Dec 15 A/BITCOIN RISES $1,153 DOLLARS TO $17,646/GOLD DOWN 30 CENTS BUT SILVER RISES 12 CENTS TO $16.04/SILVER OPEN INTEREST CONTINUES TO RISE AND ENDS THE WEEK AT OVER 208,000 CONTRACTS/IN GOLD OVER 10,000 EFP TRANSFERS TO LONDON/IN SILVER OVER 3500 CONTRACTS TRANSFERRED/MORE SWAMP NEWS FROM THE USA/

GOLD: $1254.60 down $0.30

Silver: $16.04 UP 12 cents

Closing access prices:

Gold $1255.70

silver: $16.06

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: $1266.60 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1255.20

PREMIUM FIRST FIX: $11.40

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SECOND SHANGHAI GOLD FIX: $1267.59

NY GOLD PRICE AT THE EXACT SAME TIME: $1255.55

Premium of Shanghai 2nd fix/NY:$12.04

SHANGHAI REJECTS NY /LONDON PRICING OF GOLD

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LONDON FIRST GOLD FIX: 5:30 am est $1257.25

NY PRICING AT THE EXACT SAME TIME: $1257.50

LONDON SECOND GOLD FIX 10 AM: $1254.60

NY PRICING AT THE EXACT SAME TIME. 1255.10

For comex gold:

DECEMBER/

 NUMBER OF NOTICES FILED TODAY FOR DECEMBER CONTRACT:  80 NOTICE(S) FOR 800 OZ.

TOTAL NOTICES SO FAR: 7090 FOR 709,000 OZ (22.052 TONNES),

For silver:

DECEMBER

29 NOTICE(S) FILED TODAY FOR

145,000 OZ/

Total number of notices filed so far this month: 5927 for 29,135,000 oz

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Bitcoin: BID $17,717/OFFER $17,837 UP $1217 (morning) 

BITCOIN : BID $17,646 :  OFFER 17,765  UP $1153 (CLOSING)

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY ROSE BY A GOOD SIZED 2406 contracts from 206,110 RISING TO 208,516 DESPITE YESTERDAY’S TINY  SIZED 7 CENT RISE IN SILVER PRICING.  WE HAD NO  COMEX LIQUIDATION AND ON TOP OF THIS, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE: A HUGE  3376 EFP’S FOR MARCH (AND ZERO FOR DEC AND OTHER MONTHS) AND THUS TOTAL ISSUANCE OF 3376 CONTRACTS. HOWEVER THE MOVEMENT ACROSS TO LONDON IS NOT AS SEVERE AS IN GOLD AS THERE SEEMS TO BE A MAJOR PLAYER TAKING ON THE BANKS AT THE COMEX.  STILL, WITH THE TRANSFER OF 3376 CONTRACTS, 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 1492 EFP’S FOR SILVER ISSUED.

ACCUMULATION FOR EFP’S/SILVER/ STARTING FROM FIRST DAY NOTICE/FOR MONTH OF DECEMBER:

34,713 CONTRACTS (FOR 11 TRADING DAYS TOTAL 34,713 CONTRACTS OR 173.57 MILLION OZ: AVERAGE PER DAY: 3,155 CONTRACTS OR 15.778 MILLION OZ/DAY)

RESULT: A GOOD SIZED RISE IN OI COMEX WITH THE  7 CENT RISE IN SILVER PRICE.  HOWEVER  WE HAD NO SILVER LIQUIDATION AT THE COMEX BUT WE DID HAVE   A HUGE SIZED EFP ISSUANCE OF 3376 CONTRACTS  WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS:  FROM THE CME DATA 3376 EFP’S  WERE ISSUED TODAY (FOR MARCH EFP’S)  FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS. IN ESSENCE THE  DEMAND FOR SILVER PHYSICAL INTENSIFIES GREATLY. WE REALLY GAINED 5782 OI CONTRACTS i.e. 3376 open interest contracts headed for London (EFP’s) TOGETHER WITH A INCREASE OF 2406 OI COMEX CONTRACTS. AND ALL OF THIS INCREASED DEMAND  HAPPENED WITH THE TINY SIZED  RISE IN PRICE OF SILVER BY 7 CENTS AND A  CLOSING PRICE OF $15.92 YESTERDAY. YET WE STILL HAVE A MASSIVE AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just OVER 1 BILLION oz i.e. 1.043 BILLION TO BE EXACT or 149% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT DECEMBER MONTH/ THEY FILED: 270 NOTICE(S) FOR 1,350,000 OZ OF SILVER

In gold, the open interest FELL BY WHOPPING 5408 CONTRACTS DOWN TO 450,743 DESPITE THE GOOD SIZED GAIN  IN PRICE OF GOLD YESTERDAY ($8.60).  HOWEVER,  THE TOTAL NUMBER OF GOLD EFP’S ISSUED YESTERDAY FOR TODAY  TOTALED A CONSIDERABLE  10,561 CONTRACTS OF WHICH THE MONTH OF DECEMBER SAW 0 CONTRACTS AND FEB SAW THE ISSUANCE OF 10,561 CONTRACTS. The new OI for the gold complex rests at 450,743. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE WITNESS THE HUMONGOUS 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 WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.  IN ESSENCE WE HAVE A GOOD GAIN OF 5153 OI CONTRACTS: 5408 OI CONTRACTS DECREASED AT THE  COMEX  AND A GOOD SIZED  10,561 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.

YESTERDAY, WE HAD 17,961 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF DECEMBER STARTING WITH FIRST DAY NOTICE147,764 CONTRACTS OR 14.776 MILLION OZ OR 459.59 TONNES (11 TRADING DAYS AND THUS AVERAGING: 13,433 EFP CONTRACTS PER TRADING DAY OR 1.3433 MILLION OZ/DAY)

Result: A GOOD SIZED DECREASE IN OI DESPITE THE RISE IN PRICE IN GOLD TRADING  YESTERDAY ($8.60). WE  HAD A GOOD SIZED  NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 10,561. 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 10,561 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 5153  contracts:

10,561 CONTRACTS MOVE TO LONDON AND A 5408 CONTRACTS DECREASED AT THE  COMEX. (in tonnes, the gain yesterday equates to 18.70 which is unbelievable)

we had:  80  notice(s) filed upon for 8000 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: 844.29 tonnes.

SLV

A small withdrawal of 377,000 oz and that usually means to pay for fees.

INVENTORY RESTS AT 326.337 MILLION OZ/

end

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

1. Today, we had the open interest in silver ROSE BY A GOOD SIZED 2406 contracts from 206,110 UP  TO 208,516 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE TINY RISE IN PRICE OF SILVER OF 7 CENTS YESTERDAY . HOWEVER,OUR BANKERS  USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER  3376  PRIVATE EFP’S FOR MARCH (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM).  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  WE HAD ZERO COMEX SILVER COMEX LIQUIDATION. ON TOP OF THIS, IF WE TAKE THE OI GAIN AT THE COMEX 2406 CONTRACTS TO THE 3376 OI TRANSFERRED TO LONDON THROUGH EFP’S  WE OBTAIN A NET GAIN OF  5782  OPEN INTEREST CONTRACTS, AND YET WE STILL HAVE A  HUGE AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN DECEMBER (SEE BELOW). THE NET GAIN TODAY IN OZ: 28.91 MILLION OZ!!! 

RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE TINY 7 CENT RISE IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING).  BUT WE ALSO  HAD ANOTHER 3376 EFP’S ISSUED TRANSFERRING  COMEX LONGS OVER TO LONDON . TOGETHER WITH THE HUGE AMOUNT OF SILVER OUNCES STANDING FOR DECEMBER, DEMAND FOR PHYSICAL SILVER INTENSIFIES DESPITE THE CONSTANT RAIDS.

(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 DOWN 26.30.59 points or 0.80% /Hang Sang CLOSED DOWN 318.27 pts or 0.62% / The Nikkei closed DOWN 141.23 POINTS OR 0.62%/Australia’s all ordinaires CLOSED DOWN 0.15%/Chinese yuan (ONSHORE) closed DOWN at 6.6090/Oil DOWN to 57.40 dollars per barrel for WTI and 63.27 for Brent. Stocks in Europe OPENED ALL RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6090. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.6060 //ONSHORE YUAN SLIGHTLY WEAKER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT VERY HAPPY TODAY.(WEAK MARKETS)

 

)

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea

b) REPORT ON JAPAN

3 c  CHINA

4. EUROPEAN AFFAIRS

the go ahead was given for phase 2 for BREXIT, but it will be far more headwinds facing them

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7. OIL ISSUES

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)Craig Hemke wonders if gold investors are ready for gold’s next rally

( Craig Hemke/GATA)

ii)Alasdair, correctly identifies the Euro has the most vulnerable currency and he explains why

( Alasdair Macleod/)

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

i)Not good:  soft data, NY manufacturing index (Empire index) slides to 5 month lows

( zerohedge)

ii)Hard data, industrial production disappoints in November

( zerohedge)

iii)this is not want Trump needs:  the timing of the tax reform bill is in limbo as more Senators get cold feet

( zerohedge)

iv   a)SWAMP STORIES

Unbelievable reports from the Wall Street Journal on the corrupt FBI as the meddled into the 2016 USA election

( Wall Street Journal)

iv  b)Looks like they must replace the entire FBI for bias.

a must read…

 

( zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY A GOOD SIZED 5408  CONTRACTS UP to an OI level of 450,743 DESPITE THE RISE IN THE PRICE OF GOLD ($8.60 GAIN WITH RESPECT TO YESTERDAY’S TRADING).  WE DID HAVE COMEX GOLD  LIQUIDATION BUT IN REALITY WE GAINED IN OPEN INTEREST AS WE  HAD ANOTHER STRONG 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 10,561 EFP’S WERE ISSUED FOR FEBRUARY FOR A TOTAL OF 10,561 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS.

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 5408 OI CONTRACTS IN THAT 10,561 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON  AND WE LOST 5408 COMEX CONTRACTS.  NET GAIN: 5153 contracts OR 515300 OZ OR 16.02 TONNES

Result: AN GOOD SIZED DECREASE IN COMEX OPEN INTEREST DESPITE THE RISE IN THE PRICE OF GOLD YESTERDAY ($8.60.)  WE HAD NO REAL GOLD LIQUIDATION ANYWHERE. TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 5153 OI CONTRACTS…

We have now entered the  active contract month of DECEMBER. The open interest for the front month of December saw it’s open interest fell by 272 contracts down to 1901.  We had 288 notices filed upon yesterday so we gained  16 COMEX contracts or an additional 1600 oz will  stand for delivery AT THE COMEX in this active delivery month of December. THREE DAYS AGO I REPORTED:  “THIS IS THE FIRST TIME THAT WE HAVE EVER SEEN A HUGE AMOUNT IN OZ OF QUEUE JUMPING IN GOLD.” IT CONTINUED ON AGAIN IN EARNEST TODAY AS BANKERS ARE DESPERATE TO GET THEIR HANDS ON PHYSICAL GOLD.

January saw its open interest LOSS OF 68 contracts DOWN to 1752. FEBRUARY saw a LOSS of 5652 contacts down to 333,225.

We had 80 notice(s) filed upon today for 800 oz

PRELIMINARY VOLUME TODAY ESTIMATED;  not provided

FINAL NUMBERS CONFIRMED FOR YESTERDAY:  275,417

comex gold volumes are increasing dramatically

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And now for the wild silver comex results.

Total silver OI ROSE BY A HUGE 2,406 CONTRACTS  FROM 206,151 UP TO 208,516 DESPITE YESTERDAY’S TINY  7 CENT GAIN IN PRICE .  HOWEVER WE DID HAVE ANOTHER HUGE  3376 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: 3376.  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  LONG SILVER LIQUIDATION AS DEMAND FOR PHYSICAL SILVER INTENSIFIES ESPECIALLY AS WE WITNESS A HUGE AMOUNT OF SILVER OUNCES STANDING FOR METAL IN DECEMBER AS WELL AS THAT CONTINUAL MIGRATION OF EFPS OVER TO LONDON. ON A PERCENTAGE BASIS THERE ARE MORE EFP’S ISSUED FOR GOLD THAN SILVER AS IT SEEMS THAT A MAJOR PLAYER WISHES TO TAKE ON THE CROOKED COMEX SHORTS.  ON A NET BASIS WE GAINED 5782 OPEN INTEREST CONTRACTS:

2406 CONTRACTS GAIN AT THE COMEX WITH THE ADDITION OF  3376 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN: 5782 CONTRACTS

We are now in the big active delivery month of December and here the OI FELL by 268 contracts DOWN to 583.  We had 270 notice filed upon yesterday so we GAINED 2 contract or an additional 10,000 oz will  stand in this active delivery month of December.

The January contract month FELL by 35 contracts DOWN to 1309.  February saw a LOSS OF 1 OI contract FALLING TO 31. The March contract GAINED 2130 contracts UP to 168,831.

We had 29 notice(s) filed  for 145,000 oz for the DECEMBER 2017 contract

INITIAL standings for DECEMBER

 Dec 15/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil oz
Withdrawals from Customer Inventory in oz  
37,346.391 oz
HSBC
Scotia
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
96.47 oz
Brinks
No of oz served (contracts) today
 
80 notice(s)
8000 OZ
No of oz to be served (notices)
1821 contracts
(182,100 oz)
Total monthly oz gold served (contracts) so far this month
7090 notices
709,000 oz
22.052 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  0 kilobar trans

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

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

we had 1 customer deposit(s):

i) Into Brinks: 96.47 oz

total customer deposits 96.47  oz

We had 2 customer withdrawal(s)

i) Out of HSBC: 23,682.641 oz

ii) Out of Scotia: 13,663.75

Total customer withdrawals: 37,346.391 oz

we had 1 adjustment(s)

 

i) Out of HSBC:  200,233.94 oz was adjusted up to the dealer account to try and settle many of our long holders (from his customer account)

*December is the biggest delivery month of the year for gold and the fact that no gold has entered the vaults these past three trading 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 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 80 contract(s) of which 51 notices were stopped (received) by j.P. Morgan dealer and 15 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 (7090) x 100 oz or 709,000 oz, to which we add the difference between the open interest for the front month of DEC. (1901 contracts) minus the number of notices served upon today (80 x 100 oz per contract) equals 891,100 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 (7090) x 100 oz or ounces + {(1901)OI for the front month minus the number of notices served upon today (80) x 100 oz which equals 891,100 oz standing in this active delivery month of DECEMBER (27.716 tonnes). THERE IS  33.4 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE GAINED 16 COMEX CONTRACTS STANDING OR AN ADDITIONAL 1600 OZ WILL STAND AT THE COMEX  AND QUEUE JUMPING INTENSIFIES IN GOLD.

.

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ON FIRST DAY NOTICE FOR DECEMBER 2016,  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 1,079,954.036 or 33.59 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 9,046,656.053 or 282.00 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 72 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

DECEMBER INITIAL standings

 Dec 15/ 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil oz
Withdrawals from Customer Inventory
1,627.260.660 oz
Brinks
Delaware
Scotia
Deposits to the Dealer Inventory
 nil oz
Deposits to the Customer Inventory 
 1,200,434.380 oz
CNT
Scotia
No of oz served today (contracts)
 29
CONTRACT(S)
(145,000 OZ)
No of oz to be served (notices)
554 contract
(2,770,000 oz)
Total monthly oz silver served (contracts) 5827 contracts

(29,135,000 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 0 dealer withdrawals:

total dealer withdrawals: nil oz

we had 3 customer withdrawal(s):

i) Out of Brinks: 1,225,331.02 oz

ii) Out of Delaware: 1004.80 oz

iii) Out of Scotia: 400,924.84 oz

TOTAL CUSTOMER WITHDRAWAL  1,727,260.660 oz

We had 0 Customer deposit(s):

***deposits into JPMorgan have stopped again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver

total customer deposits: nil oz

we had 1 adjustment(s)

i) Out of CNT:

10,027.39 oz was adjusted out of the dealer and this lands into the customer account of CNT

The total number of notices filed today for the DECEMBER. contract month is represented by 29 contract(s) FOR 145,000 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 5827 x 5,000 oz = 29,135,0000 oz to which we add the difference between the open interest for the front month of DEC. (583) and the number of notices served upon today (29 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the DECEMBER contract month: 5827 (notices served so far)x 5000 oz + OI for front month of DECEMBER(583) -number of notices served upon today (29)x 5000 oz equals 31,905,000 oz of silver standing for the DECEMBER contract month. This is EXCELLENT for this active delivery month of November.

WE GAINED AN ADDITIONAL 2 CONTRACTS OR 10,000 OZ THAT WILL STAND AT THE COMEX AS QUEUE JUMPING CONTINUES WITH RESPECT TO SILVER.  BOTH GOLD AND SILVER ARE NOW EXPERIENCING QUEUE JUMPING.

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: not provided

CONFIRMED VOLUME FOR FRIDAY:   79,378 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 79,378 CONTRACTS EQUATES TO 396 MILLION OZ OR 56.6% 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: 56.846 million
Total number of dealer and customer silver: 239.752 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 2.1 percent to NAV usa funds and Negative 1.4% to NAV for Cdn funds!!!!
Percentage of fund in gold 63.2%
Percentage of fund in silver:36.5%
cash .+.3%( Dec 15/2017)

 

2. Sprott silver fund (PSLV): NAV FALLS TO -1.09% (Dec 15 /2017)
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.68% to NAV (Dec13/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -1.09%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.68%/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 15/NO CHANGES IN GOLD INVENTORY/RESTS AT 844.29 TONNES.

Dec 14/a good sized gain of 1.48 tonnes of gold into the GLD/inventory rests at 844.29 tones

Dec 13/no changes in gold inventory at the GLD/inventory rests at 842.81 tonnes

Dec 12/SURPRISINGLY NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 842.81 TONNES

Dec 11/SURPRISINGLY NO CHANGES IN GOLD INVENTORY AT THE GLD DESPITE THE CONSTANT RAIDS ON GOLD/INVENTORY RESTS AT 842.81 TONNES

Dec 8/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 842.81 TONNES

Dec 7/A BIG WITHDRAWAL OF 2.66 TONNES FROM THE GLD/INVENTORY RESTS AT 842.81 TONNES

Dec 6/No changes in GOLD inventory at the GLD/Inventory rests at 845.47 tonnes

Dec 5/A WITHDRAWAL OF 2.64 TONNES FROM THE GLD/INVENTORY RESTS AT 845.47 TONNES

Dec 4/A MASSIVE DEPOSIT OF 8.56 TONNES OF GOLD INTO THE GLD/THE BLEEDING OF GLD GOLD HAS STOPPED/INVENTORY RESTS TONIGHT AT 848.11 TONNES

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Dec 15/2017/ Inventory rests tonight at 844.29 tonnes

*IN LAST 293 TRADING DAYS: 96/66 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 228 TRADING DAYS: A NET 60.62 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 29.51 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Dec 15/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.337 MILLION OZ/

Dec 14/a small withdrawal of 377,000 oz and that usually means to pay for fees./inventory rests at 326.337 million oz/

Dec 13/no change in silver inventory at the SLV/Inventory rests at 326.714 million oz/

Dec 12/WOW!ANOTHER STRANGE ONE: SILVER HAS BEEN DOWN FOR 10 CONSECUTIVE DAYS, YET THE SLV ADDS ANOTHER 1.415 MILLION OZ TO ITS INVENTORY. IN THAT 10 DAY PERIOD, SLV ADDS 9.584 MILLION OZ/

INVENTORY RESTS AT 326.714 MILLION OZ

Dec 11/WOW!! ANOTHER STRANGE ONE: SILVER DESPITE BEING DOWN FOR 9 CONSECUTIVE TRADING DAYS ADDS ANOTHER 944,000 OZ TO ITS INVENTORY. FROM NOV 30 UNTIL TODAY SILVER HAS BEEN DOWN EVERY DAY. HOWEVER THE INVENTORY OF SILVER HAS RISEN 8.169 MILLION OZ.

Dec 8/A HUGE DEPOSIT OF 2.642 MILLION OZ/INVENTORY RESTS AT 324.355 MILLION OZ/

Dec 7/strange!! with the continual whacking of silver, no change in silver inventory at the SLV/Inventory rests at 321.713

Dec 6/no change in silver inventory at the SLV/Inventory remains at 21.713 million oz.

Dec 5/THIS ONE HIT ME LIKE A TON OF BRICKS: SLV ADDS 2.507 MILLION OZ DESPITE THE HUGE DRUBBING SILVER TOOK TODAY. (PRICE DISCOVERY?)

Dec 4/NO CHANGE IN SILVER INVENTORY AT THE SLV

INVENTORY RESTS AT 319.207 MILLION OZ/

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

INVENTORY 319.207 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/

Dec 15/2017:

Inventory 326.337 million oz

end

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

+ 1.62%
12 Month MM GOFO
+ 1.87%
30 day trend

end

 

We receive the COT report at 3:30.  However I must warn you because of the use of EFP’s which transfer longs over to London, the report is basically useless!

 

my goodness/wait until you see these figures

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
201,912 94,844 45,407 155,730 275,193 403,049 415,444
Change from Prior Reporting Period
-49,322 16,939 502 23,221 -47,206 -25,599 -29,765
Traders
157 104 78 47 49 243 194
 
Small Speculators  
Long Short Open Interest  
43,569 31,174 446,618  
-578 3,588 -26,177  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, December 12, 2017

our large speculators

those large speculators who have been long in gold morphed into long London forwards and thus 49,322 contracts are removed from the comex and sent on their journey to London

those large speculators who have been short in gold did not learn the tea leaves and they went further short by another 16,939 contracts

our commercials

those commercials who have been long in gold added a huge 23,221 contracts to their long side

those commercials who have been short transferred a net 47,206 contracts over to London and this balances with the large specs.

our small speculators

those small specs who have been long in gold added a tiny 51 contracts to their long side

those small specs who have been short in gold added 4209 contracts to their short side??

 

And now silver

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
77,169 67,255 19,259 75,352 100,181
-7,736 13,776 2,275 13,578 -7,947
Traders
102 59 41 40 33
Small Speculators Open Interest Total
Long Short 202,797 Long Short
31,017 16,102 171,780 186,695
1,710 1,723 9,827 8,117 8,104
non reportable positions Positions as of: 158 121
Tuesday, December 12, 2017

 

our large speculators

those large speculators who have been long in gold transferred a net 7736 contacts for forwards in London

 

those large speculators who have been short in silver added a huge 13,776 contracts to their short side??

our commercials

those commercials who have been long in silver added 13,578 contracts to their long side

those commercials who have been short in silver transferred a net 7947 contracts over to London

our small speculators

those speculators who have been long in silver added 1710 contracts to their long side

those speculators who have been short in silver added 1723 contracts to their short side.

 

end

 

Major gold/silver trading /commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

WGC: 2018 Set To Be A Positive Year For Price of Gold and Investors

 
GoldCore's picture

WGC: 2018 Set To Be A Positive Year For Price of Gold and Investors

– Gold expected to build on 2017 gains into 2018 despite headwind conditions
– Gold has gained more than 9% in the year-to-date
– Monetary policy and policymakers will continue to be “significant drivers of gold demand”
– Physical and structural market changes will support gold into 2018
– Goldcore has been at forefront of reporting on major developments in gold market and price

Gold’s had a tough year. This isn’t in reference to price. After all, it has made double-digit gains in some currencies and US Gold futures are up more than 9%. The precious metal has had some harsh criticism from the mainstream media and unfair comparisons to bubblicious assets, such as bitcoin and US equities.

Few have acknowledged gold’s impressive performance in the face of rising interest rates, tightening monetary policies and the ongoing equity bull market.

The World Gold Council’s Chief Market Strategist John Reade is optimistic that gold can carry on with its strong performance, well into 2018. Below, we outline how he expects gold to perform next year.

Monetary policy and Fed chairs

Monetary policy – and policymakers – will continue to be significant drivers of gold demand, given that the Federal Reserve (the Fed) is anticipated by many to hike rates further next year and start to allow its balance sheet to contract. The new staff roster may also change the way the Fed acts and communicates. Jerome Powell, nominated as the next Fed chair, recently aired his views on Fed communications and any changes that he makes could lead to a period of adjustment by fixed income and other markets. Other staff will change too, most interestingly the suggestion that Mohamed El-Erian – a known supporter of gold as an investment asset – may become vice-chairman. 

Jerome Powell will certainly be one to watch in the coming months. As we explained yesterday Janet Yellen is considered to have been successful in navigating the US economy. Powell is unlikely to rock the boat too much in the eyes of the FOMC but this does not necessarily mean great things for the global economy.

You can read more about the likely new Fed Chair Jerome Powell and our thoughts on what he will (or won’t) bring to the table.

Not just the Fed feeding the gold price 

Of course, it is not all about the US central bank. Over the next 12 months, we may see a slowdown in the ECB’s extraordinary monetary policy action, while even the Bank of Japan may dial back its quantitative easing. Finally, China could continue its efforts to rebalance economic growth and possibly de-leverage some sectors of the economy. 

Not only are central banks ones to watch when it comes to monetary policy but also when it comes to their influence on banking rules. This was something we’ve covered a lot this year, with the ECB’s proposal to end deposit protection as one of the most important stories of the year. It served as a timely reminder as to why keeping assets out of the banking system was more pertinent than ever.

This week we’ve had a rally of central bank announcements. The FOMC increased rates by 0.25% whilst the Bank of England maintained at 0.5%.  Both decisions were influenced by inflation rates. For the US, inflation remains ‘stubbornly’ low, whilst in the UK Mark Carney has been forced to explain the above target rate of 3.1%.

With inflation still subdued around the world, we see monetary policy tightening as likely to be gentle, but  there are risks, not least the Fed’s planned balance  sheet reduction – the first time such an action has  been attempted. 

Read more: Year-end Rate Hike Once Again Proves To Be Launchpad For Gold Price

Gold to benefit from US dollar headwind

Away from monetary policy, we view two other factors as potentially important for gold. First, the ongoing strength – or otherwise – of already expensive US equities. And second, the trajectory of the US dollar. We believe that the bull market in US equities has reduced gold’s appeal in 2017: an end to that trend could reignite demand for gold. The direction of the US dollar could also be important: if 2017 marks the end of a multi-year period of US dollar strength, gold could benefit from that tailwind, unlike the headwind that it has experienced since 2001.

When it comes to the US dollar strength various charts should not be considered as the only way to read the market. We’ve paid a lot of attention this year towards the ongoing move away from US dollar hegemony.

From Russia to China to Venezuela support for the currency is rapidly depreciating. Much of this is thanks to countries establishing trading mechanisms that embrace the borderless and sovereign-free currency of gold bullion.

Read more: Own Gold Bullion To “Support National Security” – Russian Central Bank

Positives in the Physical Market

What physical market trends should investors pay attention to in 2018? Income growth is probably the most significant because, over the long run, it has been the most important driver of gold demand. And we believe the outlook here is encouraging. China, the world’s largest gold market, has avoided the hard landing that many were predicting 18 months ago and is expected to grow at a fair clip in 2018, with the consensus forecast at around 6.4%. 

The Indian economy is recovering from the shock demonetisation of 2016 and adjusting to the Goods and Service Tax rolled out in 2017. The slowdown in GDP growth last year is expected to moderate, as businesses and consumers adapt. Indeed, India is expected to be one of the fastest-growing countries in the world in 2018, expanding at an even faster rate than it did between  2012-2014. 

Stories of strong demand in India and China are usually expected at various times in the year. What no one in the mainstream was prepared for in 2017 was the decade-long evidence that Germans had been boosting their personal gold reserves.

Solid income growth in the world’s largest gold markets would undoubtedly be viewed as good news. But other countries are making progress too. Germany’s economy is expected to maintain its momentum and unemployment is anticipated to continue falling, providing support for the world’s third-largest bar and coin market. Across the Atlantic, the US jewellery market, the third-largest in the world, could benefit from continuing economic growth and high consumer confidence. 

Read more: Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust

Structural changes in the gold market are also worth noting. These may not have a direct impact on the gold market in 2018, but they can herald significant changes in the years to come. Potential changes to the VAT rate currently applied to gold bars in Russia is a case in point. A punitive 18% has stifled market growth, so a reduction could open up an exciting new market. Elsewhere, banks and mints are continuing to develop Shari’ah-compliant gold products, and we may see this part of the market gain traction. And in India, the move to develop a spot exchange could result in greater transparency, boosting India’s gold trade.  

Read more about Shari’ah-compliant gold products here. 

News and Commentary

Gold steady amid subdued dollar, poised for weekly gain (Reuters.com)

Dollar Eyes Weekly Drop on Tax; Asia Stocks Fall (Bloomberg.com)

U.S. regulators ditch net neutrality rules as legal battles loom (Reuters.com)

If the bitcoin boom goes bust, the stock market could see collateral damage, analyst Bob Doll says (CNBC.com)

Gold will continue its climb in 2018, World Gold Council predicts (MarketWatch.com)


ref: finviz

World’s Biggest Pension Fund Says AI Will Replace Asset Managers (Bloomberg.com)

New York Fed Inflation Gauge And Gold Price (Gold-Eagle.com)

Central Banks Want the World to Carry On While They Quietly Tighten (Bloomberg.com)

Crypto Vs. Gold: Gold Has Value Unto Itself (SeekingAlpha.com)

What the World’s Central Banks Are Saying About Bitcoin (Bloomberg.com)

Gold Prices (LBMA AM)

15 Dec: USD 1,257.25, GBP 937.41 & EUR 1,065.52 per ounce
14 Dec: USD 1,255.60, GBP 935.67 & EUR 1,062.49 per ounce
13 Dec: USD 1,241.60, GBP 929.96 & EUR 1,056.97 per ounce
12 Dec: USD 1,243.40, GBP 933.92 & EUR 1,056.27 per ounce
11 Dec: USD 1,251.40, GBP 935.80 & EUR 1,061.19 per ounce
08 Dec: USD 1,245.85, GBP 924.42 & EUR 1,061.09 per ounce
07 Dec: USD 1,256.80, GBP 937.57 & EUR 1,066.77 per ounce

Silver Prices (LBMA)

15 Dec: USD 15.99, GBP 11.93 & EUR 13.55 per ounce
14 Dec: USD 16.01, GBP 11.92 & EUR 13.54 per ounce
13 Dec: USD 15.71, GBP 11.76 & EUR 13.38 per ounce
12 Dec: USD 15.78, GBP 11.82 & EUR 13.40 per ounce
11 Dec: USD 15.84, GBP 11.84 & EUR 13.43 per ounce
08 Dec: USD 15.83, GBP 11.76 & EUR 13.48 per ounce
07 Dec: USD 15.91, GBP 11.94 & EUR 13.49 per ounce


Recent Market Updates

– Year-end Rate Hike Once Again Proves To Be Launchpad For Gold Price
– UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall
– Buy Gold, Silver Time After Speculators Reduce Longs and Banks Reduce Shorts
– Bitcoin – Plan Your Exit Strategy Now – Maybe With Gold
– Gold Demand Increases Along with Uncertainty Thanks to Trump, Brexit and North Korea
– UK Pensions Risk – Time to Rebalance and Allocate to Cash and Gold
– Bailins Coming In EU – 114 Italian Banks Have NP Loans Exceeding Tangible Assets
– Silver’s Positive Fundamentals Due To Strong Demand In Key Growth Industries
– An Interview with GoldCore Founder, Mark O’Byrne
– Risk Of Online Accounts Seen As One of Largest Brokerages In World Halts Online Trading After “Glitch”
– 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

END

 

Craig Hemke wonders if gold investors are ready for gold’s next rally

 

(courtesy Craig Hemke/GATA)

 

Craig Hemke: Are gold investors ready for the next rally?

 Section: 

5:17p ET Thursday, December 14, 2017

Dear Friend of GATA and Gold:

The TF Metals Report’s Craig Hemke, writing for Sprott Money, asks this week if gold investors are ready for the next rally. Of course they probably have been ready for a few years now. But Hemke produces a few charts suggesting that a rally really is in the cards. Hemke’s analysis is headlined “Are You Ready for the Next Rally?” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/are-you-ready-for-the-next-rally-craig-…

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

END

 

Alasdair, correctly identifies the Euro has the most vulnerable currency and he explains why

 

(courtesy Alasdair Macleod/)

Alasdair Macleod: Europe, Brexit, and the credit cycle

 Section: 

6:10p ET Thursday, December 14, 2017

Dear Friend of GATA and Gold:

GoldMoney research director Alasdair Macleod writes today that the euro is the most vulnerable major currency and thus most vulnerable to cryptocurrencies when the European Central Bank begins the next round of wholesale money creation to save the European banking system. Macleod’s analysis is headlined “Europe, Brexit, and the Credit Cycle” and it’s posted at GoldMoney here:

https://www.goldmoney.com/research/goldmoney-insights/europe-brexit-and-…

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

END

 

 



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 DOWN AT 6.6190 /shanghai bourse CLOSED DOWN AT 26.30 POINTS 0.80% / HANG SANG CLOSED DOWN 318.27 POINTS OR 1.08%
2. Nikkei closed DOWN 141.23 POINTS OR 0.62% /USA: YEN FALLS TO 112.19

3. Europe stocks OPENED ALL RED   /USA dollar index RISES TO 93.57/Euro RISES TO 1.1796

3b Japan 10 year bond yield: FALLS TO . +.0460/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.71/ 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:: 57.40  and Brent: 63.27

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.296%/Italian 10 yr bond yield DOWN to 1.774% /SPAIN 10 YR BOND YIELD DOWN TO 1.419%

3j Greek 10 year bond yield FALLS TO : 4.000?????????????????

3k Gold at $1259.55 silver at:16.01: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 6/100 in roubles/dollar) 58.93

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 DEVALUATION SOUTHBOUND

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.19 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 0.9892 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1668 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 +0.324%

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 2.351% early this morning. Thirty year rate at 2.705% /

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

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

European, Asian Stocks Slide But US Futures Rebound As Tax Deal Fears Ease

 

U.S. equity index futures point to a higher open, having rebounded some 10 points off session lows with the VIX stuck on the edge between single and double digits, while European and Asian shares decline as investors assess central banks’ shift toward tighter monetary policy and concern over tax overhaul ahead of final plan.

It has been a groggy end to what is still set to be a third week of gainsfor MSCI’s global stock index following more upbeat data and signs that central banks including the Federal Reserve will keep treading carefully with interest rate hikes.

On Thursday, US stocks closed 0.41% lower after Republican Senator Rubio said he intends to oppose the tax bill as written unless there was a larger child tax credit (currently $1,100). He said GOP leaders “found the money to lower the top (individual tax) rate”, but “can’t find a little bit” more to help working class parents raising children. However, later on, President Trump said he is “very sure” Mr Rubio will vote yes. So still lots of potential changes here before the bills gets voted by the Senate, potentially as soon as Monday, although on Friday, US equities appears sanguine about the risks and have faded most of Thuesday’s weakness.

“The more the tax bill gets watered down, the less pronounced the effect will be on the dollar.” said Commerzbank currency strategist Esther Reichelt, in Frankfurt.

This morning in Asia, markets followed the negative US lead and are trading lower, with the MSCI Asia Pac Index and its ex-Japan couisn both down -0.4%. Australia’s ASX 200 (-0.2%) closed negative as weakness in its top-weighted financials sector weighed, while Nikkei 225 (-0.5%) was pressured after a mixed Tankan survey but then rebounded amid reports the BoJ is to tweak its language due to dovish dissent. Shanghai Comp. (-0.6%) and Hang Seng (-0.9%) were subdued after the recent quasi-tightening in China and with President Xi also expected to stress the need to curb financial risks at next week’s annual Central Economic Work Conference.

European markets were all lower, with the Stoxx Europe 600 Index following benchmarks from Hong Kong to Tokyo and Sydney lower, and down 0.4%, impacted by utilities and financials stocks post the marginally dovish ECB meeting. On a sector breakdown, consumer discretionary names are seen lower in the wake of a profit warning from Salvatore Ferragamo (-8%) and H&M (-15%) delivering an uninspiring trading update. Retailers led the decline as Hennes & Mauritz AB plunged after reporting a slump in quarterly sales. Banks struggled too on a renewed dip in euro zone bond yields after Thursday’s message from the European Central Bank that it was sticking to its pledge to keep money pouring into the bloc’s economy for as long as needed.

In currencies, the dollar steadied, but was down at 112.21 against the yen and, despite having been at a one-month high earlier in the week, stuttering toward a 0.3% weekly drop against a basket of six rival currencies, while Treasuries declined as some tax cut jitters remained. South Africa’s rand gained even as volatility soared before the ruling African National Congress meets this weekend to elect a new leader.

Meanwhile, the euro headed for a weekly gain after the ECB remained cautious about the prospects of reaching its inflation goals, even as it reiterated a pledge to keep stimulus in place. The pound dropped and yields on U.K. gilts fell to the lowest since September amid speculation Brexit talks are about to get more difficult. Russia’s ruble fluctuated after the nation’s central bank cut rates more than expected. The New Zealand dollar was the biggest mover among major currencies, up 0.6 percent at a two-month high of after the country’s Finance Minister Grant Robertson said he was comfortable with the currency’s general trend.

And speaking of Brexit, PM Theresa May is expected to back down on Brexit date plan in order to avoid a second defeat in the commons next week, according to press reports. German Chancellor Merkel said EU leaders will move to Brexit phase 2 today, but added that a lot of work is still needed regarding migration. There were also reports that EU leaders warned UK Conservative Party rebels have made a no deal Brexit more likely.

Back in the US, uncertainty surrounding the fate of U.S. tax reform is threatening to sour what has been a stellar run for equities in 2017, as money managers dial back their appetite to take risk amid signs that the eight-year stock rally may not be far from its end. PIMCO sees the good times rolling on in 2018 as global economies grow in sync, but the bond giant warned investors to brace for a downturn as central banks from the U.S. to Europe gradually tighten policy.

“The theme is still one of gradual policy tightening,” said Societe Generale interest rates strategist Jason Simpson, who said the Bank of England had also sent a steady-as-you-go signal at its meeting the previous day. “Today is also going to be the last one (this year) of any real flow… so bond yields are just squeezing lower as any short positions are being covered.”

In commodity markets, crude oil futures extended gains, after rising on Thursday as a pipeline outage in Britain continued to support prices despite forecasts showing a global crude surplus in the beginning of next year. U.S. crude added 0.3 percent, or 15 cents, to $57.19 a barrel, after gaining 0.8 percent overnight. Brent crude futures were up 0.2 percent, or 14 cents, at $63.45. Industrial metal copper CMCU3, headed for a 3 percent weekly gain after two weeks of hefty falls while gold edged away from a four month low hit earlier in week as it nudged up to $1,257 an ounce.

Bitcoin was on track for its smallest weekly move since October, having turned less volatile following the start of trading of Cboe Global Markets’ bitcoin futures. Rival CME Group will launch its own version on Sunday. The cryptocurrency was trading near a record high around $17,000 on the Bitstamp exchange, having climbed around 15 percent since Monday – the fifth straight week of gains.

Economic data include Empire State Manufacturing Survey and industrial production.

Overnight Bulletin Summary from RanSquawk

  • Last trading session of the week sees EU bourses slightly softer.
  • USD is under pressure again amid political headwinds over the tax plan
  • Looking ahead, highlights include US Industrial Production, Baker Hughes Rig Count and the Brussels Summit

Market Snapshot

  • S&P 500 futures up 0.15% to 2,660
  • STOXX Europe 600 down 0.3% to 387.86
  • MSCI Asia down 0.4% to 170.33
  • MSCI Asia ex Japan down 0.4% to 554.09
  • Nikkei down 0.6% to 22,553.22
  • Topix down 0.8% to 1,793.47
  • Hang Seng Index down 1.1% to 28,848.11
  • Shanghai Composite down 0.8% to 3,266.14
  • Sensex up 0.7% to 33,489.07
  • Australia S&P/ASX 200 down 0.2% to 5,996.97
  • Kospi up 0.5% to 2,482.07
  • German 10Y yield fell 1.3 bps to 0.303%
  • Euro up 0.1% to $1.1791
  • Italian 10Y yield fell 0.3 bps to 1.529%
  • Spanish 10Y yield fell 2.6 bps to 1.421%
  • Brent futures little changed at $63.29/bbl
  • Gold spot up 0.4% to $1,257.33
  • U.S. Dollar Index up 0.02% to 93.51

Top Overnight News

  • President Donald Trump said he’s “very sure” Marco Rubio will vote to pass tax legislation after senator threatened to vote against the bill unless negotiators boost the child tax credit.
  • Vice President Mike Pence’s Mideast trip shrinks after President Trump declared Jerusalem the capital of Israel
  • European Union leaders discuss the latest Brexit developments as May returns to Brussels after parliament defeat on Brexit legislation
  • Tax Overhaul Suspense as Holdouts Remain; Brevan Howard Braced for Worst Year Ever; Oracle Shares Jump on Cloud Warning
  • Congressional Republicans are scheduled to reveal final details of their agreed-upon tax-overhaul legislation today: Tax Debate Update
  • Central bankers are gingerly trying to take away the punch bowl without interrupting the party with moves either so well-telegraphed, or so tiny, and the language about future action so hedged, that there was barely a ripple in financial markets
  • Mylan NV, Perrigo Co. and Reckitt Benckiser Group Plc are among companies that submitted preliminary bids for Merck KGaA’s consumer health division, which could be valued at about $5 billion
  • With consumer spending surging, retailers are hoping for something they haven’t seen since the last recession began a decade ago: a truly great Christmas
  • Brevan Howard Asset Management is bracing for at least $1 billion of client withdrawals at the end of the month, as its main fund heads for a record annual loss
  • A new dissenter on the Bank of Japan board calling for more stimulus has prompted the BOJ to adjust its communications to flag risks of additional easing
  • GM Squares Off With Old Detroit Foes in $90 Billion Pickup Fight
  • BOJ Is Said to Tweak Message as Dissenter Calls for More Easing
  • Deutsche Telekom Recharges Dutch Challenge With Tele2 Deal
  • New Africa Gas Comes at Right Time for Europe in Supply Woes
  • Brexit Talks Set to Get Messy as Unity Hits High-Water Mark

Asia stocks were mostly lower as the downbeat tone rolled over from the US close, where sentiment was pressured on tax reform discord after Republican Senator Rubio said he would not vote for the GOP tax bill unless it expands the child tax credit. ASX 200 (-0.2%) closed negative as weakness in its top-weighted financials sector weighed, while Nikkei 225 (-0.5%) was pressured after a  mixed Tankan survey but then rebounded amid reports the BoJ is to tweak its language due to dovish dissent. Shanghai Comp. (-0.6%) and Hang Seng (-0.9%) were subdued after the recent quasi-tightening in China and with President Xi also expected to stress the need to curb financial risks at next week’s annual Central Economic Work Conference. Conversely, Indian markets  bucked the trend with gains of 0.9% after the country’s ruling BJP retained power in Gujarat with a clear majority and won  Himachal Pradesh from Congress in the state assembly elections. Finally, 10yr JGBs were relatively uneventful despite the  indecisive tone in Japan, while the BoJ Rinban announcement also failed to spur demand with the total amount at a reserved JPY 290bln in 10yr-25yr+ maturities. PBoC injected CNY 80bln via 7-day reverse repos and CNY 70bln via 28-day reverse repos, for a weekly net injection of CNY 80bln vs. last week’s CNY 510bln net drain. PBoC set CNY mid-point at 6.6113 (Prev. 6.6033). BoJ reportedly is to tweak its message after dissenter calls for further easing, according to reports.

  • Japanese Tankan Large Manufacturing Index (Q4) 25 vs. Exp. 24 (Prev. 22).
  • Tankan Large Manufacturing Outlook (Q4) 19 vs. Exp. 22 (Prev. 19)
  • Tankan Large All Industry Capex (Q4) 7.4% vs. Exp. 7.5% (Prev. 7.7%)

Top Asian News

  • Noble Group Sees More Pain Ahead as Creditor Talks Progress
  • Sunac Shares Plunge 10% After Placement Prices Near Bottom End
  • Hong Kong Moves Toward Dual-Class Shares, Wooing Next Alibaba
  • Hong Kong Stocks Retreat as Volatility Climbs to One-Year High
  • Financials to Overshadow Drugmakers in India’s Revamped Sensex
  • Vietnam Coffee Trade Slows as Buyers Bet on Bigger Discounts
  • AirAsia Said in Talks on Sale of Leasing Arm to Everbright
  • After Overtaking Diageo, China’s Moutai Plans Three IPOs

European equities have kicked the final trading session of the week in muted fashion, and lacking in firm direction (Eurostoxx 50 -0.1%) with yesterday’s ECB decision/press conference seeing no follow through into today’s trade. On a sector breakdown, consumer discretionary names are seen lower in the wake of a profit warning from Salvatore Ferragamo (-8%) and H&M (-15%) delivering an uninspiring trading update. Consumer discretionary aside, individual movers have been relatively limited thus far. The extent of the opening/early bid on core EU bonds appeared somewhat excessive in the absence of something more supportive/bullish, and without much further follow-through buying, Bunds and Gilts have duly drifted back down. The 2 benchmarks are now middle and near the bottom of ranges respectively, with the 10 year UK debt future just off a new 125.33 low (+4 ticks vs +40 ticks at best, and seemingly unwinding some of Thursday’s marked outperformance). A degree of stability in stocks may have encouraged longs to book profits/pare positions, and trading volumes are relatively light after yesterday’s CB-inflated turnover, so price moves are exaggerated. Indeed, for many this could mark the last full week of the year before Xmas and the New Year. Elsewhere, USTs continue to bide time just a few ticks below parity, with IP data ahead.

Top European News

  • Brexit Talks Set to Get Messy as Unity Hits High-Water Mark
  • Bank of Russia to Rescue Third Major Lender in Four Months
  • Natixis Deal to Boost MiFID Pricing Power Says Oddo’s Beumer
  • Airbus Puts Helicopters Chief in Line for Top Job in Shakeup

In FX, the USD is under pressure again following concerns over Rubio’s commitment to the latest draft of the US tax bill . The Index is only just maintaining 93.500+ status and still looking vulnerable within the broader 94.000-93.000 recent range. JPY finding some resistance against latest safe-haven gains just above 112.00 vs the USD but sellers appear eager to short the headline pair ahead of 112.50 amidst talk that the BoJ may be listening to dovish dissenters and tweak guidance accordingly. Cable hugs the 1.3400 handle amidst ongoing Brexit uncertainty and conflicting headlines. AUD/CAD/NZD all firmer vs their US rival and not just because the Dollar is weaker across the board. EUR Still struggling to advance beyond 1.1800 vs the Greenback, but equally supported well before 1.1713 and with 2.9bln option interest at the big figure running off today. The Russian Federation Central bank unexpectedly cuts its key rate by 50bps to 7.75% vs. Exp. 8.00% (Prev. 8.25%).

In commodities, gold remains supported by aforementioned tax concerns while copper and aluminium prices outperformed their peers during Asia-Pac trade with some attributing the price action to recent Chinese industrial output data. In the energy complex, WTI and Brent crude futures continue to remain firmer in the wake of ongoing supply disruptions from the Forties pipeline with the latest reports suggesting that repairs could take several weeks. The Nigerian Pengassan white-collar oil and gas workers union is in discussions with the government about cancelling their intended Dec 18th strike. Chinese finance ministry are to remove export duties on steel products.

Looking at the day ahead, the conclusion of the EU Council summit will be the main focus for markets on Friday with leaders expected to endorse Brexit talks moving to the next stage. Away from that it should be fairly quiet with October trade data for the Euro area, along with the December empire manufacturing and November industrial production prints in the US the only data due.

US Event Calendar

  • 8:30am: Empire Manufacturing, est. 18.7, prior 19.4
  • 9:15am: Industrial Production MoM, est. 0.3%, prior 0.9%
  • 9:15am: Capacity Utilization, est. 77.2%, prior 77.0%
  • 9:15am: Manufacturing (SIC) Production, est. 0.3%, prior 1.3%
  • 4pm: Total Net TIC Flows, prior $51.3b deficit
  • 4pm: Net Long-term TIC Flows, prior $80.9b

DB’s Jim Reid concludes the overnight wrap

I wonder whether with all the central bank meetings out of the way now and with today’s continuation of the EU summit likely to be a non-event, activity will now grind to a halt. To be fair, we still have the potential conclusion to the tax reform story next week and the regional elections in Catalonia, but outside of these it feels like that could be pretty much it for the worthwhile 2017 newsflow.

On central banks, according to DB’s Mark Wall the buzzword from the ECB yesterday was “Confidence”. Rising optimism was signalled in the much larger-than-expected upward revisions to the staff GDP forecasts and the “significant” reduction in slack creating grounds for “greater confidence” in the normalisation of inflation. However, the ECB is in no rush to change the policy stance according to Mark. The language on the stance was resolutely unchanged. The ECB still needs to see the recovery in inflation to take action. Indeed they’ve revised down the core inflation forecasts from 1.3% to 1.1% in 2018 even if the headline rate has gone up with energy prices. Our economists are more confident a turning point has been reached in the inflation cycle, but recent inflation disappointments and the euro’s appreciation this year mean the next step-up in core inflation is later in 2018. With regards to the BoE, our economists felt it was a slightly hawkish set of minutes but the reality is that the outlook in very Brexit driven and thus highly uncertain and changeable. Our economists thinks rates are unlikely to rise before 2019 though. See their report on both meetings.

Away from central banks, the big data focus yesterday was another round of super strong flash PMIs in Europe. The December manufacturing print for the Euro area came in better than expected 60.6 (vs. 59.7 expected), up from 60.1 the month prior. That is the highest reading on record since 1997. The services reading also jumped a bit more than expected to 56.5 (vs. 56.0 expected) from 56.2, which in turn helped the composite jump 0.5pts to 58.0 and the highest since February 2011. That data is consistent with a fairly incredible +0.8% qoq or +3.75% annualised GDP growth rate for the Euro area.

At the country level it was the data in Germany which really stood out with the manufacturing reading surging 1.1pts to 63.3 (vs. 62.0 expected) and the highest on record. The composite rose 1.4pts to 58.7 (vs. 57.2 expected) and to the highest in 80 months. In France the manufacturing print jumped to 59.3 (from 57.7; 57.2 expected) although a slightly weaker services reading saw the composite edge down to 60.0 from 60.3. The data for the core implies a slight decline on average for the data in the periphery, mostly due to manufacturing. So while the data implies a very strong growth picture, it’s worth noting that the prices data was a little softer at the margin. The composite output prices reading for the Euro area declined 0.4pts to 53.0 for example, while input prices were also down slightly, albeit from still elevated levels. So not quite the same read through for inflation just yet.

Onto US equities which fluctuated and then closed 0.3%-0.4% lower, partly due to increased uncertainty on tax reforms. Yesterday afternoon, Republican Senator Rubio noted he intends to oppose the tax bill as written unless there was a larger child tax credit (currently $1,100). He said GOP leaders “found the money to lower the top (individual tax) rate”, but “can’t find a little bit” more to help working class parents raising children. Although later on, President Trump said he is “very sure” Mr Rubio will vote yes. So still lots bubbling along before the bills gets voted by the Senate, potentially as soon as Monday.

This morning in Asia, markets have followed the negative US lead and are trading lower. The Nikkei (-0.10%), China’s CSI (-0.73%) and Hang Seng (-0.98%) are all down while the Kospi is up 0.62% as we type. Now recapping other market performance from yesterday. The S&P fell 0.41%, with consumer discretionary the only sector in the green following the retail sales beat, while losses were led by materials and health care stocks. European markets were all lower, with the Stoxx 600 down 0.46%, impacted by utilities and financials stocks post the marginally dovish ECB meeting. Across the region, the DAX (-0.44%), FTSE (-0.65%) and CAC (-0.78%) all fell modestly.

Government bond yields were little changed (UST 10y +0.7bp; Bunds -0.2bp) but Gilts outperformed with yields down 4.2bp to the lowest since mid-September after the BOE retained a cautious economic outlook. Turning to currencies, the US dollar index and Sterling firmed 0.21% and 0.08% respectively, while Euro fell 0.41% post the ECB meeting. In commodities, WTI oil was up 1.01% despite IEA forecasts that new supply may grow faster than demand next year. Elsewhere, precious metals weakened and broadly reversed the prior day’s gains (Gold -0.20%; Silver -1.11%) while other base metals modestly increased (Copper +0.53%; Zinc +0.60%; Aluminium +0.95%).

Away from the markets, we round out other central bank actions from yesterday. In Switzerland, the SNB made no change to cash rates but did lift its inflation forecast and now expects it to reach its target in late 2020 mainly due to the Franc’s depreciation. However, the SNB President Jordan said “it’s still early, very early, to talk about (rate) normalization……there’s no risk of inflation, also inflation expectations are very well anchored at a much lower level.” Over in Norway, Norges Bank also left its rates unchanged, but the improved growth and inflation forecasts allowed the bank to bring forward its projected first rate hike, which is now expected to be in late 2018. The Krone rose 0.69% versus Euro yesterday.

Over in France, the central bank now projects GDP growth of 1.8% this year and 1.7% in 2018. The ECB’s Villeroy noted the French economic recovery is “significant and sustainable” but the problem is we’re hitting up against “structural limits” and need reforms to materially increase growth. He also added to the Bitcoin debate, noting it is “clearly not a currency, even a virtual one” and that it’s a “speculative asset” and those who invest in it do it at their own risks.

Ahead of the Catalonia elections on 21 December, the latest Metroscopia polls shows the anti-independence groups leading with a combined 44.9% support versus the separatists at 43.8%.  Elsewhere, Spain’s Supreme Court refused a request from Catalan separatist Jordi Sanchez that he be freed from jail to participate in the election.

In Germany, our economists have just published their outlook piece. They expect the economic boom to continue in 2018 with GDP growth of 2.3% again, which would represent an above-potential rate for the fifth consecutive year. They expect the boom to be driven by investment activity, fuelled by rising export demand and considerably higher capacity utilisation and ongoing strong employment growth. On inflation, due to the base effects from energy prices, inflation may slow down temporarily at the beginning of the year. For more detail, please refer to their note.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the November retail sales ex-auto number was above market at 1% mom (vs. 0.6% expected) even with favourable revisions to the prior month. Following this solid report, the Atlanta Fed’s GDPNow estimate of 4Q GDP growth has increased to 3.3% saar versus 2.9% previously. The weekly initial jobless claims (225k vs. 236k expected) and continuing claims (1,886k vs. 1,900k) were slightly lower than expectations. Elsewhere, the December manufacturing US PMI was above market (55 vs. 53.9 expected), but services (52.4 vs. 54.7 expected) and the composite PMIs were both below (53 vs. 54.5 previous). Finally, headline import prices rose 3.1% yoy, but excluding fuel, growth was 1.4% yoy.

The UK’s November retail sales (ex-fuel) was well above expectations and rose 1.2% mom (vs. 0.4% expected) to the highest in seven months – with the strength partly due to the Black Friday discounts. Elsewhere, France’s final reading of the November CPI was revised lower to 1.2% yoy (vs. 1.3% expected), while Italy’s final CPI reading was in line at 1.1% yoy.

Looking at the day ahead, the conclusion of the EU Council summit will be the main focus for markets on Friday with leaders expected to endorse Brexit talks moving to the next stage. Away from that it should be fairly quiet with October trade data for the Euro area, along with the December empire manufacturing and November industrial production prints in the US the only data due.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 26.30.59 points or 0.80% /Hang Sang CLOSED DOWN 318.27 pts or 0.62% / The Nikkei closed DOWN 141.23 POINTS OR 0.62%/Australia’s all ordinaires CLOSED DOWN 0.15%/Chinese yuan (ONSHORE) closed DOWN at 6.6090/Oil DOWN to 57.40 dollars per barrel for WTI and 63.27 for Brent. Stocks in Europe OPENED ALL RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6090. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.6060 //ONSHORE YUAN SLIGHTLY WEAKER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT VERY HAPPY TODAY.(WEAK MARKETS)

3 a NORTH KOREA/USA

NORTH KOREA/

 

3 b  JAPAN

c) REPORT ON CHINA

 

Even though Seoul asked the USA to delay joint military exercises with Japan, this did not stop China from having live fire drills off the Korean peninsula

 

(courtesy zerohedge)

4. EUROPEAN AFFAIRS

 

the go ahead was given for phase 2 for BREXIT, but it will be far more headwinds facing them

 

(courtesy zerohedge)

6. GLOBAL ISSUES

The world’s second largest clothing retailer  ( H and M) crashed 15% on an unexpected drop in 4th Q 2017 sales.

It share price plummeted on the Swedish stock exchange

 

( zerohedge)

 

World’s Second Largest Clothing Retailer Crashes Most In 16 Years

Shares of Stockholm-based Hennes & Mauritz, better known as H&M, the world’s second largest clothing retailer after Inditex (owner of Zara), crashed 14.8% after reporting an unexpected drop in fiscal 4Q 2017 sales. Sales missed both consensus and company estimates with the resulting fall in H&M’s share price was the steepest intra-day decline since 11 September, 2011.

Source: FT.

The news from H&M, along with a warning from Italian luxury goods maker, Ferragamo that it could no longer confirm profits targets for the next three years, helped drag down the European retail sector as a whole. The Stoxx Retail sector index declined more than 2%, taking its year-to-date decline to 3.5%, the worst sector performance in 2017. H&M is down more than 30% this year, while Dixons Carphone is down 47%, Carrefour down 24% and Inditex down 6.3%, Bloomberg reports. The broader Stoxx 600 as a whole is up 7.5% year-to-date.

H&M reported Q4 2017 sales excluding VAT of SEK50.4 billion, a drop of 4% compared with the year ago quarter. Analysts had been expecting a 2% rise in sales to SEK53.9 billion. In the press release, H&M blamed lower “footfall” in its physical stores bearing the H&M brand.

…sales development in the fourth quarter was significantly below the company’s own expectations. The H&M brand’s online sales and sales of the group’s other brands continued to develop well. Meanwhile, the quarter was weak for the H&M brand’s physical stores, which were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry. In addition, there have been imbalances in parts of the H&M brand’s assortment composition. In order to correct this, a number of actions have been taken. Moreover, the management team of the H&M brand has recently been strengthened.

As Bloomberg notes, H&M is not managing the continuing shift towards online as well as some of its competitors.

H&M reported the biggest drop in quarterly sales in at least a decade Friday as fewer customers visited H&M stores, raising questions about the company’s expansion plans. The retailer said it plans more store closures and fewer openings as a crisis that’s shuttered shopping malls in the U.S. spreads to other parts of the world. The company’s earnings have suffered this year amid markdowns to clear out inventory.

 

Rival Inditex has been outpacing H&M as it expands more aggressively in e-commerce. The Spanish company this week reported a rebound in revenue growth for November and early December.

The decline in H&M’s Q4 2017 sales was only the third decline in the past decade. The company is playing catch-up on e-commerce and fast fashion. According to H&M.

In order to respond even quicker to customers’ fast-changing behaviour the company’s ongoing transformation journey is being accelerated. Among other things, this includes continued integration of the physical and digital stores, and intensifying the optimisation of the H&M brand’s store portfolio – leading to more store closures and fewer openings.

H&M said in September it planned a net addition of 385 stores this year, which includes 90 closures. The company also said at the time it aimed to have online sales in 43 markets by year-end. Inditex already sells online in 45 markets and is starting to add services such as same-day delivery in key cities. In an effort to boost e-commerce, H&M said it’s expanding a cooperation agreement with Alibaba Group Holding Ltd.’s Tmall to add additional brands on the Chinese digital platform.

Some are very skeptical the company can pull it off: German broker Berenberg, which had a sell recommendation on H&M shares, cautioned that a turnaround in the company would take time and recommended selling through to next February’s capital markets day. Via Bloomberg:

Broker sees the capital markets day in Feb. 2018 focusing on investment in accelerating the supply chain and integrating stores and online; Says while important areas of investment, it will take time – a distribution center typically takes three years to build and automate; sees top-line growth minimal and profitability flat at best in meantime Says to keep selling into the Feb. CMD. Expects consensus to cut estimates by 3% in FY17, more significant cuts in outer years.

“H&M’s supply chain lacks reactivity, which is one of the group’s structural issues in front of abrupt changes in fashion,” wrote Cedric Rossi, an analyst at Bryan Garnier.

Macquarie Capital analyst Andreas Inderst said he sees a “clear divergence between winners and losers” and remains “on the sidelines” for H&M, which he rates neutral. He’s positive on Inditex and online retailers Zalando SE and Asos Plc.

Less than two weeks ago, Goldman cut the recommendation on H&M to sell highlighting its concern that company initiatives, like data analytics, RFID, Click & Collect and increased in-season sourcing would be offset by structural headwinds, like online cannibalization of store sales and its long lead-time retail model. It forecast zero like-for-like sales growth during 2018-19. In November, Handelsbanken downgraded the shares to Reduce from Accumulate, seeing a “painful journey” towards digitalisation for the company.

As such, H&M is fast becoming a belated poster child for the significance of a carefully executed e-commerce strategy in the retail sector.

(courtesy zerohedge)

Swedish Housing Bubble Pops As Stockholm Apartment Prices Crash Most Since June 2009

Even though Sweden’s property bubble is not the longest running (that accolade goes to Australia at 55 years), it is probably the world’s biggest with prices up roughly 6-fold since starting its meteoric rise in 1995.

Of course, as we noted last month when the SEB’s housing price indicator, which measures the difference between those who believe prices will rise and those who expect them to drop, took its first substantial tumble, the era of the steadily inflating housing bubble in Stockholm may finally have come to an end.

Sweden

Now, it seems that the “hard data” is aligning with the “soft data” as Swedish home prices across the Nordic country posted their first decline since the spring of 2012, down 0.2% year-over-year and 2.9% sequentially.  Per Bloomberg:

The property market in the largest Nordic economy is rapidly cooling after years of price increases that were driven largely by housing shortages and ultra-low interest rates. Supply is now outstripping demand and stricter mortgage rules, as well as growing apprehension among households, are driving prices lower. The drop is being led by high-end apartments in Stockholm.

 

According to Maklarstatistik’s number, nationwide apartment prices fell a monthly 3 percent in November, adding to October’s 1 percent drop. House prices fell 1 percent in the month, after being unchanged in October. Apartment prices in greater Stockholm fell 3 percent in the month and were down 4 percent from a year earlier, the first such decline in almost six years.

Worse yet, the slump in Stockholm specifically is even more dramatic with apartment prices down 4.2% sequentially, the steepest since October 2008, and 6.0% year-over-year, the biggest June 2009.

Not surprisingly, the sudden pricing collapse has sparked a bit of a panic supply boost as sellers attempt to beat the bursting of the bubble.  Of course, we’re sure this strategy will work out perfectly, as it always does, because nothing helps correct an over-supplied market like a massive flood of even more supply.

Greater supply “has resulted in buyers having more to choose from and taking longer before buying,” Hans Flink, head of sales and business development at Maklarstatistik, said in a statement. “The sellers are therefore starting to adjust their prices to the tougher competition, which is pushing prices down somewhat.”

Luckily, Bloomberg was able to find at least one economist who dug up some “rather encouraging” signs amongst the wreckage…

But there may be glimmers of hope. Andreas Wallstrom, an economist at Nordea Bank AB in Stockholm, said data for the last few weeks from property-listings website Booli “are rather encouraging,” as they indicate that prices have leveled out since mid-November and up until the first week of December. Average prices per square meter have even increased somewhat in both Stockholm and in the country as a whole in that period, he said.

 

“Our tentative call for December is that home prices will stay unchanged compared to November,” Wallstrom said. “In all, we forecast relatively stable home prices from here. To see a sustained downturn in prices, it will likely require a change in households’ housing costs. As long as mortgage rates remain low, which we expect, it is difficult to see a marked decline.”

Of course, we remember some Bear Stearns analysts who saw similarly “rather encouraging” signs in the U.S. housing market back in 2008…

7. OIL ISSUES

 

Nick Cunningham is of the belief that an oil glut will return in 2018. And this will happen for sure if China stops adding to its Strategic Petroleum Reserve

 

(courtesy Nick Cunningham/Oil Price.com)

 

Is The Oil Glut Set To Return?

Authored by Nick Cunningham via OilPrice.com,

For the second month in a row, the IEA has poured cold water onto the oil market, publishing an analysis that suggests 2018 could hold some bearish surprises for crude.

The IEA’s December Oil Market Report dramatically revises up the expected growth of U.S. shale, which goes a long way to torpedoing the excitement around the OPEC extension.

Late last month, when OPEC agreed to extend its production cuts through the end of 2018, the U.S. EIA came out with data – on the same day as the OPEC announcement – that showed an explosive increase in shale output for the month of September, up 290,000 bpd from the month before.

Although there is a time lag on publishing production data, the huge jump in output in September, plus the spike in rig count activity over the past few weeks, points to strength in the U.S. shale sector. Against that backdrop, the IEA predicted that non-OPEC supply would grow by 1.6 million barrels per day (mb/d) in 2018, a rather significant upward revision of 0.2 mb/d compared to last month’s report.

Adding insult to injury for OPEC, the IEA sees oil demand growing by just 1.3 mb/d. In other words, supply will grow at a faster pace than demand next year, opening up a global surplus once again. “So, on our current outlook 2018 may not necessarily be a happy New Year for those who would like to see a tighter market,” the IEA said. The surplus will be front-loaded – the first half of the year will see a glut of about 200,000 bpd.

(Click to enlarge)

“A lot could change in the next few months but it looks as if the producers’ hopes for a happy New Year with de-stocking continuing into 2018 at the same 500 kb/d pace we have seen in 2017 may not be fulfilled,” the agency wrote. In the past few months, a sense of bullishness and optimism returned to the oil market for the first time in years, but the IEA warned that it won’t last.

The news wasn’t all bad for oil bulls. OPEC production fell by 130,000 bpd in November, due to lower output in Saudi Arabia, a rather large decline in Angola, and the continued erosion of output from Venezuela. It is the fourth consecutive month of falling output from OPEC, and the compliance rate for the cartel jumped to 115 percent in November, the highest rate so far this year. That bodes well for the extension of the deal – OPEC and its partners seem resolved to keep compliance high heading into 2018.

Inventories also continue to decline. The IEA said that OECD commercial stocks fell by 40.3 million barrels in October to 2,940 mb, the lowest level since July 2015. That decline was almost twice as large as usual for this time of year. And for crude inventories specifically, they fell counter-seasonally by 19.7 mb, including the first decline in China this year.

But even there, the IEA was quick to point out reasons to be bearish, noting that the inventory drawdowns will soon end. “Going into 1Q18, our balances imply that global oil stocks will increase by 300 kb/d, assuming stable OPEC crude production of 32.5 mb/d,” the IEA said in its report.

Those increases in inventories in 2018 largely come down to U.S. shale, which continues to grow at an impressive rate. Rystad Energy says that almost 1,000 horizontal wells were completed in October, the highest total since March 2015. That should ensure a rush of fresh supply will be added onto the market by the end of this year and into 2018.

Overall, the downbeat conclusions from the IEA report were largely backed up by OPEC itself a day earlier. The cartel published data that also anticipated large increases in U.S. shale output, including an upward revision for 2017 output by 150,000 bpd – an acknowledgement that shale drillers are adding supply at a faster rate than expected. More ominously, OPEC predicts that the U.S. will add more than 1 mb/d of new supply in 2018 – a truly staggering figure.

Putting it all together, OPEC is essentially keeping 1.2 mb/d off of the market in 2018 so that the U.S. can add 1 mb/d. It’s a quite a gamble; a bet that by doing so, the group can prevent oil prices from falling. But the payoff is debatable. OPEC is selling less oil and allowing the U.S. to sell more.

The bet is that next year inventories will fall and oil prices will gradually rise, but the IEA’s report predicts that such a scenario may not play out.

 

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 1.1796 UP .0021/ 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 112.19 DOWN 0.048(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 1.3420 DOWN .197 (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 1.2773 DOWN .0022(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 ROSE by 21 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1796; / Last night the Shanghai composite CLOSED DOWN 26.30 POINTS OR 0.80% / Hang Sang CLOSED DOWN 318.27 POINTS OR 1.05% /AUSTRALIA CLOSED DOWN 0.15% / EUROPEAN BOURSES OPENED ALL RED 

The NIKKEI: this THURSDAY morning CLOSED DOWN 141.23 POINTS OR 0.62%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 318.27 POINTS OR 1.08% / SHANGHAI CLOSED DOWN 26.30 POINTS OR 0.80% /Australia BOURSE CLOSED DOWN 0.11% /Nikkei (Japan)CLOSED DOWN 141.23 POINTS OR 0.62%

INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1258.05

silver:$15.99

Early FRIDAY morning USA 10 year bond yield: 2.3512% !!! UP 1 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 2.705 UP 0 IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)

USA dollar index early FRIDAY morning: 93.57 UP 8 CENT(S) from WEDNESDAY’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: 1.840% UP 2  in basis point(s) yield from THURSDAY

JAPANESE BOND YIELD: +.046% DOWN 2/5  in basis point yield from THURSDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.459% UP 1  IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 1.812 UP 2 POINTS in basis point yield from THURSDAY

the Italian 10 yr bond yield is trading 36 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.301%  DOWN 1 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/4:00 PM

Euro/USA 1.1774 UP.0005 (Euro UP 5 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.64 UP 0.225(Yen DOWN 23 basis points/

Great Britain/USA 1.3311 DOWN 0.0120( POUND DOWN 120 BASIS POINTS)

USA/Canada 1.2843 UP  .0048 Canadian dollar DOWN 48 Basis points AS OIL ROSE TO $57.33

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This afternoon, the Euro was UP 5 to trade at 1.1774

The Yen FELL to 112.64 for a LOSS of 23 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 120 basis points, trading at 1.3311/

The Canadian dollar FELL by 48 basis points to 1.2843/ WITH WTI OIL RISING TO : $57.33

The USA/Yuan closed AT 6.6090
the 10 yr Japanese bond yield closed at +.046% DOWN 2/5  IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 1/ 2  IN basis points from THURSDAY at 2.369% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.699 DOWN 2  in basis points on the day /

Your closing USA dollar index, 93.83 UP 34 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 UP 42,45 POINTS OR 0.57%
German Dax :CLOSED UP 35.48 POINTS OR 0.27%
Paris Cac CLOSED DOWN 7.84 POINTS OR 0.15%
Spain IBEX CLOSED DOWN 26.10 POINTS OR 0.26%

Italian MIB: CLOSED DOWN 97.70 POINTS OR 0.44%

The Dow closed UP 143.08 POINTS OR 0.58%

NASDAQ WAS  UP 80.06 Points OR 1.17% 4.00 PM EST

WTI Oil price; 57.33 1:00 pm;

Brent Oil: 63.13 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 58.82 UP 4/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 4 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.301% 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:$57.34

BRENT: $63.23

USA 10 YR BOND YIELD: 2.351% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.6881%  ?????

EURO/USA DOLLAR CROSS: 1.1754 DOWN .0020

USA/JAPANESE YEN:112.60 DOWN 0.212

USA DOLLAR INDEX: 93.93 UP 45 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3326 : DOWN 105 POINTS FROM LAST NIGHT

Canadian dollar: 1.2882 DOWN 87 BASIS pts

German 10 yr bond yield at 5 pm: +0.301%

END

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

TRADING IN GRAPH FORM FOR THE DAY

US Yield Curve Crashes Most In 6 Years As Stocks, Bitcoin Hit Record Highs

What could go wrong?

 

Small Caps exploded higher today, driven by financials, presumably on tax reform hype.. but after Bob Corker said “yes” there was some notable “sell the news”…

Notably, as soon as the cash market closed, futures ripped to the highs of the day…

 

On the week, Nasdaq (green) and Dow (red) outperformed as Trannies (blue lagged)…

 

Tech outperformed on the week but financials lagged…

 

Oddly, high-tax companies notably undeperformed low-tac companies on the week….

High yield bonds lagged notably on the week…

 

Yields were mixed on the week with the short-end higher and long-end outperforming…

 

30Y Treasury yields are at their lowest since September’s Draghi taper tantrum…

 

The 5s30s yield curve crashed 10bps this week to 52bps (the last two days post-Fed have seen the biggest curve flattening since June 2009)

 

The weekly plunge is the biggest percentage flattening of the Treasury curve since the US downgrade in the fall of 2011…

The yield curve is down 5 straight weeks

 

The Dollar ended the week modestly lower, after chopping around on The Fed and tax headlines (and CPI)

 

Huuge week for copper but crude ended the week lower…

 

Bitcoin rose 13.5% this week – the 5th weekly gain in a row to a new record high…and gold managed to hold gains…

 

And Futures compressed their premium to spot…

 

And finally, there is a very serious dollar shortage around the world…signalling ominous signs of growing funding stress in the financial “plumbing”.

 

 

END

 

Stocks surge on news that Rubio will vote yes on the tax reform bill

 

(courtesy zerohedge)

 

Stocks, Yields, Dollar Surge On News Rubio Is “Yes” On Tax Bill

And just like that, stocks priced in tax reform for the nth consecutive day, because one day after speculation that Marco Rubio would be a hurdle to the passage of tax reform, which pushed stocks modestly lower, moments ago Fox – or is that Disney – reported that Marcio Rubio is a “yes” on the tax bill, sending risk assets soaring in the latest “buy-everything” euphoria.

Source to FBN: Sen. @marcorubio will be a ‘yes’ on tax bill.

Rubio’s turn comes shortly after Speaker Paul Ryan told the media that the Senate and House are both planning to hold votes on the bill by end-of-day Wednsday with the first vote likely coming in the House Tuesday and the Senate following either Tuesday or Wednesday. Separately, Senator Brady announced that the tax measure is now done, and should win every senator’s support.

  • BRADY: TAX MEASURE DONE, SHOULD WIN EVERY SENATOR’S SUPPORT

The result in markets was fast and furious, with the S&P, dollar, yields and the USDJPY all surging following the report.

And putting yesterday’s and today’s moves in context:

Yesterday – SPX down 10 on news Rubio wont vote yes on principle…

Today – SPX up 17 on news he will vote yes and has no principles.

end

 

And yet the yield curve is crashing!! Why??

The Yield Curve Is Crashing-er

Stocks are at record highs on the basis that Marco Rubio might a ‘yes’ and John McCain will make it through the weekend… but if everything is so awesome, why is the yield curve collapsing?

This is the 5th weekly plunge in the yield curve in a row – the longest streak since March 2016

 

The yield curve is now the flattest since Nov 2007, with the flattenig accelerating…

 

2017 is the fastest yield curve collapse since 2007…

 

If this is not going to end badly, we are going to need more QE – as JPMorgan shows in the chart below – each episode of QE steepened the curve and lengthened the current cycle…

end

 

Here is the final GOP tax bill that will come to a vote on Wednesday

(courtesy zero hedge)

“It’s Done”: Here Is What’s In The Final GOP Tax Bill

Well – for now – that was an anti-climax…

  • *RUBIO IS SAID TO BACK TAX BILL AFTER CHILD CREDIT TWEAKS: CNBC
  • *BRADY SAYS HE HAS ALL SIGNATURES HE NEEDS, “IT’S DONE”

But the market seems unimpressed by the ‘news’

 

And even “high tax” names are underperforming…

 

Here is Bloomberg’s breakdown of what we know so far as the final Republican bill heads for votes in the House and Senate next week.

Corporate Tax Rate

Current law: 35 percent

Proposed: 21 percent, beginning in 2018.

Individual State and Local Tax Deductions

Current law: Individuals can deduct the state and local taxes they pay, but the value is subject to certain limits for high earners.

Proposed: Individuals can deduct no more than $10,000 worth of the deductions, which could include a combination of property taxes and either sales or income taxes.

Obamacare Individual Mandate

Current law: An individual who fails to buy health insurance must pay penalties of $695 (higher for families) or 2.5 percent of their household income — whichever is higher, but capped at the national average cost of the most basic, low-premium, high-deductible plan.

Proposed: Repeal the penalties.

Mortgage Interest Deduction

Current law: Deductible mortgage interest is capped at loans of $1 million.

Proposed: Deductible mortgage interest for new purchases of homes would be capped at loans of $750,000.

Medical Expense Deduction

Current law: Qualified medical expenses that exceed 10 percent of the taxpayer’s adjusted gross income are deductible.

Proposed: Reduce the threshold to 7.5 percent of AGI for the tax years 2017 and 2018.

Child Tax Credit

Current law: A $1,000 credit for each child under 17. The credit begins phasing out for couples earning more than $110,000. The credit is at least partially refundable to qualified taxpayers who earned more than $3,000.

Proposed: Double the credit to $2,000 and provide it for each child under 18 through 2024. Raise the phase-out amount to $500,000, and cap the refundable portion at $1,400 in 2018.

Estate Tax

Current law: Applies a 40 percent levy on estates worth more than $5.49 million for individuals and $10.98 million for couples.

Proposed: Double the thresholds so the levy applies to fewer estates. The higher thresholds would sunset in 2026.

end

Not good:  soft data, NY manufacturing index (Empire index) slides to 5 month lows

(courtesy zerohedge)

 

Stagflation Signals Loom As Empire Fed Slides To 5 Month Lows

For the second straight month, Empire Fed Manufacturing survey disappointed expectations in December, tumbling to its lowest since July.

 

Under the hood are glimpses of stagflation as new orders slide but prices paid rise…

and employment and workweek number stagnate (if not contract)…

 

end

Hard data, industrial production disappoints in November

 

(courtesy zerohedge)

 

 

Industrial Production Disappoints In November – Remains Below 2014 Peak

Recovery” is a funny word that seems to mean very different things to different people…

Industrial Production rose just 0.2% in November (below the 0.3% rise expected) but October was revised higher from 0.9% to 1.2% amid storm reconstruction.

 

And so while The Dow Jones Industrial Average has ‘recovered’ its way to new record highs way beyond Dec 2014 levels, actual Industrial Production continues to lag…

 

this is not want Trump needs:  the timing of the tax reform bill is in limbo as more Senators get cold feet

 

(courtesy zerohedge)

 

“Suspense Mounts” – Timing Of Tax-Reform Votes In Limbo As More Senators Get Cold Feet

With Bloomberg writing this morning that “Mystery, Suspense Mount” two days after President Donald Trump told the American public that Congress was “just days away” on tax reform, two more senators  – including one-time Trump rival – Marco Rubio appear to be getting cold feet – much to the market’s chagrin. Yesterday afternoon, stocks dropped and the VIX jumped above 10 as Rubio and Utah’s Mike Lee said they had reservations about the draft bill being put together by the conference committee.

While Rubio and Lee’s objections are different from Hatch’s, several senators have expressed concerns about one of the tax-reform plan’s overarching themes: namely, it benefits corporations and the wealthy, while not doing enough to help extend tax breaks to the middle and working classes.

Worries about the bill’s impact on the deficit have persisted, and if anything, they only intensified after the Treasury Department released a laughable one-page report about the tax plan’s impact on GDP and revenue that was widely ridiculed.

As the fast-moving Republican tax package has evolved, it has tilted increasingly toward benefiting businesses and wealthy taxpayers, a trend that aides were saying privately is a growing concern for some lawmakers. Provisions for offsetting the revenue costs of last-minute changes also were becoming worrisomely unclear, they said.

 

After resisting demands for weeks to cut the top income tax rate for the richest taxpayers, the bill’s authors did agree in recent days to lower it to 37 percent from 39.6 percent. “My concern is that if you found the money to lower the top rate … you can’t find a little bit to at least somewhat increase the refundable portion” of the child credit? Rubio said.

Specifically, Rubio and Lee are pushing the bill’s authors to set aside more money for the child tax credit for working and middle class families – “I‘m a no … It has to be higher than $1,100,” Rubio told Reuters.

White House spokeswoman Sarah Sanders said the White House will continue to work with Rubio on the child tax credit. So far, the bill’s biggest feature is a steep cut of the income tax rate to 21% from 35%, a step that corporate tax lobbyists have been pursuing for many years.

Meanwhile, Orrin Hatch, chairman of the Senate tax committee and one of the bill’s chief authors, said the Senate would probably vote on a final Senate-House measure on Monday, and that “he hoped” Rubio and Lee’s concerns would be addressed.

As Bloomberg pointed out, Hatch injected some more uncertainty into the process yesterday when he said he “didn’t know” if lawmakers would be able to meet Rubio’s demand. Asked if the Senate could pass the bill without Rubio’s vote, he said, “Probably.” Separately, Sen. Cornyn, the Republican whip and one of the key stewards of the bill, has said Rubio and Lee’s concerns are being addressed.

“Sen. Rubio would like to see us do a little more, and we’re trying to work with him to get there,” said Sen. John Cornyn (R., Texas), a member of the tax negotiating team. “We’re trying to figure out what we can do. I can’t give the current state of play on that since it’s in flux, but the goal is to give a $2,000-per-child tax credit, with a significant portion of that to be refundable.”

Rubio and Lee aren’t the only potential holdouts. Tennessee senator and deficit hawk Bob Corker – the lone Republican who voted with the Democrats against the initial Republican tax plan – has said his concerns about the Senate bill, specifically the addition of some $1.5 trillion to the national debt over 10 years, have not been addressed.

Corker’s not the only one who feels that way. As Bloomberg points out, at least three other senators have yet to publicly declare their support for the reconciled bill – and may well vote against it.

Jeff Flake of Arizona, who has voiced concerns about tax cuts adding to the deficit, said Thursday he’s undecided as well.

 

Susan Collins of Maine has voiced opposition to cutting the tax rate for incomes above $1 million and has pushed for passage of two health-care stabilization bills that the House has been cold to. She hasn’t committed to supporting the final tax measure. “I am going to review the tax bill over the weekend,” she said. “There’s lots of rumors about what’s in it, what isn’t.”

 

There’s also uncertainty around the votes of GOP senators John McCain of Arizona and Thad Cochran of Mississippi. Both have been absent from the Senate this week with health issues, but officials have said both will be able to return for votes next week.

According to WSJ, the original plan had called for the Senate to vote on Monday, with the House following on Tuesday. Now, the sequence of those votes is up in the air.

House Speaker Paul Ryan said Thursday he’s not sure which chamber will vote first on the final bill. One consideration, he said, was “managing absences in the Senate” – likely an allusion to McCain’s and Cochran’s medical issues.

Trump has promised to pass the bill by Christmas. And earlier this week, the task of passing tax reform took on a new sense of urgency when Alabama Democrat Doug Jones defeated Republican Roy Moore in a tightly contested senate race that was marred by allegations of pedophilia against Moore.

Still, even if Republicans fail to pass tax reform – an outcome that would have wide-ranging implications for markets – we’ll always have this video of President Trump symbolically cutting the “red tape” representing America’s overwrought tax code…

In 1960, there were approximately 20,000 pages in the Code of Federal Regulations. Today there are over 185,000 pages, as seen in the Roosevelt Room.

Today, we CUT THE RED TAPE! It is time to SET FREE OUR DREAMS and MAKE AMERICA GREAT AGAIN!

END

 

 

 

 

SWAMP STORIES

 

Unbelievable reports from the Wall Street Journal on the corrupt FBI as the meddled into the 2016 USA election

 

(courtesy Wall Street Journal)

WSJ Exposes The Real Election Meddling… At The FBI

Via The Wall Street Journal Editorial Board,

More troubling evidence of election meddling at the bureau…

Democrats and the media are accusing anyone who criticizes special counsel Robert Mueller as Trumpian conspirators trying to undermine his probe. But who needs critics when Mr. Mueller’s team is doing so much to undermine its own credibility?

Wednesday’s revelations—they’re coming almost daily—include the Justice Department’s release of 2016 text messages to and from Peter Strzok, the FBI counterintelligence agent whom Mr. Mueller demoted this summer. The texts, which he exchanged with senior FBI lawyer Lisa Page, contain expletive-laced tirades against Mr. Trump. Such Trump hatred is no surprise and not by itself disqualifying. More troubling are texts that suggest that some FBI officials may have gone beyond antipathy to anti-Trump plotting.

“I want to believe the path you threw out for consideration in Andy’s office—that there’s no way [Trump] gets elected—but I’m afraid we can’t take that risk,” Mr. Strzok wrote Ms. Page in an Aug. 15, 2016 text. He added: “It’s like an insurance policy in the unlikely event you die before you’re 40.”

What “policy” would that be? The “Andy” in question is Andrew McCabe, the deputy FBI director. FBI officials are allowed to have political opinions, but what kind of action were they discussing that would amount to anti-Trump “insurance”?

In another exchange that month, Ms. Page forwarded a Trump-related article and wrote:

“Maybe you’re meant to stay where you are because you’re meant to protect the country from that menace.”

 

He thanked her and assured: “Of course I’ll try and approach it that way.”

Mr. Strzok, recall, is the man who changed the words “grossly negligent” to “extremely careless” in James Comey’s July 2016 public exoneration of Hillary Clinton’s emails.

The McCabe meeting came on the heels of the FBI’s launch of its counterintelligence probe into Trump-Russia ties. July is also when former British spook Christopher Steele briefed the FBI on his Clinton-financed dossier of salacious allegations against Mr. Trump. The texts explain why Mr. Mueller would remove Mr. Strzok, though a straight shooter wouldn’t typically resist turning those messages over to Congress for as long as Mr. Mueller did.

Meanwhile, we’re learning more about the political motives of Mr. Mueller’s lieutenant, Andrew Weissmann.

Judicial Watch last week released an email in which Mr. Weissmann expressed his “awe” and praise for Sally Yates, after the then acting AG and Obama holdover refused to implement Mr. Trump’s travel ban.

This should trouble anyone who cares about the integrity of the Justice Department. Ms. Yates had every right to resign at the time if she felt she couldn’t implement Mr. Trump’s order. But she had no authority as an executive branch official to defy a legitimate presidential order. Mr. Weissmann’s support for her insubordination was a declaration that he is part of the “resistance.” This should be unacceptable in a ranking FBI official, much less someone charged with conducting a fair-minded investigation.

Public confidence isn’t helped by the continuing Justice and FBI refusal to cooperate with Congress. Deputy Attorney General Rod Rosenstein, who supervises Mr. Mueller, toed the Mueller-FBI line on Wednesday before the House Oversight Committee. He repeated FBI Director Christopher Wray’s preposterous excuse that he can’t answer questions because of an Inspector General probe. And he wouldn’t elaborate on the news that Nellie Ohr, the wife of senior Justice official Bruce Ohr, worked for Fusion GPS, which hired Mr. Steele to gin up his dossier.

The man who should be most disturbed by all this is Mr. Mueller, who wants his evidence and conclusions to be credible with the public. Evidence is building instead that some officials at the FBI—who have worked for him—may have interfered in an American presidential election. Congress needs to insist on its rights as a co-equal branch of government to discover the truth.

end

 

Looks like they must replace the entire FBI for bias.

 

a must read…

 

(courtesy zerohedge)

FBI Edits To Clinton Exoneration Go Far Beyond What Was Previously Known; Comey, McCabe, Strzok Implicated

The Senate Homeland Security and Governmental Affairs Committee has discovered that edits made to former FBI Director James Comey’s statement exonerating Hillary Clinton for transmitting classified info over an unsecured, private email server went far beyond what was previously known, as detailed in a Thursday letter from committee chairman Sen. Ron Johnson (R-WI) to FBI Director Christopher Wray.

James Comey, Andrew McCabe, Peter Strzok

The letter reveals specific edits made by senior FBI agents when Deputy Director Andrew McCabe exchanged drafts of Comey’s statement with senior FBI officials, including Peter Strzok, Strzok’s direct supervisor, E.W. “Bill” Priestap, Jonathan Moffa, and an unnamed employee from the Office of General Counsel (identified by Newsweek as DOJ Deputy General Counsel Trisha Anderson) – in what was a coordinated conspiracy among top FBI brass to decriminalize Clinton’s conduct by changing legal terms and phrases, omitting key information, and minimizing the role of the Intelligence Community in the email investigation. Doing so virtually assured that then-candidate Hillary Clinton would not be prosecuted.

Heather Samuelson and Heather Mills

Also mentioned in the letter are the immunity agreements granted by the FBI in June 2016 to top Obama advisor Cheryl Mills and aide Heather Samuelson – who helped decide which Clinton emails were destroyed before turning over the remaining 30,000 records to the State Department. Of note, the FBI agreed to destroy evidence on devices owned by Mills and Samuelson which were turned over in the investigation.

Sen. Johnson’s letter reads:

According to documents produced by the FBI, FBI employees exchanged proposed edits to the draft statement. On May 6, Deputy Director McCabe forwarded the draft statement to other senior FBI employees, including Peter Strzok, E.W. Priestap, Jonathan Moffa, and an employee on the Office of General Counsel whose name has been redacted. While the precise dates of the edits and identities of the editors are not apparent from the documents, the edits appear to change the tone and substance of Director Comey’s statement in at least three respects.

It was already known that Strzok – who was demoted to the FBI’s HR department after anti-Trump text messages to his mistress were uncovered by an internal FBI watchdog – was responsible for downgrading the language regarding Clinton’s conduct from the criminal charge of “gross negligence” to “extremely careless.”

“Gross negligence” is a legal term of art in criminal law often associated with recklessness. According to Black’s Law Dictionary, gross negligence is “A severe degree of negligence taken as reckless disregard,” and “Blatant indifference to one’s legal duty, other’s safety, or their rights.” “Extremely careless,” on the other hand, is not a legal term of art.

According to an Attorney briefed on the matter, “extremely careless” is in fact a defense to “gross negligence”: “What my client did was ‘careless’, maybe even ‘extremely careless,’ but it was not ‘gross negligence’ your honor.” The FBI would have no option but to recommend prosecution if the phrase “gross negligence” had been left in.

18 U.S. Code § 793 “Gathering, transmitting or losing defense information” specifically uses the phrase “gross negligence.” Had Comey used the phrase, he would have essentially declared that Hillary had broken the law.

18 U.S. Code § 793
 
In addition to Strzok’s “gross negligence” –> “extremely careless” edit, McCabe’s damage control team removed a key justification for elevating Clinton’s actions to the standard of “gross negligence” – that being the “sheer volume” of classified material on Clinton’s server. In the original draft, the “sheer volume” of material “supports an inference that the participants were grossly negligent in their handling of that information.”

Also removed from Comey’s statement were all references to the Intelligence Community’s involvement in investigating Clinton’s private email server.

Director Comey’s original statement acknowledged the FBI had worked with its partners in the Intelligence Community to assess potential damage from Secretary Clinton’s use of a private email server. The original statement read:

[W]e have done extensive work with the assistance of our colleagues elsewhere in the Intelligence Community to understand what indications there might be of compromise by hostile actors in connection with the private email operation.

The edited version removed the references to the intelligence community:

[W]e have done extensive work [removed] to understand what indications there might be of compromise by hostile actors in connection with the personal e-mail operation.

Furthermore, the FBI edited Comey’s statement to downgrade the probability that Clinton’s server was hacked by hostile actors, changing their language from “reasonably likely” to “possible” – an edit which eliminated yet another justification for the phrase “Gross negligence.” To put it another way, “reasonably likely” means the probability of a hack due to Clinton’s negligence is above 50 percent, whereas the hack simply being “possible” is any probability above zero.

It’s also possible that the FBI, which was not allowed to inspect the DNC servers, was uncomfortable standing behind the conclusion of Russian hacking reached by cybersecurity firm CrowdStrike.

The original draft read:

Given the combination of factors, we assess it is reasonably likely that hostile actors gained access to Secretary Clinton’s private email account.”

The edited version from Director Comey’s July 5 statement read:

Given that combination of factors, we assess it is possible that hostile actors gained access to Secretary Clinton’s personal e-mail account.

Johnson’s letter also questions an “insurance policy” referenced in a text message sent by demoted FBI investigator Peter Strzok to his mistress, FBI attorney Lisa Page, which read “I want to believe the path you threw out to consideration in Andy’s office — that there’s no way he gets elected — but I’m afraid we can’t take that risk.” It’s like an insurance policy in the unlikely event you die before you’re 40….”

One wonders if the “insurance policy” Strzok sent to Page on August 15, 2016 was in reference to the original counterintelligence operation launched against Trump of which Strzok became the lead investigator in “late July” 2016? Of note, Strzok reported directly to Bill Priestap – the director of Counterintelligence, who told James Comey not to inform congress that the FBI had launched a counterintelligence operation against then-candidate Trump, per Comey’s March 20th testimony to the House Intelligence Committee. (h/t @TheLastRefuge2)

Transcript, James Comey Testimony to House Intel Committee, March 20, 2016

The letter from the Senate Committee concludes; “the edits to Director Comey’s public statement, made months prior to the conclusion of the FBI’s investigation of Secretary Clinton’s conduct, had a significant impact on the FBI’s public evaluation of the implications of her actions. This effort, seen in the light of the personal animus toward then-candidate Trump by senior FBI agents leading the Clinton investigation and their apparent desire to create an “insurance policy” against Mr. Trump’s election, raise profound questions about the FBI’s role and possible interference in the 2016y presidential election and the role of the same agents in Special Counsel Mueller’s investigation of President Trump.”

Johnson then asks the FBI to answer six questions:

  1. Please provide the names of the Department of Justice (DOJ) employees who comprised the “mid-year review team” during the FBI’s investigation of Secretary Clinton’s use of a private email server.
  2. Please identify all FBI, DOJ, or other federal employees who edited or reviewed Director Comey’s July 5, 2016 statement. Please identify which individual made the marked changes in the documents produced to the Committee.
  3. Please identify which FBI employee repeatedly changed the language in the final draft statement that described Secretary Clinton’s behavior as “grossly negligent” to “extremely careless.” What evidence supported these changes?
  4. Please identify which FBI employee edited the draft statement to remove the reference to the Intelligence Community. On what basis was this change made?
  5. Please identify which FBI employee edited the draft statement to downgrade the FBI’s assessment that it was “reasonably likely” that hostile actors had gained access to Secretary Clinton’s private email account to merely that than [sic] intrusion was “possible.” What evidence supported these changes?
  6. Please provide unredacted copies of the drafts of Director Comey’s statement, including comment bubbles, and explain the basis for the redactions produced to date.

We are increasingly faced with the fact that the FBI’s top ranks have been filled with political ideologues who helped Hillary Clinton while pursuing the Russian influence narrative against Trump (perhaps as the “insurance” Strzok spoke of). Meanwhile, “hands off” recused Attorney General Jeff Sessions and assistant Attorney General Rod Rosenstein don’t seem very excited to explore the issues with a second Special Counsel. As such, we are now almost entirely reliant on the various Committees of congress to pursue justice in this matter. Perhaps when their investigations have concluded, President Trump will feel he has the political and legal ammunition to truly clean house at the nation’s swampiest agencies.

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

GOP Finally Defeats Moore, Fire Mueller, Economic Danger Signs

By Greg Hunter On December 15, 2017 In Weekly News Wrap-Ups

By Greg Hunter’s USAWatchdog.com (WNW 313 12.15.17)

Looks like the GOP finally defeated its own candidate for Senator in the Alabama Special Election. The GOP could not stop Moore in the primary after spending $32 million, but it teamed up with Democrats and got Moore defeated. Moore is not conceding, and plenty of people are saying there was voter fraud. It’s a long shot that Moore could force a recount, but even so, a last minute court decision in Alabama allowed paper ballots to be destroyed after a winner was declared. Some say that will make a recount next to impossible. Congratulations Mitch McConnell, you got a Democrat elected in a 60/40 Red state.

Special Prosecutor Robert Mueller is being charged with running a totally biased investigation against Donald Trump by members of Congress. Some say he should be fired. There is still no evidence of Russian collusion but plenty of evidence that the same people that exonerated Hillary Clinton for multiple crimes are now going after Donald Trump. I am referring to the DOJ and FBI investigators. On top of that, the Justice Department will not answer questions that it used a totally false so-called dossier bought and paid for by the DNC and Hillary Clinton to start the investigation. You cannot make this stuff up.

The yield curve continues to flatten, and that historically means the country is headed for big economic trouble and a recession. The yield curve flattened before the 2008 meltdown, and it is flattening again. Now, you know why Trump and others are pushing hard for tax cuts to get the economy moving.

Video Link

https://usawatchdog.com/gop-finally-defeats-moore-fire- mueller-economic-danger-signs/

END

I will see you MONDAY night

HARVEY

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3 comments

  1. Just wanted to see if anyone has any thoughts on the massive amounts of gold EFP settlements that are taking place on the COMEX? It would seem that this amount of gold would be difficult to deliver at best? Just as a thought experiment, It the commercial banks are responsible to help control the price of gold to help keep interest rates suppressed, and do so by selling massive naked short futures contracts(with no ability to ever deliver) that this might cause the bullion banks a dilemma,

    The big bullion banks sell naked shorts with total immunity in the interest of national security.

    How would the bullion banks be viewed by the deep financial state if they were suddenly long?

    Could it be possible that the bullion banks are the ultimate holder’s of these EFP’s,

    If these EFP’s are in the non reportable over the counter environment, is it possible that they could serve as a hedge for a run up in the price of gold against the short positions? Would these over the counter EFP’S deflect a negative view of the bullion banks not doing their part to hold down and help manage the price of gold?

    The bottom line, it seems the only reasonable explanation to me is that the big bullion banks are buying their own shorts at this price and giving themselves a EFP? If the COMEX is truly out of gold, this would allow them to hedge a sharp rise in price and be in a very good position to profit from a rise in gold price. It would also allow them to do it without being in the spotlight of not being a team player in helping to keep the price in a manageable spot.

    Just thinking.

    bgp3201@aol.com

    Like

  2. Check kiting is a form of check fraud, involving taking advantage of the float to make use of non-existent funds in a checking or other bank account. In this way, instead of being used as a negotiable instrument, checks are misused as a form of unauthorized credit.

    Sounds like EFP’s.

    Like

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