Dec 1/Gold rises $5.65 on news of charges and conviction of Michael Flynn who will no doubt testify against Trump and probably Kushner/silver does not participate as it was down 8 cents/Again huge EFP transfers from the comex to London: in gold a whopping 15,472 contracts transferred, in silver: 5387 contracts transferred as EFP s/Tax bill likely to pass the Senate this evening/

GOLD: $1279.50  UP $5.65

Silver: $16.35 DOWN 8 cents

Closing access prices:

Gold $1280.30

silver: $16.45

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: $1282.27 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1275.30

PREMIUM FIRST FIX: $6.97

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SECOND SHANGHAI GOLD FIX: $1283.09

NY GOLD PRICE AT THE EXACT SAME TIME: $1275.40

Premium of Shanghai 2nd fix/NY:$7.69

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LONDON FIRST GOLD FIX: 5:30 am est $1277.25

NY PRICING AT THE EXACT SAME TIME: $1276.20

LONDON SECOND GOLD FIX 10 AM: $1275.50

NY PRICING AT THE EXACT SAME TIME. 1275.00

For comex gold:

DECEMBER/

 NUMBER OF NOTICES FILED TODAY FOR DECBER CONTRACT:  627 NOTICE(S) FOR 62700 OZ.

TOTAL NOTICES SO FAR: 2936 FOR 293,600 OZ (9.131 TONNES)

For silver:

DECEMBER

398 NOTICE(S) FILED TODAY FOR

1,990,000 OZ/

Total number of notices filed so far this month: 4392 for 21,960,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $1016/OFFER $1022, up $278 (morning) 

BITCOIN : BID $10814 OFFER: $10881 // UP $881 (CLOSING)

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY FELL BY ONLY  2493 contracts from 189,526 FALLING TO 187,033 DESPITE YESTERDAY’S CONTINUAL DRUBBING OF SILVER  WHICH SAW OUR METAL FALL 13 CENTS AND NOW WELL BELOW THE HUGE $17.25 SILVER RESISTANCE.   WE HAD SURPRISINGLY NO REAL COMEX LIQUIDATION AS WE WERE ALSO NOTIFIED THAT WE HAD ANOTHER LARGE NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE :  5387 EFP’S FOR MARCH AND THUS TOTAL ISSUANCE OF 5387 CONTRACTS.   I GUESS WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. YESTERDAY WITNESSED 5700 EFP’S FOR SILVER ISSUED.

RESULT: A SMALLER SIZED FALL IN OI COMEX DESPITE THE CONTINUAL DRUBBING IN SILVER PRICE: YESTERDAY IT FELL  13 CENTS. HOWEVER  WE HAD ALL OF OUR COMEX LONGS WHICH EXITED OUT OF THE SILVER COMEX  TRANSFERRED THEIR OI TO LONDON THROUGH THE EFP ROUTE:  FROM THE CME DATA 5387 EFP’S  WERE ISSUED TODAY  FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS. IN ESSENCE THE  DEMAND FOR SILVER PHYSICAL INTENSIFIES GREATLY. WE REALLY GAINED 2894 OI CONTRACTS i.e5387 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 2493 OI COMEX CONTRACTS.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.935 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 398 NOTICE(S) FOR 1,990,000 OZ OF SILVER

In gold, the open interest FELL BY ONLY 3727 CONTRACTS DOWN TO 485,309  DESPITE THE HUGE FALL  IN PRICE OF GOLD YESTERDAY ($9.15).  HOWEVER  THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR TODAY  TOTALED ANOTHER 15,472 CONTRACTS OF WHICH THE MONTH OF DECEMBER SAW 0 CONTRACTS AND FEB SAW THE ISSUANCE OF 15,472 CONTRACTS. The new OI for the gold complex rests at 486,098. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE WITNESS THE HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE AMOUNT OF GOLD OUNCES STANDING FOR DECEMBER. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK  TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD.  THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX  HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND ON TOP OF THAT IT IS TAKING A FURTHER 13 WEEKS TO OBTAIN PHYSICAL FROM THE POINT WHEN FORWARDS BECOME DUE. IN ESSENCE WE HAD A NET GAIN OF 11,745 OI CONTRACTS: 3727 OI CONTRACTS LOST AT THE  COMEX OI  BUT  15,472 OI CONTRACTS NAVIGATED OVER TO LONDON. AS I REPORTED YESTERDAY: “THE CME HAS BEEN VERY TARDY IN THEIR REPORTING OF EFP ISSUANCE.  THESE GUYS ARE CROOKS. THEY ARE IMMEDIATELY REMOVING OPEN INTEREST NUMBERS BUT DELAYING RELEASE OF EFP’S FOR 24 HOURS OR GREATER.

YESTERDAY, WE HAD 20,559 EFP’S ISSUED.

Result: A HUGE SIZED DECREASE IN OI  WITH THE HUGE SIZED FALL IN PRICE IN GOLD YESTERDAY ($9.15). WE  HAD AN LARGE  NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 15,472. THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE REACHED THE HUGE DELIVERY MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES.  IF YOU TAKE INTO ACCOUNT THE 15,472 EFP CONTRACTS ISSUED, WE HAD A NET GAIN OPEN INTEREST OF 11,745 contracts:

15,472 CONTRACTS MOVE TO LONDON AND 3727 CONTRACTS REMOVED FROM   THE COMEX.

we had:  627  notice(s) filed upon for 62,700 oz of gold.

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

GLD:

Today, no changes in gold inventory at the GLD/

Inventory rests tonight: 839.55 tonnes.

SLV

TODAY WE HAD A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: AN DEPOSIT OF 2.076 MILLION OZ WITH SILVER IN THE DUMPSTER THESE PAST FEW DAYS????

INVENTORY RESTS AT 319.206 MILLION OZ

end

.

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

1. Today, we had the open interest in silver SURPRISINGLY FELL BY ONLY 2493 contracts from 189,526 DOWN  TO 187,033 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE LOSS IN PRICE OF SILVER PRICE (A FALL OF 13 CENTS ). HOWEVER, OUR BANKERS  USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER HUGE  5387  PRIVATE EFP’S FOR MARCH (WE DO NOT GET A LOOK AT THESE CONTRACTS).  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.    AS I STATED YESTERDAY: “THIS IS THE SCENE WHERE IN THE PAST WE DID SEE MASSIVE COMEX OI CONTRACTION ALTHOUGH IT WAS MORE PRONOUNCED IN GOLD THAN WITH SILVER.” IF YOU COMPARE GOLD TO SILVER ONE CAN SEE THE DIFFERENCE: GOLD HAS A MUCH GREATER TRANSFER IN EFP’S THAN SILVER.  TODAY IN REALITY WE HAD ZERO COMEX SILVER COMEX LIQUIDATION. IF WE ADD THE OI LOSS AT THE COMEX (2493 CONTRACTS)   TO THE 5387 OI TRANSFERRED TO LONDON THROUGH EFP’S  WE OBTAIN A NET GAIN OF A MASSIVE  2894  OPEN INTEREST CONTRACTS, ON TOP OF THE HUGE AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN DECEMBER (SEE BELOW)

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE 13 CENT FALL IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING).  BUT WE ALSO  HAD ANOTHER 5387 EFP’S ISSUED.. TRANSFERRING OUR COMEX LONGS OVER TO LONDON . TOGETHER WITH THE HUGE AMOUNT OF SILVER OUNCES STANDING FOR DECEMBER, DEMAND FOR PHYSICAL SILVER IS STRONG.

(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 THURSDAY night/FRIDAY morning: Shanghai closed UP 0.43 points or .01% /Hang Sang CLOSED DOWN 103.11 pts or 0.35% / The Nikkei closed UP 04.07 POINTS OR 0.41%/Australia’s all ordinaires CLOSED UP 0.30%/Chinese yuan (ONSHORE) closed UP at 6.6093/Oil DOWN to 57.83 dollars per barrel for WTI and 63.25 for Brent. Stocks in Europe OPENED ALL RED .    ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6093. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.6069 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS SLIGHTLY WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.(MARKETS  WEAK)

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/South Korea

This will move the stock market another 300 points up and cause gold to fall again.  North Korea is preparing to launch another missile

( zero hedge)

 

ii)New images show that North Korea now has the capability of carrying multiple warheads

(courtesy zerohedge)

b) REPORT ON JAPAN

3 c  CHINA

 

4. EUROPEAN AFFAIRS

UK labour leader: Jeremy Corbyn lashes out at Morgan Stanley and yes: Yes, I am a threat to the big banks

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)RUSSIA

Stands to reason:  Russian Parliament bans access to all USA reporters as the USA government yanked their TV station credentials

 

( zerohedge)

 

ii)Turkey

A bad hair day for Erdogan
( zerohedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

 

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)The advantages to hold gold

Bullion Star/Persson/GATA)

ii)This is going to be interesting:  Coinbase loses its bid to block a USA tax probe of gains made by individuals

( Rosenblatt/Bloomberg)

 

iii)Bill Murphy correctly states that the monetary metals camp is demoralized with the constant criminal acts by our bankers.  Very shortly gold/silver will be joined by Bitcoin as the bankers flood the system with non backed bitcoin paper

( Bill Murphy/GATA)

iv)Alasdair outlines why the prospects to the dollar are poor.  He is always a must read.

( Alasdair Macleod)

10. USA stories which will influence the price of gold/silver

i)Chaos last night as they delay the tax bill to today. It may include 350 billion in new tax hikes.

( zerohedge)

ii)Then late in the morning: Johnson and Daines support the tax proposal and the voting looks close:

( zerohedge)

iii)Interesting:  the White House is monitoring the “bitcoin situation”

( zerohedge)

iv)What an absolute joke:  Michael Flynn is to plead guilty to lying to the FBI

( zerohedge)

iv b What a riot: gold rises as Flynn is to testify against Trump saying that Donald Trump directed him to make contact with Russians.

 

iv c what garbage!!

( zerohedge)

iv b) Here are two scenarios, one bad for Trump and the other quite innocuous.  I will go with the latter

( zerohedge)

 

v)Soft data Markit Manufacturing Index falls lead by new orders

( zero hedge)

vi)I like Graham Summers very much.  He explains in simple language the huge debt bubble which in turn creates bubbles in just above everythinga must read…(courtesy Graham Summers/Phoenix Capital Research)

Let us head over to the comex:

The total gold comex open interest FELL BY A LESS THAN EXPECTED 3,727  CONTRACTS DOWN to an OI level of 485,509 DESPITE THE  HUGE SIZED FALL AND CONTINUAL DRUBBING IN THE PRICE OF GOLD ($9.15 LOSS WITH RESPECT TO YESTERDAY’S TRADING).   IN ACTUAL FACT WE DID NOT HAVE ANY  GOLD  LIQUIDATION.  WE  HAD ANOTHER LARGE COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED  A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. THE CME REPORTS THAT 0 EFPS WERE ISSUED FOR DECEMBER  AND 15,472 EFP’S WERE ISSUED FOR FEBRUARY FOR A TOTAL OF 15,472 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS.  THE CONSTANT BANKER RAIDS CONTINUE AS THEY TRY TO GET  OUR “MATHEMATICAL PAPER LONGS” IN GOLD TO LIQUIDATE THEIR POSITIONS AT THE COMEX. SO FAR IT HAS NOT SUCCEEDED (AS THEY MORPH INTO LONDON FORWARDS) AND THUS THE  CONTINUAL RAID EVEN TODAY . THE CME HAS BEEN VERY TARDY IN THEIR REPORTING OF EFP’S CONTRACTS AFTER A COMEX OI MORPHS INTO AN EFP WHICH WAS THE REASON FOR MY 2ND LETTER TO THE CFTC.

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 11,745 OI CONTRACTS IN THAT 15,472 LONGS WERE TRANSFERRED AS LONGS TO LONDON AS A FORWARD AND WE LOST  3727 COMEX CONTRACTS.  NET GAIN: 12,334 contracts.

Result: a SMALLER THAN EXPECTED DECREASE IN COMEX OPEN INTEREST WITH THE HUGE SIZED LOSS IN THE PRICE OF GOLD ($12.30.)   WE HAD NO REAL GOLD LIQUIDATION. TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 11,745 OI CONTRACTS…AS I STATED YESTERDAY: “WITH A PROBABLE FURTHER ADDITION IN EFP TOMORROW” .  FROM THE DATA, THAT CERTAINLY WAS THE CASE.

.

We have now entered the  active contract month of DECEMBER. The open interest for the front month of December saw it’s open interest decline by 3560 contracts down to 8,348.  We had 2309 notices filed upon yesterday so we lost 1,251 contracts or an additional 125,100 oz will not stand for delivery in this active delivery month of December but they did migrate over to London as a forward for February…the reason for the move is that there is not any gold for them at the comex.

January saw its open interest GAIN OF 174 contracts UP to 2093. FEBRUARY saw a loss of 733 contacts down to 377,095.

We had 627 notice(s) filed upon today for 62700 oz

PRELIMINARY VOLUME TODAY ESTIMATED;  417,474

FINAL NUMBERS CONFIRMED FOR FRIDAY:  371,115

comex gold volumes are increasing dramatically

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And now for the wild silver comex results.

Total silver OI SURPRISINGLY FELL  BY ONLY 2,493 CONTRACTS  FROM 189,526 DOWN TO 187,033 DESPITE YESTERDAY’S 13 CENT LOSS IN PRICE.  HOWEVER WE DID HAVE ANOTHER STRONG 5387 EMERGENCY EFP’S FOR MARCH ISSUED BY OUR BANKERS (ZERO FOR DECEMBER) TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.THE TOTAL EFP’S ISSUED: 5387.  IT SURE LOOKS LIKE THE SILVER BOYS HAVE STARTED TO MIGRATE TO LONDON FROM THE START OF DELIVERY MONTH AND CONTINUING RIGHT THROUGH UNTIL FIRST DAY NOTICE JUST LIKE WE ARE WITNESSING TODAY.  USUALLY WE NOTED THAT CONTRACTION IN OI OCCURRED ONLY DURING THE LAST WEEK OF AN UPCOMING ACTIVE DELIVERY MONTH. THIS PROCESS HAS JUST BEGUN IN EARNEST IN SILVER STARTING IN SEPTEMBER.  HOWEVER, IN GOLD, WE HAVE BEEN WITNESSING THIS FOR THE PAST 2 YEARS.  WE HAD NO REAL  LONG SILVER  LIQUIDATION AS DEMAND FOR PHYSICAL SILVER REMAINS STRONG ESPECIALLY AS WE WITNESS A HUGE AMOUNT OF SILVER OUNCES STANDING FOR METAL IN DECEMBER AS WELL AS THAT MASSIVE MIGRATION OF EFPS OVER TO LONDON. IT SEEMS THAT ALL OF OUR LOST SILVER COMEX OI CONTRACTS HAVE MIGRATED OVER TO THE PHYSICAL HUB OF OUR PRECIOUS METALS, LONDON. ON A NET BASIS WE GAINED 2894 OPEN INTEREST CONTRACTS:  2493 CONTRACTS LOST AT THE COMEX WITH THE ADDITION OF  5387 OI CONTRACTS NAVIGATING OVER TO LONDON.

We are now in the big active delivery month of December and here the OI fell by 4390 contracts down to 2188.  We had 3994 notices filed upon yesterday so we LOST 396 contracts or an additional 1,980,000 oz will NOT stand in this active delivery month of December BUT THEY DID MIGRATE THEIR LONG POSITION OVER TO LONDON..

The January contract month fell by 276 contracts down to 1395.  February saw the first initial 23 oi advance. The March contract gained 2078 contracts up to 148,230.

We had 398 notice(s) filed initially for 1,990,000 oz for the DECEMBER. 2017 contract

INITIAL standings for DECEMBER

 Dec 1/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil oz
Withdrawals from Customer Inventory in oz  
1484.298 oz
HSBC
Scotia
10 kilobars
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
nil
oz
No of oz served (contracts) today
 
627 notice(s)
62,700 OZ
No of oz to be served (notices)
7721 contracts
(771,600 oz)
Total monthly oz gold served (contracts) so far this month
2936 notices
293,600 oz
9.1321 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     xxx oz
Today we HAD  1 kilobar trans

WE HAD nil DEALER DEPOSIT:
total dealer deposits: nil oz

We had nil dealer withdrawals:
total dealer withdrawals: nil oz

we had 0 customer deposit(s):

total customer deposits nil  oz

We had 2 customer withdrawal(s)

i) Out of HSBC: 1162.798 oz

ii) Out of Scotia: 321.500 oz (10 kilobars)

Total customer withdrawals: 1488.298 oz

we had 0 adjustment(s)

*December is the biggest delivery month of the year for gold and the fact that no gold has entered the vaults these past two days speaks volumes that there is no appreciable gold at the comex to deliver upon our longs and thus the reason for the migration to London

For DECEMBER:
Today, 0 notice(s) were issued from JPMorgan dealer account and 328 notices were issued from their client or customer account. The total of all issuance by all participants equates to 627 contract(s) of which 338 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 DECEMBER. contract month, we take the total number of notices filed so far for the month (2936) x 100 oz or 293,600 oz, to which we add the difference between the open interest for the front month of DEC. (8348 contracts) minus the number of notices served upon today (627 x 100 oz per contract) equals 1,065,700 oz, the number of ounces standing in this  active month of DECEMBER

Thus the INITIAL standings for gold for the DECEMBER contract month:

No of notices served (2936) x 100 oz or ounces + {(8348)OI for the front month minus the number of notices served upon today (627) x 100 oz which equals 1,065,700 oz standing in this active delivery month of DECEMBER (33.14 tonnes). INTERESTINGLY THERE IS ONLY 28 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

LAST YEAR WE SAW CONSIDERABLE GOLD LEAVE THE COMEX THROUGH EFP’S. TODAY WE SAW 1345 CONTRACTS OR 1,345000 OZ NOT STAND AT THE COMEX BUT THESE GUYS MIGRATED OVER FOR A LONDON FORWARD.

 

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ON FIRST DAY NOTICE FOR DECEMBER,  THE INITIAL  GOLD STANDING:  39.038 TONNES STANDING

BY THE END OF THE MONTH:  FINAL: 29.791 TONNES STOOD FOR COMEX DELIVERY AS THE REMAINDER HAD TRANSFERRED OVER TO LONDON FORWARDS.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Total dealer inventory 922,639.946 or 28.69 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,913,360.693 or 277.24 tonnes

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 14 MONTHS 77 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

DECEMBER INITIAL standings

 Dec 1/ 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 23,979.679 oz
 Brinks
Delaware
Deposits to the Dealer Inventory
 nil
oz
Deposits to the Customer Inventory 
 1,200,022.23 oz
 Scotia
No of oz served today (contracts)
398 CONTRACT(S)
(1,990,000OZ)
No of oz to be served (notices)
1,720 contract
(8,600,000 oz)
Total monthly oz silver served (contracts) 4392 contracts

(21,960,000 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

today, we had 0 deposit(s) into the dealer account:

 

total dealer deposit: nil oz

we had nil dealer withdrawals:
total dealer withdrawals: nil oz

we had 2 customer withdrawal(s):

i) Out of Brinks:  21,906.679 oz

ii) Out of Delaware:  2073.000 oz  ??exact weight???

TOTAL CUSTOMER WITHDRAWAL  23,979.679 oz

We had 1 Customer deposit(s):

i) Into Scotia: 1,200,022.23 oz

***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: 1,200,022.23 oz

we had 1 adjustment(s)

i) Out of Brinks:

10,578.420 oz was adjusted out of the customer and this landed into the dealer account of Brinks

 

The total number of notices filed today for the DECEMBER. contract month is represented by 398 contract(s) FOR 1,990,000 oz. To calculate the number of silver ounces that will stand for delivery in DECEMBER., we take the total number of notices filed for the month so far at 4392 x 5,000 oz = 21,960,0000 oz to which we add the difference between the open interest for the front month of DEC. (2118) and the number of notices served upon today (398 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the DECEMBER contract month: 4392 (notices served so far)x 5000 oz + OI for front month of DECEMBER(2118) -number of notices served upon today (398)x 5000 oz equals 30,560,000 oz of silver standing for the DECEMBER contract month. This is EXCELLENT for this active delivery month of November.

WE LOST   396 CONTRACTS OR 1,980,000 OZ WILL NOT STAND AT THE COMEX BUT THESE LONGS MIGRATED OVER TO LONDON AS THERE IS NO APPRECIABLE SILVER AT THE COMEX FOR DELIVERIES.

 

 

ON FIRST DAY NOTICE FOR THE DECEMBER 2016 CONTRACT WE HAD 15.282 MILLION OZ STAND.

THE FINAL STANDING: 19.900 MILLION OZ AS QUEUE JUMPING INTENSIFIED.

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ESTIMATED VOLUME FOR TODAY: 97,094
CONFIRMED VOLUME FOR YESTERDAY: 97,575 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 97,575 CONTRACTS EQUATES TO 487 MILLION OZ OR 69.6% OF ANNUAL GLOBAL PRODUCTION OF SILVER

COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION.  THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.

Total dealer silver: 55.863 million
Total number of dealer and customer silver: 237.081 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 1.7 percent to NAV usa funds and Negative 2.0% to NAV for Cdn funds!!!!
Percentage of fund in gold 63.0%
Percentage of fund in silver:36.7%
cash .+.3%( Dec 1/2017)

2. Sprott silver fund (PSLV): NAV FALLS TO -0.47% (Dec 1 /2017)
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.40% to NAV (Dec 1/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -0.47%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.40%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

END

And now the Gold inventory at the GLD

Dec 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 839.55 TONNES

Nov 30/no change in gold inventory at the GLD. Inventory rests at 839.55 tonnes

Nov 29/a withdrawal of 2.66 tonnes at the GLD/Inventory rests at 839.55 tonnes

NOV 28/ no change in gold inventory at the GLD/inventory rests at 842.21 tonnes

Nov 27 Strange!! we gold up by $6.40 today, we had a good sized withdrawal of 1.18 tonnes from the GLD. Here is something that is also strange: we have had exactly 1.18 tonnes of gold withdrawn from the comex on 5 separate occasions in the past 30 days..explanation?

Nov 24/no change in gold inventory at the GLD/Inventory rests at 843.09 tonnes

Nov 22/no change in gold inventory at the GLD/Inventory rests at 843.39 tonnes

Nov 21/no change in gold inventory at the GLD/inventory rests at 843.39 tonnes

NOV 20/no change in gold inventory at the GLD/Inventory rests at 843.39 tonnes

Nov 17/no change in gold inventory at the GLD/inventory rests at 843.39 tonnes

Nov 16./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 843.39 TONNES

Nov 15./no change in gold inventory at the GLD/inventory rests at 843.09 tonnes

NOV 14/a small deposit of .300 tonnes into the GLD inventory/Inventory rests at 843.39 tonnes

Nov 13/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 843.09 TONNES

Nov 10/no change in gold inventory at the GLD/Inventory rests at 843.09 tonnes

Nov 9/no changes in inventory at the GLD/Inventory rests at 843.09 tonnes

NOV 8/ANOTHER HUGE WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD DESPITE GOLD’S RISE TODAY. INVENTORY RESTS AT 843.09

Nov 7/a huge withdrawal of 1.48 tonnes of gold from the GLD/Inventory rests at 844.27 tonnes

NOV 6/ a tiny withdrawal of .29 tonnes to pay for fees etc/inventory rests at 845.75 tonnes

Nov 3/no change in gold inventory at the GLD/Inventory rests at 846.04 tonnes

NOV 2/STRANGE!!! WE HAD ANOTHER WITHDRAWAL OF 3.55 TONNES FROM THE GLD DESPITE GOLD’S RISE OF $6.60 YESTERDAY AND $1.55 TODAY/INVENTORY RESTS AT 846.04 TONNES

Nov 1/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 849.59 tonnes

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Dec 1/2017/ Inventory rests tonight at 839.55 tonnes

*IN LAST 284 TRADING DAYS: 101.40 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 219 TRADING DAYS: A NET 55.88 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 24.77 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Dec 1/VERY STRANGE!! WITH SILVER IN THE DUMPSTER THESE PAST FEW DAYS, SLV ADDS 2.076 MILLION OZ/???

Nov 30/no changes in silver inventory despite the huge drop in price/inventory rests at 317.130 million oz

Nov 29/no changes in silver inventory at the SLV/Inventory rests at 317.130 million oz/strange!! at drop of 32 cents and no change in inventory?

Nov 28/no change in silver inventory at the SLV/Inventory rests at 317.130 million oz.

Nov 27/NO CHANGE IN SILVER INVENTORY DESPITE A ZERO GAIN IN PRICE /QUITE OPPOSITE TO GOLD WHICH SAW 1.18 TONNES OF GOLD WITHDRAWN DESPITE A RISE IN PRICE OF $6.40

Nov 24/A WITHDRAWAL OF 944,000 OZ OF SILVER FROM THE SLV//INVENTORY RESTS AT 317.130 MILLION OZ

Nov 22/no change in silver inventory at the SLV/Inventory rests at 318.074 million oz.

Nov 21/no change in silver inventory at the SLV/inventory rests at 318.074 million oz/

NOV 20/no change in silver inventory at the SLV/inventory rests at 318.074 million oz

Nov 17/no change in silver inventory at the SLV/inventory rests at 318.074 million oz/

Nov 16./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ/

Nov 15./no change in silver inventory at the SLV/inventory rests at 318.074 tones

NOV 14/no change in silver inventory at the SLV/Inventory rests at 318.074 tonnes

Nov 13/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ

Nov 10/no change in silver inventory at the SLV/Inventory rests at 318.074 million oz/

Nov 9/no change in silver inventory at the SLV/inventory rests at 318.074 million oz.

NOV 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ

Nov 7/a huge withdrawal of 944,000 oz from the SLV/inventory rests at 318.074 million oz/

NOV 6/no change in silver inventory at the SLV/Inventory rests at 319.018 million oz/

Nov 3/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS TONIGHT AT 319.018 MILLION OZ.

NOV 2/A TINY LOSS OF 137,000 OZ BUT THAT WAS TO PAY FOR FEES LIKE INSURANCE AND STORAGE/INVENTORY RESTS AT 319.018 MILLION OZ/

Nov 1/STRANGE! WITH SILVER’S HUGE 48 CENT GAIN WE HAD NO GAIN IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/

 

 

 

Dec 1/2017:

Inventory 319.207 million oz

end

6 Month MM GOFO
Indicative gold forward offer rate for a 6 month duration

+ 1.52%
12 Month MM GOFO
+ 1.82%
30 day trend

end

 

I normally provide the COT which we receive at 3 :30 pm.  Since we have discovered massive amounts of long contracts in gold and silver are transferred to London (through EFP’s) with the bankers having the same obligation to deliver but over there, I felt that the data provides nothing to us to aid us in predicting what the crooks are up to. Thus I will not provide it from this day forth, as I do not want you to waste your time reading the crap data.

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Goldcore:

Risk Of Online Accounts Seen As One of Largest Brokerages In World Halts Online Trading After “Glitch”

– ‘Technical issue’ at Fidelity temporarily blocks access to online accounts and halts online trading
– Fidelity is 3rd largest brokerage by client assets: $1.7 trillion at the end of 2016
– NatWest, RBS, Ulster Bank  have experienced online banking “issues” in November
– Clients left without access to funds & failed payments & little to no recourse
– Social media exposing the banks’ and online trading platforms’ shortcomings
– Reminder that online accounts can be rendered non-viable and vulnerability of absolute dependence and digital cash, digital gold etc

Editor: Mark O’Byrne

Yesterday, customers of Fidelity, the third largest brokerage in the world, found themselves unable to access their online accounts.

The company is responsible for an estimated 8% of total US wealth management. With such a huge responsibility, Fidelity,  like most companies, works hard to ensure clients have access to online accounts at all times.

Yet it still happened, reminding investors of the risks posed by digital assets – be they stocks, gold or indeed deposits – held solely through online accounts and platforms – the ‘Single point of failure’.

Fidelity is just one of many online “outages” or “glitches” reported by financial institutions in the last year. In Europe, particularly the United Kingdom, banking customers have found themselves regularly facing bank account ‘glitches’. It is thanks to social media that some of these even come to the fore, with many organisations keen to sweep them under the carpet.

Investors, savers and, in fact, any user of online services needs to be aware of the risks and how to protect themselves in the case of a sudden ‘access denied’ message or worse, a prolonged period of not being able to access, trade and or withdraw funds from an online account.

Not like the old days…

Prior to online accounts it rarely occurred to users that they could suddenly be without access to funds, unable to make transactions or even receive their wages. Sadly, with the dawn of the internet and growing cyber security risks this is something no-one can afford to be without a plan-B for.

Outages can happen for a number of reasons, but many result in customers being unable to transact and being without funds.

In the case of Fidelity, it appears to have been an internal error, which also seems to be the common thread among many banking outages. However, cyber security is a major threat to any account that involves personal data and financial information.

Just this week Uber finally admitted exposing hackers to over 2.7 million customers’ data, putting savings and futures at risk.

We must also consider what happened in Puerto Rico for a lesson in how vulnerable we are should natural disasters impede access to much needed personal funds for days and weeks.

Absolute reliance on online accounts and digital cash and digital gold is not prudent. When such accounts can be rendered non-viable in a matter of seconds, there is little recourse for the digital saver and investor should they not also own some tangible assets.

Social media prevents cover-up

Online account failures are becoming more common. We are increasingly aware of this thanks to social media. Whilst the majority of outages experienced in the West are resolved within a few hours (in the case of Fidelity it was hours) or days, customers are left feeling nervous and frustrated and in some cases they experience real repercussions. Rents are not paid, important direct debits fail and charges are incurred.

This last month Lloyds and Halifax Bank of Scotland experienced major issues with accounts. Some account holders not only found transactions weren’t processed but also logged in to be told they no longer had an account with their bank.

Many customers in the recent Natwest outage were particularly frustrated at the bank’s lack of communication and failure to alert account holders to the problem.

“Not just an online problem, my bank card is not working now as well for online payments! People have bills to pay, how much longer?”

“You were acknowledging this problem over an hour ago but only to those that tweeted you directly. Why has it taken so long for a public tweet?”

Also this week Nationwide customers found themselves embarrassed when their funded accounts suggested they had no money:

Banking outages are becoming so common that we no longer hear reports in the mainstream media of them. Users report to feeling ’embarrassed’ but the reality and severity of the situation and can have far-reaching complications.

One would have thought that banks would have learnt from the 2012 disaster that was seen in the summer of 2012 for customers of RBS, NatWest and Ulster Bank. Users found they could not access funds for a week or more as account balances had to be manually updated. RBS was fined £56m for the inconvenience and risk placed on account holders.

Complacency amongst bank and online account users

I don’t think I am aware of a single person who has not experienced problems with bank or financial account services. Whether access to, payment issues or information failure everyone I know has come up against such issues in the past.

Concern regarding the risks to online customers is so high that the European Banking Authority this week mentioned the growing reliance on online digital platforms as a major risk to customers.

What do the majority of people do? Get a bit annoyed then shrug their shoulders and make some comment about ‘banks today’. The same goes for the likes of Fidelity, Uber and TalkTalk, non-banks who have also exposed their customers with little to no recourse for the end user.

The lethargy regarding customers’ switching banks is astonishing when one considers the problems that have been caused in recent years. This is for two reasons, the first is because there is little knowledge of the alternatives out there and secondly, because there is a belief that this is just what you have to put up with these days.

This is a sad state of affairs. Those who earn and save money have every right to be able to access their funds at all times, for whatever purpose. It is tragic that the digital, online economy has made many feel otherwise. For something that was heralded as giving customers so many more options, it is instead making many feel trapped and without options.

Cyber-attacks, natural disasters and technical errors are all very good reasons for those who wish to hold money and data with an organisation to seek out ways to diversify their investments. This is not just in terms of spreading the risks between digital accounts, but also away from solely digital assets.

Non digital gold cannot be exposed to ‘glitches’ 

Gold and silver often get a bad rap when it comes to discussions about their role as money. Both are pushed to the bottom of the pile when you consider the convenience of spending on a card, paying out wages or making quick gains when trading stocks and shares.

But one thing that is guaranteed with physical, allocated and segregated gold and coins and bars for delivery as offered by GoldCore, is that you know you will always have access and liquidity due to outright legal ownership of bullion. Either with bullion in your possession or with direct ownership in some of the safest vaults in the world. That is not the case with fiat electrons bank accounts or online trading accounts, whether in times of crisis or technical outages.

In addition many such platforms force you to only buy and sell through their online account and their online platform and website. Such digital platforms are “closed loop systems” where liquidity and pricing are dependent on a single platform, website and large corporation. A buyer can only buy and sell through that one online platform. An investor is in effect “captive” and massively dependent on that one counter party and a single point of failure.

No matter the town, city or country you find yourself in, times such as these pose multiple threats whether military, natural or just digital.

Today we still assume banks, companies and governments are competent and will look after our accounts. We cannot bring ourselves to imagine electricity systems and our banking systems including ATMs going down and not having access to our hard earned savings. This is despite it clearly happening increasingly frequently.

News and Commentary

Gold volatility ‘breakout’ coming soon to ‘eerily quiet’ market – Metals Expert (CNBC.com)

Gold inches up as dollar weakens after U.S. Senate tax bill stalls (Reuters)

Dollar Dips as Tax Bill Hits Snag; Stocks Decline: Markets Wrap (Bloomberg.com)

U.S. Mint American Eagle gold, silver coin sales fall sharply (Reuters)

Turkish gold trader implicates Erdogan in Iran money laundering (Reuters)


Source: City AM

“There will be pain”: Bank of England’s Carney warns against no deal Brexit (City AM)

Chance of US stock market correction now at 70 percent: Vanguard Group (CNBC)

4 habits that will make you poor (SBCH)

How central banks paved the way for bitcoin’s birth (MoneyWeek)

Sharia-compliant gold standard – Response from Muslim investors has been positive (The National )

Gold Prices (LBMA AM)

01 Dec: USD 1,277.25, GBP 946.57 & EUR 1,072.51 per ounce
30 Nov: USD 1,282.15, GBP 952.64 & EUR 1,084.06 per ounce
29 Nov: USD 1,294.85, GBP 965.70 & EUR 1,092.46 per ounce
28 Nov: USD 1,293.90, GBP 972.75 & EUR 1,088.95 per ounce
27 Nov: USD 1,294.70, GBP 969.73 & EUR 1,084.83 per ounce
24 Nov: USD 1,289.15, GBP 967.89 & EUR 1,086.37 per ounce
23 Nov: USD 1,290.15, GBP 969.93 & EUR 1,089.40 per ounce

Silver Prices (LBMA)

01 Dec: USD 16.42, GBP 12.16 & EUR 13.80 per ounce
30 Nov: USD 16.57, GBP 12.32 & EUR 14.00 per ounce
29 Nov: USD 16.90, GBP 12.60 & EUR 14.26 per ounce
28 Nov: USD 17.07, GBP 12.84 & EUR 14.36 per ounce
27 Nov: USD 17.10, GBP 12.81 & EUR 14.32 per ounce
24 Nov: USD 17.05, GBP 12.80 & EUR 14.38 per ounce
23 Nov: USD 17.10, GBP 12.84 & EUR 14.43 per ounce


Recent Market Updates

– Low Cost Gold In The Age Of QE, AI, Trump and War
– Own Gold Bullion To “Support National Security” – Russian Central Bank
– Bitcoin $10,000 – Huge Volatility of Cryptocurrencies and Risky Fiat Making Gold Attractive
– Financial Advice from Dr Wayne Dyer
– Buy Gold As Fed Shows Uncertainty And Concern Over Financial ‘Imbalances’
– Brexit Budget – Grim Outlook As UK Economy Downgraded
– Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
– Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
– Money and Markets Infographic Shows Silver Most Undervalued Asset
– Is New Fed Chief A “Swamp Critter Extraordinaire”?
– Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe
– UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off
– Protect Your Savings With Gold: ECB Propose End To Deposit Protection

 

END

 

The advantages to hold gold

Bullion Star/Persson/GATA)

Torgny Persson: Even if you don’t eat it, gold has unique advantages

 Section: 

6p GMT Thursday, November 30, 2017

Dear Friend of GATA and Gold:

Bullion Star proprietor Torgny Persson today demolishes the old disparagement about gold’s value in emergencies — that you can’t eat it. In fact you can, Persson notes, even if it provides no nutritional value. But, Persson asks, what financial instrument is edible?

In emergencies, Persson notes, gold has advantages over other financial instruments. “Since gold is a universal money supported by a highly liquid global market, it will always be accepted everywhere at the going gold price,” Persson writes. “Gold can easily be sold. Gold can easily be traded or even bartered with, especially in non-functioning economies where the local paper currency has collapsed or has become worthless. That gold coins are regularly issued to elite military personnel in areas of conflict attests to gold’s critical benefits in times of monetary crisis and localized economic collapse.” And of course unlike other financial instruments gold has no counterparty risk.

Persson’s commentary is headlined “Eat Gold” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/bullionstar/eat-gold/

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

END

 

This is going to be interesting:  Coinbase loses its bid to block a USA tax probe of gains made by individuals

 

(courtesy Rosenblatt/Bloomberg)

 

Coinbase loses bid to block U.S. tax probe of bitcoin gains

 Section: 

By Joel Rosenblatt
Bloomberg News
Wednesday, November 29, 2017

Coinbase Inc. lost a bid to block an Internal Revenue Service investigation into whether some of the company’s customers haven’t reported their cryptocurrency gains.

U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco ruled that the tax agency’s demand for information isn’t overly intrusive. The price of bitcoin has been soaring and crossed $10,000 Tuesday.

With just 800 to 900 taxpayers reporting bitcoin gains from 2013 through 2015 in a period when more than 14,000 Coinbase users have either bought, sold, sent, or received at least $20,000 worth of bitcoin, “many Coinbase users may not be reporting their bitcoin gains,” she wrote. “The IRS has a legitimate interest in investigating these taxpayers.” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-11-29/coinbase-loses-bid-to…

END

Bill Murphy correctly states that the monetary metals camp is demoralized with the constant criminal acts by our bankers.  Very shortly gold/silver will be joined by Bitcoin as the bankers flood the system with non backed bitcon apper

 

 

(courtesy Bill Murphy/GATA)

Sector is demoralized and monetary metals are bargains, GATA chairman says

 Section: 

9:05a GMT Friday, December 1, 2017

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy, interviewed by GoldSeek Radio’s Chris Waltzek, says the monetary metals sector is hugely demoralized and gold and silver are the world’s most undervalued assets. The interview is eight minutes long and can be heard at GoldSeek Radio here:

http://radio.goldseek.com/nuggets/murphy.11.30.17.mp3

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

END

As promised to you, here is Part ii of a powerful commentary on the “War on Gold”

you do not want to miss this

 

(courtesy Stewart Dougherty)

 

The War on Gold Intensifies: It Betrays The Elitists’ Panic And Coming Defeat – Part 2

by admin

Here is Part 2 of Stewart Dougherty’s “War on Gold” essay.  Here’s Part 1
Magicians use distraction, deflection and misdirection to conduct their tricks. They get their audiences to look to the left while they perform their magic undetected on the right. So do con artists and swindlers.
George H. W. Bush, in a speech delivered to a joint session of Congress on 11 September 1990 entitled “Toward a New World Order,” headlined a geopolitical theme that has garnered a great deal of attention ever since. And while Bush was not the first person to use the term, it struck a global nerve when he invoked it.
Bush’s speech about the New World Order deflected and misdirected the people’s attention to the left, and prevented them from seeing the real action that was taking place to the right: the imposition of a New World Central Banking Order throughout the west. This multi-country, supranational, autonomous, all-powerful, privately-controlled, for profit, non-auditable, monopolized, collusive, monetary leviathan has become what we call the Western Central Banking Dictatorship (WCBD).
This dictatorship, and we are not being pejorative, we are simply applying the standard definition of the word to what central banking actually is, operates throughout the broadly defined “west,” which includes: the United States, Canada, Mexico, the European Union, the United Kingdom, Japan, India, New Zealand and Australia. Certain African, Asian and South American countries also play lesser parts in the regime. Dictatorially ruled by this private monetary system are the hundreds of millions of citizens who must use Euros, Yen, Rupees, and United States, Canadian, Australian and New Zealand dollars to function in their daily lives, as these fiat currencies are all 100% controlled by the regime, and are subject to whatever actions, no matter how experimental or extreme (such as Quantitative Easing and negative interest rates), the controllers, in their sole discretion, decide to take.
One of the seven core principles of Inferential Analytics, the forecasting method we have developed and use, is that all phenomena represent Life Forces, and that all Life Forces ceaselessly work to expand, evolve, empower themselves, and conquer new terrain.
Some of the most powerful Life Forces on earth are the “isms.” One of today’s most rapidly evolving “isms’ is crony communism, the national operating system now metastasizing throughout western nations to replace its dying predecessor, crony capitalism. In this expanding system of crony communism, the cronies loot the capital that was produced by the dying capitalistic system, while the masses descend into communistic impoverishment, entrapment and despair. Crony communism is a system in which the forces of diabolism, greed and evil usurp and exploit state power for their own enrichment, empowerment and dominance, at the direct expense of the communized masses.
Relentlessly increasing wealth concentration combined with spreading impoverishment and paycheck to paycheck living are two glaring signs among many others that the Life Force of crony communism has entrenched itself throughout the west, and that it is evolving and advancing.
The enabling institution for the spread of crony communism is the WCBD, which is owned and operated by the Deep State crony elite, both of which are Life Forces of plunder and human exploitation.
To those who pay attention to fiscal, monetary, economic and financial realities, it is becoming clear, despite the current frenzy of propaganda to the contrary, that the existing system is failing. In the United States, to focus on one national example, massively underfunded pensions will collapse without equally massive bailouts; every government entitlement program is bankrupt, a fact publicly admitted by the programs’ respective government overseers; structural deficits are uncontrollable under current law and can only be contained if government promises are broken at extreme expense to the economy and people; debt at all levels is exploding and structurally, must continue to explode; mass financial stress is directly observable in such forms as street-level, in one’s face homelessness, fast-spreading tent cities, and teeming under-bridge communities; paycheck to paycheck and government welfare payment to government welfare payment living is now the norm for the vast majority of the population (for example, 78% of full time workers in the United States now live paycheck to paycheck; the financial condition of part time and unemployed persons is even more dire); the savings rate has plunged as people struggle to make ends meet or engage in financially disastrous “Eat, Drink and Be Merry” binge spending programmed into their brains by the MSM, which repeatedly tells them that things have never been better and they should go shopping; overall savings are non-existent or meaningless for the vast majority of the population; among many other signs of fiscal and financial decline.
The WCBD, which includes all western central banks, the World Bank, the IMF, the ESF and their consolidating organization, the intensely secretive, predatory, and frigid BIS, is fully aware that the system is failing. The United States Federal Reserve System alone employs hundreds of Ph. D. economists and statisticians, and it is literally impossible they do not comprehend that trillions more fiat currency units must be created out of nothing to keep the monetary system functioning. Further, it is impossible that these Ph. D.s and their management do not realize that ultimately, the very design of the fiat monetary edifice means that it must erupt into a hyperinflationary bonfire, exactly as it has repeatedly done throughout history. Every “fix” now being implemented, most particularly the new, frenzied fixation on GDP growth, is an urgent attempt deflect attention away from the structural impossibilities of the monetary system, and to buy time.
For years, people have realized that certain vital government statistics, such as employment, inflation, retail sales and GDP are manipulated to tell a comforting narrative that all is well in the land. Confidence is everything in debt-dependent, fiat currency-based, consumer-expenditure-addicted economies. But for some strange reason, very few people question the most important statistic of all: money supply. This is remarkable in light of the fact that long after the emergency measures taken to re-start the system during the Great Financial Crisis (GFC), we learned that the Fed had created, in total secrecy, trillions of dollars’ worth of currency swaps that were extended to foreign central banks in order to bail out the financial system. This was so far outside the Fed’s “Dual Mandate” that it beggared belief they had actually done it, let alone without any public or even intra-governmental disclosure whatsoever.
We believe that such secret GFC money creation is just the tip of the iceberg, and that the revelation of actual, as opposed to deliberately misstated money supply would dumbfound even the most sophisticated of financial observers and require a recalculation of virtually every financial and economic metric. All of which would massively deteriorate. We believe that this is one black swan among dozens that could ignite a broad-based flight into physical gold, as people rushed to monetary high ground for financial and personal safety.
On 27 June 2017, during the British Academy President’s Lecture Q&A Session in London, Janet Yellen made the following, now famous statement in answer to a question:
“Would I say there will never, ever be another financial crisis? You know,
that would probably be going too far, but I do think we are much safer, and
I hope that it will not be in our lifetimes, and I don’t believe it will be.”
Many observers chalked up this comment to central banker self-congratulation and boastfulness. Or, they assumed that Ms. Yellen was making a campaign statement to land a second term as Fed Chair. We viewed it differently.
We do not believe Yellen ever had any intention of serving a second term as Fed Chair, and that her “candidacy” was theater. Yellen, Fischer and Dudley, all of whom have gotten or are getting out, realize that the monetary and financial systems are rigged to the breaking point, and that when they fail, the fallout will be uncontrollable. They know the systems are rigged, because they rigged them, and don’t want to be anywhere near them when they blow apart. This helps explain the documented elitist fascinations with long range Gulfstream jets and New Zealand, among their numerous other escape vehicles.
If Yellen had said she was not interested in serving a second term, this would have indicated that something is seriously wrong, a message central bankers never send beforehand. Having admitted, as she has, that she and many of her colleagues no longer understand inflation, an appreciation of which is absolutely critical to the entire process of central banking, she also admitted that, like Fukushima, the monetary system is melting down and out of control. Therefore, she played the game of running for a second term, even though it was just an act.
In the second to last paragraph of her 20 November 2017 resignation letter, Yellen wrote:
“I am enormously proud to have worked alongside many dedicated and highly able
women and men, particularly my predecessor as Chair, Ben S. Bernanke, whose
leadership during the financial crisis and its aftermath was critical to restoring the
soundness of our financial system and prosperity of our country. I am also gratified
by the substantial improvement in the economy since the crisis. The economy has
produced 17 million jobs, on net, over the past 8 years and, by most metrics, is
close to achieving the Federal Reserve’s statutory objective of maximum employment
and price stability. Of course, sustaining this progress will require continued
monitoring of, and decisive responses to, newly emerging threats to financial and
economic stability.” [Our italics.]
This statement was an Inferential Analytics trigger, because we noted that she did not say, “if” there are “newly emerging threats to financial and economic stability.” [Cryptocurrencies/Bitcoin are seen as threat per Trump’s statement that Homeland Security was monitoring Thursday’s Bitcoin sell-off]
A second IA trigger was pulled when Jerome Powell, during his opening comments to the U.S. Senate Banking Committee reviewing his Fed Chair nomination, said the following on 28 November 2017:
“We must be prepared to respond decisively and with appropriate force to new and
unexpected threats to our nation’s financial stability and economic prosperity.”
Please note two things: 1) Like Yellen, he did not say “if” there are “new and unexpected threats to our nation’s financial stability and economic prosperity;” and, 2) the nearly identical language used by both.
To us, both Yellen and Powell are warning that “newly emerging financial threats to financial and economic stability” and “economic prosperity” are on the horizon. People might comfort themselves by saying, “That is always the case,” which is true. Endogenous and exogenous risks to complicated systems always exist. The problem is that when these threats manifest themselves, what can they do about them at this point, other than print massive quantities of new currency units, a so-called medicine that has become more toxic than the disease it attempts to cure.
Central bankers go to lengths to paint a rosy picture, because belief is everything when people are living in a fantasy, which an economy that is more than $200 trillion in debt all told, is. We therefore find it extraordinary that Yellen, on her way out, and Powell, on his way in are painting a dark picture by talking about “threats to financial and economic stability.” They would not be using these words if they did not know that something serious is on the horizon. They know, because the threats are of the WCBD’s direct making.
Regarding the specific comment Yellen made in London, we believe she was saying that the Fed in particular, and the WCBD in general, have now transferred the mechanisms perfected over the past 40 years to control precious metals prices, to western stock markets, in order to control their prices. The only difference being that while they have used sophisticated, computerized price manipulation techniques to push precious metals prices down, they are using the same techniques to push stock prices up.
Why? For four primary reasons: 1) To prevent the pension system from collapsing, which would bring down the entire economy and banking system with it; 2) To generate badly needed income and capital gains tax revenue; (Please keep in mind that most employee stock option gains are taxed as individual income, and result in top income tax rates being imposed; full, uncapped Medicare taxes being paid by both employee and employer; and, the Obamacare 0.9% Medicare surtax being collected. Therefore, such stock option gains represent a trifecta tax bonanza for the government. Additionally, capital gains over a minor threshold amount, which is not indexed to inflation, are now subject to the Obamacare 3.8% surtax, which the proposed “Repeal and Replace” House and Senate legislation never rescinded, evidence that the government is dependent upon the surtax revenue and will not let it go. As we can see, Republican legislators spoke with a forked tongue; while they said they hated Obamacare, they forgot to mention that they love its tax revenue and have no intention of parting with it); 3) To foster the “Wealth Effect,” and thereby stimulate consumer spending, which is critical to employment, corporate profits, corporate profit taxes and state sales taxes. In deliberately creating a consumer spending, as opposed to a production economy, the government and the citizens have become slaves to a low-to-zero savings, binge spending, consumer impoverishment economy, which is a Castle in the Air and a mirage that will fade; 4) To facilitate a high-intensity, big-dollar insider trading, front running and looting spree, via the dissemination of inside information to the elite regarding upcoming WCBD policy decisions and government economic reports, all of which move markets in predictable, sizable, and enormously profitable ways for those who can exploit them in advance. The surge in wealth inequality is not natural, and not an accident.
In addition to precious metals price controls and the legalization of bail-in banking, numerous other developments, such as the accelerated push to eliminate cash all suggest that the people are being elaborately set up for epic financial slaughter by the Deep State plunderers. The Deep Statists are intent on eliminating financial sanctuaries that are outside their bail-in dragnets. In past situations of this kind, gold has performed admirably in protecting wealth and, far more important, human lives.
We mentioned in Part 1 that there is a clue in the Financial Times article that demonstrates the statists’ fear that they cannot prevent broad scale interest in gold from developing among the people. The FT article argued that due to dealer commissions, physical gold is more expensive than its electronic counterpart. It also stated that physical coin dealers are dangerous because they are “exploitative” and “shady.” The conclusion the author reached for his dear readers to follow was this: “More gold will be traded electronically,” because if one is going to buy gold, electronic products are the better deal.
This is exactly what the increasingly concerned Deep Statists are trying to steer people into doing: buying electronic, not physical gold. They appear to realize that they might not be able to control the gold price for much longer, and that if the price gets away from them, the Cryptocurrency Effect will be activated in gold. If that happens, a price Vesuvius lies ahead. The volcano, they cannot stop. All they can do is misdirect the people’s money into their phony electronic gold products, to sterilize and control those funds. Then, when the price does explode, they will force customers to accept involuntary cash settlements and close out the electronic acounts. The customers will get fiat currency at the precise time when it is plunging in value, and the statists will keep any physical gold they might have purchased with customers’ funds.
As Sun Tzu said, in war, you must know the enemy and yourself if you intend to win. We hope that our article has helped readers know the enemy a bit better. The next task is to know yourself; to ask yourself, “Given what I know, what should I do?” In our opinion, and this is just our personal point of view, not an investment recommendation, which we are not licensed to provide, the fact that the Deep State elitists are stopping at nothing to discourage you from buying physical gold is the precise reason why you should buy it. And if this article has resonated with you, then you probably also believe, as we do, that the time to financially prepare yourself is getting short. The current intensity of price maneuvering and manipulation in a broad variety of markets implies that the center is losing hold, and that something wicked this way comes.
Stewart Dougherty is the creator of Inferential Analytics, a forecasting method that applies to events proprietary, time-tested principles of human instinct, desire and action. In his view, forecasting methods not fundamentally based upon principles of human action are unlikely to be reliable over time. He is a graduate of Tufts University (BA) and Harvard Business School (MBA). He developed expertise in strategic analysis and planning during a 35+ year business career, has traveled to and conducted research in over 25 countries and has refined Inferential Analytics into a reliable predictive instrument over a period of 17+ years
admin | December 1, 2017

end

 

Alasdair outlines why the prospects to the dollar are poor.  He is always a must read.

 

(courtesy Alasdair Macleod)

 

 

Alasdair Macleod: The dollar’s prospects are poor

 Section: 

9:24a GMT Friday, December 1, 2017

Dear Friend of GATA and Gold:

GoldMoney research director Alasdair Macleod writes this week that the next credit crisis will diminish demand for dollars and that if governments don’t obstruct them, cryptocurrencies will diminish demand for all government currencies. Such developments, Macleod concludes, will support gold prices. Macleod’s analysis is headlined “Monetary Update for the Dollar” and it’s posted at GoldMoney here:

https://www.goldmoney.com/research/goldmoney-insights/monetary-update-fo…

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

Alasdair Macleod…

A dispassionate look at the quantities and flows of fiat dollars tells us much about the current state of the US economy, and therefore prospects for the dollar itself.

This is a starting point for understanding the dynamics likely to affect the dollar’s purchasing power after the next credit-induced crisis, which are now beginning to clarify. That is the purpose of this article, which starts by updating the most recent developments in the quantity of fiat money (FMQ), the greatest of all monetary pictures.  [i]

1

Inflation of the fiat money quantity appears to be stalling, as the above graph attests. It has increased just under 3% over the last year to October, compared with 5.8% the previous year. It seems the monetary punch bowl, while not taken away, is lacking its post-crisis drive.

By far the largest component is deposits and savings held at the banks, which total $11,132bn, and have grown a vigorous 7.4% during the last year. The component that has a significantly lower balance is the US Treasury general account, which has reduced from $348.7bn to $160.4bn, knocking FMQ’s overall growth rate. The fact that it is this account that is holding back FMQ inflation tells us that FMQ inflation in public hands is still very much alive.

In recent months, there has been heated debate about whether the US economy is stalling or not, and that perhaps the widely anticipated increase in the Fed funds rate next month will be the last for some time. However, the continuing growth in depositors’ bank balances suggests consumer demand is reasonably robust and interest rate rises are not over.

We are of course skating over an important consideration, the ownership of these deposits. Long-standing experience tells us that when the banks first increase their loans to their customers after a credit crisis, they tend to favour the lower risk accounts. These are the big corporates capable of bringing not only interest income, but fees as well. Additional loans are drawn down through payments to their suppliers, who tend to be large and medium-sized businesses. Thus, deposits are created, and they filter down from the larger to smaller businesses over time. And as these businesses employ extra staff, their personal bank balances benefit as well.

This trickle-down effect conventionally disperses the ownership of bank balances from the large to the less large, and eventually the general public. But today, life is not so simple. The general public is up to its neck in credit card, auto, student and mortgage debt. The creation of bank deposits is therefore the result of consumer debt, more than business loans. This issue is explored further later in this article.

Business finance

It is also clear that we need to dig deeper to see what is going on with American businesses, and whether they collectively think trading conditions merit further investment. There is no doubt the Fed is keeping interest rates suppressed below the level indicated by time-preference, the condition required to justify increasing business investment.[ii] This can be measured by seeing what proportion of overall monetary expansion is being applied to business investment, and whether it is increasing or decreasing relative to the total, which is represented by the blue line in the following chart.

2

The blue line represents business loans as a percentage of broad money (M2). An increasing percentage represents periods, when in aggregate, businesses are investing in production. A decline represents periods when businesses decide returns on business investment are less than the cost of financing. Instead, they pay down their loans, or alternatively the banks decide to call them in. Before 1980, investment downturns were driven by both these reasons, while after 1980, central bank interest rate policy increasingly became the overriding factor. The correlation between interest rates and the expansion and contraction of business loans, while readily apparent, should be regarded in this light.

There are other factors to consider. Since the last financial crisis, a substantial portion of business debt taken out has been for share buy-backs, so even less investment has been applied to production than the chart implies. Before the last financial crisis, FMQ had been growing at a reasonably constant annual average of 5.9% (the dashed line in the first chart), after which the quantity of fiat money increased with unprecedented rapidity. The chart shows that lending to businesses as a percentage of money supply has been anaemic at best compared with lending to other categories since the crisis, even though it has increased in absolute terms.

Whichever way you cut it, this chart shows the US’s supply-side is now stalling (circled), particularly following the quarter-point increases in the Fed funds rate from December 2015 onwards (also circled). And with only 15.5% of M2 applied to business loans, the other 74.5% is applied to consumer credit and purely financial activities.

This finding is consistent with business surveys that indicate a mixed picture for US production, and supports concerns in the investment community that the economy faces a low-growth future, with a significant risk of a downturn.

The lacklustre performance of this, the supply side of the US economy, is in contrast with the pick-up in productive activity elsewhere in the world. Driven by China’s voracious appetite for commodities, the outlook for all commodity exporters is improving. Europe is being linked into the Chinese economy through two-way trade, driving the euro up on improving economic prospects. Japan similarly benefits from the expansion of regional trade with China and all the East Asian nations. The only exception to this positive outlook is for the US and therefore its currency, the dollar.

Credit flows have reversed

The decline of US domestic business lending as a proportion of the total is the consequence of decades of monetary and economic meddling with free markets. When money was sound, or relatively so, the bulk of non-financial lending was to commercial businesses, and it was their demands for funds that drove interest rates, in the context of monetary policy. This is no longer so. Consumer credit became an increasingly important economic factor, particularly after 1980. Excluding mortgage debt, it is currently 27.5% of M2, compared with business loans at 15.5%. While business loans are interest-rate sensitive, consumer credit is very much less so, being comprised of credit cards, motor vehicle and student loans.

Mortgages are a far larger and additional element of consumer credit, and the majority of them in America are fixed rate, with only 10% being variable.[iii] As we have seen, the small increases in interest rates have already stalled business loan growth, but it will need further interest rate increases to moderate the expansion of consumer debt. So, if the Fed is forced to raise rates further from here, there will be a disproportionally negative effect on businesses.

The effect of bank credit growth switching to consumers has been to reverse credit flows from their original direction. Instead of credit flowing from the financial sector to finance business expansion, which in turn leads to increased consumption, business is now bypassed and consumption is financed directly. Instead, deposit balances are accumulating in the bank accounts of financial entities as a consequence of debt origination taken up directly by the consumer.

In terms of credit flows, a consumption-driven economy is therefore very different from a production-driven economy. Consequently, production of goods fails to keep pace with demand. This surplus demand is satisfied by imports, which sooner or later leads to a general price adjustment through a decline in the currency.

Not enough attention is paid to these flows and the consequences of reversing the natural order of monetary events. They are an important contributor to the trade deficit, which has little or nothing to do with the current administration’s obsession with supposedly unfair trade practices by foreign manufacturers. Inevitably, the expansion of credit in favour of the consumer while neglecting the supply side creates net selling of the dollar, requiring inward investment or government intervention to counteract its decline.

There are other reasons why the dollar is set to decline anyway. Foreign ownership is already at saturation point, and further portfolio flows into foreign hands appear to be stalling. Additionally, China is pursuing a policy of discouraging use of the dollar for her own trade. The world is therefore awash with dollars that fewer people need or want.

This brings us back to the importance of the fiat money quantity. While the dollar was rising in terms of its purchasing power against both commodities and other currencies, it did not matter that the FMQ was increasing above its long-term trend rate. Those conditions have now changed, and the outlook for the dollar in terms of commodities and other currencies is for it to weaken. And when the next credit crisis comes along, instead of there being a scramble for dollar liquidity, after the initial hiatus we can expect a public desire to hold alternatives to bank deposits. Therefore, the next credit crisis should threaten the dollar with a significant fall in its purchasing power in the years following.

A falling purchasing power for the dollar is obviously beneficial for the gold price. How beneficial can be visualised from the next chart, which shows gold priced in dollars adjusted for the increase in FMQ since the price was first fixed at $35.

3
Adjusted for the increase in FMQ, the gold price today is in the same territory as it was when the gold pool failed in the late 1960s, and at the turn of the century when gold sank to $260. It is clear from this chart that the gold price is unlikely to go lower and has substantial upside, now that the dollar is poised for further weakness.

There is more on the dollar-gold relationship towards the end of this article.

The impact of cryptocurrencies

The context of our analysis so far has been restricted to the well-established credit cycle. This consists of a period of credit expansion, facilitated by central banks suppressing interest rates, leading to price inflation, and thereby forcing central banks to raise interest rates until credit stops expanding. Inevitably, when bank credit stops expanding, businesses get into difficulty, the economic climate sours, and bank credit begins to implode. The correlation between changes in bank credit applied to business loans and interest rates managed by the central banks is evident in the second chart in this article.

It should be clear that the current period of credit expansion, being unprecedented in its magnitude, will be followed by a credit crisis potentially worse than the last. Furthermore, as posited above, the rapid expansion of base money, which is the traditional central bank response to a credit crisis, will coincide with a surfeit of deposited dollars in the banking system accumulated since the last crisis. Accordingly, instead of a deflationary event being triggered, the next crisis will increase these deposits even further, and is likely to trigger an inflationary event, once the dust settles. Depositors, who are not finance companies, will almost certainly attempt to reduce their swollen bank accounts, in favour of precious metals, and perhaps tangible assets such as art, land and buildings as well.

We now must consider the impact of a new element, cryptocurrencies. Assuming that central banks do not prohibit commercial banks from processing payments to facilitate cryptocurrency settlements, it is likely the cryptocurrency bubble will not only survive the next credit-induced economic crisis, but be fuelled by it. This being the case, increasing public participation becomes an additional destabilising factor for fiat currencies themselves.

Before the next credit crisis, there could be increasing speculation in cryptocurrencies, providing windfall profits for growing numbers of the general public all round the world. This will have two affects. Fiat money will be diverted from other uses into settling cryptocurrency transactions. This will require additional expansion of bank credit, if not for this direct purpose, to satisfy continuing economic activities that benefit indirectly from the bubble’s wealth creation. And secondly, the decline in preference for fiat money in favour of holding cryptocurrencies is could trigger a wider decline in the purchasing power of state-issued money.

It is perhaps time to consolidate our thoughts so far, and summarise the danger to the dollar. Unlike the last credit-induced crisis, which triggered a flight into the dollar, the dynamics building for the next crisis are wholly different, even though it will happen for the same underlying reasons. This time, the world is flooded with dollars, both in the form of investment money and bank deposits.

The Fed’s solution to a credit-induced crisis is always to inject more money into the system. But there is already too much money in circulation, illustrated by the above-trend increase in FMQ since August 2008. Foreign ownership of dollars in portfolios also increased from $9.641 trillion in 2009 to $17.139 trillion in 2016 (according to TIC data from the US Treasury), the unwinding of which will undoubtedly put pressure on the dollar’s exchange rate, in addition to other negative trade-related factors. Furthermore, fiat currency in the banks and at the Fed is now $6.4 trillion above its long-term sustainable growth rate.

There is therefore, already a recipe for a substantial fall in the dollar, adversely affecting all other fiat currencies linked to it. This problem is compounded by the lack of headroom to raise interest rates without aggravating the overall debt situation. The addition of cryptocurrencies as an alternative to holding fiat cash, if the cryptocurrency bubble is still extant at the time of the next credit crisis, can be expected to offer the public an alternative to holding fiat currencies deposits in the banks. This is all bad news for the dollar.

The implications for gold

Some commentators have taken the view that cryptocurrencies are the new gold, sound money compared with unbacked fiat currencies. I have written elsewhere why cryptocurrencies are not money, but if they are going to undermine anything, it is not gold, but fiat currencies.

In the short-term, along with the more credible alternatives, bitcoin has had an incredible run, hitting $11,400 this week. There is perhaps too much bullishness in the price for the short-term, and while it has the potential to go much higher, a period of consolidation would be healthy. If that doesn’t happen, the price could blow off, doing serious damage to cryptocurrencies’ credibility in the longer term. It would also encourage governments to kill the phenomenon.

A far better outcome for cryptocurrencies would be some consolidation, making the potential threat to financial stability appear to diminish. That would encourage intervening governments to back off. It would give breathing space for futures and other regulated and listed investments to be planned and implemented, opening up cryptocurrencies to investing institutions. And then in the fullness of time, there is likely to be a wider participation from the public.

If some order and acceptability is restored, cryptocurrencies seem certain to eventually undermine fiat currencies, and in turn push up the price of gold. On our third chart of gold deflated by FMQ, a return to the $35 set in 1934 in today’s adjusted money is the equivalent of a gold price of $11,000 per ounce. This figure is only relevant in the sense it gives an indication of how suppressed gold relative to an expanding dollar has become over the last 83 years. If the dollar is undermined by a combination of speculation in cryptocurrencies and the Fed’s response to the next credit crisis, the magnitude of the shift in prices we should initially expect is in this ball-park. In this sense, the dramatic rise in cryptocurrencies so far could be just a foretaste of a similar rise in the gold price.

[iii] See http://aviewfromthedesk.co.uk/2017/02/mortgages-and-monetary-policy-in-the-us-and-uk/

[ii] Time preference in this context is the discounted future value of the components that comprise production. If this value is deemed greater than the monetary cost of financing it, a businessman will profit by borrowing to invest. This is the theory behind monetary stimulation of production.

[i] FMQ, simply expressed, is the sum of true, or Austrian money supply, and money not in public circulation, being held on the balance sheet of the central bank.

end

 

The CFTC approves the futures trading in Bitcoin and with the massive paper shorting that the bankers will orchestrate, you will see Bitcoin finally succumb in price

\

(courtesy zerohedge)

Bitcoin Soars After CFTC Approves Futures Trading: First Trade To Take Place Dec.18

Bitcoin is back over $10,000 after the the CFTC confirmed what had been previously reported, namely that it would allow bitcoin futures to trade on two exchanges, the CME and CBOE Futures Exchange, also granting the Cantor Exchange permission to trade a contract for bitcoin binary options.

The CFTC announced that through a process known as “self-certification,” CME and Cboe stated that their contracts comply with U.S. law and CFTC regulations. The US commodity regulator also said that the it held “rigorous discussions” with the exchanges that resulted in improvements to the contracts’ designs and settlement.

As to when the first bitcoin futures will cross the tape, the CME said it has self-certified the initial listing of its bitcoin futures to launch Monday, December 18, 2017.

Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past,” said CFTC Chairman J. Christopher Giancarlo. “As a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets. In working with the Commission, CME, CFE and Cantor have set an appropriate standard for oversight over these bitcoin contracts given the CFTC’s limited statutory ability to oversee the cash market for bitcoin.”

Market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. There are concerns about the price volatility and trading practices of participants in these markets. We expect that the futures exchanges, through information sharing agreements, will be monitoring the trading activity on the relevant cash platforms for potential impacts on the futures contracts’ price discovery process, including potential market manipulation and market dislocations due to flash rallies and crashes and trading outages. Nevertheless, investors should be aware of the potentially high level of volatility and risk in trading these contracts.”

In response to the news, Bitcoin has surged back over $10,000…

… and lifted the entire crypto space higher.

Some more details from the press release:

As trading on these DCMs evolves, the Commission will continue to assess whether further changes are required to the contract design and settlement processes and work with the DCMs to effect any changes.

 

Once the contracts are launched, Commission staff will engage in a variety of risk-monitoring activities.  These activities include monitoring and analyzing the size and development of the market, positions and changes in positions over time, open interest, initial margin requirements, and variation margin payments, as well as stress testing positions.  Commission staff will additionally conduct reviews of designated contract markets, derivatives clearing organizations (DCOs), clearing firms and individual traders involved in trading and clearing bitcoin futures.

 

The CFTC will also work closely with the National Futures Association (NFA). NFA has issued an investor advisory on this topic to its members, including futures commission merchants and introducing brokers that are involved in the trading of any virtual currency futures product, and will closely monitor its member firms trading this product. If the Commission determines that the margin the DCOs hold against bitcoin futures positions is inadequate, it can take measures to require that the margin held at the DCOs be increased, including requiring that they use a longer margin period of risk to generate margin requirements.

 

As with all contracts offered through Commission-regulated exchanges and cleared through Commission-regulated clearinghouses, the completion of the processes described above is not a Commission approval. It does not constitute a Commission endorsement of the use or value of virtual currency products or derivatives.  It is incumbent on market participants to conduct appropriate due diligence to determine the particular appropriateness of these products, which at times have exhibited extreme volatility and unique risks.

 

The Commission, pursuant to its statutory mission, will continue to foster open, transparent, competitive and financially sound markets. The CFTC will monitor markets and work closely with the exchanges to avoid systemic risk and to protect market users and their funds, consumers and the public from fraud, manipulation and abusive practices related to products that are subject to the Commodity Exchange Act.

In other news, it is yet to be determined what initial and variation margin the CME/CBOE will demand for bitcoin trades.

* * *

So what does the start of bitcoin futures trading mean? Here is one explanation as posted last night from DataTrek’s Nicholas Colas:

What will the entrance of futures exchanges and bitcoin contracts do to the price?

 

Both the CME and CBOE are set to launch bitcoin futures soon, and today the NASDAQ threw its hat in the ring as well. Moving bitcoin into a regulated structure will allow more sorts of investors and traders to speculate on price moves in the currency. That, the thinking goes, should be good for bitcoin prices.

 

One intriguing point: shorting bitcoin is currently a clunky process, but futures markets will make it much easier. The difficulty of shorting bitcoin has been an underappreciated feature of its meteoric rise, limiting true price discovery. Whether anyone is brave enough to put on a sizable short position remains to be seen. But someone who wants to back up their “Bitcoin is a fraud” talk with dollars will soon have a place to express their viewpoint.

 

 


Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST

i) Chinese yuan vs USA dollar/CLOSED UP AT 6.6093/shanghai bourse CLOSED UP AT 0.43 POINTS .01% / HANG SANG CLOSED DOWN 103.11 POINTS OR 0.35%
2. Nikkei closed UP 94.07 POINTS OR 0.41% /USA: YEN RISES TO 112.33

3. Europe stocks OPENED RED   /USA dollar index FALLS TO 93.04/Euro FALLS TO 1.1894

3b Japan 10 year bond yield: FALLS TO . +.035/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.33/ 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:: 57.83  and Brent: 63.25

3f Gold UP/Yen DOWN

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

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

3h Oil DOWN for WTI and DOWN FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.329%/Italian 10 yr bond yield DOWN to 1.711% /SPAIN 10 YR BOND YIELD DOWN TO 1.411%

3j Greek 10 year bond yield FALLS TO : 5.45???

3k Gold at $1276.00 silver at:16.40: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 21/100 in roubles/dollar) 58.64

3m oil into the 57 dollar handle for WTI and 63 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.33 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 0.9824 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1692 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 +0.329%

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 2.376% early this morning. Thirty year rate at 2.784% /

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

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

Global Stocks, US Futures Slide As Tax Bill Chaos Erupts In The Senate

 

Markets were thrown for a loop in the past 24 hours, with the Dow first soaring nearly 400 points on Thursday on expectations that tax reform was a done deal, when drama emerged just after the close when the Senate tax bill came this close to falling apart when the proposed “Trigger” was ruled as invalid, pushing a Thursday tax vote to this morning, and as of this moment the bill appears in limbo with the GOP scrambling to find ways to appease the sudden loud opposition among budget hawks. UBS economist Paul Donovan summarized it best this morning:

Tax cut plans were thrown into confusion by the realisation that the US Treasury Secretary repeating “tax cuts pay for themselves” does not, in fact, make it true. A tax increase trigger mechanism was also ruled out. Votes will take place today to attempt to strike a new compromise. Faced with this crisis, US President Trump has responded with swift and decisive leadership by publically saying “Merry Christmas”. Like every other president has done.

On Friday morning, Trump continued the pep talk…

… but this time the market wasn’t falling for it, and overnight both US futures and global equity markets are notably lower on concerns over what the latest fireworks in the Senate tax bill mean.

For those who missed it, here’s what happened: as reported last night, the Senate postponed a vote on the GOP tax bill on Thursday night with the debate to continue on Friday, in which US Senate Majority leader McConnell stated that the next floor votes will be 1100EST. in related news, US Senator Mike Rounds said the Senate is to adopt a USD 10K state-local tax deduction and Senator Cornyn said other trigger ideas are being vetted for tax reforms, while Senator Corker stated the bill is to include USD 350bln in tax increases. In other words, the tax cut somehow is now a tax hike.

As a result, first Asian, then European stocks dropped at the start of the last month of 2017 as the tech stock selloff resumed. The dollar was pressured by tax confusion, and Treasuries predictably gained.

The Stoxx Europe 600 Index fell to a two-week low, with all but one of the 19 industry sectors turning red. The price action in Europe began with DAX tripping through the 13k level and  yesterday’s low, while the November low resides at 12,847. In tandem with this, auto names had been leading the losses with Fiat Chrysler shares halted for trade, having fallen 5%. Tech stocks stumbled sharply for a third day, bringing their decline this week to almost 5%. The SX8P index was down 1.7% vs Stoxx 600’s 0.8% decline; the tech subindex extends this week’s decline to as much as 5.2%. Among the worst performers: Infineon -4.2%, Software AG -3.5%, STMicro -3.2%, Logitech -2.2%, SAP -1.9%, ASML -1.8%.

Sentiment in Asian markets was also subdued and Japanese stocks briefly gave up all their gains amid a pullback in USD/JPY, a miss on Chinese PMI data and after the Senate postponed a tax reform vote to Friday morning. Shanghai Comp. (Unch.) and Hang Seng (-0.4%) were indecisive in the wake the aforementioned data and after the PBoC skipped operations due to high liquidity, with Tencent also jittery following its fall out from the USD 500bln club. The Hang Seng Index fell 0.4% Friday, and down 2.7% on the week, to close out its worst week since December last year, with Tencent Holdings Ltd. and Ping An Insurance among the main drags on the benchmark. China large caps also have worst week of 2017, with CSI 300 Index declining 2.6%. Shenzhen Composite Index adds 0.8% Friday. Tencent tumbled 3.3% for weekly loss of 7.4%, though stock is still a top performer this year, with 103% gain.

The MSCI World Index slid 0.2%. Japan’s Nikkei had finished 0.4% higher, while MSCI’s broadest index of Asia-Pacific shares outside Japan was nearly flat on the day.

The dollar pared its weekly gains as U.S. tax overhaul stalled and Treasuries advanced; the euro met renewed demand from leveraged accounts and the loonie rose before the release of Canadian growth and labor data; the pound slipped below $1.35 as the Irish border question remained unanswered; core euro-area government bonds edged higher, while the S&P future index fell, suggesting U.S. stocks will track European equities’ weakness. Chinese bonds posted their first weekly gain since mid-September.

There was one outlier in overnight FX: the pound was on track for its best week since mid-October even as the Brexit breakthrough that boosted the currency this week appeared to be at risk. Sterling has gained since Tuesday on hopes U.K. Prime Minister Theresa May and her European counterparts will agree to move Brexit talks on to trade at a Dec. 4 meeting, although the Irish border issue threatens to be a roadblock. The currency, which was also boosted by month-end dollar selling, could take direction from Friday’s manufacturing data for November, expected to come in stronger than the previous month.  “Any sterling gains we may see on a beat on manufacturing PMI should be sold into as it makes sense to take profit on any gains into the weekend” CIBC’s head of G-10 FX strategy Jeremy Stretch said in emailed comments

U.S. stock-index futures also declined. 10Y TSY yields dropped back below 2.4%, down 2bps – the largest dip in more than a week – after climbing eight basis points in the previous two days. The euro pared an advance even after manufacturing data underscored the region’s economic resilience. The latest Markit PMI showed Euro zone factories had their busiest month for over 17 years in November. Of course, ISM and PMIs are nothing but “fake news” as UBS also explained:

Assorted manufacturing sentiment opinion polls are due out. 1) This is not the real world, and calling a rising PMI or ISM “stronger output” is fake news. 2) People lie on surveys, answer questions inaccurately, or answer a different question to the one asked. 3) This is why the correlation of sentiment surveys with economic reality is so low.

“We have a two-faced market. Wall Street continues to run on hopes of fiscal reform while in Europe, the renewed strength of the euro is hurting the DAX which in turn is dragging all the other bourses to the downside,” said Carlo Alberto De Casa, Chief Market Analyst at ActivTrades.

The gap between German 10-year and 30-year borrowing costs was at its tightest level since late August as a worse-than-expected euro zone inflation number on Thursday pushed back prospects for monetary policy tightening well into the future. The dollar index against a basket of six major currencies was 0.1% lower at 92.95 but poised to eke out some gains for the week, supported by oil prices, after OPEC and other major producers agreed to extend production curbs.

In commodities, crude futures were up 28 cents, or 0.5%, at $57.67 a barrel. Brent added 37 cents or 0.6% to $63.01 a barrel. Brent rose for a third consecutive month in November. “This outcome was widely expected, but its confirmation has removed a clear near-term downside risk to prices,” said Gordon Gray, head of oil and gas equity research at HSBC. Gold edged higher as the dollar eased but was still trading near the 3-1/2-week low touched in the previous session, with investors flocking to riskier assets. Spot gold was up 0.2 percent at $1,277.82 an ounce. Copper advanced 0.5 percent to $3.08 a pound, the first advance in a week.

Expected economic data include manufacturing PMIs and construction spending. National Bank of Canada and Big Lots are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.3% to 2640.5
  • Stoxx 600 down 0.6% to 384
  • MSCI Asia Pacific down 0.1% to 170
  • Nikkei 225 up 0.4% to 22819
  • Hang Seng down 0.4% to 29074
  • Shanghai Composite up less than 0.1% to 3318
  • S&P/ASX 200 up 0.3% to 5990
  • FTSE 100 down 0.2% to 7311
  • DAX down 0.9% to 12910
  • German 10Yr yield down 3bps to 0.34%
  • Italian 10Yr yield down 1bp to 1.74%
  • Spanish 10Yr yield down less than 1bp to 1.44%
  • Brent Futures up 1% to $63.25
  • Gold spot up 0.2% to $1,277.34
  • Dollar Index little changed

Top Overnight News from BBG

  • Time is quickly running out for U.S. Secretary of State Rex Tillerson. The White House is weighing a plan to replace him with CIA Director Mike Pompeo, three administration officials said.
  • The U.S. dropped tentative plans to visit Britain soon after President Donald Trump re-tweeted anti-Muslim videos from a British right-wing activist then criticized Theresa May for rebuking him, the Telegraph reported. U.K. Prime Minister May said the close alliance between the two countries will endure.
  • The Northern Irish party that props up May’s government threatened to bring her down if she makes anything like the concessions that Europe is demanding. The move risks May’s Brexit breakthrough deal with the European Union.
  • A second daily surge in Europe’s overnight benchmark rate sparked widespread speculation among traders about the trigger, though there were no signs of wider funding stress
  • Some traders attributed the jump in the Eonia rate to possible year-end funding squeeze at some lenders, while others pinned it down to demand related to Greece’s just-concluded bond swap
  • The breakthrough in Brexit talks that Theresa May has been working to clinch next week was at risk Friday as the Northern Irish party that props up her government threatened to bring her down if she makes anything like the concessions that Europe is demanding
  • Oil extended gains after a third monthly advance as OPEC agreed to prolong production cuts through to the end of 2018 in an effort to drain a global glut. Goldman Sachs Group Inc. says oil markets are overly jittery and there’s a reduced risk of both unexpected increases in supply as well as excess draws in stockpiles
  • The Senate tax bill is headed for a marathon debate this week after Republican leaders brought the measure to the floor Wednesday with the goal of holding a final vote by the end of the week
  • Federal Reserve Bank of Cleveland President Loretta Mester brushed aside concerns over a flattening yield curve while expressing some worry over elevated stock market valuations, saying both were reasons for continued interest rate hikes
  • Short sellers may be aggravating China’s biggest bond selloff in four years. While the nation’s debt market has no official measure of short sales, analysts say a surge in bond lending has been partially fueled by rising bearish bets

Asia equity markets were choppy as the region counterbalanced the momentum from the record highs in the US with disappointing Chinese Caixin Manufacturing PMI data. ASX 200 (+0.3%) and Nikkei 225 (+0.4%) took impetus from the rally in  US where tax optimism fuelled advances in S&P 500 and Dow to fresh all-time highs, in which the latter also surmounted the 24,000 level for the first time. However, sentiment was brought down a notch and Japanese stocks briefly gave up all their gains amid a pullback in USD/JPY, miss on Chinese data and after the Senate postponed a tax reform vote to Friday morning. Shanghai Comp. (Unch.) and Hang Seng (-0.4%) were indecisive in the wake the aforementioned data and after the PBoC skipped operations due to high liquidity, with Tencent also jittery following its fall out from the USD 500bln club. Finally, 10yr JGBs eventually found mild support from an indecisive risk tone and the BoJ’s Rinban operation for nearly JPY 1tln of  JGBs in 1yr-10yr maturities, which underpinned prices to above 151.00. Chinese Caixin Manufacturing PMI Final (Nov) 50.8 vs. Exp. 50.9 (Prev. 51.0). PBoC skipped open market operations for a net weekly drain of CNY 40bln vs. last week’s CNY 150bln net injection. PBoC sets CNY mid-point at 6.6067 (Prev. 6.6034) Japanese CPI (Oct) Y/Y 0.2% vs. Exp. 0.2% (Prev. 0.7%). Japanese CPI Ex. Fresh Food (Oct) Y/Y 0.8% vs. Exp. 0.8% (Prev. 0.7%)

Top Asian News

  • Short Sellers Seen Fueling Worst China Bond Rout Since 2013
  • Japan’s Economy Is Still Outrunning Its Potential Growth Rate
  • Central Banks Find Post-Crisis Bubble Tool Is Doing the Job
  • Hang Seng Index Has Worst Week This Year as Tencent Weighs
  • China’s Iron Ore Port Stockpiles Jump to Record on Winter Curbs

European stocks are beginning the final trading month of the year on the backfoot with the Euro Stoxx 50 trading with losses of over 1%. The price action in EU bourses began with DAX tripping through the 13k level and yesterday’s low, while the November low resides at 12,847. In tandem with this, auto names had been leading the losses with Fiat Chrysler shares halted for trade, having fallen 5%. Additionally, sentiment has not been helped after a delayed vote on the US tax reform bill, which has dented trading. Several potential catalysts and some bullish factors that are guaranteed to have propelled bonds to their highs. Bunds took a while to challenge 162.96 near term technical resistance, but once through there was little psychological opposition to gains through 163.00 before a pause at yesterday’s 163.10 Eurex session peak. However, with the Dax dumping for no obvious reason other than charts turning bearish once it breached Thursday’s low,  13k and the late November base, the core 10 year bond advanced further to almost hit highs made during the countdown to month end (163.26, so far). Interestingly and perhaps tellingly, Gilts have not been unduly ruffled by stronger than forecast UK manufacturing PMI, and remain above 124.00 within a 123.57-124.08 range (so almost ½ point ahead at best), so it seems that some kind of asset-reallocation has occurred, legged in and by default if not designed or as a specific trade. Back to the abrupt about turn down in the German index and other EU cash bourses, there is talk of algo/chart selling, maybe a basket of equities and even an erroneous sale in a big auto that dragged other car names down with it.

Top European News

  • Brexit Risks Leaving Banks on the Hook for Impossible Contracts
  • Morgan Stanley Is Right to Fear My Party, Labour’s Corbyn Says
  • Eonia Mystery Deepens Despite No Sign of Wider Funding Stress
  • Turkey’s Success Selling Junk Yen Bonds Shows Hunger for Yield
  • Poland’s Goldilocks Economy Faces Inflation Wake-Up Call

In FX, the USD-index appears unable to sustain recovery gains above 93.000, with the delayed Senate vote on US tax reforms undermining Dollar sentiment, while Sterling and other major currency counterparts continue to thrive on bullish independent factors. GBP failed to benefit from firmer than expected manufacturing PMI from the UK (58.2 vs. Exp. 56.5) as markets pause for breath in the wake of recent gains and potential weekend risk ahead of PM May’s meeting with Barnier and Juncker on Monday with the Norther Ireland border issue also seemingly unresolved. EUR is maintaining 1.1900+ status vs the Greenback, but only just and capped by offers between 1.1940-50 before key chart resistance at 1.1961. JPY holding within a new broad 112.00- 113.00 range vs the Usd, eyeing JGB/UST yield differentials and of course the passage of US tax reform proposals/bills. Decent option expiries between 112.65-70 (1 bn).

In commodities, crude prices marginally firmer, following last night’s decision by OPEC and Non-OPEC to extend production cuts for 9-months which was widely expected. The more interesting development had come out from the EIA, who stated that US production rose around 300k bpd. Elsewhere, the metals complex has been relatively uneventful with both gold and copper sideways throughout Asia hours

Looking at the day ahead, the final November PMIs in Europe are due, while in the US, the November ISM manufacturing print and November vehicle sales data is due. Also worth noting is the various Fedspeak with Bullard, Kaplan and Harker all due.

US Event Calendar

  • 9:05am: Fed’s Bullard Speaks in Little Rock, Arkansas
  • 9:30am: Fed’s Kaplan Addresses Symposium in  McAllen, Texas
  • 9:45am: Markit US Services PMI, est. 54, prior 53.8
  • 10am: ISM Manufacturing, est. 58.3, prior 58.7
  • 10am: Construction Spending m/m, est. 0.5%, prior 0.3%
  • 10:15am: Fed’s Harker Speaks on Inclusive Economic Growth

DB’s Jim Reid concludes the overnight wrap

I arrived back to London yesterday to snow, albeit for a few minutes and consisting of a few dozen snow flakes. However my twitter and Facebook feed is full of pictures and videos recording this monumental occasion. London has had a lot to deal with this year – first Brexit and now a nanometer of snow sending the capital flocking to buy shovels and tinned food. Wherever you are around the world please think of us Londoners trying to navigate through this deluge as we commute to work today. The transport system typically doesn’t respond well to such disruption.

Anyway welcome to December. My wife officially marks this as the start of Xmas and I will most likely be greeted tonight at home as I come through the door with the Michael Buble’s Christmas Album which I always moan at but secretly quite like. In markets it’s beginning to look a lot like a new record for the S&P 500 as yesterday’s +0.82% climb cemented the 13th successive month of positive total returns in the index. We’ve never had such a run with data going back over 90 years. We’ve also never seen each month of a calendar year with a positive return so can December mark another landmark in this pretty incredible equity bull market?

The month ended with the FANG and wider technology stocks regaining some of their mojo after a difficult day on Wednesday. The NASDAQ (+2.2%) and FANGs (+1.5%) recovered but with the DOW powering on and crossing 24,000 for the first time ever (30 business days after first crossing 23,000) and the S&P 500 hitting a new record high.

Onto the US tax reform, momentum had been strong during the day, particularly after Senator McCain has decided to support the bill. However, later in the evening, there was a setback with three Senators (Mr Corker, Flake and Lankford) wanting to tie their votes to a triggering mechanism into the bill which would increase taxes down the track if revenue targets are not met. This seemed
to prevent any chance of a late night Thursday vote. Looking ahead, the timing of the full Chamber vote is evolving. The wires (eg Bloomberg) are potentially suggesting this morning (11am US time) at the earliest. As a reminder, there are currently five undecided GOP Senators, with three of them required to pass the bill in the Senate (GOP control 52 seats and need 50 yes votes).

One of the highlight yesterday was that not only did equities rise but US bond yields sold off quite sharply late in the Euro session. At one point we were up c5.5bp before closing +2.1bp to 2.41%, partly being bumped around by the tax developments and before that the solid core PCE data. European bond markets were firmer after weaker regional CPI data, with core yields down 1-3bp (Gilts -1bp; Bunds -1.7bp; OATs -2.8bp) while peripherals fell 4-6bp, with the outperformance led by Portugal where its yields are now the lowest since April 2015.

Staying in Europe, the economy is currently flying and latest surveys suggest it will likely continue. However, it’s precisely because of this strong growth impulse that DB’s Mark Wall feels the recent spell of unusually low macro volatility will inevitably change in 2018. He takes a closer look at the potential sources of change, including economic trends, Brexit, France’s Macron pivot, the Italy election and ECB tapering. Refer to his note for more details.

This morning in Asia, markets are mixed but little changed. The Nikkei (+0.62%) and Kospi (+0.13%) are up modestly, while the Hang Seng (-0.28%) and China’s CSI 300 (-0.24%) are slightly lower as we type. Elsewhere, China’s November Caixin manufacturing PMI was softer than expectations at 50.8 (vs. 50.9), while Japan’s Nikkei manufacturing PMI was slightly lower than last month (53.6 vs. 53.8 previous) but core October CPI was in line at 0.8% yoy.

Now briefly recapping other markets performance from yesterday. European markets were broadly lower, not responding to the positive boost from US tax reforms and the rebound in tech stocks. The Stoxx 600 and DAX were both down c0.3% while the FTSE fell 0.9%, impacted by the stronger Sterling.

Turning to currencies, the US dollar index fell 0.17% while the Euro and Sterling gained 0.50% and 0.88%, with the latter boosted by increased signs of a potential Brexit deal. In commodities, WTI oil edged up 0.17% after OPEC members agreed to extend production cuts to the end of 2018, note that Libya and Nigeria have accepted their output caps for the first time.

Away from markets, our US economists take a closer look at what new Fed nominee Marvin Goodfriend could mean for the Fed. They note that Mr Goodfriend is a respected monetary economist with considerable experience both inside and outside the Federal Reserve system. He has previous experience in Washington, having served on Ronald Reagan’s Council of Economic Advisers. In their view, his appointment will add much needed expertise on macroeconomics and monetary policymaking to a Board that has lost Stanley Fischer. Overall, they believe Goodfriend “leans hawkish, but is not a strident hawk”.

Staying with central bankers, firstly on bitcoin. The Fed’s regulation chief Mr Quarles noted “while these digital currencies may not pose major concerns at their current level of use, more serious financial stability issues may result” if they’re adopted widely. The ECB’s Mersch also noted “I can’t call the assets currencies and sooner or later….there will be a price paid for having excessive speculation”. Turning back to the traditional economy, the ECB’s Praet noted the breadth of economic expansion in the Euro area is “notable” and that monetary policy still plays an important role in sustaining recovery, but “it is not the only game in town”. Elsewhere, the Fed’s Kaplan noted one of the Fed’s big concern is labour participation, which could fall below 61%. On tax reforms, he believes reforming the corporate tax code “could be beneficial”, but some elements of the overall tax plans will create “a short term (economic) bump…but when it’s over, we’ll be more highly leveraged” than before.

Back in the UK, there seems to be little progress on the issue of Irish borders. Northern Island’s Democratic Unionists lawmaker Mr Wilson noted “it they (PM May) stop defending the union, we stop voting for them…it’s as simple as that”. Looking ahead, PM May is expected to meet with EC President Juncker on 4th December to discuss the next steps.

Over in Germany, Ms Merkel has held initial talks with the SPD to potentially form the next coalition government. Little specific details were released but the SPD Premier of the State of Lower Saxony Mr Weil noted “I expect that we would wrap up coalition talks before February as a best case scenario”. Before then, the SPD will hold their party conference on 7-9 December.

Finally, the NY times and then Bloomberg and Reuters have reported that the White House may be planning to replace Secretary of State Mr Tillerson with CIA Director Mike Pompeo, in part due to a slow pace of hiring and differences with President Trump. As per the administration officials, no official decision has been made, but if true, it could be a negative signal on the stability of Trump’s administration. Notably, the Guardian has reported that the White House has since denied such reports.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the October PCE core was in line at 0.2% mom and  1.4% yoy, but note the prior reading was revised up 0.1ppt and recent momentum looks stronger with the 3-month annualized rate now at 1.9%. The October personal income growth was above market at 0.4% mom (vs. 0.3% expected), but spending was in line at 0.3% mom. Elsewhere, the November Chicago PMI was above expectations at 63.9 (vs. 63 expected), while the weekly initial jobless claims (238k vs. 240k expected) was in line but continuing claims were slightly above (1,957k. vs. 1,890k expected).

In Europe, the November inflation data ranged from slightly below to in line. The Eurozone core CPI was below market at 0.9% yoy (vs. 1.0% expected). In Italy, CPI was also below at 1.1% yoy (vs. 1.2% expected). However, France’s CPI was in line at 0.1% mom but higher on an annual basis at 1.3% yoy (vs. 1.2% expected).

For October unemployment stats, the Eurozone was slightly lower at 8.8% (vs. 8.9% expected) but Germany and Italy were both in line at 5.6% and 11.1%, respectively. In terms of the October PPI, Italy was slightly above the prior reading at 2.2% yoy (vs. 2.0% previous), but France was below at 1.5% yoy (vs. 2.0% previous). Elsewhere, Germany’s October retail sales were below market at -1.4% yoy (vs. 2.8% expected). Finally, in the UK, the November GfK consumer confidence was weaker than expectations at -12 (vs. -11) – back to its post- Brexit vote low. The Nationwide house price index was also below market at 2.5% yoy (vs. 2.7% expected).

Looking at the day ahead, the final November PMIs in Europe are due, while in the US, the November ISM manufacturing print and November vehicle sales data is due. Also worth noting is the various Fedspeak with Bullard, Kaplan and Harker all due.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 0.43 points or .01% /Hang Sang CLOSED DOWN 103.11 pts or 0.35% / The Nikkei closed UP 04.07 POINTS OR 0.41%/Australia’s all ordinaires CLOSED UP 0.30%/Chinese yuan (ONSHORE) closed UP at 6.6093/Oil DOWN to 57.83 dollars per barrel for WTI and 63.25 for Brent. Stocks in Europe OPENED ALL RED .    ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6093. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.6069 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS SLIGHTLY WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.(MARKETS  WEAK)

3 a NORTH KOREA/USA

NORTH KOREA/South Korea

 

This will move the stock market another 300 points up and cause gold to fall again.  North Korea is preparing to launch another missile

 

(courtesy zero hedge)

North Korea’s Newest Missile Is Capable Of Carrying Multiple Warheads

Contrary to the South Korean government’s initial analysis, the missile launched by North Korea into the waters west of Japan yesterday could represent an important advancement in the country’s missile technology that would allow it to carry multiple warheads.

According to a report in Japanese business newspaper Nikkei, photos of the Hwasong-15 published by local North Korean media showcase a newly developed launch system and casing.

Rodong Sinmun, a mouthpiece for the North’s ruling Workers’ Party of Korea, published photos of the Hwasong-15, the country’s latest intercontinental ballistic missile, at liftoff and mounted on what appears to be a newly developed mobile launch system. The missile seems to involve a completely new rocket, judging by its size and shape, South Korea’s Ministry of National Defense said Thursday. The ministry’s initial analysis Wednesday claimed the Hwasong-15 was merely a retooled version of the Hwasong-14 ICBMs launched in July.

The shape of the rocket’s nose cone suggests that it was designed with an eye toward carrying multiple warheads, which could make it easier for the North to outfit the rocket with a nuclear payload. Also, by possessing the capability to strike multiple sites with one missile, it would make it more difficult for anti-missile defense systems to intercept it.

The latest missile’s nose cone is more rounded than that of its predecessor. This could indicate it was designed with an eye toward a multiple-warhead system, Chang Young-keun of the Korea Aerospace University said in response to questions from South Korea’s Yonhap News Agency. It was generally agreed that inserting multiple warheads into the Hwasong-14’s pointed nose cone would be difficult.

 

A missile capable of striking multiple sites at once would be more difficult for ship- and land-based defense systems to fully neutralize than a single-warhead missile. North Korea, long thought to be seeking this technology, would pose a much greater threat as a result.

To be sure, the rounded nose cone may have been designed solely to protect the missile as it reenters Earth’s atmosphere. Atmospheric re-entry has long been a major obstacle for the North’s missile program.

The missile’s shape may also be related to technology intended to protect its payload from the stress of re-entering the Earth’s atmosphere, said Kim Jung-bong, a professor at Hanzhong University. Heavy use of high-performance material such as carbon fiber could account for the rounded form, Kim said.

 

Re-entry technology is considered a major hurdle blocking North Korea from deploying a functional ICBM. A warhead must survive the intense heat and pressure of re-entry to be useful as a weapon. The North is thought to have obtained high-performance materials, using them in its quest to clear that barrier.

Finally, the rounded nose might be necessary to allow North Korea to load its rudimentary nuclear warheads on the rocket. US and Japanese officials now believe the North is less than two years away from being able to successfully strike the continental US with nuclear weapon.

A rounder nose cone also allows for a larger payload, perhaps intended to let Pyongyang mount a nuclear warhead on the rocket, a source at Japan’s Ministry of Defense said. The North’s technology is “certainly advancing,” Adm. Katsutoshi Kawano, chief of the Japanese Self-Defense Forces’ Joint Staff, told reporters Thursday. Japan will operate under the assumption that “the threat has grown,” he said.

Furthermore, the missile’s added girth suggests that it has been outfitted with two engines for the first two stages of flight instead of one.

The Hwasong-15 is 30 centimeters wider than its predecessor at around 2 meters, one expert said. This suggests the missile contains two engines in the first of its two stages, up from one in the Hwasong-14, said Kim Dong-yup, a professor at the University of North Korean Studies in Seoul. The increased thrust could put the entire U.S. mainland within the missile’s range without any reduction in the weight of the payload, the professor said.

 

A Rodong Sinmun editorial posted online Thursday called the launch of the Hwasong-15 a watershed moment for the North. Many think locking down multiple-warhead technology will take some time. But Pyongyang’s progress toward a functional ICBM is undeniable.

While there’s still no guarantee the North could pull off a nuclear strike with a high degree of accuracy, a nuclear weapon detonated several hundred miles above the center of the country could destroy the US by causing a giant electromagnetic pulse. Such an attack could kill hundreds of thousands, if not millions, of people by wiping out access to electricity across the entire continent.

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

 

UK labour leader: Jeremy Corbyn lashes out at Morgan Stanley and yes: Yes, I am a threat to the big banks

 

(courtesy zerohedge)

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

RUSSIA

Stands to reason:  Russian Parliament bans access to all USA reporters as the USA government yanked their TV station credentials

 

(courtesy zerohedge)

 

6 .GLOBAL ISSUES

7.OIL ISSUES

8. EMERGING MARKET

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

Euro/USA 1.1894 DOWN .0003/ REACTING TO MERKEL’S FAILED COALITION/ SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ 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 RED 

USA/JAPAN YEN 112.33 DOWN 0.244(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 1.3498 DOWN .0031 (Brexit March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2881 DOWN .0011(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro FELL by 3 basis points, trading now ABOVE the important 1.08 level RISING to 1.1894; / Last night the Shanghai composite CLOSED UP 0.43 POINTS OR .01% / Hang Sang CLOSED DOWN 103.40 POINTS OR 0.351% /AUSTRALIA CLOSED UP 0.30% / EUROPEAN BOURSES OPENED ALL RED 

The NIKKEI: this FRIDAY morning CLOSED UP 94.07 POINTS OR 0.41%

Trading from Europe and Asia:
1. Europe stocks OPENED ALL RED 

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 103.11 POINTS OR 0.35% / SHANGHAI CLOSED UP 0.43 POINTS OR .01% /Australia BOURSE CLOSED UP 0.30% /Nikkei (Japan)CLOSED UP 94.07 POINTS OR 0.41%

INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1275.75

silver:$16.39

Early FRIDAY morning USA 10 year bond yield: 2.376% !!! DOWN 4 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield 2.784 DOWN 5 IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)

USA dollar index early FRIDAY morning: 93.04 DOWN 1 CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.883% UP 1 in basis point(s) yield from THURSDAY

JAPANESE BOND YIELD: +.035% DOWN 2/5  in basis point yield from THURSDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.417% DOWN 3  IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 1.716 DOWN 3 POINTS in basis point yield from THURSDAY

the Italian 10 yr bond yield is trading 31 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.305% DOWN 2 IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1905 UP.0006 (Euro UP 6 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.88 DOWN 0.708(Yen UP 71 basis points/

Great Britain/USA 1.3504 DOWN 0.0026( POUND DOWN 26 BASIS POINTS)

USA/Canada 1.2707 DOWN  .0078 Canadian dollar UP 78 Basis points AS OIL ROSE TO $58,63

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This afternoon, the Euro was UP 6 to trade at 1.1905

The Yen fell to 111.88 for a LOSS of 71 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

The POUND FELL BY 26 basis points, trading at 1.3504/

The Canadian dollar ROSE by 185 basis points to 1.2707/ WITH WTI OIL RISING TO : $58.63

The USA/Yuan closed AT 6.6163
the 10 yr Japanese bond yield closed at +.035% DOWN 2/5  IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 5 IN basis points from THURSDAY at 2.347% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.745 DOWN 9  in basis points on the day /

Your closing USA dollar index, 92.64 DOWN 40 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00

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

London: CLOSED DOWN 26.18 POINTS OR 0.36%
German Dax :CLOSED DOWN 162.49 POINTS OR 1.25%
Paris Cac CLOSED DOWN 55.90 POINTS OR 1.40%
Spain IBEX CLOSED DOWN 126.00 POINTS OR 1.23%

Italian MIB: CLOSED DOWN 262.19 POINTS OR 1.17%

The Dow closed DOWN 40.76 POINTS OR 0.17%

NASDAQ WAS closed DOWN 26.39 Points OR 0.38% 4.00 PM EST

WTI Oil price; 58.63 1:00 pm;

Brent Oil: 63.82 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 59.00 UP 57/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 57 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.367% FOR THE 10 YR BOND 1.00 PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM

Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:$58.36

BRENT: $63.66

USA 10 YR BOND YIELD: 2.3633% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.7592%

EURO/USA DOLLAR CROSS: 1.1899 up .0001

USA/JAPANESE YEN:112.12 DOWN 0.463

USA DOLLAR INDEX: 92.89 down 15 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3477 : DOWN 51 POINTS FROM LAST NIGHT

Canadian dollar: 1.26890 UP 204 BASIS pts

German 10 yr bond yield at 5 pm: +0.367%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stock Markets Mueller’d As Yield Curve Collapse Continues

So to summarize – the former national security chief agrees to testify against the sitting president and The Dow drops 40pts…

 

China stocks were mixed with CHINEXT surging overnight but CSI300 ending at the lows (worst week in 2017)

 

Europe saw stocks and bond yields notably lower…

 

But for US equities, overnight weakness (as Asian tech wrecked) was quickly dismissed into the US open thanks to Daines and Johnson saying “yes” to the tax bill. Everything was awesome for a while and then the Flynn headlines hit, plunging stocks lower. But then luckily, Europe closed and McConnell says GOP had the votes for the tax bill and stocks took off again…

 

On the week, Nasdaq ended lower – worst week in 3 months, Trannies soared most since the election…

 

But futures show the real swings during a chaotic week

 

Today’s big event was Flynn’s headlines which sparked a bid for safe haven bonds and bullion, but that faded as tax vote came and went…

 

VIX spiked to 3-month highs but was monkey-hammered lower into the close in a desperate attempt to get The Dow green

 

And remains hugely decoupled from stocks…

 

After 10 straight days of short squeeze, ‘Most Shorted’ stocks actually dropped today.. barely…

 

Equity market momentum factor suffered it biggest weekly loss since the election (and best week for Value stocks since the election)

Obviously this week was all about taxes (this was the biggest jump for ‘high tax’ corps relative to ‘low tax’ corps in history…

 

Tech stocks were worst on the week as Retailers and Financials ripped oddly together higher…

 

Banks outperformed on the week despite a collapsing yield curve…

 

FANG Stocks worst week since June…Semis plunge the most in 2017 (after 11 weeks higher in a row)…

 

And the tech wreck hit Asia too…

 

Notably, while stocks (aside from Nasdaq) rallied on the week, high yield bonds did not…failing to get back above their 200DMA and fading notably today…

 

And remain notably decoupled from stocks… (notably today’s weakness was in Consumer Staples and Financials and more broad-based)

 

Nasdaq and bonds have recoupled…

 

Nasdaq and FX carry recoupled…

 

Bonds were well bid today with the long-end massively outperforming…(leaving 30Y yield lower on the week)

 

Crashing the yield curve to new cycle-lows (back at Oct 2007) – 3rd weekly flattening in a row…

As one witty gentlemen noted – if Mueller files charges against 3 or 4 more people, the curve will invert.

The Dollar Index managed to scramble back into the green for the week (despite a big plunge on Flynn today) – after 3 straight weeks lower…

 

All major commodities were lower on the week – note that gold (and crude) briefly tagged unchange on the Flynn headlines before being sold…

 

Gold ripped on the Flynn headlines, tagged the 100DMA and then tumbled…

 

Finally, Bitcoin ended the week up 31% – The best week since Dec 2013…Despite a huge drawdown…

end

 

Early morning trading today:

Dow Dumped As Tech Spikes On Chaotic Open

Having ramped on Tax hopes into the open this morning, some relative chaos erupted as the first trading day of December opened…

Dow was dumped at the open, S&P fell back red, and Nasdaq dumped and pumped…

All major indices are back in the red…

end

 

Bond yields crashing again:  it does not look like the USA economy is booming if the yield curve plummets;

 

(courtesy zerohedge)

 

 

Meanwhile… The Yield Curve Is Crashing-er

Remember Monday when stocks jumped and the yield curve steepened and every talking head and their pet rabbit said the bond market is about to explode… well the yield curve is now imploding again with 5s30s crashing almost 10bps to 64bps – the lowest since Oct 2007.

False start…

 

The trend is jnot The Fed’s friend…

 

This morning Fed’s Bullard warned that more rate-hikes could invert the yield curve (which has signal 7 of the last 7 recessions).

“There is a material risk of yield curve inversion over the forecast horizon if the FOMC continues on its present course of increases in the policy rate,” Bullard, who doesn’t vote on the policy-setting Federal Open Market Committee until 2019, said on Friday in Arkansas.

 

“Yield curve inversion is a naturally bearish signal for the economy. This deserves market and policy maker attention.’’

Hoever, last night Cleveland Fed President Loretta Mester on Thursday played down concerns about the yield curve, instead advocating continued gradual increases in the federal funds rate.

“Long rates are going to go up given where we are in the economy and given where we see the economy going,” she said in an interview.

 

“But this is another reason why we need to keep raising up the short rate. These financial conditions are accommodative.”

So Bullard rightly worried, Mester – it’s different this time.

 

 

end

 

Soft data Markit Manufacturing Index falls lead by new orders

 

(courtesy zero hedge)

 

US Manufacturing’s Hurricane-Rebound Is Over: New Orders Sink, Costs Soar

The brief rebound in US manufacturing after the hurricanes appears to have ended as Markit’s PMI dropped from 54.6 to 53.9 as new orders slowed amid soaring inflation. For once ISM Manufacturing also agreed with PMI – dropping to its lowest since July – with employment and export orders sinking.

While new orders slowed, the most notable item in the PMI data was that inflation is surging…

Average prices charged by manufacturers rose further in November, with the pace of inflation accelerating to the fastest in almost four years.

 

Anecdotal evidence suggested the increase was due to greater cost burdens which were largely passed on to clients.

 

Input price inflation also quickened since October and was steep overall. Survey respondents commonly stated that components costs rose due to logistical delays.

ISM data shows a drop in employment and export orders…

ISM respondents seem enthused still:

  • “Continuing to see more orders for the next six to 12 months.” (Chemical Products)
  • “Strong sales through third and now fourth quarters. Backlog increasing, and capacity at suppliers tightening.” (Machinery)
  • “Business has leveled out but remains strong heading into the end of the year.” (Computer & Electronic Products)
  • “We are just coming off a record sales year. We expect to continue in 2018 robust activity.” (Miscellaneous Manufacturing)
  • “We are seeing steady, consistent demand for end of year. We usually see a slowdown, which we haven’t seen yet.” (Fabricated Metal Products)
  • “Overall industry demand remains strong. Continue to have a healthy backlog of orders. Local economy is also strong, with a fairly tight labor market.” (Transportation Equipment)
  • “Business is strong. Employment is tight. Supplier deliveries have lengthened. A few suppliers are still blaming Hurricane Harvey for the lead times.” (Food, Beverage & Tobacco Products)
  • “Strong season demand for products and continued requirements for uptime.” (Nonmetallic Mineral Products)
  • “Currently, we have not experienced the typical seasonal slowdown toward the end of Q4. Could be that there is a lot of optimism in the American economy.” (Plastics & Rubber Products)

Within the ISM data, we note that the percentage of respondents saying New Orders are ‘better’ dropped to 31, the lowest since November 2016.

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

“US manufacturers reported further solid growth in November. The rate of expansion settled slightly after October’s rebound from the hurricanes, but still leaves the sector on course for its best quarter since the opening months of 2015.

 

“What’s especially encouraging is that growth is being led by producers of business equipment and machinery, indicating investment spending is on the rise.

 

“Jobs growth in the sector has also picked up in recent months compared with the subdued hiring earlier in the year, suggesting that an expansionary mood is beginning to prevail in the goods producing sector. Business optimism is now at its highest since the start of 2016, underscoring how firms believe the upturn has further to run as we move into 2018.

 

“Prices continued to rise at an increased rate, linked to higher costs, though in many cases the price hikes were linked to ongoing supply chain disruptions since the hurricanes, suggesting inflationary pressures should start to cool soon, at least in terms of manufacturing costs.”

Transitory?

 

end

Chaos last night as they delay the tax bill to today. It may include 350 billion in new tax hikes.

(courtesy zerohedge)

 

“A Potential Nightmare Scenario For The GOP”: Tax Vote Delayed To Friday; May Include $350BN In New Tax Hikes

Update: The Senate tax plan roll vall vote which was widely expected to take place on Thursday evening, has been pushed back to 11am on Friday following the collapse of the “Trigger” compromise (discussed below) to win a majority for a Senate tax overhaul left Republicans scrambling to salvage the legislation, Bloomberg reports. While debate over the bill may continue into the evening, McConnell said. It’s unclear when the unlimited amendment vote series known as “vote-a-rama” would begin.

“For the information of all senators, the Senate will continue to debate the bill tonight. The next roll call votes will be at 11 a.m tomorrow morning,” Mitch McConnell announced Thursday night. The decision to skip a late-night session came as deficit hawks, led by Bob Corker pushed for a guarantee that the Senate tax legislation won’t increase the deficit. In its current format an analysis released late on Thursday found tax reform would cost $1 trillion.

As Bloomberg explains:

“the day’s events left GOP leaders contemplating a variety of potentially unpalatable measures — including making some tax cuts on the individual and corporate side end within six or seven years. The current version of the Senate bill would sunset individual breaks in 2026.”

And the punchline: “It’s a potential nightmare scenario for Republicans, who have been counting on a tax overhaul to be their first major legislative accomplishment of the year. The party is under enormous pressure to complete the tax measure with less than a year to go before the mid-term elections and with wealthy donors and large corporations demanding tax rate cuts.”

* * *

Following a report from the Joint Committee on Taxation, which unveiled late on Thursday afternoon that the Senate Tax bill would generate enough economic growth to lower its $1.4 trillion revenue cost by only about $458 billion over a decade – in other words it would still boost the deficit by roughly $1 trillion – in a dramatic showdown on the Senate floor, GOP leaders agreed to effectively increase taxes by $350 billion in response to a procedural ambush by deficit hawks led by Sen. Bob Corker that nearly killed the GOP tax reform bill.

According to Bloomberg, Senator David Perdue, a Georgia Republican, said that GOP Senators are “discussing a new compromise for their planned tax overhaul that would increase taxes in future years.”


David Perdue

Quoted by The Hill, Senate Republican Whip John Cornyn told reporters after a round of intense discussions on the floor, “we have an alternative, frankly, tax increase we don’t want to do to try to address Sen. Corker’s concerns.”  Cornyn said the details of the proposal are being worked out.

Corker had insisted on a “trigger” proposal that would have rolled back tax relief in case economic projections fell short of expectations; the flipside is that it would have also made any recession in the near future far worse by staggering tax increases just as the economy slowed down, in the process sending the deficit soaring and accelerating the economic contraction.

And in an unexpected, 11th hour reversal, the Senate parliamentarian ruled Tuesday afternoon that the trigger would not pass procedural muster. “It doesn’t look like the trigger’s going to work according to the parliamentarian,” Cornyn said. Cornyn’s remarks came after an hour long standoff on the Senate floor in which three Republicans – Corker, Ron Johnson and Jeff Flake – held up a procedural vote that would have sent the measure back to the Senate Finance Committee.

At least two of those members, senators Bob Corker of Tennessee and Jeff Flake of Arizona, had backed the trigger concept in recent days. Corker The deficit hawks threatened to vote for a motion to recommit the tax bill back to the Finance Committee. That move would have put the legislation in limbo for the foreseeable future and scuttled an all-night voting session on tax relief.

As The Hill adds, Republican leaders appeared extremely frustrated with Corker, Flake and Johnson during their intense discussions on Thursday night while the fate of the bill teetered in the balance.

McConnell’s face grew flushed as he huddled with Corker and Sen. Pat Toomey (R-Pa.), one of the main architects of the tax reform bill, while GOP colleagues crowded around them to listen in. Johnson said he joined Corker’s rebellion so he could win an assurance from GOP leaders about getting a vote on setting the corporate tax rate above the 20-percent level favored by President Trump.

Ultimately the hawks allowed the floor debate to continue, but it’s unclear whether or how their demands might be met. Meanwhile, Senator David Perdue said the estimated tax increase would be $350 billion over a decade. Cornyn told reporters that the size could be even larger. Senator Ron Johnson of Wisconsin said he held out as well, to ensure he can offer amendments, including one to raise the pass-through deduction to about 25%, paid for by eliminating the corporate deduction for state and local taxes.

Quoted by Bloomberg, Johnson said he doesn’t know if senators will finish the bill Thursday night. “We just saw a kink in the time plan right there so who knows what other cogs might be put in this wheel,” he said.

Republican Senator Lindsey Graham added: “I think you’re going to see a lot of these scrums, and here’s the way they’ll end: We’ll pass the bill sometime tomorrow.”

For the sake of the parabolic market, he better be right.

end

 

Then late in the morning: Johnson and Daines support the tax proposal and the voting looks close:

(courtesy zerohedge)

 

Futures Surge As Johnson, Daines Greenlight Tax Bill

After a planned series of votes on the Trump tax plan were called off last night, GOP senators were scrambling to assuage the concerns of Republican holdouts who suddenly decided that the tax bill would blow out the deficit after one proposal – a so-called “trigger” that would automatically raise taxes if revenue targets aren’t met – was rejected by the Senate Parliamentarian. With the first roll-call vote set for 11 am, Republican leaders were scrambling to have amendments of their own lined up for later in the day, with a vote hoped for by late Friday or early Saturday.

And while global stocks and US futures slid overnight on bill jitters, “risk on” euphoria promptly returned when in the latest Friday morning developments, Senators Steve Daines and Ron Johnson both said they would support the Republican bill following a plan to raise the pass-through deduction – a tax tool overwhelmingly used by small businesses – to 23%.

Senator Daines says he doesn’t see a revenue trigger replacement making it into the final Senate Republican tax bill, adding he thinks bill will pass without needing changes to win Sen. Bob Corker’s support.  “That’s going nowhere,” he says of revenue raisers to replace the trigger, adding that what Corker is suggesting “is just causing more problems.”

“The win that we obtained last night … really it’s a $100 billion tax cut for these Main Street businesses,” Daines said Friday on “Fox and Friends First.” According to The Hill, Daines said his change would allow the effective tax rate for pass-throughs to fall below 30 percent. Pass-through income can currently be taxed at rates as high as 39.6 percent.

Separately, a spokesperson for Johnson confirmed that the Wisconsin Republican would also be a yes vote. Daines and Johnson had earlier come out against the version of the bill that passed the Senate Finance Committee, saying it didn’t do enough to help pass-through businesses.

Pass-throughs are entities such as partnerships and sole proprietorships whose income is taxed through the individual code. Small businesses tend to be pass-throughs. The Senate bill initially included a 17.4-percent deduction for pass-through businesses. Daines’s office said the senator has gotten a commitment that the deduction will be increased to 23 percent.

The news sent stock futures surging, mirroring a bump from last night when Sen. John McCain announced that he would vote for the bill, defying speculation that he would instead vote to kill it.

The reason for the surge: if Daines, Collins, and McCain stick to their commitments to back the tax bill –  and now Johnson joins – and no one besides Flake and Corker vote against it, the Republican Senate should have enough votes to pass the tax bill.

That said, keep a close eye on McCain.

end

Interesting:  the White House is monitoring the “bitcoin situation”

(courtesy zerohedge)

 

 

White House Says It Is “Monitoring The Bitcoin Situation”

In the past few days two Federal Reserve presidents have discussed cryptocurrencies and concluded they are “niche” and “don’t matter today.

The total market capitalization of the entire cryptocurrency space is around $300 billion – smaller than the Top 10 names in the S&P 500.

In the last three years, Bitcoin has gained a similar amount of market cap as Nvidia…

de minimus percentage of Americans are exposed to Bitcoin and crypto-currencies.

But it appears the last few days of turbulence in Bitcoin  – which saw total losses of around $3 billion yesterday, compared to $60 billion lost in FANG stocks alone – has ‘triggered’ the world’s media into a frenzy..

Which led to today’s White House Press Briefing and an unusual question from one reporter…

Has the president been following cyrptocurrencies at all? Specirfically the major run-up in it…

 

Does he have an opinion on it, and does he feel it is now something that needs to be regulated?

The answer was, perhaps, somewhat surprising…

“The [Bitcoin situation] is something that is being ‘monitored’ by our team…

 

Homeland Security is involved.”

Which made us wonder…

Is Homeland “monitoring” FANG stocks and how dangerous they are?

 

Is The White House aware of the billions of dollars bing slammed through precious metals paper markets every morning?

 

Does President Trump have opinion on the massive spike in EONIA this week?

Did Bitcoin just make it to the big show?

end

 

What an absolute joke:  Michael Flynn is to plead guilty to lying to the FBI

(courtesy zerohedge)

Michael Flynn Charged With Lying To FBI, Set To Plead Guilty

Special Counsel Robert Mueller has charged former Trump national security adviser Michael Flynn with “willfully and knowingly” making “false, fictitious and fraudulent statements” to the FBI regarding conversations with Russia’s ambassador. Flynn, in turn, is expected to plead guilty in a DC court to making false statements to FBI agents in January 2017, according to the court filing presented below. The plea hearing is set for 10:30 am ET.

  • COURT FILING SAYS FLYNN FALSELY STATED HE DID NOT ASK RUSSIAN AMBASSADOR TO REFRAIN FROM ESCALATING SITUATION AFTER U.S. HAD IMPOSED SANCTIONS ON RUSSIA
  • COURT FILING SAYS FLYNN FALSELY STATED HE DID NOT RECALL THAT RUSSIAN AMBASSADOR TOLD HIM RUSSIA HAD CHOSEN TO MODERATE ITS RESPONSE TO U.S. SANCTIONS AS A RESULT OF HIS REQUEST
  • COURT FILING SAYS FLYNN FALSELY STATED THAT HE DID NOT ASK RUSSIAN AMBASSADOR TO DELAY VOTE ON PENDING UN SECURITY COUNCIL RESOLUTION AND THAT AMBASSADOR NEVER DESCRIBED RUSSIA’S RESPONSE TO HIS REQUEST

Michael Flynn is now the second person involved with the Trump campaign to admit wrongdoing in Mueller’s probe into allegations of collusion between the Trump campaign and Russia.

The news about Flynn comes a day after CNN reported that Jared Kushner had met earlier this month with Mueller’s team as part of the investigation into Russia’s meddling in the election, according to two people familiar with the meeting.

The question is whether as part of the plea Flynn will ‘reveal’ something about Trump, because if 6 months after the Mueller probe the best he could get out of Flynn is making a “false statement” about meeting the Russian ambassador, then Trump has nothing to be worried about.

end

What a riot: gold rises as Flynn is to testify against Trump saying that Donald Trump directed him to make contact with Russians.

 

what garbage!!

(courtesy zerohedge)

 

Flynn Prepared To Testify Against Trump; Gold Spikes, Stocks Plunge

Gold is spiking as stocks and the dollar sink after headline reports from ABC that Michael Flynn promised “full cooperation to the Mueller team” and is prepared to testify that as a candidate, Donald Trump “directed him to make contact with the Russians.”

The Dollar plunged…

 

Gold spiked and stocks slumped…

=

It did not take long for Dianne Feinstein to issue a damning statement:

  • *FEINSTEIN SAYS FLYNN GUILTY PLEA ABOUT MORE THAN LYING TO FBI
  • *FEINSTEIN: PLEA SHOWS TRUMP ASSOCIATE NEGOTIATING WITH RUSSIANS

There are more headlines:

  • FLYNN HAD CONTACT WITH `SENIOR’ TRANSITION AIDE RE: AMBASSADOR
  • FLYNN ADMITS MAR-A-LAGO CALL TO DISCUSS TALKS WITH AMBASSADOR

Reuters adds some color on what is occurring in the court:

  • FEDERAL PROSECUTORS SAY FLYNN SPOKE WITH SENIOR MEMBERS OF TRUMP’S TRANSITION TEAM ABOUT HIS CONVERSATIONS WITH RUSSIAN AMBASSADOR REGARDING U.S. SANCTIONS
  • PROSECUTORS SAY FLYNN SPOKE WITH A ‘SENIOR OFFICIAL’ OF TRUMP’S TRANSITION TEAM WHO WAS AT MAR-A-LAGO RESORT IN DEC 2016 TO DISCUSS WHAT TO COMMUNICATE TO RUSSIAN AMBASSADOR
  • PROSECUTORS SAY FLYNN WAS DIRECTED BY ‘A VERY SENIOR MEMBER’ OF TRUMP TRANSITION TEAM TO POLL COUNTRIES AHEAD OF UN VOTE IN DEC 2016
  • PROSECUTORS SAY FLYNN WAS TOLD BY THE SENIOR MEMBER OF TRUMP TRANSITION TEAM TO REACH OUT TO OTHER COUNTRIES TO INFLUENCE THE UN VOTE TO DELAY OR DEFEAT THE RESOLUTION

Trump’s Impeachment odds spiked…

The Dollar plunged…

 

Gold spiked and stocks slumped…

 

All major equity indices are tumbling…

 

end

 

Here are two scenarios, one bad for Trump and the other quite innocuous.  I will go with the latter

 

(courtesy zerohedge)

Kushner Said To Have Ordered Flynn To Contact Russia

When commenting on the Flynn plea deal with Mueller, we said that while hardly evidence of collusion between Trump and Russia, especially since all events took place after the election, the real question is who was the “senior member of the transition team” that instructed Flynn to call Russia. Now, according to Bloomberg’s Eli Lake we may have the answernone other than Jared Kushner, who as Lake says, “could be one of the next dominoes to fall.”

According to the Bloomberg report, “one of Flynn’s lies to the FBI was when he said that he never asked Russia’s ambassador to Washington, Sergey Kislyak, to delay the vote for the U.N. Security Council resolution. The indictment released today from the office of special prosecutor Robert Mueller describes this lie: “On or about December 22, 2016, Flynn did not ask the Russian Ambassador to delay the vote on or defeat a pending United Nations Security Council resolution.” At the time, the U.N. Security Council resolution on Israeli settlements was a big deal. Even though the Obama administration had less than a month left in office, the president instructed his ambassador to the United Nations to abstain from a resolution, breaking a precedent that went back to 1980 when it came to one-sided anti-Israel resolutions at the U.N.

This was the context of Kushner’s instruction to Flynn last December. One transition official at the time said Kushner called Flynn to tell him he needed to get every foreign minister or ambassador from a country on the U.N. Security Council to delay or vote against the resolution. Much of this appeared to be coordinated also with Israeli prime minister Benjamin Netanyahu, whose envoys shared their own intelligence about the Obama administration’s lobbying efforts to get member stats to support the resolution with the Trump transition team.

As Lake correctly notes, “for now it’s unclear what to make of all of this” especially since th most important part of a case is missing: motive.

We also know from Flynn’s “statement of the offense” that he lied to FBI agents as the bureau was investigating Russia’s meddling in the 2016 election and any links between Russia and the Trump campaign in this period. Nonetheless, nothing in the Flynn plea sheds any light on whether the Trump campaign actually colluded with Russia to influence the election.

Here there are two possibilities: one bad for Trump, and one innocuous. As ABC News reported on Friday, Flynn is prepared to tell Mueller’s team that Trump had instructed him to make contact with Russia during the campaign itself.

If those contacts involved the emails the U.S. intelligence community charges Russia stole from leading Democrats, then Mueller will have uncovered evidence of actual collusion between the president and a foreign adversary during the election. Impeachment could then be in the cards.”

That’s the bad case. But, Lake concedes, it’s also possible that the Justice Department became interested in Flynn’s initial conversation with Kislyak on other, less explosive grounds.

One leading theory pushed Friday by Democrats involves a violation of a 1799 statute known as the Logan Act. A relic of the John Adams administration, this discredited law makes it illegal for a private U.S. citizen to undermine the foreign policy of a sitting president in contact with a foreign power. No American has ever been successfully prosecuted under that law.

This path is likely a dead end: some conservatives urged the George W. Bush administration to prosecute former House speaker Nancy Pelosi under the Logan Act in 2007 when she visited the Syrian dictator, Bashar al-Assad, when the White House was trying to isolate him. Nothing ever came of that.

Still, a Logan Act investigation would explain the bureau’s interest in Flynn’s conversations about the U.N. Security Council resolution on Israel. This is what Senator Dianne Feinstein, the ranking Democrat on the Senate Judiciary Committee, said on Friday: “This shows a Trump associate negotiating with the Russians against U.S. policy and interests before Donald Trump took office and after it was announced that Russia had interfered in our election. That’s a stunning revelation and could be a violation of the Logan Act, which forbids unauthorized U.S. citizens from negotiating with a foreign power.”

If that is the extent of Mueller’s charges, it’s nothing and Trump walks away scott free. As Lake notes, “if that’s all there is, then the whispers of collusion will look foolish. Nonetheless, it may be enough to take out not only Flynn, but also the man who married the president’s daughter.

Of course, if Kushner is the last casualty of all this, it is likely safe to say that not many tears will be shed.

I like Graham Summers very much.  He explains in simple language the huge debt bubble which in turn creates bubbles in just above everything

 

a must read…

 

(courtesy Graham Summers/Phoenix Capital Research)

Bubble Watch: US Margin Debt Now Equal the Economy of Taiwan

Phoenix Capital Research's picture

 

When Central Banks attempted to corner the sovereign bond market via ZIRP and QE, they forced ALL risk in the financial system to adjust lower.

Remember, in a fiat-based monetary system such as the one used by the world today, sovereign bonds NOT gold are the ultimate backstop for the financial system.

And for the US, which controls the reserve currency of the world, sovereign bonds, also called Treasuries, represent the “risk-free” rate of return for the entire world.

So when the Fed moved to corner this market, forcing the yields on these bonds to drop to all-time lows, it was effectively forcing ALL risk in the US financial system to adjust to an abnormal risk-profile.

Put simply, the Fed created a bubble in bonds, which in turn fueled a bubble in everything.

Yes, everything… corporate bonds, municipal bonds, stocks, even consumer credit. Indeed, nine years into this insanity things have reach such egregious levels of excess that even tertiary debt instruments such as margin debt have reached levels greater than ever before.

What is margin debt?

Margin debt is money that stock investors borrow in order to buy stocks. It is direct leverage. And it just hit a new record… or $561 billion.

To put this number into perspective, it is:

  • Equal to the entire economy of Asian powerhouse Taiwan.
  • Nearly greater than the amount of margin debt borrowed at the peak of the last bubble in 2007 50%.
  • DOUBLE the amount of margin debt borrowed at the peak of the Tech Bubble.

Now, no one in their right mind would argue that late 2000 or late 2007 were periods of fiscal restraint.

Well, today investors are borrowing hundreds of billions or dollars MORE to invest in the stock market than they were at those times.

As I explained in my bestseller, The Everything Bubble: the Endgame For Central Bank Policy, the bubble in bonds is what finances this entire mess.

By creating a bubble in bonds, the US Federal Reserve has created a bubble in EVERYTHING because borrowing costs are at absurdly low levels.

This is why I coined the term The Everything Bubble in 2014It’s also why I wrote a book on this issue as well as what’s coming down the pike: because when this bubble bursts (as all bubbles do) the policies Central Banks employ will make those from 2008-2015 look like a cakewalk.

We are putting together an Executive Summary outlining all of these issues as well as what’s to come when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

END

Let us close out the week with this offering courtesy of Greg hunter of USAWatchdog

 

(courtesy Greg Hunter/Usa Watchdog)

NK Missiles Can Hit DC, Record Stock Market Again, Bitcoin Bubble?

By Greg Hunter On December 1, 2017 In Weekly News Wrap-Ups

By Greg Hunter’s USAWatchdog.com (WNW 311 12.1.17)

North Korea had another very successful missile test. This time it went 10 times higher than the international space station. Secretary of Defense James Mattis says this proves North Korean ballistic missiles can now reach Washington or anywhere else in the world. President Trump was quoted as saying “We’ll take care of it,” but didn’t explain what he meant. Trump also said of the North Korean Missile launch, “It is a situation that we will handle.” UN Ambassador Nikki Haley was blunter and said, “If war comes, make no mistake, the North Korean regime will be utterly destroyed.” At the very least, more sanctions are coming for North Korea.

The stock markets set new record all-time highs—again. This time it was on the news that Senator John McCain said he was going to vote for the GOP tax cut package. You remember during the partial repeal of Obama Care, McCain was the vote that killed the deal. Meanwhile, all is not a rosy picture, and many are warning that valuations are high and the yield curve is signaling recession. One of those people doing the warning was none other than outgoing Fed Head Janet Yellen.

Whether you are a fan of Bitcoin or not, one thing is for sure. It’s been on one wild ride this year. Bitcoin shot over $10,000 a unit all the way up past $11,000. Then it fell 20%, but it’s still way up for the year. Now, Bitcoin has gotten the attention of the White House, Homeland Security and the Fed. The Federal Reserve is now saying that Bitcoin could “pose financial stability issues.” Could the U.S government try to make Bitcoin illegal?

Join Greg Hunter as he looks at these stories and more in the Weekly News Wrap-Up.

Correction: I meant to say that the North Korean ballistic missile went 2,800 miles up into space and not 28,000.

Video Link

https://usawatchdog.com/nk-missiles-can-hit-dc-record- stock-market-again-bitcoin-bubble/

Well that about does it for today

HAVE AN ENJOYABLE WEEKEND AND…

I will see you MONDAY night

HARVEY

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