Sept 6/Small flash crash knocks gold down $4.90 to $1334.14 and silver down one cent to $17.86/USA tells UN its 5 wishes to curtail Kim of which both Russian and China disagree with those sanctions/Irma flattens St Martaan and now is heading straight for Miami/Looks like the debt ceiling debacle has been put off for another 3 months so as to fund Harvey/

GOLD: $1334.15 DOWN   $4.90

Silver: $17.86  DOWN 1 CENT(S)

Closing access prices:

Gold $1334.20

silver: $17.88

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: $1342.93 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1339.90

PREMIUM FIRST FIX:  $3.03

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SECOND SHANGHAI GOLD FIX: $1344.02

NY GOLD PRICE AT THE EXACT SAME TIME: $1338.00

Premium of Shanghai 2nd fix/NY:$6.02

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LONDON FIRST GOLD FIX:  5:30 am est  $1340.15

NY PRICING AT THE EXACT SAME TIME: $1339.90

LONDON SECOND GOLD FIX  10 AM: $1337.85

NY PRICING AT THE EXACT SAME TIME. 1338.85 ???

For comex gold:

SEPTEMBER/

NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 0 NOTICE(S) FOR  nil  OZ.

TOTAL NOTICES SO FAR: 49 FOR 4900 OZ  (0.1524 TONNES)

For silver:

SEPTEMBER

 160 NOTICES FILED TODAY FOR

800,000  OZ/

Total number of notices filed so far this month: 3,078 for 15,390,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Today we had a mini flash crash that took gold down initially to $1331.00.  This happened as soon as London was put to bed and thus we were strictly in the paper markets.  Gold then rebounded a bit but in the end it was down almost $5.00.  Silver ended the session down only 1 cent.As soon as we hit the physical time zones, gold will rebound form where it left off yesterday. It looks like the USA will get a 3 month reprieve on its debt ceiling.  They needed funding for Harvey and did not wish to complicate things.

Let us have a look at the data for today

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In silver, the total open interest ROSE BY A CONSIDERABLE  3581 contracts from 178,897 UP TO 183,276 WITH THE GOOD SIZED GAIN IN PRICE THAT SILVER UNDERTOOK YESTERDAY’S TRADING (UP 14 CENTS). WE NOW HAVE MORE NEWBIE LONGS ENTER THE SILVER CASINO WITH NO SILVER LONGS EXITING FOR EFP’S. THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE SHORT PAPER IN TOTAL SYMPATHY WITH GOLD

RESULT: A SMALL RISE IN OI COMEX  WITH THE 22 CENT PRICE RISE. 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.916 BILLION TO BE EXACT or 130% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 160 NOTICE(S) FOR 800,000  OZ OF SILVER

In gold, the open interest ROSE BY A MONSTROUS 11,274 CONTRACTS WITH THE RISE  in price of gold ($13.45 GAIN YESTERDAY). The new OI for the gold complex rests at 566,817.

CONDITIONS ARE RIPE AND AMPLE FUEL FOR ANOTHER  HUGE RISE IN THE NUMBER OF  NEWBIE SPECS  ENTERING THE GOLD ARENA WITH THE COMMERCIALS AGAIN SUPPLYING THE NECESSARY PAPER. THE NORTH KOREAN SITUATION CERTAINLY  ENCOURAGED  MORE NEWBIE LONGS TO  BECOME EMBOLDENED IN THEIR CONTINUING QUEST OF TAKING ON THE BANKERS WHO RECIPROCATED IN KIND WITH  SHORT PAPER.

Result: A HUGE SIZED GAIN IN OI WITH THE RISE IN PRICE IN GOLD ($13.45). THE COMMERCIALS SUPPLIED THE NECESSARY SHORT PAPER. MORE NEWBIE LONGS ENTERED THE COMEX CASINO WILLING TO TAKE ON THE BANKERS

we had: 0 notice(s) filed upon for nil oz of gold.

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

GLD:

Tonight , we had another huge  changes in gold inventory: a huge deposit of 5.91 tonnes

Inventory rests tonight: 837.12 tonnes

it the last two days: 20.69 tonnes

IN THE LAST 37 TRADING DAYS: GLD ADDS 9.02 TONNES YET GOLD IS HIGHER BY $100.75 .

SLV

Today:  WE HAD NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 331.178 MILLION OZ

end

.

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

1. Today, we had the open interest in silver ROSE BY A STEADY 3,581 contracts from 178,897 UP TO 183,276 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH YESTERDAY’S 14 CENT GAIN IN TRADING. SILVER RESPONDED LIKE GOLD TO THE ECONOMIC CLIMATE (E.G NORTH KOREA’S ATOMIC BLAST.) AS  NEWBIE LONGS PILED INTO THE SILVER ARENA. THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE NECESSARY SHORT PAPER.

RESULT:  A  HIGHER OI AT THE COMEX WITH THE INCREASE IN PRICE OF 14 CENTS.  BANKERS SUPPLIED THE NECESSARY  SHORT PAPER.  

(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 TUESDAY night/WEDNESDAY morning: Shanghai closed UP 1.07 POINTS OR 0.03%   / /Hang Sang CLOSED DOWN 127.59 POINTS OR 0.46%/ The Nikkei closed DOWN 27.83 POINTS OR 0.14%/Australia’s all ordinaires CLOSED DOWN 0.26%/Chinese yuan (ONSHORE) closed UP at 6.5250/Oil UP to 48.83 dollars per barrel for WTI and 53.81 for Brent. Stocks in Europe OPENED RED. Offshore yuan trades  6.5374 yuan to the dollar vs 6.5250 for onshore yuan. NOW THE OFFSHORE MOVED SLIGHTLY WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN MUCH STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE  WEAKER DOLLAR. CHINA IS HAPPY TODAY 

 

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA/

this is scary!!  North Korea’s atomic blast as created numerous landslides around a mountain next to the site of impact.  The mountain is not stable and may crumble leaving a hole to which radiation can seep into the atmosphere and spread to China.  Actually China is very concerned..

( zero hedge)

ii)We now have the 5 big demands from the US to curtail the North Koreans:

1. an oil embargo (China is the dominant supplier followed by Russia)
2 Kim asset freeze
3 curtail workers from entering foreign jurisdictions
4 freeze national airline
5.block their textile exports.
Both China and Russia will not go for this!
(courtesy zero hedge)

 

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)China holds military exercises along their border with North Korea

( zero hedge)

ii)China closes one of its border crossings with North Korea

( zerohedge)

4. EUROPEAN AFFAIRS

This should be interesting:  Polish foreign Minister demand 1 trillion in reparations. Actually Poland is one of only countries that did not receive much in reparation payments  (only a tiny amount in 1953)

( zero hedge)

( zero hedge)

iii)We will hear officially tomorrow but it looks like the ECB will again delay its decision to curtail QE

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

Caribbean Islands

Irma reaches the Caribbean and flattens the islands of St Martin, Barbuda and now heading for Puerto Rico. It is still heading straight for Miami

 

( zerohedge)

7. OIL ISSUES

i)Whereas Harvey hit both demand and supply of oil, a major hit on Florida will only hit the demand side of the equation

( Cunningham/OilPrice.com)

ii) The latest report  on the impact of Harvey shows a much greater crude build with a smaller gasoline draw

( zerohedge)

8. EMERGING MARKET

VENEZUELA

9.   PHYSICAL MARKETS

i)I brought this to your attention yesterday.  Lael Brainard has the ear of the Fed Chairman Yellen and thus we must be cognizant of what she says.  She is now urging the central bank to pretend that there is no inflation and thus do not expect rate hikes.

( GATA)

ii)this one is tiny when you compare the fraud committed by the Bullin banks

(courtesy CFTC)

iii) Craig Hemke on the massive amounts of “paper” gold entering GLD

(courtesy Craig Hemke/TFMetals)

10. USA Stories

i)Why Trump has a lot on his plate:
(courtesy zerohedge)
ib)And now onto the Debt Ceiling fiasco: a 3 month raise in the debt ceiling for Harvey relief. Ryan dismisses this as ‘unworkable”(courtesy zerohedge)
ic)Republicans are furious with Trump as he sides with the Democrats for a short term rise in the debt ceiling for Harvey funding and other goodies demanded by the left.( zerohedge)

ii)Update on Irma: 7 am est

( zerohedge)

iii)Despite the lower dollar, the July trade deficit rose again up to $43.7 billion from a downward revised $43.5 billion

This will hurt GDP numbers in the 3rd quarter.

( zero hedge)

iv)Last week we brought you a commentary on the public pension problems facing Kentucky.  It seems that a lot of citizens have figured out how to beat the system as fears of a pension collapse in that state mount

 

( zero hedge)

we must be vigilant..

( zero hedge)

vi)Another rat to flee a sinking ship:  Stanley Fischer, Vice Chairman of the Fed unexpectedly resigns
( zero hedge)

vii)Cohn unlikely to get Trump’s nod for fed Chair. Question; why is he still hanging around?( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY A MONSTROUS 11,274 CONTRACTS UP to an OI level of 566,817 WITH THE FAIR SIZED GAIN IN THE PRICE OF GOLD  ($13.45 GAIN IN YESTERDAY’S trading). This time the bankers again supplied the necessary gold short paper when newbie longs took on our criminal bankers realizing that the geopolitical climate  was to their liking as they continued to pile into the gold comex with the commercials, undaunted, supplying the necessary short paper.

We had 0 notices of gold filed for Tuesday and thus nil oz will be delivered upon.

Result: a  huge SIZED open interest increase with an good sized rise in the price of gold coupled with the North Korea’s atomic test blast. 

The new non active September contract month saw it’s OI ROSE 2 contracts UP to 835.   We had 0 notices filed on yesterday so we GAINED 2 contracts or an additional 200 oz will stand AND  0 EFP’s WERE ISSUED which entitles them to a fiat bonus plus a deliverable contract on a different exchange and most likely that would be London.  These are private deals so we do not get to see the makeup of these deals only the number of EFP’s issued.

The next active contract month is Oct and here we saw a LOSS of 656 contracts DOWN to 45,185.

The November contract saw A GAIN OF 116 contracts UP to 118.

The very big active December contract month saw it’s OI gain 10,122 contracts up to 446,088.

We had 0 notice(s) filed upon today for  nil oz

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And now for the wild silver comex results.  Total silver OI ROSE BY 3581 CONTRACTS FROM 178,897 UP TO 183,276 WITH YESTERDAY’S  14 CENT GAIN IN PRICE.  SILVER RESPONDED TO THE GEOPOLITICAL CLIMATE THROUGHOUT THE WORLD AND BECAME MORE EMBOLDENED TO TAKE TO TAKE ON SOME OF OUR BANKERS WITH THE NORTH KOREAN ATOMIC BLAST TEST.  THIS TIME, THE BANKERS DID SUPPLY THE SHORT COMEX PAPER.  DEMAND FOR PHYSICAL SILVER REMAINS EXTREMELY HIGH AS AGAIN THE AMOUNT STANDING FOR DELIVERY INCREASED AGAIN.  WE HAVE BEEN WITNESSING THIS PHENOMENA FOR THE PAST 5 MONTHS.  (SEE BELOW). WE LOST NO SEPT LONGS TO EFP’S TODAY
RESULT:  A GOOD SIZED INCREASE IN OI AT THE COMEX WITH A 14 CENT GAIN IN PRICE. DEMAND FOR PHYSICAL SILVER RISES AGAIN AS THE AMOUNT STANDING INCREASES FOR THE SEPT CONTRACT MONTH.  THE BANKERS THIS TIME DID  SUPPLY THE NECESSARY SHORT PAPER.

We are now in the active contract month of September (and the last active month until December). Today we witness Sept. OI fall by 265 contacts down to 1610. We had 373 notices filed yesterday, so we again gained 108 contracts or an additional 540,000 oz will stand for delivery. This phenomenon has been happening in silver for the past 5 months whereby the amount standing increases on each and every delivery day.  This queue jumping highlights the huge demand for silver that we have been witnessing around the globe. The next non active contract month for silver after September is October and here the OI GAINED 39 contacts UP TO 951. November saw another gain of 21 contracts up to 36. After November, the NEXT big active contract month is December and here the OI GAINED by 3238 contracts UP to 161,957 contracts.

We had 160 notice(s) filed for  800,000 oz for the SEPT. 2017 contract

VOLUMES: for the gold comex

ESTIMATED VOLUME TODAY: 288,095 CONTRACTS WHICH IS EXCELLENT

YESTERDAY’S confirmed volume was 580,815 which is HUMONGOUS

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for SEPTEMBER

 Sept. 6/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
nil oz
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
  7812.45  oz
243 kilobars
Brinks
No of oz served (contracts) today
 
0 notice(s)
nil OZ
No of oz to be served (notices)
835 contracts
(83500 oz)
Total monthly oz gold served (contracts) so far this month
49 notices
4900 oz
0.1524 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   5,369.1  oz
Today we HAD  1 kilobar transaction(s)/ 
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had 1 customer deposit(s):
 i) Into Brinks: 7812.45 oz
(243 kilobars)
total customer deposits; 7812.45  oz
We had 0 customer withdrawal(s)
total customer withdrawals; nil oz
 we had 0 adjustment(s)
For SEPT:

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 0  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the initial total number of gold ounces standing for the SEPTEMBER. contract month, we take the total number of notices filed so far for the month (49) x 100 oz or 4900 oz, to which we add the difference between the open interest for the front month of SEPT. (835 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 82,200  oz, the number of ounces standing in this active month of SEPT.
 
Thus the INITIAL standings for gold for the SEPTEMBER contract month:
No of notices served so far (49) x 100 oz  or ounces + {(835)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 88,400 oz standing in this  active delivery month of SEPTEMBER  (2.7496 tonnes)
We GAINED 2 contracts or 200 oz will stand and 0 EFP’s were issued for September which gives the long holder a fiat bonus plus a deliverable product on another exchange and that most likely will be London.
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Total dealer inventory 741,512.035 or 23.06 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,698,622.950 or 270.56 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 270.56 tonnes for a  loss of 32  tonnes over that period.  Since August 8/2016 we have lost 83 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 13 MONTHS  83 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE AUGUST DELIVERY MONTH
September initial standings
 Sept 6  2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,780,702.393 oz
CNT
Scotia
HSBC
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
 150,135.600 oz
 Scotia
No of oz served today (contracts)
160 CONTRACT(S)
(800,000 OZ)
No of oz to be served (notices)
1450 contracts
(7,250,000 oz)
Total monthly oz silver served (contracts) 3078 contracts (15,390,000 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 3,660,156.9 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil   oz
we had 0 dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
 i) Out of CNT:  610,761173 oz
ii) Out of Scotia:  1,149,884.930 oz
iii) Out of HSBC: 20,050.290  oz
TOTAL CUSTOMER WITHDRAWALS: 1,1780,702.393 oz
We had 0 Customer deposit(s):
***deposits into JPMorgan have stopped  again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: nil oz
 
 we had 1 adjustment(s)
i) out of CNT:  1,105,404.368 oz was adjusted out of the dealer and this landed into the customer account of CNT
The total number of notices filed today for the SEPTEMBER. contract month is represented by 160 contract(s) for 800,000 oz. To calculate the number of silver ounces that will stand for delivery in SEPTEMBER., we take the total number of notices filed for the month so far at 3078 x 5,000 oz  = 15,390,000 oz to which we add the difference between the open interest for the front month of SEPT (1610) and the number of notices served upon today (160) x 5000 oz equals the number of ounces standing.
 

 

.
 
Thus the INITIAL standings for silver for the SEPTEMBER contract month:  3078 (notices served so far)x 5000 oz  + OI for front month of SEPTEMBER(1610 ) -number of notices served upon today (160)x 5000 oz  equals  22,640,000 oz  of silver standing for the SEPTEMBER contract month. This is excellent for this active delivery month. Silver is being constantly demanded at the silver comex and we witness again the amount of silver demanded daily increase right from the get go.
 
WE HAD AN INCREASE OF 108 CONTRACTS OR AN ADDITIONAL 540,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS ACTIVE CONTRACT MONTH OF SEPTEMBER. THIS HAS BEEN THE 5th CONSECUTIVE MONTH THAT WE HAVE WITNESSED EITHER AN INCREASE (95% OF THE TIME) OR STANDING PAT (THE OTHER 5%).  WE HAVE NOT HAVE A DECREASE IN STANDING I.E. AS THEY DELIVERY MONTH PROCEEDS NOBODY WISHES AN EFP PRODUCT IN EXCHANGE FOR A DEPARTING LONG.
Last yr on the first day notice for the Sept silver 2016 contract we had 17.070 million oz stand for delivery.
By month end:  16.075 million oz/
 
Volumes: for silver comex
ESTIMATED VOLUME TODAY: 71,244 CONTRACTS WHICH IS  HUGE
YESTERDAY’s  confirmed volume was 132,778 contracts which is GIGANTIC
YESTERDAY’S CONFIRMED VOLUME OF 132778 CONTRACTS WHICH EQUATES TO 663 MILLION OZ OF SILVER OR 95% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.
 
Total dealer silver:  41.911 million (close to record low inventory  
Total number of dealer and customer silver:   214.831 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.7 percent to NAV usa funds and Negative 7.1% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.5%
Percentage of fund in silver:37.5%
cash .+0.0%( Sept 6/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.31% (Sept 6/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLSS TO -0.48% to NAV  (Sept 6/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.31%/Sprott physical gold trust is back into NEGATIVE/ territory at -0.48%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

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

(courtesy Sprott/GATA)

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

 Section: Daily Dispatches

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

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

SEPT 6/WE HAD ANOTHER DEPOSIT OF 5.91 TONNES INTO THE GLD/IN THE LAST TWO DAYS: 20.69 TONNES/INVENTORY RESTS AT 831.21 TONES

Sept 5/we had a huge deposit of 14.78 tonnes into the GLD/Inventory rests at 831.21 tonnes

Sept 1/ no change in gold inventory at the GLD/Inventory rests at 816.43 tonnes

AUGUST 31/no change in gold inventory at the GLD. Inventory rests at 816.43 tonnes

August 30/another deposit of 2.07 tonnes into the GLD inventory/inventory rests at 816.43 tonnes

August 29/a huge deposit of 9.16 tonnes of probable paper gold/inventory rests at 814.36 tonnes

AUGUST 28/a huge deposit f 5.91 tonnes of gold into GLD inventory/inventory rests at 805.20 tonnes

AUGUST 25/NO CHANGE IN GOLD INVENTORY/INVENTORY RESTS AT 799.29 TONNES

AUGUST 24/no change in gold inventory at the GLD/inventory rests at 799.29 tonnes

August 23/no change in gold inventory at the GLD/Inventory rests at 799.29 tonnes

August 22/no change in gold inventory at the GLD/Inventory rests at 799.29 tonnes/

AUGUST 21/this is good!! a huge deposit of gold into the GLD to the tune of 3.85 tonnes/Inventory rests at 799.29 tonnes

August 18/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 795.44 TONNES

August 17/late last night, a deposit of 4.43 tonnes of gold at the GLD/inventory rests at 795.44 tonnes/the bleeding of gold has stopped.

August 16/no change in gold inventory at the GLD. Inventory rests at 791.01 tonnes

August 15/no change in gold inventory at the GLD/inventory rests at 791.01 tonnes

August 14/this is good!!: a gain of 4.14 tonnes of gold into the GLD inventory/the removal of GLD gone to the east has now stopped probably because there is no physical to send/inventory rests at 791.01 tonnes

August 11/no change in gold inventory/Inventory rests at 786.87 tonnes

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Sept 6 /2017/ Inventory rests tonight at 837.21 tonnes
*IN LAST 226 TRADING DAYS: 103.89 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 163 TRADING DAYS: A NET  53.54 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  22.15 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

SEPT 6/STRANGE WITH A HUGE DEMAND FOR SILVER THROUGHOUT THE WORLD THESE DOORKNOBS WITHDRAW A HUGE 3.148 MILLION OZ OF SILVER FROM THE SLV/INVENTORY RESTS AT 328.033 MILLION OZ

Sept 5/2017: no change in silver inventory at the SLV/Inventory rests at 331.178 million oz/

Sept 1/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 331.178 MILLION OZ

AUGUST 31/STRANGE!! a huge withdrawal of 2.019 million oz with silver up today./INVENTORY RESTS AT 331.178 MILLION OZ

August 30/no change in silver inventory at the SLV/inventory rests at 333.178 million oz

August 29/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

AUGUST 28/no change in silver inventory at the SLV/Inventory rests at 333.178 million oz/

AUGUST 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

AUGUST 24/A HUGE WITHDRAWAL OF 1.229 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

August 23/no change in silver inventory at the SLV/Inventory rests at 334.407 million oz

August 22/no change in silver inventory at the SLV/inventory rests at 334.407 million oz.

AUGUST 21/no change in silver inventory/inventory rests at 334.407 million oz/

August 18/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REST AT 334.407 MILLION OZ

August 17/A WITHDRAWAL OF 1.418 MILLION OZ LEAVES THE VAULTS OF THE SLV (WITH SILVER UP 25 CENTS YESTERDAY?)/INVENTORY RESTS AT 334.407 MILLION OZ

August 16/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz/

August 15/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz.

August 14./no change in silver inventory/inventory rests at 335.825 million/

August 11/no change in silver inventory tonight.  However we lost 3,781 million oz from Tuesday through Thursday. Inventory rests at 335.825 million oz/

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

Sept 6.2017:

Inventory 328.033  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.43%
  • 12 Month MM GOFO
    + 1.53%
  • 30 day trend

end

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 

Bitcoin Falls 20% as Mobius and Chinese Regulators Warn

– Bitcoin falls 20% as Mobius and Chinese regulators warn
– “Cryptocurrencies are beginning to get out of control” – warns respected investor Mark Mobius
– Mobius believes governments will begin to clamp down on cryptocurrencies sparking rush to gold

– Yesterday China’s PBOC ruled Initial Coin Offerings (ICOs) are illegal and all related activity to halt
– China is home to majority of bitcoin miners
– Paris Hilton latest celebrity to support an ICO
– Gold’s return of 16% YTD look ‘dull’ or ‘stable’?

– Bitcoin fell 23%, now down 16% from $5,000 high

Editor: Mark O’Byrne

Bitcoin in USD 1 Year (Coindesk)

An ICO – “unregulated issuances of cryptocoins where investors can raise money in bitcoin or other [cryptocurrencies]”
Financial Times

Just as you thought you were getting your head around bitcoin and all the other hundreds of cryptocurrencies out there, the financial headlines are screaming at you about something called initial coin offerings or ICOs. Now you don’t really know what’s going on.

The latest news in the crypto world is that the People’s Bank of China (PBOC) announced yesterday that ICOs (Initial Coin Offering) are illegal and that all related fundraising activity should cease immediately.

But what is an ICO?

An ICO is like an IPO but kind of in reverse.  It is a tool that trades future cryptocoins in exchange for cryptocurrencies of immediate, liquid value. You exchange bitcoin or ethereum with the underlying company in exchange for a new token, say ‘ISawYouComing Coin’

A more formal explanation is offered by Travis Scher:

An ICO is a crowdsale of cryptographically secured blockchain tokens to fund the development and operation of one of three types of blockchain projects:

A platform-layer blockchain (such as ethereum or Lisk)

An organization that operates on a blockchain (known as a decentralized autonomous organization (‘DAO‘), or a centrally organized distributed entity (‘CODE‘)

A decentralized application (‘dapp’) that runs on a platform-layer blockchain. Tokens that fund these are sometimes known as appcoins. 

So far in 2017 $1.366 billion has been raised in ICOs. In global market terms they are still relatively small. But when you consider that US startups raised just $11 billion through IPOs in the second-quarter of this year then you can appreciate the rapid growth in the space.

The largest ICO so far this year has been by Tezos to fund its new blockchain tech which is still alpha testing. They raised $232 million worth of bitcoin (BTC) and ether (ETH) coins.

To be clear, to partake in an ICO does not automatically grant you ownership or shareholder rights to the underlying company, as would happen in an IPO. Instead you are exchanging money for a token that may or may not succeed in the future.

Given how many thousands of cryptos are currently competing with one another this is a real punt. Investors have to make sure they spend a huge amount of time researching the underlying blockchain, the market, the team etc. You should only go for an ICO if you have a very significant appetite for risk, no concerns about losing your capital and love a good flutter.

Sound little too new and Wild West? You’re not the only one who thinks so and there is plenty of evidence to back up your concerns.

There is no regulation ensuring that those offering the ICO do so in a responsible manner as per other fundraising activities.

A quick search of ICO fraud and you will be confronted with many articles (all from 2017) reporting on various ICO scams. Plus Paris Hilton has just jumped in on one…not to cast aspersions but, but, but…it is …

So what’s the deal? A $2bn+ fundraising market and no regulation?

In a brilliant report by Smith+Crown it is explained how the usual rules of fundraising can be avoided by ICOs:

Most ICOs today are marketed as ‘software presale tokens’ akin to giving early access to an online game to early supporters. In order to try to avoid legal requirements that come with any form of a security sale, many ICOs today use language such as ‘crowdsale’ or ‘donation’ instead of ICOs.

Don’t forget the bitcoin and cryptocurrency industry is also relatively unregulated. By allowing it to grow organically and without various regulatory restrictions we have seen major shakeouts in the industry and it has forced its members to pull up their socks and seek out regulation.

However ICOs are now at a point where they are no doubt attracting unsophisticated investors. I have met many people who are worried they have missed out ‘on the bitcoin thing’ and believe that by getting in on an ICO they might be getting ahead of the game.

These same people tend to know little about blockchain instead stating that it is ‘the next big thing’ and just have major FOMO.

Without regulation there is little protecting newbie investors.

What’s the difference between an ICO scam and all the other’s we’ve seen before now? Matt Levine of Bloomberg explains it perfectly:

‘an ICO scam is subtly different from a gold-mining scam in that, with an ICO scam, you can do a scam ICO. You don’t have to get a publicly listed company and pump and dump its stock: You can just say “I’m doing an ICO, here’s the address to send money,” and people will send you money if you have scammed them correctly. Lord knows, it happens often enough. This does not work as well with gold: You can’t say “I found some gold, please buy some,” because buyers will want to see the gold. (Well, there are gold scams like that, but they seem harder to pull off.) With an ICO you may have to write a white paper explaining your token, but the quality bar for that is low, certainly lower than faking up some bars of gold. Lower even, I would think, than faking up a public company, making false filings with the SEC, doing wash trades to pump the stock higher, and then dumping it at the right moment on unsuspecting buyers.’

The government clampdown

But this may now be about to come to an end. Seven-China based regulators took sweeping action against ICOs, putting both the practice and the future of the underlying tokens at risk.

A joint statement released by the regulators explained:

[ICO financing] is a kind of non-approved illegal open fund raising behavior, suspected of illegal sale tokens, illegal securities issuance and illegal fund-raising, financial fraud, pyramid schemes and other criminal activities.

Subsequent statements have ordered that all fundraising activity cease and all completed ICOs be refunded.

China is not the world’s biggest coin offering market but does account for 25% of the capital raised in the last year. There are 43 ICO platforms in China. By mid-July this year these platforms had raised 2.6 billion yuan ($399 million) from 105,000 investors.

The China decision is not totally unexpected and comes on the back of both the US and Canadian regulators voicing similar concerns about ICOs.

In the US the SEC has mentioned these potential ‘pump and dump schemes’ whilst the Canadians have suggested that ‘most ICOs need oversight.’ Both have referred to the tokens as potentially being ‘unlicensed securities.’

Just last week the SEC suspended trading of shares in four companies that had been talking up ICO-related activity. The four firms (First Bitcoin Capital Corp., CIAO Group, Strategic Global, and Sunshine Capital).

None of the four firms are currently big deals by any means but it didn’t stop them from announcing as such. CIAO Group, for example  announced a”$530 Billion [!!!] Blockchain and Cryptocurrency Target Market Collaboration” this summer.

A total scam

Not everyone running an ICO is out to scam you. One of the dangers of the press coverage is that its getting to be a little like the initial coverage of bitcoin, i.e. if you’re using it you must be a crook.

This is certainly not the case for all entrepreneurs offering an ICO. ICOs can be an easy way to raise money.  Even the SEC explained that not all ICOs are not intrinsically bad, stating that they “may provide fair and lawful investment opportunities.”

Anyone who has run a start-up knows how tough and time-consuming it is to raise capital. Should the ICO do well then the broad distribution of the token can provide some pretty powerful momentum for your business.

It is also an interesting way for the bitcoin millionaires to use their new-found wealth. In the same way we see Silicon Valley entrepreneurs re-invest their wealth into startups, we see a similar effect taking place in the crypto world.

However, they are unregulated with a serious lack of control regarding valuation, marketing and ethics.

Worse than the dot com bubble

We have seen a number of bubbles over the years, people still speak of the dot com bubble. Then of course there was the global real estate bubble that helped trigger this whole financial mess.

With both situations inexperienced investors thought they had found quick and easy ways to make money. This in itself isn’t how investing is supposed to work.

A recent Sovereign Man blog explained this well:

There’s a token issued by Stratis, for example, that is up 101,168% since its ICO last summer. The NXT token is up 672,989%.

Those are not type-o’s.

There’s another token that’s actually called “Fuck” which is up 370% in the last 24 hours.

The returns are absurd… especially considering the assets are priced in Ether or Bitcoin, which have also soared to all-time highs.

So on top of a 1,000% return in Bitcoin, ICO investors have also made a 100,000% return in the token.

But I’m hearing exactly the same cackling that I heard from the real estate bubble days more than a decade ago.

– It’s soooo easy to make money in ICOs. 
– It’s a foregone conclusion that the tokens will go up in value.

Sorry, but it just doesn’t compute.

If the tokens represent ownership in a business, then the only thing that matters is whether or not the underlying business performs well.

Does the company have a compelling long-term strategic plan?

More importantly– are the managers successfully implementing the plan and achieving milestones?

Is the company on a path to financial sustainability?

Nobody seems to be paying attention to these details. They just buy tokens with the expectation that the price will rise.

And even if a business performs well, it’s ridiculous to think that a startup company can be worth 100,000% more in a year. Or nearly 700,000% more in a couple of years.

To put these numbers in context, Peter Thiel invested $500,000 in Facebook back in 2004 as the company’s first big investor. In 2012 he sold most of it for $1 billion.

That’s a return of 200,000% in eight years… pretty tame by ICO standards.

Does gold look dull or just stable?

Earlier this year the bitcoin price surpassed that of gold for the first time. When it had previously reached parity with the precious metal it had subsequently experienced a fall back in price. Since then it has slowly but with major volatility recovered in price and reached a high of $5,000 last Saturday (Sept 2).

Bitcoin’s stellar performance has prompted some respected investors to suggest that gold will be replaced by either bitcoin or another cryptocurrency.

Many of the arguments for this surround the potential convenience of bitcoin plus the returns that investors have experienced over this period of time. Some have dubbed gold as ‘dull’ in comparison.

The problem is that one is bought by and trusted by central banks, the other isn’t. Not only that but the infrastructure forming around bitcoin and its contemporaries is making regulators increasingly nervous rather than reassured.

When governments get nervous about an industry it’s a bad sign for those hoping a cryptocurrency will succeed. In order to succeed a cryptocurrency needs a strong infrastructure surrounding it.

Legendary investor Mark Mobius believes this is good news for gold. He told Bloomberg:

“Cryptocurrencies are beginning to get out of control and it’s going to attract the attention of governments around the world,” Mobius said. “You’re going to get a reversion back to gold because people are going to wonder, can I really trust these currencies?”

Currently it isn’t so much the cryptocurrencies that are getting out of control but instead part of the infrastructure. However this in itself get people nervous and wondering if they can trust a crypto as a store of value and medium of exchange.

“People need a means of exchange and they need to trust that,” said Mobius, who was interviewed before China’s announcement. “Right now the trust is good — with bitcoin people are buying and selling it, they think it’s a reasonable market — but there will come a day when government crackdowns come in and you begin to see the currency come down.”

That day is here now.

News and Commentary

Gold eases from near 1-year high as dollar steadies (Reuters)

Safe Havens Maintain Gains as Korea Threats Linger (Bloomberg)

Gold Prices Jump On Fresh North Korean Fears, Long Positions Increase Further (Economics Calendar)

Perth Mint Silver sales slump to one-year low; Gold sales down 2.3% (Scrap Register)

China’s virtual coin fundraising ban just the start of tighter regulations (Reuters)

Source: Zerohedge.com

We’re addicted to debt and headed for a crash. It could be worse than 2007 (The Guardian)

The Return of Meltdown Risk? (Handelsblatt)

The Decline and Fall of America (In Numbers) (Medium.com)

Ethereum, Bitcoin Crash After China Declares Initial Coin Offerings Illegal (Zerohedge)

Mobius Foresees Cryptocurrency Crackdown Sparking a Rush to Gold (Bloomberg)

Gold Prices (LBMA AM)

05 Sep: USD 1,331.15, GBP 1,029.51 & EUR 1,120.43 per ounce
04 Sep: USD 1,334.60, GBP 1,030.98 & EUR 1,120.53 per ounce
01 Sep: USD 1,318.40, GBP 1,020.18 & EUR 1,107.98 per ounce
31 Aug: USD 1,305.80, GBP 1,013.17 & EUR 1,098.31 per ounce
30 Aug: USD 1,310.60, GBP 1,014.93 & EUR 1,096.71 per ounce
29 Aug: USD 1,323.40, GBP 1,020.34 & EUR 1,097.36 per ounce
25 Aug: USD 1,287.05, GBP 1,003.90 & EUR 1,090.90 per ounce

Silver Prices (LBMA)

05 Sep: USD 17.88, GBP 13.80 & EUR 15.03 per ounce
04 Sep: USD 17.80, GBP 13.75 & EUR 14.95 per ounce
01 Sep: USD 17.50, GBP 13.53 & EUR 14.69 per ounce
31 Aug: USD 17.34, GBP 13.47 & EUR 14.62 per ounce
30 Aug: USD 17.44, GBP 13.49 & EUR 14.60 per ounce
29 Aug: USD 17.60, GBP 13.59 & EUR 14.62 per ounce
25 Aug: USD 17.02, GBP 13.26 & EUR 14.40 per ounce


Recent Market Updates

– Gold Surges To $1338 as U.S. Warns of ‘Massive’ Military Response
– 4 Reasons Why “Gold Has Entered A New Bull Market” – Schroders
– Gold Reset To $10,000/oz Coming “By January 1, 2018” – Rickards
– Gold Surges 2.6% After Jackson Hole and N. Korean Missile
– Diversify Into Gold On U.S. “Political Instability” Advise Blackrock
– Trump Presidency Is Over – Bannon Is Right
– The Truth About Bundesbank Repatriation of Gold From U.S.
– Cyberwar Risk – Was U.S. Navy Victim Of Hacking?
– Global Financial Crisis 10 Years On: Gold Rises 100% from $650 to $1,300
– Mnuchin: I Assume Fort Knox Gold Is Still There
– Buffett Sees Market Crash Coming? His Cash Speaks Louder Than Words
– Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High
– Must See Charts – Gold Hedges USD Devaluation, Rise in Oil, Food and Cost of Living Since Nixon Ended Gold Standard

END

I brought this to your attention yesterday.  Lael Brainard has the ear of the Fed Chairman Yellen and thus we must be cognizant of what she says.  She is now urging the central bank to pretend that there is no inflation and thus do not expect rate hikes.

(courtesy GATA)

Fed governor urges central bank to pretend there’s no inflation

 Section: 

Fed Should Be Cautious in Face of Weak U.S. Inflation, Fed Governor Brainard Says

By Jonathan Spicer and Stephanie Kelly
Reuters
Tuesay, September 5, 2017

NEW YORK — Inflation is falling “well short” of target so the Federal Reserve should be cautious about raising interest rates any further until it is confident that prices are headed higher, an influential Fed policymaker said today.

In a dovish speech in the face of months of weak inflation readings, Fed Governor Lael Brainard said the U.S. central bank should go so far as to make clear it is comfortable pushing prices modestly above the Fed’s 2-percent target.

Brainard, a permanent voter on the Fed’s monetary policy who has in the past convinced colleagues to delay tightening, seized on a core price reading that has dipped to 1.4 percent and has remained below a 2-percent target for five years.

“We should be cautious about tightening policy further until we are confident inflation is on track to achieve our target,” Brainard said in a speech in New York. …

… For the remainder of the report:

http://www.reuters.com/article/us-usa-fed-brainard/fed-should-be-cautiou.

END

this one is tiny when you compare the fraud committed by the Bullin banks

(courtesy CFTC)

CFTC Charges Monex Deposit Company, its Affiliates, and their Principals in Multi-Million Dollar Fraudulent Precious Metals Scheme

CFTC alleges that defendants deceived thousands of retail customers who lost hundreds of millions of dollars in connection with illegal, off-exchange leveraged precious metals transactions

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced that on September 6, 2017, it filed a civil injunctive enforcement action in the U.S. District Court for the Northern District of Illinois against three affiliated companies located in Newport Beach, California, Monex Deposit Company, Monex Credit Company, and Newport Services Corporation (collectively, Monex), and Monex’s principals Louis Carabini and Michael Carabini. The CFTC Complaint charges the Defendants, among other claims, with defrauding thousands of retail customers nationwide out of hundreds of millions of dollars, while executing thousands of illegal, off-exchange leveraged commodity transactions.

James McDonald, the CFTC’s Director of Enforcement stated: “Today, we announce the filing of one of the largest precious metals fraud cases in the history of the Commission. As alleged, the Defendants defrauded thousands of retail customers—many of whom are elderly—out of hundreds of millions of dollars as part of a multi-year scheme. Fraud in our markets, like that alleged here, undermines confidence, reduces transparency, and harms competition…

http://www.cftc.gov/PressRoom/PressReleases/pr7609- 17#PrRoWMBL

 

 

-END-

 

Craig Hemke on the massive amounts of “paper” gold entering GLD

(courtesy Craig Hemke/TFMetals/Sprott Asset Management)

A Massive Surge In GLD “Inventory”

 

A Massive Surge In GLD “Inventory”

Posted with permission and written by Craig Hemke, TF Metals Report 

 

Yesterday saw the 2nd-largest one day surge in GLD “inventory” in the past five years. What does this signal, if anything at all?

I think most everyone here knows how I feel about the GLD. It’s a scam. It’s a sham and it’s a fraud. Oh sure, there’s almost certainly some gold held in the HSBC vaults but how much is truly, 100% allocated to just the GLD? Recall the whole charade from back in 2011 when Bob Pissonme of CNBS was allegedly driven in circles for hours before being allowed into the super-secret vaults that house the GLD’s gold: http://www.silverdoctors.com/gold/gold-news/ned-naylor-leyland-reveals-actual-owner-of-bob-pisanis-gld-gold-bar/

Meh, whatever. There’s no sense in re-litigating this nonsense today. What is curious sometimes is the timing of the the Authorised Participant (Bullion Bank) alleged additions and withdrawals. Most recently we noted a stretch of 16 consecutive withdrawals over the period from June 26 through August 7. The total amount of “gold” withdrawn from “inventory” over that time was 66.81 metric tonnes.

However, since August 7, the GLD has seen seven consecutive additions to inventory. The first six, from August 14 to August 30, were for a total of 29.56 metric tonnes. This is astonishing in its own right as it’s difficult to imagine this gold just laying around, waiting for HSBC to pick it up when needed. And then yesterday, we got the coup de grace…an incredible 23.65 metric tonnes were allegedly added yesterday alone.

How much gold is 23.65 metric tonnes? That’s about 760,000 troy ounces.

And is that a lot? Well, there are about 400 troy ounces in every London Good Delivery Bar so 23.65 metric tonnes equates to about 1,900 of these babies:

If you stack 192 of them to a pallet, it also means you’re looking at 10 pallets as shown below:

So, I’m sure this is all totally on the up-and-up and honest. Remember, the custodian for the GLD gold is HSBC and they have a stellar and impeccable reputation: http://www.corp-research.org/HSBC

Again…whatever. This is all old news. The only reason I bring this up is to remind you of the last two times the GLD saw such a massive addition to “inventory”.

Recall the heady days of June and July 2016. The Brexit vote had just shocked the financial world. Negative rates abounded and even the 10-year US treasury note traded at a yield of just 1.50%. Comex Digital Gold began the year near $1100 but had risen to $1300 and beyond.

On June 24, 2016…the day after the Brexit vote…the GLD “inventory” surged by 18.41 mts. “Inventory” continued to rise into early July and then, with the largest one day surge that we have on record since 2012, “inventory” jumped 28.81 metric tonnes on July 5. Hmmmm….July 5. What else happened on July 5? That was the very day of the 2017 price peak near $1375! How about that?

Cause and effect? Effect and cause? Simple coincidence? Maybe there’s no connection at all as the APs (Bullion
Banks) can simply stuff the GLD “inventory” with as many delivery receipts and promissory notes as they deem necessary to give the appearance of propriety. But then again, maybe not.

However, I don’t want to leave you with the impression that this HAS TO BE a bad sign and signal of a short-term price top. According to our records over the past five years, there was one other massive GLD inflow. It was for 18.74 metric tonnes and it came in on December 18, 2015. And where was price then? Near $1060 and the absolute bottom of the 2012-2015 bear market. From that point, price soared nearly 30% in 6 months and the GLD “inventory” rose with it from 630.17 mts on December 17, 2015 to that July 5, 2016 peak noted above at 982.72 mts.

At any rate, we hope that by now you realize that, in the end, anyone holding anything but true physical gold is going to be left holding the bag when this entire paper charade system comes crashing down. Just yesterday, even the criminals at TungstenmanSachs admitted as such. Be sure to see this link though the money shot is pasted below: http://www.zerohedge.com/news/2017-09-05/using-gold-hedge-korea-nuclear-war-risk-how-do-it-according-goldman

Today is a day of relative market calm before the dual storms of Irma and Kim rear their ugly heads again later this week. Use this time to prepare wisely and accordingly.

Questions or comments about this article? Leave your thoughts HERE.

 

A Massive Surge In GLD “Inventory”

Posted with permission and written by Craig Hemke, TF Metals Report 

 

 

Com

 



Your early WEDNESDAY 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 MUCH STRONGER 6.5250 (REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES SLIGHTLY WEAKER TO ONSHORE AT   6.5374/ Shanghai bourse CLOSED UP 1.07 POINTS OR 0.03%  / HANG SANG CLOSED DOWN 127.59 POINTS OR 0.46% 

2. Nikkei closed DOWN 27.84 POINTS OR 0.14%    /USA: YEN RISES TO 108.83

3. Europe stocks OPENED RED     ( /USA dollar index FALLS TO  92.16/Euro UP to 1.1937

3b Japan 10 year bond yield: RISES  TO  -+.012%/ 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::  48.83 and Brent: 53.81

3f Gold UP/Yen DOWN (RARE)

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.351%/Italian 10 yr bond yield DOWN  to 2.01%    

3j Greek 10 year bond yield FALLS TO  : 5.5110???  

3k Gold at $1338.25  silver at:17.95 (8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 8/100 in  roubles/dollar) 57.44-

3m oil into the 48 dollar handle for WTI and 53 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 FAIR SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 108.86 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  0.9542 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1389 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 FALLING to  +0.351%

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 2.077% early this morning. Thirty year rate  at 2.6934% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

6. USA CASH BALANCES ON HAND: $55 BILLION

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

Global Stocks Slide As Geopolitical Headwinds, Hurricanes Grow

Global risk sentiment remained gloomy coming into Wednesday, with global European and Asian stocks sliding on growing concerns about North Korea and political inaction in the US, another hurricane bearing down on the US and the American debt ceiling looming. Industrial metals dropped as the latest Chinese commodity bubble appears to have peaked. Shortly before 6am a sharp risk-off move across asset classes was blamed on an erroneous North Korea earthquake tweet by the British Geological Survey.

In European markets, almost every sector of the Stoxx Europe 600 Index retreated after equities slid from Hong Kong to Sydney as traders prepared for potential news of intercontinental ballistic missile launch by Pyongyang. U.S. stock futures fluctuated, and the dollar edged lower with Treasuries a day after dovish comments from Federal Reserve officials sparked a bond surge. The Bloomberg Commodity Index retreated from the highest since April even as crude oil extended a rally.

“The 10 basis point fall in Treasury yields is clearly not something the European market can ignore,” said Mizuho rates strategist Antoine Bouvet. “The market’s also taking a bit of view on what the U.S. Federal Reserve will do next.”

Asia was also mostly in the red, with the MSCI Asia ex Japan index falling 0.5% and Tokyo’s Nikkei hitting a four-month low closing down 0.1%. South Korea’s KOSPI ended down 0.3% at a near four-week low as did Australia’s ASX. The Hang Seng Index declined 0.5% in Hong Kong on low volumes and China’s equity benchmarks were also lower.

According to Bloomberg the case for a continued risk-off tone was supported by a lack of consensus among the U.S., Russia and China on how to pressure Kim Jong Un to abandon his nuclear ambitions. Russian President Vladimir Putin rejected U.S. calls for more sanctions, echoing China’s resistance to more punitive measures. Still, despite the sharply lower “risk off” move in yields, equities refuse to budge and remain just shy of all time highs.

The euro rose for a third day, hitting 1.1950 again before paring gains, and shrugged off an unexpected decline in German factory orders which unexpectedly fell for the first time since April, declining 0.7% MoM, missing expectations of a 0.2% increase.

The euro was also stable ahead of the ECB announcement due in just over 24 hours: tomorrow Mario Draghi is expected to give more clarity on winding down the European Central Bank’s bond-buying program when he speaks after a policy decision on Thursday, even as he looks for ways to keep the common currency below 1.20.

Speaking of the Euro, in currency trading, the dollar was on the backfoot as geopolitical concerns continued to support the yen; as noted previously a delayed Twitter posting from the British Geological Survey on a North Korea earthquake caused a brief spike in the yen before investors realized it was a reference to last week’s nuclear tests. The Canadian dollar was steady ahead of BOC’s review, with economists forecasting policy makers to be on hold. The Bloomberg Dollar Spot Index held its 0.3 percent loss from Tuesday after Fed Governor Lael Brainard said the U.S. central bank needs to pay careful attention to underlying inflation before raising interest rates again, while Minneapolis Fed President Neel Kashkari said rate increases may be “doing real harm” to the economy.

“The broad-based theme appears to be justifiable caution despite the USD weakness stemming from dovish remarks from Brainard building on U.S. debt ceiling risks that have plunged UST yields, and correspondingly the USD,” said Vishu Varathan, Singapore-based head of economics and strategy at Mizuho Bank Ltd. “But the KRW is the dead give-away that risk aversion appears to be multi-faceted, and not a creature confined to the USD.”

In Asia, most emerging currencies (with the notable exception of the “safe trade” Yen) fell as concern over any potential fresh provocations from North Korea dominated sentiment, offsetting the impact of dovish comments from Federal Reserve officials. The won led losses, while Malaysia’s ringgit bucked the trend after oil prices jumped Tuesday.

The MSCI EM Asia Index of shares fell while bonds mostly rose. Among the Group-of-10 currencies, the yen rose against the dollar for a third day, while the Aussie erased gains after second-quarter economic growth missed forecasts.

U.S. Treasuries fell after 10-year yields tumbled to the lowest this year; Hurricane Irma was on a path that may bring it ashore in Florida and destroy so much property that damages may surpass Hurricane Katrina. The yield on 10-year Treasuries climbed two basis points to 2.08%.  Germany’s 10-year yield also gained two basis points to 0.35% while Britain’s 10-year gilt dipped less than one basis point to 1.026%.

There was some good news for oil bulls with Brent and WTI continuing their recent rally with futures in New York topping $49/bbl for 1st time since Aug 14. Brent also extends gains, hitting day-high $54/bbl, highest since May 25. Brent volume spiked to day-highs at 10:55am London time as prices broke through Tuesday highs.  Gold gained less than 0.05 percent to $1,340.08 an ounce.  The Bloomberg Commodity Index declined 0.1 percent to 85.29, the first retreat in a week.

Looking ahead, we get MBA mortgage applications, trade balance, Markit services PMI and ISM non-manufacture compositethe, while the Federal Reserve releases its Beige Book. Hurricane Irma, a strong Category 5 storm, could make landfall in Florida as early as this weekend.

Bulletin Headline Summary from RanSquawk

  • Old earthquake reports shake markets
  • AUD/USD initially reclaimed 0.8000 before moving back below the level following domestic Q2 GDP numbers
  • Looking ahead, highlights include US ISM Non-Manufacturing PMI, BoC rate decision and APIs

Market Snapshot

  • S&P 500 futures up 0.01% to 2,460.00
  • MSCI Asia down 0.2% to 160.22
  • MSCI Asia ex Japan 0.4% to 529.28
  • Nikkei down 0.1% to 19,357.97
  • Topix up 0.08% to 1,592.00
  • Hang Seng Index down 0.5% to 27,613.76
  • Shanghai Composite up 0.03% to 3,385.39
  • Sensex down 0.4% to 31,697.02
  • Australia S&P/ASX 200 down 0.3% to 5,689.73
  • Kospi down 0.3% to 2,319.82
  • STOXX Europe 600 down 0.4% to 372.16
  • German 10Y yield rose 0.7 bps to 0.345%
  • Euro up 0.3% to $1.1949
  • Italian 10Y yield fell 3.9 bps to 1.707%
  • Spanish 10Y yield rose 2.4 bps to 1.558%
  • Brent Futures up 0.1% to $53.44/bbl
  • Gold spot down 0.09% to $1,338.49
  • U.S. Dollar Index down 0.1% to 92.12

Top Overnight News

  • Russian President Vladimir Putin again rejected U.S. calls for new sanctions against North Korea after its sixth and most powerful nuclear test, echoing China’s resistance to more punitive measures to pressure Pyongyang into abandoning its atomic and missile programs
  • North Korea: Putin and South Korean President pledge to continue diplomatic efforts
  • Fed’s Kaplan: repeats Fed should be patient on rates, may still hike in 2017 but must see how inflation plays out
  • Politico: Trump is continuing to push for lowering the corporate tax rate to 15% despite opposition within his own party, according to people familiar
  • Hurricane Irma: classed as extremely dangerous major hurricane; increasing chance of direct impacts on Florida, according to the NHC
  • German Aug. Factory Orders m/m: -0.7% vs +0.2% est.
  • Merkel bloc lead grows as SPD loses support in Forsa poll
  • The ECB will raise its 2017 GDP and possibly its 2018 GDP forecasts when it releases new macroeconomic projections on Sept. 7, according to a Bloomberg survey
  • German factory orders fell in July ahead of general elections; adjusted for seasonal swings and inflation, declined 0.7% in July after a revised gain of 0.9% in June
  • President Donald Trump’s decision to end an Obama-era program preventing the deportation of immigrants illegally brought to the U.S. as children risks a deep wedge between the Republican Party’s leaders and its conservative base ahead of next year’s congressional elections
  • U.K. faces ‘break it, own it’ problem on Brexit, Irish say

Asia stock indices traded with a negative tone following the losses on Wall St. where markets reacted to the North Korean concerns, while financials led the selling amid declining yields and with insurers reeling from Harvey and the approaching Irma. This pressured ASX 200 (-0.4%) and Nikkei 225 (-0.1%), as financials in the region mirrored the underperformance in their US counterparts, while a slight miss in Australian GDP added to the sombre tone. Hang Seng (-1.0%) and Shanghai Comp. (-0.3%) also conformed to the downbeat sentiment with participants unimpressed by the PBoC’s resumption of open market operations from a 4-day hiatus, as this still resulted to a net daily drain of CNY 120bln. Finally, 10yr JGBs were marginally high with slight support seen from the risk averse tone, while the BoJ were also in the market although this was for a relatively reserved amount. PBoC injected CNY 20bln via 7-day reverse repos and CNY 20bln via 28-day reverse repos, for a net daily drain of CNY 120bln vs. Prev. CNY 70bln drain. PBoC set CNY mid-point at 6.5311 (Prev. 6.5370)

Top Asian News

  • North Korea Threat Hits Hong Kong Stocks Even Harder Than Seoul
  • Onshore Chinese Stocks Burst Into Life as Demand Surges
  • Apple Refusal to Approve India Spam App Antagonizes Regulator
  • Fingerprint Drops; UBS Cuts to Sell, Notes Chinese OEM Risk
  • Noble Default-Swap Verdict in Play as Test of ISDA System
  • Japan Equity Movers: Recruit, Optex, Iriso, Toshiba, CyberAgent

European bourses have been impacted by the risk off tone from American and Asian trade with 9/10 Stoxx 600 sectors trading
in the red. Much anticipation is set to be on tomorrow’s ECB decision, with range bound trade evident across EU markets. Stock
specific news sees UK homebuilders underperforming, with Barratt Developments down 3.4%, as some analysts point towards the
company’s poor outlook. Elsewhere sees insurance names underperform amid the hurricane concerns growing across the US. Consolidation has been the theme as we approach Draghi tomorrow; with bunds interested in a gap fill, trading around
yesterday’s low. The lack of direction shows in EZ/UK 10y yields, largely unchanged, as gilts await any French Brexit news or any
further North Korean developments.
The Spanish German spread is wider by 2.20 bps, ahead of supply tomorrow, supported by The Catalan Speaker’s Committee
voting 5-2 in favour of debating the referendum bill in Catalan parliament.
Germany sold EUR 2.436bln vs. Exp. EUR 3bln 0.0% 2022 Bobl with a b/c 1.6 (Prev. 1.0), average yield -0.36% (Prev. -0.26%)
and retention 18.8% (Prev. 24.5%)

Top European News

  • German Factory Orders Fell in July Ahead of General Elections
  • Hungary, Slovakia Lose Refugee Legal Case in Deepening EU Rift
  • Iceland Plans to Shut the Door on Chinese Investors, Again
  • Nova Development in London Voted Britain’s Worst New Building
  • Shell Seeks to Boost LNG Demand in Order to Build New Plants
  • Panmure Gordon Hires Ex-UBS Research Boss to Prepare For MiFID
  • Deutsche Bank CEO Highlights Asset Bubbles on Excess Cheap Money

In currencies, the Australian GDP figure overnight saw AUD/USD fall back below the 0.8 handle that was claimed in trade yesterday.
AUD/NZD also follows the recent Aussie weakness and looks back toward the overnight low; with the previous resistance around
1.1 likely to be a target for bears.
USD/JPY has been the pair to watch, as Japanese buying interest has been touted around the 108.50 level, which has held
throughout the session. Further support is likely around these levels with YTD lows ahead of 108.
Australian GDP (Q2) Q/Q 0.8% vs. Exp. 0.9% (Prev. 0.3%). (Newswires)
Australian GDP (Q2) Y/Y 1.8% vs. Exp. 1.9% (Prev. 1.7%)

In commodities, the hurricane concerns in the US have led to the continued bid in oil markets, as WTI looks toward USD 49.00/bbl. Oil
trade in Asia has led to snapping up crude cargoes from the US after the closures, with possibly more closures inevitable.
Russia Energy Minister Novak stated OPEC and Russia may extend output cap deal if needed, while he also sees oil prices in
2018 at range between USD 45-55/bbl. (Newswires)
Motiva’s Port Arthur (603K BPD) is expected to initially return to 40% production by the end of this weekend. (Newswires)
Libya’s Sharara oil field re-opens after a 2-week pipeline blockage, according to sources. (Newswires)

Looking at the day ahead, we get the ISM
non-manufacturing PMI, the Fed’s Beige book, trade balance and final
Markit services and composite PMIs are also due. Away from the data, UK
PM Theresa May will face opposition leader Jeremy Corbyn in Parliament
and the IMF’s managing director Lagarde will speak at a conference in
Korea. Elsewhere, President Trump will also meet House Speaker Ryan,
Senate Leader McConnell and a few others to discuss the upcoming debt
ceiling.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -2.3%
  • 8:30am: Trade Balance, est. $44.7b deficit, prior $43.6b deficit
  • 9:45am: Markit US Services PMI, est. 56.9, prior 56.9; US Composite PMI, prior 56
  • 10am: ISM Non-Manf. Composite, est. 55.6, prior 53.9
  • 2pm: U.S. Federal Reserve Releases Beige Book

DB’s Jim Reid concludes the overnight wrap

Tough to know where to start this morning following a surprisingly frantic day for markets yesterday. To be honest we’re struggling to pinpoint the root cause of the price action which saw 10y Treasury yields plummet back towards levels last seen on 9th November 2016 and flirt with a 1% handle and Gold rally to the highest since September 2016.

Instead it feels like you could take your pick from any combination of the following catalysts; (1) the latest escalation in rhetoric over the North Korea nuclear test, (2) some fairly dovish Fedspeak, (3) ongoing concerns about the looming debt ceiling, (4) the decision to end the DACA program, and (5) the threat of Hurricane Irma which has resulted in Florida announcing a state of emergency and adding to recent adverse weather events. That’s not to exclude Brexit, NAFTA discussions and the ongoing Trump-Russia investigation as others bubbling away in the background at the moment.

Before we look at some of those in more detail, in terms of markets and following the Labour Day holiday on Monday, the US initially walked back in and the early move was a reasonably modest risk-off one and certainly nothing that appeared out of the ordinary. However things quickly escalated from the late afternoon. At first it was the big rally for US Treasuries which stole the limelight. 10y Treasuries touched a new YTD low of 2.053% before ending at 2.060% and down 10.7bps on the day. That was strongest session since March 15th. 5y and 30y Treasuries were both 10bps lower, while the 2y10y spread hit just 77bps and the lowest since August 2016. Fed rate hike expectations were hit and December hike odds edged below 30%. Meanwhile Gold rallied +0.44% to $1339.7/oz and the usual safe havens like the Yen (+0.81%) and Swiss Franc (+0.30%) were bid up. In contrast, the S&P 500 (-0.76%) fell by the most since mid-August and ended a six-day winning streak. The Dow also closed -1.07% and the Nasdaq -0.93% while the VIX jumped over 20%. The sector moves told a story itself with Insurers tumbling in the wake of the Hurricane Irma threat (S&P Insurance sector down -2.07%) and Banks selling-off reflecting the move for bonds (S&P Banks sector down -2.38% and the most since May). On the other hand Energy stocks were one of the few sectors to enjoy a decent day after WTI Oil rallied +2.90% which makes the move for rates even more impressive. It’s worth noting also that a bumper day for US IG primary issuance seemed to have little side effect while the Treasury’s four-week T-bill auction – a decent barometer for the debt ceiling concerns – saw investors demand the highest yield since September 2008 at 1.30% and yields on existing T-bills maturing on October 5th and 12th jump by more than 4bps post the auction.

This morning in Asia, markets have followed the lead from US and are all in the red as we type. The Nikkei (-0.31%), Kospi (-0.50%), ASX 200 (-0.55%), Shanghai Comp (-0.30%) and Hang Seng (-1.05%) are all down. It’s worth noting that Chinese banks are weaker, likely impacted by one Republican Congressman calling out Bank of China as a potential sanction target and then Treasury Secretary Mnuchin saying punishing specific entities is an option. Elsewhere, 10y Treasuries are a shade weaker this morning (+0.9bps) along with US equity futures.

Back to some of those catalysts we highlighted at the top. Starting with North Korea, the most notable development yesterday was President Trump tweeting that he was allowing Japan and South Korea to “buy a substantially increased amount of highly sophisticated military equipment from the US” while South Korean newswires also suggested that North Korea was preparing a missile launch before Saturday. At the same time Russia President Vladimir Putin rejected calls for new sanctions on North Korea as proposed by Trump signalling some disconnect between world leaders on the appropriate path to take.

Staying with politics, the news yesterday that the Trump administration had controversially agreed to end the DACA program was met with a chorus of criticism from Chief Executives around the world. There was also some suggestion that the decision could throw something of a curve ball into GOP efforts to raise the debt limit should Democrats demand a legislative solution to DACA to perhaps link with a debt limit hike. That remains to be seen however. Meanwhile over at the Fed the most noteworthy comments came from Fed Governor Brainard. She said in a speech in New York that “my own view is that we should be cautious about tightening policy further until we are confident inflation is on track to achieve our target”. She also said that “I am concerned that the recent low readings for inflation may be driven by depressed underlying inflation, which would imply a more persistent shortfall in inflation from our objective”. She made mention of there being a persistent shortfall from the Fed’s inflation target going back 5 years and also suggested that trend inflation may have moved lower.

In fairness, it is no secret that Brainard is a well-known dove but the comments still seemed to catch the market out. Minneapolis Fed President Kashkari followed up with some fairly dovish comments of his own later on noting that “It’s very possible that our rate hikes over the past 18 months are leading to slower job growth, leaving more people on the sidelines, leading to lower wage growth, and leading to lower inflation and inflation expectations.”

Closer to home the big news last night was the Guardian leaking that Britain will end the free movement of labour immediately after Brexit and bring in restrictions to deter all but highly-skilled EU workers. This came under the detailed proposals set out in an 82-page Home Office Proposal which for the first time detailed how the UK intends to approach the sensitive immigration issue. One has to imagine that this would not be taken well in Brussels and lends some weight to the hard Brexit case again. Whether or not this overshadows a planned speech by PM May later this month remains to be seen but it’ll be worth watching the EU reaction in the coming days.

Over in Italy, it’s worth noting an FT article highlighting that leading populist parties are toning down their anti-EU rhetoric ahead of next year’s election. Luigi Di Maio, the candidate from the leading Five Star movement party said the party’s call for a referendum on Italy’s euro membership would only be a “last resort” and a bargaining chip to force a relaxation in EU fiscal rules. Similarly, the candidate from the Northern league party noted that it wants to be prepared for a collapse of the Euro, but not “blow up the EU monetary system”.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, factory orders for July fell -3.3% mom, but were in line with expectations. The final reading for the headline July durable goods orders print was worse than expected, at -6.8% mom (vs. -2.9% expected), but core durable goods rose +0.6% mom, slightly above last month and core capital goods orders also rose +1.2% mom (vs. +1.0% previously).

Back in Europe, the final Eurozone service sector PMI for August came in at 54.7 (vs. 54.9 previously), with the revision mainly due to a -0.6pt revision in the French PMI to 54.9, which is the lowest reading since January. After the manufacturing PMI was confirmed at 57.4, the final reading for the Eurozone’s composite PMI was 55.7, unchanged versus July. DB’s Sidorov noted that the broad picture combines a gradual moderation in the services sector from strong levels, offset by new highs and increased capacity constraints in the manufacturing sector. Overall, the readings are still consistent with annual GDP growth of 2.5% for the Euro area. I n the UK, the service PMI for August fell 0.6pts to an 11-month low of 53.2 (vs. 53.5 expected), but the composite PMI was in line at 54.0, which points to a continuation of GDP growth at the 1.7% yoy rate recorded in 2Q.

Looking at the day ahead, Germany’s July factory orders will be out early in the morning (+0.2% mom and +5.8% yoy expected). Then we have the Italian retail sales for July. Over in the US, the ISM non-manufacturing PMI, the Fed’s Beige book, trade balance and final Markit services and composite PMIs are also due. Away from the data, UK PM Theresa May will face opposition leader Jeremy Corbyn in Parliament and the IMF’s managing director Lagarde will speak at a conference in Korea. Elsewhere, President Trump will also meet House Speaker Ryan, Senate Leader McConnell and a few others to discuss the upcoming debt ceiling.

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 1.07 POINTS OR 0.03%   / /Hang Sang CLOSED DOWN 127.59 POINTS OR 0.46%/ The Nikkei closed DOWN 27.83 POINTS OR 0.14%/Australia’s all ordinaires CLOSED DOWN 0.26%/Chinese yuan (ONSHORE) closed UP at 6.5250/Oil UP to 48.83 dollars per barrel for WTI and 53.81 for Brent. Stocks in Europe OPENED RED. Offshore yuan trades  6.5374 yuan to the dollar vs 6.5250 for onshore yuan. NOW THE OFFSHORE MOVED SLIGHTLY WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN MUCH STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE  WEAKER DOLLAR. CHINA IS HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/CHINA

this is scary!!  North Korea’s atomic blast as created numerous landslides around a mountain next to the site of impact.  The mountain is not stable and may crumble leaving a hole to which radiation can seep into the atmosphere and spread to China.  Actually China is very concerned..

(courtesy zero hedge)

Chinese Scientists Warn North Korea’s Nuke Test Site At Risk Of Imploding, “Releasing Many Bad Things”

Earlier we showed the shocking satellite images showing numerous landslides aound the mountain that is North Korea’s nuclear test site, and it appears Chinese officials are also keeping a very close eye on the region, instigating “emergency monitoring” for radiation leaks as the former chairman of the China Nuclear Society warns of thepotential for a massive environmental disaster.

As SHTFplan.com’s Mac Slavo notes, we already know that North Korea has the capability of not only firing Inter-Continental Ballistic Missiles that could strike major U.S. cities, but that they have the nuclear technology to make any such attack absolutely devastating.

Weapons of Mass Destructionelectro-magnetic pulse weapons and World War III aside, however, the South China Morning Post reports that another danger lurks just below the mountain where North Korea has been testing their nuclear devices.

A total of at least six nuclear device tests have reportedly taken place in North Korea and Chinese seismologists have been able to pinpoint their locations to within 100 meters.

nk-testsite1

(January 2016 Blast Site – via The Daily Signal)

nk-testsite2

(The September 2017 blast took place in the same location – Via Norsar)

It turns out that all of the tests occurred under the same mountain and scientists are now warning that it could implode, leaving a massive hole that would leak deadly radiation across the entire region, including China:

Wang Naiyan, the former chairman of the China Nuclear Society and senior researcher on China’s nuclear weapons programme, said that if Wen’s findings were reliable, there was a risk of a major environmental disaster.

 

Another test might cause the whole mountain to cave in on itself, leaving only a hole from which radiation could escape and drift across the region, including China, he said.

“We call it ‘taking the roof off’. If the mountain collapses and the hole is exposed, it will let out many bad things.”

Sunday’s blast was followed by an earthquake eight minutes later, which China’s seismic authorities interpreted as a cave-in triggered by the explosion.

Source: South China Morning Post

If the results are accurate – which we now know they are judging by the satellite images – then there has already been a partial implosion of the mountain, though the radiation released during recent nuclear tests remains contained. At least we think it is still contained.

Close-up of slope between North Portal and mountain peak showing multiple landslides before:

And after:

With North Korea planning even more tests, China has reason to be worried.

“The increasing size of North Korea’s nuclear bombs was also making ‘topping’ more likely,” Wang said.

“A 100 kiloton bomb is a relatively large bomb. The North Korean government should stop the tests as they pose a huge threat not only to North Korea but to other countries, especially China,” he said.

As we’ve seen with Fukushima, radiation could force long-term evacuations of thousands of square miles and cause deadly consequences for people living downwind of any potential leak.

The theory sounds reasonable. And whether or not its true, it certainly gives China a solid position from which to negotiate North Korea’s nuclear disarmament.

If this report continues to gain traction – and the satellite images we showed earlier appear to confirm it –  then North Korea’s weapons testing is no longer just a geo-political military problem, but rather, has the potential for a massive humanitarian crisis, something that both East and West could use to further pressure the North’s leader Kim Jong Un in an effort to avoid widespread nuclear conflict.

We now have the 5 big demands from the US to curtail the North Koreans:
1. an oil embargo (China is the dominant supplier followed by Russia)
2 Kim asset freeze
3 curtail workers from entering foreign jurisdictions
4 freeze national airline
5.block their textile exports.
Both China and Russia will not go for this!
(courtesy zero hedge)

US Demands North Korean Oil Embargo, Kim Asset Freeze In Draft UN Resolution

Details are emerging of what President Trump’s administration is hoping the UN will agree to with regard sanctions pressure on North Korea. AFP reports the US seeks an asset freeze (and travel ban) on leader Kim Jong-Un as well as an oil embargo, and blockade of textile exports.

 US seeks oil embargo on North Korea, according to a draft UN resolution

 US seeks oil embargo on North Korea, according to a draft UN resolution

 US seeks asset freeze on North Korean leader Kim Jong-Un, according to draft UN resolution

OAdditionally, Reuters reports that:

  • DRAFT U.N. RESOLUTION SEEKS TO BAN NORTH KOREAN EXPORTS OF TEXTILES, and
  • TO PROHIBIT THE PAYING, HIRING OF NORTH KOREAN LABORERS ABROAD
  • DRAFT U.N. RESOLUTION SEEKS TO FREEZE THE ASSETS OF THE GOVERNMENT OF NORTH KOREA
  • DRAFT U.N. RESOLUTION WOULD IMPOSE AN ASSET FREEZE ON NORTH KOREA’S NATIONAL AIRLINE AIR KORYO

Of course, China will never agree (and Russia – North Korea’s secondary oil supplier after China – is likely to be unhappy), but perhaps that is the point.

As The Telegraph reports, South Korea’s president has asked Vladimir Putin to help tame North Korea, but the two leaders are divided over the need for sanctions on the rogue regime.

While Mr Moon has sought Russian support for stronger sanctions against North Korea, Mr Putin continued to insist that this is a dead end.

He called Pyonyang’s nuclear weapons programme a “crude violation of UN security council resolutions” but said it was “impossible to resolve the problem of the Korean peninsula only by sanctions and pressure”.

“It’s not worth giving in to emotions and driving North Korea into a corner,” Mr Putin said. “Now more than ever everyone needs to be cold-blooded and avoid steps leading to an escalation of tensions.”

During their meeting, the South Korean leader said it was inevitable Pyongyang’s oil supply would be cut and asked his Russian counterpart to cooperate, Mr Moon’s press secretary said.

Mr Putin responded that shutting off the pipeline would damage hospitals, his aide Yuri Ushakov said.

Although China provides the bulk of North Korea’s oil, Russia exports 40,000 tonnes of oil per quarter to the isolated state, Mr Putin said on Tuesday

b) REPORT ON JAPAN

end

c) REPORT ON CHINA

China holds military exercises along their border with North Korea

(courtesy zero hedge)

China Holds Military Exercise Along North Korea Border

The Chinese government bristled last week after the US suggested that it might cut economic ties with any country trading with North Korea, an implicit dig at the Chinese, who are responsible for 90% of the isolated country’s foreign trade. And after suggesting that they might use their UN Security Council veto power to block more sanctions against the North – after all, the China-Russia peace map calls for the US and South Korea to stop holding military drills – the North’s neighbor and primary benefactor has reportedly conducted a military exercise of its own, according to Reuters.

News of the drill arrived as US President Donald Trump is expected to press China to institute an oil embargo against North Korea, eliminating the country’s primary source of petroleum, which flows to it from China through the “Friendship Pipeline” which runs from China under the Yalu River into North Korea.

China’s air force has carried out exercises near the Korean peninsula to practice defending against a “surprise attack” coming over the sea, Chinese state media reported. An anti-aircraft defense battalion carried out the exercises early on Tuesday, near the Bohai Sea, the innermost gulf of the Yellow Sea that separates China from the peninsula, an official military website www.81.cn reported.

While Reuters offers scant details about the exercise and the motives behind it, it’s safe to say that China is preparing for any blowback that could occur should the US-North Korea war of words blossoms into a full-scale military conflict, as Russian President Vladimir Putin has repeatedly warned. If the Kim regime falls, China would certainly need to defend its border with the North as the country devolves into chaos.

Troops traveled to the Bohai site from central China before starting drills to fend off the “surprise attack.” “The troops’ rapid response capabilities and actual combat levels have effectively been tested,” it said.

Initial reports said it was the first time “certain weapons” had been used to shoot down low-altitude targets coming over the sea, but they didn’t specify what the weapons are. China’s Defence Ministry did not immediately respond to a faxed request for comment, Reuters said. Of course, China’s exercise came days after North Korea carried out its sixth and largest nuclear test of an advanced hydrogen bomb and there is mounting concern internationally that the country plans more weapons tests, possibly of a long-range missile.

As Reuters points out, South Korea and the US have also been discussing the deployment of aircraft carriers and strategic bombers to the Korean peninsula. The North’s benefactor is “extremely suspicious” of any US-backed military buildup and repeatedly expressed anger at the deployment of US THAAD missile-defense systems in South Korea. To China, the missile “defense” systems look like weapons.

We imagine that, as tensions continue to simmer, China will continue to prepare for the eventuality of  US-led coalition forces advancing beyond the 38th parallel

end

China closes one of its border crossings with North Korea

(courtesy zerohedge)

China Closes North Korean Border Crossing

China has publicly denounced the US’s plans for tightening sanctions against North Korea, but if local media reports are accurate, the world’s second-largest economy has closed part of its border with its isolated neighbor without any external prompting, possibly to help comply with the latest round of UN Security Council sanctions, which took effect last month.

According to Daily NK, “an internal source in the Quanhe Commercial District of Hunchun City informed us that the customs offices are preparing to close the gate today (September 4), and that Chinese businessmen and merchants staying in North Korea have been notified,” a source in China with knowledge of the development told Daily NK.”

However, the more widely used Sino-Korean Friendship Bridgea road-rail bridge that spans the Yalu river into North Korea, connecting Dandong and Sinuiju and accounting for 70% of the trade volume between the two countries, remains open.

As we reported previously, China has been increasingly scanning for radiation along the North Korean border. According to the Wall Street Journal, China has added stations since 2013 because it fears cross-contamination from the North’s nuclear program.

DailyNK, a South-Korea based website that reports information gleaned from North Korean insiders, speculates that the border closure could be an attempt to “send a message” to the North that it needs to curb its bellicose actions an rhetoric.

“The Chinese government may have elected to close its minor customs offices first, as a message to North Korea. Analysts note that China appears to be pressuring North Korea to restrain from provocations with the implied message that it may close other customs offices in the future.”

Some have speculated that Chinese officials have closed the post because of the volume of North Korea seafood that travels through it. Under the newest UN sanctions, countries aren’t allowed to buy North Korean seafood, a move that will primarily hurt the country’s poor fishermen.

“However, it has also been suggested that Quanhe Customs may have closed because it primarily deals with North Korean fisheries products, which have been prohibited for export under the new sanctions. It has also been argued that the measure will have only a minor effect on the North Korean leadership and could be little more than an empty gesture by China to show that it is participating in international sanctions.”

Apparently, the closure of the post is part of a pattern.

“Quanhe Customs has been temporarily closed every time North Korea has engaged in provocations. So it’s likely that China will soon reopen the office after claiming that it is participating in the sanctions,” one North Korea analyst suggested on condition of anonymity.”

The site also reported – apropos of nothing – that Chinese authorities are investigating Chinese nationals who may have been involved in smuggling components and materials used for North Korea’s sixth nuclear test. China has officially banned the export of materials to North Korea that could be used for nuclear tests and missile launches, but has failed to effectively crack down on smuggling, according to DailyNK.

“The Chinese authorities have been put on the back foot by North Korea’s nuclear test and thus have strengthened the inspections,” a separate source in China familiar with North Korean affairs said.

Quanhe is the second biggest of nine customs posts between China and North Korea, according to Bloomberg.

 

end

We will hear officially tomorrow but it looks like the ECB will again delay its decision to curtail QE

(courtesy zerohedge)

EURUSD Dumps’n’Pumps After ECB QE Decision Delay, Inflation Cut Leaks Reported

Last week Reuters provided the outlet for leaked comments from The ECB (regarding QE) that sparked chaos in EURUSD. This week it is Bloomber who reports sources suggesting The ECB will cut inflation outlooks (pouring cold water on Draghi’s “reflationary forces” hoopla) and seemingly confirming The ECB will kick the can on the decision to taper QE into 2018.

As Bloomberg reports, ECB Governing Council has been presented with documents outlining multiple scenarios for adjusting quantitative easing, according to euro-area officials familiar with the matter.

  • Papers were put together by the ECB’s technical committees for the two-day meeting that starts Wednesday, and include different combinations for the size and duration of asset purchases, the people say
  • Documents don’t identify a preferred scenario and aren’t intended as formal policy proposals, people say
  • A decision doesn’t currently look likely before the Governing Council’s Oct. 26 meeting, people say
  • Governing Council will also look at the parameters of QE, including constraints dictated by European law and the ECB’s self-imposed choice of asset classes, to gauge how much room they have for purchases, people say
  • Officials may also talk about altering their forward guidance on interest rates, one person says
  • Draft economic projections show 2017 growth forecast revised up, 2018 and 2019 inflation forecasts revised slightly lower, separate euro-area official says, citing document distributed to national central banks
  • ECB spokesman declines to comment
  • People ask not to be named because the Governing Council’s deliberations, documents are private

The reaction was a swift plunge to the day’s lows followed by a surge to the day’s highs, and then retracement…

 

Once again, it appears The ECB is strawman-ing the market’s response ahead of the statement tomorrow… and for now, EURUSD is entirely unimpressed.

This should be interesting:  Polish foreign Minister demand 1 trillion in reparations. Actually Poland is one of only countries that did not receive much in reparation payments  (only a tiny amount in 1953)

(courtesy zero hedge)

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

Russia/USA

6 .GLOBAL ISSUES

Caribbean Islands

Irma reaches the Caribbean and flattens the islands of St Martin, Barbuda and now heading for Puerto Rico. It is still heading straight for Miami

 

(courtesy zerohedge)

“Devastating” Hurricane Irma Flattens “Most Solid” Buildings On Caribbean Island

Irma is the kind of storm where you get thousands of lives lost. This is not going to be the big slow-motion flood like Harvey – this is a real, honest-to-God hurricane.”

       – Chuck Watson, disaster modeler with Enki Research

Hurricane Irma, the most powerful Atlantic storm on record according to the NHC, raced across northern Caribbean islands on Wednesday with a “catastrophic mix of fierce winds, surf and rain”, ahead of what appears a virtually guaranteed Florida landfall at the weekend. While Irma precise trajectory remained uncertain, the latest NHC forecast sees the cone coming right on top of the panhandle.

.@NHC_Atlantic cone w/  & how its changed over time. Trend back to the right and a wide cone still relaying uncertainty on future track

The eye of Irma, a Category 5 storm packing winds of 185 miles per hour (295 km per hour), moved away from the island of Barbuda and toward the island of St. Martin, east of Puerto Rico, early on Wednesday, the U.S. National Hurricane Center (NHC) in Miami reported. It could hit Florida on Saturday. It is expected to bring strong storm surges and up to 20 inches of rain in some places.

“We are hunkered down and it is very windy … the wind is a major threat,” said Garfield Burford, the director of news at ABS TV and Radio on the island of Antigua, south of Barbuda. “So far, some roofs have been blown off” he added according to Reuters.  Most people who were on Antigua and Barbuda were without power and about 1,000 people were spending the night in shelters in Antigua, according to Burford. “It’s very scary … most of the islands are dark so it’s a very, very frightening,” he said.

The eye of the storm passed over St. Martin and its northern wall was pounding Anguilla, the U.S. National Hurricane Center said in an advisory around 8 a.m. New York time. It’s on a path that should pass near or just north of Puerto Rico later Wednesday, it said.

The French government has said that the four “most solid” buildings on the Caribbean island of Saint Martin have been destroyed by Irma as the Hurricane wreaked catastrophic damage in the region,

[IRMA] Saint Martin dans le mur de l’oeil subit les effets de l’ouragan IRMA  (Source : Rinsy Xieng)

Serious flooding and building damage has affected a number of islands, French interior minister Gerard Collomb said. “We know that the four most solid buildings on the island have been destroyed which means that more rustic structures have probably been completely or partially destroyed,” he told reporters. The French government has said there are electrical blackouts and widespread flooding on the islands of St Barthélemy and St Martin.

Public relations professional Alex Woolfall said on Twitter he was hiding underneath a concrete stairwell as the storm neared St. Maarten.

“Still thunderous sonic boom noises outside and boiling in stairwell. Can feel scream of things being hurled against building,” he said. “Okay I am now pretty terrified so can every non-believer, atheist & heretic please pray for me.”

 is wrecking Saint Martin…

Puerto Rico is next and Florida still to come.pic.twitter.com/goDjQ4lD6D@B911Nature

The amount of damage and the number of casualties were not known early on Wednesday. A 75-year-old man died while preparing for the storm in Puerto Rico’s central mountains, police said. Several other Leeward Islands, including Anguilla, Montserrat, St. Kitts and Nevis, as well as the U.S. and British Virgin Islands, Puerto Rico and the Dominican Republic were under a hurricane warning.

Anguilla’s Disaster Management Department said the island was experiencing extremely heavy winds and rain, the Associated Press reported on Wednesday. In Barbuda, phone lines went down and howling winds sent debris flying as people huddled in their homes or government shelters.

“Preparations to protect life and property should be rushed to completion,” the Hurricane Center said, warning that Irma “will bring life-threatening wind, storm surge and rainfall hazards” to those islands. Along the beachfront of Puerto Rico’s capital, San Juan, work crews scrambled to cover windows with plywood and corrugated metal shutters along Avenida Ashford, a stretch of restaurants, hotels and six-story apartments.

“I am worried because this is the biggest storm we have seen here,” said Jonathan Negron, 41, as he supervised workers boarding up his souvenir shop.

The NHC said Irma ranked as one of the five most powerful Atlantic hurricanes during the past 80 years and the strongest Atlantic basin storm ever outside the Caribbean Sea and Gulf of Mexico.

As the storm approached Puerto Rico, Governor Ricardo Rossello urged the 3.4 million residents of the U.S. territory to seek refuge in one of 460 hurricane shelters in advance of the storm and later ordered police and National Guard troops to begin evacuations of flood-prone areas in the north and east of the island.

“This is something without precedent,” Rossello told a news conference.

On Tuesday evening, President Trump approved emergency declarations for Florida, Puerto Rico and the U.S. Virgin Islands, mobilizing federal disaster relief efforts, the White House said.

Meanwhile, as the Hurricane approaches Florida, local authorities called for a mandatory evacuation of visitors in the Florida Keys to start at sunrise on Wednesday, and public schools throughout South Florida were ordered closed, some as early as Wednesday. Residents of low-lying areas in densely populated Miami-Dade County were urged to move to higher ground by Wednesday as a precaution against coastal storm surges, three days before Irma was expected to make landfall in Florida. It is likely that an evacuation for Miami will be called later today.

According to the latest meteorological forecasts, there is now a 50% chance for major hurricane force winds from Irma on Sunday-Monday in Miami.

Adding to concerns, the City of Miami warned resident to watch out for construction cranes, built to withstand 145 mph winds. Some advice from the city:

  • Do no stay in a building next to a crane
  • Comply with evacuation orders (if and when the city issues them)
  • If you live in a high-rise building and do not evacuate, take shelter in an enclosed concrete stairwell

City of Miami warns to watch out for construction cranes, built to withstand 145 mph winds. ’s are 185 mph http://cnn.it/2wGdl8r 

At the same time, residents of Texas and Louisiana were still recovering from Harvey, which struck Texas as a Category 4 hurricane on Aug. 25. It dumped several feet of rain, destroying thousands of homes and businesses, and displaced more than 1 million people.

As reported yesterday, should Irma hit Miami with the same force as a Category 4 storm that struck in 1926, insured losses would reach $125 billion to $130 billion, according to a Barclays analysis. Uninsured losses would be on top of that. Across the Caribbean the cost of damage could easily reach $8 billion to $10 billion, Watson said.

Only three Category 5 hurricanes have hit the contiguous 48 U.S. states, according to Weather Underground: The Labor Day Hurricane of 1935 that devastated the Florida Keys, Hurricane Camille in 1969 and Hurricane Andrew that cut across Florida in 1992.

Finally, following close on the heels of Irma is Tropical Storm Jose, which is expected to become a full blown Hurricane on Wednesday night, while Tropical Storm Katia has developed in the Gulf of Mexico…

end

 

Quite unexpectedly the Canadian loonie soars after the Bank of Canada unexpectedly hikes rates by 25 basis points.
(courtesy zero hedge)

Loonie Soars After Bank Of Canada Unexpectedly Hikes Rates By 25 bps

With only 6 of 33 forecasters predicting a rate hike in today’s Bank of Canada announcement, it was inevitable: the Bank of Canada surprised a good 75% of the market, and triggered massive stop loss orders in the looni, when moments ago it announced it hiked rates by 25bps to 1%, sending the USDCAD lower by nearly 300 pips…

the biggest spike in the loonie since March 2016, and the highest in two years.

According to the BOC statement, “removal of some of the considerable monetary policy stimulus in place is warranted” given stronger than expected economic performance while adding that “future monetary policy decisions are not predetermined” and will be guided by economic data and financial-market developments as they “inform the outlook for inflation.”

The Central bank also said that “close attention will be paid to the sensitivity of the economy to higher interest rates” given elevated household indebtedness. The bank will give particular focus to evolution of economy’s potential and labour market conditions, while highlighting that inflation remains below 2% but has evolved “largely as expected” since July MPR.

In the statement the central bank also highlighted that “excess capacity remains in labour market, wage and price pressures more subdued than historical relationships suggest” while “geopolitical risks and uncertainties around international trade and fiscal policies remain.”

Finally, the bank expects moderation of pace of economic growth in 2H 2017, but GDP level higher than expected in July MPR.

The full statement is below (link):

The Bank of Canada is raising its target for the overnight rate to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

 

Recent economic data have been stronger than expected, supporting the Bank’s view that growth in Canada is becoming more broadly-based and self-sustaining. Consumer spending remains robust, underpinned by continued solid employment and income growth.  There has also been more widespread strength in business investment and in exports. Meanwhile, the housing sector appears to be cooling in some markets in response to recent changes in tax and housing finance policies. The Bank continues to expect a moderation in the pace of economic growth in the second half of 2017, for the reasons described in the July Monetary Policy Report (MPR), but the level of GDP is now higher than the Bank had expected.

 

The global economic expansion is becoming more synchronous, as anticipated in July, with stronger-than-expected indicators of growth, including higher industrial commodity prices. However, significant geopolitical risks and uncertainties around international trade and fiscal policies remain, leading to a weaker US dollar against many major currencies. In this context, the Canadian dollar has appreciated, also reflecting the relative strength of Canada’s economy.

 

While inflation remains below the 2 per cent target, it has evolved largely as expected in July. There has been a slight increase in both total CPI and the Bank’s core measures of inflation, consistent with the dissipating negative impact of temporary price shocks and the absorption of economic slack. Nonetheless, there remains some excess capacity in Canada’s labour market, and wage and price pressures are still more subdued than historical relationships would suggest, as observed in some other advanced economies.

 

Given the stronger-than-expected economic performance, Governing Council judges that today’s removal of some of the considerable monetary policy stimulus in place is warranted. Future monetary policy decisions are not predetermined and will be guided by incoming economic data and financial market developments as they inform the outlook for inflation. Particular focus will be given to the evolution of the economy’s potential, and to labour market conditions. Furthermore, given elevated household indebtedness, close attention will be paid to the sensitivity of the economy to higher interest rates.

The question now, of course, is with Canadian interest rates continuing to rise, what happens next to what many have dubbed the biggest housing bubble in the world?

 end

7. OIL ISSUES

Whereas Harvey hit both demand and supply of oil, a major hit on Florida will only hit the demand side of the equation

(courtesy Cunningham/OilPrice.com)

(courtesy zerohedge)

8. EMERGING MARKET

VENEZUELA/USA

end

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

Euro/USA   1.1937 UP .0014/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/HOUSTON FLOODING/EUROPE BOURSES ALL IN THE RED

USA/JAPAN YEN 108.83 UP 0.229(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/   

GBP/USA 1.3047 UP .0006 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.23891 UP .0021 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 14 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1937; / Last night the Shanghai composite CLOSED  UP 1.07 POINTS OR 0.03%     / Hang Sang  CLOSED  DOWN 127.59 POINTS OR 0.46% /AUSTRALIA  CLOSED DOWN 0.26% / EUROPEAN BOURSES OPENED  ALL IN THE RED 

The NIKKEI: this WEDNESDAY morning CLOSED DOWN 27.84 POINTS OR 0.14%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 127.84 POINTS OR 0.14%  / SHANGHAI CLOSED UP 1.07 POINTS OR 0.03%   /Australia BOURSE CLOSED DOWN 0.26% /Nikkei (Japan)CLOSED DOWN 27.84  POINTS OR 0.14%   / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1339.10

silver:$17.95

Early WEDNESDAY morning USA 10 year bond yield:  2.077% !!! DOWN 8   IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

The 30 yr bond yield  2.6934, DOWN 8  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 92.16 DOWN 9  CENT(S) from TUESDAY’s close.

This ends early morning numbers  WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 2.846% UP 1 in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.012%  UP 1/2   in   basis point yield from TUESDAY/JAPAN losing control of its yield curve/NOW NEGATIVE

SPANISH 10 YR BOND YIELD: 1.567% UP 3  IN basis point yield from TUESDAY 

ITALIAN 10 YR BOND YIELD: 2.027 UP 3 POINTS  in basis point yield from TUESDAY 

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

GERMAN 10 YR BOND YIELD: +.346% UP 1  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1959 UP .0016 (Euro UP 16 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 108.74 UP 0.1385(Yen DOWN 14  basis points/ 

Great Britain/USA 1.3067 UP  0.0026( POUND UP 26 BASIS POINTS)

USA/Canada 1.2216 DOWN .0153 (Canadian dollar UP 153 basis points AS OIL ROSE TO $49.23

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP  by 16 basis points to trade at 1.1939

The Yen FELL to 108.74 for a LOSS of 14  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 26  basis points, trading at 1.3067/ 

The Canadian dollar ROSE by 153 basis points to 1.2216,  WITH WTI OIL RISING TO :  $49.23

The USA/Yuan closed at 6.5240/
the 10 yr Japanese bond yield closed at +.012%  UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 2  IN basis points from TUESDAY at 2.064% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.681 DOWN 2 in basis points on the day /

Your closing USA dollar index, 92.00  DOWN 25 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 WEDNESDAY: 1:00 PM EST

London:  CLOSED DOWN  18.79 POINTS OR 0.25%
German Dax :CLOSED UP 90.83 POINTS OR 0.75%
Paris Cac  CLOSED UP 14.85 POINTS OR 0.29% 
Spain IBEX CLOSED DOWN 48.80 POINTS OR 0.48%

Italian MIB: CLOSED UP 76.87 POINTS OR 0.35% 

The Dow closed DOWN 234.25 OR 0.18%

NASDAQ WAS closed DOWN 59.76  POINTS OR 0.93%  4.00 PM EST

WTI Oil price;  49.23  1:00 pm; 

Brent Oil: 53.44 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.34 DOWN 17/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 17 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0.346%  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:$49.14

BRENT: $54.13

USA 10 YR BOND YIELD: 2.103%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.7220%

EURO/USA DOLLAR CROSS:  1.1919 DOWN .0003

USA/JAPANESE YEN:109.27  UP  0.664

USA DOLLAR INDEX: 92.25  down 1  cent(s)  

The British pound at 5 pm: Great Britain Pound/USA: 1.3045 : UP 4 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2222 UP 146 BASIS pts 

German 10 yr bond yield at 5 pm: +0.346%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Pop, Gold Drops After ‘Calmed’ Korea, Debt-Ceiling Delay, & Dismal Data

Disappointing Data this morning was trump’d by some de-escalation with North Korea and a short-term debt-ceiling can-kicking – stocks rallied, bonds & bullion leaked lower, and the dollar was unable to get back into the green...

 

The biggest headlines of the day came out of DC (as usual) with Trump seeming to de-escalate his rhetoric with North Korea (prompting a drop in gold)…

 

And then Trump acquiescing to Democrats’ demands on the debt-ceiling, sending gold lower and crushing October bill yields…

 

However, it merely kicked the can from October bills…

to December bills…

 

Some context for today’s bounce however…

 

Equity markets got a boost from the news…but was unable to recover yesterday’s losses… (NOTE – stocks were weak into the close)

 

Two decent short squeeze efforts today to ignite some momo…

 

VIX was clubbed like a baby seal once again as all risks were removed from markets…

 

Vols across all major indices fell today but remain higher from Friday…

 

FANG Stocks were panic bid today – erasing all of yesterday’s losses…

 

Bonds and Stocks remain completely decoupled…

 

Treasury yields rose on the day, after the debt-ceiling deal was agreed, but in context, bonds remain lower in yield on the week…

 

With 10Y Yield hovering at 2.10%…

 

 

The Dollar Index closed lower on the day, hit by weak ISM data…

 

The Loonie soared today after BOC unexpectedly hiked rates…

 

 

WTI Crude rallied back above $49 – one month highs – as RBOB Gasoline slipped lower amid refinery restarts (ahead of tonight’s API inventory data)

 

Gold and Silver dropped today…barely…

 

Lot of chatter about OJ Futures today but we note that the front-month Nov contract tumbled over 3% – but remains well above last week’s levels…

 

Finally, Bitcoin bounced back impressively after China’s ICO ban…

 

Bonus Chart… You are here…

end
 Why Trump has a lot on his plate:
(courtesy zerohedge)

Why Yesterday’s T-Bill Turmoil Is More Bad News For Trump

Yesterday we highlighted the turmoil in the T-Bill market, when the sale of $20 billion in 4 week paper priced at a high yield of 1.30%, a whopping 7bps tail, and the highest yield since September 2008.

 

This was notable as it indicated just how nervous short-term Treasury investors had gotten with the debt ceiling negotiation  just around the corner – now reportedly resolved if only for the time being with the Senate ready to attack a debt ceiling extension to a Harvey aid bill. However, there were other, more pressing concerns. Below is the the latest Macro View from Bloomberg macro commentator Garfield Reynolds, who explains just what the implications of the turmoiling auction were.

 T-Bill Sale Flags Severity of Trump’s Challenges

 

The latest four-week bill auction was arguably the scariest since the lead-up to the 2008 crisis, underscoring just how concerned investors are that President Donald Trump and Congress will fail to resolve cleanly the regular debt-ceiling jeopardy that the U.S. seems locked into.

 

The $20 billion of debt was sold at 1.30%, 1 bp above the 2-yr Treasury yield (see chart); the last auction when bills yielded more than 2-yrs was in March 2008, when expectations for massive Fed rate cuts were pulling down note yields.

 

Even in 2013, when the battle between President Barrack Obama and Republican lawmakers led to a partial government shutdown, 4-week bill rates at auction only got as close as 3 bps below 2-yr yields.

 

Spiking bill rates don’t signal investors are seriously worried about not getting repaid — if you want to see what that sort of risk looks like, recall that Russia’s bills topped 80% in the month before its 1998 default.

 

What it does say is the paper sold Tuesday is relatively less attractive than it has been for a long time — arguably because of the likelihood of a period of much greater price volatility — which is something many bill investors are looking to avoid.

 

Unlike true cash, T- bills can swing around based on a presidential tweet or an angry Congress member’s press conference as politicians wrangle over the debt ceiling.

 

The other dynamic here is a massive rally in longer-dated debt sending 10-year yields crashing toward 2% — propelled by North Korea tensions, political infighting hampering U.S. reflation legislation and concerns over economic damage from monster hurricanes.

 

While the worst of times can bring out the best in politicians of all stripes, Trump has a lot on his plate besides the debt ceiling and his track record so far lacks any major legislative accomplishments.

 

Until another muddle-through on the debt ceiling is realized, the pressure at the very short end for a flatter Treasuries curve is here to stay.

end

Pay no attention to this garbage:  soft data USA services rebounds in August

(courtesy zero hedge)

US Services Economy Rebounds In August “But Harvey Impact A Big Unknown”

While US Manufacturing PMI slid in August, US Services PMI rose for the 5th straight month to its highest since Nov 2015. Following last month’s collapse in ISM Services, August rebounded modestly to 55.3 (but missed expectations). Of course, as Markit notes, “the strong survey data add to the expectation that the economy was picking up further momentum before hurricane Harvey hit, the impact of which is still a big unknown.”

Which do you trust? ‘Soft’ survey data or ‘Hard’ real economic outputs?

Bloomberg notes that while the main ISM gauge was slightly below its average for this year, the results show the abrupt slowdown in July was temporary, and underscore sustained demand for services that account for about 90 percent of the economy and span industries such as utilities, retailing, health care, and construction.

The outlook remains one of modest but steady economic growth backed by a resilient job market, healthier household finances and low borrowing costs.

The services data from Tempe, Arizona-based ISM also are consistent with a pickup at factories. The group’s manufacturing index, released last week, surged to the highest level since 2011.

The new orders and employment indices both rose, but Prices-paid index rose most notably to 57.9 from 55.7.

However, inventory (and inventory sentiment) both dropped markedly on the month suggesting all is not as rosy as headlines predict.

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

The US service sector moved up a gear in August, providing a welcome boost to the economy after the sister PMI survey showed slower manufacturing growth. The two PMI surveys collectively point to the fastest rate of economic expansion since January as businesses enjoyed a summer growth spurt.

 

“The strong survey data add to the expectation that the economy was picking up further momentum before hurricane Harvey hit, the impact of which is still a big unknown. While the pre-Harvey data were pointing to third quarter GDP rising at an annualised rate of 3.5%, this could now be slightly below 3.0%.

 

“Encouragingly, August saw companies become more optimistic about the year ahead, with confidence across manufacturing and services climbing to the highest since January. Any hurricane-related impact is therefore likely to result in only a temporary lull, with stronger growth returning later in the year.

 

“With new orders growth accelerating, backlogs of work rising and job creation buoyant, the surveys clearly point to an economy that’s generally in expansion mode.

 

For Fed-watchers, the upturn in price pressures sends an additional hawkish signal for policy. Average selling prices for goods and services rose at the steepest rate for nearly three years. Another rate hike in December is therefore looking increasingly likely.”

So you decide – is US GDP growth going to be 2% or 4%? As @TopDownCharts notes, depends if you ask ISM or Markit…

 

So, to summarise:

ISM – Manufacturing surging as Services slump

Markit PMI – Manufacturing slumping as Services surge

 

Update on Irma: 7 am est

 

(courtesy zerohedge)

 

“Monster” Irma Is Now The Strongest Atlantic Hurricane On Record As Florida Preps For “Catastrophe”

Update 3: The Irma hits just keep on coming, with the NHC Atlantic Ops twitter page reporting that as of this moment, Irma is now the stronger hurricane in the Atlantic basin outside of the Caribbean Sea and Gulf of Mexico in NHC records. “Preparations should be rushed to completion in the hurricane warning area,” the NHC said.

 is the strongest  in the Atlantic basin outside of the Caribbean Sea & Gulf of Mexico in NHC records http://hurricanes.gov 

Taking things to the next level, literally, meteorologist Eric Holthaus writes that Hurricane Irma is now expected to *exceed* the theoretical maximum intensity for a storm in its environment, or as he puts it “Redefining the rules.”

Wow. Hurricane  is now expected to *exceed* the theoretical maximum intensity for a storm in its environment. Redefining the rules. https://twitter.com/KieranBhatia/status/905152863046955009 

Puerto Rican Governor Ricardo Rossello urged the 3.4 million residents of the U.S. territory to seek refuge in one of 460 hurricane shelters before the storm is expected to hit as early as Tuesday night. “This is something without precedent,” Rossello told a news conference. He will ask U.S. President Donald Trump to declare a federal state of emergency even before the storm passes to allow disbursement of U.S. emergency funds.

Gary Randall, head of the Blue Waters Resort on Antigua’s north coast, said the staff had boarded up windows, stripped trees of coconuts and fronds and secured anything that could become a hazard. “I wasn’t that nervous yesterday, but today I‘m nervous,” Randall said by telephone, adding that he expected the hotel’s beach to be swept away and much of the 108-room property to be flooded.

According to Bloomberg, Irma’s current path – headed straight for Florida – has prompted the state to prepare for the “catastrophic” system.

Unlike Harvey, which caused widespread damage, power outages and flooding and taking almost a fifth of U.S. oil refining capacity offline, Irma is a bigger threat to agriculture, with orange juice futures surging.

Airlines have canceled flights across the Caribbean and are adding planes to evacuate tourists, while cruise-line stocks have tumbled.

A strike on Florida would be the first time since 1964 that the U.S. was hit by back-to-back storms of Category 3 or more and only the second time since 1851, Henson said. Irma is now among the 7 most powerful storms on record to cross the Atlantic.

 

“Our biggest concern is Florida citrus,” said Joel Widenor, co-founder of Commodity Weather Group LLC in Bethesda, Maryland. “There is big enough fruit on the trees that the fruit could drop off, it could literally get blown off. The bigger issue is tree damage that is a lot harder to recover from.”

Some more facts: Florida is the world’s largest producer of orange juice after Brazil. About two-thirds of the state’s citrus crop is located in the lower two-thirds of the peninsula. Orange juice for November delivery jumped as much as 6.9 percent to $1.4595 a pound on ICE Futures U.S. Tuesday, the biggest intraday gain for the contract since Jan. 28, 2016. Cotton for December delivery jumped by the 3-cent exchange limit, or 4.2 percent, to 74.88 cents a pound. Aggregate trading for both commodities for this time doubled compared with the 100-day average, according to data compiled by Bloomberg.

“There is an increasing chance of seeing some impacts from Irma in the Florida Peninsula and the Florida Keys later this week,” the National Hurricane Center said after Governor Rick Scott declared an emergency.

There is still hope that a direct hit will be avoided: “The expected path has shifted considerably west over the last two days and can still change over the next two,” said Olivier Jakob, founder of energy consultant Petromatrix GmbH in Zug, Switzerland. “We cannot yet rule out a move further west with a Louisiana risk.”

Irma’s track could shift as it nears Cuba and Florida, according to Bob Henson, a meteorologist with Weather Underground in Boulder, Colorado. One possibility is a turn to the north that would take the storm up the Florida peninsula.

 

“It is four to five days away,” Henson said. “In hurricane-land that is a pretty long time span.”

Beyond the threat to people and property in the Caribbean, the focus for now is on agriculture, Jakob said. Irma is leading traders to be “long orange Juice futures rather than gasoline futures,” he said.

Only three Category 5 hurricanes have hit the contiguous 48 U.S. states, Henson told Bloomberg. The Labor Day Hurricane of 1935 that devastated the Florida Keys, Hurricane Camille in 1969 and Hurricane Andrew that cut across Florida in 1992. Andrew was originally classified as a Category 4 storm only to be upgraded years later after further analysis.

“It is obviously a rare breed,” Henson said. “We are in rare territory.”

* * *

Update 2: While few are willing to admit it yet, according to meteorologist Ryan Maye, Hurricane Irma is still intensifying, with winds up to 155-knots (180 mph) and that extrapolating Saffir-Simpson scale, 158-knots would be Category 6.

View image on TwitterView image on Twitter

Hurricane  is still intensifying. Now up to 155-knots (180 mph)
Extrapolating Saffir-Simpson scale, 158-knots would be Category 6.

* * *

Update: Irma has been upgraded from a Cat 5+ Hurricane to “Potentially Catastrophic” Cat 5++ storm, with winds now near 180 mph gusting to 220 mph, still moving due west at 14 mph.

 has gone from Cat 5+ to Cat 5++, winds are now near 180 mph gusting to 220 mph, mvng due west at 14 mphhttp://www.nhc.noaa.gov/text/refresh/MIATCPAT1+shtml/051159.shtml ?

Here is the latest NHC update:

At 1100 AM AST (1500 UTC), the eye of Hurricane Irma was located near latitude 16.8 North, longitude 58.4 West. Irma is moving toward the west near 14 mph (22 km/h), and this general motion is expected to continue today, followed by a turn toward the west-northwest tonight. On the forecast track, the extremely dangerous core of Irma is forecast to move over portions of the northern Leeward Islands tonight and early Wednesday.

 

Reports from an Air Force Hurricane Hunter aircraft indicate that the maximum sustained winds are near 180 mph (285 km/h) with higher gusts.  Irma is a an extremely dangerous category 5 hurricane on the Saffir-Simpson Hurricane Wind Scale. Some fluctuations in intensity are likely during the next day or two, but Irma is forecast to remain a powerful category 4 or 5 hurricane during the next couple of days.

 

Hurricane-force winds extend outward up to 60 miles (95 km) from the center and tropical-storm-force winds extend outward up to 160 miles (260 km).

 

The latest minimum central pressure reported by reconnaissance aircraft is 931 mb (27.50 inches).

* * *

Irma has strengthened to an “extremely dangerous” Category 5 hurricane, the National Hurricane Center said in its advisory at 7:45am AST. According to the Hurricane center, NOAA and Air Force hurricane hunter aircraft data indicate Hurricane Irma has intensified into an “extremely dangerous” Category 5 hurricane on the Saffir-Simpson Hurricane Wind Scale with maximum winds of 175 mph (280 km/h) with higher gusts.

View image on TwitterView image on Twitter

Recon finds surface winds of 152 knots (175 mph) in ‘s right front quadrant. Holy crap.

As of this moment, the hurricane is located 270 miles east of Antigua, moving west at 14 mph. States of emergency were declared in Puerto Rico, the U.S. Virgin Islands and all of Florida while people on various Caribbean islands boarded up homes and rushed to find last-minute supplies, forming long lines outside supermarkets and gas stations. This morning the Dominican Republic has issued a Hurricane Watch from Cabo Engano to northern border with Haiti; Tropical Storm Watch from south of Cabo Engao to Isla Saona.

BREAKING: Hurricane  is the first Category 5 storm of the 2017 Atlantic season. Winds are at 175 mph. This is a very dangerous storm!

According to meteorologists, Irma is the 17th hurricane in the Atlantic on record to have max winds >= 175 mph. Atlantic max wind record is Allen (1980) at 190 mph.

 is the 17th hurricane in the Atlantic on record to have max winds >= 175 mph. Atlantic max wind record is Allen (1980) at 190 mph.

Ultimately, the question is how strong Irma will be when it inevitably makes landfall on the Eastern Seaboard, somewhere in the vicinity of Miami.

Meanwhile, officials across the northeastern Caribbean canceled airline flights, shuttered schools and urged people to hunker down indoors as Hurricane Irma barreled toward the region, now as an “extremely powerful” Category 5 storm. Irma’s maximum sustained winds increased to near 175 mph early Tuesday.

According to AP, emergency officials warned that the storm could dump up to 10 inches (25 centimeters) of rain, unleash landslides and dangerous flash floods and generate waves of up to 23 feet (7 meters) as the storm drew closer.

“We’re looking at Irma as a very significant event,” Ronald Jackson, executive director of the Caribbean Disaster Emergency Management Agency, said by phone. “I can’t recall a tropical cone developing that rapidly into a major hurricane prior to arriving in the central Caribbean.”

U.S. residents were urged to monitor the storm’s progress in case it should turn northward toward Florida, Georgia or the Carolinas. “This hurricane has the potential to be a major event for the East Coast. It also has the potential to significantly strain FEMA and other governmental resources occurring so quickly on the heels of (Hurricane) Harvey,” Evan Myers, chief operating officer of AccuWeather, said in a statement.

In the Caribbean, the director of Puerto Rico’s power company predicted that storm damage could leave some areas of the U.S. territory without electricity for four to six months. But “some areas will have power (back) in less than a week,” Ricardo Ramos told radio station Notiuno 630 AM.

The power company’s system has deteriorated greatly amid Puerto Rico’s decade-long recession, and the territory experienced an islandwide outage last year. Meanwhile, the governor of the British Virgin Islands urged people on Anegada island to leave if they could, noting that Irma’s eye was expected to pass 35 miles (56 kilometers) from the capital of Road Town.

“This is not an opportunity to go outside and try to have fun with a hurricane,” U.S. Virgin Islands Gov. Kenneth Mapp warned. “It’s not time to get on a surfboard.”

Antigua and Anguilla shuttered schools Monday, and government office closures were expected to follow. On the tiny island of Barbuda, hotel manager Andrea Christian closed the Palm Tree Guest House. She said she was not afraid even though it would be her first time facing a storm of that magnitude.

“We can’t do anything about it,” Christian said by phone, adding that she had stocked up on food and water. “We just have to wait it out.”

Both Puerto Rico and the U.S. Virgin Islands expected 4 inches to 8 inches (10-20 centimeters) of rain and winds of 40-50 mph with gusts of up to 60 mph. Puerto Rico Gov. Ricardo Rossello activated the National Guard, canceled classes for Tuesday and declared a half-day of work. He also warned of flooding and power outages. “It’s no secret that the infrastructure of the Puerto Rico Power Authority is deteriorated,” Rossello said.

Meteorologist Roberto Garcia warned that Puerto Rico could experience hurricane-like conditions in the next 48 hours should the storm’s path shift. “Any deviation, which is still possible, could bring even more severe conditions to Puerto Rico and the U.S. Virgin Islands,” Garcia said. The U.S. Virgin Islands said the school year would open Friday instead of Tuesday.

Gov. Kenneth Mapp said most hotels in the U.S. territory were at capacity with some 5,000 tourists. He noted the storm was expected to pass 40 miles (64 kilometers) north of St. Thomas and warned that the island could experience sustained winds as high as 80 mph

“It’s not a lot of distance,” he said, adding: “It could affect us in a tremendous way. I’m not saying that to alarm anyone or scare anyone, but I want the Virgin Islands to be prepared.”

Residents on the U.S. East Coast were urged to monitor the storm’s progress due to the possibility it could turn northward toward Florida, Georgia or the Carolinas. “This hurricane has the potential to be a major event for the East Coast. It also has the potential to significantly strain FEMA and other governmental resources occurring so quickly on the heels of (Hurricane) Harvey,” Evan Myers, chief operating officer of AccuWeather, said in a statement.

Just spoke to @POTUS – he offered the full resources of the federal government as Floridians prepare for Hurricane Irma.

In Miami-Dade County, the early scramble was on to stock up on hurricane supplies, reports CBS Miami. People were shopping for gasoline, generators, food, batteries, and everything else they’d need get by were Irma to hit the region hard.

“We are not yet at the height of hurricane season and people have not taken steps to get prepared yet,” Miami-Dade County Emergency Management Director Curt Sommerhoff said Monday. “We are encouraging them to take those steps today.” Miami-Dade officials were to meet Tuesday to assess the danger.

END

 

And now onto the Debt Ceiling fiasco: a 3 month raise in the debt ceiling for Harvey relief. Ryan dismisses this as ‘unworkable”

 

(courtesy zerohedge)

 

 

 

Pelosi And Schumer Offer 3-Month Debt Ceiling Deal, Ryan Quickly Dismisses As “Unworkable”

After weeks of speculation on how/if a debt ceiling increase might come to a fruition before, or possibly after, the Treasury department runs out of cash, the latest reports from Washington DC seemingly suggest that Chuck Schumer and Nancy Pelosi may step in to save the day for a divided Republican Party that can’t seem to get out of its own way.

As Politico notes this morning, Congressional Democrats are expected to offer Republicans their votes for a short-term funding package that would fund the government through mid-December while also raising the debt limit and delivering aid to victims of Hurricane Harvey.

“Given Republican difficulty in finding the votes for their plan, we believe this proposal offers a bipartisan path forward to ensure prompt delivery of Harvey aid as well as avoiding a default, while both sides work together to address government funding, DREAMers, and health care.”

.@SenSchumer and @NancyPelosi announce that Democrats support a three-month debt ceiling extension as part of Harvey aid bill.

Meanwhile, as Axios notes, pursuing a deal with Democrats will undoubtedly result in a revolt by the House Freedom Caucus which is intent upon linking any funding deals to spending cuts.

 

Three sources with knowledge of the discussions confirmed them to Axios. They stressed nothing has been decided and the move would be highly risky, with a strong chance of a conservative revolt. It’s especially unclear whether such a vehicle could move through the House — given the Freedom Caucus and other conservative members are already angry about the plans to use the Harvey funding to raise the debt ceiling without spending cuts.

 

The advantage: If GOP leadership can get the CR done this week with Harvey funding and the debt ceiling that would be a big tactical victory, given Democrats may be poised to oppose the government funding extension if it doesn’t include measures to support DACA.

 

Per a source close to GOP Senate leadership: “Leadership is testing the waters in the Senate for adding the CR…Senate leaders will only add it if House leaders believe they can pass it. Problem is the CR is the vehicle for the Dems to demand a DACA fix and the Freedom Caucus to fight that and push for spending reductions. It is a bold idea but putting together the votes seems tough.”

Trump

 

Meanwhile, the spread between 10/5 T-bills and 9/21 paper just collapsed indicating that the market is buying the the Schumer/Pelosi hope for now…

Risk Premium

 

Then again, it all may be short-lived as Paul Ryan described the Pelosi/Schumer deal as “ridiculous, disgraceful and unworkable” just moments ago…

“I think that’s a ridiculous idea,” House Speaker Paul Ryan tells reporters during news conference in Washington about Democrats’ offer to support Harvey aid along with a three-month extension of the debt limit, which could set up another showdown at the end of the year.”

 

I think that’s ridiculous and disgraceful that they want to play politics on the debt ceiling when there are people in need following the hurricane.”

 

 

end

 

Republicans are furious with Trump as he sides with the Democrats for a short term rise in the debt ceiling for Harvey funding and other goodies demanded by the left.

(courtesy zerohedge)

 

Republicans Furious As Trump Sides With Democrats On Short-Term Debt Limit Extension

It appears President Trump has found a new ally in Congress: the Democrats whose plan – derided earlier by Paul Ryan – to keep any ‘fix’ for the debt-ceiling, short-term; was approved over the Republicans’ howls of objection. As The Hill reports, President Trump agreed with top congressional Democrats at a White House meeting to fund the government and raise the debt ceiling through Dec. 15. despite objections from virtually all GOP leaders.

“In the meeting, the President and Congressional leadership agreed to pass aid for Harvey, an extension of the debt limit, and a continuing resolution both to December 15, all together,” Senate Minority Leader Charles Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) said in a joint statement.

While the report give the impression of delightful civility, the reality was rather different, as Trump concluded a deal with Schumer, Pelosi et al behind Ryan and McConnell’s backs. Politico’s Jake Sherman reports that:

I am told by multiple sources Rs are furious. The Democratic ploy — to keep debt limit short term — worked. It took just a few hours.

 

TRUMP also agreed to extend government funding until December 15, setting up a wild final month of the year.

 

TRUMP agrees to 3-month debt limit increase in meeting w hill leaders. All GOP leaders were opposed, per multiple sources.

 

TO BE CLEAR: Debt limit, govt funding expires 12/15. Ryan, McConnell, McCarthy were all opposed. Trump, Pelosi, Schumer were on same side.

The agreement comes after Speaker Paul Ryan earlier in the day called the idea of adding a three-month extension of the debt ceiling to Hurricane Harvey aid “ridiculous” after the Democratic leaders proposed it. The initial Democratic offer did not mention the government funding.

Once cleared, the package would set up a end-of-the-year cliff on both funding the government and the debt ceiling. Schumer and Pelosi added that “both sides have every intention of avoiding default in December and look forward to working together on the many issues before us.”

The Democrats had offered the idea of combining Harvey aid with a three-month extension of the debt limit earlier on Wednesday.

Ryan initially offered a dim review of the suggestion, accusing the Democrats of playing politics. Yet Ryan also faced opposition within his conference to a long extension of the debt limit.

 

Asked about the statement, a spokesman for McConnell predicted the Kentucky Republican would address the deal at a weekly leadership press conference scheduled for Wednesday afternoon.

And some additional perspective from Jake Sherman:

What just happened at the White House is what Republicans have been complaining about for months.

 

On many occasions, Rs have felt like they have a plan. Then Trump will hear something else, and he’ll agree, blowing up the GOP framework

 

On this occasion, Democrats feel like they’ve just completely rolled him. Now the debt ceiling will be a threat at least 1 more time in 2017 and Dems — looking to extract a win on DACA — have a host of must-pass bills in the hopper in 3 months. Rs think this is the worst outcome

As a result of Trump’s deal with democrats, all three circles in Goldman’s Venn Diagram of Fiscal Agenda “Doom” have now been “resolved”, if only for another three months, until mid-December:

T-Bill yields confirmed their earlier plunge

… and gold is tumbling on the short-term can-kicking effort.

 

However, with the October Bill situation now resolved, it’s the turn of the December 21 Bills to “kin” and sure enough:

As the can was kicked from Oct Bills to Dec Bills…

Update: here are some soundbites from Trump on board AF1:

  • TRUMP SAYS HE BELIEVES CONGRESS WANTS A DEAL ON DACA, HE WILL SIGN IT IF THERE IS A DEAL
  • TRUMP SAYS HE WOULD LIKE TO SEE BORDER SECURITY AND DACA MEASURES IN AN IMMIGRATION DEAL
  • TRUMP SAYS HE WOULD LIKE TO SEE A PERMANENT DEAL AND HE THINKS IT IS GOING TO HAPPEN
  • TRUMP SAYS FUNDING WILL BE ADDED TO HARVEY PACKAGE FOR HURRICANE DAMAGE IN FLORIDA
  • TRUMP SAYS HE HAS A FEELING IT WON’T BE NECESSARY TO REVISIT DACA ISSUE IN SIX MONTHS BECAUSE CONGRESS WANTS TO DO SOMETHING ABOUT IT

And the punchline, which will hardly be approved by Steve Bannon:

  • TRUMP SAYS ‘WE ESSENTIALLY CAME TO A DEAL’ WITH DEMOCRATIC LEADERS AND ‘I THINK THE DEAL WILL BE VERY GOOD’

Finally, putting it all in context is this 2013 tweet from Trump himself:

The worst negotiators in history (otherwise known as Republicans) have just offered to suspend debt ceiling for four months. Pathetic!

 

Despite the lower dollar, the July trade deficit rose again up to $43.7 billion from a downward revised $43.5 billion

This will hurt GDP numbers in the 3rd quarter.

(courtesy zero hedge)

 

US Trade Deficit Rises In July, Beats Estimates As Oil Imports Slide

The US trade deficit widened in July, growing by 0.3% from a downward revised $43.5 billion to $43.7 billion, and beating expectations of $44.7 billion, as exports decreased more than imports. The goods deficit decreased less than $0.1 billion in July to $65.3 billion. The services surplus decreased $0.2 billion in July to $21.6 billion.

Breaking down the components, first exports:

  • Exports of goods and services decreased $0.6 billion, or 0.3 percent, in July to $194.4 billion. Exports of goods decreased $0.4 billion and exports of services decreased $0.1 billion.
    • The decrease in exports of goods mostly reflected decreases in consumer goods ($0.7 billion) and in automotive vehicles, parts, and engines ($0.6 billion). An increase in capital goods ($0.9 billion) partly offset the decreases.
    • The decrease in exports of services mostly reflected a decrease in travel (for all purposes including education) ($0.3 billion).

And imports:

  • Imports of goods and services decreased $0.4 billion, or 0.2 percent, in July to $238.1 billion. Imports of goods decreased $0.5 billion and imports of services increased less than $0.1 billion.
    • The decrease in imports of goods mostly reflected decreases in automotive vehicles, parts, and engines ($0.8 billion) and in industrial supplies and materials ($0.7 billion). An increase in capital goods ($1.3 billion) partly offset the decreases.
    • Imports of services were nearly unchanged, reflecting small and offsetting changes across all categories.

Broken down by geography, the July figures showed:

  • Surpluses with South and Central America ($3.5), Hong Kong ($2.8), Brazil ($0.8), Saudi Arabia ($0.8), and Singapore ($0.7).
  • Deficits with China ($31.8), European Union ($12.1), Japan ($5.5), Mexico ($5.4), Germany ($5.3), Italy ($2.4), India ($1.9), Taiwan ($1.9), South Korea ($1.8), France ($1.3), Canada ($0.9), United Kingdom ($0.2), and OPEC ($0.1).
  • The surplus with South and Central America increased $0.9 billion to $3.5 billion in July. Exports increased $1.0 billion to $12.9 billion and imports increased $0.1 billion to $9.4 billion.
  • The balance with Saudi Arabia shifted from a deficit of less than $0.1 billion to a surplus of $0.8 billion in July. Exports increased $0.4 billion to $1.9 billion and imports decreased $0.4 billion to $1.2 billion.

The Trade deficit excluding petroleum was at $40.6 billion. in July

A closely watched metric, in light of recent declines in oil exports by OPEC (mostly Saudi Arabia) to the US, showed that July crude oil imports declined to $10.16 billion from $11.12 billion last month, representing 76.1% of total petroleum imports, with oil imports from OPEC falling to 40.4% of the total, while oil imports from Saudi Arabia fell 7.8m barrels. July non-crude petroleum imports widened to $3.2b from $3.1b m/m; 23.9% of total petroleum imports.

  • Crude oil imports averaged 7.585m b/d in July compared to 8.292m b/d in June
  • Oil imported from Canada and Mexico was 47.3% of total in July vs 48.7% in June

At the same time, Petroleum exports rose in real dollars to $10,867b in July after $10,354b in June.

end

 

Last week we brought you a commentary on the public pension problems facing Kentucky.  It seems that a lot of citizens have figured out how to beat the system as fears of a pension collapse in that state mount

 

(courtesy zero hedge)

we must be vigilant..

(courtesy zero hedge)

House Panel Subpoenas DOJ, FBI For “Trump Dossier” Records

The one Russia-collusion narrative that Democrats have actively worked to suppress is coming back to haunt them.

Investigators from the House Intelligence Committee have issued subpoenas to the DOJ and FBI for information related to the now-infamous Trump dossier that, as we recently learned, was provided to the FBI even though it contained knowingly inaccurate allegations. It was also financed by a “senior Russian government official,” according to testimony given to the Senate Judiciary Committee.

As expected, the move is being spearheaded by Republicans, while Democrats on the committee, including leading anti-Trumper Adam Schiff, are resisting the subpoenas, claiming this is the latest ploy to try and “discredit” the dossier’s author, former British intelligence officer Christopher Steele.

Here’s the Washington Examiner, which first reported the news:

In the most significant escalation yet in the wrangling between Congress and the FBI over the Trump dossier, the House Intelligence Committee has subpoenaed the bureau and the Justice Department for documents relating to the dossier, the FBI’s relationship with dossier author Christopher Steele, and the bureau’s possible role in supporting what began as an opposition research project against candidate Donald Trump in the final months of last year’s presidential campaign.

In reality, Democrats may be worried that, if the background materials are finally publicized, they could terminally damage the Trump-Russia collusion narrative. Here’s more from CNN:

“’We’ve got to run this thing to ground,’ said Republican Rep. Michael Conaway, who is heading the House Russia investigation. Rep. Adam Schiff, the top Democrat on the panel, said the pair of subpoenas were issued over his objections last month and are designed to “undermine” the claims about the Trump campaign and the Kremlin.”

As Hermitage Capital’s William Browder told the Senate Judiciary Committee during testimony in July, the dossier, which contains allegations that the Russians had compromising information on President Trump, was actually funded by a senior Russian government source, who paid Democratic opposition research firm Fusion GPS to conduct opposition research into Trump. The story hasn’t gotten a lot of traction in the mainstream press, we believe, because it violates the Russia-Trump narrative that the media has worked so hard to build from nothing.

Here’s the relevant exchange between Browder and Senator Lindsey Graham:

Graham: You believe that Fusion GPS should of registered under FARA, because they were acting on the behalf of the Russians?

Browder: That’s correct.

Graham: So, I just want to absorb that for a moment. The group that did the dossier on President Trump hired this British spy, wound up getting it to the FBI. You believe they were working for the Russians?

Browder: And in the Spring and Summer of 2016 they were receiving money indirectly from a senior Russian government official.

Graham: Okay. So, these are the people that were trying to undermine Donald Trump by showing the nefarious ties to Russia. Is that what you’re saying?

Browder: Well, what I’m saying with 100% certainty is that they were working to undermine the Magnitsky act and the timing of that.

Graham: But, the Fusion GPS products apparently as they hired a guy to look into Trump?

Browder: Yes.

Graham: Right.

Browder: Correct.

Republicans have rightfully argued that it is important to understand the genesis of the dossier and whether it was created to sabotage Trump during his successful campaign for president, and also whether Democrats intentionally tried to mislead the FBI.

The dossier was funded by a group called Fusion GPS that conducts political opposition research and was initially hired by anti-Trump Republicans during the primary before switching to the Democrats after Trump had secured the nomination. One of its co-founders, Glenn Simpson, a longtime investigative reporter at the Wall Street Journal, abruptly canceled voluntary testimony before the Senate Judiciary Committee back in July.

As Reuters reminds us, the House intelligence panel is conducting one of several Congressional probes into alleged collusion between the Trump and Russia campaigns, as well as allegations of Russian interference in the 2016 election.

Russia, naturally, denies meddling in the election and Trump denies any collusion, and as the latest series of leaks have shown, Special Counsel Robert Mueller and the other investigators have shifted their focus in the “collusion” probe to “financial crimes” conducted by the subjects of the investigation. What they have is reportedly sufficient to try to nail Paul Manafort on some kind of financial-fraud related charge in the hope that he’ll turn on the president to save his own neck.

While it remains unclear what materials they’re trying to subpoena, we hope that as more of this narrative is exposed to the public, the attempt by Trump’s opponents – supposedly including a “senior Russian government official” – to smear the president, while attempting to foment an FBI investigation based on false information – receives the publicity it deserves.

Another rat to flee a sinking ship:  Stanley Fischer, Vice Chairman of the Fed unexpectedly resigns
(courtesy zero hedge)

Fed Vice Chair Stan Fischer Unexpectedly Resigns “For Personal Reasons”

In a shocking announcement, the latest rat to abandon the sinking ship – because it is far less fun to navigate the world’s biggest economy when you are raising rates than when injecting trillions – Federal Reserve Vice Chairman Stanley Fischer has announces his decision to step down effective October 13 (Friday), citing “personal reasons” in letter of resignation to President Donald Trump. His term as vice chair was set to expire on June 12, 2018

“Stan’s keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations. He represented the Board internationally with distinction and led our efforts to foster financial stability,” Janet Yellen said in the Fed’s statement below.

Stanley Fischer submits resignation as a member of the Board of Governors, effective on or around October 13, 2017

 

Stanley Fischer submitted his resignation Wednesday as Vice Chairman and as a member of the Board of Governors of the Federal Reserve System, effective on or around October 13, 2017. He has been a member of the Board since May 28, 2014.

 

“Stan’s keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations. He represented the Board internationally with distinction and led our efforts to foster financial stability,” said Chair Janet L. Yellen. “I’m personally grateful for his friendship and his service. We will miss his wise counsel, good humor, and dry wit.”

 

Dr. Fischer, 73, was appointed to the Board by President Obama for an unexpired term ending January 31, 2020. His term as Vice Chairman expires on June 12, 2018. During his time on the Board, he served as chairman of the Board’s Committee on Financial Stability as well as the Committee on Economic and Financial Monitoring and Research. He represented the Board internationally including at the Financial Stability Board, the Bank for International Settlements, the Group of 20, the Group of Seven, the International Monetary Fund, and the Organisation for Economic Co-operation and Development.

 

Before joining the Board, Dr. Fischer was governor of the Bank of Israel, from 2005 to 2013. He was vice chairman of Citigroup from February 2002 to April 2005. He served as first deputy managing director of the International Monetary Fund from September 1994 through August 2001. From January 1988 to August 1990, he was the chief economist of the World Bank. He was a professor of economics at the Massachusetts Institute of Technology from 1977 to 1999 and associate professor from 1973 to 1977. Prior to joining the faculty at MIT, he was an assistant professor of economics and postdoctoral fellow at the University of Chicago.

 

Dr. Fischer was born in Lusaka, Zambia, in October 1943. He received his B.Sc. and M.Sc. in economics from the London School of Economics. He received his Ph.D. in economics from the Massachusetts Institute of Technology in 1969.

 

Dr. Fischer is married with three adult children.

 

end

 

Cohn unlikely to get Trump’s nod for fed Chair. Question; why is he still hanging around?

(courtesy zero hedge)

Gary Cohn “Unlikely To Get Trump’s Nomination” For Fed Chair, WSJ Reports

Just hours after Fed Vice Chair Fischer resigned, and Goldman CEO Lloyd Blankfein threw his support behind Gary Cohn…

“No one’s perfect, but he’s the best I know,” Blankfein said of Cohn, his former No. 2 at Goldman Sachs, during a talk with journalists on Wednesday at the bank’s headquarters in New York.

 

“He’d be a different kind of person” than Fed Chair Yellen, Blankfein added.

 

“He’s not an academic. I don’t know that he reads a lot of policy papers, let alone write them.”

‘Sources’ confirm President Trump is unlikely to nominate Gary Cohn to become Federal Reserve Chairman, WSJ’s Nate Becker reports in tweet.

@WSJ scoop crossing now: Trump unlikely to nominate Cohn as Fed chair; his chances dropped after he criticized Trump on Charlottesville.

As The Wall Street Journal reports, this shift inside the Oval Office was largely due to Mr. Cohn’s reaction to Mr. Trump’s response to the violence in Charlottesville, Va., in which the president at times blamed both white supremacists opposing the removal of a Confederate war statue and counterprotesters.

According to PredictIt, Cohn’s odds just crashed…

 

Interestingly there is some reaction in stocks, as some wonder what Cohn is sticking around for now… (especially after being called out as a “globalist” by Trump)

 

 

end

I will see you THURSDAY  night

gold and silver should resume its northerly trajectory later this evening.

Harvey.

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