Dec 22.Gold advances $8.55 to $1275.85/silver rises 18 cents to $16.37/ Gold comex EFP’s : 6514/silver EFP’s: 921/Bitcoin collapses/Coinbase stops buying and selling of bitcoin because of excessive volume/Trump signs the new tax bill into law/More swamp news/

GOLD: $1275.85 up $8.55

Silver: $16.37 up 18 cents

Closing access prices:

Gold $1274.80

silver: $16.42

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: $1276.55 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1266.20

PREMIUM FIRST FIX: $10.35

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SECOND SHANGHAI GOLD FIX: $1277.56

NY GOLD PRICE AT THE EXACT SAME TIME: $1265750

Premium of Shanghai 2nd fix/NY:$10.06

SHANGHAI REJECTS NY /LONDON PRICING OF GOLD

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LONDON FIRST GOLD FIX: 5:30 am est $1268.85

NY PRICING AT THE EXACT SAME TIME: $1268.45

LONDON SECOND GOLD FIX 10 AM: $1268.85

NY PRICING AT THE EXACT SAME TIME. 1268.50??

For comex gold:

DECEMBER/

 NUMBER OF NOTICES FILED TODAY FOR DECEMBER CONTRACT: 149 NOTICE(S) FOR14,900 OZ.

TOTAL NOTICES SO FAR: 8979 FOR 897,900 OZ (27.928 TONNES),

For silver:

DECEMBER

31 NOTICE(S) FILED TODAY FOR

155,000 OZ/

Total number of notices filed so far this month: 6395 for 31,975,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $13,847/OFFER $14,000 DOWN $1740 (morning) 

BITCOIN : BID $14,320 :  OFFER 14,468  down $1274 (CLOSING)

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY FELL BY A CONSIDERABLE  2117 contracts from 207,275 FALLING TO 201,108 DESPITE YESTERDAY’S TINY 2 CENT FALL IN SILVER PRICING.  WE HAD GOOD  COMEX LIQUIDATION.  WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER SMALL SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE: A RESPECTABLE 921 EFP’S FOR MARCH (AND ZERO FOR DEC AND OTHER MONTHS) AND THUS TOTAL ISSUANCE OF 921 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 921 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 1196 EFP’S FOR SILVER ISSUED. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. I BELIEVE THAT WE MUST HAVE HAD SOME BANKER SHORT COVERING

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

42,751 CONTRACTS (FOR 16 TRADING DAYS TOTAL 42,751 CONTRACTS OR 213.75 MILLION OZ: AVERAGE PER DAY: 2,672 CONTRACTS OR 13.260 MILLION OZ/DAY)

RESULT: A GOOD SIZED FALL IN OI COMEX DESPITE THE TINY  2 CENT FALL IN SILVER PRICE WHICH INDICATES SOME BANKER SHORTCOVERING.   WE HAD CONSIDERABLE COMEX SILVER LIQUIDATION . WE ALSO HAD A SMALL SIZED SIZED EFP ISSUANCE OF 921 CONTRACTS  WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS:  FROM THE CME DATA 921 EFP’S  WERE ISSUED TODAY (FOR MARCH EFP’S)  FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS.  WE REALLY LOST 1117 OI CONTRACTS i.e. 921 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 2117 OI COMEX CONTRACTS. AND ALL OF THIS  HAPPENED WITH THE FALL IN PRICE OF SILVER BY 2 CENTS AND A  CLOSING PRICE OF $16.19 WITH RESPECT TO YESTERDAY’S TRADING. 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. 1.005 BILLION TO BE EXACT or 143% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT DECEMBER MONTH/ THEY FILED: 31 NOTICE(S) FOR 155,000 OZ OF SILVER

In gold, the open interest ROSE BY A CONSIDERABLE 3160 CONTRACTS UP TO 455,498 WITH THE TINY SIZED RISE  IN PRICE OF GOLD YESTERDAY ($1.10).  HOWEVER,  THE TOTAL NUMBER OF GOLD EFP’S ISSUED YESTERDAY FOR TODAY  TOTALED A CONSIDERABLE  6514 CONTRACTS OF WHICH THE MONTH OF DECEMBER SAW 0 CONTRACTS AND FEB SAW THE ISSUANCE OF 6514 CONTRACTS. The new OI for the gold complex rests at 455,498. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO 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 9674 OI CONTRACTS: 3160 OI CONTRACTS INCREASED AT THE  COMEX  AND A GOOD SIZED  6514 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.

YESTERDAY, WE HAD 5230 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF DECEMBER STARTING WITH FIRST DAY NOTICE191,105 CONTRACTS OR 19.105 MILLION OZ OR 594.09 TONNES (16 TRADING DAYS AND THUS AVERAGING: 11,944 EFP CONTRACTS PER TRADING DAY OR 1.1944 MILLION OZ/DAY)

Result: A GOOD SIZED INCREASE IN OI DESPITE THE TINY SIZED RISE IN PRICE IN GOLD TRADING YESTERDAY ($1.10). WE  HAD A GOOD SIZED  NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6514. 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 6514 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 9674  contracts:

6513 CONTRACTS MOVE TO LONDON AND A 3160 CONTRACTS INCREASED AT THE  COMEX. (in tonnes, the gain  equates to 31.25 TONNES)

we had:  149  notice(s) filed upon for 14,900 oz of gold.

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

GLD:

Today, A HUGE CHANGE: A DEPOSIT OF 1.48 TONNES OF  GOLD INTO THE GLD/

Inventory rests tonight: 837.50 tonnes.

SLV/

THIS MAKES A LOT OF SENSE: IF SILVER UP 18 CENTS TODAY:

A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF:755,000 OZ ???

INVENTORY RESTS AT 325.582 MILLION OZ/

end

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

1. Today, we had the open interest in silver FELL BY A CONSIDERABLE SIZED 2117 contracts from 207,945 DOWN  TO 201,108 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE TINY FALL IN PRICE OF SILVER OF 2 CENTS YESTERDAY . HOWEVER,OUR BANKERS  USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER  921  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 CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. BUT, IF WE TAKE THE  OI LOSS AT THE COMEX OF 2117 CONTRACTS TO THE 921 OI TRANSFERRED TO LONDON THROUGH EFP’S  WE OBTAIN A LOSS OF  1196  OPEN INTEREST CONTRACTS, AS WE MUST HAVE HAD SOME BANKER SHORT COVERING.  WE STILL HAVE A  HUGE AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN DECEMBER (SEE BELOW). THE NET LOSS TODAY IN OZ: 5.598 MILLION OZ!!! 

RESULT: A GOOD SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE TINY  2 CENT FALL IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING).  BUT WE ALSO  HAD ANOTHER 921 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 2.99 points or 0.09% /Hang Sang CLOSED UP 210.95 pts or 0.72% / The Nikkei closed UP 36.66 POINTS OR 0.16%/Australia’s all ordinaires CLOSED DOWN 0.19%/Chinese yuan (ONSHORE) closed UP at 6.5759/Oil UP to 58.05 dollars per barrel for WTI and 64.50 for Brent. Stocks in Europe OPENED ALL RED . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5759. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.5679 //ONSHORE YUAN  STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  SLIGHTLY STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS   HAPPY TODAY.(GOOD MARKETS

 

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea

The UN imposes new North Korean sanctions

( zerohedge)

b) REPORT ON JAPAN

 

3 c  CHINA

4. EUROPEAN AFFAIRS

SPAIN

Nothing solved tonight as the separatists win the Catalan election and this is a huge blow to Rajoy whose candidate finished in last place.  Thus the secession crisis will continue.

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

( zerohedge)

6 .GLOBAL ISSUES

 

i)SWEDEN

 

JUST AWFUL, 3 GANG RAPES IN A FEW WEEKS LEAVES A 17 YR OLD HOSPITALIZED. PROTESTS’GALORE!!

( ZEROHEDGE)

 

ii)Mexico

 

( zerohedge)

7. OIL ISSUES

What will cause the next oil price crash?

 

( Paraskova/OilPrice.com)

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)Bitcoin breaks into the 13,000 handle:
( zerohedge)
ii)Is there a secret 10 yr deal orchestrated by government to rig both gold and silver( Ted Butler)
Alasdair Macleod… 2018 the year for gold
(Alasdair Macleod)

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

i)Hard data durable goods order falter in November as business spending drops

( zero hedge)

ii)Fascinating:  Credit card debt or revolving credit surges a huge 18% as consumers go on a spending spree..it looks like a major part of that spending was in Bitcoin

(courtesy zerohedge)

iii)Personal income rose by a less than expected .3% but the consumer keeps on spending.  Thus the personal savings rate plunges to a 10 yr low

( zerohedge)

iv)University of Michigan confidence disappoints badly (soft data)

( zerohedge)

v)SWAMP

 

a)Congress demands that the Dept of Justice turn over evidence related to a Obama Hezbollah drug trafficking scheme in order to secure the awful Iran deal struck with the west last year.

( zerohedge)

 

b)The FBI fires the leaker James Baker.  Baker is an ally of James Baker

( zerohedge)

v)Tax bill signed into law

 

( zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY A CONSIDERABLE 3160 CONTRACTS UP to an OI level of 455,871 DESPITE THE TINY RISE IN THE PRICE OF GOLD ($1.10 GAIN WITH RESPECT TO YESTERDAY’S TRADING).  WE DID HAVE ZERO COMEX GOLD  LIQUIDATION BUT WE DID HAVE A HUGE GAIN IN TOTAL 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 6514 EFP’S WERE ISSUED FOR FEBRUARY FOR A TOTAL OF 6514 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS.

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 9674 OI CONTRACTS IN THAT 6514 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON  AND WE GAINED 3160 COMEX CONTRACTS.  NET GAIN: 9674 contracts OR 967,400 OZ OR 30.09 TONNES

Result: AN GOOD SIZED INCREASE IN COMEX OPEN INTEREST WITH THE TINY RISE IN THE PRICE OF GOLD TRADING  YESTERDAY ($1.10.)  WE HAD NO  GOLD LIQUIDATION. TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 9674 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 RISE by 11 contracts UP to 260.  We had 21 notices filed upon yesterday so we GAINED 32 COMEX contracts or an additional 3200 oz will not stand for delivery AT THE COMEX in this active delivery month of December AND QUEUE JUMPING INTENSIFIES

January saw its open interest LOSE  93 contracts DOWN to 1210. FEBRUARY saw a GAIN of 1238 contacts UP to 332,691.

We had 149 notice(s) filed upon today for 14,900 oz

PRELIMINARY VOLUME TODAY ESTIMATED;  N/A

FINAL NUMBERS CONFIRMED FOR YESTERDAY:  209,009

comex gold volumes are increasing dramatically

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And now for the wild silver comex results.

Total silver OI FELL BY A CONSIDERABLE 2117 CONTRACTS  FROM 203,225 DOWN TO 201,108 DESPITE YESTERDAY’S TINY 2 CENT FALL IN PRICE .  HOWEVER, WE DID HAVE ANOTHER SMALL SIZED 921 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: 921.  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 CONSIDERABLE  LONG COMEX SILVER LIQUIDATION AS WELL AS TOTAL SILVER OI LIQUIDATION AS IT SEEMS THAT WE ARE HAVING SOME BANKER SHORTCOVERING.  WE ARE ALSO WITNESSING A HUGE AMOUNT OF SILVER OUNCES STANDING FOR COMEX 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 LOST 1196 OPEN INTEREST CONTRACTS:

2117 CONTRACTS LOSS AT THE COMEX WITH THE ADDITION OF  921 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS: 1196 CONTRACTS

We are now in the big active delivery month of December and here the OI FELL by 127 contracts DOWN to 240.  We had 129 notices filed UPON YESTERDAY so we gained 2 contracts or an additional 10,000 oz will  stand in this active COMEX delivery month of December and queue jumping continues as physical supplies seem to be waning.

The January contract month FELL by 12 contracts DOWN to 1304.  February saw a gain OF 11 OI contract RISING TO 56. The March contract LOST 1995 contracts DOWN to 160,308.

We had 31 notice(s) filed  for 155,000 oz for the DECEMBER 2017 contracts

INITIAL standings for DECEMBER

 Dec 22/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil oz
Withdrawals from Customer Inventory in oz  
4436.838 oz
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
149 notice(s)
14,900 OZ
No of oz to be served (notices)
121 contracts
(12,100 oz)
Total monthly oz gold served (contracts) so far this month
8979 notices
897,900 oz
27.928 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 0 customer deposit(s):

total customer deposits nil  oz

We had 1 customer withdrawal(s)

i) OUT OF HSBC: 4836.838oz

Total customer withdrawals: 4836.838 oz

we had 0 adjustment(s)

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 149 contract(s) of which 63 notices were stopped (received) by j.P. Morgan dealer and 8 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 (8979) x 100 oz or 897,900 oz, to which we add the difference between the open interest for the front month of DEC. (260 contracts) minus the number of notices served upon today (149 x 100 oz per contract) equals 910,000 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 (8979) x 100 oz or ounces + {(260)OI for the front month minus the number of notices served upon today (149) x 100 oz which equals 910,000 oz standing in this active delivery month of DECEMBER (28.304 tonnes). THERE IS  33.29 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE GAINED 32 COMEX CONTRACTS STANDING OR AN ADDITIONAL 3200 OZ WILL  STAND AT THE COMEX AND QUEUE JUMPING INTENSIFIES

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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 1,070,309.229 or 33.29 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 9,143,181.135 or 284.39 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 70 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

DECEMBER INITIAL standings

 Dec 22/ 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil oz
Withdrawals from Customer Inventory
659,779.509 oz
Brinks
CNT
Delaware
Scotia
Deposits to the Dealer Inventory
 nil
oz
Deposits to the Customer Inventory 
 600,279.49 oz
Scotia
No of oz served today (contracts)
 31
CONTRACT(S)
(155,000 OZ)
No of oz to be served (notices)
209 contract
(1,045,000 oz)
Total monthly oz silver served (contracts) 6395 contracts

(31,975,000 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 4 customer withdrawal(s):
i) Out of Brinks:  4947.000 oz

ii) Out of CNT: 591944.199 oz

iii) out  or Delaware: 2114.300 oz

iv) out of Scotia: 60,774.010 oz

TOTAL CUSTOMER WITHDRAWAL  659,779.509  oz

We had 1 Customer deposit(s):

i) Into Scotia: 600,279.49 oz

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

total customer deposits: 600,279.49  oz

we had 0 adjustment(s)

The total number of notices filed today for the DECEMBER. contract month is represented by 31 contract(s) FOR 155,000 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 6395 x 5,000 oz = 31,975,000 oz to which we add the difference between the open interest for the front month of DEC. (240) and the number of notices served upon today (31 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the DECEMBER contract month: 6395 (notices served so far)x 5000 oz + OI for front month of DECEMBER(370) -number of notices served upon today (31)x 5000 oz equals 33,020,000 oz of silver standing for the DECEMBER contract month. This is EXCELLENT for this active delivery month of November.

WE GAINED 2 CONTRACTS OR 10,000 additional OZ THAT WILL STAND AT THE COMEX

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: 50,679

CONFIRMED VOLUME FOR FRIDAY:  48,624 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 48,624 CONTRACTS EQUATES TO 243 MILLION OZ OR 34.7% 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: 59.182 million
Total number of dealer and customer silver: 240.232 million oz

The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 1.3 percent to NAV usa funds and Negative 1.6% to NAV for Cdn funds!!!!
Percentage of fund in gold 63.2%
Percentage of fund in silver:36.5%
cash .+.3%( Dec 22/2017)

2. Sprott silver fund (PSLV): NAV FALLS TO -1.53% (Dec 22 /2017)??????????????????????????????
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.53% to NAV (Dec 22 /2017 )
Note: Sprott silver trust back into NEGATIVE territory at -1.53%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.53%/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 22/ A DEPOSIT OF 1.48 TONNES OF GOLD INTO GLD INVENTORY/INVENTORY RESTS AT 837.50 TONNES

Dec 21′ NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 836.02 TONNES

Dec 20/DESPITE THE GOOD ADVANCE IN PRICE TODAY/THE CROOKS RAIDED THE COOKIE JAR TO THE TUNE OF 1.18 TONNES/INVENTORY RESTS AT 836.02 TONNES

Dec 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 837.20 TONNES

Dec 18 SHOCKINGLY AFTER TWO GOOD GOLD TRADING DAYS, THE CROOKS RAID THE COOKIE JAR BY THE SUM OF 7.09 TONNES/INVENTORY RESTS AT 837.20 TONNES

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Dec 22/2017/ Inventory rests tonight at 837.50 tonnes

*IN LAST 297 TRADING DAYS: 103.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 232 TRADING DAYS: A NET 53.83 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 212.72 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Dec 22

Dec 21/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.227 MILLION OZ/

Dec 20/INVENTORY REMAINS CONSTANT AT 326.337 MILLION OZ (COMPARE WITH GLD)

Dec 19/SILVER INVENTORY REMAINS CONSTANT AT 326.337 MILLION OZ

Dec 18.2017//SILVER INVENTORY CONTINUES TO REMAIN PAT./INVENTORY REMAINS AT 326.337 MILLION OZ/

INVENTORY RESTS AT 326.337 TONNES

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.

Dec 22/2017:

Inventory 326.337 million oz

end

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

+ 1.89%
12 Month MM GOFO
+ 2.01%
30 day trend

end

At 3:30 pm we receive the COT report but it is basically useless due to the huge EFP transfers;

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
197,473 83,678 56,410 156,226 284,443 410,109 424,531
Change from Prior Reporting Period
-4,439 -11,166 11,003 496 9,250 7,060 9,087
Traders
154 95 82 47 51 236 196
 
Small Speculators  
Long Short Open Interest  
43,486 29,064 453,595  
-83 -2,110 6,977  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, December 19, 2017

OUR LARGE SPECULATORS

those large specs that have been long in gold pitched a net 4439 contracts from their long side and all of these went for London forward

those large specs that have been short in gold covered a huge 11,166 contracts from their short side.

OUR COMMERCIALS

those commercials that have been long in gold added 496 contracts to their long side

those commercials that have been short in gold added a huge 9250 contracts to their short side  (and this is on top of the huge efp transfers)

OUR SMALL SPECULATORS

those small specs that have been long in gold pitched a tiny 83 contracts from their long side

those small specs that have been short in gold covered 2110 contracts from their short side.

 

and now for our silver cot

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
77,575 75,106 19,558 76,696 95,317
406 7,851 299 1,344 -4,864
Traders
109 63 44 44 36
Small Speculators Open Interest Total
Long Short 203,703 Long Short
29,874 13,722 173,829 189,981
-1,143 -2,380 906 2,049 3,286
non reportable positions Positions as of: 171 128
Tuesday, December 19, 2017

 

OUR LARGE SPECULATORS

those large speculators that have been long in silver added 406 contracts to its long side

those large speculators that have been short in silver added a monstrous 7851 contracts to its short side???

 

OUR COMMERCIALS

those commercials that have been long in silver added 1344 contracts to its long side.

those commercials that have been short in silver covered 4864 contacts from its short side

OUR SMALL SPECULATORS

those small specs that have been long in silver pitched 1143 contracts from its long side

those small specs that have been short in silver covered 2380 contracts from its short side.

 

Conclusions; on both gold and silver/nothing but a fraud..do not read anything in these reports.

 

end

Major gold/silver trading /commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Goldnomics Podca

END
Bitcoin breaks into the 13,000 handle:
(courtesy zerohedge)

Looks like the original guys are getting out;  coinbase is temporarily disables buying and selling of cryptocurrencies due to high traffic

(courtesy zero hedge)

 

Coinbase “Temporarily Disables” Buying And Selling Of Cryptocurrencies Due To High Traffic

Following today’s crypto-rout which saw bitcoin plunge as low as $10,000, down over 30% on the day, and nearly 50% from its Sunday high of just below $20,000, the HODLers and no longer HODLing and instead are rushing to get out. So, in taking a page from the futures markets, the largest US crypto-exchange, Coinbase, said on Friday that buying and selling was temporarily disabled due to high traffic.

“Investigating – All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience,” Coinbase said on its status website at 8:11am PST (11:11am ET).

Just over 20 minutes later the company added in a subsequent statement that “due to today’s high traffic, buys and sells may be temporarily offline. We’re working on restoring full availability as soon as possible.”

On Thursday, Coinbase had temporarily disabled buys and sells at 5:57 p.m., ET, according to its status website. The issue was resolved within 15 minutes.

Bitcoin had dropped traded about 17% lower near $13,000 on Coinbase as of noon, rebounding more than 20% from intraday session lows. As reported previously, Coinbase’s mobile app recently became the most downloaded application in the Apple App store.

end

Is there a secret 10 yr deal orchestrated by government to rig both gold and silver

(courtesy Ted Butler)

Ted Butler: A 10-year-deal to let JPM rig silver?

 Section: 

10:47a ET Thursday, December 21, 2017

Dear Friend of GATA and Gold:

Silver market analyst Ted Butler today speculates that the U.S. government has a 10-year agreement with JPMorganChase, stemming from the failure of the Bear Stearns investment bank, waiving commodity and anti-trust law enforcement so that Morgan can keep the price of silver under control and profit greatly from doing so.

This brings Butler quite a bit closer to the possibility that Morgan is simply the executor of U.S. government trades, which easily would explain why there is never any enforcement against even the most brazen rigging of the monetary metals markets. After all, the Gold Reserve Act fully authorizes the U.S. government, through the Treasury Department’s Exchange Stabilization Fund, to rig any market in the world —

https://www.treasury.gov/resource-center/international/ESF/Pages/esf-ind…

— and filings by CME Group, operator of the major futures exchanges in the United States, show that governments and central banks receive volume trading discounts for secretly trading all futures contracts on CME Group exchanges:

http://www.gata.org/node/14385

http://www.gata.org/node/14411

Butler’s commentary is headlined “A 10-Year Deal?” and it’s posted at GoldSeek’s companion site, SilverSeek, here —

http://silverseek.com/commentary/ten-year-deal-17017

— and at 24hGold here:

http://www.24hgold.com/english/news-gold-silver-a-ten-year-deal-.aspx?ar…

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

end

A Ten Year Deal?

Theodore Butler

|

December 21, 2017 – 9:53am

 

Here’s a thought that I fully acknowledge didn’t originate with me, but from a close associate, even though it incorporates many of my findings. If it does come to fruition, I will gladly reveal my associate’s identity to give him his proper due; but in case it doesn’t, I’ll spare him any embarrassment for an incorrect premise. As I think you’ll see, I can’t deny that my friend’s premise seems to tie up all the loose ends about the silver manipulation.

In a few short months, we will hit the ten year anniversary of perhaps the most seminal event in modern silver history – the takeover of the failing investment bank, Bear Stearns, by JPMorgan in March 2008.  Bear Stearns failed as a firm due to a variety of problems which, in effect, caused a run on the bank. But what makes the failure and subsequent takeover so prominent in silver history was the revelation shortly thereafter that Bear had been the biggest short seller in COMEX  silver and gold futures and was replaced in that role by JPMorgan.

Since the takeover, JPMorgan has not only remained the largest short seller in COMEX silver futures, but has gone on to rack up a perfect trading record on the short side of COMEX silver; taking profits on every new short position it has added since taking over Bear Stearns and never, ever taking a loss. More importantly, for the past nearly seven years, JPMorgan has used its ironclad control over silver prices to accumulate the largest investment position ever witnessed in physical silver; and all at the depressed prices it created with its massive paper short position on the COMEX.  At this point, I peg JPM’s physical silver position to be no less than 675 million oz.

I’ve been on JPMorgan’s case since the fall of 2008, when I first uncovered that the bank was the new king short in silver. Because the evidence has been so strong that JPMorgan has both manipulated the price and accumulated a massive amount of physical silver, I lost any fear I had when I first started referring to JPMorgan as crooked in its silver (and gold) dealings. Yes, I still send the bank all my articles and I assume I would have heard from bank officials had they had any objection to what I write.

Because the takeover of Bear Stearns by JPMorgan was necessitated by concerns for the stability of the financial system, it was, basically, arranged and overseen by the highest levels of US Government financial regulators, the Treasury Dept. and the Federal Reserve. In a nutshell, Bear Stearns was too big to fail.  Yet fail it did, although the USG and JPMorgan took strong measures to contain the damage from the Bear Stearns failure. One of those measures was to prevent Bear’s failure from affecting the silver and gold market.

As the biggest short seller in COMEX gold and silver futures contracts, Bear Stearns’ failure would be expected to cause prices to explode in an orgy of short covering by the biggest short suddenly gone bad. Actually, silver and gold prices had been running to new highs back then as Bear Stearns lurched toward bankruptcy in mid-March 2008.  From the start of that year, silver had jumped by $6 to $21, a new 28 year price high and gold hit its then all-time high of over $1000, up $150 since year end, with both price highs occurring on the very day that Bear Stearns was taken over, March 17, 2008 (St. Patrick’s Day).

That was the day, of course, when JPMorgan took over the short reins from Bear Stearns, with full prodding, cooperation and participation from the US Treasury and the Fed. Almost from that day, silver and gold prices began falling and didn’t stop until October of 2008, when silver traded below $9, nearly 60% lower than when JPMorgan took over – not just Bear Stearns, but the market itself. Gold fell from its then all-time high of $1020 to under $700 by that October. And on these massive price declines in 2008, JPMorgan bought back much of its massive COMEX short position with profits of many hundreds of millions of dollars. This was the very first of the many coming successful manipulation campaigns conducted by JPMorgan upon its ascension to the very top of the silver market.

Not one word of the forgoing was made up and can be easily substantiated. I fully admit that as the events of 2008 unfolded, I didn’t have as clear a perspective of what was occurring as I do now, but 2008 was a big year for me, what with initiating the infamous 5 year investigation into silver manipulation by the CFTC and having the agency confirm my speculation that it was JPMorgan as the big COMEX silver and gold short. That being said, I had no idea back then about what would transpire over the next ten years in silver and gold. I had a pretty good sense that prices would move higher and they did, with silver up more than five-fold from the lows of 2008 to the highs near $49 less than three years later. But I never conceived that JPMorgan would regain control for the next seven years and pressure prices lower. Otherwise, I would have told you (and myself).

Because of the involvement of the US Treasury and Federal Reserve in JPMorgan taking over Bear Stearns was so obvious, no one can deny that JPMorgan demanded and received something in return for “saving” the financial system; that reward being allowed to dominate and control the silver (and gold) market without regulatory interference.  To my mind, the reward included a hands-off agreement by which the CFTC was ordered to ignore the increasingly blatant dominance over the silver and gold markets by JPM. Many have further expanded this premise to claim that this proves the US Government is controlling the price of precious metals, but I’ve never gone that far (because nothing I have seen in my more than half-century of adult life persuades me the government I’ve observed over all that time is capable of such a feat).

While not a believer in full-blown conspiracy theories by any measure, it is also clear to me that the CFTC has handled JPMorgan with kid gloves, at best. How else to describe the behavior of JPMorgan in the silver market that no other entity could get away with? We don’t have to go much further than JPM never taking a loss on COMEX silver short positions and how it can be allowed to be both the biggest paper short and biggest physical buyer simultaneously.  How can one reconcile the broader concern of overall government control of precious metals prices in the face of JPMorgan’s specific actions in COMEX silver? My friend’s speculation does a pretty good job of answering that dilemma.

He contends that the US Government made a ten year deal with JPMorgan, giving the bank immunization against regulatory oversight in matters involving silver (and gold). And we’re certainly close to the ten-year mark of any such agreement. Again, I’m not claiming authorship of the ten year deal speculation, but I do wish I was the author. That’s because it aligns perfectly with everything I think I know about silver, the US Government, COMEX and JPMorgan. I never believed the USG would grant permanent immunity to JPMorgan for manipulating silver and gold, so a ten year deal fits as a substitute.

Certainly, JPMorgan has put the last ten years to good use, in both milking guaranteed profits from its COMEX short side paper dominance and then by beginning to accumulate physical silver seven years ago on a scale never before witnessed. Most importantly, the ten year deal fits perfectly with my “big one” premise, as it is downright remarkable what a good position JPMorgan has put itself in for a liftoff in price just recently. My friend holds that the coming end to this year marks the end of the ten year deal and I’m in no position to argue, since it was his idea to start with. Aside from me fervently wishing that his take will be the right take, I can find nothing to dispute it.

Ted Butler

December 21, 2017

 

 

end

 

 

Alasdair Macleod…

 

2018 could be the year for gold

We approach 2018 having seen the seeds planted in recent years for a monetary revolution. They include the massive world-wide expansion of credit and debt since the last credit crisis, and the advent of potentially disruptive cryptocurrencies. Geopolitical shifts of tectonic scale have occurred, hardly noticed by the ordinary person. That was until now. We are now on board a train which is gathering speed towards its buffers: the end of dollar hegemony and its potential collapse.

It might take a few years yet to get there, but the speed of our train is dependant to a large degree to how the engine’s boiler is stoked by America through her isolationist plans. It is very hard to see how the dollar cannot decline significantly with America’s autarkic trade policies, benefiting gold.

Geopolitics are likely to become more prominent in 2018, risking an upset of the precarious balance in what amounts to an ongoing financial war. Upset that balance, and chaos results. President Trump threatens to do just that by formally identifying China and Russia as America’s main adversaries in his National Security Strategy, released only this week.[i] The document repeatedly casts China and Russia as geopolitical villains seeking world domination, and America as the world’s saviour.

The subtext is Trump will compete for dominance on military grounds, while the battle for global power is in fact economic. It is a strategy America is bound to ultimately lose, because empires always thrive on trade, not suppression. Suppression is an end-game. By opting for trade isolationism and military power, the Americans are risking everything on the dollar’s status being maintained, because if the dollar sinks, so does America. However, that is an increasingly likely outcome.

Essentially, Trump’s National Security Strategy document highlights the struggle ahead for a country which has already lost economic control over the world, and like all empires before it, is now in decline. America is being outspent by China nearly everywhere, and, bizarrely, America’s response is to isolate herself through trade protectionism. Instead, by ramping up her military capability, America is becoming more belligerent as her own economy declines, relative to those of China and Russia.

China’s and Russia’s immediate response to Trump’s National Security Strategy was to declare it is a return to the cold war. The question for next year is will this encourage China and Russia to show less restraint, less patience, in their plans to dethrone the dollar?

This has to be our central theme, and how the relationship between unsound fiat and sound money, gold, is affected. Goldmoney readers are rightly interested in the prospects for gold in 2018. They look good, from an investor’s point of view. From an economist’s point of view, it’s not gold that looks good as such, but that the decline towards destruction for the dollar, the world’s reserve currency, is now progressing towards its inevitable conclusion.

This article examines the outlook for gold in monetary and economic contexts, organised under these headings, followed by some concluding remarks:

  • How US economic policies can be expected to undermine the dollar, and lead to an accelerating decline in its purchasing power;
  • China’s economic and monetary objectives, and how they are being progressed in partnership with Russia;
  • The erosion of the dollar’s petrodollar status, and the consequences thereof;
  • Global interest rates, the advancement of the credit cycle, and the effect on the gold price; and
  • The disruption to the monetary order created by cryptocurrencies.

US economic policy, and the dollar

The White House under President Trump appears to understand that the Democrat’s policy of transferring wealth from ordinary people to the state, and that the concomitant state control over its electors’ day-to-day business and behaviour is ultimately destructive. From a narrow economic point of view, arguably this was what President Trump was elected to change.

The market response to him winning the Presidency was initially positive, with the dollar rising strongly, before the difficulties his administration faced in overturning the status quo become the primary concern. The dollar then began to decline against other currencies, before a slight year-end recovery in recent months. Since Trump was elected, it has become clear that reversing the socialisation of the US economy is not straightforward. The struggles over Obamacare and a budget that proposed to reduce the tax burden on wealth creators are testament to that, as well as the bruising battle for control of the permanent establishment. Instead of a clear progression to a Reagonomics supply-side revolution, the economic risks appear to be increasing, rather than diminishing.

Trump’s underlying economic problems appear to be two-fold. He and his immediate advisors are trade protectionists, believing that US jobs can be protected, and even increased, through trade tariffs and protectionist policies. All history screams at us that this is a horrible mistake, and classical sound money economics clearly explains why.[ii] His second problem is he has inherited welfare legislation that is increasingly costly, and virtually impossible to reverse. So not only is the White House economically rudderless, but it is unable to reduce the burden of the state on the overall economy, necessary for the state’s destruction of wealth to be reduced.

The hope is that tax cuts will eventually generate increased nominal taxes, through economic recovery. Even if we assume that this happens, the budget deficit will increase significantly before it decreases.

Dollar bulls are expected to take this on trust. But while the intention behind supply-side stimulus may be improvement over previous consumer-driven policies, it is far from clear that the hoped-for economic benefits will materialise. An important plank of supply-side reform is a return to free markets. That is not what is happening. If anything, the drift towards state control is increasing, which is what trade protectionism is really about.

The current mistaken policy over trade was exposed to earlier generations by the Smoot-Hawley Tariff Act of 1930, which made the depression considerably worse than it would otherwise have been. Tariffs are not just a tax on consumption, but they are a tax on producers importing raw materials and those importing goods for further assembly as well. They are therefore regressive with respect to economic progress. They do not fix the trade deficit, nor are they in any way constructive to supply-side reform. Furthermore, the trade deficit is certain to increase despite tariffs, driven by a higher budget deficit and an expansionary monetary policy.

Smoot-Hawley occurred at a time of sound money, because dollars were readily convertible into gold. This was why the economic collapse in the thirties to which it contributed resulted in a devastating collapse in prices. Today, that’s not the case, and the negative impact of America’s trade isolationism is bound to be defrayed by yet more monetary inflation.

There is another good reason why monetary policy is likely to undermine the dollar as well, measured by its purchasing power in commodities, goods and services. It is a mistake made by the Fed and nearly all mainstream commentators to think interest rates control money’s purchasing power by regulating its quantity. They do not: all they control is the allocation of money between cash and loans of different maturities, not the overall quantity. An increase in the overall money quantity is a function of central bank interventions in the bond markets (particularly quantitative easing, asset purchase programmes and their reversal) and variations in the quantity of bank credit. Raise interest rates high enough, and you end up with a monetary-induced crisis by bankrupting borrowers of circulating credit. The one thing you do not get is a controlling brake that fine-tunes the quantity of fiat money, and through it the purchasing power of the currency.

Understanding this point is central to grasping some of the errors behind interest rate policy. The Fed appears to believe the opposite is true, otherwise monetary policy would not be what it is. Dollar bulls, who think otherwise and are confident in the dollar’s objective exchange value, are in error. Furthermore, as the US’s credit cycle progresses and money flows from financial to non-financial businesses, the rate of price inflation increases as well. Banks usually respond to price pressures at this stage of the credit cycle by supressing the true cost of borrowing, because they are competing with each other for market share. This only serves to reduce the currency’s purchasing power even more.

On purely domestic fiscal and monetary considerations, it is therefore hard to visualise the dollar entering a new bull phase. More likely, the current rally is no more than a countertrend bounce in an ongoing decline with important implications for commodity prices. This is obviously positive for the price of gold measured in dollars.

China’s economic policies and objectives

China’s economic policies and objectives are best understood if one regards the Chinese state as a latter-day East India Company, which was known colloquially as John Company. John Company, founded in 1600, obtained a charter from the British Government to trade with the East Indies, which was interpreted as all of the Indian sub-continent and all the territories to the east, included China and Japan. It obtained control over the whole Indian subcontinent, which it ran as if it and its peoples were company property, while trading with all the other lands. Indians of any race and creed, as well as Britons seeking their fortunes, owed their primary allegiance to John Company, but were permitted to trade on their own account. Nabobs returning to Britain had made their fortune under the aegis of John Company, and it prospered under the success of this strategy, particularly in the hundred years until 1858, the year after the Indian Mutiny.[iii]

Not only was John Company almost as powerful at its height as China is today, but China appears to model herself in key respects on John Company. The allegiances of the population are similar, and there is no democratic choice, but citizens are free to make their own fortunes. The glue that makes it stick together is the opportunity for wealth creation, while the state provides the physical and financial infrastructure, and the overall strategic direction. And like John Company, the Chinese are securing trade on an Asia-wide basis, but with a greater reach inland and also towards Europe.

It is inappropriate to compare China with a modern Western democracy, which is the approach of most financial and political commentators. China controls everything, and there is no other choice for its people. If the government decides to create new cities, it has the power to populate them. If it decides to build a bridge to nowhere, it can command nowhere becomes somewhere. While this approach is alien to modern Westerners and runs against concepts of free markets and democracy, it has been and remains a successful strategy.

Foreign relations are carefully managed, in the context of an Asia-wide trade strategy. The most important partnership is with Russia: Russia has energy and the raw materials for industry, as well as superior defence capabilities. Between them, Russia and China control the bulk of Asia’s landmass. Through their joint leadership of the Shanghai Cooperation Organisation and the BRICS alliance, they have secured trading relationships with the Indian subcontinent, Iran, and others. The Chinese diaspora in South East Asia ensures those countries are tied in as well. Like John Company of old, China controls or influences the largest economic unit in the world.

This strategy was anticipated by Halford Mackinder, commonly acknowledged as the father of geopolitics, in two contributions in 1904 and 1919. He identified the geopolitical control of the Eurasian landmass from its Heartland, consisting of a region stretching from Eastern Europe to the Yangtze River. What is not so well known is he updated his theory in the 1940s when he was in his eighties, to include “The Monsoon lands of India and China consisting of a thousand million people of ancient oriental civilisation, that will grow to prosperity”. Mackinder’s prescience is being realised by China’s version of John Company, though the population of his Monsoon Lands is closer to three thousand million today.

One hundred and sixty years after the Indian Mutiny, China’s version of John Company is driven by communications, automation and modernisation. With high-speed rail, goods transverse the whole Eurasian continent at less than half the time taken by sea, and this time will be cut even further. Data processing, online businesses and artificial intelligence are now the norm. With robotics, machines do routine tasks more quickly and accurately than humans in control of lesser machines. The fast pace of this new industrial revolution, and the progress for everyone involved throughout Eurasia is truly remarkable.

The general public in the West is hardly conscious of these developments, only being vaguely aware that more and more products seem to be imported from China. They are certainly not aware that America has already lost its position as the world’s policeman, the guarantor of economic freedom and democracy, or whatever other clichés are peddled by the media. And only this week, President Trump in releasing his National Security Document, and pledging “America would reassert its great advantages on the world stage”, showed the American establishment is similar to a latter-day Don Quixote, unaware of the extent of change in the world and the loss of its power.

Like a monetary embodiment of Cervantes’ tilter at windmills, the world’s reserve currency is rapidly becoming an anachronism. And for China to realise her true destiny, it must dispense with dollars, and if in the process it crushes them, then so be it.

Of course, crushing the dollar has enormous economic implications, not least of which is the potential for it to collapse into a hyperinflationary spiral, further propelled by a central bank trying to buy off the consequences of every systemic crisis. The central planners in China must have been anticipating this risk for some time, which explains why the state has quietly and secretly amassed large quantities of bullion since 1983, and encouraged her citizens to do likewise since 2002.[iv]

The erosion of the dollar’s petrodollar status

In all currency pairs, international traders have to take into account factors driving two currencies in assessing a future exchange rate. The purpose of foreign exchange at its most basic is to settle gross cross-border trade movements, with the balance of these flows paramount in determining the exchange rate. Today, by far the largest trading nation is China, so settling trade between the dollar as the default currency for trade and the yuan is the most important currency issue today.

China manages her currency rate to her perceived national advantage. In recent years, this has meant tracking industrial commodity prices. When they were falling measured in dollars, the yuan was managed lower with them. But with commodity prices rising from last January, the yuan has also risen. We can therefore assume that as China’s imports of commodities accelerate to satisfy the ambitions of her current thirteenth five-year plan, the yuan will continue to be managed to rise in line with the general level of commodity prices.

From this flows the relationship between the yuan and the dollar. That said, China manages to keep commodity prices suppressed through the simple expedient of bypassing markets by purchasing agreements that only use market prices for reference. Doubtless, China hopes that through off-market supply agreements, her infrastructure plans will not raise commodity prices unduly against her.

This hoped-for period of relative calm in international commodity markets should allow China to pursue her plans to increasingly use yuan for trade settlement with her energy and commodity suppliers. She has already set up some of the financial instruments to make the yuan more acceptable to suppliers, and held back on others, notably energy. The oil-yuan futures contract has been the subject of considerable controversy, because it will allow oil suppliers such as Iran to bypass the dollar entirely and to hedge yuan by buying gold through matching yuan-gold futures.

For the avoidance of doubt, these contracts are only available to non-domestic traders, and any gold bullion acquired through the yuan-gold futures contracts will be sourced from international markets, not China nor her citizens.

The problem with these contracts is they amount to a frontal attack on the US-dominated international financial system. Since the collapse of the Bretton Woods Agreement in 1971, the Americans have rejected all monetary roles for gold, and selling commodities or goods for gold is strongly discouraged. More sensitively, pricing and selling oil in anything other than the dollar is a direct threat to the petrodollar and the dollar’s hegemony. For these reasons, the Chinese have held back on plans to introduce an oil-yuan futures contract, though the exchange is set up and ready to go.[v]

It is quite likely the subject of these contracts has been discussed between Beijing and Washington, given their sensitivity. However, if the Chinese don’t introduce oil-for-yuan futures soon, it is likely other exchanges might, given the potential demand and China’s preference for settling energy purchases in yuan. There already exists a yuan-for-gold future in Dubai, and it would make enormous sense to introduce a matching oil-for-yuan future alongside it.

The largest oil exporters by volume to China are Russia, followed by Saudi Arabia. Both Russia and Angola, another major supplier, are selling oil for yuan. Saudi Arabia will need to do the same, to maintain market share, and there are rumours this will happen early in the new year.[vi] Saudi Arabia is tiptoeing cautiously towards China and Russia, recognising that is where her commercial future lies. However, it was the agreement between Nixon and King Faisal in 1973, which created the petrodollar and ensured all other commodities would continue to be priced in dollars after the Nixon shock.[vii] If the Saudis start accepting yuan for oil, it will mark the end of that agreement and therefore the beginning of the end for the petrodollar. At that point, the oil-for-yuan futures contract becomes inevitable, if not already introduced beforehand.

Applying the brakes on the speed of change is never easy, and if the market wants something, someone, somewhere, will provide it. This is the reality behind the oil-for-yuan issue. Elsewhere, China’s plans move on. Financing structures for Asian infrastructure spending are being assembled. For example, a private £750m fund, chaired by ex-Prime Minister David Cameron, was announced this week and it will act as a lead manager for UK and European based infrastructure investments in Silk Road and other Asian Infrastructure Investment Bank projects. This will help ensure the City of London continues to play a major international financial role after Brexit.

These developments will undoubtedly be a major blow for the dollar in 2018, adding to selling pressure on the exchanges. Once these pressures become more apparent, foreign owners of dollar investments are bound to become nervous, being over-weighted, holding $17.139 trillion in mid-2016, the last date of record.[viii]

Global interest rate outlook, and the implications for gold

In 2018, major economies can expect to run into a brief expansionary phase of the credit cycle before the next credit crisis. By the expansionary phase, we mean the reallocation of credit from financial assets to non-financial activities, which will be recorded as a further fall in bond prices, the beginnings of an equity bear market, and a material acceleration in nominal GDP.

This phase happens in every credit cycle, when returns on financial investments decline and risks in non-financial lending appear to have receded, along with memories of the last credit crisis. When extra bank credit is then applied to non-financial demand and supply, prices of goods and services inevitably begin to rise as that credit is spent and the price effect spreads through the economy. In some nations, this process has been evident for some time. Given these things develop a momentum of their own, it is likely that in 2018 prices of raw materials will resume their upwards trajectory, and price inflation in fiat currencies will rise as well.

Fuelling this trend will be China, whose appetite for industrial commodities is planned to escalate significantly. This is why China is likely to offset some price inflation pressures through managing the yuan’s exchange rate upwards against the dollar. While China’s commodity purchases will predominantly bypass markets (as stated earlier in this article), there can be little doubt major shortages will develop as other economies, benefiting indirectly from China’s expansion, increase their demand for raw materials. A combination of rising goods and services prices will be coupled with falling bond and equity prices, as the reallocation of bank credit from financial activities gathers pace. Central banks will desperately try to moderately adjust interest rates upwards, hoping not to trigger a credit crisis. The result is they will always be one step behind the markets, and these are the optimum conditions which favour gold.[ix]

Driving the global economy, is of course, China. Without China, other major economies would stagnate, with ordinary people heavily encumbered by a triple burden of taxes, regulation, and wealth destruction through monetary inflation. It stands to reason that those closest to the Asian story benefit most. Commodity suppliers, led by Russia, the Central Asian states, Australasia, the Middle east, sub-Saharan Africa and Latin America all benefit from China’s thirteenth five-year plan. Canada does as well. Europe benefits from increased trade through the Silk Road, where goods are now in transit for less than two weeks compared with a month by sea, a time that will soon be cut to less than ten days.

The observant reader will notice the United States is missing from this list. America has moved from being the world’s dominant economic power, to only supplying the commonly used currency, a currency that is rapidly becoming irrelevant for trade. By pursuing an isolationist “America first” policy that restricts free trade, America will end up last.

For this reason alone, the bearish headwinds facing the dollar and an isolated US economy in 2018 appear to be badly underestimated.

The cryptocurrency disruption

The rise and rise of cryptocurrencies, notably bitcoin, is a new source of financial and monetary disruption. It has even had some people who are deeply suspicious of state-issued currencies selling their gold to buy them, leading to commentary suggesting bitcoin is the new gold, and that gold as sound money is now redundant. This view appears to be confirmed by the limited supply characteristics of bitcoin, which is more comparable with gold than infinitely issuable state currencies.

Any serious student of money should know this to be a mistake. If there is one statement the reader should take away from this article to cogitate upon, it should be the following:

Cryptocurrencies share exactly the same theoretical monetary qualification with state-issued currencies.

The only reason we use state currencies is they are forced upon us. That is a different issue from genuine validity through freedom of choice. Both fiat and cryptocurrencies are equally monetary imposters, despite their different supply characteristics. As such, they are competing with each other, not gold, which has always been the sound money selected by ordinary people and communities, independently from one another, for millennia. It is simply preposterous to confuse the fakes with the real.

If the cryptocurrency phenomenon continues to run, it will be at the expense of state-issued currencies, because it is between the two that monetary preferences will swing. And because selling government fiat to buy cryptocurrency has an exaggerated value, the benefits of doing so are magnified. This will be of increasing concern to governments in 2018, assuming the cryptocurrency bandwagon continues to roll.[x]

It appears the crypto-bubble may still be in its early stages. Admittedly there is bubble-like speculation currently, but so far, it is mainly technology specialists and a limited number of prescient entrepreneurs who have understood the displacement value of a marriage of new blockchain and financial technologies. Only now is cryptocurrency moving into the mainstream, with service providers realising they must conform to basic financial regulations, and regulated futures and listed investment vehicles are now being established.

For institutional speculators, wary of overpriced investment markets, the temptation of cryptocurrencies must be increasingly hard to resist. It is difficult to see how governments can stop it, because transactions are essentially on a peer-to-peer basis. If they tried to destroy cryptocurrencies, they would merely push them into a parallel monetary system, not destroy them.

Assuming the phenomenon continues to run, the result is likely to be widespread wealth creation through cryptocurrency ownership, compared with the wealth destruction endemic to government fiat. It is hard to see how that can persist without undermining fiat money’s credibility in the public’s collective mind, and therefore its purchasing power. For this reason, cryptocurrencies are likely to be a further stimulant to the gold price, measured in fiat, as cryptocurrencies damage the status quo.

Conclusion

On domestic and international considerations, the outlook for the dollar is deeply negative, and so is correspondingly positive for the dollar price of gold. Price inflation in the US will likely increase, and the Fed, fearful for bond markets and asset prices generally, will be too slow in its response. In any event, raising interest rates does not restrict the money quantity, which according to monetarist thinking is what will be required to bring price inflation under control.

Instead, rising interest rates alters the allocation ratios between cash and term loans. Eventually, central banks raising interest rates will trigger the next credit crisis, but until that happens, the dollar is likely to be weak against commodity prices in particular, and the yuan as well, assuming the Chinese authorities continue to track commodity prices in their currency management strategy.

Internationally, portfolios are loaded to the gunwales with dollars, a remnant of past dollar strength, so they are quite likely to turn sellers. Meanwhile, the largest trading nation by far, China, is doing away with the dollar, and is fully aware that this policy could easily end in a disaster for the world’s reserve currency. Presumably, the Chinese anticipated this eventuality when they began to accumulate gold from 1983 onwards, and encouraged their citizens to do so as well after 2002. Owning physical gold is the ultimate protection against a fiat currency collapse.

Next year is almost certain to see the introduction of hedging facilities for oil exporters to China, forced to take yuan for oil. An oil-for-yuan contract is ready for launch, and could easily be announced in the coming weeks. This event, which is increasingly inevitable, will mark the end of the petrodollar, and can be expected to begin a major financial upheaval, likely to spread to all commodity markets.

Meanwhile, the Americans seem oblivious to these challenges. Only this week President Trump in his National Security Strategy document again promoted his trade isolationist policies, while maintaining that America still has primacy over other nations. This is wholly delusional, because the economic locomotive pulling the world along is China, not America.

The cryptocurrency phenomenon, if it continues, is likely to be an additional destabilising factor for the dollar. In truth, bitcoin and the dollar share the same lack of true monetary status, but their supply characteristics are where they differ. Cryptocurrencies seem likely to expose fiat currencies’ weaknesses, which after all is why they come into existence.

This background of negative events for the dollar is also the primary positive factor for gold. For years, control of the gold price has been suppressed in American markets, through the expansion of unbacked gold derivatives. That control is likely to be first challenged by a weakening dollar, and ultimately wrested from US futures and London’s forward markets, if only because physical gold markets are now firmly under Chinese control.

[i] See https://www.whitehouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2017-0905.pdf

[ii] For an explanation of the benefits of free trade, see https://www.goldmoney.com/research/goldmoney-insights/the-fiscal-benefits-of-free-trade

[iii] It is not widely appreciated how powerful John Company was at its height. Its private army was twice the size of the British army and it possessed a vast fleet of merchant Indiamen and warships, numbered in their thousands.

[iv] The regulations appointing the People’s Bank were introduced specifically with this in mind. See https://www.goldmoney.com/research/goldmoney-insights/china-s-gold-strategy and http://www.pravdareport.com/business/finance/15-05-2015/130611-china_gold_dollar-0/

[v] See the announcements page of the Shanghai International Energy Exchange: http://www.ine.cn/en/news/notice/

[vi] See http://foreignpolicy.com/2017/10/26/china-is-eyeballing-a-major-strategic-investment-in-saudi-arabias-oil/ and http://www.zerohedge.com/news/2017-12-18/yuan-priced-crude-futures-could-arrive-christmas

[vii] The Nixon shock was the announcement that foreign central banks could no longer exchange their dollars for gold on demand, and ended the post-war Bretton Woods Agreement.

[viii] See http://ticdata.treasury.gov/Publish/shlhistdat.html

[ix] For a deeper analysis of why gold rises when interest rates rise, see https://www.goldmoney.com/research/goldmoney-insights/rate-hikes-and-what-it-means-for-gold

[x] There are moves to put cryptocurrencies on the agenda for the next G-20 meeting in April.

 

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 UP AT 6.5759 /shanghai bourse CLOSED DOWN AT 2.99 POINTS 0.09% / HANG SANG CLOSED UP 210.95 POINTS OR 0.72%
2. Nikkei closed UP 36.66 POINTS OR 0.16% /USA: YEN RISES TO 113.36

3. Europe stocks OPENED RED   /USA dollar index RISES TO 93.35/Euro FALLS TO 1.1853

3b Japan 10 year bond yield: FALLS TO . +.048/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.35/ 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:: 58.05  and Brent: 64.50

3f Gold UP/Yen DOWN

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

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

3h Oil 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 RISES TO +.418%/Italian 10 yr bond yield UP to 1.927% /SPAIN 10 YR BOND YIELD UP TO 1.485%

3j Greek 10 year bond yield FALLS TO : 4.130?????????????????

3k Gold at $1268.60 silver at:16.21: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 14/100 in roubles/dollar) 58.21

3m oil into the 58 dollar handle for WTI and 64 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 HUGE SIZED REVALUATION NORTHBOUND

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.35 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 0.9839 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1728 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.418%

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 2.483% early this morning. Thirty year rate at 2.844% /

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

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

“This is Groundhog Day”: Spanish Stocks Battered By Catalan Vote, Bitcoin Crashes

 

Spanish stocks and the euro fell, while Spanish government bond yields hit their highest levels in over a month after Catalan secessionists delivered an unexpected blow to the government of Spanish PM Rajoy by winning the Catalan regional election. Meanwhile across the Atlantic, U.S. equity futures and the dollar rose on the last trading session before the Christmas holiday. The MSCI index of world stocks was flat.

Europe’s Stoxx 600 Index traded sideways as Spain’s Ibex 35 underperformed, dropping as much as 1.6%. Spanish stocks dominated Europe’s biggest fallers, confirming analyst expectations that any shake-out from the Catalonia vote would be mostly confined to Spain. Spain’s bonds also fell along with peripheral European government debt, though bunds were little changed after a selloff this week drove yields to five-week highs.  For those who missed it, Catalan separatist parties triumphed in regional elections, outperforming some polls and reigniting Spain’s political trauma. While the Euro has stabilized since, it suffered a mini flash crash in the illiquid aftermath of the Catalan election news, momentarily dipping to $1.1817 before trimming losses to last stand at $1.1853, down 0.2 percent.

“This is Groundhog Day, we have been here,” said Christopher Peel, chief investment officer at Tavistock Wealth. “I just don’t think the Spanish government can do anything other than come to the table now.” He added that thin liquidity due to the holidays could be accentuating what he called a kneejerk reaction on the IBEX. “Likely there’s some hedge funds leaning on it, but in terms of long-only money I don’t think there will be much movement now.”

The result also battered Spanish stocks, with Spain’s IBEX falling as much as 1.1% as European bourses opened. Financial stocks were the biggest drag on stock indices across the region, with the euro zone banks index falling 0.8 percent. Investor concerns about the country were a distraction from economic data, with reports on consumer spending, wholesale prices and gross domestic product from France and the Netherlands underscoring the region’s health. Elsewhere in Europe the chaos was contained as Germany’s DAX edged down 0.1 percent, in line with France’s CAC 40.

Putting the move in context, Spanish stocks were Europe’s best-performing benchmark for much of the year, before October’s independence referendum sent the IBEX tumbling. It was last 9 percent down from its May peak.

Earlier, equities in Asia closed the week largely in the green, with Japan’s Topix Index reaching its highest level since 1991. Asia rejoiced to the news that Congress passed the stop-gap measure which would avert a shutdown and keep the government funded through to January 19th. Australia’s ASX 200 (+0.2%) was higher as energy stocks tracked the outperformance seen in their US counterparts, while Nikkei 225 (+0.2%) was tepid as flows into the JPY restricted upside for equities. Elsewhere, Hang Seng (+0.7%) was positive and Shanghai Comp. (+0.1%) traded somewhat indecisive after the PBoC refrained from open market operations, which still resulted to a net liquidity injection of CNY 200bln for the week. Finally, 10yr JGBs were sideways amid a lack of drivers and an indecisive risk tone in Japan, while an uneventful enhanced liquidity auction for 10yr-30yr JGBs also kept price action tame. PBoC refrained from open markets operations today, for a weekly net injection of CNY 200bln vs. last week’s CNY

Although Treasuries stabilized, they were set for the biggest weekly loss since September as investors contemplate prospects for continued growth and reduced central bank stimulus.

In addition to the fireworks in Spain, in the US, the House voted 231 vs.188 and Senate voted 66 vs. 32 to pass the stop-gap funding bill to keep government funded through to January 19th. Elsewhere, US Federal Judge dismissed lawsuit against President Trump regarding foreign payments to Trump-owned businesses, US President Trump’s Deputy Chief of Staff Rick Dearborn and White House Economic Advisor Katz are said to resign, according to reports.  Additionally, CNBC reported that Larry Lindsey is being considered for role of Fed Vice Chair and he is also said to be interested in exploring the job.

* * *

The Bloomberg Dollar Spot Index edged higher and Treasuries steadied before a spate of U.S. economic data including the Fed’s preferred measure of inflation. The euro slipped after Spain’s pro-independence parties prevailed in the Catalan vote, but the currency was still on track for its first weekly advance against the greenback since November.

“As liquidity on the markets is likely to be quite thin already, surprisingly strong data might provide some decent support for USD into the year-end,” write analysts at Commerzbank, including Antje Praefcke, referring to Friday’s U.S. inflation data. “Inflation has remained weak despite a strengthening economy and labor market so until this puzzle is solved for the market, strong USD appreciation is unlikely.”

The DXY continues to languish below 93.500 after another brief knee-jerk above as Congress approved a further stop-gap funding extension. In truth, very little deviation in Usd/major pairs with the Index confined to a tight 93.555-340 range, though again the downside looks more attractive unless Friday’s data gives the Greenback a boost (PCE and durables the picks of a packed agenda). For GBP, UK GDP data has given Sterling some additional impetus with Q3 y/y growth was upgraded to 1.7% from 1.5% in the final release).

* * *

Just as dramatic as the Spanish fireworks was the overnight crash in Bitcoin and the cryptocurrency space. Bitcoin fell as much as 21%, briefly sliding below $13,000 on Friday, last trading at $13,885. Bitcoin, which was at about $1,000 at the start of the year, had climbed to a record high of $19,666 on Sunday. But it has fallen each day since then, with losses accelerating on Friday. It fell to as low as $12,560 on Bitstamp. At 0700 ET it was trading at around $14,000 and was heading for its worst day in more than three months. The plunge resulted in bitcoin’s worst week since April 2013down about a third.

Other cryptocurrencies also tumbled, with bitcoin cash crashing 31 percent and ethereum losing 20 percent over the past 24 hours, according to coinmarketcap.com.

As Bloomberg notes, the losses represent a major test for the cryptocurrency industry and the blockchain technology that underpins it, which have rapidly entered the mainstream in recent weeks. Bears cast doubt on the value of the virtual assets, with UBS Group AG this week calling bitcoin the “biggest speculative bubble in history.” Bulls argue the technology is a game changer for the world of investment and finance. Both will be closely watching the outcome of the current selloff.

“The sharks are beginning to circle here, and the futures markets may give them a venue to strike,” said Ross Norman, chief executive officer of London-based bullion dealer Sharps Pixley Ltd., which offers gold in exchange for bitcoin. “Bitcoin’s been heavily driven by retail investors, but there’ll be some aggressive funds looking for the right opportunity to hammer this thing lower.”

Worse, traders who bought the currency on futures exchanges using collateral may start facing margin calls following the price decline. Two venues launched products in recent weeks that required hefty security, with Cboe needing 44 percent to clear contracts, and the CME 47 percent. “There’s no doubt people who got in on margin will face some pressure here,” Norman said by phone from London. “The volumes weren’t huge, so it won’t be a major price driver, but for those caught on the wrong side it will hurt.”

In commodities, U.S. crude futures CLc1 slipped 0.5 percent to $58.07 per barrel, an earlier rise losing steam as traders sold to adjust positions ahead of the year-end. [O/R]The contracts had reached a nine-day peak of $58.38 overnight as OPEC started working on plans for an exit strategy from its deal to cut crude supplies, fuelling hopes it would not end supply cuts abruptly. Brent was down 0.3 percent at $64.72 a barrel after closing Thursday at $64.90 a barrel, its highest since June 2015. The broader rise in commodities this week — copper on the London Metal Exchange reached a two-month high on Thursday — lifted the Australian dollar to $0.7718 AUD=D4, its highest since Nov. 2.

U.S. data Friday on spending, prices and capital-goods orders will provide further clues about the robustness of the world’s biggest economy.

Bulletin Headline Summary from RanSquawk

  • US House voted 231 vs.188 and Senate voted 66 vs. 32 to pass the stop-gap funding bill to keep government funded through to January 19th
  • The positive sentiment in the Asian session has failed to inspire European bourses with participants reacting to the fallout of the Catalonian elections
  • Looking ahead, highlights include UK GDP, US Durables, PCE, Personal Income, Uni. Of Michigan (F)

Market Snapshot

  • E-Mini futures on S&P 500 up 0.1%
  • E-Mini futures on Dow Jones up 0.1%
  • E-Mini futures on Nasdaq 100 up 0.1%
  • VIX Index down 2.7% to 9.36
  • U.S. Dollar Index up 0.08% to 93.35
  • STOXX Europe 600 down 0.06% to 390.46
  • MSCI Asia Pacific up 0.6% to 172.53
  • MSCI Asia Pacific ex Japan up 0.7% to 562.35
  • Nikkei up 0.2% to 22,902.76
  • Topix up 0.4% to 1,829.08
  • Hang Seng Index up 0.7% to 29,578.01
  • Shanghai Composite down 0.09% to 3,297.06
  • Sensex up 0.5% to 33,913.01
  • Australia S&P/ASX 200 up 0.2% to 6,069.71
  • Kospi up 0.4% to 2,440.54
  • German 10Y yield fell 0.7 bps to 0.41%
  • Euro down 0.2% to $1.1856
  • Brent Futures down 0.2% to $64.77/bbl
  • Italian 10Y yield fell 3.1 bps to 1.639%
  • Spanish 10Y yield rose 2.1 bps to 1.488%
  • Gold spot up 0.1% to $1,268.19

Top Overnight News from Bloomberg

  • Pro-independence parties won back control of Catalonia in Thursday’s regional election as Spanish efforts to contain the separatist movement earned Prime Minister Mariano Rajoy a historic defeat
  • o    Congress Averts a Shutdown But Now Faces a Messy Start to 2018
  • The U.S. Senate gave final approval Thursday night to a short-term extension of federal funding to keep the government running for three more weeks while shoving a raft of fiscal and policy fights into the new year
  • A picture of inflation-squeezed consumers and Brexit-wary companies emerged in the U.K.’s latest overview of its economy; annual growth in the third quarter slowed to 1.7 percent, slightly higher than previously estimated but still the weakest pace in 4 1/2 years
  • Prime Minister Theresa May said U.K. financial services should be optimistic about Britain’s trade talks with the European Union, despite EU Chief Negotiator Michel Barnier ruling out a special deal for the sector
  • May left Warsaw on Thursday with the support of the Polish government for a generous settlement on services after Brexit and unity in fighting propaganda campaigns by Russia
  • China has signaled it’s ready to back another round of United Nations sanctions that will slash exports of fuel to North Korea, according to people familiar with the matter
  • Bitcoin sank as much as 21 percent on Friday, extending its loss from its intraday high this month toward 40 percent, as the crypto-world was swamped by a wave of selling
  • DoubleLine Capital, headed by Jeffrey Gundlach, is embarking on a plan to originate and securitize mortgages, seeking to fill a niche that has traditionally belonged to banks and brokerage firms

Asia equity markets traded with a positive tone after the Christmas cheer returned on Wall Street where most majors finished with gains amid outperformance across energy and financials. Furthermore, Congress also added to the glee after-hours as both the House and Senate passed the stop-gap measure which would avert a shutdown and keep the government funded through to January 19th. ASX 200 (+0.2%) was higher as energy stocks tracked the outperformance seen in their US counterparts, while Nikkei 225 (+0.2%) was tepid as flows into the JPY restricted upside for equities.  Elsewhere, Hang Seng (+0.7%) was positive and Shanghai Comp. (+0.1%) traded somewhat indecisive after the PBoC refrained from open market operations, which still resulted to a net liquidity injection of CNY 200bln for the week. Finally, 10yr JGBs were sideways amid a lack of drivers and an indecisive risk tone in Japan, while an uneventful enhanced liquidity auction for 10yr-30yr JGBs also kept price action tame. PBoC refrained from open markets operations today, for a weekly net injection of CNY 200bln vs. last week’s CNY 80bln net injection.

Top Asian News

  • Hong Kong Stocks Rise in Best Week Since Oct. as Developers Gain
  • Japan Takes Step to Broaden ETF Market Beyond Bank of Japan
  • Japan’s Topix Index Notches Biggest Weekly Gain in Two Months
  • As Bali Losses Hit $1 Billion, President Visits to Calm Tourists
  • Lotte Chairman Shin Gets Suspended Prison Term in Graft Trial

The positive sentiment in the Asian session has failed to inspire European bourses with participants reacting to the fallout of the Catalonian elections whereby, the Unionist Citizens (anti-independence) party won the most seats, although separatists groups collectively still retained a majority in Parliament and took 70 out of the 135-seat Parliament. In turn, the IBEX (-1.1%) has underperformed this morning with the losses led by Spanish banking names. In European rates, it’s been a slow grind and turnover remains painfully thin, but Bunds and Gilts have extended recovery gains all the same.
The 10 year benchmarks printed at 161.86 and 124.54 respectively, +15 and +17 ticks on the day vs -13 and flat at one stage since
the Eurex and Liffe opens. The core German/Eurozone debt future is still deriving a degree of safe-haven support from periphery
underperformance as although the main Spanish assets are off worst levels, results of the Catalan election showing a proper majority for the separatists has seed the regions CDS premium spike. Italian data up next, but for Bunds there may be some resistance/support in futures and cash terms around the 0.40% cash yield.

Top European News

  • Catalan Separatists Win Regional Election in Blow to Rajoy
  • GVC to Buy U.K. Bookmaker Ladbrokes Coral for Up to $5.4 Billion
  • U.K. Economy Held Back by Inflation Squeeze, Brexit Wariness
  • Europe’s Last Dictator Now Wants to Be Its Blockchain King
  • Sistema Offers Rosneft Settlement as Putin Pushes Peace: RNS
  • NetEnt Drops; DNB Cuts on Near-Term Growth Recovery Question
  • Emerging-Market Carry Trade Not Over Yet, Says Credit Agricole
  • Free Power on the Cards for German Factories This Christmas
  • With Elections in Sight, Italian Consumers Grow Optimistic

In FX, The DXY continues to languish below 93.500 after another brief knee-jerk above as Congress approved a further stop-gap funding extension. In truth, very little deviation in Usd/major pairs with the Index confined to a tight 93.555-340 range, though again the downside looks more attractive unless Friday’s data gives the Greenback a boost (PCE and durables the picks of a packed agenda). For GBP, UK GDP data has given Sterling some additional impetus with Q3 y/y growth was upgraded to 1.7% from 1.5% in the final release). CAD/AUD/NZD all on the firmer side of flat vs their US counterpart, with the Loonie still buoyed by Thursday’s much better than expected Canadian data. Aud/Usd has finally breached strong upside chart levels just ahead and over the 0.7700 level, eyeing the next key resistance at 0.7733, but also wary of massive option expiry interest at the big figure (3.2 bn). Nzd/Usd reclaimed 0.7000+ status overnight and tripped some stops at 0.7025 before running into congestion between 0.7020-35.

In Commodities, WTI and Brent crude futures off slightly with the latter failing to make a break above USD 65/bbl, however losses have been curbed with WTI finding support at USD 58. Elsewhere, gold prices are slightly higher with the precious metal supported by FTQ (Flight-To-Quality) flow.

Looking at the day ahead, the main data of note is the November personal income and spending data and core PCE data in the US. Also due out in the US is the flash November durable and capital goods orders data, November new home sales and the final December University of Michigan consumer sentiment reading. In Europe we’ll receive final Q3 GDP revisions for France and the UK and  January consumer confidence data for Germany.

US Event Calendar

  • 8:30am: Personal Income, est. 0.4%, prior 0.4%; Personal Spending, est. 0.5%, prior 0.3%; Real Personal Spending, est. 0.2%, prior 0.1%
    • PCE Deflator MoM, est. 0.3%, prior 0.1%; Deflator YoY, est. 1.8%, prior 1.6%; PCE Core MoM, est. 0.1%, prior 0.2%; PCE Core YoY, est. 1.5%, prior 1.4%
  • 8:30am: Durable Goods Orders, est. 2.0%, prior -0.8%;  Durables Ex Transportation, est. 0.5%, prior 0.9%
    • Cap Goods Orders Nondef Ex Air, est. 0.5%, prior 0.3%; Cap Goods Ship Nondef Ex Air, est. 0.3%, prior 1.1%
  • 10am: New Home Sales, est. 655,000, prior 685,000; MoM, est. -4.38%, prior 6.2%
  • 10am: U. of Mich. Sentiment, est. 97.2, prior 96.8; Current Conditions, prior 115.9; Expectations, prior 84.6; 1 Yr Inflation, prior 2.8%; 5-10 Yr Inflation, prior 2.5%
  • 11am: Kansas City Fed Manf. Activity, est. 15, prior 16

We conclude with the last daily wrap from DB’s Jim reid

Here we are then. That’s it for another year from us. It’s fair to say that when I started this year I had little idea of the carnage that my life would go through over the next 12 months. A relaxing Xmas and NY in the Alps but with no snow led us to find other ways of passing the time and 8 months later we were blessed with identical twins but with a crazy amount of hard work, both before the birth as Trudi had severe long lasting morning sickness, and post the birth given their nocturnal feeding habits. So all I can do is blame global warming for our predicament. However deep down we can’t believe how lucky we have been to have had three children whilst both being nearly 42 when we had our first. Last year I did a comprehensive list of my favourite TV programs, films, albums and books of the year. However it’s fair to say that our downtime has been reallocated throughout 2017 so my lists would be small. There was always time made for GoT though and if you haven’t seen the following please make time to seek them out. Narcos, Curb Your Enthusiasm, Line of Duty, Stranger Things, Catastrophe, Fargo, The Good Fight and The Crown. I’m sure there are more I’ve enjoyed. However the three programs on most in our house over the last year have been ‘In The Night Garden’ for the first half then ‘The Clangers’ and now for the last two months ‘Paw Patrol’. The last of which Maisie is absolutely obsessed with at the moment.

So happy holidays and a Happy NY. Thanks to all for reading this year and thanks for all the interactions and support. Without readers we wouldn’t be writing, although perhaps at least I wouldn’t have to go through the stress tomorrow of deciding between two equally extortionate and complicated kitchen designs. So swings and roundabouts. See you on the other side in 2018 (assuming we  survive your MIFIDII cut!!).

Firstly over in the US, a partial government shutdown from Saturday has been averted. Both the House (231-188) and Senate (66-32) have voted in favour to extend the government funding until January 19. Notably, the waiver of automatic cuts to medicare programs in the bill could allow President Trump to sign the tax bill into law a bit earlier – as early as today rather than 3 January. Now turning to Catalonia’s regional election where there was record voter turnout of 82%. The separatist bloc surprised slightly on the upside with c48% of the votes (vs. c47% from prior polls) and claimed 70 seats out of 135. However, DB’s Marc de-Muizon noted the formation of a government could prove very difficult, in part as the three independentist parties did not join forces during the campaign and would now have to agree on a common leadership and political agenda. Further, another uncertainty is the situation of elected independentists that may not be able to turn up in the regional Parliament because they are in exile or in jail. Looking ahead, there is no deadline to elect a President of the regional government, only once an investiture vote has been triggered does the 2-month deadline to form a government starts ticking. If no government is voted in after that, new elections would occur within 40 to 60 days. This means that new regional elections could be occurring in Spring 2018.

This morning in Asia, the Euro is down 0.23% and equities are little changed. The Kospi (+0.57%), Hang Seng (+0.35%) and Nikkei (+0.09%) are all modestly up, while China’s CSI 300 (-0.20%) is down as we type. Treasuries are trading broadly flat.

In terms of what to look forward to on the last business day of the year we go out with lots on what should be the pivotal topic in 2018 – namely inflation. The Fed’s preferred PCE measure is published today and overall we still think we’re in the calm before the slightly stronger inflationary winds that are likely to come around Q2 onwards. Indeed DB expect core PCE inflation (0.1% mom vs 0.2% previously) to moderate slightly off of October’s strong print. A print in line with our forecast would still bring the year-on-year number up about 6bps from October’s 1.45%. The six month annualized change would show a similar increase over October, which would present solid evidence that inflation is showing signs of firming if not yet alarming the Fed.

Staying with inflation, if you’re a sceptic about wage inflation ever picking up it’s worth taking a look at DB’s Matt Luzzetti’s piece from yesterday. The team find evidence of a non-linear relationship between the unemployment rate and wage growth once the former falls below a certain low level using state level data. In other words, a one percentage point decline in the unemployment rate causes a sharper rise in wage growth when unemployment is, for example below 4%, rather than 7%. Under DB’s forecast, which anticipates that the national unemployment rate will near 3.5% by end-2018, wage growth should rise by about 0.5 – 0.6 percentage points over the next year. In contrast, a linear wage Phillips curve without any kinks would only imply a roughly 0.3 percentage point rise in wage inflation by 2019.

Staying on the inflation theme, Canada’s headline November inflation print was firmer than expected at 2.1% yoy (vs. 2.0% expected). More importantly, two of the three core measures followed by the Central bank were also higher than prior readings with the CPI core trim at 1.8% yoy (vs. 1.5% previous) and CPI core median at 1.9% (vs. 1.7% previous). Elsewhere, the October retail sales was well above expectations at 1.5% mom (vs. 0.3% expected). Following the above, the implied odds per Bloomberg of a Canadian rate hike in January lifted c13ppt to 60%.

Now recapping market performance from yesterday. US equities rebounded to near record highs, with the S&P 500 (+0.20%), Dow (+0.23%) and Nasdaq (+0.06%) all slightly higher. Within the S&P, gains were led by energy and financial stocks, with partial offsets from utilities and real estate names. Barring a material adverse change next week, the S&P is on track to achieve positive total returns for every month in 2017, marking the only time this has ever been achieved. European markets were all higher, with the Stoxx 600 up 0.60% after two prior days of losses, supported by mining and energy stocks. Across the region, the FTSE led the gains (+1.0%) followed by Spain’s IBEX (+0.95%) and the DAX (+0.62%).

Government bonds were mixed but little changed with UST 10y yields down 1.4bp while Bunds and Gilts both rose c1bp. Onto currencies, the US dollar index dipped 0.05% after the final reading of 3Q GDP was trimmed by 0.1ppt, while the Euro and Sterling edged up 0.03% and 0.07% respectively. In commodities, WTI oil rose 0.24%, while precious metals (Gold +0.08%; Silver -0.36%) and other base metals were little changed (Copper +0.39%; Zinc +0.20%; Aluminium +0.31%).

Away from the markets and turning back to yesterday’s BOJ decision, our Japanese economists noted policy member Kataoka was the only dissenter who voted against leaving the cash rate on hold, but there was no evidence that his suggestions were put forward as a formal proposal. In its economic assessment, the bank raised its view of private consumption and capital investment but lowered its evaluation of public investment. Its price assessment and risk factors were unchanged. Overall, our team expect the BoJ will maintain its current monetary policy stance throughout 2018.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. The US macro data was a bit mixed. The final reading for the 3Q GDP and core PCE was both revised 0.1ppt lower to 3.2% and 1.3% respectively. That said, the 3Q GDP annualised growth still grew at the fastest pace since March 2015, with the source of revision being weaker consumer spending and trade. The November Conference Board’s leading index was in line at 0.4% mom, lifting the 6-month annualized growth rate to 6.1% – highest since October 2014. The December Philly Fed index was above market at 26.2 (vs. 21 expected) but the November Chicago Fed index was lower than expectations at 0.15 (vs. 0.5) although still above trend. Elsewhere, the weekly continuing claims (1,932k vs. 1,898k expected) and initial jobless claims (245k vs. 233k expected) were both higher than expectations. Finally, the October FHFA House Price Index was slightly above at 0.5% (vs. 0.4% expected).

In Europe, the flash Euro area consumer confidence index rose to 0.5 (vs. 0.2 expected) and now to the highest level since 2001. In France, the December business confidence (112 vs. 111 expected) rose to a fresh decade high while manufacturing confidence (112 vs. 113 expected) was slightly below expectations. In the UK, the November private sector net borrowing (£8.7bln vs. £9.0bln expected) and public sector net borrowing (£8.1bln vs. £8.3bln expected) were both slightly less than expected. Elsewhere, the GfK consumer confidence declined to the lowest in four years at -13 (vs. -12 expected), marking a new post-Brexit vote low.

Looking at the day ahead, the main data of note is the November personal income and spending data and core PCE data in the US. Also due out in the US is the flash November durable and capital goods orders data, November new home sales and the final December University of Michigan consumer sentiment reading. In Europe we’ll receive final Q3 GDP revisions for France and the UK and  January consumer confidence data for Germany.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 2.99 points or 0.09% /Hang Sang CLOSED UP 210.95 pts or 0.72% / The Nikkei closed UP 36.66 POINTS OR 0.16%/Australia’s all ordinaires CLOSED DOWN 0.19%/Chinese yuan (ONSHORE) closed UP at 6.5759/Oil UP to 58.05 dollars per barrel for WTI and 64.50 for Brent. Stocks in Europe OPENED ALL RED . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5759. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.5679 //ONSHORE YUAN  STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  SLIGHTLY STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS   HAPPY TODAY.(GOOD MARKETS)

3 a NORTH KOREA/USA

NORTH KOREA/

 

The UN imposes new North Korean sanctions

(courtesy zerohedge)

3 b  JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

6. GLOBAL ISSUES

(courtesy zerohedge)

7. OIL ISSUES

 

What will cause the next oil price crash?

 

(courtesy Paraskova/OilPrice.com)

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 1.1853 UP .0009/ 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 GREEN  

USA/JAPAN YEN 113.36 UP 0.051(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 1.3375 UP .0004 (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 1.2708 DOWN .0031 (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 9 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1853; / Last night the Shanghai composite CLOSED DOWN 2.99 POINTS OR 0.09% / Hang Sang CLOSED UP 210.95 POINTS OR 0.72% /AUSTRALIA CLOSED UP 0.18% / EUROPEAN BOURSES ALL RED 

The NIKKEI: this FRIDAY morning CLOSED UP 36.66 POINTS OR 0.16%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 36.66 POINTS OR 0.16% / SHANGHAI CLOSED DOWN 2.99 POINTS OR 0.09% /Australia BOURSE CLOSED UP 0.18% /Nikkei (Japan)CLOSED UP 36.66 POINTS OR 0.16%

INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1268.50

silver:$16.20

Early FRIDAY morning USA 10 year bond yield: 2.483% !!! DOWN 0 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 2.844 UP 1 IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)

USA dollar index early FRIDAY morning: 93.35 UP 8 CENT(S) from YESTERDAY’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: 1.838% UP  8  in basis point(s) yield from THURSDAY

JAPANESE BOND YIELD: +.048% DOWN 1   in basis point yield from THURSDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.472% UP 1  IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 1.912 UP 1 POINTS in basis point yield from THURSDAY

the Italian 10 yr bond yield is trading 43 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.420%  UP 1/3 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 1.1852 DOWN.0001 (Euro DOWN 1 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.27 DOWN 0.044(Yen UP 4 basis points/

Great Britain/USA 1.3381 UP 0.0001( POUND UP 1 BASIS POINTS)

USA/Canada 1.2748 UP  .0009 Canadian dollar DOWN 9 Basis points AS OIL ROSE TO $58.24

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN 1 to trade at 1.1852

The Yen FELL to 113.27 for a GAIN of 4 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 ROSE BY 1 basis points, trading at 1.3381/

The Canadian dollar FELL by 9 basis points to 1.2748/ WITH WTI OIL RISING TO : $58.24

The USA/Yuan closed AT 6.5773
the 10 yr Japanese bond yield closed at +.048% DOWN 1  IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 0   IN basis points from THURSDAY at 2.486% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.841  UP  1  in basis points on the day /

Your closing USA dollar index, 93.37 UP 9 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00

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

London: CLOSED DOWN 11.32 POINTS OR 0.15%
German Dax :CLOSED DOWN 36.95 POINTS OR 0.28%
Paris Cac CLOSED DOWN 21.25 POINTS OR 0.39%
Spain IBEX CLOSED DOWN 122.60 POINTS OR 1.19%

Italian MIB: CLOSED DOWN 31.10 POINTS OR 0.14%

The Dow closed DOWN 28,33 POINTS OR 0.11%

NASDAQ WAS  DOWN 5.40 Points OR 0.08% 4.00 PM EST

WTI Oil price; 58.24 1:00 pm;

Brent Oil: 64.95 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 58.54 DOWN 9/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 9 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO +.420% FOR THE 10 YR BOND 1.00 PM EST EST

END

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

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

WTI CRUDE OIL PRICE 4:30 PM:$58.30

BRENT: $65.01

USA 10 YR BOND YIELD: 2.481%   THE RAPID ASSENT IN YIELD IS VERY DANGEROUS/ANYTHING OVER 2.70% AND THE ENTIRE DERIVATIVES BLOW UP

USA 30 YR BOND YIELD: 2.8381%

EURO/USA DOLLAR CROSS: 1.1863 up .0011

USA/JAPANESE YEN:113.27 down 0.039

USA DOLLAR INDEX: 93.32 up 4 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3356 : down 20 POINTS FROM LAST NIGHT

Canadian dollar: 1.2716 UP 23 BASIS pts

German 10 yr bond yield at 5 pm: +0.420%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Bitcoin Bloodbaths Most In 4 Years As Stocks, Bond Yields, & Bullion Bounce

 

It was quite a week…

  • Dow, S&P up 5th week in a row
  • VIX up
  • Long Bond’s worst week since the election
  • HY Bond down 4th week in a row
  • Bitcoin’s worst week since Dec 2013
  • Gold’s best week in 2 months
  • Copper’s best 2 weeks since election

But cryptocurrencies made all the headlines this week…

With Bitcoin crashing 43% from its highs before stabilizing around $13,000…

And then spiking above $14,000 into the US equity cash close…

 

On the week, Gold gained 1.6%, Bitcoin dropped 28% (the first time that’s happened since the first week of September) and is the worst week for Bitcoin since Dec 2013

 

Arbs disappeared across the crypto space as volumes picked up in futures…

 

Futures were halted numerous times this week but as is clear there was a bid off the lows this afternoon as panic-sellers left the market…

Limit Down Halt in CME Futs today…

(NOTE – one-way street lower since CME opened its Bitcoin Futures)

 

Ethereum, Litecoin, and Bitcoin were lower but Ripple managed gains on the week… but not before flash-crashing to unch today…

 

As we transition to equity market-land, it is worth noting that the cyrpto carnage leaked over into several firms…

 

Stocks were higher on the week… but S&P, Dow, and Nasdaq were not very impressed with the greatest tax cut in the history of man…Trannies were best on the week…

 

While stocks were higher, so was VIX unusually…

 

Unsurprisingly, High-Tax companies outperformed Low-Tax companies on the week – back to cycle highs…

 

Financials ended the week higher but were a mess…

 

But it’s not all shits and giggles – there is serious professoinal selling pressure (Bloomberg’s SMART money flow index is seeing its worst month since June 2015 as the major indices are rotated to retail)…

 

And High Yield bond land is getting ugly again…

 

It was an ugly week for the long-end of the yield curve  – the worst yield increase since the election – but that rolled over as we suspect the record spec long squeeze was flushed…

 

The yield curve steepened most since the election… but the last two days saw the trend reverse…

 

The Dollar Index slipped lower on the week but was very rangebound…

 

Copper stood out in the commodity space (note the pre-open ramp every day) as PMs and Crude seemed to group-hug around a 1.5 to 2% gain…

 

As Bitcoin collapsed so a bid for that other ‘alternative currency’ – PMs – was very evident…

Hard data durable goods order falter in November as business spending drops

(courtesy zero hedge)

Durable Goods Orders Stumble In November – Business Spending Drops Most Since 2016

Headline durable goods orders rose 1.3% in November (prelim), missing expectations of a 2.0% rise, but core durable goods fell in the preliminary November print – the worst drop since April.

Perhaps even more concerning is the 0.1% drop in capital goods new orders ex-aircraft and parts – i.e. business spending – this is the equal weakest print in 2017.

(courtesy zerohedge_

Credit Card Debt Suddenly Surges 18% As U.S. Consumers “Pre-Spend” Tax Relief Savings

With Republicans in Washington D.C. on the verge of passing their first major piece of legislation in the form of comprehensive tax cuts that will allow Americans across the income spectrum to keep a little more of their hard earned cash in 2018, it appears as though eager U.S. consumers may have already “pre-spent” their savings on their credit cards.

As the folks at Gluskin Sheff point out, 13-week annualized credit card balances in the U.S. have gone completely vertical in the last few months of 2017 which should make for some great Christmas gifts for little Johnny and Susie…gifts that will undoubtedly find themselves tucked away in a dark closet, never to be seen again, by mid January.

Of course, as we pointed out earlier this month, the latest Fed data revealed that total consumer credit rose by 6.5% Y/Y, rising to $3.802 trillion as of Oct 31. That number is more than double the rate of increase of US GDP or wage growth, making it clear just where America’s “purchasing power” comes from.

Finally, this was also the single biggest monthly increase in consumer credit since November 2016.

And while nonrevolving credit reached a fresh record high of $2.791 trillion, revolving – or credit card debt – is now back well over a trillion dollars, or $1.011 trillion to be precise, and fast approaching the all time bubble high of $1.02 trillion hit in the summer of 2008.

So, what hot new Christmas gadget has Americans suddenly willing to max out their credit cards?  Well, if Google search trends are any clue, it might not be a gadget, or anything tangible for that matter, at all…

h/t @lisaabramowicz1

END

Personal income rose by a less than expected .3% but the consumer keeps on spending.  Thus the personal savings rate plunges to a 10 yr low

 

(courtesy zerohedge)

 

US Consumers Tap Out: Personal Savings Rate Plunges To 10 Year Low While Americans Splurge

The latest confirmation that the US consumer is now effectively tapped out came moments ago when the Dept of Commerce reported that in November, Personal Income rose by a lower than expected 0.3% (exp. 0.4%), while US consumers continued to splurge at an accelerated rate, with personal spending rising 0.6%, above the 0.5% expected, as Americans decided to splurge on holiday products and services.

A way of visualizing the historical change in income, spending – and savings – is the next chart below:

However, and speaking of savings, therein lay the rub, because as Americans splurged in November – and much of 2017 – the personal savings rate continued to decline, and in the latest month it tumbled from 3.2% to 2.9%, the lowest since November 2007, which as a reminder is one month before the recession started.

This incidentally explains the surge in credit card usages we noted last night. As a reminder, the 13-week annualized credit card balances in the U.S. have gone completely vertical in the last few months of 2017, a troubling sign and yet another confirmation that US household savings are almost gone, forcing Americans to resort to savings.

 

What is somewhat strange is that this collapse in savings took place even as US wage growth actually surprised to the upside, with wage growth rising at 4.5% Y/Y (private rose 4.8%, government 3.0%), more than core consumer spending (4.3%) for the first time since December 2015.

And yet, despite this favorable wage background, Americans were not only unable to save but saw collective savings decline by $41 billion in November to $426 billion.

At this rate the Fed will have to step in and bailout the plunge in bitcoin or else risk a complete collapse in holiday spending.

end

 

University of Michigan confidence disappoints badly (soft data)

 

(courtesy zerohedge)

UMich Confidence Disappoints As Bipartisan Divide Weighs On Hope

Hope is fading among Americans…

Consumer confidence continued to slowly sink in December, with most of the decline among lower income households.

Tax reform was spontaneously mentioned by 29% of all respondents, with a nearly equal split between positive and negative impacts on economic prospects.

As usual, party affiliation was the dominant correlate of people’s assessments of the tax legislation.

The long term outlook for the economy was most affected, with three-quarters of Republicans expecting a stronger economy and three-quarters of Democrats expecting a downturn.

end

 

Yet new home sales explode higher:  a 9 sigma gain

 

(courtesy zerohedge)

New Home Sales Explode Higher: Biggest Monthly Jump In 25 Years

Earlier we discussed that US personal savings tumbled to the lowest since 2007, and now we can also conclude that one of the things Americans splurged on last month was New Homes, because according to the Census on Friday morningnew home sales in November soared by a near record 109K to 733,000 from a downward revised 624,000 in October (from 685,000 previously).

On a year over year basis, new home sales soared by a whopping 26.6%:

This was not only a 9-sigma beat to consensus expectations of 655K…

… but it was the biggest monthly increase since January 1992 (that said, the previous 3 months were revised lower by 77,000.)

Broken down geographically, every single region saw an increase, although the biggest surge by far was in the West, where new home sales jumped by a whopping 31% M/M:

  • Northeast: 9.5%
  • Midwest: 6.9%
  • South: 14.9%
  • West: 31.1%

Some other observations:

  • Median new home price rose 1.2% y/y to $318,700; average selling price at $377,100
  • 15% of new homes sold in Nov. cost more than $500,000, down from 16% last month
  • New home sales on pace for 613k this year compared to a 2016 total of 561k
  • Houses for sale in Nov. unchanged at 283,000
  • Months’ supply at 4.6 in Nov. compared to 5.4 last month

Still, as the chart below shows, new home sales have a way to go before they catch up to where median new home prices suggest sales should be.

 

end

 

Tax bill signed into law

 

(courtesy zerohedge)

Trump Signs Tax Overhaul, Stopgap Spending Bills In First Major Legislative Victory

Update: as previewed moments ago, President Trump on Friday morning signed into law legislation funding the government through Jan. 19 and more importantly, the $1.4 trillion Tax Cut and Jobs Act, i.e. the Tax Reform bill, overhauling the U.S. tax code. Trump is now set to depart for Florida.

The bill’s signing ends the president’s first year in office on a high note. As the Hill adds, the president has had some other successes as well, in areas such as rolling back regulations and getting a new Supreme Court Justice, Neil Gorsuch, confirmed. But Republicans were unable to repeal and replace ObamaCare, and the headlines over the past year have also at times been dominated by the Russia election meddling investigations and palace intrigue stories about disagreements among Trump’s staff.

Trump publicly made efforts to try to get Democrats to vote for the measure as well — particularly senators facing 2018 reelection bids in states the president carried in 2016. But while the president gave speeches on the tax plan in states with vulnerable Democratic senators such as Missouri, North Dakota, Indiana and Pennsylvania, no Democrat in either chamber of Congress ultimately backed the package.

Democrats have focused on the fact that some taxpayers would get tax increases and have argued that the largest benefits will go to wealthy people like the president. They think attacking Republicans on the plan will help them in the midterms since polls show the measure is unpopular with the public.

 

But Republicans are brushing off the polls, arguing that public opinion will change in February when people start to see higher take-home pay. They argue that the bill will be a winner because it will boost job creation, wages and the economy.

The irony will be if the tax bill – slammed by Democrats – actually ends up being popular and succeeds in reducing prevailing tax rates. Such an outcome would result in an even greater lock on Congress by the GOP after the 2018 midterm elections, forcing the Democrats to truly scramble what Russian collusion scandal they will trot out next.

* * *

After days of speculation over whether Trump would sign his new tax reform bill this year or wait until January to avoid certain spending cuts (something we covered here), Trump has just announced that the tax bill, along with the missile defense bill, will be signed in the Oval Office later today before he heads off to Mar-A-Lago for Christmas.

“Will be signing the biggest ever Tax Cut and Reform Bill in 30 minutes in Oval Office. Will also be signing a much needed 4 billion dollar missile defense bill.”

Will be signing the biggest ever Tax Cut and Reform Bill in 30 minutes in Oval Office. Will also be signing a much needed 4 billion dollar missile defense bill.

Oddly, at least for Trump, the bill signing will be conducted in private rather than as part of a massive media event.

Per senior administration official @POTUS will sign  bill before departing WH for Mar-a-Lago this morning. Am advised signing will be private. WH event to celebrate slated for Jan. 3

And just like that, the White House just delivered a $1,000 Christmas bonus to AT&T employees around the country…something that we’re almost certain will result in another Trump tweet at some point today.

SWAMP

 

Congress demands that the Dept of Justice turn over evidence related to a Obama Hezbollah drug trafficking scheme in order to secure the awful Iran deal struck with the west last year.

 

(courtesy zerohedge)

 

 

Congress Demands DOJ Turn Over Evidence Related To Obama-Hezbollah Drug Trafficking

Congress has demanded that the Department of Justice turn over all documents related to a disturbing report from POLITICO that the Obama administration quashed a massive DEA investigation into a $200 million per month drug trafficking and money laundering scheme on U.S. soil which was directly funding Hezbollah’s various terror campaigns around the world. 


Add this to the long list of concessions the Obama administration made in pursuit of the nuclear agreement with Iran,” said the source, who was not authorized to speak on the record about the matter. “The difference here is that this wasn’t just bad policy—it was potentially criminalCongress absolutely has a responsibility to get to the bottom of this.

The letter follows a commitment made by congressional leaders to open an investigation into the explosive claims of what is being described as a “potentially criminal” enterprise described to the Free Beacon by a congressional source as an offshoot of Obama’s nuclear agreement with Iran which saw $1.7 billion dollars of euros, Swiss francs and other currencies shipped directly to Tehran on wooden pallets.

In early 2016, French police smashed a Hezbollah cell accused of trafficking cocaine for one of the world’s most ruthless drug cartels in order to fund the militant group’s operations in Syria. The Telegraph reported at the time:

The agents, arrested in France, allegedly masterminded a massive global drug ring which raised millions of dollars to arm Hizbollah gunmen fighting for Bashar al-Assad, the Syrian president, in Syria. Two years ago, one of the outfit’s sicarios, or hitmen, was arrested in Spain on suspicion of having ordered up to 400 murders worldwide. The Hizbollah agents detained by French police include alleged leaders of the group’s European cell, including 45-year-old businessman Mohamad Noureddine. The DEA, which has classified him as a “specially-designated global terrorist”, accuses him of being a Lebanese money launderer for Hizbollah’s financial arm.

 

A DEA statement said: “These proceeds are used to purchase weapons for Hizbollah for its activities in Syria. This ongoing investigation…once again highlights the dangerous global nexus between drug trafficking and terrorism.”

Despite the active and ongoing DEA investigations into Hezbollah’s global operations, the Obama administration “threw an increasingly insurmountable series of roadblocks in its way” according to Politico.

In a Thursday letter from Reps. Jim Jordan (R-OH) and Ron DeSantis (R-FL) and obtained by the Washington Free Beacon, Congress demanded all communications and documents related to the DEA’s “Project Cassandra” campaign which targeted “a global Hizbollah network responsible for the movement of large quantities of cocaine in the United States and Europe,” along with information on operations “Titan” and “Perseus,” as well as the Lebanese Canadian Bank, The Iran-Hezbollah Super Facilitator Initiative, and several named individuals.

Also sought are “all documents and communications referring or relating to the potential designation of Hezbollah as a Transnational Criminal Organization,” along with “all documents referring or relating to efforts to prosecute targets related to Hezbolah” via the RICO act.

We have a responsibility to evaluate whether these allegations are true, and if so, did the administration undermine U.S. law enforcement and compromise U.S. national security,” the lawmakers wrote to Attorney General Jeff Sessions Sessions.

As the Free Beacon reported yesterday:

U.S. drug enforcement agents who spoke to Politico about the matter accused the Obama administration of intentionally derailing an investigation into Hezbollah’s drug trafficking and money laundering efforts that began in 2008 under the Bush administration.

 

The investigation centered on Hezbollah and Iranian-backed militants who allegedly participated in the illicit drug network, which was subject to U.S. wiretaps and undercover operations.

 

Hezbollah is believed to have been laundering at least $200 million a month just in the United States, according to the report.

 

When U.S. authorities were ready to make the case against Hezbollah’s most senior leadership, Obama administration officials allegedly “threw an increasingly insurmountable series of roadblocks in its way,” according inside sources who spoke to Politico about the situation

 

The Obama-led effort to block the investigation was “a policy decision, it was a systematic decision,” one source said. “They serially ripped apart this entire effort that was very well supported and resourced, and it was done from the top down.”

As we reported yesterday, Representative Peter Roskam (R-IL), a chief national security voice in the House who fought against the nuclear accord, mimicked the views of DeSantis saying that Congress must investigate the Obama administration’s actions and work to increase pressure on Hezbollah.

The report alleging the Obama Administration turned a blind eye and allowed Hezbollah to pump drugs into the United States to fund its terror campaigns in the Middle East is not surprising,” Roskam said. “Hampering the DEA’s investigation of Hezbollah would be emblematic of the previous administration’s fixation to strike a nuclear accord with Iran at any costs.

 

“This blind eye imperiled our efforts to combat Iran and its proxies’ malign behavior and left us with a cash-flush Iran on the warpath across the Middle East with a nuclear program legitimized by the JCPOA,” Roskam said, using the acronym for the nuclear deal’s official name, the Joint Comprehensive Plan of Action. “Congress needs to investigate this report and do what the Obama Administration refused to do, severely increase pressure on Hezbollah and hold the terrorist group, and its benefactor Iran, accountable for their crimes.”

Congress is especially interested to learn whether key Obama Administration officials, such as National Security Council staffer Ben Rhodes, were involved in quashing the DEA investigation in an effort to preserve diplomatic relations with Iran surrounding the nuclear deal. U.S. DEA agents who spoke to POLITICO accused the Obama administration into derailing an investigation launched during the Bush administration into drug trafficking and money laundering by Hezbollah. The derailed DEA investigation centered on Hezbollah and Iranian-backed militants, which used wiretaps and undercover operations to gather evidence.
END
The FBI fires the leaker James Baker.  Baker is an ally of James Baker
(courtesy zerohedge)

FBI Fires Suspected Leaker And Comey Ally James Baker

Just hours after FBI Deputy Director Andrew McCabe delivered private testimony to the House Intelligence Committee, his boss, FBI Director Christopher Wray, announced that the bureau’s top lawyer would be leaving his post, an attempt to bring in “new blood” to an agency whose reputation has been hopelessly compromised by revelations that agents’ partisan bias may have influenced two high-profile investigations involving President Donald Trump and his former campaign rival, former Secretary of State Hillary Clinton.

As the Washington Post reported, the FBI’s top lawyer, James Baker, is being reassignedWaPo says Baker’s removal is part of Wray’s effort to assemble his own team of senior advisers while he tries to defuse allegations of partisanship that have plagued the bureau in recent months.

James Baker

But reports published over the summer said Baker was “the top suspect” in an interagency leak investigation, as we reported back in July

Three sources, with knowledge of the investigation, told Circa that Baker is the top suspect in an ongoing leak investigation, but Circa has not been able to confirm the details of what national security information or material was allegedly leaked.

 

A federal law enforcement official with knowledge of ongoing internal investigations in the bureau told Circa, “the bureau is scouring for leakers and there’s been a lot of investigations.”

 

The revelation comes as the Trump administration has ramped up efforts to contain leaks both within the White House and within its own national security apparatus.

The news of the staff shakeup comes as Trump and his political allies have promised to “rebuild” the FBI to make it “bigger and better than ever” following its “disgraceful” conduct over the Trump probe. Baker played a key role in the agency’s handling of major cases and policy debates in recent years, including the FBI’s unsuccessful battle with Apple over the growing use of encryption in cellphones.

ABC Breaking News | Latest News Videos

Wray has, of course, resisted Congress’s push to learn more about senior agent Peter Strzok, who was a key player in both the Clinton investigation and the Trump probe. Strzok was exposed last month for exchanging anti-Trump texts with FBI attorney Lisa Page, with whom he was having an affair. Strzok played important roles with both investigations. Later, it was revealed that his edits to Clinton’s exoneration letter went further than had been previously disclosed.

According to WaPoBaker told colleagues he will be taking on other duties at the FBI. Unsurprisingly, the Jeff Bezos-owned paper describes Baker as “one of the most trusted, longest-serving national security officials in the US. He has served as the head of the FBI’s Office of General Counsel for several years.”

Of course, WaPo says Baker’s reassignment has nothing to do with the leak investigation, which ended without any publicly disclosed findings. It’s also unclear what, exactly, Baker was suspected of leaking.

Baker is reportedly a very close to former FBI director James B. Comey, who asked Baker to be his general counsel. The two men were colleagues at the Justice Department and when they were out of government at Bridgewater Associates, an investment management firm.

It’s notable that Baker’s departure comes six months after the leaking scandal, and just days after AG Jeff Sessions reportedly asked DOJ prosecutors to begin asking FBI agents about the details of the Uranium One investigation. A sign that the bureau is finally moving to address concerns expressed by Republican lawmakers about bias that may have favored Clinton.

Baker’s head is the third to roll in the “housecleaning” that saw the FBI sanction Strzok and Bruce Ohr, a senior DOJ official who reportedly concealed his wife’s ties to opposition research firm Fusion GPS – the firm that supervised the creation of the infamous “Trump dossier.”

It was also revealed recently that Baker’s name is on a list of DOJ officials who are expected to receive a subpoena to testify before the House Intelligence Committee. Strzok and Ohr’s names are also on that list.

If that’s any indication of what’s to come, we doubt this will be the last time we hear Baker’s name.

I will see you TUESSDAY night

THROUGHOUT THE HOLIDAYS AND THE FIRST WEEK OF THE NEW YEAR,  I WILL BE VERY SPORADIC IN MY COMMENTARIES

I WILL AT LEAST PROVIDE FOR YOU THE COMEX DATA AS I FEEL THAT IS ESSENTIAL

HARVEY

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