to Reuters.
Meanwhile, as Venezuela crumbles and implodes, Maduro continues to accuse the U.S. “empire” of waging economic war on Venezuela and refuses to allow humanitarian aid to enter the country. He says the new assembly is the only way to unify Venezuela into a peaceful, prosperous socialist state.
Former Foreign Minister Delcy Rodriguez, a hard-line Maduro loyalist, was named president of the new assembly and demonstrated just what real delustion and propaganda truly means:
“There is no humanitarian crisis here. What we have is love. What we have is a crisis of the right-wing fascists,” said Rodriguez, in a fiery socialist inaugural address which made no sense and in which she paid homage to late socialist leader Hugo Chavez, Maduro’s far more capable predecessor.
* * *
Also on Saturday, South America’s trade bloc Mercosur suspended the oil rich nation indefinitely adding to international pressure on Maduro. The foreign ministers of Argentina, Paraguay, Uruguay and Brazil announced the decision in Sao Paulo, urging Maduro to release prisoners and immediately start a political transition.
Quoted by Reuters, Brazilian Foreign Minister Aloysio Nunes said after the meeting. “We are saying: Stop with this! Enough with the deaths, enough with the repression. It is not possible to inflict such torture on the people.” Asked to comment on Ortega’s dismissal, Nunes replied with a Latin proverb: “Whom the gods would destroy they first drive mad.”
Also on Saturday, Argentina’s Foreign Minister Jorge Faurie called Venezuela a dictatorship: “It is very bad to push a brother out of the door, but it did so with conviction because we are watching a situation that causes us great pain,” Faurie said. Speaking of symbolism, the Mercosur suspension will not affect trade and migration policies to avoid worsening the humanitarian crisis, Nunes said. “Venezuelans who want to come to Brazil will be welcome.” In other words, for all the condemnations by both the US and Latin America, it remains business as usual with the oil rich nation.
Finally, earlier on Saturday, national security adviser H.R. McMaster, the U.S. said in an MSNBC interview that “democracy is over right now in Venezuela,” but dismissed the threat of military intervention there from an outside source.
Repsol, Statoil Pull Foreign Oil Workers From Venezuela
One day after Venezuela allegedly squashed a “military rebellion“, in anticipation of further political and social turmoil in the socialist nation, energy giant Repsol SA pulled all foreign workers from its fields in Venezuela, Bloomberg reports adding that Norway’s Statoil ASA also removed all expat staff.
According to Bloomberg, Repsol field workers left the country in the past few weeks, with a skeleton expatriate staff remaining at the company’s offices in Caracas. Separately, Statoil withdrew its last three foreign workers before the July 30 election to ensure their safety, Erik Haaland, a company spokesman, told Bloomberg by phone.
The immediate result of the departures will be an even bigger decline in Venezuela’s oil output – the only remaining asset which Maduro can readily exchange for dollars – further exacerbating the country’s financial crisis as the inflow of hard currency slows further.
The departure of workers will be a concern to the government because oil output, which has tumbled over the past two years, accounts for 95 percent of Venezuela’s foreign-currency earnings. Repsol gets about 10% of its production from the country, where it owns a stake in the Carabobo heavy-oil field. The Spanish company also is a partner in the Perla project, Latin America’s largest offshore gas deposit, together with Eni SpA.
A spokesman for Rome-based Eni said the company is keeping only essential expatriate personnel in the country. It isn’t currently considering an evacuation but continues to monitor the situation, he said.
In what some may consider employee discrimination, Repsol said it still has Venezuelan citizens working at its operations without specifying how many foreign staff had been in the country. Statoil also still has Venezuelans – but not foreigners – at its sites, Haaland said.
As a reminder, the violence in Venezuela escalated sharply ahead of the July vote to elect members of the constituent assembly, with the opposition denouncing the move as a power-grab by President Nicolas Maduro. While the election faced accusations of fraud, including from the company that provided voting machines for the ballot, the new assembly convened last week. One of its first actions was to remove chief prosecutor Luisa Ortega Diaz, the highest-ranking member of Maduro’s administration who broke rans with the authoritarian and was critical of the government.
Rand Surges After South Africa’s Parliament Speaker Allows Secret Ballot In Zuma No-Confidence Vote
In a surprise announcement, moments ago South Africa’s parliament speaker announced a secret ballot will be held on Zuma no-confidence motion on Tuesday.
Speaking to journalists, the speaker of the national assembly, Baleka Mbete, who is a member of the ruling ANC party, said it is her responsibility as speaker to decide whether or not the no confidence vote in President Zuma will be conducted by secret ballot or not. Her decision which was just announced: the vote will indeed be secret.
Some more soundbites via Bloomberg:
- Motion is “potent tool towards holding president to account”
- Central to the freedom of a member of parliament is to follow the dictates of personal conscience
- Members must exercise oversight powers effectively
- Secret ballot becomes necessary where environment is “toxic or highly charged”
A no-confidence motion is scheduled to be debated on Tuesday and requires the backing of a majority of the 400 lawmakers to pass.
And since it is generally assumed that a secret ballot would increase the chances of President Zuma being ousted, as ruling-party lawmakers who back his ouster won’t risk losing their jobs, the ZAR has surged by as much as 2.0%, trading up 1.5% to 13.2495/USD last while yields on benchmark government bonds due Dec. 2026 drops 7bps to 8.58%, as it now appears that a more “stable” regime may be in the offing.
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings MONDAY morning 7:00 am
Euro/USA 1.1803 UP .0034/REACTING TO + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/EUROPE BOURSES MOSTLY RED EXCEPT LONDON
USA/JAPAN YEN 110.77 UP 0.133(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/ HELICOPTER MONEY ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST/LABOUR PARTY LOSES IN LOCAL ELECTIONS
GBP/USA 1.3053 UP .0028 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS
USA/CAN 1.2675 UP .0065 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS MONDAY morning in Europe, the Euro ROSE by 34 basis points, trading now ABOVE the important 1.08 level RISING to 1.1803; 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 UP 17.38 POINTS OR .53% / Hang Sang CLOSED UP 127.68 POINTS OR 0.46% /AUSTRALIA CLOSED UP 0.89% / EUROPEAN BOURSES OPENED MOSTLY IN THE RED
We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;
1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.
2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)
3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.
These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>
The NIKKEI: this MONDAY morning CLOSED UP 103.56 POINTS OR .52%
Trading from Europe and Asia:
1. Europe stocks OPENED IN THE RED (EXCEPT LONDON)
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 127.68 POINTS OR 0.46% / SHANGHAI CLOSED DOWN 17.38 POINTS OR 0.52% /Australia BOURSE CLOSED UP 0.89% /Nikkei (Japan)CLOSED UP 103.56 POINTS OR .52% / INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1258.20
silver:$16.21
Early MONDAY morning USA 10 year bond yield: 2.2637% !!! UP 0 IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.
The 30 yr bond yield 2.8359, DOWN 1 IN BASIS POINTS from FRIDAY night.
USA dollar index early MONDAY morning: 93.38 DOWN 16 CENT(S) from FRIDAY’s close.
This ends early morning numbers MONDAY MORNING
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And now your closing MONDAY NUMBERS
Portuguese 10 year bond yield: 2.863% DOWN 2/5 in basis point(s) yield from FRIDAY
JAPANESE BOND YIELD: +.072% UP 7/10 in basis point yield from FRIDAY/JAPAN losing control of its yield curve
SPANISH 10 YR BOND YIELD: 1.459% DOWN 2 IN basis point yield from FRIDAY
ITALIAN 10 YR BOND YIELD: 1.994 DOWN 3 POINTS in basis point yield from FRIDAY
the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.459% DOWN 1 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR MONDAY
Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/5:00 PM
Euro/USA 1.1784 UP .0014 (Euro UP 14 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 110.82 UP 0.185(Yen DOWN 19 basis points/
Great Britain/USA 1.3024 DOWN 0.0002( POUND DOWN 2
basis points)
USA/Canada 1.2686 UP .0076 (Canadian dollar DOWN 76 basis points AS OIL FELL TO $48.85
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This afternoon, the Euro was UP by 14 basis points to trade at 1.1784
The Yen FELL to 110.82 for a LOSS of 19 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016
The POUND FELL BY 2 basis points, trading at 1.3024/
The Canadian dollar FELL by 76 basis points to 1.2686, WITH WTI OIL FALLING TO : $48.85
Your closing 10 yr USA bond yield DOWN 1 IN basis points from FRIDAY at 2.256% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.8380 DOWN 1 in basis points on the day /
Your closing USA dollar index, 93.51 DOWN 3 CENT(S) ON THE DAY/1.00 PM
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 1:00 PM EST
London: CLOSED UP 20.23 POINTS OR 0.27%
German Dax :CLOSED DOWN 40.55 POINTS OR 0.33%
Paris Cac CLOSED UP 4.75 POINTS OR 0.09%
Spain IBEX CLOSED UP 18.10 POINTS OR 0.19%
Italian MIB: CLOSED UP 95.38 POINTS/OR 0.43%
The Dow closed UP 25.61 OR 0.12%
NASDAQ WAS closed UP 32.21 POINTS OR 0.51% 4.00 PM EST
WTI Oil price; 48.85 at 1:00 pm;
Brent Oil: 51.77 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 60.00 UP 4/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 4 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +0.459% FOR THE 10 YR BOND 4.PM EST EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today
Closing Price for Oil, 5 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 5:00 PM:$49.29
BRENT: $52.21
USA 10 YR BOND YIELD: 2.2566% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.8367%
EURO/USA DOLLAR CROSS: 1.1794 UP .0024
USA/JAPANESE YEN:110.75 UP 0.109
USA DOLLAR INDEX: 93.44 DOWN 10 cent(s)
The British pound at 5 pm: Great Britain Pound/USA: 1.3031 : UP 5 POINTS FROM LAST NIGHT
Canadian dollar: 1.2680 UP 70 BASIS pts
German 10 yr bond yield at 5 pm: +0.459%
END
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Dow Rises To 9th Straight Record Close On Lowest Volume In Years
The 9th record close in a row for The Dow (and 10th straight day higher – longest streak since Feb).
As one veteran trader exclaimed “holy smokes… never saw volume this low” –
This is the lowest aggregate S&P 500 e-mini Futs volume for this day in history since 2001…
This is easy…
For 13 days in a row the S&P 500 cash had closed with a 247X handle… Until Today…
2474, 2473, 2473, 2470, 2477, 2478, 2475, 2472, 2470, 2476, 2478, 2472, 2477… 2481
But this is the lowest volatility in the 90-year history of the S&P…
VIX dropped back below 10…managing to get the S&P 500 to close with a 2480 handle
Nasdaq was the clear outperformer (FANG up for 2nd day) and we note Small Caps were squeezed (on EU Close) and dumped…
As RBC noted earlier, over the past five sessions, a number of crowded sub-sectors have experienced notable profit-taking and reversal as per the below table (H/T RBC Neal Sullivan):
Treasury yields drifted lower through the US day session ending the day marginally lower…
The Dollar Index clung to most of its gains from Friday…
EUR was slightly stronger on the day as commodity currencies lost ground…
Just one thing – is it ‘time’ for a reversal?
Bitcoin surged over 18% from Friday’s close to a new record high… 3rd biggest daily gain in the last 4 years
Silver continues to slide from its 50DMA after payrolls…
And gold was practically unchanged finding support again at its 100DMA… (though it did roll over into the close)
WTI Crude closed lower on the day but bounced back (for the 5th day in a row off its 100DMA)…
Bonus Chart: Yale Survey: 100% of institutional investors, 99% individual, expect higher stock prices a year from now.
h/t @Callum_Thomas
end
Mueller asks for more White House documents relating to Flynn’s dealing with a Turkish American business. The dealings between the two were meant to discredit Turkey’s arch enemy Gulen:
(courtesy zero hedge)
In First Formal Request, Mueller Asks White House For Flynn Documents
In the first known case of special counsel Robert Mueller’s team asking the White House to hand over records, investigators working for Mueller – who is investigating whether President Donald Trump’s 2016 campaign colluded with Russia and who last week reportedly impaneled a grand jury – have asked the White House for documents related to former national security adviser Michael Flynn, the New York Times reported late on Friday.
Prosecutors and FBI agents “have spent hours poring over the details of Mr. Flynn’s business dealings with a Turkish-American businessman who worked last year with Mr. Flynn and his consulting business, the Flynn Intel Group” the Times reports. The company was paid $530,000 to run a campaign to discredit an opponent of the Turkish government who has been accused of orchestrating last year’s failed coup in the country. Flynn’s campaign to discredit Erdogan’s opponent, Fethullah Gulen, began on Aug. 9 when his firm signed a $600,000 deal with Inovo BV, a Dutch company owned by a Turkish-American businessman.
Reuters reported in June that according to a subpoena, federal prosecutors in Virginia were investigating a deal between Flynn and Turkish businessman Ekim Alptekin as part of a grand jury criminal probe. Investigators want to know if the Turkish government was behind those payments — and if the Flynn Intel Group made kickbacks to the businessman, Ekim Alptekin, for helping conceal the source of the money.
Prosecutors have also asked during interviews about Mr. Flynn’s speaking engagements for Russian companies, for which he was paid more than $65,000 in 2015, and about his company’s clients — including work it may have done with the Japanese government.
They have also asked about the White Canvas Group, a data-mining company that was reportedly paid $200,000 by the Trump campaign for unspecified services. The Flynn Intel Group shared office space with the White Canvas Group, which was founded by a former Special Operations officer who was a friend of Mr. Flynn’s.
Furthermore, Flynn has filed three versions of his financial-disclosure forms, as his first version did not disclose payments from Russia-linked companies, which he added to an amended version of the forms he submitted in March. This week he filed a third version, adding that he briefly had a contract with SCL Group, the parent company of Cambridge Analytica, a data-mining firm that worked with the Trump campaign.
The new forms list at least $1.8 million in income, up from roughly the $1.4 million he had previously reported. It is unclear how much of that money was related to work Mr. Flynn did on Turkey issues.
The new line of questioning suggests that Mueller’s inquiry has expanded into a full-fledged examination of Flynn’s financial dealings, the Times reports, beyond disclosures about his conversations and business arrangements with Russian officials and the relatively narrow question of whether he failed to register as a foreign agent or lied about his conversations and business arrangements with Russian officials.
As a reminder, Flynn – who lasted only 24 days as national security advisor – resigned from the Trump administration in February after reports surfaced he had misled senior White House officials about his past conversations with Kremlin officials. Flynn declined to comment for the Times report, while Trump’s special counsel Ty Cobb stressed that the White House was cooperating with the probe.
“The White House will not be discussing any specific communications with the Special Counsel out of respect for the Special Counsel and his process. Beyond that, as I have stressed repeatedly, we continue to fully cooperate with the Special Counsel,” Cobb said in a statement.
end
A terrific commentary from David Stockman explaining how Trump is the set up guy who is going to take the fall with the stock market plummets. He indicates that the waterfall will start with the debt ceiling debate
(courtesy David Stockman/DailyReckoning)
David Stockman Warns Trump “The Swamp Is Undrainable”
Authored by David Stockman via The Daily Reckoning,
Approximately two months before the election on September 10th I locked down the final draft of my book, Trumped!
In the opening sentence I ventured the following opinion, which was most certainly not in the mainstream at the time:
FIRST THERE WERE 17. THEN LITTLE MARCO, LOW ENERGY JEB AND LYIN’ Ted were gone. At length, there was one. And now there is even a chance he may become President.
That he did, and contrary to all expectations, too. But now there is an excellent chance that Mike Pence will become the 46th occupant of that office.
This time the pundits do see it coming. That’s because they are complicit — functioning as self-appointed magistrates of a recount of the 2016 election.
Indeed, the mainstream media is no longer even in the news business. It’s conducting a grand witch hunt and venomous prosecution that will not be sated until the Donald vacates the Oval Office — one way or another, probably by a threatened invocation of the 25th Amendment by the GOP elders on Capitol Hill.
Yes, it sounds a tad far fetched. But the key to what comes next is hiding in plain sight.
The Donald is exceedingly vulnerable because he is an insurgent outsider who will eventually end up alone in the Swamp in helpless isolation.
Trump’s impetuous tweeting is a case in point. Take a recent tweet about Germany, for example. It was essentially on point, but amounted to waving a red cape in the face of the already enraged establishment bull:
We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change.
Of course, the establishment’s concerns have less to do with peace and security than raising sales, earnings and stock prices in the Atlantic-area’s military industrial complex.
And the establishment won’t abide any threat to its power.
In this vein, the Donald is also pulling America out of the Paris Climate Accords, an establishment totem.
“Climate denialism” is about as offensive to establishment sensibilities as is “creationism.” So the shrieks of outraged disbelief reached ear-splitting decibels after Trump’s announcement.
I’m glad the Donald takes on the greatest “environmental hoax” of the modern era — even if it does accelerate his downfall.
That’s because it is based on an expansion of government that knows no limits — including the deliberate and systematic distortion of climate data to fit a weak theory that defies common sense and the known facts of the planet’s history.
In any event, the Donald’s jail break from the Paris Accords has further isolated him in the Imperial City — even if it does win him plaudits in the Rust Belt.
What will be the trigger that finally sends the establishment after Trump?
Ultimately, the hammer of fiscal crisis and a crashing stock market will break any remaining loyalty of the GOP elders as they smell the 2018 elections turning into a replay of the rout of 1974.
And then the Donald will be gone, and well before August 2018, too. I told an audience in Vancouver last Friday that it could happen by February.
The bottom line is that the Swamp is so undrainable that it will end up making mincemeat of Donald Trump.
Needless to say, the ultimate causes of his demise are anchored deep in the failing status quo.
America is so addicted to war, debt and central bank driven false prosperity that even the most resourceful and focused challenger would be taken down by its sheer inertia.
But the Donald is so undisciplined, naïve, out-of-touch, thin-skinned, unfocused and megalomaniacal that he is making it far easier for the Swamp critters than they deserve. To a very considerable extent, in fact, he is filling out his own bill of indictment.
Moreover, he is totally clueless about how to manage his presidency or cope with the circling long knives of the Deep State which are hell bent on removing him from office.
Accordingly, the single most important thing to know about the present risk environment is that it is extreme and unprecedented.
In essence, the Donald is the ultimate bull in an exceedingly fragile China shop — and an already badly wounded one at that.
So it is no understatement to suggest that the S&P 500 at 2470 and the Dow at 22,000 is about as fragile as the “market” has ever been.
And Amazon, poster boy for Bubble Finance, is trading around 190 times earnings.
Any untoward pinprick could send it into a tailspin — meaning that the coming political bleeding-out of the Donald amounts to a 50,000 pound pin.
It’s the mighty Orange Swan that will lay the casino low like never before.
The utter fragility of the latest and greatest Fed bubble could not be better proxied than in this astounding fact…
During the last 6,000 trading days (since the early 1990s), the VIX Index closed below 10 on 26 occasions or just 0.4% of the time. No less than 16 out of those 26 ‘below-10’ closes occurred in the last three months!
Stated differently, in just the last 0.6% of the trading days since 1997, over 65% of the ultra-low VIX readings have occurred.
That’s complacency begging to be monkey-hammered.
That was surely true in late 1999 and early 2000 when the NASDAQ 100 rose by 30% in three months — just as has been recently when the FAAAM Five (Facebook, Apple, Amazon, Alphabet and Microsoft) gained 33% or $600 billion since the turn of the year.
But this time is actually different in a special sense.
We are now at the inflection points not just of the post-crisis bubble engineered by the Bernanke-Yellen Fed and their fellow-traveling central bankers around the world, but the inflection point for the whole multi-decade enterprise of monetary central planning.
At the heart of the matter is that the Washington-Wall Street establishment rests on a bipartisan political foundation that has no use for existential threats to their continued rule, respectively.
So the Deep State’s prosecution of Trump’s incumbency under the RussiaGate file is continuing apace, while a calamitous debt ceiling crisis is now less than two months away according to his own Treasury Secretary.
The debt-ceiling crisis will cause a thunderous panic among the clueless gamblers on Wall Street. And the resulting 40% plunge in the stock market will pave the way for the Donald’s eventual demise.
At that point the Donald will truly be friendless. For comparison’s sake, consider the fate of Richard Nixon.
Notwithstanding three decades of network building and the accumulation of vast IOUs from his relentless politicking and campaigning, the GOP establishment sent Nixon packing in August 1974 when the party’s demise stood just around the corner.
By contrast, the Donald has no GOP network, friends, IOUs or even history. A mere twelve years ago he was cavorting with the Clinton’s at Chelsea’s wedding.
When the S&P 500 drops below 1,500 there will be panic in the GOP precincts all around Capitol Hill. Then I expect Trump to be escorted to the South Lawn for his final trip aboard the Richard Nixon memorial helicopter.
What is different this time, however, is that America is in no shape to weather the ensuing storm.
Judge Jeanine Posts Epic Rant: “[Dems] Lie, Steal, Cheat And Continue To Get Away With It”
Following a FOIA dump last week by the American Center for Law and Justice (ACLJ) which seemingly revealed collusion between the FBI, DOJ and several mainstream media outlets to coverup the now-infamous meeting between then Attorney General Loretta Lynch and Bill Clinton just days before the FBI exonerated Hillary, Judge Jeanine decided to ask a very simple question, one which we’ve pondered many times ourselves, in her opening monologue, “why do we continue to let them get away with it?”
“Why do we let them get away with it? They lie, cheat, violate the rules, then cover up. And, they get away with it.”
“We’re no longer a country where the law is equally applied. This country…is no longer true to its Declaration of Independence.”
“Less than 48 hours ago we learned just how far Democrats and the highest law enforcement agencies, allegedly non-partisan offices, would go to cover up for the Obama administration.”
“Now, you remember that meeting on the tarmac between Attorney General Loretta Lynch and Bill Clinton, outed only because a local reporter happened to be there. The FBI wouldn’t allow photos, pictures or cell phones. There were no reports made that the highest ranking law enforcement official in this country was approached by the spouse of a woman being actively investigated in the most important criminal investigation in the history of presidential politics.”
“But we didn’t know how deep and dirty the collusion was until 48 hours ago.”
Pirro went on to call for a grand jury investigation into everyone from Hillary Clinton to Loretta Lynch and Eric Holder.
“Folks, this was a coverup of an illegal meeting. Collusion between Bill Clinton and the Attorney General after which the FBI interrogated Hillary and then exonerated her. After which Hillary then brazenly proclaimed that, if she won, she would hire Loretta Lynch as Attorney General.”
“Now, I have an idea. It’s time to take the country back. Back to the original intent of our founders. No one is above the law and no one is below it.”
“Mueller has empaneled a grand jury in a district that despises our president. Mueller is a friend of Comey, who has brought on Hillary and Obama lovers to take down the President. He is completely conflicted.”
“Loretta Lynch’s case needs to be heard by a grand jury. To review the collusion on that tarmac and the promise of a payoff to Lynch.”
“Hillary Clinton’s case needs to be brought to a grand jury immediately. There is still time to prosecute her for putting our classified information on her private server that she then shared with her girlfriends, one of whom shared a computer with her dirtbag husband.”
“All of the immunity agreements need to be nullified. Most of the terms have already been violated.”
“And Hillary must be prosecuted for perjury. She and her State Department intentionally lied saying there were no Benghazi email and no classified emails as she deleted 33,000 emails on ‘yoga’ and ‘her wedding dress.'”
“And she needs to be prosecuted for destroying and concealing subpoenaed property and the emails.”
“Eric Holder, who perjured himself before Congress under oath, needs to be prosecuted too.”
“I don’t wanna hear ‘Hillary’s a good woman,’ she’s not!”
“While we play by the rules they lie, steal, cheat and continue to get away with it. Because we let them.”
* * *
end
USA citizens in the latest report shows a huge increase in credit card debt (revolving credit). Student loans + auto loans also reach a record 2.8 trillion. With the removal last week of the total personal savings rate to zero, USA citizens are now relying more on their credit card in the daily routine.
(courtesy zerohedge)
US Credit Card Debt Surpasses Financial Crisis Record, As Student And Auto Loans Hit New All Time High
Who would have expected that today’s otherwise boring monthly consumer credit report would be the day’s most exciting event. Well, moments ago the monthly update from the Federal Reserve confirmed that as of the end of June, total revolving (i.e. credit card) credit rose to $1,021.7 billion, an increase of $4.1 billion on the month, and a new all time high, taking out the previous record high set during the summer of 2008.
Coupled with the monthly $8.3 billion increase in non-revolving credit, which also rose to an all time high of $2,834.1 billion...
… means that total consumer credit in June increased by $12.4 billion, slightly less than the $13.9 billion expected and modestly less than the $18.4 billion increase in May, to $3,855.8 billion, also a record high.
Taking a closer look at the quarterly update in non-revolving debt, we find that for another consecutive quarter, both student and auto loans hit record highs, of $1.450 trillion and $1.131 trillion respectively, although there does appears to be a modest slowdown in credit issuance for these two largest categories.
Considering the recent sharp revision to the US household savings rate, which wiped out $250 billion in personal savings with the stroke of an excel pen…

… the fact that US households increasingly have to rely on their credit cards to support their daily lives will hardly come as a surprise
end
WELL THAT ABOUT DOES IT FOR TONIGHT
I will not be able to do commentaries from Tuesday till Thursday
I will see you Friday night
Harvey.
















































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