GOLD: $1328.80 down $1.15
Silver: $16.52 DOWN 10 cents
Closing access prices:
Gold $1329.10
silver: $16.53
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: $1335.15 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1328.80
PREMIUM FIRST FIX: $6.35
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SECOND SHANGHAI GOLD FIX: $1337.63
NY GOLD PRICE AT THE EXACT SAME TIME: $1326.90
discount of Shanghai 2nd fix/NY:$10.73
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LONDON FIRST GOLD FIX: 5:30 am est $1328.90
NY PRICING AT THE EXACT SAME TIME: $1329.10
LONDON SECOND GOLD FIX 10 AM: $1328.90
NY PRICING AT THE EXACT SAME TIME. $1328.10
For comex gold:
FEBRUARY/
NUMBER OF NOTICES FILED TODAY FOR FEBRUARY CONTRACT: 16 NOTICE(S) FOR 1600 OZ.
TOTAL NOTICES SO FAR:1800 FOR 180,000 OZ (5.5980 TONNES),
For silver:
FEBRUARY
1 NOTICE(S) FILED TODAY FOR
5000 OZ/
Total number of notices filed so far this month: 387 for 1,935,000 oz
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Bitcoin: BID $10,162/OFFER $10,233: UP $362(morning)
Bitcoin: BID/ $9,932/offer $10,002: DOWN $132 (CLOSING/5 PM)
end
Let us have a look at the data for today\
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In silver, the total open interest FELL BY A CONSIDERABLE SIZED 3176 contracts from 201,946 FALLING TO 198,429 DESPITE YESTERDAY’S TINY 1 CENT LOSS IN SILVER PRICING. WE HAD CONSIDERABLE COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE: 1255 EFP’S FOR MARCH AND AND 500 EFP’S FOR MAY AND ZERO FOR ALL OTHER MONTHS AND THUS TOTAL ISSUANCE OF 1199 CONTRACTS. WITH THE TRANSFER OF 1755 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 1755 CONTRACTS TRANSLATES INTO 8.755 MILLION OZ DESPITE WITH THE CONTINUAL DROP IN OPEN INTEREST IN SILVER AT THE COMEX.
ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF FEBRUARY:
43,223 CONTRACTS (FOR 17 TRADING DAYS TOTAL 43,223 CONTRACTS OR 216.115 MILLION OZ: AVERAGE PER DAY: 2543 CONTRACTS OR 12.712 MILLION OZ/DAY
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH: 216.115 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 30.85% OF ANNUAL GLOBAL PRODUCTION
ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S: 464.65 MILLION OZ.
ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ
RESULT: A CONSIDERABLE SIZED LOSS IN OI SILVER COMEX DESPITE THE TINY 1 CENT LOSS IN SILVER PRICE. WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 1755 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 1755 EFP’S FOR MONTHS MARCH AND MAY WERE ISSUED FOR TODAY FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS. WE LOST 1421 OI CONTRACTS i.e. 1755 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 3176 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF 1 CENT AND A CLOSING PRICE OF $16.62 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. 0.992 BILLION TO BE EXACT or 142% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER
In gold, the open interest ROSE BY 0 CONTRACTS REMAINING AT 524,449 DESPITE THE TINY RISE IN PRICE OF GOLD WITH YESTERDAY’S TRADING ($0.90). HOWEVER, IN ANOTHER DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR FRIDAY AND IT TOTALED AN SMALL SIZED 2746 CONTRACTS OF WHICH APRIL SAW THE ISSUANCE OF 2746 CONTRACTS AND JUNE SAW THE ISSUANCE OF 0 CONTRACTS AND THEN ALL OTHER MONTHS ZERO. The new OI for the gold complex rests at 524,449. 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 2746 CONTRACTS: 0 OI CONTRACTS INCREASED AT THE COMEX AND A SMALL SIZED 2746 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.(2746 oi gain in CONTRACTS EQUATES TO 8.541TONNES)
YESTERDAY, WE HAD 9751 EFP’S ISSUED.
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEBRUARY STARTING WITH FIRST DAY NOTICE: 184,719 CONTRACTS OR 18,471,900 OZ OR 574.52 TONNES (17 TRADING DAYS AND THUS AVERAGING: 10,865EFP CONTRACTS PER TRADING DAY OR 1,086,500 OZ/ TRADING DAY)
TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS : SO FAR THIS MONTH IN 17 TRADING DAYS: IN TONNES: 574.52 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2200 TONNES
THUS EFP TRANSFERS REPRESENTS 574.52/2200 x 100% TONNES = 26.11% OF GLOBAL ANNUAL PRODUCTION SO FAR IN FEBRUARY ALONE.
ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE: 1207.94 TONNES
ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22 TONNES
Result: A ZERO SIZED INCREASE IN OI AT THE COMEX DESPITE THE TINY RISE IN PRICE IN GOLD TRADING YESTERDAY ($0.90). HOWEVER, WE HAD ANOTHER TINY SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 2746 CONTRACTS 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 2746 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 2746 contracts ON THE TWO EXCHANGES:
2746 CONTRACTS MOVE TO LONDON AND 0 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 8.54 TONNES).
we had: 16 notice(s) filed upon for 1600 oz of gold.
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With respect to our two criminal funds, the GLD and the SLV:
GLD
WITH GOLD DOWN $1.15 : A BIG CHANGE IN GOLD INVENTORY AT THE GLD/ANOTHER DEPOSIT OF 1.47 TONNES OF GOLD INTO THE GLD
Inventory rests tonight: 829.26 tonnes.
SLV/
WITH SILVER DOWN 10 CENTs TODAY:
ANOTHER BIG CHANGES IN SILVER INVENTORY AT THE SLV/A DEPOSIT OF 1.315 MILLION OZ
/INVENTORY RESTS AT 316.590 MILLION OZ/
end
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FELL BY 3176 contracts from 201,946 DOWN TO 198,429 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE TINY SIZED FALL IN PRICE OF SILVER (1 CENT WITH RESPECT TO YESTERDAY’S TRADING). OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 1255 PRIVATE EFP’S FOR MARCH AND 500 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 CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE OI LOSS AT THE COMEX OF 3176 CONTRACTS TO THE 1755 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A SMALL LOSS OF 1421 OPEN INTEREST CONTRACTS . WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN FEBRUARY (SEE BELOW). THE NET LOSS TODAY IN OZ ON THE TWO EXCHANGES: 7.105 MILLION OZ!!!
RESULT: A CONSIDERABLE SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE TINY FALL OF 1 CENT IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING ). BUT WE ALSO HAD ANOTHER GOOD 1755 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 THURSDAY night/FRIDAY morning: Shanghai closed UP 20.46 POINTS OR 0.63% /Hang Sang CLOSED UP 311.49 POINTS OR 0.97% / The Nikkei closed UP 156.37 POINTS OR 0.72%/Australia’s all ordinaires CLOSED UP 0.78%/Chinese yuan (ONSHORE) closed UP at 6.3350/Oil UP to 62.60 dollars per barrel for WTI and 66.28 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED EXCEPT GERMAN DAX . ONSHORE YUAN CLOSED 6.3350 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED AT 6.3310 AGAINST THE DOLLAR/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/ONSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR AND ALL CURRENCIES. CHINA IS NOT SO HAPPY TODAY
(SEE NEWS)
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)North Korea
b) REPORT ON JAPAN
3 c CHINA
i)Big news last night. We have been reporting on 4 major Chinese operations that have been in severe financial trouble and these entities may lead to a systemic risk.
Well, the first one succumbed as large Anbang has been taken over by the Chinese government in a bail out. They are to systemically sell off assets. The Chinese government is going to provide liquidity to shore up its deficiencies. Then after one year, the hope is that they can return as a profitable entity. The problem is the huge number of shadow banking assets on its books. If liquidated this could provide a run on the 9 trillion USA China’s Shadow Banking industry..
( zerohedge)
ii)A good commentary on how the Anbang default will spill over to the other 3 biggies, with NHA being the biggest problem. As some has pointed out, the Chinese situation is similar to the collapse of the Japanese economy in 1990
4. EUROPEAN AFFAIRS
Traders are puzzled by the British pound flash crash!! It rebounded to positive one hour later
( zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
This is escalating out of control
( zerohedge)
6 .GLOBAL ISSUES
7. OIL ISSUES
8. EMERGING MARKET
Venezuela
A glimpse into what is going on inside basket case Venezuela. Oil workers are collapsing from hunger.
( zerohedge)
9. PHYSICAL MARKETS
( Alasdair Macleod/Goldmoney.com/GATA)
ii) for your interest..Ralph Benko on gold Olympic medals which are actually silver.
10. USA stories which will influence the price of gold/silver
i)Early this morning credit markets around the globe are flashing red as yields rise
( zerohedge)
ii)This makes us very comforting to know that Mnuchin is the Sec. Treasurer of the USA:
there is no link between rising wages and inflation>????
(courtesy zerohedge)
iii)SWAMP STORIES
a)Now the FBI informant’s lawyer is demanding a Dept of Justice inquiry into a coordinated smear campaign
( zerohedge)
c)As expected, Rick Gates it to plead guilty in the Mueller probe and will provide considerable information on Manafort’s activities with Victor Yanukovich
(courtesy zerohedge)
d)Gates pleads guilty and will testify against Manafort
( zerohedge)
PRELIMINARY COMEX VOLUME FOR TODAY: 160,352 contracts
CONFIRMED COMEX VOL. FOR YESTERDAY: 221,298 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 ROSE BY AN UNEXPECTED 3176 CONTRACTS FROM 201,946 DOWN TO 198,429 DESPITE YESTERDAY’S TINY SIZED 1 CENT FALL IN TRADING). HOWEVER,WE WERE ALSO INFORMED THAT WE HAD ANOTHER GOOD SIZED 1255 EMERGENCY EFP’S FOR MARCH ISSUED BY OUR BANKERS (WITH 500 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: 1755. 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 AND A SMALL SIZED LOSS 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 LOST 1421 SILVER OPEN INTEREST CONTRACTS:
3176 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 1755 OI CONTRACTS NAVIGATING OVER TO LONDON.
NET LOSS ON THE TWO EXCHANGES: 1421 CONTRACTS
We are now in the poor non active delivery month of FEBRUARY and here the front month GAINED 21 contracts RISING TO 21 contracts. We had 0 notices filed upon yesterday so we GAINED 21 contract or NIL ADDITIONAL 105,000 oz will stand for delivery at the comex
The March contract lost 8384 contracts DOWN to 44,986
April GAINED 145 contracts UP to 342 .
.
We had 1 notice(s) filed for 5000 OZ for the FEBRUARY 2018 contract for silver
INITIAL standings for FEBRUARY
Feb 23/2018.
| Gold | Ounces |
| Withdrawals from Dealers Inventory in oz | nil oz |
| Withdrawals from Customer Inventory in oz |
96.45 oz
Scotia
3 kilobars
|
| Deposits to the Dealer Inventory in oz | nil oz |
| Deposits to the Customer Inventory, in oz | nil |
| No of oz served (contracts) today |
16 notice(s)
1600 OZ
|
| No of oz to be served (notices) |
1068 contracts
(106,800 oz)
|
| Total monthly oz gold served (contracts) so far this month |
1800 notices
180,000 oz
5.5980 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 |
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 16 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 16 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 (1800) x 100 oz or 180,000 oz, to which we add the difference between the open interest for the front month of FEB. (1084 contracts) minus the number of notices served upon today (16 x 100 oz per contract) equals 286,800 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 (1800 x 100 oz or ounces + {(1084)OI for the front month minus the number of notices served upon today (16 x 100 oz )which equals 286,800 oz standing in this active delivery month of February (8.9206 tonnes). THERE IS 14.516 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.
WE LOST 23 CONTRACTS OR AN ADDITIONAL 2300 OZ WILL NOT STAND IN THIS ACTIVE DELIVERY MONTH OF FEBRUARY AND THEY MORPHED INTO LONDON BASED FORWARDS
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IN THE LAST 17 MONTHS 70 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE DECEMBER DELIVERY MONTH
FEBRUARY FINAL standings
| Silver | Ounces |
| Withdrawals from Dealers Inventory | nil oz |
| Withdrawals from Customer Inventory |
26,175.24 oz
Brinks
JPM
|
| Deposits to the Dealer Inventory |
nil
oz
|
| Deposits to the Customer Inventory |
952.800 oz
JPM
|
| No of oz served today (contracts) |
1
CONTRACT(S
(5,000 OZ)
|
| No of oz to be served (notices) |
21 contracts
(105,000 oz)
|
| Total monthly oz silver served (contracts) | 387 contracts
(1,935,000 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 0 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 JPMorgan: 952.800 oz
total inventory deposits: 952.80 oz
*** JPMorgan is continually adding to its inventory almost every single day.
JPMorgan now has 136 million oz of total silver inventory or 55% of all official comex silver.
JPMORGAN TOOK A BREAK TODAY IN NOT ADDING ANYTHING APPRECIABLE TO ITS OFFICIAL INVENTORY COUNT.
we had 2 withdrawals from the customer account;
iii) Out of Brinks:: 25,183.740 oz
ii) Out of jpm:: 991.500 oz
total withdrawals; 26,175.240 oz
we had 01 adjustments
i) Out of Scotia: 1,008,194.080 oz was adjusted out of the customer account and this landed into the dealer account of Scotai
total dealer silver: 45.337 million
total dealer + customer silver: 246.380 million oz
The total number of notices filed today for the FEBRUARY. contract month is represented by 1 contract(s) FOR 5,000 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 387 x 5,000 oz = 1,935,000 oz to which we add the difference between the open interest for the front month of FEB. (21) and the number of notices served upon today (1 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the FEB contract month: 387(notices served so far)x 5000 oz + OI for front month of FEBRUARY(21) -number of notices served upon today (1)x 5000 oz equals 2,040,000 oz of silver standing for the FEBRUARY contract month.
WE GAINED 21 CONTRACT OR AN ADDITIONAL 105,000 OZ WILL STAND AT THE COMEX
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ESTIMATED VOLUME FOR TODAY: 81,221 CONTRACTS
CONFIRMED VOLUME FOR YESTERDAY: 116,177 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 116,177 CONTRACTS EQUATES TO 580 MILLION OZ OR 82.8% 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 -2.10% (FEB 23/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.30% to NAV (FEB 23/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.10%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.30%/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 RISES TO -3.12%: NAV 13.71/TRADING 13.28//DISCOUNT 3.12.
END
And now the Gold inventory at the GLD/
FEB 23/WITH GOLD DOWN $1.15, WE HAD A GOOD INVENTORY GAIN OF 1.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 829.26 TONNES
FEB 22/WITH GOLD UP 90 CENTS AGAIN TODAY, WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 827.79 TONNES
FEB 21/ WITH THE 90 CENT GAIN WE HAD ANOTHER DEPOSIT OF 3.15 TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS TONIGHT AT 827.79 TONNES
Feb 20/WITH GOLD DOWN BY $24.25, THE CROOKS DECIDED THAT THEY HAD BETTER RETURN (DEPOSIT) 3.34 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS TONIGHT AT 824,64 TONNES
Feb 16/WITH GOLD UP BY 25 CENTS, THE CROOKS DECIDED AGAIN TO RAID THE COOKIE JAR BY WITHDRAWING 2.36 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 821.30 TONNES
Feb 15/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 823.66 TONNES
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 23/2018/ Inventory rests tonight at 829,26 tonnes
*IN LAST 329 TRADING DAYS: 111.89 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 259 TRADING DAYS: A NET 45.42 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
end
Now the SLV Inventory
FEB 23/WITH SILVER DOWN 10 CENTS TODAY, WE HAD ANOTHER HUGE ADDITION OF 1.315 MILLION OZ/INVENTORY RESTS AT 316.590 MILLION OZ/
fEB 22.2018/WITH SILVER DOWN 1 CENT TODAY, WE HAD NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 315.271 MILLION OZ/
FEB 21/WITH SILVER UP 15 CENTS TODAY, WE HAD A GOOD SIZED INVENTORY ADDITION OF 1.226 MILLION OZ/INVENTORY RESTS AT 315.271 MILLION OZ/
Feb 20/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ
Feb 16/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/
Feb 15/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/
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 23/2017:
Inventory 315.271 million oz
end
HUGE SCARCITY OF GOLD IN LONDON AS THE GOLD LENDING RATE SURPASSES 2.28%
6 Month MM GOLD LENDING RATE 1.87/ and libor 6 month duration 2.13
Indicative gold forward offer rate for a 6 month duration/calculation:
GLR+ 1.87%
libor 2.168 FOR 6 MONTHS/
gofo: .298%
12 Month MM GOLD LENDING RATE
+ 2.28%
LIBOR FOR 12 MONTH DURATION: 2.449
GOFO = LIBOR – GOLD LENDING RATE
GOFO = 2.449 – 2.28 = .169
GOLD IS NOW EXTREMELY SCARCE.
end
At 3:30 pm we receive the COT report which gives position levels at the comex. Due to the huge amount of EFP’s issued by the banks, this report is basically worthless. However for completeness, I will provide it for you.
|
Gold COT Report – Futures |
||||||
|
lLarlarge Speculators |
Commercial |
Total |
||||
|
Long |
Short |
Spreading |
Long |
Short |
Long |
Short |
|
257,205 |
66,283 |
67,636 |
154,913 |
369,791 |
479,754 |
503,710 |
|
Change from Prior Reporting Period |
||||||
|
5,345 |
-9,971 |
3,394 |
4,066 |
24,408 |
12,805 |
17,831 |
|
Traders |
||||||
|
178 |
77 |
75 |
46 |
58 |
262 |
177 |
|
|
||||||
|
|
Small Speculators |
|
|
|||
|
|
Long |
Short |
Open Interest |
|
||
|
|
48,400 |
24,444 |
528,154 |
|
|
|
|
|
3,604 |
-1,422 |
16,409 |
|
|
|
|
|
non reportable positions |
Change from the previous reporting period |
|
|||
|
COT Gold Report – Positions as of |
Tuesday, February 20, 2018 |
|||||
our large speculators/
those large specs that have been long in gold added a net 5345 contracts to its long side
those large specs that have been short in gold covered 9971 contracts from its short side
our commercials
those commercials that have been long in gold added 4066 contracts to its long side
those commercials that have been short in gold added a whopping 24,408 contracts to its short side
our small specs
those small specs who have been long in gold added 3604 contracts to its long side
those small specs who have been short in gold covered 1422 contracts from its short side.
end
| Silver COT Report: Futures | |||||
| Large Speculators | Commercial | ||||
| Long | Short | Spreading | Long | Short | |
| 63,200 | 57,880 | 26,167 | 86,061 | 105,506 | |
| -1,616 | 1,775 | 5,228 | 6,035 | 3,532 | |
| Traders | |||||
| 92 | 62 | 48 | 45 | 39 | |
| Small Speculators | Open Interest | Total | |||
| Long | Short | 203,629 | Long | Short | |
| 28,201 | 14,076 | 175,428 | 189,553 | ||
| -74 | -962 | 9,573 | 9,647 | 10,535 | |
| non reportable positions | Positions as of: | 163 | 129 | ||
| Tuesday, February 20, | |||||
our large speculators
those large specs who have been long in silver pitched 1616 contracts from its long side
those large specs who have been short in silver added 1775 contracts to its short side
our commercials
those commercials who have been long in silver added a large 6035 contracts to its long side
those commercials who have been short in silver added 3532 contracts to its short side
our small specs
those small specs that have been long in silver pitched 74 contracts from its short side.
those small specs that have been short in silver covered 962 contracts from its short side.
end
Major gold/silver trading /commentaries for FRIDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
GoldCore
Weekly Briefing: Currency Wars – ECB Warns Re Trump, Russia and Turkey Buy Gold and BOE Bitcoin Warning
Russian Central Bank Buys Gold 600,000 Ounces In January As Venezuela Launches ‘Petro Gold’
US-China Trade War Escalates As Further Measures Are Taken
Bank Bail-In Risk In European Countries Seen In 5 Key Charts
Bitcoin or British Pound ‘Pretty Much Failed’ As Currency?
News and Commentary
Trump Currency Wars – ECB Warn (IrishTimes.com)
Gold swings higher as dollar surrenders early gains (Reuters.com)
Gold books slight gain as dollar softens (MarketWatch.com)
U.S. 30-year mortgage rates rise seventh straight week (Reuters.com)
Stocks rebound in broad rally as strong labor data overshadows Fed jitters (MarketWatch.com)
Source: ZeroHedge via Econimica blog
Twin beliefs propping up this market are crumbling (MoneyWeek.com)
Platinum is the one asset I feel tempted to bet on right now (MoneyWeek.com)
Who Will Buy Trillions Of US Treasuries? (ZeroHedge.com)
Are Bitcoin Gains a Loss for Gold Investors? (RealDaily.com)
How to protect your portfolio from the next banking crisis (DailyReckoning.com)
Gold Prices (LBMA AM)
23 Feb: USD 1,328.90, GBP 951.09 & EUR 1,079.20 per ounce
22 Feb: USD 1,323.50, GBP 952.66 & EUR 1,076.40 per ounce
21 Feb: USD 1,328.60, GBP 952.87 & EUR 1,078.16 per ounce
20 Feb: USD 1,337.40, GBP 955.97 & EUR 1,083.83 per ounce
19 Feb: USD 1,347.40, GBP 961.10 & EUR 1,085.47 per ounce
16 Feb: USD 1,358.60, GBP 964.61 & EUR 1,086.47 per ounce
15 Feb: USD 1,353.70, GBP 962.21 & EUR 1,084.45 per ounce
Silver Prices (LBMA)
23 Feb: USD 16.61, GBP 11.88 & EUR 13.50 per ounce
22 Feb: USD 16.47, GBP 11.86 & EUR 13.40 per ounce
21 Feb: USD 16.44, GBP 11.80 & EUR 13.35 per ounce
20 Feb: USD 16.57, GBP 11.85 & EUR 13.42 per ounce
19 Feb: USD 16.72, GBP 11.92 & EUR 13.46 per ounce
16 Feb: USD 16.84, GBP 11.97 & EUR 13.49 per ounce
15 Feb: USD 16.83, GBP 11.98 & EUR 13.49 per ounce
Recent Market Updates
– Russian Central Bank Buys Gold – 600,000 Ounces Or 18.7 Tons In January As Venezuela Launches ‘Petro Gold’
– Bitcoin or British Pound ‘Pretty Much Failed’ As Currency?
– Bank Bail-In Risk In European Countries Seen In 5 Key Charts
– US-China Trade War Escalates As Further Measures Are Taken
– Gold Up 3.8% In Week – If Closes Above $1,360/oz Will Be Biggest Weekly Gain In Nearly 2 Years
– Is The Gold Price Heading Higher? IG TV Interview GoldCore
– Global Debt Crisis II Cometh
– Sovereign Wealth Funds Investing In Gold For “Long Term Returns” – PwC
– Bitcoin and Crypto Prices Being Manipulated Like Precious Metals?
– “This Is Where They Completely Lost Their Minds” – Hussman
– Brexit Risks Increase – London Property Market and Pound Vulnerable
– Peak Gold: Global Gold Supply Flat In 2017 As China Output Falls By 9%
– Crypto Currency Backlash Sees Flight From Cryptos and Bitcoin
Call for Gold Sovereigns at Ultra Low 4% Premium For Storage in London or Insured Delivery
END
(courtesy Alasdair Macleod/Goldmoney.com/GATA)
Alasdair Macleod: A Roman lesson on inflation
Submitted by cpowell on Thu, 2018-02-22 21:34. Section: Daily Dispatches
4:34p ET Thursday, February 22, 2018
Dear Friend of GATA and Gold:
GoldMoney research director Alasdair Macleod argues today that a credit crisis lies ahead and that it may set inflation soaring.
“Inflation prospects for the following year or two,” Macleod writes, “will be set by the response of central banks. If they do not bail out the commercial banks with monetary inflation, the global banking system will almost certainly collapse. Assuming this disaster will be prevented, it will require the injection of enormous quantities of extra money, potentially far larger than was required to bail out the global banking system in 2008-09.”
Macleod’s analysis is headlined “A Roman Lesson on Inflation” and it’s posted at GoldMoney here:
https://www.goldmoney.com/research/goldmoney-insights/a-roman-lesson-on-…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
A Roman lesson on inflation
While it is the duty of the citizen to support the state, it is not the duty of the state to support the citizen” – President Grover Cleveland
The point President Cleveland made back in the 1880s was that individuals and vested interests had no rights to preferential treatment by a government elected to represent all. For if preference is given, it is always at the expense of others.
Those days are long gone, and the last president to take this stance was Calvin Coolidge in the 1920s. He was followed by Herbert Hoover, who was very much an interventionist. As Coolidge reportedly said of his Vice-President, “That man has given me nothing but advice, and all of it bad”. Hoover was criticised for his disastrous intervention policies by Franklin Roosevelt, who succeeded in ousting him in the 1932 election, and then outdid him with even more intervention. The outflows of gold generated by accelerating government spending and the Fed’s monetary policies led in 1933 to the suspension of gold convertibility for American citizens and the devaluation of the dollar in 1934 from $20.67 to $35 per ounce of gold.
Interventionsism has increased ever since, not just in America but in all other advanced nations. The socialisation of earnings and profits and the regulation of our behaviour by governments dominates economic activity today. Despite the warnings of sound-money theorists, a process that commenced nearly a century ago has not yet led to economic collapse, though the dangers of escalating state liabilities are a growing threat to economic stability.[i]
A point that is ignored by nearly everyone is that government spending is an expensive luxury for any economy, tying up capital resources in the most inefficient way. Furthermore, governments, through tax and the diversion of savings and monetary inflation, destroy personal wealth. Yet, it is clear both through observation and economic logic that a successful economy is one that instead maximises personal prosperity.
This is clearly illustrated by observing the difference between Venezuela and America. Venezuela overtly and covertly has transferred nearly all personal wealth to its socialist government in the name of equality for all. The costs of government have increased exponentially relative to its sources of available finance, bringing forward the day when economic and civil order cease entirely. America, despite decades of growth in government spending, has not yet sequestered the majority of its citizens’ wealth, though the process has been accelerating in recent years.
However, the problem is likely to become more of a public issue in the coming months, triggered perhaps by an increase of US Government bond issues at a time of a cyclical downturn in bond demand. This downturn is driven by improving global economic prospects, which means banks will increase lending to non-financial businesses at the expense of purely financial activities.
At the same time as President Trump’s administration is increasing its budget deficit, the Fed is trying to normalise its balance sheet by running off its bond exposure. Add to the mix marginal reductions in an estimated $17 trillion of dollar exposure in foreign-owned portfolios, and we have the potential for a perfect storm in the reserve currency’s bond market.[ii]
We have already seen a sharp increase in bond yields over the last six months, with the benchmark 10-year US Treasury yield increasing from 2.06% to 2.94% currently. On an historic basis, and given the Fed’s inflation target of 2%, the time-value on this bond is still on the low side, despite the increase in yields so far. Assuming, that is, the Fed genuinely limits inflation to 2%.
Readers should give more credence to ShadowStats.com and the Chapwood index as better measures of price inflation, currently registering between 6-10%, than clearly biased government estimates.
We should not be surprised if these dynamics soon result in a derating of US Government bonds, and of the US Government’s finances. Instead of passively accepting the Fed’s monetary cool-aid, proper assessments of bond risk can be expected to dominate valuations. Assuming the Fed continues to restrain interest rates, bond yield curves will steepen, and the interest cost to the Treasury will increase for all its new debt, except for very short-term borrowing. After snoozing through the period of zero interest rates, we are bound to awaken with some suddenness to the risks we have been collectively ignoring for too long.
Therefore, when thinking about risk, the economics of inflation are likely to become central to our thoughts. And as bond yields adjust by rising, we will be increasingly aware of the debt trap faced by the US Government. A one per cent increase in interest costs it an extra $216bn. Will President Trump pay for this by cutting the overall budget? Unlikely, on the evidence so far. And when we begin to think in terms of what the time-value on US Government debt should be, possibly two per cent above a rising, but heavily doctored, CPI, how will an increase of borrowing costs of perhaps three or four per cent or even more look on the government’s books?
The pressure to increase the rate of wealth-transfer from the productive private sector will simply increase as bond yields rise. And the more wealth is transferred, the less there is left to transfer. This was the underlying reality faced in the Roman Empire, when the spendthrift Nero reduced the silver content of the denarius to pay his soldiers, having run out of money. Among other costly acts, he set much of Rome on fire in order to rebuild it, through which legend has it he fiddled. This was perhaps a metaphor, because according to Suetonius, Nero was dedicated to the arts, sex and debauchery, and was obviously a pyromaniac to boot. If Nero fiddled with anything, it was the currency. Some forty-three emperors following Nero continued the debasement process until the final monetary destruction under Diocletian over two centuries later.
The current century’s-worth of spending-led monetary debasement includes the additional burden (that is additional to Roman profligacy) of promises to the general public, in defiance of President Cleveland’s maxim. Depending on the rate at which these future financial liabilities are discounted, these are anything between five and ten times current GDP for America, and probably considerably more proportionately for Japan and many EU member states. Not even heavily-doctored price inflation figures can suppress the debt trap in which governments are now visibly ensnared, which all precedence tells us will be met with accelerating monetary debasement.
Since Herbert Hoover’s presidency, the US Government has been unconsciously rhyming the American economy with the Roman. Just as Rome’s emperors debased the coinage to pay for their profligacy and soldiery, so have America and her western allies debased their currencies to pay for welfare and military spending.
Excessive military spending was a Roman theme: pay the soldiers or the emperor dies. Diocletian 225 years after Nero went on to issue an edict in stone, banning traders from raising prices. Trade ceased, and Rome and other cities emptied for lack of food.
Donald Trump and his predecessors have overseen more sophisticated methods of achieving the same result. For the last forty years, prices for goods and services have been officially controlled by doctoring the inflation figures, though the reality is prices have continued to rise.[iii] The government’s inflation-linked spending commitments have been curbed and the state’s beneficiaries cheated. That cannot go on for ever.
Wage increases, which normally keep pace with rising prices, have been replaced by the simple expedient of encouraging the expansion of bank credit to fund personal consumption, along with discouragements to saving. Consequently, US Household debt now stands at $13.15 trillion[iv] funding personal consumption expenditures of $13.717 trillion.[v] It amounts to modern smoke-and-mirrors deflecting attention from an underlying problem.
The comparison with Rome has a further, worrying similarity. Roman silver and gold coins were the principal currency for the known world. The US dollar is the world’s reserve currency today, and nearly all the other 170-odd government fiat currencies are aligned with or refer to it. An accelerating dollar collapse takes most of them down, just as surely as the Roman debasement propelled the world into the Dark Ages.
So far in this article, we have seen that the US economy has provided us with an example of a modern debt trap, that if not faced up to, will inevitably lead to an acceleration of monetary inflation and ultimately a collapse of purchasing power for the dollar. Most other nations are in the same position, though the high levels of personal borrowing are more endemic to America and the UK than anywhere else. Consequently, when the final currency collapse happens, profligate Anglo-Saxons will suffer a slightly different fate from the citizens of nations who habitually save.
The next phase of today’s monetary debasement
The next major expense facing governments and their central banks is a future credit crisis, likely to tip the inflation story into hyper-drive. Possibly, it will be a modern Diocletian moment, the final act of debasement before the lights go out, and we (only metaphorically, one hopes) leave the cities to forage in the country. A credit crisis is always the culmination of a credit cycle, endemic to economies destabilised by central banks trying to stimulate consumption by monetary cheating.
The time for the next credit crisis is rapidly approaching, as explained in my recent article, “When will the next credit crisis occur?”[vi] We should be prepared for it to happen by the year-end. Crucially, inflation prospects for the following year or two will be set by the response of central banks. If they do not bail out the commercial banks with monetary inflation, the global banking system will almost certainly collapse. Assuming this disaster will be prevented, it will require the injection of enormous quantities of extra money, potentially far larger than was required to bail out the global banking system in 2008/09.
That was itself of historic proportions. But there is the risk they won’t succeed next time, because since the last credit crisis all G20 nations agreed to introduce bail-in procedures to replace bail-outs. The reasoning was governments shouldered the cost of the Lehman crisis, when bondholders and large depositors should have borne it instead. That is logical for rescuing single banks, or the banking system of a small country, but is likely to cause difficulties in a broader systemic crisis, because bondholders will game the system to protect themselves.
Large depositors have only two escapes, now the alternative of withdrawing cash notes in quantity is effectively closed. They can buy physical assets, at any price, to get rid of bank balances, or alternatively buy physical commodities. And top of the list of commodities must be gold, followed by silver, because they are widely accepted as the mediums of exchange everywhere. To these alternatives we can now perhaps add cryptocurrencies, their ownership is peer-to-peer, amounting to an alternative store of value.
But when you sell a currency to buy an asset, you are simply passing the currency to a willing buyer of it. The observant reader will detect that in all likelihood, there will be no bid for the riskiest currencies, and possibly no bid for the dollar itself. In other words, what in the past has been a systemic crisis for the global banking system could rapidly become a systemic crisis for the currencies themselves.
A currency crash is a growing risk
The future is by definition unknown, and we can only speculate how things will evolve. However, unlike the Roman experience, which took 225 years to completely destroy the denarius, its successors, and the empire itself, today’s wave of monetary destruction looks like terminating soon, after only a century or so.
Central banks have been aware of some systemic dangers, which is why they are keen to move us to a cashless society. With no cash, there cannot be an old-fashioned bank run. Their response to every successive credit crisis has been to restrict how businesses and people can protect themselves in the event of a systemic meltdown.
But now, long after President Cleveland made the remark that heads this article, his successors’ attempts to curry electoral favour have led to escalating costs, demonstrably out of control. The combination of a debt trap sprung on governments by higher interest rates, and the unsustainability of private sector debt threatens a financial and monetary crisis world-wide, from which any rescue through money-printing is likely to be short-lived.
The rate at which inflation and the destruction of paper currencies accelerates from hereon will be determined by how swiftly the financially aware and the ordinary public wake up to the true scale of the monetary fraud governments have perpetrated so far. The expansion of base money and bank credit has not been reflected in official price statistics, which have been hedonically manipulated to hide the evidence. An awakening to the reality, that fiat currencies have been badly abused by all governments, can be expected to have a suddenness about it, and rather like entrapped vermin, ordinary folk will find all escape routes have been closed.
Prices are bound to adjust, more suddenly than if more of the monetary fiddling had been discounted as it occurred. If the effects of Roman inflation over more than two centuries progressed with the lumbering speed of a laden oxcart, today’s could suddenly accelerate like an Italian Ferrari.
[i] We are here discussing political intervention, which arguably commenced with the First World War. Monetary intervention started earlier with the development of central banks.
[ii] This overweighting of the dollar in foreign portfolios is the natural result of earlier dollar strength, which is no longer the case. In June 2016, this amounted to a record $17.39 trillion.
[iii] For the distortions of hedonics, see https://www.theburningplatform.com/2018/02/19/do-you-believe-in-bls-unicorns/
[iv] Admittedly, this figure includes mortgages, but many mortgages are taken out simply to finance consumer spending. See https://www.newyorkfed.org/microeconomics/hhdc.html
[v] See https://fred.stlouisfed.org/series/PCE
[vi]https://www.goldmoney.com/research/goldmoney-insights/when-will-the-next-credit-crisis-occur
Ralph Benko: Olympic gold medals are mostly silver because Zeus is so poor
Submitted by cpowell on Fri, 2018-02-23 01:47. Section: Daily Dispatches
8:47p ET Thursday, February 22, 2018
Dear Friend of GATA and Gold:
Writing at Gcoin, the internet site of a new digital gold vendor, Ralph Benko reports that “gold” medals awarded at the Olympics are actually only about 1 percent percent gold — sort of like the gold market at the New York Commodities Exchange. Benko’s report is headlined “The Olympic Gold Medals Are Mostly Silver Because Zeus Is So Poor” and it’s posted at Gcoin here:
https://www.gcoin.com/blog/2018/2/22/the-olympic-gold-medals-are-mostly-…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
Your early FRIDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED UP 6.3350 /shanghai bourse CLOSED UP 20.46 POINTS OR 0.63% / HANG SANG CLOSED UP 301.49 POINTS OR 0.97%
2. Nikkei closed UP 301.49 POINTS OR 0.97% /USA: YEN RISES TO 106.75/ STILL DEADLY AS YEN CARRY TRADERS DISINTEGRATE
3. Europe stocks OPENED DEEPLY IN THE RED EXCEPT GERMANY /USA dollar index RISES TO 89.85/Euro FALLS TO 1.2308
3b Japan 10 year bond yield: FALLS TO . +.053/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.75/ 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:: 62.60 and Brent: 66.28
3f Gold UP/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.662%/Italian 10 yr bond yield UP to 2.088% /SPAIN 10 YR BOND YIELD UP TO 1.602%
3j Greek 10 year bond yield RISES TO : 4.398?????????????????
3k Gold at $1330.80 silver at:16.63 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 9/100 in roubles/dollar) 56.39
3m oil into the 62 dollar handle for WTI and 66 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 106.75 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 0.9342 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1503 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.662%
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 2.8897% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.1720% /BOTH VERY DEADLY
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
US Futures Hold To Gains In Nervous, Jittery Session Following Anbang Blowup
After a second consecutive disappointing cash close in the day session, in which futures spiked at the open only to close at the lows, we may be set for day 3 as S&P index futures again point to a higher open after Asian stocks gained despite some mixed trading in Europe. Will they once again fade what is set to be a 150 point higher open in the Dow and if so, will we finally see selling next week?
What is most surprising about the overnight session is how little attention the market paid the collapse and bailout of China’s $315 billion mega conglomerate and offshore M&A titan, insurer Anbang Insurance, which as we reported last night was effectively nationalized in the most high profile Chinese blowup in history. A quick recap for those who missed it, via BBG:
When New York’s Waldorf Astoria hotel was sold for $1.95 billion in 2014, it shot the Chinese buyer – Anbang Insurance Group Co. – and its chairman Wu Xiaohui to international prominence. That was the first deal in a $13.4 billion acquisition spree that lifted Anbang’s profile while raising questions about its ownership and financing. Those questions only deepened after Wu was detained last year by Chinese authorities investigating the firm’s acquisitions funding, market manipulation by insurers and unspecified “economic crimes.” Now, Wu is being prosecuted and China’s insurance regulator is taking over the company.
And yet, despite this critical development, which effectively confirms that China’s conglomerates are insolvent, the Shanghai Composite closed in the green and S&P futures are well well bid.
Commenting on the market’s bizarre reaction, Stock-market gains in China and Hong Kong today provide a fairly revealing insight into the market’s view of Xi Jinping’s policies. Gone are the days when something like the seizure of insurer Anbang would rattle investors, when every yuan fixing was highly anticipated and when fears of leverage, inflated property prices or military activity in the South China Sea were at the back of everyone’s minds.
Now, something like Anbang is being seen as a positive. When I talk about China with investors these days, the perspective is a lot more positive. The belt and road initiative is viewed favorably, as are the efforts to get debt under control.
Maybe… or maybe China’s halting the local VIX yesterday was an indication that something big was coming. And what better way to prevent panic from spreading than blocking the one indicator measuring panic. Although Bloomberg’s point is noted: in China, there was no panic; maybe that’s because in China there is also no longer a market?
* * *
In any case, back to the rest of the world, where the Stoxx Europe 600 Index edged lower as declines in car makers offset gains in telecom shares. n. terms of sector specific moves, telecoms are the clear outperformer with BT Group (BT/A LN) shares at the top of the FSTE 100 following a positive broker upgrade at Berenberg. The biggest story in the UK equity space comes from RBS (-4.5%) who are one of the notable laggards in the FSTE 100 as a return to profit for the Co. was not enough to soothe investor concerns over restructuring costs and a lack of clarity from the DoJ investigation. Other notable movers include Valeo (-9.5%), IAG (-4.7%), Swiss Re (+1.8%) and Pearson (+1.1%) post-earnings, while Standard Life Aberdeen (+2.2%) have been granted some reprieve after offloading their insurance unit to Phoenix (+5.4%).
Asia was decidedly more bullish, with the MSCI Asia Pacific Index rising 1%, underpinned by gains in Tokyo, Hong Kong, Sydney and Seoul equity markets. The Nikkei 225 (+0.7%) edged higher with the gains led by defensive stocks with investors seemingly content to shrug off the notion of a more aggressive Fed unwinding stimulus more rapidly than expected. Chinese markets had been positive for much of the session with the Hang Seng (+1%), while the Shanghai Comp (+0.6%) had a somewhat choppy session. JGB yields dipped overnight, with the curve modestly flatter.
As noted above, US equity futures seemed to forget Thursday’s pitiful close and spiked ahead of the European open, only to fade most of the gains: the E-mini was up +7 at last check, but back to bottom of overnight range, as European equity markets led lower. It seems one piece of bad news today and the house of cards could topple for the 3rd consecutive day.
Indeed, as Bloomberg notes markets have been creeping into risk-off mode across the board; sentiment not helped by a sudden GBP clash crash cited to incorrect trade value.
Elsewhere, credit spreads continue widen, iTraxx Crossover back within range of widest levels seen during VIX-related volatility. USD holds small gains; apart from sharp GBP move, most pairs stay in tight range. SEK weaker after Riksbank minutes highlight inflation worries.
Yields on Treasury 10-year notes fell, though were still near their highest since 2014, while those on German bunds, the benchmark for European debt, dropped to the lowest since January, while the common currency slipped.
The dollar came under pressure following the Tokyo fix, in a repeat of Thursday’s price action. The greenback’s correlation with U.S. yields seems to be back, as Treasuries extended recent gains with the 10-year yield steadying around 2.9%. Volumes were below recent averages in the majors, with unwinds of short-term positions in typical Friday fashion.
In bunds, flows spiked after futures broke the 159 threshold. European stock markets traded mixed and commodities retreated.
In the commodities complex, WTI and Brent crude futures have seen a mild pullback from yesterday’s post-DoE surge, albeit in close proximity to yesterday’s best levels. Energy newsflow remains light with traders awaiting today’s Baker Hughes release which has recently seen a trend of climbing rig counts. In metals markets, gold prices are marginally softer alongside the firmer USD and remains on track for its worst weekly performance since late last year. Elsewhere, Chinese steel futures staged a rebound overnight as traders eye a potential pick-up in demand next week as Chinese participants fully return to market.
US is said to announce new sanctions on North Korea later today, according to sources. Federal Reserve releases semi-annual monetary policy report to Congress. Fed officials John Williams, Bill Dudley and Eric Rosengren speak. European Central Bank Executive Board member Benoit Coeure and Cleveland Fed President Loretta Mester participate in panel discussion.
Market Snapshot
- S&P 500 futures up 0.2% to 2,718.00
- STOXX Europe 600 up 0.02% to 380.42
- MSCI Asia Pacific up 1% to 177.79
- MSCI Asia Pacific ex Japan up 1.1% to 582.45
- Nikkei up 0.7% to 21,892.78
- Topix up 0.8% to 1,760.53
- Hang Seng Index up 1% to 31,267.17
- Shanghai Composite up 0.6% to 3,289.02
- Sensex up 1% to 34,149.05
- Australia S&P/ASX 200 up 0.8% to 5,999.79
- Kospi up 1.5% to 2,451.52
- German 10Y yield fell 2.5 bps to 0.681%
- Euro down 0.2% to $1.2312
- Brent Futures down 0.5% to $66.07/bbl
- Italian 10Y yield rose 2.5 bps to 1.805%
- Spanish 10Y yield rose 7.6 bps to 1.594%
- Brent Futures down 0.5% to $66.07/bbl
- Gold spot down 0.3% to $1,328.59
- U.S. Dollar Index up 0.1% to 89.85
Top Overnight News
- China Seizes Anbang, Charges Dealmaking Founder With Fraud; Billions of Dollars of Anbang Assets That Could Go on the Block
- U.S. regulators are scrutinizing this month’s implosion of investments that track stock-market turmoil, including whether wrongdoing contributed to steep losses for VIX exchange-traded products offered by Credit Suisse Group AG and other firms, several people familiar with the matter said
- The Trump administration plans to announce on Friday what is said to be the largest package of sanctions against North Korea, Reuters says, citing a senior govt official it didn’t identify
- The Trump administration’s policies will raise U.S. wages without causing broader inflation, Treasury Secretary Steven Mnuchin said in an interview, brushing aside signs that investors are growing nervous about rising prices
- Japan’s key inflation gauge stalled at 0.9%, highlighting the challenge ahead for BOJ Governor Haruhiko Kuroda as he starts another five-year term.
- The European Union is set to oppose turning Theresa May’s pledge to avoid a border in the Irish Sea after Brexit into a legal guarantee, according to a diplomat familiar with the matter; Prime Minister Theresa May gathered her top ministers for an eight-hour session to get them to back her Brexit strategy, as the European Commission preempted the outcome by saying that what it’s heard of her plan won’t work.
- Barnaby Joyce quit as Australia’s deputy prime minister after having an extramarital affair with his former media adviser.
- President Xi Jinping will convene a Communist Party meeting within days to select China’s next government.
- ECB’s Smets says the events we’ve seen in the past few weeks are unlikely to affect the economic fundamentals, which are sound, on condition political leaders stay the course and continue to enact policies that are adequate for their own economies
- U.K. Prime Minister Theresa May won the backing of her divided Brexit “war cabinet” to ask for an ambitious trade deal with the European Union after a marathon eight-hour meeting at her country house, but the EU isn’t buying it
Asian equities closed the week on a positive note as major bourses traded in the green amid the uptick in crude prices. ASX 200 (+0.8%) had been buoyed by energy and material names, moving within closing just shy of 6,000. Miners were led by BHP (+1.5%) and South 32 (+5%), while oil prices rose throughout the US session after the latest DoE crude inventory data showed US oil output had dropped. Elsewhere, the Nikkei 225 (+0.7%) edged higher with the gains led by defensive stocks with investors seemingly content to shrug off the notion of a more aggressive Fed unwinding stimulus more rapidly than expected. Chinese markets had been positive for much of the session with the Hang Seng (+1%), while the Shanghai Comp (+0.6%) had a somewhat choppy session. JGB yields dipped overnight, with the curve modestly flatter. Japanese inflation data:
- Japanese CPI, Ex Food and Energy YY (Jan) 0.4% vs. Exp. 0.3% (Prev. 0.3%)
- Japanese CPI, Core Nationwide YY (Jan) 0.9% vs. Exp. 0.8% (Prev. 0.9%)
- Japanese CPI, Overall Nationwide (Jan) 1.4% vs. Exp. 1.3% (Prev. 1.0%); Highest since March 2015
Top Asian News
- As Volatility Returns, This Is How Emerging Markets Stack Up
- Hong Kong Moves Closer to Dual-Class Shares With New Rules
- India Is Said to Plan Asking PNB to Pay Banks for Jeweler Fraud
European bourses are trading on the back foot (Eurostoxx 50 -0.3%) despite calls for a slightly firmer open. In terms of sector specific moves, telecoms are the clear outperformer with BT Group (BT/A LN) shares at the top of the FSTE 100 following a positive broker upgrade at Berenberg. However, the biggest story in the UK equity space comes from RBS (-4.5%) who are one of the notable laggards in the FSTE 100 as a return to profit for the Co. was not enough to soothe investor concerns over restructuring costs and a lack of clarity from the DoJ investigation. Other notable movers include Valeo (-9.5%), IAG (-4.7%), Swiss Re (+1.8%) and Pearson (+1.1%) post-earnings, while Standard Life Aberdeen (+2.2%) have been granted some reprieve after offloading their insurance unit to Phoenix (+5.4%).
Top European News
- May’s Cabinet Backs the Brexit Plan the EU Is Poised to Reject
- RBS’s Female Employees Paid 37% Less on Average Than Men
- Riksbank Inflation Caution Sends Krona to 15-Month Low
- Bund Futures Jump in Large Volumes After Breaking Key Threshold
- What to Watch for in Gadgets, Deals From the Biggest Mobile Show
In FX, the DXY has slipped further below the 90.000 level, and it remains a very close call whether the Greenback can continue its recent ‘winning’ run to make it 5 out of 5 trading days and a first complete week of gains this year. Technically, the index needs to close above 90.500-600, so quite a bit above the upper end of the 90.060-89.750 range thus far, and much may depend on the overall tone that emerges from the latest round of Fed rhetoric via a slew of speakers and Powell’s first semi-annual monetary policy report. However, Usd/Jpy still looks pivotal for the Dollar’s overall direction with the pair now heavy around 107.00 having failed to rebound to 108.00 at the height of its rebound from 105.55 lows. Note also, a large 107.00 option expiry strike for next Monday (1.6 bn) may act like an anchor. Eur/Usd straddles 1.2300, with no reaction to final Eurozone CPI and Cable continues to be drawn towards 1.4000 while holding in above solid support ahead of 1.3800 on Brexit-related weakness (similarly 0.8800 is a pivot in Eur/Gbp). In terms of crosses, Eur/Sek has been a mover in wake of cautious and dovish Riksbank minutes as several Board members registered concerns about weak inflation at the January policy meeting, and the pair has eclipsed the 10.0333 peak from 2017, with the previous year’s high at 10.0833 next on the charts. Back to G10s, the Nzd gained little lasting traction from better NZ retail sales overnight, with a breakdown revealing discretionary items providing a major boost, and Aud/Nzd stop-buying also working against the Kiwi.
In the commodities complex, WTI and Brent crude futures have seen a mild pullback from yesterday’s post-DoE surge, albeit in close proximity to yesterday’s best levels. Energy newsflow remains light with traders awaiting today’s Baker Hughes release which has recently seen a trend of climbing rig counts. In metals markets, gold prices are marginally softer alongside the firmer USD and remains on track for its worst weekly performance since late last year. Elsewhere, Chinese steel futures staged a rebound overnight as traders eye a potential pick-up in demand next week as Chinese participants fully return to market.
Looking at the day ahead, there is the final revisions to Q4 GDP in Germany and also the final revisions to January CPI in the Euro area. The Fed’s Williams, Mester and Dudley are due to speak, along with the ECB’s Coeure. Away from that, EU leaders are scheduled to hold an informal meeting in Brussels to discuss the composition of the European Parliament and also the bloc’s next budget. Finally the Fed is expected to publish its semi-annual monetary policy report to Congress.
US Event Calendar
- Nothing major scheduled
- 10:15am: Fed’s Dudley and Rosengren Speak on Panel on Fed Balance Sheet
- 11am: Fed Releases February 2018 Monetary Policy Report to Congress
- 1:30pm: ECB’s Coeure, Fed’s Mester Participate in Panel in New York
- 3:40pm: Fed’s Williams Speaks on Outlook for U.S. Economy
DB’s Jim Reid concludes the overnight wrap.
Markets lacked a bit of leadership yesterday as the S&P 500 couldn’t hang onto 1% gains for the second day but just about ended higher (+0.1%). It appears the initial gains were spurred by a rebound in the WTI oil price (+1.77%) and the Fed’s Bullard’s more dovish words on the rates outlook. He told CNBC that raising rates too quickly could restrict economic growth and that market expectations of four rate hikes this year would be “priced to perfection”. Further he added “100bp (rate increase) in 2018 seems a lot to me” while there was a “way to go” in terms of sustainable upward move on inflation. Within the S&P, gains were led by the real estate, energy and materials sectors with partial offsets from financials. The VIX fell for the second day to 18.72 (-6.5%).
Staying in the US, Matt Luzzetti and others in the US economics team published an update to DB’s analysis that looks at the parallels between the current period and the 1960s in the US. This is work we’ve often referred to in our work. Similar to today, inflation was subdued for a protracted period during the first half of the 1960s even as the unemployment rate fell sharply. Inflation then jumped in 1966.
Recent developments – most importantly a replay of the 1960s fiscal expansion – have increased the similarities with the 1960s episode. Their updated analysis suggests that while we are unlikely to see a spike in inflation as large as the 1960s, the risks around DB’s inflation view are likely titled to the upside. As such, we would not downplay the possibility that core inflation hits 2.5% or above in the coming years, exceeding the last cycle’s peak and rising to the highest level since the early 1990s.
Turning back to Europe and the latest ECB minutes. They broadly reiterated a wait and see approach. On rates, the minutes indicated “changes in communication were generally seen to be premature” and that “monetary policy would continue to develop….with a view to avoiding abruptly or disorderly adjustments at a later stage”. On QE, “some members expressed a preference for dropping the easing bias…but it was concluded that such adjustment was premature”. On FX, “there was broad agreement among members that the recent volatility in…..the Euro was a source of uncertainty that required monitoring”. Looking ahead, “the language pertaining to the monetary policy stance could be revisited early this year as part of the regular assessment at the forthcoming policy meetings”.
Over in government bonds, core 10y bonds yields were 1-3bp lower while peripherals modestly underperformed (1-3bp higher), in part reversing the prior day’s gains. 10y Bunds and Gilts yields fell 1.6bp and 0.9bp respectively while UST 10y also fell 2.9bp. Elsewhere, the US treasury sold $29bn of 7 year notes at a yield of 2.839% with a bid-to-cover ratio of 2.49x (vs. 2.73x previous).
This morning in Asia, markets are in positive territory with the Kospi (+1.23%), Hang Seng (+0.89%), Nikkei (+0.71%) and China’s CSI 300 (+0.02%) all up as we type. Datawise, Japan’s January core CPI (ex-food) was above expectations at 0.9% yoy (vs. 0.8%) but flat for the third consecutive month. Staying with inflation, the US Treasury Secretary Mnuchin has discussed prices overnight and believes rising US wage gains may not cause broader inflation. He noted that “you can have wage inflation and not necessarily have inflation concerns in general”.
Now recapping other markets performance from yesterday. Key European bourses weakened modestly, with the Stoxx 600 (-0.20%), DAX (-0.07%) and FTSE (-0.40%) all lower. In FX, the US dollar index fell for the first time in five days (-0.28%), while the Euro and Sterling gained 0.37% and 0.27% respectively. Over reiterated that three rate hikes seems appropriate but his views could change if there was greater evidence of rising inflation or employment. Elsewhere, he noted “the Fed’s policy is accommodative, but the path to neutral may be flatter and not as far away as some think”. Finally, the Fed’s Quarles noted “with a strong labour market and likely only temporary softness in inflation, I view it as appropriate that monetary policy should continue to be gradually normalized.”
Back in Europe and ahead of the Italian election on 4thMarch, the EC President Juncker warned “we have to brace ourselves for the worst scenario….(which) could be no operational government” and that he was “more worried by the result of Italian election than the result of the vote by SPD members” in Germany. Later on in a statement, he did softened his message and noted “whatever the outcome, I’m confident that we’ll have a government that makes sure that Italy remains a central player in Europe”.
Staying in politics, the Times reported that the UK may allow EU citizens who arrives during the Brexit transition period to stay permanently. Elsewhere, before PM May outlines her vision for a post-Brexit trade deal, a presentation on the European Commission website has reiterated the potential difficulties she faces with the stance her cabinet seem to be moving towards. It noted the “UK’s views on regulatory issues in the future relationship including the three basket approach are not compatible with the principles in the EC guidelines”.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the January Conference board leading index was above market at 1% (vs. 0.7% expected) with large positive contributions from the firming of the ISM new orders index and building permits in the month. The Kansas Fed manufacturing index was slightly below at 17 (vs. 18 expected).
Elsewhere, the weekly continuing claims (1,875k vs. 1,935k expected) and initial jobless claims (222k vs. 230k expected) were both below expectations, with the latter near a c44 year low and adds to the view that the labour market is tightening further.
In Germany, the February IFO Business Climate Index fell to 115.4 from its record high in January (117.6). The drop was driven by a fall in business current assessment (126.3 vs. 127 expected) and the expectations index (105.4 vs. 107.9 expected). Overall DB’s Marc Schattenberg believes a pull-back was not surprising and the sentiment surveys are still at very high levels, signaling a continued strong economic expansion in Q1. In France, the February manufacturing confidence (112 vs. 113 expected) and business confidence (109 vs. 110 expected) were both softer than expectations. The final reading of France’s January CPI was unrevised at 1.5% yoy, while Italy’s print was revised 0.1ppt higher to 1.2% yoy. Finally, the UK’s 4Q GDP was revised down 0.1ppt to 0.4% qoq and 1.4% yoy (vs 1.5% expected).
Looking at the day ahead, there is the final revisions to Q4 GDP in Germany and also the final revisions to January CPI in the Euro area. The Fed’s Williams, Mester and Dudley are due to speak, along with the ECB’s Coeure. Away from that, EU leaders are scheduled to hold an informal meeting in Brussels to discuss the composition of the European Parliament and also the bloc’s next budget. Finally the Fed is expected to publish its semi-annual monetary policy report to Congress.
end
3. ASIAN AFFAIRS
i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 20.46 POINTS OR 0.63% /Hang Sang CLOSED UP 311.49 POINTS OR 0.97% / The Nikkei closed UP 156.37 POINTS OR 0.72%/Australia’s all ordinaires CLOSED UP 0.78%/Chinese yuan (ONSHORE) closed UP at 6.3350/Oil UP to 62.60 dollars per barrel for WTI and 66.28 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED EXCEPT GERMAN DAX . ONSHORE YUAN CLOSED 6.3350 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED AT 6.3310 AGAINST THE DOLLAR/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/ONSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR AND ALL CURRENCIES. CHINA IS NOT SO HAPPY TODAY
(SEE NEWS)
3 a NORTH KOREA/USA
/NORTH KOREA
3 b JAPAN AFFAIRS
c) REPORT ON CHINA
Big news last night. We have been reporting on 4 major Chinese operations that have been in severe financial trouble and these entities may lead to a systemic risk.
Well, the first one succumbed as large Anbang has been taken over by the Chinese government in a bail out. They are to systemically sell off assets. The Chinese government is going to provide liquidity to shore up its deficiencies. Then after one year, the hope is that they can return as a profitable entity. The problem is the huge number of shadow banking assets on its books. If liquidated this could provide a run on the 9 trillion USA China’s Shadow Banking industry..
(courtesy zerohedge)
China’s “AIG” Moment Arrives: Beijing Bails Out “Systemically Important” Anbang, Chairman Removed
In November of last year, we set forth the four candidates that would trigger China’s downfall and expose the Potemkin village economy as nothing but a facade…
It might be Anbang – the acquisitive insurance behemoth – see “Anbang Just Became A ‘Systemic Risk’: Revenues Crash As Its Chairman Is “Detained”
It might be China Evergrande – the developer of “ghost” properties and described by J Capital’s, Anne Stevenson-Yang as “the biggest pyramid scheme the world has yet seen” – see “Stevenson-Yang Warns ‘China Is About To Hit A Wall”.
It might be HNA. The highly-leveraged Chinese conglomerate, which has been on an overseas acquisition binge, is paying more for a 363-day dollar loan than serial defaulter, Argentina, paid on a 100-year loan earlier this year.
Or It might be Dalian Wanda, which established itself building and operating commercial property, luxury hotels, culture and tourism, and department stores. While the company has its roots in property and infrastructure, it recently begun to push in a bold new direction: investing in all six of Hollywood’s major studios.
And now we know
A day after banning VIX, it appears China has finally reached its “Minsky Moment,” or in the case of echoing America’s demise, its “AIG Moment.”
According to the China Insurance Regulatory Commission website, China regulators to take control of Anbang Insurance from Feb. 23, 2018 to Feb. 22, 2019.
Additionally, former Chairman Wu Xiaohui (who, as a reminder, is married to Deng Xiaoping’s granddaughter, and was in talks with Jared Kushner for stake in 666 Fifth Ave)will be removed and prosecuted for alleged economic crime.
China’s insurance regulator said Anbang violated insurance rules in fund use, according to the statement.
“In view of the fact that Anbang Group acts in violation of the provisions of the Insurance Law and may seriously endanger the solvency of the company, in order to maintain the normal operation of the Anbang Group and protect the legitimate rights and interests of insurance consumers, CIRC decided in accordance with Article 144 of the Insurance Law of the People’s Republic of China to take over Anbang Group,” stated the announcement.
The conglomerate has almost 2 trillion yuan ($316 billion) in assets and owns businesses spanning life and non-life insurance, asset management, financial leasing and banking, according to its website.
As we detailed in June of lat year, while largely ignored on the list of potential Chinese risk factors, Anbang’s troubles could soon become systemic.
In early May, Chinese insurance regulators ordered Anbang to stop selling two investment products. One, they said, was improperly marketed as long-term insurance while a crucial application for the other lacked an actuary’s signature. By that point, Anbang was already in trouble. Questions about Anbang’s financial strength had begun circulating on social media in China in March and April, as Chinese officials publicly raised questions about sales of wealth management products by some insurers.
If the drop in revenue is steep enough, Anbang could eventually be forced to liquidate assets. A big factor will be what happens with its existing policies and investment products, which comprise China’s shadow banking system. As the NYT adds, Anbang’s annual report provides little information on the monthly tempo at which its previously issued investments are maturing. The company might need to pay them out if they are not rolled over into further investments with the company. The company’s policies do have very stiff penalties on early redemption to discourage holders from turning them in early for cash. Anbang could raise money by selling some of its investments, but that could take time.
Additionally, the conglomerate, which over the past 3 years was nothing short of the world’s most aggressive “roll up” has been an active investor in Western hedge funds, in addition to making outright acquisitions of overseas companies. And those terms tend to impose severe limits on Anbang’s ability to ask for its money back quickly. That said, a firesale of Anbang assets, which include the Waldorf Astoria, should be a fascinating event.
The biggest risk from a potential unwind of Anbang, however, is the fate of its billions in WMP “assets” and whether any troubles at the insurer lead to investor impairment, and a potential run on China’s $8.5 trillion “shadow bank” considered by many as the Achilles heel of China’s massively overlevered financial system.
All of which explains why Chinese regulators have finally stepped in, removed and prosecuted Wu, and bailed out the beleagured behemoth with a capital injection aimed at restructuring the organization.
Illegal operations at Anbang could have “seriously endangered” the company’s solvency abilities,prompting the government to take control of the insurer, according to the statement.
Additionally, as Bloomberg reports, China Banking Regulatory Commission told several banks to continue providing working capital to HNA Group (another massively systemically dangerous Chinese conglomerate) and not to accelerate loans, Risk Event-Driven and Distress Intelligence reports, citing two unidentified people.
The instruction was sent to some banks in the form of so-called “window guidance”, or informal administrative advice.
China Development Bank, Export-Import Bank of China, Bank of China, China Construction Bank and China Citic Bank were reportedly among those that were told to support the company.
As a reminder, President Xi Jinping and his top economic deputies have vowed to make controlling financial risks their priority, a pledge renewed at the Communist Party’s twice-a-decade leadership congress last year.
How An Anbang Default Could Rock The Market: Wall Street Explains
Last June, when looking at the most unstable of China’s mega conglomerates Anbang Insurance (the others are HNA, China Evergrande and Dalian Wanda), we said that “Anbang’s troubles could soon become systemic.” Half a year later, that’s exactly what happened when in a “surprising” twist, the $315 billion insurer was bailed out by Beijing, just days after we pointed out the tremendous surge in the yield on its bonds.
HNA’s 2019 bonds YTM 12%, after hitting 14.2% recently
And while the market has so far blissfully ignored the potential consequences of this admission by China that all is not well with its biggest corporations, that may soon change.
For starters, there is HNA’s massive debt: according to Bloomberg data, HNA Group’s dollar debt dwarfs that of other stressed Asian borrowers such as Noble Group Ltd. and India’s Reliance Communications. S&P Global Ratings recently lowered HNA Group’s credit profile to ccc+ from b earlier this month, saying it is unclear if existing access to capital markets and some apparent bank support is sufficient for meeting its upcoming obligations. One look at the chart above should confirm that any hope HNA may have had of accessing markets is now gone, leaving only the government as a lender of last resort.
And while there’s no indication – yet – that HNA is facing such financial difficulties that a default is in the offing, some market participants are starting to game plan scenarios, and a variety of takes have emerged.
For one, the amount of dollar bonds outstanding for the conglomerate and its units, at $13.7 billion, accounts for more than 1% of Asian high-yield bonds outside of Japan, and raises the question of the impact on the broader market. While many see little wider impact in the event of a default, the case of China’s most popular, to date, debt default – that of Kaisa Group Holdings three years ago, when Asian dollar junk bond premiums widened considerably – should serve as a warning.
Below is a summary of some initial views from analysts on how any default scenario for HNA would impact the Asian bond market. What is remarkable is just how optimistic every single analyst is that a default won’t result in contagion. Which, if history is any indication, means that precisely the opposite will happen. Courtesy of Bloomberg:
HSBC (Glenn Ko) – Isolated case
- HNA is more of idiosyncratic case rather than systemic. Institutional clients and even China-based investors are not involved. Therefore the impact should be contained. Of course, if this happens on top of other negative news flow in the market, the situation could be different
Lombard Odier (Homin Lee) – Situation manageable
- HNA is a well-known story right now, so the impact of its bond fallout will be limited. Other BB names in Asia still have a strong tailwind behind them, such as real estate names amid macro stability. Single name facing some default issues will be manageable in the credit markets in Asia
- “I don’t doubt there could be some intra-day moves reflecting this worry. But in terms of the overall trend, can it make a difference? I doubt it”
ANZ (Owen Gallimore) – Default digestible
- Isolated Chinese non-state-owned junk bond defaults will be digested, even if it is HNA
- In many ways non-rated state-owned firms and LGFV dollar bond issuance has replaced the traditional China HY market of developers and industrials, so one needs to see problems in these sectors for a broader market correction
Haitong International (Ray Wepener) – Contained contagion
- “The impact of an HNA default on the wider market would depend on a number of factors. I would expect a knee jerk reaction, mostly isolated to recently (overseas) acquisitive companies”
- While HNA spreads more than doubled in 2017, Asian HY spreads tightened by 100 basis points from the wides
- The market has seen for some time now that ‘buy the dip’ has provided a floor, which should contain any widespread contagion
UBS – Spread surge
- A default scenario would increase funding costs for high-yield issuers, mainly Chinese property companies and LGFVs, and could push out spreads on junk bonds in the region by 160-240 basis points, according to a Feb. 6 equity strategy note
- UBS said in the report it doesn’t cover HNA and hasn’t done due diligence on the company, so it cannot comment on the likelihood of a default
* * *
Finally, here an interesting take from Bloomberg Markets Live commentator, Andrew Cinco, who sees the Anbang blowup as eerily similar to the Japanese bubble peak.
I guess the NYC Landmark signal still works. Anbang goes wobbly just a few short years after its splashy purchase of a trophy Manhattan property, the Waldorf-Astoria Hotel. It brings to mind the Japanese real-estate bubble in the late 80s, and one has to wonder whether China will suffer the same retreat eventually.
The height of Japan’s property-market glory was marked by Mitsubishi Estate’s acquisition of Rockefeller Center in October 1989 (NB: the Nikkei Index peaked just two months later, on Dec. 29). Mitsubishi walked away from the iconic property almost exactly six years after announcing the deal. The NY Times reported the end of the deal this way:
“Mitsubishi’s sudden decision to exit Rockefeller Center is the most striking in a string of recent retreats from the trophy properties stretching from New York to Honolulu that Japanese companies acquired during a real estate binge in the 1980s.”
4. EUROPEAN AFFAIRS
Traders are puzzled by the British pound flash crash!! It rebounded to positive one hour later
(courtesy zerohedge)
Traders Puzzled By Pound Flash Crash
Traders are scratching their heads over the latest flash crash in the pound, a currency which over the past 2 years has had more than its share of bizarre, sharp moves lower, when just as 6am ET, GBPUSD plunged 64 pips in seconds on no news (note that May’s big Brexit speech was announced for next Friday after the move).
hitting fresh day low at 1.3905, versus day high at 1.3995.
Ahead of the move, traders had reported another typical low liquidity Friday, with volumes on the light side, as such as large block could have weighed on the pound.
To explain the move, Bloomberg quotes an unnamed trader who suggests that it may have been “triggered by an incorrect amount input for the 11am fix” when “just under GBP700m was sold on one platform alone.”
Here, however, Citi warns to take this with a pinch of salt given the report cites an anonymous trader; the bank also notes that other UK assets did not follow the move, and that “given the quick retracement of the move, there is speculation that this was probably related to flows/orders as early NY wakes up.”
Ultimately, trading GBP continues to depend on broader markets, with your usual dose of those pesky Brexit headlines.
And confirming that it is now officially a robo-market, just an hour after today’s unexplained flash crash, cable was trading at session highs, wiping out the entire drop, and back to session highs of 1.3999, approaching the 21DMA at 1.4010.
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
We have been warning you of these developments for quite some time. Turkey is quite upset that they will not participate in the biggest gas discovery in years. It may also undermine their future gas pipeline route through Turkey. Now we witness that Turkey has threatened to sink Italian drill ship in Greek -Cypriot waters.
This is escalating out of control
(courtesy zerohedge)
Turkish Warships Threaten To Sink Italian Drill ship In Cypriot Waters
Amid escalating tensions between Cyprus and Turkey in the Mediterranean Sea, the two countries appear headed towards an inevitable resource war.
Just two weeks since we first reported on Turkey’s aggression in Cypriot waters, KeepTalkingGreece.com reports that a serious incident took place at 10 a.m. on Friday morning, when five Turkish warships threatened to sink the drillship SAIPEM 12000 commissioned by the Italian energy company ENI.
The drillship had set out to reach block 3 of Cyprus’ Exclusive Economic Zone (EEZ) in a new effort to reach Soupia target. SAIPEM could not reach its target due to Turkish threats.
According to Cypriot and Turkish media, the captain of one of the Turkish warships contacted the SAIPEM and threatened to sink the drill ship if it should not change its route. The drill ship changed the route and making maneuvers through the Turkish warships turned to the West and left the area.
screenshots form marinetraffic.com via newsit.cyprus
Deputy Government Spokesman Victoras Papadopoulos told the Cyprus News Agency, that after consultations between Italian company ENI and SAIPEM 12000, the captain of the drillship tried once again to drive the ship towards the Soupia (Cuttlefish) target to conduct its drilling operations.
“During its course towards block 3 and the Soupia target the drillship was halted by five Turkish warships and after threats of violence launched (by the Turks) and the threat of a collision with the drillship, despite the courageous and commendable efforts made by the captain,” CNA notes.
The SAIPEM sailed to the port of Lemessos, is expected to sail to Morocco over the weekend.
Nikos Christodoulidis told media that the drilling is postponed but the energy program continues.
During the informal EU Summit in Brussels, Cyprus, Italy and Greece hope to find a solution to the problem with the aid of top European Union officials.
END
6 .GLOBAL ISSUES
7. OIL ISSUES
8. EMERGING MARKET
Venezuela
A glimpse into what is going on inside basket case Venezuela. Oil workers are collapsing from hunger.
(courtesy zerohedge)
“I Haven’t Eaten Meat In 2 Months” – Venezuelan Oil Workers Are Collapsing From Hunger On The Job
Those who are unfamiliar with Venezuela’s unprecedented economic collapse might be surprised to learn that the country’s oil production has only slowed, even as the price of a barrel of crude has risen in most international markets.
Unsurprisingly (it’s Venezuela), there’s a macabre explanation for this phenomenon: The workers at PDVSA – Venezuela’s state-owned oil company, which once showered Venezuelans with oil wealth – are literally collapsing due to hunger and exhaustion as workers defy their government handlers and flee their jobs in their desperation as the value of their pay has been completely erased.
Bloomberg spoke with several workers in Venezuela’s oil industry about the harsh conditions they face on a daily basis.
Of course, oil workers aren’t the only ones suffering: The situation in Venezuela is getting so dire that ordinary Venezuelans are losing tons of body weight because of the food shortages. Many can no longer afford to buy meat.
One worker told Bloomberg about how his weekly salary barely pays for the corn flour he mixes with water and drinks every morning.
At 6:40 a.m., Pablo Ruiz squats at the gate of a decaying refinery in Puerto La Cruz, Venezuela, steeling himself for eight Sisyphean hours of brushing anti-rust paint onto pipes under a burning sun. For breakfast, the 55-year-old drank corn-flour water.
Ruiz’s weekly salary of 110,000 bolivares — about 50 cents at the black-market exchange rate — buys him less than a kilo of corn meal or rice. His only protein comes from 170 grams of canned tuna included in a food box the government provides to low-income families. It shows up every 45 days or so.
“I haven’t eaten meat for two months,” he said. “The last time I did, I spent my whole week’s salary on a chicken meal.”
Hunger is hastening the ruin of Venezuelan’s oil industry as workers grow too weak and hungry for heavy labor. With children dying of malnutrition and adults sifting garbage for table scraps, food has become more important than employment, and thousands are walking off the job. Absenteeism and mass resignations mean few are left to produce the oil that keeps the tattered economy functioning.
Researchers at three Venezuelan Universities reported losing on average 11 kilograms (24 lbs) in body weight last year and almost 90% now live in poverty, according to a new university study on the impact of a devastating economic crisis and food shortages. That annual survey has become a key barometer of the country’s economic stress since the government stopped releasing reliable economic data, as Reuters reports.
Per Reuters, over 60% of Venezuelans surveyed said that during the previous three months they had woken up hungry because they did not have enough money to buy food. About a quarter of the population was eating two or less meals a day.
After winning the presidency in 1999, leftist President Hugo Chavez was proud of improving Venezuela’s social indicators as the country’s economy was bolstered by oil-fueled welfare policies.
But his successor President Nicolas Maduro, who has ruled since 2013, has allowed corruption to flourish. And his political allies have mismanaged the economy to such a degree that the collapse in the price of oil during 2014 had ruinous consequences.
Even as the price of crude has begun to creep materially higher, the situation in Venezuela is only getting worse.
In contemporary Venezuela, currency controls restrict food imports, hyperinflation eats into salaries, and people line up for hours to buy basics like flour.
As a result, 90% of Venezuelans live in poverty.
In what appears to be a last-ditch effort to rescue the country’s economy and his regime, President Nicolas Maduro yesterday began sales of the Petro, Venezuela’s oil-backed cryptocurerency. The launch was so successful, Maduro has assured the public, that he is considering launch a “Petro Oro” – a cryptocurrency backed by gold reserves.
But perhaps even more shocking than the dire circumstances under which PDVSA’s remaining employees go to work every day is the contrast with the country’s prosperous past, as Bloomberg describes it…
For decades, PDVSA was a dream job in a socialist petro-state. The company supplied workers not only with a good living and revolutionary-red coveralls, but cafeterias that served lunches with soup, a main course, dessert and freshly squeezed juice. Now, the cafeterias are mostly bare, the children are hungry and employees are leaving to work as taxi drivers, plumbers or farmers. Some emigrate. Some hold out as long as they can.
…Now, instead of enjoying the trappings of a comfortable, middle-class life (not to mention freshly squeezed fruit juice), desperate employees are risking the government’s wrath – and possibly sacrificing their chance at a government pension someday – to escape not only from their jobs, but from Venezuela.
Those who quit without notice risk losing their pensions, as bureaucrats refuse to process paperwork. Many managers live in terror of arrest since the Maduro regime purged the industry, imprisoning officials from low-level apparatchiks to former oil ministers. In one human resources office, a sign advertised a limit of five resignations a day.
“Management is holding them back to stop brain and technical drain,” said Jose Bodas, general secretary of United Federation of Venezuelan Oil Workers. He estimates 500 employees have resigned at the Puerto La Cruz refinery and nearby processing facilities in the past 12 months – even though superiors have labeled them “traitors to the homeland,” a phrase that often precedes arrest. In the streets, families sell their boots and the red coveralls.
“They’re giving up because of hunger,” Bodas said. “They’re leaving because they get paid better abroad. This is unheard of, a catastrophe.”
In a nightmarish reflection of what life must’ve been like in some of the most poverty stricken areas of the Soviet Union, widespread adsenteeism is forcing those who stay behind to work long hours at the state’s insistence – without any additional compensation.
Sitting in the living room of his house, on his day off, Endy Torres says he has lost 33 pounds over the past 18 months. He shows his PDVSA identification photo as proof: a chubby-cheeked man, weighing 176 pounds.
Ten years ago, he joined the company expecting an ample salary and comfortable pension. Today, his 700,000 bolivars per month, plus a food bonus of 1.6 million bolivars (about $9.50 altogether) can’t fill the fridge at his grandmother’s house, where he lives.
About 10 people from his department resigned in January. There are 263 plant operators remaining and 180 vacancies at the Puerto La Cruz refinery, he said.
Absenteeism forces those who show up to work extra hours and burn precious calories. The lack of investment in equipment and maintenance has increased technical failures, almost all in the early hours of the morning, he said. When they occur, workers are too fatigued to act quickly, and accidents occur.
And the worst part of it all is: Even if oil prices make a surprise comeback, years of favoritism, corruption and – now – international sanctions mean it’s unlikely Venezuela’s oil industry will suddenly blossom once again: For those who stay behind, the formerly wealthiest country in Latin America will probably remain mired in poverty, for as long as it’s ruled by a corrupt autocracy.
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am
Euro/USA 1.2308 DOWN .0018/ 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 MOSTLY IN THE RED (EXCEPT GERMAN DAX)
USA/JAPAN YEN 106.75 DOWN 0.082 (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 1.3991 UP .0040(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 1.2687 DOWN .0027 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS FRIDAY morning in Europe, the Euro FELL by 18 basis points, trading now ABOVE the important 1.08 level RISING to 1.2293; / Last night Shanghai composite CLOSED UP 20.46 OR 0.63% / Hang Sang CLOSED UP 301.49 POINTS OR 0.97% /AUSTRALIA CLOSED UP 0.78% / EUROPEAN BOURSES DEEPLY IN THE RED EXCEPT GERMAN DAX
The NIKKEI: this FRIDAY morning CLOSED UP 156.34 POINTS OR 0727%
Trading from Europe and Asia:
1. Europe stocks OPENED MOSTLY IN THE RED (EXCEPT GERMANY)
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 201.49 POINTS OR 0.97% / SHANGHAI CLOSED UP 20.46 OR 0.63% /
Australia BOURSE CLOSED UP 0.78% /
Nikkei (Japan)CLOSED UP 156.34 POINTS OR 0.72%
INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1330.90
silver:$16.61
Early FRIDAY morning USA 10 year bond yield: 2.8897% !!! DOWN 3 IN POINTS from THURSDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ VERY DEADLY
The 30 yr bond yield 3.1720 DOWN 3 IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/DEADLY
USA dollar index early FRIDAY morning: 89.85 UP 11 CENT(S) from THURSDAY’s close.
This ends early morning numbers FRIDAY MORNING
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And now your closing FRIDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.035% UP 1 in basis point(s) yield from THURSDAY/
JAPANESE BOND YIELD: +.0.053% DOWN 3/10 in basis points yield from THURSDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.597% UP 7 IN basis point yield from THURSDAY/
ITALIAN 10 YR BOND YIELD: 2.067 DOWN 1 POINTS in basis point yield from THURSDAY/
the Italian 10 yr bond yield is trading 47 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.653% DOWN 5 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR FRIDAY
Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.2303 DOWN.0021 (Euro DOWN 21 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 106.65 DOWN 0.190 Yen UP 19 basis points/
Great Britain/USA 1.3989 UP .0039( POUND UP 39 BASIS POINTS)
USA/Canada 1.2655 DOWN .0059 Canadian dollar UP 59 Basis points AS OIL ROSE TO $63.50
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This afternoon, the Euro was DOWN 21 to trade at 1.2303
The Yen ROSE to 106.65 for a GAIN of 19 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 39 basis points, trading at 1.3989/
The Canadian dollar ROSE by 59 basis points to 1.2655/ WITH WTI OIL RISING TO : $63.50
The USA/Yuan closed AT 6.3372
the 10 yr Japanese bond yield closed at +.053% DOWN 3/10 BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 4 IN basis points from THURSDAY at 2.8788% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.1654 DOWN 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, 89.89 UP 15 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 FRIDAY: 1:00 PM EST
London: CLOSED DOWN 7.98 POINTS OR 0.12%
German Dax :CLOSED UP 21.88 POINTS OR 0.18%
Paris Cac CLOSED UP 8.14 POINTS OR 0.15%
Spain IBEX CLOSED DOWN 54.50 POINTS OR 0.55%
Italian MIB: CLOSED UP 208.64 POINTS OR 0.93%
The Dow closed UP 347.51 POINTS OR 1.39%
NASDAQ WAS UP 127.31 Points OR 1.77% 4.00 PM EST
WTI Oil price; 63.50 1:00 pm;
Brent Oil: 67.22 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 56.30 DOWN 18/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 18 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +.653% 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:$63.55
BRENT: $67.25
USA 10 YR BOND YIELD: 2.866% THIS RAPID ASSENT IN YIELD IS VERY DANGEROUS/DERIVATIVES START TO BLOW UP/ dangerous/stays extremely high in yield/
USA 30 YR BOND YIELD: 3.1563%/BROKE GUNDLACH’S KEY 3.00% AGAIN WHERE ALL VALUATIONS ON STOCKS BLOW UP/ VERY DEADLY
EURO/USA DOLLAR CROSS: 1.2296 DOWN.0030 (DOWN 30 BASIS POINTS)
USA/JAPANESE YEN:106.77 DOWN 0.057/ YEN UP 6 BASIS POINTS/ very dangerous as yen carry traders are getting killed/yen continues to rise despite the NYSE rising.
USA DOLLAR INDEX: 89.89 UP 16 cent(s)/dangerous as the lower the dollar the higher the inflation.
The British pound at 5 pm: Great Britain Pound/USA: 1.3965 : UP 0.0014 (FROM YESTERDAY NIGHT UP 14 POINTS)
Canadian dollar: 1.2644 UP 71 BASIS pts
German 10 yr bond yield at 5 pm: +0.653%
VOLATILITY INDEX: 16.49 CLOSED DOWN 2.23
END
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Bonds Break 7-Week Losing Streak As Fed Balance Sheet Tumbles Most In 6 Years
A week of turmoiling up and down in rates and stocks… for not very much…
On the day we saw the same old pattern of gap up open, then weakness… but this time the latter half of the day saw buying, not selling…
The Dow and Small Caps managed to creep back into the green for the week as Nasdaq melted up to Wednesday’s highs this afternoon (as bond yields tumbled)…
The Dow bounced back to its 61.8% retracement zone.
S&P managed to get back above (and close above) its 50DMA…
Credit markets had a notably weak week, diverging dramatically from equity risk…
Treasury yields were mixed on the week with the belly outperforming (and lower) while 2Y and 30Y were both higher…
With the 2s10s curve flatter for the 2nd week in a row…
10Y Yields were up 7 weeks in a row ahead of this week but the 10Y closed below last Friday’s close of 2.8749% breaking the losing streak…
As Bloomberg notes, That’s quite an unusual situation. The last time it happened was in May 2008, and before that it was May 2004. An eight-week streak of higher yields would have been the longest since a nine-week surge ending on April 1, 1994. Here’s the S&P 500 during those nine weeks:
But we note that US stocks are now their ‘most expensive’ relative to bonds since 2008…
The Dollar Index limped lower for the second day (coincidentally since China has returned from its new year festivities, banned VIX, and bailed out Anbang)…but ended higher on the week (3rd weekly gain of the last 4 weeks)
NOTE how tight the range has been in the last 36 hours.
WTI bounced for the 2nd week in a row but dollar strength hit cooper and PMs…
NOTE that WTI/RBOB are back at somewhat key technical levels right before the XIV-driven collapse…
Bitcoin bounced back above $10,000 today – back to unchanged for February – but is marginally lower on the week (as the rest of the crypto space got hammered)…
Nasdaq and Bitcoin recoupled earlier today but this afternoon saw stocks higher and crypto slipped lower…
Is Bitcoin the leading indicator for The Dow?
Finally, You Are (Still) Here…
Bonus Chart:The Fed Balance Sheet dropped $23.2bn this week (to 2/21) – that’s the most since March 2012. The Fed balance sheet is now at its lowest since August 2014…
end
Early this morning credit markets around the globe are flashing red as yields rise
(courtesy zerohedge)
Credit Markets Are Flashing Red
Despite rebounds in US (and less so European) equities and drops in both regions’ ‘VIX’ measures, the last few days have seen an ominous reawakening in credit markets that is far more systemically concerning than a volatility ETN…
European credit spreads are back near cycle wides…
And US HY spreads are pushing back towards last week’s wides…
And it’s not just HY credit, US investment grade credit spreads are starting to crack wider…
Fund outflows in HY and IG resumed their 2018 trend yesterday…
And credit remains notably decoupled from stocks…
As rate- and credit-vol remain notably elevated…
This makes us very comforting to know that Mnuchin is the Sec. Treasurer of the USA:
there is no link between rising wages and inflation>????
(courtesy zerohedge)
Mnuchin’s Most Bizarre Claim Yet: “There Is No Link Between Rising Wages And Inflation”
Treasury Secretary Steven Mnuchin has a degree from one of the most prestigious universities in the world (Harvard grads may dispute this); He was the CIO of Goldman Sachs; He launched a successful hedge fund; He is now Treasury Secretary. Yet he appears to barely grasp basic economic concepts (not to mention his apparent fondness for fake math).
Last night, Mnuchin transparently tried to sooth markets by telling a crowd of reporters who accompanied him to the US Mint in Philadelphia that investors shouldn’t worry about rising inflation and Treasury yields – even with the 10-year yield so close to crossing into the “danger zone” above 3%.
Quoted by Bloomberg, Mnuchin swatted away the suggestion that investors are worried about rising prices, even as the average hourly wage number for January soared the most since 2009, triggering this month’s “volocaust”. Why? Because in Mnuchin’s mind, wage inflation and rising consumer prices have only a tenuous link – if that.
“There are a lot of ways to have the economy grow,” Mnuchin said in an interview aboard a train to Philadelphia on Thursday, where he toured the U.S. Mint. “You can have wage inflation and not necessarily have inflation concerns in general.”
If that’s true – it’s certainly news to us. And judging by the tone of these dismayed Jeffrey Gundlach tweets, we’re not alone.
Mnuchin: policies will raise wages w/out inflation. Yeah, sure. And we are going to expand the Buffalo Art Museum without making it bigger.
If by miracle wages go up w/out inflation not good for profits. If wages go up w/ inflation not good for bond yields, ergo P/E ratios. Hmmm.
Mnuchin added that he isn’t concerned about foreign investment in new US debt, which analysts expect could exceed $1.2 trillion this year (with all the latest bells and whistles) as the Trump tax cuts force the federal government to issue more debt, saturating the market and probably driving yields higher.
Of course, Mnuchin has fallen in line behind his boss and repeatedly asserted that the US would make up for lost tax revenue by boosting economic growth to 3% over the coming decade, something that would result in one of the longest and most powerful economic expansions in modern history.
Instead, the suggestion that the Trump tax cuts would boost government revenues through growth has been widely debunked.
As Trump’s chief economic cheerleader, Mnuchin has consistently deflected any suggestion that the president’s policies could have a downside. He sidestepped the idea that tax cuts and increased federal spending Trump has signed into law amount to an economic stimulus.
“Is it very good for the economy? Absolutely,” Mnuchin said of the tax cuts. “One of the reasons why the president won the election is because most middle-class Americans had very little wage growth.”
Turning to the problem of rising crude oil prices, Mnuchin asserted that higher energy costs wouldn’t drive up the price of goods because the US is producing more of its own oil thanks to the shale boom, and is relying less on exports which… wait, what? That makes absolutely no sense: Higher oil prices are higher oil prices, period, and will impact the cost of goods from every conceivable angle, raising the cost of production and distribution, not to mention gas.
But perhaps even more concerning than his comments about inflation were his remarks about the $20 trillion pile of federal government debt, which is about to swell further. Foreigners held $6.3 trillion of that by the end of last year, something that leaders of the US intelligence community have referred to as a security threat.
Much of the new U.S. debt will be bought by foreign investors. Foreign holdings of U.S. Treasuries stood at $6.3 trillion as of the end of last year, hovering near a record amount and almost double the level when the recession ended in 2009. China alone holds about a fifth of foreign-held debt, making it the U.S.’s largest creditor.
The director of national intelligence, Dan Coats, told the Senate Intelligence Committee on Feb. 13 that the U.S. debt, now at $20.8 trillion, is “unsustainable” and “represents a dire threat to our economic and national security.”
“I would urge all of us to recognize the need to address this challenge and to take action as soon as possible before a fiscal crisis occurs that truly undermines our ability to ensure our national security,” Coats said.
But Mnuchin said that foreign investors in U.S. debt don’t worry him.
“I’m not concerned about that for national security risks,” he said, adding that what’s important is that the U.S. can afford to finance its military and intelligence operations.
Already, both energy and higher wages are having a discernible impact on prices: Consumer prices in January were 2.1% higher than a year earlier, up from 1.6% in June. With unemployment at an all-time low, tightness in the labor market SHOULD lead to rising wages and, by extension, higher consumer prices (this is a basic economic concept called the Phillips curve) – though often during her final year in office the former Fed Chairwoman Janet Yellen would suggest that this relationship has unraveled to a degree during the post-crisis period.
But many investors believe this dynamic is back in play: Persuading them otherwise will be one of Mnuchin’s more burdensome responsibilities during the coming months.
END
SWAMP STORIES
Now the FBI informant’s lawyer is demanding a Dept of Justice inquiry into a coordinated smear campaign
(courtesy zerohedge)
Uranium One: Undercover FBI Informant’s Attorney Demands DOJ Inquiry Into Coordinated Smear
The attorney for an FBI informant who was deeply embedded in the Russian nuclear industry is demanding that Attorney General Jeff Sessions investigate a coordinated smear campaign against her client. After several decades working for the CIA and the FBI, William Douglas Campbell uncovered two related bribery schemes involving Russian nuclear officials, an American trucking company, and efforts to route money to the Clinton Global Initiative through an American lobbying firm in order to overcome regulatory hurdles, according to reports by The Hill and Circa.
After details of Campbell’s undercover work for the FBI first emerged in an October 2017 report by The Hill – which did not divulge his name, Michael Isikoff of Yahoo News and Joel Schectman of Reuters published articles smearing Campbell, saying he was “so unreliable that prosecutors dropped him as a witness” in a case unrelated to his undercover work – while two “senior officials” within the Justice Department fed Congressional investigators the same thing during a December 15 briefing.
Both statements were lies, as the case was related to Campbell’s undercover work, and he was dropped as a witness after the Baltimore U.S. Attorney’s office botched their case, which Campbell’s testimony would have weakened.
(Isikoff’s name may ring a bell, as a Yahoo News article he wrote after being fed information by former UK spy Christopher Steele was used as supporting evidence alongside the “Steele Dossier” in a FISA warrant application to surveil the Trump campaign).
As part of the smear, Campbell’s name was also divulged in a public filing by the DOJ, “making him unemployable in the industry and leaving him to survive on Social Security” after decades of loyal service to both the CIA and the FBI.
Campbell testified to Congressional investigators in February after an “iron-clad” gag order was lifted.
Campbell’s lawyer Victoria Toensing, a former Reagan Justice Department official and former Chief Counsel to the Senate Intelligence Committee, fired off a letter to Attorney General Jeff Sessions on Tuesday demanding an investigation into Campbell’s character assassination – CC’ing DOJ Inspector General Michael Horowitz, along with several Congressional Investigators and others involved in the matter.
The letter reads:
“We write on behalf of our client, William Douglas Campbell, to request an investigation of disclosures by anonymous “federal officials” to the media and of Congressional briefings by “senior officials” of the Justice Department. The former provided false information about Mr. Campbell to the media. The latter provided false information about Mr. Campbell to Senate and House committees.”
Cloak and Dagger
After Campbell spent decades working for the CIA, he was “turned over” to the FBI for counterintelligence work due to relationships he had forged deep within the Russian uranium industry. While undercover, Campbell was required by the Russians – under threat, to launder large sums of money, allowing the FBI to uncover a massive Russian “nuclear money laundering apparatus.”
The Russians forced Campbell to deliver bribes from Maryland transportation company TLI in $50,000 increments to Russian nuclear official Vadim Mikerin of Russian state-owned uranium subsidiary, Tenex. Campbell did so under the direction of the FBI in order to maintain his cover, fronting hundreds of thousands of dollars he says he was never reimbursed for.
While undercover, Campbell collected over 5,000 documents and briefs over a six-year period beginning in 2009, some of which are said to detail efforts by Moscow to route money to the Clinton Global Initiative (CGI) through lobbying firm APCO Worldwide – including video evidence of bribe money related to the Uranium One deal being stuffed into suitcases.
“The contract called for four payments of $750,000 over twelve months. APCO was expected to give assistance free of charge to the Clinton Global Initiative as part of their effort to create a favorable environment to ensure the Obama administration made affirmative decisions on everything from Uranium One to the U.S.-Russia Civilian Nuclear Cooperation agreement.“ -William Campbell
Officials with APCO – the lobbying firm accused of funneling the money to the Clinton Global Initiative, told The Hill that its support for CGI and its work for Russia were not connected in any way, and involved different divisions of the firm.
As a result of Campbell’s work, the FBI pieced together evidence of a “Russian uranium dominance strategy” involving Tenex, TLI, and a pay-for-play scheme to route money to the Clinton charity to obtain approval from the Obama administration for the purchase of Uranium One, while Hillary Clinton was Secretary of State.
In January, TLI co-president Mark Lambert was charged in an 11-count indictment in connection with the scheme, while Vadim Mikerin, who resides in Maryland, was prosecuted in 2015 and is halfway through a four-year sentence.
Despite the FBI’s knowledge of the money laundering scheme – while Robert Mueller was the Director, the Obama administration approved the related deal for Tenex to purchase Uranium One.
Railroaded
In a move which can only be interpreted as an effort to protect the FBI, the Obama administration and the Clintons, AG Jeff Sessions and Deputy AG Rod Rosenstein originally tried to suggest the nuclear bribery case uncovered by Campbell is not connected to the Uranium One deal.
Via John Solomon of The Hill last November:
“Attorney General Jeff Sessions in testimony last week and Deputy Attorney General Rod Rosenstein in a letter to the Senate last month tried to suggest there was no connection between Uranium One and the nuclear bribery case. Their argument was that the criminal charges weren’t filed until 2014, while the Committee of Foreign Investment in the United States (CFIUS) approval of the Uranium One sale occurred in October 2010.”
In response, several congressional republicans pushed back:
“Attorney General Sessions seemed to say that the bribery, racketeering and money laundering offenses involving Tenex’s Vadim Mikerin occurred after the approval of the Uranium One deal by the Obama administration. But we know that the FBI’s confidential informant was actively compiling incriminating evidence as far back as 2009,” Rep. Ron DeSantis, (R-Fla.) told The Hill.
“It is hard to fathom how such a transaction could have been approved without the existence of the underlying corruption being disclosed. I hope AG Sessions gets briefed about the CI and gives the Uranium One case the scrutiny it deserves,” added DeSantis, whose House Oversight and Government Reform subcommittees is one of the investigating panels.
Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) sent a similar rebuke last week to Rosenstein, saying the deputy attorney general’s first response to the committee “largely missed the point” of the congressional investigations.
“The essential question is whether the Obama Justice Department provided notice of the criminal activity of certain officials before the CFIUS approval of the Uranium One deal and other government decisions that enabled the Russians to trade nuclear materials in the U.S,” Grassley scolded.”
“This is not just about bribery and kickbacks but about a U.S. company that was transporting yellow-cake for the Russians with our approval,” an unnamed U.S. Intelligence official told journalist Sara Carter in December, adding “This should raise serious questions.
Following the outcry, Sessions ordered Justice Department prosecutors to begin asking FBI agents to explain what they did with Campbell’s evidence, and why it didn’t factor into the Uranium One deal, according to NBC news. Where that investigation has gone, one can only imagine.
A senior law enforcement official who was briefed on the initial FBI investigation told NBC News there were allegations of corruption surrounding the process under which the U.S. government approved the sale. But no charges were filed.
And now, Victoria Toensing has another serious question for Jeff Sessions; will he get to the bottom of the coordinated effort to smear William Douglas Campbell – a man who dutifully served the CIA and FBI for decades until he chose an opportune moment to reveal a monumental corruption? We aren’t holding our breath, but hey – Inspector General Michael Horowitz was CC’d on the letter, so there’s hope.
McMaster, Kelly On Their Way Out?
Longstanding tensions within the Oval Office have reportedly reached a breaking point, as friction between President Trump and two top advisers may soon result in yet another split within the White House. Both National Security Advisor H.R. McMaster and Chief of Staff John Kelly, both military men, are reportedly close to quitting or being fired – depending on whether you’re reading CNN or Reuters.
The two are reportedly livid over Trump’s treatment of them in public and private – as well as efforts by Trump and his associates to circumvent security measures designed to keep uncleared individuals from accessing classified information, such as Presidential son-in-law Jared Kushner – who enjoys reading the president’s daily intelligence briefing.
“There have been running battles between Trump and his generals,” said one of the officials, speaking on the condition of anonymity. Kelly is a retired Marine general and McMaster an Army lieutenant general.
“But the clearance business is personal, and if Trump sets special rules for family members, I‘m not sure if Kelly and McMaster would salute,” the official said. –Reuters
And while Kelly wrestles with security clearances and reigning in President Trump’s habit of tweeting his stream of consciousness, H.R. McMaster and Trump have their own unique difficulties which have reportedly come to a head.
According to “half a dozen defense and administration officials,” the Pentagon has been quietly considering options that would allow Trump to boot McMaster – the three-star general, out of his current role and back into the military.
While administration officials have privately said the preference is to move McMaster into a position within the Army or Defense Department that qualifies as a promotion, some within the Pentagon feel he has become politicized in the White House and have expressed reservations about him returning to the military in a prominent role. Some defense officials caution that the President could also go as far as not to offer him a fourth star and force him to retire. –CNN
Five days ago Trump lashed out at McMaster over Twitter, after the National Security Advisor told an international audience at the Munich Security Conference that Russian interference in the US election is “now incontrovertible” following Special Counsel Robert Mueller’s indictments of 13 Russian nationals – while failing to mention that “the results of the 2016 election were not impacted or changed by the Russians,” as told by Deputy Attorney General Rod Rosenstein,” adding “the only Collusion was between Russia and Crooked H, the DNC and the Dems. Remember the Dirty Dossier, Uranium, Speeches, Emails and the Podesta Company!”
General McMaster forgot to say that the results of the 2016 election were not impacted or changed by the Russians and that the only Collusion was between Russia and Crooked H, the DNC and the Dems. Remember the Dirty Dossier, Uranium, Speeches, Emails and the Podesta Company!
This isn’t the first time McMaster’s neck has reportedly been on the chopping block, as West Wing rumors swirled over his departure last fall.
In January, McMaster quashed rumors of his departure, telling reporters “I have a job and it is my intention to go as long and hard as I can in service of the President of the nation,” adding that it was “a tremendous honor to do this job every day.”
Trump’s first National Security Advisor, Michael Flynn, resigned shortly after taking office amid a controversy over whether he lied to Vice President Mike Pence about his contacts with Russian ambassador, Sergey Kislyak.
On Thursday, the Pentagon directed all inquiries about McMaster to the White House. “General McMaster works for President Trump. Any decision with regards to staff, the White House will make those determinations,” said chief spokesperson Dana White. Meanwhile, White House Press Secretary Sarah Sanders told reporters on Tuesday that Trump “still has confidence in General McMaster.”
A Source within the White House, leaking to CNN, reports that Trump can’t stand McMaster’s demeanor during briefings – and that the President considers his National Security Advisor to be “gruff and condescending.”
He prefers the briefing style of someone like CIA Director Mike Pompeo or Defense Secretary James Mattis, who patiently answer his questions, regardless of the premise. McMaster, meanwhile, is the person who delivers the news that Trump doesn’t want to hear on a daily basis, according to the senior Republican source.
The issue is not political but mostly stylistic, as McMaster and Mattis tend to discuss information before it is presented to the President, the same source added. –CNN
Kelly and McMaster both declined to comment, however Reuters’ sources were quick to add that “tensions could blow over, at least for now, as have previous episodes of discord between the president and other top officials who have fallen out of favor.”
END
As expected, Rick Gates it to plead guilty in the Mueller probe and will provide considerable information on Manafort’s activities with Victor Yanukovich
(courtesy zerohedge)
Gates To Plead Guilty In Mueller Probe
Speculation has been mounting for weeks that former Paul Manafort lieutenant (and now indicted co-conspirator) Rick Gates might be preparing to cooperate with Special Counsel Robert Mueller.
Now, the New York Times is reporting that Mueller could announce a Gates guilty plea as soon as Friday afternoon, less than a day after Gates fired his lawyers following the unsealing of a superseding indictment that also slapped Manafort and Gates with bank and tax fraud charges.
Gates, a longtime political consultant who met Manafort when he interned at one of Manafort’s companies, is expected to strike a plea deal, which could be a significant development in the investigation as Gates presumably can offer a significant amount of incriminating information about Manafort and his activities relating to former Ukrainian President Viktor Yanukovich.
Gates’ primary concern has been protecting his family, both emotionally and financially, since wealthy Republican donors who were supposed to foot the bill for his defense have reportedly welched on the funding. He’s also hoping to spare his family the embarrassment of a drawn-out trial. Gates rolling over would also increase pressure on Manafort to roll over – presumably providing ‘damning’ evidence against President Trump.
Mueller’s team has traced more than $75 million that passed through offshore accounts, and has accused Manafort of laundering more than $30 million to pay for real estate and luxury goods in the US.
Gates transferred more than $3 million from the offshore accounts to his own accounts. Gates took over Eastern Europe duties at Manafort’s old lobbying firm, Manafort & Davis, back in 2008.
Mueller has already secured guilty pleas from former National Security Adviser Mike Flynn and former adviser George Papadopoulos.
end
Gates pleads guilty and will testify against Manafort
(courtesy zerohedge)
Gates Pleads Guilty In Mueller Probe, Will Testify Against Manafort
A former Trump campaign aide and longtime business partner of Paul Manafort, Rick Gates, has pleaded guilty to two charges in a scheme in which Special Counsel Robert Mueller claims more than $75 million flowed through secret accounts set up by the pair.
Gates will plead guilty to a conspiracy to defraud the United States “by impeding, impairing, obstructing and defeating” the DOJ and Treasury, and a second count of lying to authorities over his work with Manafort in Ukraine by giving a “materially false, fictitious, and fraudulent statement” to the Special Counsel’s office.
Gates and Manafort stand accused of laundering over $18 million in income related to lobbying activities on behalf of the former President of Ukraine, through his firm, DMI – of which Gates transferred over $3 million from offshore accounts to accounts he controlled. Manafort and Gates used millions of dollars from the offshore accounts to pay for personal expenses, including the payment of Gates’ mortgage, his children’s tuition, and even interior decorating for his Virginia home, Mueller claims.
In a statement, Manafort maintained his innocence.
“Notwithstanding that Rick Gates pled today, I continue to maintain my innocence. I had hoped and expected my business colleague would have had the strength to continue the battle to prove our innocence. For reasons yet to surface he chose to do otherwise. This does not alter my commitment to defend myself against the untrue piled up charges contained in the indictments against me.”
Mueller requested that the trial against Manafort and Gates to begin May 14, citing over half a million pieces of evidence, including imaged copies of 87 electronic devices.
Gates will testify against Manafort in upcoming proceedings, and has been granted permission to travel to Boston with his children for spring break in the first week of March while wearing a GPS monitor. Based on court guidelines, he faces between 57 and 71 months in prison, however the Prosecution may request a shorter sentence.
Several new tax and bank fraud charges were levied against the pair this week by Mueller, which detail a scheme to launder over tens of millions in income and mask over $10 million from Cypriot entities which were disguised as loans.
In total, the two face 32 charges – 20 more than the original 12 count indictment.
Mueller indicted the pair last October for laundering millions of dollars earned while acting as unregistered agents of the former Ukrainian government. In the superseding indictment filed on Thursday in federal court in Washington, they face new charges of tax evasion and bank fraud, as Bloomberg reported on Thursday.
“Manafort and Gates generated tens of millions of dollars in income as a result of their Ukraine work,” the new indictment said. “From approximately 2006 through the present, Manafort and Gates engaged in a scheme to hide income from United States authorities, while enjoying the use of the money.”
NBC News reported yesterday that at least some of the bank fraud charges hinge on whether Manafort promised Stephen Calk, a Chicago Banker and president of the Federal Savings Bank, a position on Trump’s Council of Economic Advisers in August 2016. Manafort received three loans in total from Calk’s bank. Manafort borrowed nearly $18 million from the bank in 2016 and 2017.
Via NBC:
Special counsel Robert Mueller’s team is now investigating whether there was a quid pro quo agreement between Manafort and Calk. Manafort left the Trump campaign in August 2016 after the millions he had earned working for a pro-Russian political party in Ukraine drew media scrutiny. Calk did not receive a job in President Donald Trump’s cabinet.
The sources say the three loans were questioned by other officials at the bank, and one source said that at least one of the bank employees who felt pressured into approving the deals is cooperating with investigators.
In court filings Friday related to Manafort’s bail, federal prosecutors said they have “substantial evidence” that a loan made from the bank to Manafort using the Virginia and Hamptons properties as collateral was secured through false representations made by Manafort, including misstatements of income.
Meanwhile, Mueller’s team was able to persuade US District Court Judge Amy Berman Jackson to deny Paul Manafort’s modified bail package, noting that the properties pledged towards his $10 million bond was “unsatisfactory,” due to the fact that the property in question was already collateral on a loan for another property which Manafort may default on.
Gates’ guilty plea follows weeks of speculation and a change in legal representation for Gates, who dropped lawyers Shanlon Wu, Walter Mack and Annemarie McAvoy for Sidley Austin senior counsel and personal acquaintance of Robert Mueller, Thomas C. Green.
Protecting Podesta?
Manafort worked closely with the Podesta Group as one of six lobbying firms to help Ukraine into the European Union between 2012 and 2014. Founded by Clinton campaign chairman John Podesta and his brother Tony, while operated by the latter, the Podesta Group was subpoenaed by Robert Mueller’s team last August in order to obtain testimony from executives who worked on the campaign.
Of note, while Manafort’s firm earned $17 million consulting for Ukrainian President Viktor Yanukovych’s pro-Russia ‘Party of Regions.’ During the same period, Manafort oversaw a lobbying campaign for the pro-Russia “Centre for a Modern Ukraine,” (ECMU) a Brussels based think tank linked to Yanukovych which was pushing for Ukraine’s entry into the European Union.
The Podesta group, operating under Manafort, earned over $1.2 million as part of that effort.
Curiously, the Podesta Group was clearly tipped off to Manafort’s investigation, as the firm retroactively filed DOJ forms they should have filed years earlier to disclose their work with the Centre for a Modern Ukraine and the Obama administration. The Washington Examiner reported last August:
Back in April, the powerful Washington lobbying firm run by Clinton ally Tony Podesta filed a document admitting its work for the pro-Russia European Centre for a Modern Ukraine may have principally benefited a foreign government. New disclosuresrevealeddozens of previously unreported interactions the firm made with influential government offices, including Hillary Clinton’s State Department and the office of former Vice President Joe Biden, while lobbying on behalf of the center. Embattled ex-Trump campaign manager Paul Manafort failed to disclose his extensive lobbying efforts on behalf of the center at the time as well.
One of the filings is for Tony Podesta himself, who was a bundler for Hillary Clinton’s 2016 presidential campaign. Tony and his brother John–Clinton’s 2016 campaign chairman–co-founded the lobbying firm in 1988.
Gates’ guilty plea suggests that he and Manafort “tricked” Podesta, ostensibly “company A” or “company B,” into their money laundering scheme:
“To conceal the scheme, Manafort and GATES developed a false and misleading cover story that would distance themselves and the Government of Ukraine, Yanukovych, and the Party of Regions from the Centre, Company A, and Company B. For instance, in the wake of extensive press reports on Manafort and his connections with Ukraine, on August 16, 2016 GATES communicated false talking points to Company B in writing.”
Paul Manafort, on the other hand, was indicted last October for – among other things, failing to register for the same work that Podesta retroactively “remembered to file” as the Mueller investigation was heating up.
While the Podesta Group was disbanded shortly after Tony Podesta stepped down last year in the wake of the Mueller inquiry, a former longtime executive of the now-defunct lobbying firm who has been “extensively” interviewed by Robert Mueller’s team revealed to Fox that Manafort and the Podesta group had been working together since at least 2011 on behalf of Russian interests, and that Manafort was at the Podesta Group offices “all the time, at least once a month,” peddling influence through the ECMU think-tank. Manafort allegedly brought a “parade of Russian oligarchs” to Congress for meetings with members and their staffs, however, Russia’s “central effort” was to get to the Obama administration.”
We don’t expect much of Manafort and Podesta’s alleged “oligarch peddling” operation to see the light of day, considering that it would implicate the Obama administration and directly ties to the Uranium One deal that Mueller’s FBI should have prevented from happening based on evidence from an undercover operative in the Russian nuclear industry, but who knows – maybe Manafort will write a book in prison depending on how things shake out.
Rick Gates, on the other hand, should be out in 18 months, returning home to wife and four kids.
RELUCTANT PREPPERS
US DOLLAR DOMINO COLLAPSE: NEW EVIDENCE | Rob Kirby
Widely followed proprietary analyst Rob Kirby sounds the alarm that the facts can no longer be denied that MAJOR FINANCIAL PLAYERS ARE ABANDONING THE US DOLLAR. Kirby names specific examples to prove that the drumbeat of new hard evidence is accelerating, as we are rapidly approaching the point of no return.
Kirby further blazes through hot topics ranging from the real root causes behind mass tragedies, to insanity preventing North American oil independence, and whether gold/silver/cryptos are the key to bring a peaceful end to the non-stop wars that have been forced upon us!
end
America Top Target of NWO, More MSM Lies, Economic Update
By Greg Hunter On February 23, 2018 In Weekly News Wrap-Ups
By Greg Hunter’s USAWatchdog.com (WNW 323 2.23.18)
The sixth edition of the “World Government Summit” in Dubai didn’t get much media attention in the United States, but it should have. That’s because it is overtly anti-American and anti-freedom and anti-Christ. America is standing in the way of the new world order that top globalists, communists and Islamists want at all costs. American is under constant attack by the globalists’ propaganda and lies. They want to disarm America and destroy our freedom, and then tell us it’s for our own good. When you look at all the treason, crime and attacks, it can be simply summed up that it is all being done by people who want communism and hate freedom. The Democrat Party has really turned into New World Order (NWO) communists. We should start calling them what they really are and not simply “progressives.” The Democrats/Marxists/NWO are, once again, pushing gun control and not worrying about real solutions and protections for American victims.
The mainstream media (MSM) is out with a new poll that says 70% of people want gun control. The weasels in MSM would not stoop to lying, would they? You know, the same lies they told over and over again in the 2016 election that said Hillary Clinton was way ahead in the polls and Donald Trump didn’t have a chance? Rasmussen Reports is also out with a brand new poll, but it says “only 24% trust the government to fairly enact gun control laws.” I think the MSM is lying again to score political points. They have to lie because their ideas hurt America, but that’s the point.
The economy is on pins and needles because of fears of inflation and rising interest rates. Former Fed Head Alan Greenspan has been worried about the potential of “rapidly rising interest rates” since August of 2016. Looks like the wild swings in the markets mean traders might be finally seeing it like Greenspan.
Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.
Video Link
https://usawatchdog.com/america-top-target-of-nwo-more- msm-lies-economic-update/
end
HARVEY
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