Feb 14/Valentine’s day/GOLD ROCKETS NORTHBOUND BY $27.40 TO $1355/40/SILVER UP BY 35 CENTS TO $16.92/USA 10 YR YIELD UP TO 2.915%/THE 30 YR BOND YIELD: 3.17%/USA/YEN CRASHES TO 106.98/DOW RISES BY OVER 200 POINTS SAVED BY HUGE DOWNDRAFT OF VIX/CORE INFLATION RISES/RETAIL SALES PLUMMET/

 

 

GOLD: $1355.40 UP $27.40

Silver: $16.92 UP 35 cents

Closing access prices:

Gold $1350.60

silver: $16.86

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: $1338.48 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1334.60

PREMIUM FIRST FIX: $3.78

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SECOND SHANGHAI GOLD FIX: $1332.29

NY GOLD PRICE AT THE EXACT SAME TIME: $1333.50

discount of Shanghai 2nd fix/NY:$1.20

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LONDON FIRST GOLD FIX: 5:30 am est $1330.75

NY PRICING AT THE EXACT SAME TIME: $1331.00

LONDON SECOND GOLD FIX 10 AM: $1336.25

NY PRICING AT THE EXACT SAME TIME. $1333.80 ???

For comex gold:

FEBRUARY/

NUMBER OF NOTICES FILED TODAY FOR FEBRUARY CONTRACT: 0 NOTICE(S) FOR NIL OZ.

TOTAL NOTICES SO FAR:1783 FOR 178300 OZ (5.458 TONNES),

For silver:

FEBRUARY

3 NOTICE(S) FILED TODAY FOR

15,000 OZ/

Total number of notices filed so far this month: 307 for 1,535,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $9168/OFFER $9240: DOWN $682(morning)

Bitcoin: BID/ $9208/offer $9277: up $724  (CLOSING/5 PM)

end

There are 4 tools used by the manipulators to raise stock prices while knocking down gold and silver:

  1. increasing the value of the USA dollar index
  2.  shorting yen  (buying usa/yen) which is your carry trade ie. buy stocks, short yen gold
  3.  hammer vix (the volatility index) which states that everything is OK. ie. short volatility and gold buy stocks
  4.  contain the 10 yr USA treasury yield below 2.80%

we are beginning to see fractures in all of them.  today it was the yen that rose and that drove gold/silver higher.

Let us have a look at the data for today\

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In silver, the total open interest FELL BY A FAIR SIZED 1455 contracts from 195,511  FALLING TO 194,056 WITH  YESTERDAY’S TINY  3 CENT LOSS IN SILVER PRICING.  WE  HAD MINIMAL COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  2724 EFP’S FOR MARCH AND AND 143 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 2867 CONTRACTS.  WITH THE TRANSFER OF 2867 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. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. THE 2867 CONTRACTS TRANSLATES INTO 14,33 MILLION OZ DESPITE  WITH THE CONTINUAL DROP IN OPEN INTEREST IN SILVER AT THE COMEX.

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

35,121 CONTRACTS (FOR 11 TRADING DAYS TOTAL 35,121 CONTRACTS OR 175.605 MILLION OZ: AVERAGE PER DAY: 3192 CONTRACTS OR 15.964 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  175.6 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 25.14% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  423.94 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

RESULT: A FAIR SIZED LOSS IN OI SILVER COMEX WITH THE TINY  3 CENT GAIN IN SILVER PRICE.  WE HOWEVER HAD A GOOD SIZED EFP ISSUANCE OF 2867 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER . FROM THE CME DATA 2867 EFP’S  FOR  MONTHS MARCH AND MAY WERE ISSUED FOR TODAY  FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE GAINED  1412 OI CONTRACTS i.e. 2867 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 1455  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE TINY FALL IN PRICE OF SILVER OF  3 CENTS AND A CLOSING PRICE OF $16.57 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A FAIR AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.974 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 3 NOTICE(S) FOR 15,000 OZ OF SILVER

In gold, the open interest  ROSE BY A HEALTHY 1595 CONTRACTS UP TO 511,745 WITH THE FAIR SIZED RISE IN PRICE OF GOLD WITH YESTERDAY’S TRADING ($3.40). HOWEVER, IN ANOTHER DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR TODAY AND IT TOTALED A HUGE SIZED  6481 CONTRACTS OF WHICH  APRIL SAW THE ISSUANCE OF 6481 CONTRACTS AND  JUNE SAW THE ISSUANCE OF 0 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.    The new OI for the gold complex rests at 511,745. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR FEBRUARY COMEX. 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 (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE TODAY DESPITE YESTERDAY’S TRADING IN GOLD,  WE HAVE A GAIN OF 8076  CONTRACTS: 1595 OI CONTRACTS INCREASED AT THE COMEX AND A HUGE SIZED  6481 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.(8076 oi gain in CONTRACTS EQUATES TO 25.11 TONNES)

YESTERDAY, WE HAD 3381 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEBRUARY STARTING WITH FIRST DAY NOTICE: 108,758 CONTRACTS OR 10,875,800  OZ OR 338.28 TONNES (11 TRADING DAYS AND THUS AVERAGING: 9,887 EFP CONTRACTS PER TRADING DAY OR 988,700 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 11 TRADING DAYS: IN  TONNES: 338.3 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2200 TONNES

THUS EFP TRANSFERS REPRESENTS 338.30/2200 x 100% TONNES =  15/37% OF GLOBAL ANNUAL PRODUCTION SO FAR IN FEBRUARY ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  971.78 TONNES

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22  TONNES

Result: A  FAIR SIZED INCREASE IN OI AT THE COMEX WITH THE FAIR SIZED GAIN IN PRICE IN GOLD TRADING YESTERDAY ($3.40). IT IS WITHOUT A DOUBT THAT MANY OF THE DEPARTED COMEX LONGS  RECEIVED THEIR PRIVATE EFP CONTRACT  FOR EITHER  APRIL OR JUNE. HOWEVER, WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6481 AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE 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 6481 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 8076 contractON THE TWO EXCHANGES:

6481 CONTRACTS MOVE TO LONDON AND  1595 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 25.11 TONNES).

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

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

GLD

WITH GOLD UP $27.40 TODAY, THE CROOKS DECIDED THAT IT WAS BETTER TO ADD TO INVENTORY/A DEPOSIT OF 2.95 TONNES

Inventory rests tonight: 823.66 tonnes.

SLV/ 

NO CHANGES IN SILVER INVENTORY AT THE SLV/ AGAIN WITH TODAY’S HUGE RISE IN SILVER PRICE:   NO CHANGE IN INVENTORY

/INVENTORY RESTS AT 314.045 MILLION OZ/

can someone please explain why GLD behaves differently to SLV????

end

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

1. Today, we had the open interest in silver FELL BY A FAIR 1455  contracts from 195,511 DOWN TO 194,056 (AND now A LITTLE FURTHER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE  THE TINY SIZED FALL  IN PRICE OF SILVER  (3 CENTS WITH RESPECT TO  YESTERDAY’S TRADING).   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 2724 PRIVATE EFP’S FOR MARCH AND 143 EFP CONTRACTS OR MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS .  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD SOME COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI LOSS AT THE COMEX OF  1455 CONTRACTS TO THE 2867 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A GAIN OF  1442  OPEN INTEREST CONTRACTS .  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NET GAIN TODAY IN OZ ON THE TWO EXCHANGES:  7.06 MILLION OZ!!!

RESULT: A FAIR SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE SMALL SIZED FALL OF 3 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING ). BUT WE ALSO HAD ANOTHER GOOD 2867 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR FEBRUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 14.20 points or 0.45% /Hang Sang CLOSED UP 676.07 or 2.27% / The Nikkei closed DOWN 90.51 POINTS OR .43%/Australia’s all ordinaires CLOSED DOWN 0.28%/Chinese yuan (ONSHORE) closed DOWN at 6.3444/Oil DOWN to 58.79 dollars per barrel for WTI and 62.55 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN  .   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.3444. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.3331//ONSHORE YUAN A LITTLE STRONGER AGAINST THE DOLLAR/OFF SHORE A LOT STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS A LITTLE STRONGER AGAINST ALL MAJOR CURRENCIES EXCEPT  CHINA YUAN.  CHINA IS  HAPPY TODAY STRONGER MARKETS IN CHINA 

 

 

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

 i)North Korea

b) REPORT ON JAPAN

Early this morning:

 

As I have outlined for you in the front of my commentary, one of the 4 vehicles used by the crooks for manipulation is the USA/Yen cross.  They borrow yen and buy the stock markets.  Since the yen costs them zero, it seems like a good deal for the crooks as they seek a positive yield gain.  However this is now beginning to haunt them as the USA/Yen cross plunges to almost 107 flat.

 

( zerohedge)

3 c CHINA

i)China begins to shot it’s muscle as they are seeking to replace the USA as the dominant player in the world

( zerohedge)

ii)this is going to get China quite angry: the uSA slaps a huge anti dumping duty on cast iron soil pipe fittings
( zerohedge)

4. EUROPEAN AFFAIRS

Exactly what planet is Macron on?  Reforming Islam?  in France?

( Kern/Gatestone Institute)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

This will be deadly to the USA dollar as Russia is now ready to turn off the SWIFT button.  SWIFT is the way that currency is wired across the globe.  Russia has its own system being developed.  This would mean less demand for dollars and eventually there will be no home for those dollars except the uSA and that is when they will experience huge inflation

( zerohedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

i)Is history repeating itself as the higher price of oil has caused a huge production increase in shale which in turn has caused a huge glut of oil on the market

( Nick Cunningham/OilPrice.com)

ii)Both crude and gasoline rise after a smaller than expected crude build but still we have record high production levels
( zerohedge)

8. EMERGING MARKET

i)VENEZUELA

 

Thousands of Venezuelans are seeking food across the bridge in Columbia

( Mac Salvo/SHFTPlan.com)

ii)SOUTH AFRICA

 Zuma finally resigns
( zerohedge)

 

9. PHYSICAL MARKETS

i)Craig Hemke has been banging the table as I.  He is referring to the huge USA deficits which will cause the 10 yr rate to rise and that will bring havoc to investors on the stock market as valuations falter as well as derivative losses

 

a must read..

( Craig Hemke/GATA/Chris Powell)

ii)What took them so long:  Idaho votes not to tax income form gold and silver gains

( Yngelmo/KXLY TV/Spokane Washington

iii)No wonder the BIS is scared:  they are afraid of currency competition.  The BIS chief fears a “systemic threat” from Bitcoin and urges action on all fronts by central authorities.  The BIS is the central bank for central banks and they have been very active in gold swaps as this entity tries to contain the price of gold.

( zerohedge)

iv)South Korea back tracks on Crypto ban and that causes our Bitcoin to rise above 9000.00 per coin
( zerohedge)
v)

We now learn that after China has been high grading their gold deposits for the past ten years, this is now haunting them as their production is now down to 426 tonnes per year and we expect that to fall again in 2018.  Interesting enough Russia has gained over 6% to 307 tonnes and are now in second place, behind China with Australia No 3
(courtesy Lawrie Williams/Sharp’s Pixley)

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

i)EARLY THIS MORNING:  Everything is hotter on the inflation front than expected/sends the 10 yr higher stocks tumble.( zerohedge)

ib  USA 10 yr yields enter the death zone;

(courtesy zerohedge)

 

ic) As the long term rate rises, this causes mortgage applications to tumble .

(courtesy zerohedge)

ii)Then the worst of all worlds:  retail sales tumble just as inflation is spiking and thus stagflation/Dow Jones tumbles

( zerohedge)

 

iii)This is not what the Fed wants to see: a big drop in wage growth and a big adjustment downward in hourly earnings (as we promised would happen).  The Fed needs wage growth or their “2 % inflation story” will begin to haunt them.

( zerohedge)

 

iv)The Bipartisan Senate group has reached a DACA deal but Trump will not like it: no funding for his wall

( zerohedge)

v)You will recall yesterday,  I highlighted the 4 key manipulating tools used by bankers.  Today 3 bears discuss 3 out of those 4 points.

in case you missed yesterday’s commentary here are the 4 key tolls used by manipulators (bankers)

There are 4 tools used by the manipulators to raise stock prices while knocking down gold and silver:

  1. increasing the value of the USA dollar index (and then buying stocks with proceeds)
  2.  shorting yen  (buying usa/yen) which is your carry trade ie. buy stocks, short yen gold
  3.  hammer vix (the volatility index) which states that everything is OK. ie. short volatility and gold buy stocks
  4.  contain the 10 yr USA treasury yield below 2.80%

we are beginning to see fractures in all of them.  today it was the yen that rose and that drove gold/silver higher.

( Albert Edwards)

 

vi)Late this afternoon, Fannie Mae needs another taxpayer bailout after suffering continual losses

(Washington’s Daily Caller/Donachie)

special thanks to Robert H for sending this down for us;

 

vii)SWAMP STORIES

a)I brought this to your attention and it is most important.  It seems this is a CYA email by Rice as she states that the investigation into the Trump campaign must be done by the book and we now know that this was opposite as to what happened.  Grassley has sent a letter to her asking questions as to why she wrote the email.

grab your popcorn on this one

( zerohedge)

 

b)Senior White House aids are stating that Kelly pressured them to lie for him

( zerohedge)

 

c)It looks like the days for White House Chief of Staff are numbered as the Oversight Committee launches an investigation as to how Kelly withheld knowledge of spousal abuse on Sec. Rob Porter as Trey Gowdy has sent a letter as to how he was allowed to work without an interim security clearance

( zerohedge)

 

d)It now looks like the White House will back Kelly

(courtesy zerohedge)

 

e)This ought to be good:  Buzzfeed is suing the Democratic National Committee for the report on the hacking of their computers.  The reason is that Buzzfeed is being sued by Russian oligarch Gubarev who was falsely named in the Steele Dossier. Good luck to Buzzfeed as they are trying to verify stuff in that dossier

( zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY A GOOD 1595 CONTRACTS UP to an OI level 511,745  WITH THE FAIR SIZED RISE IN THE PRICE OF GOLD ($3.40 GAIN WITH RESPECT TO YESTERDAY’S TRADING).   WE HAD ZERO COMEX GOLD LIQUIDATION.  HOWEVER THE CME REPORTS THAT  THE BANKERS ISSUED ANOTHER STRONG COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. WE HAD A STRONG SIZED 6481 EFP’S ISSUED FOR APRIL  AND 0 EFP’s  FOR JUNE AND ZERO FOR ALL OTHER MONTHS:  TOTAL  6481 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON FORWARD… THE COMEX IS NOW AN ABSOLUTE FRAUD!!

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 8076 OI CONTRACTS IN THAT 6481 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 1595 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 8076 contracts OR 807,600  OZ OR 25.11 TONNES.

Result: A  GOOD SIZED INCREASE IN COMEX OPEN INTEREST WITH THE  FAIR SIZED GAIN IN YESTERDAY’S GOLD TRADING ($3.40.) WE HAD ZERO COMEX GOLD LIQUIDATION.  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 8076 OI CONTRACTS..

We have now entered the active contract month of FEBRUARY where we lost 1 contracts to 1147 contracts.  We had 0 notices filed upon yesterday, so we LOST 1 contract or an additional 100 oz will NOT  stand in this active contract month of February

March saw a GAIN of 45 contracts UP to 2116.  April saw a GAIN of 950 contracts UP to 351,848.  MARCH BECOMES THE FRONT MONTH FOR GOLD

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

 

 PRELIMINARY COMEX VOLUME FOR TODAY: 213,333 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY:  225,042 CONTRACTS

comex gold volumes are RISING AGAIN

Here is a summary of the latest gold trading volumes at the Comex per year

certainly the introduction of EFP’s has certainly had an effect:

Trading Volumes on the COMEX

Meanwhile, gold-trading volumes on the COMEX have never been higher:

end

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And now for the wild silver comex results.

Total silver OI FELL  BY A FAIR SIZED 1455  CONTRACTS FROM 195,511 DOWN TO  194,056 WITH YESTERDAY’S SMALL SIZED 3 CENT FALL IN TRADING).   HOWEVER,WE WERE ALSO INFORMED THAT WE HAD ANOTHER FAIR SIZED 2724 EMERGENCY EFP’S FOR MARCH ISSUED BY OUR BANKERS (WITH 143 EFP CONTRACTS FOR MAY AND ZERO FOR ALL OTHER MONTHS) TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON: THE TOTAL EFP’S ISSUED: 2867.   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 AS WE HAVE JUST SEEN IN GOLD TODAY. THIS PROCESS HAS JUST BEGUN IN EARNEST IN SILVER STARTING IN SEPTEMBER 2017. HOWEVER, IN GOLD, WE HAVE BEEN WITNESSING THIS FOR THE PAST 2 YEARS. NICK LAIRD WAS KIND ENOUGH TO SUPPLY US THE TOTAL FOR 2017 GOLD EFP’S AND IT WAS 6600 TONNES FOR THE ENTIRE YEAR.  WE OBVIOUSLY HAD CONSIDERABLE LONG COMEX SILVER LIQUIDATION BUT A GOOD SIZED GAIN IN TOTAL SILVER OI. WE ARE ALSO WITNESSING A FAIR AMOUNT OF SILVER OUNCES STANDING FOR COMEX METAL IN THIS NON ACTIVE JANUARY 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.  ON A NET BASIS WE GAINED 1412  SILVER OPEN INTEREST CONTRACTS:

1455 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 2867 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN TWO EXCHANGES: 1412 CONTRACTS 

We are now in the poor non active delivery month of FEBRUARY and here the front month LOST 86 contracts DOWN TO  56 contracts.  We had 89 notices filed upon yesterday so we GAINED 3 contracts or 15,000 ADDITIONAL oz will stand for delivery at the comex

The March contract lost 4191 contracts DOWN to 88,272

April LOST 3 contracts DOWN to 96 .

.

We had 3 notice(s) filed for 15,000 OZ for the FEBRUARY 2018 contract for silver

INITIAL standings for FEBRUARY

Feb 14/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 17,179.105 oz
Brinks
HSBC
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz
 100.06 oz
Delaware
No of oz served (contracts) today
0 notice(s)
 NIL OZ
No of oz to be served (notices)
1147 contracts
(114,700 oz)
Total monthly oz gold served (contracts) so far this month
1783 notices
178300 oz
5.5458 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
we had 0 kilobar transaction/
We had 0 inventory movement at the dealer accounts
total inventory deposit into the dealer accounts:  nil oz
we had 2 withdrawals out of the customer account:
i) out of HSBC: 16,954.048 oz
iv) Out of Brinks: 225.057 oz
total withdrawal: 17,179.105  oz
we had 1 customer deposit
 i) Into Delaware: 100.06 oz
total customer deposits: 100.06 oz  oz
we had 1 adjustment
i) Out of HSBC:  we had 14,214.493 oz adjusted out of the customer account and this landed into the dealer account of HSBC
total registered or dealer gold:  402m632,052 oz or 12.52 tonnes
total registered and eligible (customer) gold;   9,108,277.178 oz 283.30 tones

For FEBRUARY:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the INITIAL total number of gold ounces standing for the FEBRUARY. contract month, we take the total number of notices filed so far for the month (1783) x 100 oz or 178,300 oz, to which we add the difference between the open interest for the front month of FEB. (1147 contracts) minus the number of notices served upon today (0 x 100 oz per contract) equals 293,000 oz, the number of ounces standing in this active month of FEBRUARY

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

No of notices served (1783 x 100 oz or ounces + {(1147)OI for the front month minus the number of notices served upon today (0 x 100 oz )which equals 293,000 oz standing in this active delivery month of February (9.113 tonnes). THERE IS 12.08 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE LOST 1 CONTRACT OR AN ADDITIONAL 100 OZ WILL NOT STAND IN THIS ACTIVE DELIVERY MONTH OF FEBRUARY.

THE COMEX IS NOW UNDER STRESS AS THE REGISTERED GOLD FALLS BELOW 13 TONNES AS WELL AS HUGE NUMBER OF TONNES LEAVING THE CUSTOMER ACCOUNT

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

IN THE LAST 17 MONTHS 71 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

FEBRUARY FINAL standings

feb 14 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 65,079.95 oz
Malca
CNT
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
 1,204,605.800 oz
 JPM
No of oz served today (contracts)
3
CONTRACT(S
(445,000 OZ)
No of oz to be served (notices)
53 contracts
(265,000 oz)
Total monthly oz silver served (contracts) 307 contracts

(1,535,000 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

we had zero inventory movement at the dealer side of things

 

total inventory movement dealer: nil oz

we had 1 inventory deposits into the customer account

i) into J.P.MORGAN:1,204,605.800 oz  ***

 

total inventory deposits: 1,204,605.800 oz

*** JPMorgan is continually adding to its inventory almost every single day.

JPMorgan now has 132 million oz of  total silver inventory or 52% of all official comex silver.

we had 2 withdrawals from the customer account;

 

ii) Out of CNT: 40,263.310

iii) Out of Malca: 24,816.640 oz

total withdrawals;  65,079.95  oz

we had 0 adjustment

total dealer silver:  43.827 million

total dealer + customer silver:  252.730 million oz

The total number of notices filed today for the FEBRUARY. contract month is represented by 3 contract(s) FOR 15,000 oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at 307 x 5,000 oz = 1,535,000 oz to which we add the difference between the open interest for the front month of FEB. (56) and the number of notices served upon today (3 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the FEB contract month: 307(notices served so far)x 5000 oz + OI for front month of FEBRUARY(56) -number of notices served upon today (3)x 5000 oz equals 1,800,000 oz of silver standing for the FEBRUARY contract month. 

WE GAINED 3 CONTRACTS OR AN ADDITIONAL 15,000 OZ WILL  STAND AT THE COMEX

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 109,910 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 90,215 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 90,215 CONTRACTS EQUATES TO  451 MILLION OZ OR 64.4% 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.

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 

1. Sprott silver fund (PSLV): NAV RISES TO -1.83% (FEB 14/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.48% to NAV (FEB 14/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -1.83%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.48%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA): NAV FALLS TO -3.75%: NAV 13.96/TRADING 13.44//DISCOUNT 3.75%

END

And now the Gold inventory at the GLD/

Feb 14/AN ADDITIONAL OF 2.95 TONNES OF GOLD INTO GLD WITH THE HUGE GAIN OF 27.40 IN PRICE/INVENTORY RESTS AT 823.66 TONNES

Feb 13/WITH GOLD UP $3.40 WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 820.71 TONNES

Feb 12/STRANGE!!WITH GOLD RISING BY 12.00 DOLLARS, THE CROOKS DECIDED AGAIN TO WITHDRAW 5.6 TONNES OF GOLD FOR EMERGENCY USE ELSEWHERE/INVENTORY RESTS AT 820.71 TONNES

Feb 9/AGAIN WITH HUGE TURMOIL ON THE MARKETS, THE CROOKS WITHDREW 2 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 826.31 TONNES

Feb 8/DESPITE THE GOOD GAIN IN PRICE FOR GOLD TODAY/THE CROOKS REMOVED .96 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 828.31 TONNES

FEB 7/AN UNBELIEVABLE 12.08 TONNES WAS REMOVED BY THE CROOKED BANKERS AND THIS GOLD WAS USED IN THE ASSAULT THESE PAST FEW DAYS/INVENTORY RESTS AT 829.27 TONNES

Feb 6/AGAIN VERY STRANGE: WITH TODAY’S TURMOIL, THE CROOKS DID NOT ADD ANY GOLD INVENTORY INTO THE GLD/INVENTORY REMAINS AT 841.35 TONNES

Feb 5  Strange,with all of today’s turmoil, the crooks at the GLD decided to add zero ounces into GLD inventory/inventory rests at 841.35 tonnes

Feb 2/no change in gold inventory at the GLD/Inventory rests at 841.35 tonnes

Feb 1/with gold up by $8.00/the crooks decided not to add any new physical gold metal into the GLD./inventory rests at 841.35 tonnes

Jan 31/with gold up $3.15 today, GLD shed another 5.32 tonnes of gold from its inventory/inventory rests at 841.35 tonnes

jan 30/with gold down by $4.85/GLD shed another 1.47 tonnes of gold from its inventory/inventory rests at 846.67 tonnes

JAN 29/with gold down $11.25, the GLD shed 1.18 tonnes of gold/inventory rests at 848.14 tonnes

jan 26/2018/no changes in gold inventory at the GLD/inventory rests at 849.32 tonnes

jan 25/no changes in gold inventory at the GLD/inventory rests at 849.32 tonnes

Jan 24/A HUGE DEPOSIT OF 2.65 TONNES OF GOLD INTO GLD/INVENTORY RESTS AT 849.32 TONNES

Jan 23/NO CHANGE IN GOLD INVENTORY DESPITE GOLD’S RISE/INVENTORY RESTS AT 846.67 TONNES

Jan 22/a huge deposit of 5.71 tonnes of gold despite a drop in price/inventory rests at 846.67 tonnes. In 3 trading days, the GLD has added 17.71 tonnes/the bankers are now in trouble!!

Jan 19/no change in gold inventory at the GLD/Inventory rests at 840.76 tonnes

Jan 18/SHOCKINGLY A HUGE DEPOSIT OF 11.80 TONNES WITH GOLD DOWN ALMOST $12.00/INVENTORY RESTS AT 840.76

Jan 17/no changes in gold inventory at the GLD/inventory rests at 828.96 tonnes

Jan 16/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.96 TONNES

Jan 12/no changes in inventory at the GLD despite the rise in gold price/inventory rests at 828.96 tonnes

Jan 11/ANOTHER IDENTICAL WITHDRAWAL OF 2.95 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 828.96 TONNES

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Feb 14/2018/ Inventory rests tonight at 823.66 tonnes

*IN LAST 325 TRADING DAYS: 117.49 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 259 TRADING DAYS: A NET 39.82 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory

Feb 14./NO CHANGE IN SILVER INVENTORY DESPITE THE HUGE RISE IN PRICE/INVENTORY RESTS AT 314.045 MILLION OZ

Feb 13./NO CHANGE IN SILVER INVENTORY TODAY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 12/AGAIN, WITH TODAY’S HUGE RISE IN SILVER PRICE, IN TOTAL CONTRAST TO GOLD: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 9/AGAIN WITH TURMOIL ON THE MARKETS, STRANGELY IN TOTAL CONTRAST TO GOLD: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 8/DESPITE THE TURMOIL TODAY AND A PRICE RISE: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

FEB 7/no change in silver inventory at the SLV/Inventory rests at 314.045 million oz/

Feb 6/WITH ALL OF TODAY’S TURMOIL/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 5/ we had HUGE change in silver inventory at the SLV/ A DEPOSIT OF 1.131 MILLION OZ INTO THE SLV/Inventory rests at 314.045 million oz/

Feb 2/we lost 982,000 oz from the SLV inventory /inventory rests at 312.914 million oz/

Feb 1/no change in silver inventory at the SLV/Inventory rests at 313.896 million oz/

Jan 31/ no change in inventory at the slv in total contrast to gold/inventory rests at 313.896 million oz/

Jan 30/no change in inventory/SLV inventory rests at 313.896 million oz/

Jan 29/no change in inventory/SLV inventory rests at 313.896 million oz/

Jan 26.2018/inventory rests at 313.896  million oz

Jan 25/with silver up today and yesterday, the SLV could only muster a gain of 848,000 oz

Inventory rests at 313.896 oz

jan 24/NO CHANGE IN SILVER INVENTORY DESPITE THE GOOD ADVANCE IN PRICE/INVENTORY RESTS AT 313.048 MILLION OZ/

Jan 23/ANOTHER HUGE WITHDRAWAL OF 1.131 MILLION OZ OF SILVER DESPITE THE TINY LOSS/THE CROOKS ARE USING THE INVENTORY TO RAID ON SILVER.

JAN 22.2018/with silver down by 5 cents/ the crooks at the SLV liquidate 1.321 million oz of silver/inventory rests at 314.179 million oz/

Jan 19/ no changes in silver inventory at the SLV/inventory rests at 315.500 million oz/

jan 18/A WITHDRAWAL OF 848,000 OZ OF SILVER FROM THE SLV/INVENTORY RESTS AT 315.500 MILLION OZ/

Jan 17/no changes in silver inventory at the SLV/inventory rests at 316.348 million oz/

Jan 16/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.348  MILLION OZ

Jan 12/no changes in silver inventory at the SLV/inventory rests at 316.348 million oz/

Feb 14/2017:

Inventory 314.045 million oz

end

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

+ 1.70%
12 Month MM GOFO
+ 2.10%

end

Major gold/silver trading /commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 GoldCore

Global Debt Crisis II Cometh

January 1e

– Global debt ‘area of weakness’ and could ‘induce financial panic’ – King warns
– Global debt to GDP now 40 per cent higher than it was a decade ago – BIS warn
– Global non- financial corporate debt grew by 15% to 96% of GDP in the past six years
– US mortgage rates hit highest level since May 2014

– US student loans near $1.4 trillion, 40% expected to default in next 5 years
– UK consumer debt hit ú200b, highest level in 30 years, 25% of households behind on repayments

The ducks are beginning to line up for yet another global debt crisis. US mortgage rates are hinting at another crash, student debt crises loom in both the US and UK, consumer and corporate debt is at record levels and global debt to GDP ratio is higher than it was during the financial crisis.

When you look at the figures you realise there is an air of inevitability of what is around the corner. If the last week has taught us anything, it is that markets are unprepared for the fallout that is destined to come after a decade of easy monetary policies.

Global debt is more than three times the size of the global economy, the highest it has ever been. This is primarily made up of three groups: non financial corporates, governments and households. Each similarly indebted as one another. Debt is something that has sadly run the world for a very long time, often without problems. But when that debt becomes excessive it is unmanageable. The terms change and repayments can no longer be met.

This sends financial markets into a spiral. The house of cards is collapsing and suddenly it is revealed that life isn’t so hunky-day after all. Rates are set to rise and as they do they will spark more financial shocks, as we have seen this week.

Mervyn King, former Governor of the Bank of England, gave warning about global debt levels earlier this week:

“The areas of weakness in the current system are really focused on the amount of debt that exists, not just in the U.S. and U.K. but across the world,” he said on Bloomberg Radio last Wednesday. “Debt in the private sector relative to GDP is higher now than it was in 2007, and of course public debt is even higher still.”

Consumer debt shows little sign of abating

Total UK consumer debt hit ú207 bn, in 2017 according to Standard & Poor’s. Levels such as these have not been seen since the 1980s. Now a quarter of the country’s poorest households are set to fall further into debt at a time when personal loans, credit cards etc are at pre-2008 levels.

The debt is set to get worse thanks to rising inflation, rising rates, wage stagnation, pension pot failings and just that simple problem of being stuck in a debt-laden hole.

The last financial crisis is primarily to blame for this mess that will no doubt contribute to the next crisis. Low or zero-rate loans, credit cards and finance packages were difficult to turn down by individuals who were struggling in the face of rising inflation and lack of wage growth. They were also repeatedly told by the government and media that all was going really well, they had little reason to believe their finances wouldn’t turn around soon.

But they won’t turnaround. Loan terms are set to get worse and few have enough set aside to help them manage increased payments with the savings ratio now below 7%, the lowest level since 2006.

Even if wages were to rise, this isn’t necessarily a good thing for the overall economy. The panic last week seen across the equities markets was thanks to an increase in wages. Markets saw the data which causes everyone to realise there’s the prospect of inflation rising for which interest rates will be introduced to counter it. In turn,  bond yields rise thus making equities less attractive while raising general borrowing costs. Not good for Joe Bloggs who just wanted a cheap car loan and a credit card to manage life with his family of four.

Mortgage rates, as you were

The subprime mortgage crisis was one of the leading triggers of the last global debt crisis. It followed the housing boom (and subsequent bust) in the US between 2007 and 2009.

Recent data suggests that we are heading towards another mortgage crisis in the US. Mortgage rates have now hit their highest level since May 2014. As Mortgage News Daily reports:

This marks the only time rates have risen this much without having been at long term lows in the past year. For example, late 2010, mid-2013, mid-2015, and late 2016 all saw sharper increases in rates overall, but each of those moves happened only 1-3 months after a long term rate low…So far this month, MBS have stunningly dropped over 200 bps, which easily translates into a .5% or more increase in rates. I’ve been shouting “lock early” for quite a while, and this is precisely why, This isn’t a drill, or a momentary rate upturn. It’s likely the end of a decade+ long bull bond market.

As rates are set to rise further, we will likely see this impact the housing market further. Rising rates make home buying and building less affordable. One indicator of where this will end up is by looking at the monthly supply of homes.

As Mish Shedlock points out:

Note that spikes in home inventory coincide with recessions.

A 5.9 month supply of homes did not seem to be a problem in March of 2006. In retrospect, it was the start of an enormous problem.

In absolute terms, builders are nowhere close to the problem situation of 2007. Indeed, it appears that builders learned a lesson.

Nonetheless, pain is on the horizon if rates keep rising.

Future generations laden with debt

It is a sad reflection on society when it celebrates it current successes which exist purely because of debt burdens left to future generations.

Aside from pensioners today, there is no generation that will not face significant debt burdens in their lives. This ranges from increased taxes due to increased government debt through to university education that comes at an unmanageable cost.

UK and US student loans will be one of the major catalysts of the next global debt crisis. In the US graduates owe approximately $1.4 trillion in student loans, whilst in the UK it is ú100 billion. This may seem as though the UK has little to worry about but in England the average graduate leaves education with over ú32,000 in debt, in contrast the average US graduate was $34,000 (ú27,000).

UK student debt is expected to double in the next six years, it is now the fastest growing type of borrowing and outstrips credit card debt which is commanding far more attention from the government.

The rate of default across the pond is high, the Brookings Institute estimate that 2 out of every 5 student borrowers will default in the next five years. In the UK there’s a risk they will never be paid off as it is now widely accepted that the majority of graduates will never pay off their student debt before it is cancelled 30 years after graduation.

The bursting of the student loan bubble is one that will have far-reaching consequences, as Fortune contributors Rogers and Baum remind us:

The higher education bubble (one-sixth of the U.S. economy) will likely burst with the force of all previous catastrophes combined—a shock wave so sudden, so large, that it gathers the full force of the savings and loan, insurance, energy, tech, and mortgage crashes, creating a blockbuster-level perfect storm.

See through the mirage with gold 

One of the reasons the Fed increased rates in 2017 was because everyone was talking about how well the economy was doing. From President Trump to the talking heads on Bloomberg to the man on the street, everyone was buzzing with how well it was doing. No one was acknowledging that it was coming from an unsustainable bubble. The Fed had little else to do but to raise rates, it helped to keep up the view that the US and global economy were booming.

Sadly, it is all a mirage. Since Friday 2nd February it has begun to disappear. We’re no longer suffering from heatwave, markets are beginning to see what’s on the other side of this seemingly bottomless waterhole – financial armageddon.

Last year there was one asset and one group of investors who saw through the mirage nice and early. This was in the gold space.

Gold that is held in a segregated, allocated portfolio is a key way to protect your savings from counter-party risk in the financial system.  Gold’s performance in 2017, along with low gold liquidations, increased demand for gold coins and bars and central bank purchases suggests that gold buyers identified early on that this really is all a mirage.

END

 

Craig Hemke has been banging the table as I.  He is referring to the huge USA deficits which will cause the 10 yr rate to rise and that will bring havoc to investors on the stock market as valuations falter as well as derivative losses

 

a must read..

 

(courtesy Craig Hemke/GATA/Chris Powell)

Craig Hemke: What changed on Sept. 8, 2017?

 Section: 

3:11p ET Tuesday, February 13, 2018

Dear Friend of GATA and Gold:

Writing for Sprott Money, the TF Metals Report’s Craig Hemke argues today that the Trump administration’s indifference to deficits, its eagerness to raise spending and cut taxes, is what has been roiling markets, that with burgeoning debt the U.S. government cannot tolerate higher interest rates, and that all this will prompt much inflation and higher monetary metals prices.

Of course that may presume that the U.S. government and Bank for International Settlements will be glad to let go of the metals, or that the metals somehow will escape their paper markets.

Hemke’s commentary is headlined “What Changed on September 8, 2017?” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/what-changed-on-september-8-2017-craig-…

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

END

What took them so long:  Idaho votes not to tax income form gold and silver gains

(courtesy Yngelmo/KXLY TV/Spokane Washington

Idaho House votes not to tax income from gold and silver sales

 Section: 

By Camie Yngelmo
KXLY-TV4, Spokane, Washington
Monday, February 12, 2018

https://www.kxly.com/news/idaho-votes-not-to-tax-income-from-silver-and-…

The Idaho State House today overwhelming approved a bill that excludes gains or losses on the sale of precious metals, coins, and bullion from an Idaho taxpayer’s taxable income.

State representatives voted 60-9 to pass House Bill 449, sending the measure introduced by House Majority Leader Mike Moyle and Senate Assistant Majority Leader Steve Vick to the Senate for a hearing in the Local Government and Taxation Committee.

Gold and silver are the only money mentioned in the U.S. Constitution and they should not be subject to tax,” said Stefan Gleason, president of Money Metals Exchange, an Idaho-based national precious metals dealer.

Under HB 449, all gains and losses upon the sale of physical precious metals that are reported on a taxpayer’s federal income tax return would be removed from the calculation of the taxpayer’s Idaho taxable income.

END

Interesting: a tiny Canadian bank unveils its digital vault for bitcoins

(courtesy Bloomberg)

 

Tiny Canadian Bank Unveils Digital Vault For Bitcoins

VersaBank, a tech-based, all-digital Canadian chartered bank, is developing a n ultra high-tech “Blockchain-based digital safety deposit box” for cryptocurrencies and other digital assets.

Last week, the firm announced the hiring of Gurpreet Sahota as Chief Architect of Cyber Security, a former Principal Architect of Cyber Security at BlackBerry Limited, to supervise a team of engineers in developing a novel Blockchain-based digital safety deposit box, known as the VersaVault. The service will be available by June and will serve as a means to store cryptocurrencies, according to the company’s latest press release.

VersaBank describes the VersaVault as the “world’s first blockchain-based safety deposit box,” which will soon be available on a global scale.

Your digital assets are just as valuable as any family jewelry, property deed or stock certificate, but protecting them isn’t nearly as simple. No storage device or commercial cloud service is completely safe, and most blockchain-based secure storage is only for crypto-currency… and offered by companies you’ve never heard of, in places you don’t know. VersaVault is the solution your digital wealth has been waiting for: the impenetrable security and absolute privacy of blockchain encryption, created and managed by a chartered bank in one of the world’s most trusted financial markets. Like a safety deposit box, only you have access to what’s inside, and like a safety deposit box, it’s been built by an institution you can trust to be there for the long run.

It is common that physical assets such as precious metals be stored in Switzerland, Hong Kong, and even Singapore, but when it comes to digital assets, could the country of choice soon be Canada? President and CEO David Taylor sure hopes so, and has positioned the bank to become a global leader in digital asset security from the perspective of safety.

Last month, Coincheck, a Japanese cryptocurrency exchange, told financial authorities that it had lost 500 million NEM cryptocurrency coin, which at January 26 exchange rate amounted to roughly $400 million. By far, this was the most significant crypto theft in history.

“We’re using what banks are all about — safety and security — only what we’re doing now is saying that physical box in the basement is getting obsolete,” Taylor said in an interview at Bloomberg’s Toronto office. “Most people’s really valuable assets are contained in some sort of digital format, whether it be a deed or a contract or a cryptocurrency.”

Our differentiator in this market is to be secure and super private,” added Taylor, 65. “The bank wouldn’t have any kind of back door to open up the vault, we’re just providing the facility that folks could put their digital keys in.”

Taylor said large financial institutions are showing interest in storing their digital assets in VersaVault since the company’s latest press release. He told Bloomberg that pricing has yet to be released, but he did indicate that it will be expensive.

Bloomberg notes that VersaBank is an early mover in the digital asset security space. However, VersaBank is not alone in the space with firms in Asia, Canada, and the United States, who have also made claims to digital asset secuity services.

South Korea’s Shinhan Bank said in November it planned to start a bitcoin vault by mid-year. Outside banking, Palo Alto, California-based Xapo Inc. has offered clients secure storage for Bitcoin for about four years, while Goldmoney Inc., a Toronto-based firm that lets clients buy, sell and store precious metals in vaults in seven countries, started offering Bitcoin storage in September.

Bloomberg explains  that Taylor’s decision to incorporate Blockchain technology into the bank will enable it to rapidly grow in size in a short period of time.

VersaBank, with a market value of about C$158 million ($126 million), 80 employees and C$1.73 billion in assets, has outperformed Canada’s big banks, with shares soaring 24 percent this year versus the 2.9 percent decline of the eight-company S&P/TSX Commercial Banks Index. Last year VersaBank rose 19 percent compared to the 11 percent gain of the banks index. Taylor is now eyeing a bit more growth while staying the course.

“I’m happy to be a niche player, but can probably double the size we are in assets,” he said. “I think C$3 billion is kind of a nice number.”

It remains to be seen just how much safer a “blockchain-based” crypt will be compared to traditional air-gapped hard drives. Until then, we are confident that the world’s cryptobillionaires will stick to more conventional options, such as this “secret” Swiss bunker where the ultra rich hide their bitcoins.

 

 

END

No wonder the BIS is scared:  they are afraid of currency competition.  The BIS chief fears a “systemic threat” from Bitcoin and urges action on all fronts by central authorities.  The BIS is the central bank for central banks and they have been very active in gold swaps as this entity tries to contain the price of gold.

(courtesy zerohedge)

BIS Chief Fears “Systemic Threat” Of Bitcoin, Urges “Pre-emptive Action” From Authorities

While US regulators appear to prefer a “balanced” approach to controlling the cyrptocurency space, and Fed officials “are not worried about Bitcoin,” it appears the new head of the so-called “central-banks’ central-bank” is most definitely concerned.

Bloomberg reports that in his first major public speech as head of the Bank for International Settlements, Agustin Carstens argued that central banks — along with finance ministries, tax offices and financial market regulators — should police the “digital frontier.” He said they must ensure a level playing field and functioning payment systems, and safeguard the “real value” of money.

“Bitcoin is not functional as a means of payment, but it relies on the oxygen provided by the connection to standard means of payments and trading apps that link users to conventional bank accounts,” Carstens said in Frankfurt on Tuesday.

“If the only ‘business case’ is use for illicit or illegal transactions, central banks cannot allow such tokens to rely on much of the same institutional infrastructure that serves the overall financial system and freeload on the trust that it provides.”

Simply put, Carstens argues that there is a “strong case” for authorities to rein in digital currencies because of their links to the established financial system…

“If authorities do not act pre-emptively, cryptocurrencies could become more interconnected with the main financial system and become a threat,” he said.

“Most importantly, the meteoric rise of cryptocurrencies should not make us forget the important role central banks play as stewards of public trust…”

“Private digital tokens masquerading as currencies must not subvert this trust.”

As a reminder, the BIS helps central banks pursue monetary and financial stability and while Carstens – who took over late last year after leading Mexico’s central bank – joins a list of establishment-types expressing reservations, his warnings are the most systemically serious so far with respect the truly disruptive nature of cryptocurrencies (as opposed to the usual ignorantly repeated narrative of criminality, ponzi-scheme, or worthlessness by so many.)

END

 

South Korea back tracks on Crypto ban and that causes our Bitcoin to rise above 9000.00 per coin

(courtesy zerohedge)

Bitcoin Soars Above $9000 After South Korea Back-Pedals Crypto Ban

Are cryptocurrencies playing catch up to VIX’s collapse?

Bitcoin is surging back above $9000 this morning – after testing and failing on Monday – seemingly tracking VIX’s plunge into VIX options expiration today…

 

The catalyst for the leg higher appears to be South Korea once again as regulators downplayed any threats of a ban.

As Bloomberg reports, South Korea’s government gave the strongest signal yet that it will allow cryptocurrency exchanges to keep operating in the country, a welcome development for traders who had feared an outright ban in one of the world’s biggest markets for digital assets.

Policy makers will focus on making cryptocurrency trading transparent rather than outlawing it altogether, Hong Nam-ki, minister of the Office for Government Policy Coordination, said in a video a posted on the presidential website. It was the government’s first coordinated response to the public uproar over a justice ministry proposal in December to shut digital-asset exchanges.

From last Friday’s close, Litecoin is the biggest winner (spiking after this morning’s headlines), but all major cryptos are higher on the week…

Ethereum remains the only major in the green for 2018…

But as we have noted previously, this rebound is very much the norm, seasonally as China’s lunar new year approaches…

END
We now learn that after China has been high grading their gold deposits for the past ten years, this is now haunting them as their production is now down to 426 tonnes per year and we expect that to fall again in 2018.  Interesting enough Russia has gained over 6% to 307 tonnes and are now in second place, behind China with Australia No 3
(courtesy Lawrie Williams/Sharp’s Pixley)

LAWRIE WILLIAMS: Russia may now be World No. 2 Gold Miner

 

Chinese gold production is dropping – the latest figure from the China Gold Association suggests a fall to 426.14 tonnes in 2017 (down just over 6%) – while gold output in Russia grew sharply n 2017, also by just over 6%, to 306.9 tonnes according to that nation’s finance ministry. Russia has been vying with Australia as the world’s No. 2 gold miner with the latter holding a small advantage, at least up until last year. However the latest Russian figure probably puts it ahead, with further production growth planned. It may yet take some time for Russia to overtake China as the world’s top gold miner, but that does appear to be the Russian national aim as China’s gold production falls and Russia’s continues upwards.Russia has probably also leapfrogged ahead of China in terms or gold reserves as reported to the IMF. January figures are not due out for another week but assuming Russia has added even a little gold to its reserves in January, and with China again reporting a zero increase to the IMF, Russia will almost certainly end the month in 5th place among national gold reserve holders as reported to the IMF., relegating China to 6th.There is little doubt that Russia, under President Putin’s guidance, is a believer in gold as having an important role to play in any future global financial re- alignment, and increasing national gold production is an important part of this policy. It also helps in reducing the place of the U.S. dollar, and its derivatives in its foreign exchange reserves. Russia looks to the U.S. debt situation an d is not impressed! The Russian economy remains relatively strong despite the impact of U.S.-led sanctions due to perceived involvement in Eastern Ukraine and the annexation of Crimea – now an integral part of Mother Russia and with a newly constructed 12-mile long dual road and rail bridge connection across the Kerch Strait to mainland Russia, due to open to road traffic at the end of the year. The majority of the Crimean population is ethnic Russian, although the international community still sees Crimea as part of Ukraine and the Russians as annexing the peninsula illegally.

https://www.sharpspixley.com/articles/lawrie-williams- russia-may-now-be-world-no-2-gold-miner_276781.html

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Ray Dalio increases his holdings in GLD. He adds Newmont but reduces his holdings in Barric

(courtesy Javier/Bloomberg)

Bridgewater Boosts Gold Holdings in SPDR, IShares

By Luzi-Ann Javier

Bloomberg

February 13, 2018, 5:28 PM EST Updated on February 13, 2018, 5:55 PM EST

Stake in SPDR Gold rises to 3.91 million shares, filing shows

Hedge fund boosts stake in Newmont, cuts position in Barrick

Billionaire hedge fund manager Ray Dalio boosted his holdings in the two largest gold-backed ETFs last quarter before prices of the metal capped the biggest annual gain in seven years.

As of the end of December, Dalio’s Bridgewater Associates, the world’s biggest hedge fund, raised its stake in SPDR Gold Shares and iShares Gold Trust, a regulatory filing showed Tuesday.

Assets in exchange-traded funds backed by gold rose for a fourth straight quarter in December, the longest expansion since 2012. The metal advanced 1.8 percent in the fourth quarter. A weaker dollar helped gold post a 14 percent rally last year despite three interest-rate increases by the U.S. Federal Reserve. Higher rates typically hurt the appeal of non-interest bearing assets like bullion.

In August, Dalio recommended investors consider placing 5 percent to 10 percent of their assets in gold, citing political and economic risks. By the end of December, Bridgewater raised its stake in SPDR Gold Shares by 14,091 shares to 3.91 million shares, the filing showed. Its stake in iShares Gold rose by 34,792 shares to 11.3 million shares, according to the filing.

On Monday, Dalio said risks of a recession in the next 18 to 24 months are rising.

Mining Positions

Bridgewater boosted its stake in Newmont Mining Corp. to 148,185 shares, while cutting its stake in Barrick Gold Corp. to 160,951 shares. It also reduced its position in Freeport-McMoRan Inc. The hedge fund raised its holding in iron-ore-producer Cleveland-Cliffs Inc. to 3.33 million shares, the filing showed.

Filings released this month don’t include hedge funds’ current position, which may have changed since December. Prices of the precious metal climbed 3.2 percent in January before declining about 1.2 percent this month.

Since the end of December, SPDR Gold has seen outflows of $689 million through the end of last week. Investors were more loyal to iShares Gold, adding $837 million to their holdings so far this quarter.

Money managers who oversee more than $100 million in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.

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

 

i) Chinese yuan vs USA dollar/CLOSED UP AT 6.3444 /shanghai bourse CLOSED UP AT 14.20 POINTS 0.45% / HANG SANG CLOSED UP 676.07 POINTS OR 2.27%
2. Nikkei closed DOWN 90.51 POINTS OR .43% /USA: YEN FALLS TO 107.36/DEADLY AS YEN CARRY TRADERS DISINTEGRATE

3. Europe stocks OPENED DEEPLY IN THE GREEN   /USA dollar index RISES TO 89.73/Euro FALLS TO 1.2342

3b Japan 10 year bond yield: FALLS TO . +.065/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.36/ 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:: 58.79  and Brent: 62.55

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.734%/Italian 10 yr bond yield UP to 2.061% /SPAIN 10 YR BOND YIELD UP TO 1.513%

3j Greek 10 year bond yield RISES TO : 4.48?????????????????

3k Gold at $1331.50 silver at:16.63     7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 27/100 in roubles/dollar) 57.36

3m oil into the 58 dollar handle for WTI and 62 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/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 107.36 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 0.9334 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1524 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 +0.731%

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 2.826% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.108% /BOTH STILL DEADLY

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

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

US Futures, Global Stocks Rise Before The “Most Important CPI Print Ever”

As we previewed earlier this week, only one number matters for the markets – both stocks and bonds – this week, and it will be released at 8:30am this morning, when the BLS unveils the January CPI print, dubbed by various trading desks as “the most important CPI print ever”, with every trader, both carbon and semiconductor based, focusing only on whether core CPI comes at 0.2% as expected, or higher. If it’s the latter, TSY yields will spike – conventional wisdom goes – while the second leg of the equity rout could be unleashed. Inversely, if the core CPI disappoints, we may see a sharp move lower in 10Y yields and the dollar, while stocks prepare to retest all time highs.

“Since the last payrolls about two weeks ago, inflation is the obsession of traders,” Pierre Martin, a trader at Saxo Bank in Zurich, told Bloomberg. “Given the selloff in stocks and with a lot of brokers pushing clients to buy the dip, people are trying to position themselves ahead of the CPI figures today. The sentiment is that a lot has been priced in already, but I’m a bit more cautious and wouldn’t be surprised to see volatility aftershocks in the coming days,” Martin said.

There have been no volatility shocks for now, however, as one look at the futures and global stocks ahead of today’s CPI shows not only the inverse of yesterday’s early sea of red (which quickly turned green) but broad consensus – for now at least – that either the CPI number will disappoint or the market will promptly decide it does not matter if it indicates the economy is overheating.

Following another day of strong gains around the globe, S&P index futures extended gains, hitting a session high as European opened when the E-mini ran upside stops through Monday highs, although gains have since been somewhat pared back. March contracts on the S&P 500 rose 0.4 percent just after 6am ET, fluctuating during Asian trading hours. Futures on the Dow Jones Industrial Average added 0.6 percent, while the Nasdaq 100 Index was up 0.6 percent.

Also keep in mind that even if the CPI proves to be a dud, today is the monthly VIX options expiration. Counting puts and calls, there are 15.4 million VIX options outstanding, and 40% of them mature today. The move has the potential to spark substantial market volatility.

Ahead of the CPI, traders were again keenly focused on the second day of drama in the USDJPY which as noted overnight, took out a huge barrier as the Japanese currency hit a fresh 15-month high only to see dollar buyers emerge on break below 107.00 amid concerns faster U.S. inflation will drive down stocks. Both the Nikkei (-0.4%) and Topix (-0.8%) closed red as a result. However, after the European open, the Yen lost some ground as the dollar rebounded after its 4th consecutive day of losses, and at last check the USDJPY was trading around 107.40.

As Bloomberg notes, USD/JPY recovered back to 107.50 after breaking below 107.00 in Asian session, leading to broader recovery for USD across G-10, DXY comes back to flat.

In other currencies, the ZAR rallied after ANC confirmed a no-confidence vote in Zuma for tomorrow, while the SEK eventually weakened as Riksbank stresses lack of confidence in inflation levels.

Equity trading during the Asian session was mixed as the region failed to sustain upward US. Australia’s ASX 200 (-0.3%) was subdued amid underperformance in its largest weighted financial sector as banks mulled over the Australian Prudential Regulatory Authority’s discussion paper on the application of a future leverage ratio, while Nikkei 225 (-0.4%) underperformed after disappointing Q4 GDP data and as exporters suffered the ill-effects of the soaring Yen.

Elsewhere, Shanghai Comp. (+0.5%) and Hang Seng (+2.3%) were resilient with Hong Kong propped up by strength among financials.  Hong Kong’s Hang Seng Index rose 2.6% – it biggest daily gain since May 2016 – and the Hang Seng China Enterprises Index climbed 2.8%, with banks leading the gains as U.S. futures jumped. Hang Seng Bank was the best performer on Hang Seng, rising 7.3% and heading for biggest daily gain since May 2009; co.’s rating and price target raised at Goldman. The mainland Shanghai Composite and CSI 300 indexes were cautiously higher as Chinese markets wind down for lunar new year break.

European stocks also advanced as investors assess earnings figures from companies including Natixis and Credit Suisse. The Stoxx Europe 600 Index rosw 0.6% in a broad rally. Banks were the best-performing industry group as Natixis and Credit Suisse lead gains. Sky climbed 3.2%, among the best gainers on the Stoxx 600, after the company secured its position as leading broadcaster of Premier League soccer for the next three-year cycle, reducing the cost per match by 16%.

Meanwhile, after 10Y yields sunk to session lows around midnight, just above 2.80%, treasuries rebounded with futures and the dollar, rising to 2.84%; there was bull-flattening observed in both JGB and Aussie curves amid wider risk-off. Once again, if the CPI surprises to the upside, watch as the 10Y yield jumps above 2.90% on its way to 3.00% and beyond.

Elsewhere, WTI and Brent crude futures traded lower in the wake of yesterday’s build in API inventories ahead of
today’s DoE release with focus on US production figures which climbed above the 10mln bpd level last week and surpassed that of Saudi Arabia. In terms of recent energy commentary, the Saudi Oil Minister Al Falih says Saudi Arabia will invest for maximum oil output capacity and thus shows no signing of caving to the ongoing surge in US production. In metals markets, spot gold is modestly firmer, tracking fluctuations in the USD, while Copper saw its largest jump since October during Asia-Pac trade as shorts were covered ahead of the Lunar New Year and Dalian Iron Ore printed 3-week highs.

In other news, the South African police have raided Gupta family’s home. Ajay, Atul and Tony Gupta are accused of using their friendship with Mr Zuma to control state appointments and contracts, claims they and the president have denied, the FT reported. . There were also reports that Zuma was arrested but this was dismissed as fake news by the South African police minister Mbalula. Later it was reported that South African ANC have pushed for a motion of no confidence against Zuma for tomorrow.

Figures on inflation and retail sales are set to face closer scrutiny than usual after the recent market plunge.  Scheduled earnings include Cisco Systems, Applied Materials and Marriott.

Market Snapshot

  • S&P 500 futures up 0.4% to 2,673.00
  • STOXX Europe 600 up 0.8% to 373.40
  • MSCI Asia Pacific up 0.3% to 172.95
  • MSCI Asia Pacific ex Japan up 1% to 569.23
  • Nikkei down 0.4% to 21,154.17
  • Topix down 0.8% to 1,702.72
  • Hang Seng Index up 2.3% to 30,515.60
  • Shanghai Composite up 0.5% to 3,199.16
  • Sensex down 0.05% to 34,281.61
  • Australia S&P/ASX 200 down 0.3% to 5,841.24
  • Kospi up 1.1% to 2,421.83
  • German 10Y yield fell 1.4 bps to 0.736%
  • Euro up 0.06% to $1.2360
  • Brent Futures down 0.7% to $62.30/bbl
  • Italian 10Y yield rose 4.8 bps to 1.815%
  • Spanish 10Y yield fell 2.6 bps to 1.498%
  • Brent Futures down 0.7% to $62.30/bbl
  • Gold spot up 0.08% to $1,330.59
  • U.S. Dollar Index down 0.06% to 89.65

Top Overnight News

  • Federal Reserve Chairman Jerome Powell suggested that the U.S. central bank would push ahead with gradual interest-rate increases even as it remains on the lookout for threats to the financial system in the wake of the recent stock market rout.
  • China tightened restrictions on equity-linked options trading, people familiar with the matter said, the latest sign that authorities are acting to contain market turbulence after the biggest stock slump in two years
  • The euro-area economy expanded 0.6% q/q in the fourth quarter, in line with estimates, while industrial output expanded 0.4% m/m in December, versus +0.1% estimate
  • Portugal, Malta, Slovakia and Latvia already have said they intend to support Spanish Economy Minister Luis de Guindos over Irish central bank governor Philip Lane to be the next vice president of the ECB. Officials from Austria, Cyprus and Finland told Bloomberg they are leaning toward supporting Guindos
  • Japan’s economy expanded for an eighth quarter, but the pace of growth fell sharply and missed expectations
  • Michael D. Cohen, President Trump’s longtime personal lawyer, said on Tuesday that he paid $130,000 out of his own pocket to a pornographic-film actress who had once claimed to have had an affair with Mr. Trump
  • Economists who were slow to predict the first Bank of England interest-rate hike in a decade last year now expect the next one to come in May, but the decision is seen as being on a knife-edge
  • Dutch Foreign Minister Halbe Zijlstra quit his post after admitting he lied about attending a 2006 meeting with Russian President Vladimir Putin, stepping down the same day he had been scheduled to travel to Moscow to meet his Russian counterpart
  • U.S. forces killed scores of Russian mercenaries in Syria last week in what may be the deadliest clash between citizens of the former foes since the Cold War, according to one U.S. official and three Russians familiar with the matter.

Asian sentiment was mixed as region failed to sustain the momentum from US, where stocks continued their rebound and posted a 3rd consecutive gain. ASX 200 (-0.3%) was subdued amid underperformance in its largest weighted financial sector as banks mulled over the Australian Prudential Regulatory Authority’s discussion paper on the application of a future leverage ratio, while Nikkei 225 (-0.4%) underperformed after disappointing Q4 GDP data and as exporters suffered the ill-effects of a firmer currency. Elsewhere, Shanghai Comp. (+0.5%) and Hang Seng (+2.3%) were resilient with Hong Kong propped up by strength amongst financials. Finally, 10yr JGBs were marginally higher amid a risk-averse tone in Japan and alongside overnight gains in USTs, while the 5yr JGB auction results were somewhat inconclusive and failed to impact prices. PBoC skipped open market operations.

Top Asian News

  • Japan’s Slower Growth, Surging Yen Tie the BOJ to Stimulus
  • Singapore Economy Grows at Slower Pace Than Previously Estimated
  • Hong Kong Stocks Set for Boost After Double Whammy Bruising
  • Late Rally Spurs Hong Kong Shares to Biggest Gain Since May 2016
  • Malaysia Set for Solid, But Moderating Growth in 2018

European equities (Eurostoxx 50 +0.7%) trade higher across the board as sentiment remains supported in the wake of a firmer Wall St. close and mixed Asia-Pac session with macro newsflow otherwise relatively light for the region. In terms of sector specifics, financials have been in focus following earnings from Credit Suisse (+3.2%) who sit at the top of the SMI with gains for the sector mildly offset by Credit Agricole (-2.1%) who failed to appease investors with their latest statement. Elsewhere, energy names lag their peers alongside price action for WTI and Brent in the wake of yesterday’s API build.

Top European News

  • Euro-Area Economy Keeps Cruising Speed as 2018 Outlook Improves
  • H&M Forecasts Physical Stores to Return to Growth Next Year
  • Melrose Say Would Keep GKN’s Powder Metallurgy Unit
  • German Economy Zips Along as Trade and Spending Drive Growth
  • Five Star’s Pay Pledge Backfires: Italy Campaign Trail

In currencies, the early focus on the Swedish Krona and a knee-jerk reaction to Riksbank Ohlsson’s objection against holding the repo rate steady at -0.5%. Eur/Sek briefly dropped below 9.8750 as the hawkish Board member dissented in favour of a 25 basis point hike before rebounding towards pre-policy verdict session highs (around 9.9200) on the unchanged guidance for tightening in H2 this year, slightly softer inflation outlook and caveat that more easing remains an option if favourable economic conditions change. Thereafter, SEK was placed under pressure during Jansson’s presser after stating that the Bank discussed whether to delat the first rate hike path.Meanwhile, the Jpy continued its sharp appreciation vs the Dollar and other major currency counterparts overnight, with Usd/Jpy taking out the 2017 low circa 107.30, and reported big barriers at 107.00 to record a fresh multi-year base around 106.85. However, spec short covering has subsequently pushed the pair back up over the 107.00 level to test offers around 107.50, and this has helped the DXY recover 89.500+ status. Eur/Usd looks flanked by bids and offers at 1.2350 and 1.2400 respectively, with hefty option expiries in the vicinity of those range extremes also likely to provide support and resistance (2.6 bn between 1.2335-50 and 2 bn from 1.2400-05). Other Usd/G10s are also relatively rangebound, but the Kiwi is outperforming after a rise in NZ inflation expectations, with Nzd/Usd back above 0.7300. In the EM region, Usd/Zar remains in the spotlight and back  near recent lows around 11.8500 awaiting a response from President Zuma to the latest ANC party ‘requests’ to stand down, while raids on Gupta family residences have resulted in several arrests.

In commodities, WTI and Brent crude futures trade lower in the wake of yesterday’s build in API inventories ahead of today’s DoE release with focus on US production figures which climbed above the 10mln bpd level last week and surpassed that of Saudi Arabia. In terms of recent energy commentary, the Saudi Oil Minister Al Falih says Saudi Arabia will invest for maximum oil output capacity and thus shows no signing of caving to the ongoing surge in US production. In metals markets, spot gold is modestly firmer, tracking fluctuations in the USD, while Copper saw its largest jump since October during Asia-Pac trade as shorts were covered ahead of the Lunar New Year and Dalian Iron Ore printed 3-week highs. US API Weekly Crude Stocks (Feb 9) 3.947M vs. Exp. 2.800M (Prev. -1.05M). CME raised crude oil future margins to USD 2100 from 1950 per contract for next month. Saudi Oil Minister Al Falih stated that Saudi Arabia will invest for maximum oil output capacity. (Newswires) As a guide, maximum sustainable oil capacity is 12.5mln bpd. Saudi Oil exports will be kept below 7mln bpd in March despite maintenance shutdown of Samref Refinery, while Aramco oil production will be 100K bpd below February levels; according to Saudi Oil Minister

Looking at the day ahead, the key focus is clearly the January CPI report in the US, while January retail sales will also be released alongside it. December business inventories is the other data release due in the US while in Europe we’ll get Q4 GDP in Germany (second estimate) and the final January CPI revisions, along with Q4 GDP for the Euro area (second estimate). Away from data the Bundesbank’s Weidmann is due to speak in the morning, followed by the ECB’s Mersch. German Chancellor Merkel is also due to speak at a CDU event. CISCO, and Credit Agricole will report earnings

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 0.7%
  • 8:30am: US CPI MoM, est. 0.3%, prior 0.1%; Ex Food and Energy MoM, est. 0.2%, prior 0.3%
    • US CPI YoY, est. 1.9%, prior 2.1%; Ex Food and Energy YoY, est. 1.7%, prior 1.8%
  • 8:30am: Retail Sales Advance MoM, est. 0.2%, prior 0.4%; Ex Auto MoM, est. 0.5%, prior 0.4%
    • Retail Sales Ex Auto and Gas, est. 0.3%, prior 0.4%;
    • Retail Sales Control Group, est. 0.4%, prior 0.3%
  • 8:30am: Real Avg Weekly Earnings YoY, prior 0.67%; Real Avg Hourly Earning YoY, prior 0.4%
  • 10am: Business Inventories, est. 0.3%, prior 0.4%

* * *

DB’s Jim Reid concludes the overnight wrap

Will today provide a Valentine’s Day heartbreak for markets or will we feel the warm fuzzy embrace of a soft US CPI print that reminds people of the halcyon days of 2017? This really is going to be the main focal point every month this year we think. We are torn here at DB as 2018 has long been targeted by us as the year of the inflation comeback,  however there are reasons why today’s number may not see this materialise yet. If it doesn’t we’d still be confident that the year will be marked by higher inflation than expected though. The official house forecast is for a slightly softer core inflation print for January (0.16% m/m), which would lower the year-over-year rate by one-tenth to 1.7%, due to the negative base effect from a strong print in January 2017. Nevertheless the 6-month annualised growth rate for core CPI would rise further to 2.2% under DB’s forecast. What adds to the uncertainty about today’s print is that the BLS have just updated their seasonal adjustments which may iron out what has been a consistent beat in recent years for January’s print. The new seasonal factors imply that January CPI will be 4 bps lower than it would have been under the previous seasonal assumptions and could easily be the difference between it rounding up or down a tenth. Our economists note that this risk may not be fully reflected in consensus expectations, which may have been submitted prior to the release of these factors.

Staying with CPI, Craig and I put a short “Macro Bites” out this morning which follows on from our economists’ work comparing the 1960s to the current decade. Their work looks at factors leading to a sudden breakout in inflation in the former period and how there are similarities to today. We show how various asset prices behaved pre and post the inflation surge in 1966 and compare it to today. As England football fans let’s hope the economic similarities aren’t the only ones in 2018.

Markets are again quiet leading into today’s number. It’s almost as if last week didn’t happen. However the fact that the VIX and VStoxx remain at 24.97 (-2.5%) and 25.95 (-7.9%) respectively reminds us of the shock. In equities, European markets were broadly lower, partly reversing Monday’s gains with the Stoxx (-0.63%), DAX (-0.70%) and FTSE (-0.13%) all down modestly. The S&P initially traded c0.7% lower, but recovered throughout the day to be +0.26% higher with modest gains from the real estate, financials and discretionary consumer sectors. The Dow (+0.16%) and Nasdaq (+0.45%) also advanced modestly.

Staying in the US, in the prepared remarks at his ceremonial swearing in, the new Fed Chair Powell reiterated that “we are in the process of gradually normalising both interest rate policy and our balance sheet with a view to extending the recovery…” Elsewhere, he noted that “we will remain alert to any developing risks to financial stability”, which to us sounds all very comforting, but imagine the potential carnage had he suggested that the Fed ‘won’t’ be paying any attention to risks to financial stability. Finally, he indicated the “financial system is incomparably stronger and safer, with much higher capital and liquidity” and that “we will also preserve the essential gains in financial regulation while seeking to ensure that our policies are as efficient as possible”.

Following on, the WSJ noted unnamed sources suggesting the Fed’s Mester impressed the selection team and that the White House is considering her for the Vice Fed Chair role, although also conceded there was currently no front runner for the job. Earlier on, Ms Mester reiterated her views that tax cuts could add 0.25%-0.5% of extra economic growth over this year and next, but given what she has seen so far, there could be “salient upside risks to the forecasts”. On rates, she reiterated that “if economic conditions evolve as expected, we’ll need to make some further increases in rates this year and next, at a pace similar to last year” when the Fed raised rates three times.

This morning in Asia, markets are mixed. The Hang Seng (+1.25%), Kopsi (+0.93%) and China’s CSI 300 (+0.51%) are all up while Nikkei (-0.46%) is down modestly as we type. The latter partly impacted by the stronger YEN as it’s up c0.8% this morning back to mid-November 16 levels. Datawise, Japan’s 4Q GDP was below market and the lowest in two years at 0.5% annualised (vs 1% expected), with both private consumption and business spending lower than
forecasts.
Now recapping other markets performance from yesterday. In government bonds, slight risk aversion seemed to help core bonds with 10yr UST and Bunds yields down 2.9bp and 0.7bp respectively while Gilts rose 1.7bp following theb eat on CPI. Elsewhere, peripherals yields rose 4-6bp with losses led by Portugal. Turning to currencies, the US dollar  index retreated for the second straight day (-0.56%), while the Euro and Sterling gained 0.49% and 0.40% respectively. In commodities, WTI oil dipped 0.17% while precious metals strengthened c0.4% (Gold +0.52%; Silver +0.21%). Other base metals broadly rebounded as the dollar weakened (Copper 1.37%; Zinc +1.96%; Aluminium -0.2%).

In Germany, the potential for a new grand coalition government seems to have increased. Overnight, the SPD has elected a new party leader Andrea Nahles. She noted “I’ll lobby in favour of entering into a grand coalition” with Ms Mekel’s bloc and that “….I’m going to put everything I have into getting a successful outcome”. Looking ahead, the earlier agreement between Ms Merkel and the SPD needs to be approved by the c460,000 SPD members, which is expected to wrap up in early March. Elsewhere, the UK PM May will meet with Ms Merkel this Friday at Berlin to discuss Brexit with a press briefing afterwards.

In the US, after President Trump call for a “reciprocal tax” on imports against higher tariff countries earlier in the week as part of his 2019 budget speech, an unnamed senior White House official told Bloomberg that no proposals for such tax was in the works and the President may be simply reiterating his long held sentiments. Notably, President Trump has the power to impose such trade penalties on his own.

Back in Europe, the ECB’s Draghi noted the blockchain technology is “quite promising” and the ECB is “very interested” in its potential usage. However, for now “it’s still not secure for central banking and we need to investigate it more”. Elsewhere, he reiterated that bitcoins are not considered as a proper currency. Finally, our European economics team have provided an update on what recent market developments means for the ECB. They note that their euro area financial conditions index is at the lowest level since mid-2014, just before the start of ECB unconventional monetary policy. However, they argue that strong economic momentum and the maturing economic cycle may add resilience in the face of tighter financial conditions, and they find that core inflation will continue to  satisfy the policy exit criteria if the current level of financial conditions is maintained. Overall, they note that a gradual tightening in financial conditions is the ECB’s objective. Refer to their note for more details.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the January NFIB small business optimism index was above market at 106.9 (vs. 105.3) and slightly below the 34 year  high of 107.5 back in November. In the UK, the January CPI was also above market at -0.5% mom (vs. -0.6%) and core CPI at 2.7% yoy (vs 2.6% expected). Elsewhere, both the core PPI and RPI were slightly lower than expectations. The core PPI was 2.2% yoy (vs. 2.3%), while the RPI was -0.8% mom (vs. -0.7%) with annual growth of 4%. Finally, the December house price index rose 5.2% yoy (vs. 4.9% expected) driven by Scotland and Southwest England, while London was the weakest at +2.5%. In France, its 4Q wages index was slightly below  market at 0.1% qoq (vs. 0.2%) but still up 1.3% yoy.

Looking at the day ahead, the key focus is clearly the January CPI report in the US, while January retail sales will also be released alongside it. December business inventories is the other data release due in the US while in Europe we’ll get Q4 GDP in Germany (second estimate) and the final January CPI revisions, along with Q4 GDP for the Euro area (second estimate). Away from data the Bundesbank’s Weidmann is due to speak in the morning, followed by the ECB’s Mersch. German Chancellor Merkel is also due to speak at a CDU event. CISCO, and Credit Agricole will report earnings

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 14.20 points or 0.45% /Hang Sang CLOSED UP 676.07 or 2.27% / The Nikkei closed DOWN 90.51 POINTS OR .43%/Australia’s all ordinaires CLOSED DOWN 0.28%/Chinese yuan (ONSHORE) closed DOWN at 6.3444/Oil DOWN to 58.79 dollars per barrel for WTI and 62.55 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN  .   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.3444. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.3331//ONSHORE YUAN A LITTLE STRONGER AGAINST THE DOLLAR/OFF SHORE A LOT STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS A LITTLE STRONGER AGAINST ALL MAJOR CURRENCIES EXCEPT  CHINA YUAN.  CHINA IS  HAPPY TODAY STRONGER MARKETS IN CHINA 

3 a NORTH KOREA/USA

/NORTH KOREA

end
 

3 b JAPAN AFFAIRS

 

Early this morning:

 

As I have outlined for you in the front of my commentary, one of the 4 vehicles used by the crooks for manipulation is the USA/Yen cross.  They borrow yen and buy the stock markets.  Since the yen costs them zero, it seems like a good deal for the crooks as they seek a positive yield gain.  However this is now beginning to haunt them as the USA/Yen cross plunges to almost 107 flat.

 

(courtesy zerohedge)

USDJPY Plunges To Lowest Since Nov 2016 After Weakest Japanese GDP In 2 Years

USDJPY tumbled to 107.01 – the lowest since Trump’s election in Nov 2016 – after a disappointing GDP print signaled the beginning of the end of the ‘global synchronous recovery’…

As Goldman Sachs writes, Japanese real GDP growth slowed sharply to +0.5% qoq annualized, representing a sharp slowdown from July-September (+2.2%) and coming in below the market forecast (+1.0%).

This is the weakest Japanese GDP growth since Q4 2015…

The GDP deflator turned negative qoq annualized (-0.8%, 0.0% yoy), resulting in a sharp slowdown in nominal GDP at -0.1%, from +2.6% in July-September.

Private demand remains solid, despite a sharp fallback of external demand and private inventories: The breakdown of real GDP shows private inventories and external demand, which substantially boosted July-September real GDP, made a negative contribution to October-December GDP. Despite this, however, private demand remains solid.

The reaction was swift, with USDJPY legging lower, stalling briefly at Sept 2017 lows, before tumbling to 107.01…

talling briefly at Sept 2017 lows, before tumbling to 107.01…

 

 

Yen is the strongest since November 14th 2016 against the dollar…

 

Of course, the perfectly correlated price action of US equity futures to USDJPY has decoupled amid this collapse…

Perhaps because the machines are too busy working overtime preparing for tomorrow’s – likely to be historic – VIX options expiration.

As DataTrekResearch’s Nicholas Colas notes, tomorrow could prove volatile as monthly VIX contracts will expire.

The VIX tends to experience wider intraday moves during monthly expirations than days when contracts don’t mature.

The Cboe Volatility Index tends to have bigger swings on days its contracts mature, with intraday moves of 13 percent on average on the past 12 monthly expirations. That compares with a mean daily fluctuation of 10 percent in the year through January. Of course, that was before this month, when a record VIX surge on Feb. 5 sent its average intraday move for February to almost 60 percent.

end

 

c) REPORT ON CHINA

 

China begins to shot it’s muscle as they are seeking to replace the USA as the dominant player in the world

(courtesy zerohedge)

 

China Rolls Out J-20 Stealth Fighter, Navy Calls “Serious Threat” To US Assets

As tensions mount over the South China Sea shipping corridor which handles $5 trillion in annual trade, China has finally rolled out its Chengdu J-20 stealth fighter jet which some have compared to the United States’ F-22 Raptor.

The new jet is rumored to have already been deployed to the South China Sea along with several of China’s Su-35s, to take part in a joint combat patrol over the region, according to the Chinese Ministry of Defense whose release did not mention the J-20.

a

The fourth-generation medium and long-range fighter jet made it’s maiden flight in 2011 and was first shown to the public at a November, 2016 air show in Zhuhai, Guangdong Province.

A spokesman for the People’s Liberation Army (PLO), Shen Jinke, said that the J-20 would “help the air force better shoulder the sacred mission of safeguarding national sovereignty, security and territorial integrity,” adding that the air force was in the middle of a modernization program in order to fight enemies on all fronts.

a

a

While the jet’s combat service was announced on Friday, the J-20 was officially entered military service last September – and conducted nine days of drills along with older J-16 and J-10C fighters last month, according to the air force.

The J-20 was designed for stealth and manoeuvrability and is powered by two jet engines, giving it extra power as well as the ability to survive engine failure, according to the Washington-based Centre for Strategic and International Studies.

The US Naval Institute said the aircraft was likely to be a serious threat to US aircraft, ships and bases, because the PLA might be able to put more of them into the sky. –scmp.com

Senior analyst at the Australia Strategic Policy Institute, Malcom Davis, told Business Insider that the J-20 is a “fundamentally different sort of aircraft than the F-35”

a

Davis characterized the J-20 as “high-speed, long-range, not quite as stealthy (as US fifth-gen aircraft), but [the Chinese] clearly don’t see that as important.” According to Davis, the J-20 is “not a fighter, but an interceptor and a strike aircraft” that doesn’t seek to contend with US jets in air-to-air battles.

Instead, “the Chinese are recognizing they can attack critical airborne support systems like AWACS (airborne early warning and control systems) and refueling planes so they can’t do their job,” Davis said. “If you can force the tankers back, then the F-35s and other platforms aren’t sufficient because they can’t reach their target.

Retired US Air Force Lt. Gen. David Deptula agrees. In a November assessment for Defense & Aerospace ReportDavis said “The J-20, in particular, is different than the F-22 in the context that, if you take a look and analyze the design, it may have some significant low-observable capabilities on the front end, but not all aspects — nor is it built as a dogfighter,” adding “But quite frankly, the biggest concern is its design to carry long-range weapons.

a

A senior scientist at Lockheed told Business Insider that China made serious missteps in their attempt to integrate stealth into the J-20.

“It’s apparent from looking at many pictures of the aircraft that the designers don’t fully understand all the concepts of LO design,” said the scientist.

https://content.jwplatform.com/players/8I9WjvQn-puACk8ZV.html

END
this is going to get China quite angry: the uSA slaps a huge anti dumping duty on cast iron soil pipe fittings
(courtesy zerohedge)

US Slaps China With Antidumping Duty On Cast Iron Soil Pipe Fittings

Another day, another escalation in the upcoming US-China trade war.

On Wednesday, U.S. Secretary of Commerce Wilbur Ross announced the affirmative preliminary determination in the antidumping duty (AD) investigation of imports of cast iron soil pipe fittings from China.

“Though politics plays no role in antidumping investigations, President Trump made it clear that we will vigorously enforce our trade laws and provide U.S. industry relief from unfair trade practices,” said Secretary Ross. “Today’s decision allows U.S. producers of cast iron soil pipe fittings to receive relief from the market-distorting effects of potential dumping while we continue our investigation.”

The Commerce Department announced that it had determined that exporters from China have sold cast iron soil pipe fittings in the United States at 68.37 to 109.95 percent less than fair value.

As a result of today’s decision, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits from importers of cast iron soil pipe fittings from China based on these preliminary rates.

The petitioner of the action was the Cast Iron Soil Pipe Institute (IL), the members of which are AB&I Foundry (CA), Charlotte Pipe & Foundry (NC), and Tyler Pipe (TX).

Enforcement of U.S. trade law is a prime focus of the Trump administration.  From January 20, 2017, through February 9, 2018, the Commerce Department has initiated 94 antidumping and countervailing duty investigations – an 81 percent increase from previous period.

The AD law provides U.S. businesses and workers with a mechanism to seek relief from the harmful effects of unfair pricing of imports into the United States. Commerce currently maintains 424 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.

Commerce is scheduled to announce the final determination in this investigation on or about June 28, 2018.  If Commerce makes an affirmative final determination of dumping and the U.S. International Trade Commission (ITC) makes affirmative final injury determination, Commerce will issue an AD order.  If Commerce makes a negative final determination of dumping or the ITC makes a negative final determination of injury, the investigation will be terminated and no order will be issued.

A full fact sheet on today’s action can be found here.

end

4. EUROPEAN AFFAIRS

 

Exactly what planet is Macron on?  Reforming Islam?  in France?

(courtesy Kern/Gatestone Institute)

8. EMERGING MARKET

VENEZUELA

 

Thousands of Venezuelans are seeking food across the bridge in Columbia

(courtesy Mac Salvo/SHFTPlan.com)

Mass Exodus Begins: 1000s Flee Venezuela’s Socialist Starvation Across Bridge To Colombia

Authored by Mac Slavo via SHTFplan.com,

People are fleeing the socialism forced on them in Venezuela by the hundreds of thousands. Starving, and facing violence over crumbs of food, many have no choice but to flee the wasteland which used the authority of government to destroy the lives of its citizens.

Thousands of Venezuelans are attempting to flee the socialist dystopia their nation has become. They are attempting to make it to Colombia. In a desperate bid to escape the hunger and soaring crime rate caused by the spiraling economic crisis, fueled by socialist policies, incredible pictures have surfaced showing the mass exodus of refugees crossing the Simon Bolivar international bridge trying to flee the ongoing political crisis threatening to engulf Venezuela.

Colombia and its neighbor Brazil have both sent extra soldiers to patrol their porous borders with Venezuela after officially taking in more than half a million migrants over the last six months of 2017. The country is also tightening its border controls in a bid to stem the flow of starving people. The situation in Venezuela has reached SHTF levels.

Truck drivers are subjected to horrific violence as looters target heavy goods vehicles carrying food in a desperate attempt to feed their families. The truckers are banned by the government from carrying guns to protect themselves, so have resorted to forming convoys to protect each other. They text each other warnings about potential trouble spots and keep moving as fast as possible.

According to Reutersthere were 162 lootings across Venezuela in January, including 42 robberies of trucks. That is compared to just eight lootings, including one truck robbery, 12 months ago. Last month, eight people were killed in lootings alone. Venezuela has one of the world’s highest murder rates and the attacks are pushing up food and transport costs.

The plunder is heaping more pain on battered businesses, raising questions about how much longer the starving Venezuelans can survive. The country, which is run by a full-blown socialist regime is suffering a fifth straight year of recession and the world’s highest inflation rate. –SHTFPlan

Massive numbers of Venezuelans have been driven from their homes by the dire financial crisis spurred by the disease that is socialism. Many are struggling to feed themselves and their only hope may be an exodus to Colombia. “Colombia has never lived a situation like the one we are encountering today,” said Colombian President Juan Manuel Santos. On Thursday, Santos announced new measures that would make it much more difficult for Venezuelan migrants to cross into the country illegally or remain there without any official status.

Colombia believes that there are currently around 600,000 Venezuelans illegally residing in the country. That number is expected to rise, as Venezuela continues to crumble.

END
SOUTH AFRICA
Zuma finally resigns
(courtesy zerohedge)

Zuma Resigns As President of South Africa

In a nearly hour-long televised address, Jacob Zuma – the beleaguered president of South Africa who was facing a coup by his own party, the African National Congress – announced he is resigning, putting an end to the debate whether he will comply with yesterday’s recall vote which effectively removed him from power.

  • ZUMA RESIGNS AS SOUTH AFRICA PRESIDENT WITH IMMEDIATE EFFECT
  • ZUMA SAYS HE DISAGREES WITH DECISION OF ANC LEADERSHIP
  • ZUMA THANKS MEMBERS OF CABINET, MINISTERS, GOVERNMENT OFFICIALS

USDZAR ticked higher as President Zuma first addressed the nation, after early comments suggested that he would go forward with Thursday’s confidence vote indicating that he would fight the decision to remove him. However, his resignation announcement should put an end to any speculation over his fate, and also clear the path for the pro-business Cyril Ramaphosa to replace Zuma.

It also sent the USDZAR tumbling, and the rand hit the strongest level against the dollar since March 2015, although it has since pared some of its gains as there are no more immediate upside catalysts.

 

END

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

Euro/USA 1.2342 DOWN .0010/ 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/JAPAN TAPERING BOND PURCHASES /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES DEEPLY IN THE  GREEN  

USA/JAPAN YEN 107.36 DOWN  0.404 (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/DEADLY UNWINDING OF YEN CARRY TRADE

GBP/USA 1.3858 DOWN .0024 (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 1.2576 DOWN .0014 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 10 basis points, trading now ABOVE the important 1.08 level RISING to 1.2352; / Last night Shanghai composite CLOSED UP 14.20 POINTS OR 0.45 %//   Hang Sang CLOSED UP 676.07 POINTS OR 2.27%  /AUSTRALIA CLOSED DOWN 0.28% / EUROPEAN BOURSES DEEPLY IN THE GREEN  

The NIKKEI: this WEDNESDAY morning CLOSED DOWN 90.51 POINTS OR .43%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 676.07 POINTS OR 2.27% / SHANGHAI CLOSED UP 14.20 POINTS OR 0.45% /

Australia BOURSE CLOSED DOWN 0.28% /

Nikkei (Japan)CLOSED DOWN 90.51 POINTS OR .43%

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1331.60

silver:$16.62

Early WEDNESDAY morning USA 10 year bond yield: 2.826% !!! DOWN 1 IN POINTS from TUESDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ STILL DEADLY

The 30 yr bond yield 3.108 DOWN 2 IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/DEADLY

USA dollar index early TUESDAY morning: 89.73 UP 2  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 2.079% DOWN 6  in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.0.065% DOWN 1/2     in basis points yield from TUESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.514% DOWN 1  IN basis point yield from TUESDAY/

ITALIAN 10 YR BOND YIELD: 2.065 DOWN 2 POINTS in basis point yield from TUESDAY/

the Italian 10 yr bond yield is trading 55 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.750%  DOWN 0 IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.2394 UP.0041 (Euro UP 41 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 107.05 DOWN 0.712 Yen UP 71 basis points/

Great Britain/USA 1.3959 UP .0076( POUND UP 76 BASIS POINTS)

USA/Canada 1.2561 DOWN  .0028 Canadian dollar UP 28 Basis points AS OIL ROSE TO $59.35

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP 41 to trade at 1.2394

The Yen ROSE to 107.05 for a GAIN of 76 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 76 basis points, trading at 1.3959/

The Canadian dollar ROSE by 29 basis points to 1.2561/ WITH WTI OIL RISING TO : $59.35

The USA/Yuan closed AT 6.3415
the 10 yr Japanese bond yield closed at +.065% DOWN 1/2  BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 7 IN basis points from TUESDAY at 2.891% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.157  UP 2  in basis points on the day /

THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS

Your closing USA dollar index, 89.67 DOWN 54 CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED UP 45.96 POINTS OR 0.64%
German Dax :CLOSED UP 142.66 POINTS OR 1.47%
Paris Cac CLOSED UP 56.02 POINTS OR 1.10%
Spain IBEX CLOSED UP 35.50 POINTS OR 0.37%

Italian MIB: CLOSED UP 399.33 POINTS OR 1.81%

The Dow closed UP 253.04 POINTS OR 1.03%

NASDAQ WAS UP 130.11 Points OR 1.86% 4.00 PM EST

WTI Oil price; 59.35 1:00 pm;

Brent Oil: 62.98 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 57.10 DOWN 53/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 53 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.750% 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:$60.67

BRENT: $64.33

USA 10 YR BOND YIELD: 2.9115%   THIS RAPID ASSENT IN YIELD IS VERY DANGEROUS/DERIVATIVES START TO BLOW UP/extremely dangerous

USA 30 YR BOND YIELD: 3.170%/BROKE GUNDLACH’S KEY 3.00% AGAIN WHERE ALL VALUATIONS ON STOCKS BLOW UP/DEADLY

EURO/USA DOLLAR CROSS: 1.2462 up.0108  (UP 108 BASIS POINTS)

USA/JAPANESE YEN:106.98 DOWN 0.779/ YEN UP 90 BASIS POINTS/ very dangerous as yen carry traders are getting killed.

USA DOLLAR INDEX: 88.98 DOWN 72 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.4009 : UP 0.0126  (FROM YESTERDAY NIGHT UP 126 POINTS)

Canadian dollar: 1.2498 UP 90 BASIS pts

German 10 yr bond yield at 5 pm: +0.750%


VOLATILITY INDEX:  19.26  CLOSE  DOWN   5.71  (saves the Dow/Nasdaq today)

END

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

TRADING IN GRAPH FORM FOR THE DAY

Hotflation Sparks Gold Surge, Dollar Purge, Stock Splurge

Before we start, let’s summarize what we learned today (courtesy of @Lee_Saks)

  • Yields: many many rate hikes
  • Dollar: no rate hikes
  • Stocks: mmm maybe some rate hikes
  • Gold: we blew up the fed. no rate hikes.

Anyone else feel like the financial system is doing this again…

 

Futures show today’s fun-and-games best…

Nasdaq futures were up 3% off the CPI-crash lows…

 

Nasdaq and Small Caps were up almost 2% today!!

 

S&P retook the 2700 level…

 

And The Dow closed above its 50% retracement of the losses… That is a 600-point swing from the lows to the highs today!

 

This is the 4th short-squeeze day in a row – and today’s squeeze was the biggest since Feb 2017…

Risk-Parity funds are not exactly rebounding from their losses…

 

VIX closed below 20 again (after topping 25 intraday)… yay!!!

 

The belly of the curve was hardest hit today with 5Y up 9bps and the short-and and long-end up around 6bps…

 

10Y broke out to its highest since Jan 2014…almost reaching 2.92% today…stocks now love higher rates?

Expectations for more rate-hikes in 2018 picked up notably…

 

The Dollar Index spiked on CPI but then collapsed…BBDXY is down 4 days in a row, today was worst day for USD since The Mnuchin Massacre

 

As USDJPY tumbled today, so Gold spiked…

 

Reverting back to its more normal highly negative correlation regime (after briefly going positive in the last two weeks)…

 

For a little context, since The Fed hiked rates in December, The Dow managed to get green again today, the long-bond is a bloodbath (down 6%) and gold has soared 9%…

 

Thanks to a weak dollar, commodities surged with crude spiking after inventory data (ignoring production data)…

 

 

Big day for Cryptos today, as South Korean backpedalling on bans sent most of the major surging…

 

Notably, as the dollar tumbled both gold and bitcoin were bid…

 

Finally, we noted that Atlanta Fed’s GDPNOW model has already plunged from a 5.4% estimate to 3.25% today… just as it always does…

end

 

EARLY THIS MORNING:  Everything is hotter on the inflation front than expected/sends the 10 yr higher stocks tumble.

(courtesy zerohedge)

Stocks, Bonds Tumble; Dollar, Rate-Hike-Odds Jump After Inflation Scare

OFFICIAL CPI THIS MORNING

08:30 Jan US CPI +0.5% vs. consensus +0.3%; Jan ex- Food & Energy +0.3% vs. +0.2%
Dec CPI revised to +0.2% from +0.1%
Dec ex-Food & Energy revised to +0.2% from +0.3%

The “most-watched datapoint in history” just hit… and everything is hotter than expected…

Amid updated seasonal adjustments from BLS and strong base effects, Headline CPI printed a much hotter-than-expected 2.1% YoY (1.9% YoY exp)

The index for all items less food and energy increased 0.3 percent in January. The shelter index increased 0.2 percent as the indexes for rent and owners’ equivalent rent both rose 0.3 percent, while the index for lodging away from home declined 2.0 percent over the month.

The apparel index rose sharply in January, increasing 1.7 percent after falling in previous months. The medical care index increased as well, rising 0.4 percent. The index for hospital services increased 1.3 percent, and the physicians’ services index rose 0.3 percent; the index for prescription drugs, however, declined 0.2 percent.

The index for motor vehicle insurance continued to rise in January, increasing 1.3 percent, its largest 1-month increase since November 2001. The personal care index rose 0.5 percent; this was its largest increase since January 2015. The used cars and trucks index also continued to rise, advancing 0.4 percent in January. The indexes for household furnishings and operations, education, and tobacco also increased in January.

A few indexes declined in January, including airlines fares, which fell for the third consecutive month, decreasing 0.6 percent. The new vehicles index decreased 0.1  percent. The indexes for recreation, communication, and alcoholic beverages were all unchanged in January.

*  *  *

The reaction is obvious – bond yield surging (prices tumble) and stocks drop

Equity Futures are down across the board…

10Y Yields are spiking..   usa 10 YR:  2.8639

 

The Dollar is spiking…

Rate-Hike odds jumped after the inflation scare… expectations are now for 2 and 2/3rds rate hikes in 2018…

Fed Fund Futures imply a 23% chance of 4 rate-hikes in 2018 – up from 17% yesterday.

As Bloomberg’s Richard Breslow warned yesterday:

If the fate of the stock market, and every other global asset for that matter, is so utterly sensitive to a handful of basis points either way on the 10-year Treasury, then it’s in an even bigger bubble than analysts are copping to. And we should cease and desist arguing fundamentals.

He is right of course.

END

Afternoon: total chaos as stocks surge on short squeeze coupled with a collapse in the dollar and thus a huge rise in our precious metals

(courtesy zero hedge)

 

Total Chaos – Stocks Surge On Biggest Short Squeeze In A Year As Dollar Crashes

Stocks up, Bond yields up, Bitcoin, up, Gold up, Dollar collapsing…

Buy The Fucking Hotflation Dip…

Stocks are soaring on the biggest short-squeeze in a year…

10Y Yields broke above 2.90%…

Biggest drop in the dollar since The Mnuchin Massacre.

The Collapse in the dollar is juicing many currencies – The Real is up 2.5% today…

 

And Gold and USDJPY are reverting back to their negatively correlated regime after going positive in the last few weeks…

end

As the long term rate rises, this causes mortgage applications to tumble .

(courtesy zerohedge)

Mortgage Apps Tumble As Rates Spike To 4-Year Highs

A week ago we warned“this won’t end well” as mortgage rates started to spike, and this week’s mortgage application data suggests it is…

The average 30Y mortgage rate rose 7bps this week to 4.57% – the highest level since January 2014.

And applications are tumbling…

Will higher rates break housing market momentum?

It appears to be impacting the mortgage application pipeline as purchase applications plunged 5.9% MoM – the biggest drop since October and September (impacted by storms).

As the following chart shows, that surge in rates will have a direct impact on home sales (or prices will be forced to adjust lower) as affordability collapses…

end 

 

Then the worst of all worlds:  retail sales tumble just as inflation is spiking and thus stagflation/Dow Jones tumbles

(courtesy zerohedge)

Stagflation: Retail Sales Tumble Just As Inflation Spikes

Lost in the chaos surrounding the blistering January inflation print, i.e. the market’s worst case scenario which sent yields and the dollar soaring, and futures tumbling, was a just as troubling indication that the US consumer has officially tapped out, after January retail sales dropped by -0.2%, badly missing expectations of a 0.3% increase, and the biggest decline since February 2017.

In dollar terms, retail sales fell to $492.003BN in January vs $493.3BN in December.

Stripping away volatile auto sales did not improve the situation, with retail sales ex autos unchanged, far below the 0.5% expected.

Also unchanged were retail sales ex-auto dealers, building materials and gasoline stations, as well as the retail sales “control group” which excludes food services, automobile dealers, building materials and gasoline stations and which directly feeds into GDP, will send Q1 GDP forecasts lower relative to baseline expectations.

Looking at the breakdown of retail sales categories, 6 out of 13 categories rose vs 12 last January. Notably, non-store retailers, i.e. internet sellers, were unchanged in January: the first time this series has not grown M/M in years.

But what is most troubling is that this sharp decline in retail sales takes place just as inflation is spiking, confirming that this could be the start of another dreaded stagflationary episode in which retail sales and CPI diverge to the point where they drag the economy into a recession.

But the worst news: the US consumer is now tapped out, with personal savings just shy of all time lows.

Which means any further increases in spending will be reliant entirely on rising credit card usage, which in a time of rising rates and surging APRs, is virtually certainly not to happen.

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USA 10 yr yields enter the death zone;

(courtesy zerohedge)

US Treasury Yields Enter ‘The Death Zone’

10Y Yield just tested 2.90%…

 

The death zone for stocks in the last two week…

But it’s different today… so far as VIX’s tumble is running the show.

 

end

 

 

This is not what the Fed wants to see: a big drop in wage growth and a big adjustment downward in hourly earnings (as we promised would happen).  The Fed needs wage growth or their “2 % inflation story” will begin to haunt them.

(courtesy zerohedge)

Wage Growth? Real Hourly Earnings Are Slowing Notably

Real average hourly earnings have risen only once in the last 6 months.

January’s 0.2% MoM drop is bigger than expected and confirms the first 6-month drop in over a year as wages appear to have stagnated for two years now…

But didn’t the entire market crap itself at hit wage growth print from the BLS two Fridays ago (that everyone and their cat now knows was due to hours worked adjustments)?

 

 

end

You will recall yesterday,  I highlighted the 4 key manipulating tools used by bankers.  Today 3 bears discuss 3 out of those 4 points.

in case you missed yesterday’s commentary here are the 4 key tolls used by manipulators (bankers)

There are 4 tools used by the manipulators to raise stock prices while knocking down gold and silver:

  1. increasing the value of the USA dollar index (and then buying stocks with proceeds)
  2.  shorting yen  (buying usa/yen) which is your carry trade ie. buy stocks, short yen gold
  3.  hammer vix (the volatility index) which states that everything is OK. ie. short volatility and gold buy stocks
  4.  contain the 10 yr USA treasury yield below 2.80%

we are beginning to see fractures in all of them.  today it was the yen that rose and that drove gold/silver higher.

(courtesy Albert Edwards)

 

 

Albert Edwards: “We Just Had A Small Taste Of The Coming Financial Collapse”

What is the outcome when three market skeptics sit down for dinner to discuss the future of the global economy? Whatever it is, it’s hardly optimistic.

In his latest note released moments after the big CPI upside surprise and titled, what else, “We just had a small taste of coming financial collapse. Still feeling lucky?“, SocGen’s permabearish Albert Edwards writes that he had dinner this week with “two of the great, London based, sellside macro analysts,” George Magnus (formally UBS Chief Economist and now at the China Centre, Oxford University), and Nomura’s Bob Janjuah. This is what was discussed:

In the aftermath of last week’s surge in equity volatility among many of the topics we discussed was the extraordinary ballooning of the US budget towards 6% of GDP at this late stage of the cycle. My view is that this fiscal expansion is probably the most foolhardy escapade in modern economic policy history.

Here Edwards posits that while he agrees that US corporate taxation is anomalously high, “it is the timing of the fiscal stimulus that is utterly ridiculous and will only accelerate the collapse of US financial markets as the Fed hikes rates even more quickly.”

That also happens to be his key thesis: Trump’s tax cuts will so overheat the economy, that the outcome will be another deflationary crash.

While he returns to the topic of the unprecedented fiscal stimulus at a time when the economy already appears to be overheating, Edwards first points out two charts we showed last week, namely the technical breakout in the 10Y and what that could mean for risk assets. Quote Edwards:

We are on the cusp of two key technical breakouts. Although most believe the US 10y has already broken above its long-term downtrend when it rose above 2.64%, our Technical Analysis team believe 3% is the proper breakout level to watch. Nevertheless as the chart below shows kissing this downtrend has typically been very bad news indeed for  equity markets (H/T to Zero Hedge).

​How much do bond yields need to rise before equity markets break? After last week, I think we now know the answer; above 2.85% seems to be enough to cause equities to slump.

Alternatively, Edwards also points out something else we touched upon last week, namely the record speculative positioning in the 10Y, and notes that “huge speculative shorts have now been built up in the US 10y, which may reduce the magnitude of for any near-term selling pressure (see left-hand chart below).”

Besides the 10Y, Edwards also highlights the recent relentless surge in the yen (and plunge in the USDJPY) and says that unlike the US 10y, where speculative excess makes it less likely to cause a breach an important technical level, “the yen positioning makes it far more likely the dollar will fall below Y107.90, and the yen could quickly surge once this key trendline is decisively broken. Certainly it was dollar weakness that helped set off the recent market flap as Mario Draghi got the heebie jeebies and accused the US of not keeping to the G20 agreement.”

To be sure, the paradox of the falling dollar at a time of rising interest rates has stumped many. Here, Edwards offers his explanation for this ongoing phenomenon:

One explanation I have seen cited as driving the dollar (and US bond prices) lower is the reckless fiscal stimulus that is being enacted in the US. Normally one will expect a loose fiscal policy and a tight(er) monetary policy to result in a stronger, not weaker dollar, but I have seen dollar weakness being attributed to the likely inflationary implications of  the fiscal stimulus.

Of course we all know that market moves are always justified ex-post by a plausible macro narrative and if the dollar  decisively breaks below the Y107.90 support and yen shorts rapidly unwind, commentators will no doubt attribute this to the inflationary consequences of the Trump fiscal stimulus. Certainly the US manufacturing sector is booming – as witnessed by the ISM hovering just below 60 level, and this economic expansion is set to become the second longest on record (surpassed only by that of April 1991-March 2001).

Edwards than hands the mic to the just as critical George Magnus, who likewise slams the Trump fiscal stimulus:

“Trillion dollar deficits are just over the horizon, which will cause US government debt as a share of GDP to rise in the next several years to over 100 per cent. While debt levels alone cannot predict what will happen to bond yields, the markets fear that significant unfunded government borrowing—especially when the economy is doing well—will cause the Federal Reserve to carry on raising interest rates, in turn pushing bond yields higher. On current trends, this cyclical shift will eventually, maybe in 2019, puncture the stock market, corporate profits, and most likely the economy.”

Similar to what we discussed here last week after the budget details were leaked, Edwards then quotes the Committee for a Responsible Federal Budget, which sees stubbornly high fiscal deficits for the foreseeable future despite rosy official projections. “They see the red ink rising in fiscal 2019 to $1.2 trillion. The -adjusted- deficit projection (adjusted to more realistic economic forecasts) was set to surge from 4% in this current fiscal year to 5¾% next year and that was before the latest two-year debt-limit budget agreement which will likely see the deficit breach 6% of GDP next year!

To be sure, the shocking thing is that most Republican fiscal conservatives signed up to the fiscal madness, something we asked earlier this week when we mused rhetorically if there are any fiscal conservatives left. There were notable exceptions such as Senator Rand Paul of Kentucky who waged a lonely filibuster accusing his party of hypocrisy after it railed against deficits under Obama.

Here, Edwards gives his own view:

Whatever the arguments are in favour of tax reform in the US (and there are many), this is probably the singularly most irresponsible macro-stimulus seen in US history. To say it is ill-timed and ill-judged would be a massive  understatement.

Stating that his forecast is not clouded by political bias, the SocGen strategist doubles down, “warning that the outcome of this front-end loaded stimulus package is patently obvious. It will rapidly accelerate the end of the economic cycle.

Edwards then points out what we showed previously, namely that “things changed” not on February 2 with the spike in hourly wages, or with the passage of the Senate deal, but well prior:

Even before Congress passed the expansive two-year debt-limit budget agreement last week, bond markets were belatedly recognising the irresponsibility of the fiscal package. The surprise surge in wage inflation in the payroll report may have been the match that lighted the equity market turmoil, but it was the irresponsible fiscal stimulus that provided the kindling.

The genie is now out of the bottle and the markets will react very badly to any sign of inflationary pressure. Tim Lee of pi Economics opined recently on why the Vix will struggle to regain the very low levels of a couple of weeks back (H/T The FT’s Authers’ Note), “We are much further into the cycle of what might be thought of as underlying tightening of monetary conditions. The Fed is contracting its balance sheet and raising interest rates. On top of that … US imbalances are worsening with the personal savings rate set to fall to a new low while US government finances deteriorate further. Nominal and real bond yields are rising.”

Edwards then goes on to make another prediction on the US deficit:

Because of the starting point of US fiscal policy, I have a very high confidence that in the next, not so distant, US recession, the US general government deficit will soar way beyond the 13% the OECD say was the peak for 2009. A ruinous fiscal deficit in excess of 15% of GDP will be Trump’s legacy.

At the end of the day, however, the biggest risk comes from an acceleration in the Fed’s hiking intentions, as Edwards admits.

I was chatting to my colleague Kit Juckes about this and he pointed out the Fed Reserve own blog (Liberty Street Economics) had just published a three part series on the appropriate natural rate for real interest rates (or r* as the eco-geeks call it). Essentially they, like most central banks, fully subscribe to Larry Summers’ secular stagnation view of the world, which means that the equilibrium real rate of interest rates is lower than before (see chart below)

Now that the Fed Funds futures strip has converged with the Fed dots, the risks to the equity markets from a further bond sell-off are twofold. First that the market raises its prediction of the number of Fed rate hikes it expects this year, and second and much more problematic, will there now be a re-appraisal of where Fed Funds are heading in the long-term?

What can force the Fed to reassess its rate hiking timeline? A burst in wage inflation, which was already observed earlier this month.

We have reported previously that the US Phillips Curve is not dead. Instead of looking at the headline unemployment rate, we should be looking at the prime-age employment rate relative to the total population and not the labour force – ie to take account the low participation rate. Certainly, as the St Louis Fed charts show below, recent wage data has not been anomalously low over the last two years and should carry on accelerating as the tightness in the labour market is exacerbated by Trump’s fiscal stimulus.

​​

But what about the nearly 100 million Americans out of the work force? Don’t they provide a natural buffer to rising wages in terms of cheap potential employment? Edwards is not convinced, and cites a recent article by the FT’s John Authers to make his point:

John Authers’ blog posits a disturbing thesis that “there is a group of people who have been unemployed for a long time and are now unemployable. This implies that “underemployment” is not as severe as it seems, because many of those shown in the statistics as not seeking work would – indeed be incapable of – holding down a job. They lack the skills and they have been left behind. This latter theory implies a human tragedy. It also implies that the labour market is tighter than it looks, and the supply of qualified workers is limited—meaning that there is a risk of inflationary wage rises as the economy improves.”

At this point even the deflationary bear who coined the “Ice Age” term throws in the towel and predicts that either way, “wage inflation will begin to rise more quickly, driving market expectations of longterm Fed Funds higher. Just like the peak of the last two economic cycles, it will be the implosion of financial markets that causes the next recession. And President Trump’s grotesquely ill-timed fiscal stimulus will be identified in retrospect as a – if not the trigger.”

And just in case it was not clear how, in Edwards’ opinion Trump will be the reason for blowing up the stock market that he used to swear by on twitter almost every day, here is the SocGen analyst’s conclusion:

After some eighteen months of surprising to the downside, US wage and price inflation are rising briskly, putting intense downward pressure on financial markets. Yet another Fed-inspired financial Ponzi scheme now looks set to collapse into the deflationary dust. But the post-mortem will identify President Trump’s ludicrously timed fiscal stimulus as a key trigger for the collapse. A 15% deficit will be his legacy.

Maybe… but not just yet: after tumbling on today’s stagflationary reports of surging inflation offset by slumping retail sales, stocks stayed in the red barely for half an hour before they burst in the green as “someone” decided to slam the VIX sending it back under 20  for the first time since Volocaust Monday. Rinse and repeat.

 

end

Late this afternoon, Fannie Mae needs another taxpayer bailout after suffering continual losses

(Washington’s Daily Caller/Donachie)

special thanks to Robert H for sending this down for us;

 

Fannie Mae Wants Another Multi-Billion Taxpayer Bailout

Photo of Robert Donachie

ROBERT DONACHIE
Capitol Hill and Health Care Reporter
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Fannie Mae incurred a net loss of $6.5 billion in the final quarter of 2017 and announced Wednesday it is in desperate need of a taxpayer bailout.

Fannie Mae said Wednesday the Federal Housing Agency (FHA) is seeking a $3.7 billion infusion of taxpayer money from the U.S. Treasury to make up for the loss, which reportedly stemmed from the changes Republicans made to the corporate tax code.

Due to the terms of its first taxpayer bailout, Fannie Mae operates with limited capital stores, which is why it cannot pay for the loss on its own.

The original agreement struck after the 2008 housing crisis required Fannie Mae and Freddie Mac to give their quarterly dividends to the U.S. Treasury until its capital reserves reached zero. Put simply, the government required Fannie and Freddie to send almost all of its profits to the Treasury.

The Treasury Department and the FHA eased those restrictions in 2017, allowing the agencies to hold $3 billion in capital stores to guard against potential losses.

If approved, it would be the first time the government put capital into Fannie since March 2012.

Follow Robert Donachie on Twitter and Facebook

Send tips to robert@dailycallernewsfoundation.org.

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The Bipartisan Senate group has reached a DACA deal but Trump will not like it: no funding for his wall

(courtesy zerohedge)

Bipartisan Senate Group Says DACA Deal Reached

Less than two days after GOP Senate Majority Leader Mitch McConnell used a shell bill from the House as pretext to kickstart an open-ended floor debate on an immigration reform plan, GOP Senators are telling Fox News and Bloomberg that a compromise that would preserve the so-called DACA protections has been reached.

 

*BIPARTISAN SENATE GROUP HAS DEAL ON DACA, GOP SENATORS SAY: BBG

 

The deal – which appears to have been generated by the bipartisan group led by GOP Sen. Susan Collins – will preserve DACA protections in exchange for a border security package.

“I believe our group has come together on an approach,” GOP Sen. Susan Collins says, declining to address specifics.

However, it remains unclear if the deal, which appears to leave out funding for Trump’s promised border wall, will be acceptable to both the House and to President Trump…

Collins

Minutes before the news broke, Paul Ryan told Fox’s Chad Pergram that, while he hopes to find a solution on DACA, he “hope[s] that our Democratic colleagues are more interested in finding a solution than preserving an issue for campaigns…”

 

Ryan on DACA: We want to find a solution. I hope that our Democratic colleagues are more interested in finding a solution than preserving an issue for campaigns..We’ll see what the Senate does this week

Ryan has said previously that he wouldn’t call an immigration bill to the floor for a House vote unless it has Trump’s explicit support…

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SWAMP STORIES

I brought this to your attention and it is most important.  It seems this is a CYA email by Rice as she states that the investigation into the Trump campaign must be done by the book and we now know that this was opposite as to what happened.  Grassley has sent a letter to her asking questions as to why she wrote the email.

grab your popcorn on this one

(courtesy zerohedge)

 

FBI Scandal Unraveling: Susan Rice Email From Inauguration Day Is “Disturbing”

Authored by Mac Slavo via SHTFplan.com,

As if rational-minded humans needed any other evidence that the “Russian collusion” narrative was fabricated, a disturbing email from Susan Rice has surfaced, adding fuel to that fire. Rice was Barack Obama’s ambassador to the United Nations and is most known for her lying in the aftermath of the Benghazi scandal.

Rice has been neck deep in several scandals, including the “unmasking” ordeal that unfolded shortly after Donald Trump beat Hillary Clinton in the 2016 election. Senator Lindsey Graham has now described one of Rice’s newly discovered emails as “disturbing,” flinging her head first into the invented Russian collusion scandal.

The recently revealed Inauguration Day email from Susan Rice detailed former President Barack Obama’s guidance at a high-level meeting about how law enforcement should investigate Russian interference in the 2016 election.

According to Fox News, the email first surfaced Monday, when Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and Graham, R-S.C., sent the Obama national security adviser a letter, pressing for answers about the email by next week.

“She’s sending herself an email talking about a conversation on January 5 with the president, reassuring herself, and I guess the president, that this would be done by the book,” Graham said Monday night on Fox News’ The Story with Martha MacCallum.

“I think that’s odd and disturbing because we know the investigation regarding the Trump campaign was anything but by the book.”

Rice’s email, which she sent to herself on January 20, 2017, seemed to document a January 5, 2017, meeting in the Oval Office with Obama, then-Vice President Joe Biden, former FBI Director James Comey, then-Deputy Attorney General Sally Yates, and herself.

In writing to Rice, Grassley and Graham said, “It strikes us odd that, among your activities in the final moments on the final day of the Obama administration, you would feel the need to send yourself such an unusual email purporting to document a conversation involving President Obama and his interactions with the FBI regarding the Trump/Russia investigation.”

 The two senators also noted that while Rice said that Obama instructed Comey to proceed ‘by the book,’ the Republicans claim that ‘substantial questions have arisen about whether officials at the FBI, as well as the Justice Department and the State Department, actually did proceed “by the book.”‘

This major scandal and subsequent mainstream media coverup is slowly unraveling, and it seems there are few high-powered Democrats that aren’t caught up in the corruption.

END

Senior White House aids are stating that Kelly pressured them to lie for him

(courtesy zerohedge)

Senior White House Aides Say Kelly Pressured Them To Lie For Him

For a moment yesterday afternoon, it appeared as if White House Chief of Staff John Kelly would weather what will likely be remembered as the ‘Rob Porter spousal abuse controversy’. During the daily press briefing, Press Secretary Sarah Huckabee Sanders maintained that there weren’t any discrepancies between the initial timeline of events offered by Kelly and a new timeline that FBI Chief Christopher Wray offered during Senate testimony.

Kelly

But this morning, Bloomberg is back with another story about the collection of internal and external advisers to the president whispering in his ear that his well-respected chief of staff must go, despite their ostensibly tight bond.

Some of that animosity is directly tied to Kelly’s handling of the Porter story, as several senior staffers reportedly told Bloomberg that the former general had asked them to lie on his behalf.

There is intense debate within the White House about what steps to take next. Trump himself has recently floated potential Kelly replacements with advisers, according to two of the people.

Several White House officials, including some allied with Kelly, no longer believe he can survive the Porter episode. Some senior staff feel he asked them to lie on his behalf.

Kelly stuck to his initial story during an interview with CNBC Tuesday, when he reiterated that Porter was gone “40 minutes” after Kelly learned the full extent of the allegations on the evening of Feb. 6. The White House contradicted Kelly by saying Porter officially left the next morning.

As we hinted at yesterday, Bloomberg notes that the episode is “likely to focus renewed attention” on other members of the White House staff who don’t already have permanent security clearances – a group that includes Trump son-in-law Jared Kushner.

Kushner was famously repeatedly called out for leaving off several meetings with foreign officials – including the then-Russian ambassador to the US – from his disclosure forms, something he blamed on a clerical error.

Several candidates have reportedly been floated to replace Kelly. These include OMB Chief Mick Mulvaney, National Economic Council Director Gary Cohn and Freedom Caucus leader Mark Meadows.

Trump has, in the past, shown a tendency to announce big firings at the end of the work week – a practice picked up, no doubt, from his previous life in the world of business.

The president – who hasn’t tweeted in a day – has yet to weigh in. Though we imagine we’ll hear something definitive soon.

 

END

It looks like the days for White House Chief of Staff are numbered as the Oversight Committee launches an investigation as to how Kelly withheld knowledge of spousal abuse on Sec. Rob Porter as Trey Gowdy has sent a letter as to how he was allowed to work without an interim security clearance

(courtesy zerohedge)

House Oversight Committee Launches Probe Into Porter

It seems the days are numbered for White House Chief of Staff John Kelly as The Hill reports, The House Oversight Committee is now investigating how former White House staff secretary Rob Porter kept his role in the administration even as accusations of domestic abuse were made against him, according to Rep. Trey Gowdy, the panel’s chairman.

Amid misremembering, leaks, and accusations, Gowdy sent a letter (below) to The White House demanding to know how Porter was allowed to work without an interim security clearance, despite being accused of domestic violence.

Additionally, The Hill reports that Gowdy separately sent a letter on Wednesday to FBI Director Christopher Wray seeking clarity on how the bureau investigates and issues interim security clearances. Gowdy also asked when the FBI notified the White House of any underlying issues with Porter’s background check, which has become a source of controversy.

*  *  *

Full letter from Gowdy to Kelly below…

White House chief of staff John Kelly has been at the center of the storm. He initially defended Porter, and the White House reportedly worked with some reporters to have Porter get his side of the story out publicly before deciding he should exit the administration.

White House press secretary Sarah Huckabee Sanders at a daily briefing on Tuesday suggested a White House office manned with career staff had yet to sign off on the FBI’s background check, and that this was how Porter was allowed to work in the building.

end

 

It now looks like the White House will back Kelly

(courtesy zerohedge)

Pence Says He Looks Forward To Working With Kelly “For Many, Many Months To Come”

It looks like the White House is standing by their man…

Vice President Mike Pence said Wednesday during an event sponsored by Axios said that, while the White House “could’ve done a better job” handling the Rob Porter domestic abuse scandal, Chief of Staff John Kelly has, all in all, done a “remarkable” job.

“John Kelly has done a remarkable job as chief of staff for the president of the United States and I look forward to working with him for many, many months to come,” Pence said at an event sponsored by Axios.

The vice president added that he would offer his advice on the matte directly to the president. Though, when asked outright if Kelly’s explanation that he fired Porter “40 minutes” after learning about the allegations was completely truthful, Pence dodged. Pence also alluded to Kelly’s son, who died during combat in Afghanistan.

Kelly

“There are very few Americans or American families that have served this country more honorably nor sacrificed more than the family of John Kelly,” he said.

Kelly, of course, insisted on Monday that the Porter situation “was all done right.”

Setting aside all the reports of West Wing staffers (and outside advisers) sharpening their knives at the opportunity to exact revenge on a chief of staff who hasn’t been the most popular guy in the West Wing, it’s understandable why the administration would want to keep Kelly on.

Just imagine how much he knows.

Also, as has previously been reported, the Porter issue has raised doubts about other members of the staff whose security clearances haven’t been granted on a permanent basis yet.

A group that notably includes Trump son-in-law Jared Kushner.

Additionally, Pence reiterated during his remarks that North Korea is the “most oppressive and tyrannical regime” on the planet and that the country must relinquish its nukes before any  kind of deal can be struck – though Pence reaffirmed that the US is open to talks.

end

 

This ought to be good:  Buzzfeed is suing the Democratic National Committee for the report on the hacking of their computers.  The reason is that Buzzfeed is being sued by Russian oligarch Gubarev who was falsely named in the Steele Dossier. Good luck to Buzzfeed as they are trying to verify stuff in that dossier

(courtesy zerohedge)

BuzzFeed Suing DNC For Proof They Were Hacked

BuzzFeed is suing the cash-strapped Democratic National Committee (DNC) to force them to hand over information related to the “Steele Dossier” that might help the news outlet defend itself against a lawsuit lodged by a Russian businessman who was named in the document.

Three separate lawsuits have been launched against BuzzFeed in connection to the January 11, 2017 publication of the dossier, which states that Russian tech executive Aleksej Gubarev used his web hosting companies to hack into the DNC’s computer systems.

The dossier, without substantiation, said Gubarev’s U.S.-based global web-hosting companies, XBT and Webzilla, planted digital bugs, transmitted viruses and conducted altering operations against the Democratic Party leadership.

While one key name in the dossier was blackened out by BuzzFeed, Gubarev’s was not. He alleges that he was never contacted for comment, suffering reputational harm in the process. –Foreign Policy

As part of their defense, BuzzFeed issued a subpoena to the DNC for information which might help them defend against Gubarev’s lawsuit by verifying claims in the dossier – including “digital remnants left by the Russian state operatives,” as well as a full version of the hacking report prepared by cybersecurity firm CrowdStrike.

Since the DNC wouldn’t let the FBI look at the server and instead relied on the report prepared by CrowdStrike (founded by Russian expat Dimitri Alperovitch – who sits on the very Anti-Russian Atlantic Council along with Evelyn “oops!” Farkas. The AC is funded by the US State Department, NATO, Latvia, Lithuania, and Ukranian Oligarch Victor Pinchuk, who apparently owns the Ukrainian gas company Joe Biden’s son is on the board of).

“As part of the discovery process, BuzzFeed is attempting to verify claims in the dossier that relate to the hacking of the DNC,” said BuzzFeed spokesman Matt Mittenhal in a statement. “We’re asking a federal court to force the DNC to follow the law and allow BuzzFeed to fully defend its First Amendment rights.”

Last month, the DNC claimed that providing the requested information would expose the DNC’s internal operations and harm the party politically (it’s always someone else’s fault, no?).

“If these documents were disclosed, the DNC’s internal operations, as well as its ability to effectively achieve its political goals, would be harmed,” said DNC lawyers.

If the DNC is compelled to turn over the full CrowdStrike report and “digital remnants,” perhaps Gubarev would then present a counter-analysis by researcher Forensicator which CrowdStrike apparently “missed” – revealing that the DNC files were copied at 22.6 MB/s – all but confirming that the files had to have been copied locally by an inside source. Many have speculated that DNC IT staffer Seth Rich, whose murder is still unsolved, was the source of the emails provided to WikiLeaks.

Word of BuzzFeed’s suit against the DNC comes on the heels of a Monday revelation that the news outlet hired a former top FBI and White House cybersecurity official to fly around the globe on a secret mission to corroborate various claims in the dossier.

The probe is being conducted by Anthony Ferrante – formerly the FBI’s top official in charge of “cyber incident response” at the U.S. National Security Council under the Obama administration. Ferrante is leading the investigation from his new employer, D.C.-based business advisory firm, Forensic Technologies International (FTI) consulting reports Foreign Policy.

At FTI, Ferrante launched what’s now been a months-long stealth effort chasing down documents and conducting interviews on the ground in various countries around the world. His team directed BuzzFeed lawyers to subpoena specific data and testimony from dozens of agencies or companies across the country and assembled a cyber ops war room to analyze that data, according to sources familiar with the work.

Considering that much of the Steele dossier came from a collaboration with high level Kremlin officials(a collusion if you will), one has to wonder exactly what channels Ferrante and FTI have tapped in order to access such information.

Wouldn’t it be funny if BuzzFeed proves the DNC wasn’t hacked?

END

Let us close out tonight with this great interview of John Williams with Greg Hunter

(courtesy Greg Hunter/USAWatchdog/John Williams)

Fed Triggered Stock Sell-Off – Dollar Next – John Williams

By Greg Hunter On February 14, 2018 In Market Analysis

By Greg Hunter’s USAWatchdog.com

In his latest report, economist John Williams asks the question, “Did the Fed trigger the stock sell-off? ” Williams answer, “It sure looks that way. With all the heave selling, the bond yields were rising and investors didn’t like that. Risings bond yields means someone is selling bonds. The Fed was not selling bonds, they were not rolling over the bonds they normally would. . . . There was a big drop in the amount of bonds the Fed was holding in the last week by about $10 billion. That was the biggest weekly decline since August of 2012. . . . It was enough to put some upside pressure on the interest rates . . . and that was a trigger (for the stock market sell-off). Normally, you don’t crash from an all-time high, not that it crashed, but you did have pretty heavy selling. You didn’t see much movement in the dollar. You didn’t see much movement in gold, and when this market really goes, I think you are going to see the dollar selling off very rapidly and gold being a flight to safe haven.”

Williams goes on to say, “The Fed caused this latest round of selling because they are reducing their balance sheet. I would say the Fed is in a real awkward position here because the economy is not doing what they are advertising, at least what you are seeing in the headline data. I think you are going to see a rapid slowdown in the next couple of months. Then you are going to see the markets say what’s the Fed doing here? The Fed will have to go back to quantitative easing (QE or money printing). When you see that again, that should be a heavy sell signal for the dollar. It will be a flight from the dollar that will spike oil prices and give us an inflation problem. This will tend to spike gold prices. As foreign investors flee from the dollar, they will also be fleeing from the stock market and the U.S. bond market. You will see stock selling and bond selling and then higher yields, and the Fed will be coming in and start buying the bonds again. I think that is where we are heading.”

So, are the Trump tax cuts going to help the economy or hurt it? The answer is both. Williams explains, “The tax cuts are generally positive. Anytime you cut taxes, that is generally a plus for the economy. The problem is the average guy is still not making ends meet. Anything that increases disposable income is a plus. This does not necessarily go to the guys at the lower end of the income scale, but generally there should be a little economic pick up here from it. The problem is what happens to the budget deficit. We just went through the government shutdown and a package that lays things out for the next two years, but it widens the deficit. The deficit is beyond control. We have $100 trillion in unfunded liabilities. That means you need $100 trillion in hand right now to cover the federal obligations going forward. . . . Printing money to meet obligations is what happened in the Weimar Republic in Germany. This happened in Zimbabwe. This kind of thing eventually gives you a hyperinflation. . . . Ongoing budget deficit and debasing of the dollar will give you global selling pressures in the currency markets. . . . We haven’t seen much selling in the dollar, but that is going to change. You are going to see flight from the dollar and flight from the markets as well.”

Join Greg Hunter as he goes One-on-One with economist John Williams, founder of ShadowStats.com.

Video Link

https://usawatchdog.com/fed-triggered-stock-sell-off- dollar-next-john-williams/

Just a little note to all of our lovers out there.Today is Valentine’s day so do not forget your significant other

 

I will  see you THURSDAY night

HARVEY

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