March 20/ EFP ISSUANCE SO FAR THIS YEAR IN SILVER: 636 MILLION OZ/IN GOLD A HUGE 131,000 CONTRACTS OR 1712 TONNES/GLD ADDS A SURPRISING 10 TONNES OF GOLD DESPITE GOLD BEING DOWN $5.75 TODAY TO $1312.15/NO CHANGE IN THE SLV DESPITE THE FACT THAT SILVER WAS DOWN ANOTHER 13 CENTS TO $16.20/TRUMP TO INITIATE MORE TARIFFS AGAINST CHINA THIS FRIDAY/FOMC MEETING TOMORROW/TWO INTERESTING SWAMP STORIES FOR YOU TODAY/

 

 

GOLD: $1312.15  down $5.75

Silver: $16.20 down 13 CENTS

Closing access prices:

Gold $1310.70

silver: $16.20

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: $1323.94 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1316.50

PREMIUM FIRST FIX: $7.44

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SECOND SHANGHAI GOLD FIX: $1323.95

NY GOLD PRICE AT THE EXACT SAME TIME: $1316.25

PREMIUM SECOND FIX /NY:$7.70

SHANGHAI REJECTS NY PRICING OF GOLD.

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ON APRIL 1  2018 I WILL NO LONGER PROVIDE THE LONDON FIXES AS THEY ARE MANIPULATED AND THEY WILL BE PROVIDED 36 HRS AFTER THE FACT AND  THUS TOTALLY USELESS TO US!!

LONDON FIRST GOLD FIX: 5:30 am est $1312.75

NY PRICING AT THE EXACT SAME TIME: $1316.25 ???

LONDON SECOND GOLD FIX 10 AM: $1311.00

NY PRICING AT THE EXACT SAME TIME. $1309.60 ????  SIGNALS CROSSED?

For comex gold:

MARCH/

NUMBER OF NOTICES FILED TODAY FOR MARCH CONTRACT:4 NOTICE(S) FOR 400 OZ.

TOTAL NOTICES SO FAR 28 FOR 2800 OZ

For silver:

MARCH

27 NOTICE(S) FILED TODAY FOR

135,000 OZ/

Total number of notices filed so far this month: 5186 for 25,930,000 oz

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Bitcoin: BID $8430/OFFER $8,500: DOWN $133(morning)

Bitcoin: BID/ $8931/offer $9002: UP $369  (CLOSING/5 PM)

 

end

Let us have a look at the data for today

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In silver, the total open interest ROSE  BY A GOOD SIZED 1319 contracts from 210,242  RISING TO 211.635  DESPITE YESTERDAY’S TINY 5 CENT GAIN IN SILVER PRICING.  WE OBVIOUSLY HAD ZERO COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP : 1929 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 1929 CONTRACTS.  WITH THE TRANSFER OF 1929 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 24-48 HRS IN THE ISSUING OF EFP’S. THE 1929 CONTRACTS TRANSLATES INTO 9.645 MILLION OZ  ON TOP OF THE RISE 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 MARCH:

30,997 CONTRACTS (FOR 14 TRADING DAYS TOTAL 30,997 CONTRACTS) OR 154.985 MILLION OZ: AVERAGE PER DAY: 2214 CONTRACTS OR 11.070 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  154.985 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 22.14% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  636.809 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

ACCUMULATION FOR MONTH OF FEBRUARY: 244.945 MILLION OZ

RESULT: WE HAD A GOOD SIZED GAIN  IN COMEX OI SILVER COMEX OF 1319 DESPITE THE 5 CENT GAIN IN SILVER PRICE.  WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 1929 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 1929 EFP’S  FOR THE  MONTH OF MARCH WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE GAINED  3240 OI CONTRACTS i.e. 1929 open interest contracts headed for London (EFP’s) TOGETHER WITH A INCREASE OF 1319  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE RISE IN PRICE OF SILVER OF 5 CENTS AND A CLOSING PRICE OF $16.43 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A HUGE AMOUNT OF SILVER STANDING AT THE COMEX THIS MONTH.

In ounces AT THE COMEX, the OI is still represented by just OVER 1 BILLION oz i.e. 1.051 BILLION TO BE EXACT or 150% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED: 28 NOTICE(S) FOR 140,000 OZ OF SILVER

In gold, the open interest  ROSE BY A STRONG SIZED 6790 CONTRACTS UP TO 540,677  WITH THE FAIR SIZED RISE IN PRICE  YESTERDAY ( GAIN OF $5.25) HOWEVER  FOR MONDAY, THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED AN HUGE SIZED  12,906 CONTRACTS :  APRIL SAW THE ISSUANCE OF 12,656 CONTRACTS, JUNE SAW THE ISSUANCE OF 250 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.   The new OI for the gold complex rests at 540,677. 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  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE A HUMONGOUS  OI GAIN IN CONTRACTS: 6,790 OI CONTRACTS INCREASED AT THE COMEX AND A HUGE SIZED 12,906 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS  TOTAL OI GAIN: 19,696 CONTRACTS OR 1,969,600 OZ =62.52 TONNES

YESTERDAY, WE HAD 11,571 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MARCH : 131,453 CONTRACTS OR 13,145,300  OZ OR 408.86 TONNES (14 TRADING DAYS AND THUS AVERAGING: 9390 EFP CONTRACTS PER TRADING DAY OR 939,000 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 14 TRADING DAYS IN  TONNES: 408.86 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 408.86/2550 x 100% TONNES =  16.03% OF GLOBAL ANNUAL PRODUCTION SO FAR IN MARCH ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  1711.54 TONNES

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

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY: 649.45 TONNES

Result: A CONSIDERABLE SIZED INCREASE IN OI AT THE COMEX WITH THE SMALLISH  RISE IN PRICE IN GOLD TRADING YESTERDAY ($5.25 GAIN).  HOWEVER, WE HAD ANOTHER HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 12,906 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 12,906 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 19,696 contracts ON THE TWO EXCHANGES:

12,906 CONTRACTS MOVE TO LONDON AND 6790 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 62.52  TONNES).

we had: 4 notice(s) filed upon for 400 oz of gold.

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

GLD

WITH GOLD DOWN  $5.75 : A MONSTROUS  CHANGE IN GOLD INVENTORY AT THE GLD / A DEPOSIT OF 11.49 TONNES OF GOLD

Inventory rests tonight: 850.64 tonnes.

SLV/

WITH SILVER DOWN 13 CENTS TODAY: 

NO CHANGES IN SILVER INVENTORY AT THE SLV/

/INVENTORY RESTS AT 319.671 MILLION OZ/

end

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

1. Today, we had the open interest in silver ROSE BY A FAIR 1329  contracts from 210,242 UP TO 211,561 (AND now A LITTLE  CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH THE RISE IN PRICE OF SILVER (5 CENTS WITH RESPECT TO  YESTERDAY’S TRADING).   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER 1929 EFP CONTRACTS FOR MARCH  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD SOME COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI GAIN AT THE COMEX OF 1393 CONTRACTS TO THE 1929 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A GAIN OF 3322  OPEN INTEREST CONTRACTS.  WE STILL HAVE A STRONG AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN MARCH (SEE BELOW). THE NET GAIN TODAY IN OZ ON THE TWO EXCHANGES:  16.61 MILLION OZ!!!

RESULT: A STRONG SIZED  INCREASE IN SILVER OI AT THE COMEX DESPITE THE FALL IN SILVER PRICING  YESTERDAY (5 CENTS RISE IN PRICE) . BUT WE ALSO HAD ANOTHER FAIR SIZED 1929 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR MARCH, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

(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)TUESDAY MORNING/MONDAY NIGHT: Shanghai closed UP 11.39 POINTS OR 0.35% /Hang Sang CLOSED UP 36.17 POINTS OR 0.11% / The Nikkei closed DOWN 99.93 POINTS OR 0.47%/Australia’s all ordinaires CLOSED DOWN 0.39%/Chinese yuan (ONSHORE) closed UP at 6.3308/Oil UP to 62.76 dollars per barrel for WTI and 66.91 for Brent. Stocks in Europe OPENED GREEN EXCEPT SPAIN   .   ONSHORE YUAN CLOSED UP AT 6.3308 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3266 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR . CHINA IS NOT VERY  HAPPY TODAY (STRONGER CURRENCY &  MARKETS/BUT  NEW TRUMP TARIFFS  INITIATED/WEAKER GLOBAL MARKETS ) 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

 i)North Korea

b) REPORT ON JAPAN

3 c CHINA

i)Trump is set to unleash a huge $60 billion China tariffs on Friday as he tries to tackle their “theft” of intellectual property and other Chinese transgressions

( zerohedge)

ii)Xi delivers a stark warning to Trump:  keep your hands off Taiwan after he signs into law the “Taiwanese Travel Act”.  Relations between Taiwan and Central have been antagonistic lately as the new Taiwan leader, Tsai, is against the “One China Policy” which stipulates that Taiwan is only a province of mainland China.

( zerohedge)

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey/Syria

Erdogan, after his victory in Afrin has sights on Eastern Syria and Sinjar Iraq as he will no doubt “cleanse” the area of PKK  ( Kurdish) supporters

( zerohedge)

6 .GLOBAL ISSUES

G-20 statement is a win for protectionism and thus Japan and the uSA wins.  Also Crypto fears subside.  However they all butted heads trying to come up with a statement

(courtesy zerohedge)

7. OIL ISSUES

i)Saudi CDS jumps big time as this nation is facing an economic crisis.  The failure to raise money from their sale of Aramco is no doubt the major cause of this

( zerohedge)

ii)Oil and Gasoline rise again after bigger than expected crude draws

( zerohedge)

8. EMERGING MARKET

9. PHYSICAL MARKETS

Chris Powell answers Dr Keith Weiner beautifully on central bank gold suppression

( Chris Powell/GATA)

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

i)This is not good:  a package bound for Austin exploded at a Texas Fed Ex warehouse

( zerohedge)

ii)The USA national debt at 21 trillion dollars is growing 36% faster than the uSA economy.  This is a time bomb

(courtesy Simon Black/SovereignMan.com)

iii)Amid a barrage of ethical and legal questions over business practices, the board of Cambridge Analytica has suspended its CEO pending a full investigation.  The company was harvesting data provided by Facebook

( zerohedge)

iv)Dave Kranzler comments on the poor retail sales number as well as other deteriorating economic fundamentals.  He also highlights Craig Roberts paper on the same subject

(courtesy Kranzler/Roberts)

v)Another great commentary from David Stockman on where the uSA economy is heading

( David Stockman)

vi)SWAMP STORIES

a)Trump to hand over written documents to Mueller/but provide a narrative of the White House view and not Trump’s personal view

( zerohedge)

b)First Stormy Daniels and now ex Playboy model, McDougal is suing the parent of the National Enquirer, AMI to break the silence on their affair.  In essence she wants to be paid.  The CEO of AMI is a close friend of Donald Trump

( zerohedge)

 

Let us head over to the comex:

The total gold comex open interest ROSE BY AN STRONG SIZED 6790 CONTRACTS UP to an OI level 540,677  WITH THE RISE IN THE PRICE OF GOLD ($5.25 GAIN/ YESTERDAY’S TRADING).    HOWEVER THE CME REPORTS THAT  THE BANKERS ISSUED A HUGE SIZED  COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. WE HAD A 12,656 EFP’S ISSUED FOR APRIL , AND 250 CONTRACTS FOR  JUNE AND ZERO FOR ALL OTHER MONTHS:  TOTAL  12,906 CONTRACTS.  THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON FORWARD… THE COMEX IS NOW AN ABSOLUTE FRAUD!!

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 19,696 OI CONTRACTS IN THAT 12,906 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 6790 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 19,696 contracts OR 1,969,600  OZ OR 62.52 TONNES.

Result: A STRONG SIZED INCREASE IN COMEX OPEN INTEREST WITH THE  RISE IN PRICE ON YESTERDAY  (ENDING UP WITH A GAIN OF $5.25.)THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 19,696 OI CONTRACTS..

We have now entered the non active contract month of MARCH where we LOST 9 contracts LOWERING TO  498 contracts. We had 11 notices served upon yesterday, so GAINED 2 contacts  or 200 additional  oz will  stand for delivery at the comex

April saw a LOSS of 8296 contracts DOWN to 235,787. May saw A GAIN of 40 contracts to stand at 519. The really big June contract month saw a GAIN of 15,323 contracts UP to 203,893 contracts.

We had 4 notice(s) filed upon today for  400 oz

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY:354.161  contracts

CONFIRMED COMEX VOL. FOR YESTERDAY:  321,719 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:

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 A FAIR SIZED 1393  CONTRACTS FROM 210,242 UP TO 211,561 WITH OUR 5 CENT GAIN IN YESTERDAY’S TRADING)  ALSO,WE WERE ALSO INFORMED THAT WE HAD 1929 EMERGENCY EFP’S FOR MARCH ISSUED BY OUR BANKERS 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: 1929.   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 ZERO LONG COMEX SILVER LIQUIDATION AND WE ALSO HAVE A STRONG SIZED GAIN IN TOTAL SILVER OI FROM OUR TWO EXCHANGES. WE ARE ALSO WITNESSING A STRONG AMOUNT OF SILVER OUNCES STANDING FOR COMEX METAL IN THIS ACTIVE OF MARCH AS WELL AS THAT CONTINUAL MIGRATION OF EFPS OVER TO LONDON. ON A PERCENTAGE BASIS THERE ARE MORE EFP’S ISSUED FOR GOLD THAN SILVER.  ON A NET BASIS WE GAINED  3240  SILVER OPEN INTEREST CONTRACTS AS  WE OBTAINED A 1319 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1929 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES: 3240 CONTRACTS 

AMOUNT STANDING FOR SILVER AT THE COMEX

We are now in the  active delivery month of MARCH and here the front month GAINED 95 contracts RISING TO 225 contracts. We had 24 contracts filed YESTERDAY, so we GAINED 119 contracts or an additional 595,000 OZ will stand in this active delivery month of March.(AS SOMEBODY IS IN URGENT NEED OF CONSIDERABLE PHYSICAL SILVER)

April GAINED 3 contracts RISING TO 417 .

The next big active delivery month for silver will be May and here the OI GAINED 172 contracts UP to 150,528

We had 27 notice(s) filed for 135,000 OZ for the MARCH 2018 contract for silver

INITIAL standings for MARCH/GOLD

MARCH 20/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
9840.61 oz
Brinks
Scotia
Deposits to the Dealer Inventory in oz NIL oz
Deposits to the Customer Inventory, in oz  nil OZ
No of oz served (contracts) today
4 notice(s)
 400 OZ
No of oz to be served (notices)
494 contracts
(49400 oz)
Total monthly oz gold served (contracts) so far this month
28 notices
2800 oz
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz
we had 1 kilobar transaction/
We had 0 inventory movement at the dealer accounts
total inventory deposit into the dealer accounts:  NIL  oz
total inventory withdrawals out of dealer accounts; nil oz
we had 2 withdrawals out of the customer account:
i) out of Scotia:  9645.000 oz
300 kilobars
ii) out of Brinks: 195.610 ox
total withdrawal: 9840.61   oz
we had 0 customer deposit
total customer deposits: nil oz
we had 0 adjustment(s)
total registered or dealer gold:  339,378.269 oz or 10.556 tonnes
total registered and eligible (customer) gold;   9,060,591.220 oz 281.82 tones
THE COMEX IS AGAIN IN STRESS AS ONLY 10.556 TONNES OF GOLD ARE LEFT TO SERVICE DELIVERIES
 

For MARCH:
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 4 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 1 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 MARCH. contract month, we take the total number of notices filed so far for the month (28) x 100 oz or 0 oz, to which we add the difference between the open interest for the front month of FEB. (498 contracts) minus the number of notices served upon today (4 x 100 oz per contract) equals 52,200 oz, the number of ounces standing in this nonactive month of MARCH (1.6238 tonnes)

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

No of notices served (28 x 100 oz or ounces + {(498)OI for the front month minus the number of notices served upon today (4 x 100 oz )which equals 52,000 oz standing in this  nonactive delivery month of March . THERE IS 10.556 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE GAINED 2 CONTRACTS OR AN ADDITIONAL 200 OZ WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF MARCH.

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XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

IN THE LAST 18 MONTHS 72 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

MARCH INITIAL standings/SILVER

March 20 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 5071.859 oz
Delaware
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
 599,140.700 oz
CNT
No of oz served today (contracts)
27
CONTRACT(S
(135,000 OZ)
No of oz to be served (notices)
198 contracts
(990,000 oz)
Total monthly oz silver served (contracts) 5186 contracts

(25,930,000 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 dealer deposits:  nil oz

we had 1 deposits into the customer account

i) Into CNT: 599,140.700 oz

ii) Into JPMorgan:  nil oz

*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.

JPMorgan now has 137 million oz of  total silver inventory or 53.6% of all official comex silver.

JPMorgan  deposited zero into its warehouses (official) today.

total deposits today:  599,140.700  oz

we had 1 withdrawals from the customer account;

i) Out of Delaware:  5071.859 oz

total withdrawals;  5071.859  oz

we had 0 adjustments

total dealer silver:  59.203 million

total dealer + customer silver:  257.451 million oz

The total number of notices filed today for the March. contract month is represented by 27 contract(s) FOR 135,000 oz. To calculate the number of silver ounces that will stand for delivery in March., we take the total number of notices filed for the month so far at 5186 x 5,000 oz = 25,930,000 oz to which we add the difference between the open interest for the front month of Mar. (225) and the number of notices served upon today (27 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the March contract month: 5186(notices served so far)x 5000 oz + OI for front month of March(225) -number of notices served upon today (27)x 5000 oz equals 26,920,000 oz of silver standing for the March contract month. 

We GAINED an additional 119 contracts or 595,000 additional silver oz will stand for delivery at the comex as somebody was in urgent need of physical silver.

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ESTIMATED VOLUME FOR TODAY: 69,847 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 77,589 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 77,589 CONTRACTS EQUATES TO  387 MILLION OZ OR 55.4% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -2.37% (MARCH 20/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.62% to NAV (March 20/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.37%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.62%/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 -2.87%: NAV 13.50/TRADING 13.10//DISCOUNT 2.87.

END

And now the Gold inventory at the GLD/

March 20/WITH GOLD DOWN $5.75, A SURPRISING HUMONGOUS DEPOSIT OF 10.42 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 850.64 TONNES/

SO FAR, FOR THE MONTH OF MARCH, THE GLD HAS ADDED 19.61 TONNES WITH A NET LOSS OF $17.45

March 19/WITH GOLD UP $5.25: ANOTHER HUGE DEPOSIT OF GOLD TO THE TUNE OF 2.07 TONNES/GOLD INVENTORY RESTS TONIGHT AT 840.22 TONNES

MARCH 16/WITH GOLD DOWN $5.65/OUR CROOKS DEPOSITED ANOTHER 4.42 TONNES INTO GLD INVENTORY/INVENTORY RESTS AT 838.15 TONNES

FOR THE WEEK: GOLD LOST  $11.80, BUT GOLD INVENTORY ADVANCED:4.42 TONNES

MARCH 15/WITH GOLD DOWN $7.85, NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.73 TONNES

MARCH 14/WITH GOLD DOWN $1.55/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.73 TONNES

MARCH 13/WITH GOLD UP $6.25/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.73 TONNES

MARCH 12/WITH GOLD DOWN $3.00/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.73 TONNES

MARCH 9/WITH GOLD UP $2.25/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.73 TONNES

March 8/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.73 TONNES

GOLD DOWN 5.45 TODAY.

MARCH 7/WITH GOLD DOWN 8.00/A SLIGHT CHANGE IN GOLD INVENTORY AT THE GLD/A WITHDRAWAL OF .25 TONNES TO PAY FOR FEES//INVENTORY RESTS AT 833.73 TONNES

MARCH 6/WITH GOLD UP $15.60/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.98 TONNES

March 5/WITH GOLD DOWN $4.10/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.98 TONNES

MARCH 2/WITH GOLD UP $18.70/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.98 TONNES

March 1/WITH GOLD DOWN ANOTHER $12.30/A HUGE CHANGE IN GOLD INVENTORY/ A DEPOSIT OF 2.96 TONNES/INVENTORY RESTS AT 833.98 TONNES

FEB 28/WITH GOLD DOWN ANOTHER 70 CENTS/NO CHANGE IN GOLD INVENTORY/INVENTORY RESTS AT 831.03 TONNES/.

feb 27/WITH GOLD DOWN $13.80 WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 831.03 TONNES

FEB 26/WITH GOLD UP $2.40/WE HAD ANOTHER INVENTORY GAIN/THIS TIME 1.77 TONNE ADDITION TO THE GLD INVENTORY/INVENTORY RESTS AT 831.03 TONNES/WE HAVE HAD 5 INCREASES IN THE PAST 6 TRADING GOLD SESSIONS/

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

MARCH 20/2018/ Inventory rests tonight at 850.64 tonnes

*IN LAST 345 TRADING DAYS: 90.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 275 TRADING DAYS: A NET 65.80 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory

March 20/WITH SILVER DOWN 13 CENTS/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.671 MILLION OZ

March 19/WITH SILVER UP 5 CENTS, THE SLV ADDS A SMALL 659,000 OZ TO ITS INVENTORY/INVENTORY RESTS AT 319.671 MILLION OZ/

MARCH 16/WITH SILVER DOWN 15 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ.

FOR THE WEEK;  SILVER IS DOWN 42 CENTS YET ADDS 943,000 OZ OF SILVER INTO THE SLV/

MARCH 15/WITH SILVER DOWN 11 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ/

MARCH 14/WITH SILVER DOWN 8 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ/

MARCH 13/WITH SILVER UP 10 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ/

MARCH 12/WITH SILVER DOWN 8 CENTS/A BIG CHANGES IN SILVER INVENTORY AT THE SLV/ A DEPOSIT OF 943,000 OZ/INVENTORY RESTS AT 319.012 MILLION OZ/

MARCH 9/WITH SILVER UP 21 CENTS, NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ/

March 8/WITH SILVER DOWN 1 CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ/

MARCH 7/WITH SILVER DOWN 27 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ/

MARCH 6/WITH SILVER UP 38 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ/

March 5/WITH SILVER DOWN 11 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ/

MARCH 2/WITH SILVER UP 23 CENTS: A HUGE 1.479 MILLION OZ WAS ADDED TO SILVER’S INVENTORY/INVENTORY RESTS AT 318.069 MILLION OZ/

March 1/WITH SILVER DOWN 11 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.590 MILLION OZ./

FEB 28/WITH SILVER DOWN 5 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.590 MILLION OZ/

feb 27/WITH SILVER DOWN 17 CENTS/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 316.590 MILLION OZ

FEB 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.590 MILLION OZ/

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/

MARCH 20/2018: NO CHANGES TO SILVER INVENTORY/

Inventory 319.671 million oz

end

6 Month MM GOFO 1.98/ and libor 6 month duration 2.39

Indicative gold forward offer rate for a 6 month duration/calculation:

G0FO+ 1.98%

libor 2.39 FOR 6 MONTHS/

GOLD LENDING RATE: .41%

XXXXXXXX

12 Month MM GOFO
+ 2.39%

LIBOR FOR 12 MONTH DURATION: 2.633

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.24

end

Major gold/silver trading /commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Four Charts: Debt, Defaults and Bankruptcies To See Higher Gold

– $8.8B Sprott Inc. sees higher gold on massive consumer debt, defaults & bankruptcies 
– Rising and record U.S. debt load may cause financial stress, weaken dollar and see gold go higher
– Massive government and consumer debt eroding benefits of wage growth (see chart)

by Bloomberg

Rising U.S. interest rates, usually bad news for gold, are instead feeding signs of financial stress among debt-laden consumers and helping drive demand for the metal as a haven.

That’s the argument of Sprott Inc., a precious-metals-focused fund manager that oversees $8.8 billion in assets. The following four charts lay out the case for why gold could be poised to rise even as the Federal Reserve tightens monetary policy.

Gold futures have managed to hold on to gains this year, staying above $1,300 an ounce even as the Fed raised borrowing costs in December for a fifth time since 2015 and is expected to do so again next week.

The increases followed years of rates near zero that began in 2008. Low rates coupled with the Fed’s bond-buying spree contributed to the precious metal’s advance to a record in 2011. Higher rates typically hurt the appeal of gold because it doesn’t pay interest.

Paper Losses

The U.S. posted a $215 billion budget deficit in February, the biggest in six years, as revenue declined, Treasury Department data show. That’s boosting the government debt load, fueling forecasts for higher yields and raising the specter of paper losses for international investors who own $6.3 trillion of U.S. debt.

Slowing demand for Treasuries from overseas buyers is contributing to dollar weakness against the currency’s major peers, helping support gold prices, according to Trey Reik, a senior portfolio manager at Sprott’s U.S. unit.

Debt-Laden Shoppers

The yield on the 10-year U.S. Treasury, which has been in decline for more than three decades, has risen over 40 basis points this year as the Fed raised rates and U.S. debt ballooned to more than $20 trillion.

That has ramifications for American households already struggling to pay down their credit cards and auto loans, dimming the outlook for consumer spending that helped fuel U.S. growth.

Those concerns have been widely overlooked by investors but will spur demand for haven assets like gold, Reik said.

“With as much debt as there is in the system, if you have a backup in rates, you’re going to see a default wave pretty quickly,” Reik said in an interview at Bloomberg’s headquarters in New York. “You’re going to have personal bankruptcies flare up. Gold really does well when financial stress starts to take hold in the system.”

In December, Fed officials signaled they may boost interest rates three times this year amid improving U.S. economic growth and a tightening labor market that could spur wage growth and push inflation toward the central bank’s target of 2 percent.

Even with a synchronized global expansion, though, consumer debt is likely to erode the benefits of rising wages, undercutting the argument from gold bears that an improving world economy will damp haven demand for gold, Reik said.


Related Content

Fed Increases Rates 0.25% – Rising Interest Rates Positive For Gold

What Peak Gold, Interest Rates And Current Geopolitical Tensions Mean For Gold in 2018

Prepare For Interest Rate Rises And Global Debt Bubble Collapse

Data shows rising interest rates is positive for gold as seen in 1970s and again from 2003 to 2007. Source: New York Federal Reserve for Fed Funds Rate, LBMA.org.uk for Gold (PM fix)

News and Commentary

Stocks Struggle After Tech Selloff; Dollar Rises (Bloomberg.com)

Gold prices inch down on stronger dollar, Fed in focus (Reuters.com)

Tech stocks weigh on Asian markets after Wall Street selloff (MarketWatch.com)

Global stocks sink in worst slide since November; eyes on Fed meeting (Reuters.com)

U.S. bans transactions with Venezuela’s digital currency (Reuters.com)

10 years after the fall of Bear Stearns, D.C. is poised to cause another financial crisis (LATimes.com)

A decade later, three lessons from the financial crisis (Reuters.com)

Central banks manipulating & suppressing gold prices (RT.com)

Iran’s break with the dollar is easier said than done (Al-Monitor.com)

Why the U.S. Treasury likes a weak dollar – Englander (Bloomberg.com)

 

Gold Prices (LBMA AM)

20 Mar: USD 1,312.75, GBP 935.60 & EUR 1,066.22 per ounce
19 Mar: USD 1,311.70, GBP 934.59 & EUR 1,066.41 per ounce
16 Mar: USD 1,320.05, GBP 945.42 & EUR 1,071.09 per ounce
15 Mar: USD 1,323.35, GBP 949.24 & EUR 1,070.72 per ounce
14 Mar: USD 1,324.95, GBP 949.59 & EUR 1,071.35 per ounce
13 Mar: USD 1,318.70, GBP 948.94 & EUR 1,069.60 per ounce
12 Mar: USD 1,317.25, GBP 950.66 & EUR 1,069.87 per ounce

Silver Prices (LBMA)

20 Mar: USD 16.25, GBP 11.60 & EUR 13.22 per ounce
19 Mar: USD 16.29, GBP 11.59 & EUR 13.24 per ounce
16 Mar: USD 16.48, GBP 11.79 & EUR 13.36 per ounce
15 Mar: USD 16.52, GBP 11.86 & EUR 13.37 per ounce
14 Mar: USD 16.61, GBP 11.88 & EUR 13.42 per ounce
13 Mar: USD 16.51, GBP 11.88 & EUR 13.38 per ounce
12 Mar: USD 16.46, GBP 11.88 & EUR 13.39 per ounce

 

goldcore
end

Andrew Maguire’s Kinesis money which is a “bitcoin” but backed 100% by allocated gold and silver is set to go.

it think it would be a great idea to look at this!

please read at:  https://kinesis.money/#/

(Andrew Maguire)

Andrew Maguire

2:57 PM (1 hour ago)
to me

Harvey

Here It is my friend!  https://kinesis.money/#/ Please let everyone know.

Let catch up on Monday if you have time. We have billions in the hopper ready to be allocated on the 1st day of trading. The paper market days are over.

Warm regards

Andy

end.


* * *

END

Chris Powell answers Dr Keith Weiner beautifully on central bank gold suppression

(courtesy Chris Powell/GATA)

Does Weiner really know what central bankers think better than they themselves do?

 Section: 

11:05a ICT Tuesday, March 19, 2018

Dear Friend of GATA and Gold:

Thanks to Keith Weiner of Monetary Metals for at least attempting a reply to your secretary/treasurer’s recent commentary —

http://gata.org/node/18105

— disputing his assertion that central banks don’t care about gold and aren’t manipulating its price.

But in his new commentary, “Standing Ready to Lease Gold,” posted at GoldSeek here —

http://news.goldseek.com/GoldSeek/1521468000.php

— 24hGold here —

http://www.24hgold.com/english/news-gold-silver-standing-ready-to-lease-…

— and ZeroHedge here —

https://www.zerohedge.com/news/2018-03-19/standing-ready-lease-gold-repo…

— Weiner just reiterates that assertion, addresses only two of the many documents of gold price suppression cited to him, and evades the points of those.

“Central bankers do not think about gold,” Weiner writes again, just days after Hungary’s central bank announced that it is repatriating its gold reserves from London:

http://www.gata.org/node/18103

Could such repatriation have been decided without thinking? If Hungary’s central bankers don’t think about gold, wouldn’t they have just forgotten the metal in London?

As for the recent explosive increase in gold derivatives on the books of the Bank for International Settlements —

http://gata.org/node/18041

— Weiner says nothing. Could those derivatives have been undertaken without thinking too?

Weiner characterizes as “conspiracy theorists” those who complain about gold price suppression. Perhaps he will explain in his next commentary what it is when government officials meet secretly to decide and implement a course of action. Conspiracy is defined by the Federal Reserve Board’s monthly meetings in Washington to the monthly meetings of the board of the BIS in Basle, Switzerland. Weiner should try attending one of those meetings.

Weiner argues at length that the purpose of the meeting of U.S. Secretary of State Henry Kissinger and his deputy, Thomas O. Enders, at the State Department in April 1974 was not about suppressing the gold price:

http://www.gata.org/node/13310

Yet Enders was explicit: that since the Western Europeans collectively had obtained more gold than the United States, “this gives them the dominant position in world reserves and the dominant means of creating reserves. … If they have the reserve-creating instrument, by having the largest amount of gold and the ability to change its price periodically, they have a position relative to ours of considerable power.”

Plainly, control of the world’s currency and financial system was at stake for the United States. This explains the motive for gold price suppression by the United States particularly, though of course other countries might consider gold a threatening competitor to their own currencies as well.

Weiner writes that “gold is not in the system anymore.” This is rank nonsense.

All major central banks book gold as a financial asset.

The International Monetary Fund considers gold so powerful and sensitive an asset that the agency allows its member central banks to fudge their accounting so that leased gold cannot be distinguished from gold unimpaired in the vault, lest accurate accounting interfere with their surreptitious interventions in the gold and currency market:

http://www.gata.org/node/12016

The Reserve Bank of Australia noted in its annual report in 2003: “Foreign currency reserve assets and gold are held primarily to support intervention in the foreign exchange market. In investing these assets, priority is therefore given to liquidity and security, in order to ensure that the assets are always available for their intended policy purposes”:

http://www.gata.org/files/ReserveBankOfAustraliaAnnualReport2003.pdf

How could central bankers intervene in the gold market without thinking about gold?

Weiner offers a long digression about Federal Reserve Chairman Alan Greenspan’s testimony to Congress in 1998 opposing the regulation of derivatives, in which Greenspan mentioned gold leasing by central banks:

https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

Weiner’s digression is mere distraction from the point your secretary/treasurer sought to make: that in his testimony Greenspan acknowledged that the objective of gold leasing is price suppression, not what Weiner continues to pretend, the earning of income for central banks.

Weiner asserts that in the long run gold leasing does not suppress prices because the leased gold has to be returned. Not true. For central banks that leased gold in the 1990s sold gold heavily in the following decade. Since the gold price rose steadily in the 2000s despite the regular announcements of those sales, most likely the “sold” gold never hit the market when the announcements were made because those sales were really just the cash settlement of the gold leases from the previous decade.

Besides, since central banks are so secretive and unaccountable about their gold and their activity in the gold market, how does Weiner or anyone really know what they’re doing at any particular moment?

Weiner does not address the broader point of why the Federal Reserve should have been opposing the regulation of derivatives, which generally are thought to pose certain dangers to the world financial system. But a more than plausible answer is implied by Greenspan’s acknowledgment that central banks lease gold to keep its price down.

That is, what if central banks already were using derivatives to control not only the gold market but all major commodity and financial markets? Filings by CME Group, operator of the major U.S. futures exchanges, with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission, as well as postings at CME Group’s own internet site show that governments and central banks indeed are secretly trading all major futures contracts:

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

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

http://www.gata.org/node/17976

If, when Greenspan testified, governments and central banks were already controlling markets secretly with their own trading, congressional regulation of derivatives might have exposed and impaired that.

Three years after Greenspan testified against regulating derivatives, the British economist Peter Warburton put it all together in an essay titled “The Debasement of World Currency — It Is Inflation, But Not as We Know It”:

http://www.gata.org/node/8303

Warburton suspected that central banks were using investment banks to issue derivatives throughout the commodity futures markets to siphon away from real assets the money that might seek a hedge against inflation, money that was seeking to use real assets, not financial assets, as a store of value. Use of real assets that way would make inflation more visible in consumer price indexes.

Warburton wrote: “How much capital would it take to control the combined gold, oil, and commodity markets? Probably no more than $200 billion, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world’s large investment banks have overtraded their capital so flagrantly that if the central banks were to lose the fight on the first front, then the stock of the investment banks would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.”

As the saying goes: “The futures markets are not manipulated. The futures markets are the manipulation.”

But there is little need for hypothesis when frank admissions of gold market rigging long have been available from central bankers themselves.

For example, William R. White, then the director of the monetary and economic department of the Bank for International Settlements, told a BIS conference in Basel in June 2005 that a primary purpose of international central bank cooperation is “the provision of international credits and joint efforts to influence asset prices — especially gold and foreign exchange — in circumstances where this might be thought useful”:

http://www.gata.org/node/4279

A president of the Netherlands Central Bank who was also president of the Bank for International Settlements, Jelle Zijlstra, wrote in his memoirs in 1992 that the gold price was suppressed at the behest of the United States:

http://www.gata.org/node/11304

So what is Weiner thinking when he writes that central bankers don’t think about gold? Does Weiner know their thoughts better than they themselves do? And exactly how does he know? He never cites any authority for his mind-reading.

A disappointing detail here: While Weiner’s disinformation lately has been welcomed at 24hGold and ZeroHedge, those internet sites have declined requests to post GATA’s replies.

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


 _____________________________________________________________________________________

Your early TUESDAY 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 6.3308  /shanghai bourse CLOSED UP 11.39 POINTS OR 0.35%  / HANG SANG CLOSED UP 36.19 POINTS OR 0.11%
2. Nikkei closed DOWN 99.93 POINTS OR 0.47% /USA: YEN RISES TO 106.44/  

3. Europe stocks OPENED IN THE GREEN     /USA dollar index RISES TO 90.09/Euro FALLS TO 1.2309

3b Japan 10 year bond yield: RISES TO . +.047/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.44/ 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:: 62.76  and Brent: 66.91

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.581%/Italian 10 yr bond yield DOWN to 1.932% /SPAIN 10 YR BOND YIELD DOWN TO 1.306%

3j Greek 10 year bond yield FALLS TO : 4.193?????????????????

3k Gold at $1312.50 silver at:16.28     7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 3/100 in roubles/dollar) 57.80

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 106.44 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 0.9529 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1730 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.578%

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 2.865% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.098% /

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

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

Global Stocks Struggle To Rebound After Tech Drubbing As Rate Hike Looms

After yesterday’s violent selloff which was sparked by a series of negative tech stories including Facebook’s escalating data scandal and a fatal accident involving an Uber self-driving car, Tuesday trading has so far been relatively calm and muted with Europe bourses paring early gains and Asian stocks trading slightly lower…

… while S&P futures were hugging the unchanged line as Nasdaq futures pointed to more tech declines.

The tech dump, which took place one day after we noted that “FANG + Apple Now Account For A Quarter Of The Nasdaq, And Some Are Getting Worried” is prompting even more fears among investors that the glory days of the tech momentum trade are over.

“There certainly are some stocks where valuations look somewhat stretched … so we’re focusing our exposure within the technology sector on the cheaper end of the market,” said Mike Bell, global market strategist at JPM Asset Management. “We’re a bit more cautious on the more expensive and some of the more popular names in the sector.”

Gains are also muted as investors braced for new Federal Reserve Chairman Jerome Powell’s first policy meeting starting later in the day and amid concerns that U.S. President Donald Trump could impose additional protectionist trade measures.

“Investors lightened their positions ahead of the Fed’s policy meeting. The markets are completely split on whether the Fed will project three rate hikes this year or four,” said Hiroaki Mino, senior strategist at Mizuho Securities.

Following the tech selloff and with a Fed rate hike imminent, bullish sentiment appears scarce. Compounding concerns was a late Monday report that the White House plans to impose $60BN in tariffs on Chinese products as part of a battle over safeguarding intellectual property. It would be the latest phase of President Donald Trump’s protectionist agenda, and threatens to increase market fears of a trade war.

Underscoring the lack of an upside case, Morgan Stanley’s chief equity strategist suggested that the highs of the year have already been seen.

Looking at regional markets, European shares eked modest gains as investors awaited Fed Chair Jay Powell’s first meeting as the Federal Reserve’s new chairman while eyeing Facebook headlines. The Stoxx 600 Index gained 0.2%, after dropping the most in two weeks on Monday. Sectors are broadly in the red, with the exception of materials which has been supported after Rio Tinto (+0.6%) announced the sale of its Hail Creek and Valeria units in a USD 1.7bln deal with Glencore.

Earlier in Asia, stocks traded lower across the board following on bearish momentum from the US. Australia’s ASX 200 (-0.4%) was weaker with miners pressured in Australia as Dalian iron ore futures extended on losses due to rising inventories, while Nikkei 225 (-0.5%) underperformed despite a weaker currency. Elsewhere, Hang Seng (+0.1%) & Shanghai Comp. (+0.3%) were subdued for a bulk of the session although the Shanghai Composite pushed back into positive territory in the latter stages of trade, after the PBoC skipped liquidity operations and amid trade war concerns with US President Trump said to be preparing a $60BN package of tariffs for China.

In FX, the USD slowly strengthened across G-10 and EMFX, while the pound was a notable mover, erasing early gains after U.K. inflation missed expectations, leaving the currency defending Monday’s advance as progress in the Brexit talks turns focus to Thursday’s BOE decision where Carney is expected to set the stage for a May rate hike. The dollar fluctuated amid lack of U.S. economic data before edging higher, while the yen whipsawed.

The Japanese yen was pushed lower after Japan’s Trade Minister said the nation is likely to get exemptions to U.S. tariffs, only to whipsaw higher later after comments from Deputy Governor Amamiya hit that the BOJ may adjust rates before the inflation target is hit (very unlikely). Separately, deputy governor Wakatabe stated that the BOJ will not hesitate to ease further if necessary, but any changes must not be premature. He also believes it is possible for monetary policy to be updated. Below are the key FX moves from Bloomberg:

  • Sterling erased its advance after data showed U.K. inflation slowed more than forecast in February, but the currency stayed above 1.40; GBP/USD little changed 1.4024, holding its 0.6% advance in the past two days; it strengthened 0.1% to 87.84 pence per euro
  • The Bloomberg Dollar Spot Index gains 0.2% as markets await Wednesday’s Fed policy decision; Treasuries dip with the 10-year yield rising to 2.87%
  • The yen pared an earlier decline after remarks from BOJ’s Amamiya that while there was no current need to hike rates, it is something they wouldn’t rule out; USD/JPY climbs 0.3% to 106.41, having earlier touched 106.61
  • The euro reversed early gains to trade 0.2% lower at 1.2307 amid light volumes

While long-term U.S. bond yields were muted, short-dated yields rose ahead of an expected rate hike from the U.S. Federal Reserve after its two-day policy meeting starting on Tuesday. The yield on 10-year Treasuries was little changed at 2.857%, 10 basis points below the four-year high of 2.957% touched a month ago. But the yield on two-year notes hit a 9 1/2-year high of 2.32% on Monday as the Fed appears set to bump up its policy interest rates to 1.50-1.75 percent from the current 1.25-1.50 percent. Still, with a Fed rate rise already fully priced in, the dollar barely gained from the prospect of a rate hike.

In geopolitical news, US and South Korea agreed to resume joint military exercises on April 1st following the postponement due to Winter Olympics, while North Korea has been notified of the schedule for the drills. In the US, Saudi Crown Prince Bin Salman and US President Trump will discuss Iran nuclear deal this Tuesday, according to a senior administration official.

In commodities, WTI and Brent remain in close proximity to yesterday’s highs which were seen after reports that the US was exploring sanctions on Venezuelan oil. Elsewhere, energy newsflow remains light with markets now awaiting the latest API report. In metals markets, gold is sat in negative territory albeit modestly so alongside the slightly firmer USD. Elsewhere, Chinese iron ore continued its decline overnight after yesterday’s slump as mounting inventories and soft domestic demand hampers prices while copper was also lacklustre amid the risk-averse tone.

No major economic data is expected. FedEx is among companies set to report earnings.

Bulletin Headline Summary From RanSquawk

  • European equities sit in modest positive territory in what has been a relatively choppy session thus far
  • BoJ Deputy Governor (Amamiya) suggested that rates could be adjusted before inflation reaches the 2% target
  • Looking ahead, today sees a lack of tier 1 highlights

Top Overnight News from Bloomberg

  • Trump may plan to impose $60b in annual tariffs against China by Friday, double what senior aides had proposed, Washington Post reports, citing people familiar
  • German Mar. ZEW Expectations: 5.1 vs 13.0 est; Current Situation 90.7 vs 90.0 est.
  • U.K Feb. CPI y/y: 2.7% vs 2.8% est; Core CPI 2.4% vs 2.5% est, ONS cites base effects of GBP depreciation starting to fall out of the calculation
  • BOJ’s Amamiya: does not rule out the BOJ adjusting rates before inflation hits 2%; however no need to consider a rate hike now
  • China made further promises to protect the intellectual property of foreigners investing in its economy, addressing a long- standing U.S. grievance as President Donald Trump plans new tariffs aimed at Beijing
  • Japan will keep pressing for exemptions from U.S. tariffs and it’s highly likely that it will secure them for specific goods, Japanese Trade Minister Hiroshige Seko said at a press conference in Tokyo on Tuesday
  • The EU will consider offering the U.K. “improved equivalence” for financial services after Brexit, according to the bloc’s latest negotiating guidelines, a system Britain has rejected as “wholly inadequate”
  • The broad transition deal announced on Monday might be too late to stop some of the Brexit fallout: nearly one in seven EU companies with U.K. suppliers have moved some of their business out of Britain, according to the Chartered Institute of Procurement & Supply. Ministers of the bloc are set to sign off to EU Summit conclusions, post-Brexit relationship negotiating guidelines later Tuesday
  • Facebook Inc. has failed to contain the fallout from the Cambridge Analytica revelations as the company’s efforts to get ahead of the media firestorm backfired
  • Norwegian krone pares Monday’s drop after Justice Minister Sylvi Listhaug resigned to avert a government crisis ahead of a no-confidence vote in parliament

Market Snapshot

  • S&P 500 futures up 0.06% to 2,724.50
  • STOXX Europe 600 up 0.2% to 374.44
  • MXAP down 0.2% to 176.54
  • MXAPJ up 0.08% to 583.57
  • Nikkei down 0.5% to 21,380.97
  • Topix down 0.2% to 1,716.29
  • Hang Seng Index up 0.1% to 31,549.93
  • Shanghai Composite up 0.4% to 3,290.64
  • Sensex up 0.1% to 32,958.29
  • Australia S&P/ASX 200 down 0.4% to 5,936.38
  • Kospi up 0.4% to 2,485.52
  • German 10Y yield rose 1.2 bps to 0.581%
  • Euro up 0.02% to $1.2338
  • Brent Futures up 0.8% to $66.55/bbl
  • Italian 10Y yield fell 1.8 bps to 1.708%
  • Spanish 10Y yield fell 1.5 bps to 1.326%
  • Brent Futures up 0.8% to $66.55/bbl
  • Gold spot down 0.2% to $1,314.31
  • U.S. Dollar Index up 0.2% to 89.92

Asian stocks traded lower across the board amid a spill-over effect from Wall St where all majors saw firm losses heading into the week’s key risk events and amid a sell-off in tech led by Facebook on reports of data breaches. ASX 200 (-0.4%) was weaker with miners pressured in Australia as Dalian iron ore futures extended on losses due to rising inventories, while Nikkei 225 (-0.5%) underperformed despite a weaker currency. Elsewhere, Hang Seng (+0.1%) & Shanghai Comp. (+0.3%) were subdued for a bulk of the session (Shanghai Comp. ebbed back into positive territory in the latter stages of trade) after the PBoC skipped liquidity operations and amid trade war concerns with US President Trump said to be preparing a USD 60bln package of tariffs for China. Finally, 10yr JGBs were lacklustre alongside subdued trade in T-note futures during Asia hours, and with price action also restricted amid an enhanced liquidity auction for long to super-long bonds which saw a lower b/c then prior.

Top Asian News

  • U.S. Is Said to Plan Heavy China Tariff Hit as Soon as This Week
  • China Pledges Action on Tech Transfer as Trump Plans Tariff Hit

European stocks have seen a choppy session thus far (Eurostoxx 50 +0.2%) following a softer US and Asia-Pac session. Sectors are broadly in the red, with the exception of materials which has been supported after Rio Tinto (+0.6%) announced the sale of its Hail Creek and Valeria units in a USD 1.7bln deal with Glencore. The media-sector initially outperformed at the open after the world’s third-largest advertising group Publicis (-0.5%) reported its latest strategy action, before Co. shares were dragged lower as markets continued to digest the update. Elsewhere, banks are showing mild gains across the region lifting financials, ahead of tomorrow’s widely expected Fed rate hike.

Top European News

  • U.K. Will Be Colder Than Normal in April, Weather Co. Says
  • Crisis Ends as Norway’s Listhaug Resigns Claiming ‘Witch Hunt’
  • EU Offers U.K. ‘Improved Equivalence’ for Financial Services
  • Glencore Buys Rio’s Stake in Hail Creek, Valeria for $1.7B Cash

In FX, the Jpy extended overnight losses amidst what seemed to be a stop-driven run in early European trade, with Usd/Jpy up through 106.50 and its 20 DMA (106.50-55) to circa 106.60 at one stage, while Eur/Jpy spiked to around 131.70 as the single currency retains a bid in its own right on hawkish ECB source reports. However, recent comments from one of the new BoJ Deputy Governor’s (Amamiya) suggesting that rates could be adjusted before inflation reaches the 2% target has prompted some Jpy demand/short covering. Meanwhile, Eur/Usd has rallied further above 1.2300, reaching 1.2355 at best and eyeing offers at 1.2360 next, while bids are seen in the 1.2330-20 area, but in terms of the G20 arena overall, Sterling remains the top performer after yesterday’s UK-EU Brexit transition deal and despite weaker than expected UK inflation data almost across the board that only sparked a knee-jerk Pound sell-off. Cable is back to mid-range between 1.4067-20 parameters and Eur/Gbp still sub-0.8800 as attention switches to the latest labour/wage update on Wednesday and then the BoE on Thursday. At the opposite end of the spectrum the  Aud and Nzd remain laggards with the former not helped by very neutral, still in wait and see mode RBA minutes or a further dump in iron ore prices and around 0.7700 vs the Usd, while the Kiwi is just keeping its head above 0.7200 vs  the Greenback awaiting the RBNZ. Conversely, Usd/Cad is attempting to retrace a bit further below 1.3100 on better  NAFTA vibes.

In commodities, WTI and Brent crude futures remain in close proximity to yesterday’s highs which were seen after reports that the US was exploring sanctions on Venezuelan oil. Elsewhere, energy newsflow remains light with markets now awaiting the latest API report. In metals markets, gold is sat in negative territory albeit modestly so alongside the slightly firmer USD. Elsewhere, Chinese iron ore continued its decline overnight after yesterday’s slump as mounting inventories and soft domestic demand hampers prices while copper was also lacklustre amid the risk-averse tone.

US Event Calendar

  • Nothing major scheduled

DB’s Jim Reid concludes the overnight wrap

A bit like this nasty cold spell in the UK, markets received a fairly rude awakening yesterday as a freefalling tech sector spread collateral damage across most risk assets. Much of the blame was placed at the hands of Facebook with the stock plummeting -6.77% for the biggest one-day fall since March 2014. This followed the news that a political advertising company had retained information on 50 million of its users without consent. In addition, the Apple news concerning efforts to develop its own screens and a European Commission proposal suggesting that large digital companies operating in the EU could face a 3% tax on their gross revenues also added to the pain for the sector. Indeed a broad measure of large tech stocks including the FAANG names fell -2.90% yesterday for the biggest decline since February 8th while the Nasdaq tumbled -1.84%, also the biggest drop in over 5 weeks.

That tech tantrum seemed to ricochet across other markets with the likes of the S&P 500 (-1.42%) down for the fifth time in the last six sessions, and the Stoxx 600 (-1.07%) and DAX (-1.39%) also down prior to this in Europe. The VIX also spiked above 20 at one stage before paring back at the close to finish just above 19, albeit up 3pts from Friday. Credit indices weren’t immune either with CDX IG and iTraxx Main about 1.5bps wider while 10y Treasuries rallied nearly 5bps fromearly highs and Gold was up about +0.70% from the lows as safe havens were quick to outperform.

So some decent moves. Yesterday might well be an isolated case but it fits in with our view that we are likely to see more tantrums in markets this year, certainly relative to the incredible calm that was 2017. Indeed, it’s fairly amazing that the S&P 500 has now seen 16 days of plus or minus 1% moves in either direction since the start of February, which compares to only 10 occasions through the 13 months ending in January.

This morning in Asia it’s been more of the same with bourses broadly lower across the board, although moves are slightly more modest, with the Nikkei (-0.66%), Hang Seng (-0.49%), ASX 200 (-0.39%) and Kospi (-0.02%) all down as we type. Speaking at the conclusion of the NPC, China’s Premier Li noted that China “will further reduce the overall tax level for imported goods”, particularly on consumer products and will pursue a further opening up in sectors such as pensions, financial services and manufacturing. Li addressed the trade war debate by saying that “there’s no winner in a trade war, and war is going against the rules of trade”.

In other news, away from markets there was better news to come from the latest Brexit developments with the UK and EU agreeing to the terms around a 21- month transition period. This will kick in at the Brexit date of 30th March 2019, or 376 days for those counting down the days. The biggest news to come from yesterday’s announcement though was that in reaching the transition the UK also agreed to the principle of the EU’s backstop solution for Northern Ireland post Brexit. As DB’s Oliver Harvey noted yesterday, this is a bigger surprise, and while details have yet to be agreed, enhances the credibility of yesterday’s deal.

This implied that the UK has backed down from PM May’s initial stance. David Davis confirmed in the press conference that the UK’s preferred solution to the Northern Ireland border remains a close enough future UK/EU relationship that no hard border is needed, or technological solutions. However, that doesn’t take away from the fact that the agreement is a positive and unless there is a huge walk back, we should get official signoff at this week’s EU Council on Thursday and Friday, where the EU will also formally release guidelines for negotiations on the future economic relationship. Sterling rallied as much as +1.26% at one stage to close in on $1.41, before settling down to close at $1.402 and the highest since mid-Feb. The stronger Pound did weigh on the FTSE 100 (-1.69%) however which all of a sudden is at the lowest since December 2016.

The Euro was also kept busy yesterday by headlines suggesting that ECB policymakers have begun shifting the debate towards the steepness of the rate path with even the most dovish members accepting that QE should end this year. Specifically, it was a Reuters story which caused a few heads to turn. The story also suggested that policy makers were comfortable with market pricing, including for a rate hike by mid-2019, but that no big decision was likely to be made at the April meeting and instead only small changes to the statement is expected for now. Confirmation of the market pricing isn’t a huge surprise but – if the story has some legs to it – the prospect of ECB officials already moving to debate around rate hikes is fairly significant. The story helped 10y Bund yields actually rise nearly 4bps and back above 0.60% at one stage before the broad flight to safety across markets put the brakes on that move and saw Euro bond markets close more or less unchanged by the end of play.

Staying with the ECB, one of the bank’s policy makers, Yves Mersch, noted yesterday that inflation has recently risen “more significantly than foreseen in October” and that “given the improving inflation outlook, we can gradually reduce our net purchases while maintaining a sufficiently loose monetary policy” He also added that “the trend in wages and underlying inflation seem to have turned a corner”. It’s worth noting that Mersch is considered one of the more
hawkish ECB officials.

Across the pond, it won’t come as a great surprise to hear that the White House wasn’t kept fully out of the headlines yesterday. Indeed, news that President Trump could be preparing to fire Special Counsel Robert Mueller quickly spread across the wires although a White House spokesman announced last night that the President is just “frustrated by the ongoing investigation”, rather than preparing to dismiss Mueller. Away from this there was an Axios story suggesting that Trump wasn’t done with just the aluminium and steel tariffs, and his administration was in fact tentatively planning to put tariffs on hundreds of Chinese products by the end of this month. In the late afternoon Canadian Prime Minister Justin Trudeau also told a conference that President Trump was “enthusiastic” about getting to a NAFTA deal, although the story was slightly light on specifics so the devil will really be in the details.

Over at the G20 meetings, most global finance chiefs warned against protectionism with BOJ Governor Kuroda noting “the G20 will continue to emphasize the importance of free trade” while France’s Finance Minister Le Maire reiterated that there will only be losers in a trade war and that EU members want a full exemption from US steel and aluminium tariffs. On the other side, a senior unnamed US Treasury official told Reuters that the President strongly believes in free trade, but “where the expectation is America totally subordinates its national interest for free trade, is just one we don’t accept” and that instead “we believe in free trade with reciprocal terms that leads to more balance trade relationships”. Earlier on, senior EU officials told Bloomberg that the US will grant waivers to tariffs provided the EU meet five conditions, including limiting exports of the two materials to the US and actively addressing China’s various trade distorting practices.

Finally, it was mostly second tier economic data releases yesterday but for completeness, the Euro area’s January trade surplus was below market at €19.9bn (vs. €22.5bn expected), while Italy’s January IP fell more than expected at -1.9% mom (vs. -0.6% expected).

Looking at the day ahead, the main focus will likely be the UK’s February CPI, RPI and PPI data. German PPI for February will also be released, while the March ZEW survey should also be closely watched. In the afternoon the Euro area consumer confidence reading for March is due out. Away from this President Trump is scheduled to meet with Saudi Crown Prince Mohammed bin Salman. Illinois will also hold a primary election for governor and congressional seats ahead of the midterms later in the year.

end

3. ASIAN AFFAIRS

i)TUESDAY MORNING/MONDAY NIGHT: Shanghai closed UP 11.39 POINTS OR 0.35% /Hang Sang CLOSED UP 36.17 POINTS OR 0.11% / The Nikkei closed DOWN 99.93 POINTS OR 0.47%/Australia’s all ordinaires CLOSED DOWN 0.39%/Chinese yuan (ONSHORE) closed UP at 6.3308/Oil UP to 62.76 dollars per barrel for WTI and 66.91 for Brent. Stocks in Europe OPENED GREEN EXCEPT SPAIN   .   ONSHORE YUAN CLOSED UP AT 6.3308 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3266 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR . CHINA IS NOT VERY  HAPPY TODAY (STRONGER CURRENCY &  MARKETS/BUT  NEW TRUMP TARIFFS  INITIATED/WEAKER GLOBAL MARKETS ) 

3 a NORTH KOREA/USA

/NORTH KOREA/USA

 

3 b JAPAN AFFAIRS

END

c) REPORT ON CHINA

Trump is set to unleash a huge $60 billion China tariffs on Friday as he tries to tackle their “theft” of intellectual property and other Chinese transgressions

(courtesy zerohedge)

Trump Set To Unleash $60bn China Tariffs On Friday

Having rejected a plan for imposing $30 billion in tariffs on Chinese imports last week, saying they weren’t big enough; President Trump is reportedly planning to unveil by Friday, a package of $60 billion in annual tariffs against China

.

Trump is following through on a long-time threat that he says will punish China for intellectual property infringement and create more American jobs, and, as The Washington Post reports, the timing of the tariff package, which Trump plans to unveil by Friday, was confirmed by four senior administration officials.

The package could be applied to more than 100 products, which Trump argues were developed by using trade secrets the Chinese stole from U.S. companies or forced them to hand over in exchange for market access.

WaPo also notes that many of the financial ministers at the G-20 meeting have also alleged that China should make changes to its trade policies, but so far most have tried to cajole Beijing multilaterally, a strategy that Trump has said doesn’t work.

Trump this month announced 25 percent tariffs on imported steel and 10 percent for aluminum and they will also take effect Friday.

As Bloomberg reminds us, Canada and Mexico are already excluded from the levies, and the Trump administration has left the door open for Australia and possibly other allies to win a similar concession if they can show they are trading fairly and are national-security partners. Planned retaliation from the European Union to China has triggered concerns over a global trade war.

And as we warned previouslythe recently announced global steel and aluminum tariffs (with various exemptions) by the Trump administration were just a (Section 232) preview of the main eventTrump’s imminent trade war with China, which as Credit Suisse previews, will be unveiled any moment in the form of tariffs and restrictions on trade with China, reportedly in retaliation for Chinese IP violations.

First, a reminder on the all-important Section 301:

  • What is Section 301? Section 301 of the 1974 Trade Act allows the President to, among other things, “impose duties or other import restrictions on the products of [a] foreign country,” if the President determines that that country is violating a trade agreement or “engages in discriminatory or other acts or policies which are unjustifiable or unreasonable and which burden or restrict United States commerce.“ The U.S. relied heavily on the provision during the Reagan era (an administration in which the current USTR Robert Lighthizer served as Deputy USTR) into the early 1990s, but it has been used infrequently since the World Trade Organization was formed in 1995 and provided a forum for dispute resolution.

How will Section 301 figure in the upcoming US-Chinese trade war, and what are the key points:

  • Last August, President Trump instructed his U.S. Trade Representative Robert Lighthizer to initiate a Section 301 investigation into China’s forced technology transfer policies.
  • While the results of the 301 investigation are not due until August 2018, the President appears poised to act on the issue in the coming weeks.
  • The President is reported to be seriously considering a package of tariffs on Chinese imports (targeting between $30BN and $60BN worth).
  • Reports have stated that Administration officials have used China’s manufacturing roadmap, “Made in China 2025,” in deciding what goods to impose tariffs on. This will likely further concern Chinese leaders.
  • In addition, the Administration has discussed rescinding licenses for Chinese businesses and employing other such methods to restrict Chinese investment in the United States. The President’s recent decision to block a Singaporean company’s bid to takeover a U.S. company underscores his aversion to Chinese direct investment (the company had Chinese affiliations).
  • As part of the 301 action, the Administration has also reportedly discussed visa restrictions and a mandate that U.S. stock exchanges limit who can list in a U.S. market. It remains unclear whether the restrictions will go this far, but the President has, to date, been hawkish in his trade policy and there seem to be fewer and fewer moderating voices in the White House.
  • The 301 investigation and potential actions resulting from it seem to complement congressional efforts to restrict Chinese investment through legislation broadening the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS). We believe this legislation is on track to be signed into law in Q3 2018.

What to expect? here are some high-level thoughts from Credit Suisse:

  • The Chinese will likely respond in kind, beginning a succession of tit-for-tat trade policies between the two countries.
  • The United States has the option to take a multilateral approach and work with allied nations to initiate their own WTO dispute regarding Chinese technology transfer policies. However, at this point, the U.S. appears more likely to instead take unilateral retaliatory action without WTO authorization, which may run afoul of the U.S.’s WTO obligations.
  • If the U.S. acts unilaterally (as it appears it will), China will likely bring a challenge before the World Trade Organization (WTO).
  • The President appears committed to maintaining his “tough on China” stance. Even after losing top advisor Gary Cohn after the imposition of steel and aluminum tariffs, the President appears steadfast in his campaign against China’s trade practices and Chinese investment in the U.S, and we expect continued restrictive trade policies with respect to China.
  • The President’s actions may not receive the congressional backlash that his steel and aluminum tariffs did. Many U.S. corporations are frustrated with China’s policy requiring foreign companies to turn over source code and other proprietary technology in exchange for access to the Chinese market. However, if the President takes this as far as he currently seems to be planning to, punitive measures by China coupled with the chilling of foreign investment could be a major concern for U.S. corporations.

In terms of specifics, the US trade deficit last year hit an all time high of $375BN.

The Trump administration is planning imposing tariffs on up to $60bn of Chinese goods, or roughly 13% of goods import from China ($505BN), and 2.75% of total US goods import according to Danske Bank; the tariffs will target tech products, telecoms & clothing.

A snapshot of the key aspect of the US-China trade relationship:

  • the US exports soybeans, pharmaceuticals, vehicles and aircraft.
  • the US imports textiles,clothing, manufactures of metals,electronics and toys.

How to trade it?

As noted last week, when discussing which industries and companies would be impacted, we said that there are some obvious sectors such as industrials (cars, planes), agriculture, and technology. Below, courtesy of Strategas,  is a list of US companies which derive the largest percentage of their total revenue from China.As trade war looms, it would be prudent for investors to start thinking about potential risks to the companies they own if they have sufficient business in China.

END

Xi delivers a stark warning to Trump:  keep your hands off Taiwan after he signs into law the “Taiwanese Travel Act”.  Relations between Taiwan and Central have been antagonistic lately as the new Taiwan leader, Tsai, is against the “One China Policy” which stipulates that Taiwan is only a province of mainland China.

(courtesy zerohedge)

Emperor Xi Delivers Stark Warning To Trump: Hands Off Taiwan

President Donald Trump may have kicked the hornet’s nest by signing on Friday the “Taiwanese Travel Act”, encouraging official visits to Taiwan by officials at all levels with an emphasis on “national security officials.”

The signing angered the newly crowned Chinese President Emperor Xi Jinping, who lashed out at Trump and the US during a speech on Tuesday marking the start of his second term running the world’s most populous country. Xi warned that attempts to sow divisions between China and Taiwan would be “punished by history”.

His speech follows Chinese bureaucrats’ rubber-stamping changes to the constitution that could allow Xi to serve as leader for life, or as some have correctly defined it, emperor.

“Any actions or tricks to separate the country are bound to fail,” Xi said. “They will receive the condemnation of the people and the punishment of history.”

“We cannot allow, and it is impossible for, an inch of our great country’s territory to separate from China,” said Mr. Xi.

Also, several close Xi allies have been confirmed in senior government posts – though Xi somewhat unexpectedly named Yi Gang the next chairman of the People’s Bank of China, a veteran deputy governor whose only task it appears is to preserve continuity. China’s legislature also approved former anti-graft czar Wang Qishan as vice president and economic adviser Liu He – poised to become China’s financial superregulator – as vice premier.

Two

Xi warned in his speech that China has the means to retaliate against attempts to divorce Taiwan from the mainland, per Bloomberg.

In an address to China’s almost 3,000-member national parliament, Xi said China had the capabilities to stop any attempt to formalize the democratically ruled island’s independence. The remarks came just days after U.S. President Donald Trump signed a law allowing high-level official visits to Taiwan, a move that would elevate its diplomatic status.

“All acts and schemes to split China are doomed to failure and will be condemned by the people and punished by history,” Xi told the closing session of the National People’s Congress in Beijing. “The Chinese people have the firm will, full confidence and sufficient ability to defeat all activities to split the country.”

The remarks on Taiwan were part of a roughly 40-minute speech in which Xi repeatedly emphasized the importance of “the people’s” support for the Communist Party’s rule. The president said public backing was fundamental to achieving his goal of becoming a global power by 2050.

One academic who spoke with Bloomberg said the speech constituted an “official warning” from the People’s Republic of China: Don’t interfere in mainland-Taiwan relations.

“This is an official warning from China’s top leader to the U.S. and Taiwan,” said Wang Jiangyu, an international law professor at the National University of Singapore. “It’s an announcement that China will never compromise on Taiwan-related issues.”

While Trump and Xi have maintained the appearance of a cordial relationship, the two men have clashed on issues ranging from Taiwan to trade. As a reminder, just days after his electoral victory, Trump inadvertently offended the Communist Party by accepting a congratulatory phone call from Taiwanese president Tsai Ing-wen who has repeatedly antagonized the mainland after her predecessor, Ma Ying-jeou, pushed for closer social and economic ties. That call, as it was later revealed, was actually the result of a months-long lobbying pushspearheaded by former Republican presidential candidate Bob Dole.

Tsai has refused to endorse China’s “One China” framework, which stipulates that Taiwan is essentially a province. Trump initially signaled support for the doctrine after the phone-call incident, but has also recently taken a tougher stance against Beijing. The new legislation will raise Taiwan’s profile in Washington by allowing reciprocal visits between diplomats of both countries, per the Wall Street Journal.

Xi consolidated his power during a quinquennial meeting of China’s rubberstamp legislature back in November. At the time, he was unanimously reelected for a second term, and his name was added to the Chinese constitution – making him the first living leader, and only the third since Mao Zedong, to have their name added to the constitution. At the meeting, analysts noted that the lack of a clear successor in the Politburo suggested that Xi will run for at least one more term.

end

4. EUROPEAN AFFAIRS

8. EMERGING MARKET

END

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

Euro/USA 1.2309 DOWN .0027/ 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 ALL IN THE GREEN EXCEPT SPAIN   

USA/JAPAN YEN 106.44 UP  0.475 (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 1.4017 DOWN .0007  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3063 DOWN .0019 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS TUESDAY morning in Europe, the Euro FELL by 27 basis points, trading now ABOVE the important 1.08 level RISING to 1.2309; / Last night Shanghai composite CLOSED UP 11.39  OR 0.35% /   Hang Sang CLOSED UP 36.17 POINTS OR 0.11%  /AUSTRALIA CLOSED DOWN 0.39% / EUROPEAN BOURSES   IN THE GREEN EXCEPT SPAIN

The NIKKEI: this TUESDAY morning CLOSED DOWN 99.63 POINTS OR 0.47%

Trading from Europe and Asia:
1. Europe stocks OPENED ALL IN THE GREEN EXCEPT SPAIN 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 36.17 POINTS OR 0.11%  / SHANGHAI CLOSED UP 11.39 OR 0.35%   /

Australia BOURSE CLOSED DOWN 0.39% /

Nikkei (Japan)CLOSED DOWN 99.93 POINTS OR 0.47%

INDIA’S SENSEX  IN THE RED 

Gold very early morning trading: 1313.40

silver:$16.28

Early TUESDAY morning USA 10 year bond yield: 2.865% !!! UP 1  IN POINTS from MONDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ 

The 30 yr bond yield 3.0980 UP 1/2  IN BASIS POINTS from MONDAY night. (POLICY FED ERROR)/

USA dollar index early  TUESDAY morning: 90.09 UP 33  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.731% DOWN 1  in basis point(s) yield from MONDAY/

JAPANESE BOND YIELD: +.0.043% UP 0    in basis points yield from MONDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.308% DOWN 3  IN basis point yield from MONDAY/

ITALIAN 10 YR BOND YIELD: 1.901 DOWN 6 POINTS in basis point yield from MONDAY/

the Italian 10 yr bond yield is trading 60 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES TO +.580%   IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.2272 DOWN .0065 (Euro DOWN 65 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 106.39 UP 0.421 Yen DOWN 42 basis points/

Great Britain/USA 1.40100 DOWN .0014( POUND DOWN 14 BASIS POINTS)

USA/Canada 1.3078 DOWN  .0004 Canadian dollar UP 4 Basis points AS OIL ROSE TO $62.72

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This afternoon, the Euro was DOWN 65 to trade at 1.2272

The Yen FELL to 106.39 for a LOSS of 42 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND FELL BY 14 basis points, trading at 1.40100/

The Canadian dollar ROSE by 4 basis points to 1.3093/ WITH WTI OIL RISING TO : $63.58

The USA/Yuan closed AT 6.3341
the 10 yr Japanese bond yield closed at +.046%  DOWN  5/10 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 3  IN basis points from MONDAY at 2.8773% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.112  UP 4    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,90.24 UP 47 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 TUESDAY: 1:00 PM EST

London: CLOSED UP 22.73 POINTS OR 0.32%
German Dax :CLOSED UP 58,38 POINTS OR 0.48%
Paris Cac CLOSED UP 15.76 POINTS OR 0.30%
Spain IBEX CLOSED UP 00.10 POINTS OR 0.00%

Italian MIB: CLOSED  UP 143.66 POINTS OR 0.63%

The Dow closed UP 116.36 POINTS OR 0.47%

NASDAQ WAS DOWN 20.06 Points OR 0.27% 4.00 PM EST

WTI Oil price; 63.58 1:00 pm;

Brent Oil: 67.72 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 57.45 DOWN 32/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 32 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO +.580% 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:$63.40

BRENT: $67.34

USA 10 YR BOND YIELD: 2.8904%   THIS RAPID ASSENT IN YIELD IS VERY DANGEROUS/DERIVATIVES START TO BLOW UP/ 

USA 30 YR BOND YIELD: 3.1227%/

EURO/USA DOLLAR CROSS: 1.2242 down .0094  (down 94 BASIS POINTS)

USA/JAPANESE YEN:106.54 UP 0.571/ YEN DOWN 57 BASIS POINTS/ very dangerous as yen carry traders are getting killed/yen continues to rise despite the NYSE rising. however gold is now breaking away from yen influence.

USA DOLLAR INDEX: 90.43 up 67 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.3997: down 0.0028  (FROM LAST NIGHT down 28 POINTS)

Canadian dollar: 1.3081 UP 9 BASIS pts

German 10 yr bond yield at 5 pm: +0.580%


VOLATILITY INDEX:  18.31  CLOSED  down   0.71

LIBOR 3 MONTH DURATION: 2.22%  ..DANGEROUS LIBOR RISING EVERY DAY

END

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

TRADING IN GRAPH FORM FOR THE DAY

Dollar, Bitcoin, & Bond Yields Pop As Stocks Get Zuckerberg’d Again

A lot of sound and fury today for no return… because Powell will save us all tomorrow

Despite modest gains in stocks, Trannies were the only index to get back into the green from Friday’s close; NASDAQ remains the week’s biggest loser…

The S&P 500 has now seen 16 days of plus or minus 1% moves in either direction since the start of February, which compares to only 10 occasions through the 13 months ending in January.

Facebook did rebound from its worst levels of the day but was still ugly…

FANGMAN stocks bounced with Amazon and nVidia back into the green from Friday…

NOTE – Amazon passed Alphabet as the 2nd-most valuable public company behind Apple.

Oracle crashed to its lowest in 6 weeks…

GE lowest since Sept 2009

But bank stocks bounced back today…

So much for rotation to value as FB dumped…

Vol fell on the day but remains elevated to Friday’s OPEX close… with Nasdaq vol the biggest riser on the week…

Treasuries were sold all day.. ahead of tomorrow’s FOMC meeting…

 

Once Asia closed, the USD was bid, erasing yesterday’s losses and then some – to its highest since March 1st…

 

Dollar strength sent PMs and copper lower but crude spiked over 2% on the day..

Cryptos extended their gains today as the G-20 statement confirmed rumors of no looming global crackdown…

END

Trading today:

We have been highlighting to you the importance of a continual rise in Libor and its derivative:  Libor-ois

(The OIS part of the equation is a risk free swap in interest rates).  The rise is Libor is due to lack of dollar funding and thisis no doubt due to the huge amount of dollars repatriated. This seems to have freeked out Citibank

(courtesy zerohedge)

Why Citi Is Suddenly Freaking Out About The Exploding LIBOR-OIS

When it comes to ongoing blow out in the Libor-OIS spread, which this morning jumped to another 9 year wide, rising to 54.6bps or the most since May 2009 after 3M USD Libor rose for the 30th consecutive day from 2.2225% to 2.2481%…

… there are two types of analysts (and analysis): those who dismiss the move as merely symptomatic of the deluge in T-Bill issuance and nothing else, a view adopted seemingly by much of Wall Street and most market commentators at a certain terminal sales-funded financial outlet… and those who warn that not only could the move indicate something far more sinister, but what is more troubling, is that no matter what is behind it, financial conditions are becoming increasingly tighter with every passing day, and could potentially result in a funding crisis not only among banks, but also impact the broader.

Our approach has been the latter, and as we showed last week, there are six possible explanations for the sharp move in the spread:

  • an increase in short-term bond (T-bill) issuance
  • rising outflow pressures on dollar deposits in the US owing to rising short-term rates
  • repatriation to cope with US Tax Cuts and Jobs Act (TCJA) and new trade policies, and concerns on dollar liquidity outside the US
  • risk premium for uncertainty of US monetary policy
  • recently elevated credit spreads (CDS) of banks
  • demand for funds in preparation for market stress

Those who say “don’t panic” have been focusing squarely on the first three, while we, and other traders, are increasingly concerned that the answer may be found in the latter, and far more concerning, three explanations.

Now, in a report by one of Wall Street’s most respected analysts and credit strategists, Citi’s Matt King echoes our repeated warnings, and writes that “the dramatic rise in $ LIBOR-OIS spread is contributing to a general increase in nervousness around risk assets”, a process he thinks “has further to go.”

Recall our take of the ongoing blowout from March 11:

Whatever the cause of the ongoing blow out in Libor-OIS, this move is having defined, and adverse, consequences on both dollar funding and hedging costs… It’s not just rates: the consequences of rising dollar funding costs will eventually impact every aspect of the fixed income market, even if simply taken in isolation due to the ongoing spike in 3M Libor which still is the benchmark reference rate for hundreds of trillions in floating-rate debt.

The reality, however, is that without a specific diagnosis what is causing the sharp surge wider, and thus without a predictive context of high much higher it could rise, and how it will impact the various unsecured funding linkages of the financial system, it remains anyone’s guess how much wider the Libor-OIS spread can move before it leads to dire consequences for the financial system.

Fast forward to today when King picks up where we left off, and notes that while technical in nature, “the widening nevertheless reflects an increasing scarcity of $ funding over and above the Fed’s intended tightening” and “In coming months, we expect this pressure to spread from unsecured money markets and repo to the cross-currency basis.” It gets worse:

The bad news is that we think it has further to go in coming months, and expect the effects to become more far-reaching. It contributes to our preference for € credit over $ credit, and expectation that much of the foreign money buying $ credit will shift towards € credit in coming months.

But the biggest risk, and one which those who complacently ignore the move in this critical spread ignore, is the implications it could have on the Fed’s overall normalization plans, because as King warns, the sudden tightening in financial conditions “contributes to our bearishness on credit markets as a whole, and conviction that central banks’ carefully stage-managed exit from extreme stimulus is liable to lead to a sharper tightening of financial conditions than they have been anticipating.”

In other words, after just 1-2 more rate hikes, not only will it result in a whimpering of the Fed’s tightening cycle end, but it could also lead to a bang in the stock market which has similarly been complete ignoring the sharp move in the L-OIS, oblivious to the sharp funding squeeze behind the scenes.

Before we continue, here is King’s own take on what is causing the move: spoiler alert – it’s not just the surge in T-Bill issuance.

The unprecedented widening in $ LIBOR-OIS has at once awakened unwelcome memories of 2007-8, and yet at the same time left analysts scrambling for explanations. The most commonly cited factor is increased T-bill issuance. But while T-bills may have widened earlier (already in 2017), in the latest move they have actually outperformed vs Eurodollars and Libor rather than underperformed – hardly what would be expected if their issuance was overwhelming everything else. (Figure 4). Presumably the cause is something US-specific, since – in stark contrast with 2007-08 and 2011-12 – LIBOR-OIS spreads in € and £ have been almost completely unaffected (Figure 5).

The immediate explanation which makes most sense to us is a series of changes in $ markets following US tax reform. These seem likely to be structural rather than temporary.

Just as we and many others predicted, repatriation has led to a sharp flattening of the $ credit curve. While last year the flattening seemed to be driven largely by the long end (and expectations of reduced issuance by corporates using bond issuance+offshore cash to fund share buybacks), since February there has been a shift towards a sell-off, with the front end underperforming in beta-adjusted terms (Figure 6). This occurred among both financials and nonfinancials, and was initially concentrated in $, though there are now some signs € credit is trying to follow suit, especially among financials (Figure 7).

What King, correctly, thinks has happened is that corporations with offshore cash piles have gone from seeing those funds as being trapped almost indefinitely to recognizing that they could be called upon to spend that cash at short notice, “most likely on M&A or share buybacks. As such, they have been anxious to reduce the duration of their holdings.”

Indicatively, here is a chart from BofA, which shows the 25 largest US HG non-financial holders of overseas cash, which as Q4 held $1.07tr in total cash, cash equivalents, short-term marketable securities and investments, of which $888bn resided abroad. The full breakdown of various cash equivalent holdings is shown below.

The repatriation of offshore cash has been reflected in part in front end bond selling, but the changes are more visible in money markets. In brief, volumes are up, but maturities are sharply down. The average maturity of CP outstandings has fallen – in the case of A2/P2 issuers to post-crisis lows. A similar maturity shortening has been visible in repo markets.

To be sure, the details of this conventional pathway are well understood (we explained them in detail recently), and on the surface, King admits it would all sounds just like a “strong in a teacup.”

Yes, a few issuers may find they need to pay up to borrow rather more in short maturities now that corporate treasurers’ cash piles are not at their beck and call, and yes, this may well be a structural rather than a temporary shift. But it hardly constitutes the sort of trigger for broad-based weakness in risk assets that LIBOR-OIS widening is sometimes taken to be.

This is precisely where the apologists stop in the analysis of the consequences of the move wider in Libor-OIS, a position reinforced further by the lack of other signs of stress which have traditionally accompanied LIBOR-OIS widening have so far been absent.

But, as King warns, “this is about to change.

First, the Citi strategist looks at the correlation between the FRA-OIS and the Cross-FX basis, which traditionally have moved together during times of stress, yet which have so far avoided a parallel move. However, not for long though, as King explains:

Normally when one bank funding market gets stressed, multiple funding markets become stressed as borrowers pre-emptively draw down liquidity wherever they can find it – hence the strong correlation between FRA/OIS and FX OIS basis. So widening in $ LIBOR-OIS has typically been associated with widening in the  crosscurrency bases, and vice versa. But this year’s pickup in LIBOR-OIS is to date a notable exception (Figure 12).

The reason for this? The Fed is masking the liquidity signal with the $2.1 trillion in excess reserves it has generously handed out to banks. As King notes, until now, banks’ excess reserves have remained ample, ensuring that FX swap markets had abundant liquidity and stayed relatively tame even as CP markets became more stressed.

Note that excess reserves are a necessary but not a sufficient condition for there not to be stress in the system. Banks not only need reserves to be available; they also need to be willing to take advantage of them by engaging in lending activity within the constraints of their capital requirements – leverage ratios in particular. Reserves have taken on added importance in the post-crisis era as a key $ liquidity source foreign investors can borrow, especially for those in lower-yielding DMs.

The cushioning role of reserves also explains why although boosting excess reserves through successive rounds of QE has typically helped to reduce $ funding stresses in the system, draining reserves (or even just reducing their rate of increase) has often led to increased stress (Figure 13) – even when their level from a strict regulatory perspective has been more than adequate.

Of course, now that the Fed’s balance sheet is in rolloff mode, reserves are starting to decline, even if very, very slowly. That’s one way reserves will shrink; another way is the upcoming moves in the Treasury General Account at the Fed. King looks at both below:

There are two main drivers of excess reserves, and – while it is conceivable that near-term worries are overdone – both are set to tighten in coming months.

The most obvious – and gradual – is the Fed’s balance sheet reduction. Just as QE led to a $2tn expansion in excess reserves, so as the Fed’s securities holdings are allowed to roll off and its balance sheet contracts, so banks’ excess reserves are contracting in direct proportion. In 18Q1 the contraction has been $20bn/month; from April the pace steps up to $30bn/month, with two more $10bn increments scheduled from June and September.

The second factor is the level of the Treasury General Account (TGA) at the Fed. This – finally – is where T-bill issuance comes in, not through the weight of supply on RV between short-term market rates but through its indirect impact on banks’ excess reserves. When Treasury issuance increases – either through bills or bonds – Treasury either spends the money immediately or deposits it at the Fed. If they spend it immediately – on social security, or infrastructure, or anything else – the level of private sector deposits in the banking system remains unchanged. Even though private sector funds will have been used to buy the Treasury issuance – thereby reducing deposits – Treasury’s spending will sooner or later lead to the same amount being re-deposited in the banking system. The asset which corresponds to the banks’ deposit liabilities is the level of their reserves at the Fed – which will therefore also remain unchanged.

If instead Treasury’s spending is deferred, deposit liabilities in the banking system fall as someone buys the issuance and are instead transferred to the Treasury General Account at the Fed. Once again, the banks’ asset which falls in parallel with their deposit liabilities is the level of reserves.

This relationship explains why there has been a close link between movements in the TGA and movements in banks’ reserves in recent years (Figure 14), with reserves moving roughly $2 for every $1 change in the TGA . This is because there have been other changes in the liability side of the Fed balance sheet besides TGA, such as an increased RRP facility, expanded deposit programs for CCPs, and a natural increase in paper cash, as well as the Fed normalization in recent months.

So why is this macro-level accounting lesson important? Because it has a direct consequence on the cross-currency basis: the one aspect of the liquidity tightening story that has so far not been observed even as Libor-OIS was shot  wider. Specifically, the level of reserves has been a direct determinant of stress in money markets – the cross-currency basis in particular. As a rule of thumb, a $200bn reduction in reserves has added about 10bp to the 5y €/$ basis (Figure 15). And as Citi adds, moves in the $/¥ basis have if anything been larger still.

Next, King explains why as a result of seasonal affects, especially as it relates to the tax-collection cycle, the recent surge in Bills has not been sufficient to boost the TGA, and reduce reserves. We will spare readers the details, suffice to note that according to King, should the recent increase in Bill issuance persist, by June banks’ reserves could have fallen by around $300bn.

If realized, this would warrant renewed widening in the cross-currency basis, and would almost certainly stoke the general degree of anxiety about a sharp tightening of $ liquidity.

One possible counter here is that in order to avoid a funding squeeze the Fed could inject extra liquidity, however as we explained last week, this is unlikely, at least until there is a pronounced hit to risk assets at which point the Fed will have no choice but to intervene.

Until then, Citi expects conditions to tighten before anything is implemented, most likely in 2019. As for the Fed, King believes that it seems unlikely they will suddenly spring into action now when they studiously ignored the speeches from the BIS and other central banks when the cross-currency basis gapped out in 2016.

So what happens next?

Well, if the predicted tightening does occur as expected, Citi anticipates three quite far-reaching effects.

First, the foreign bid for $ credit – which has all but evaporated in the past couple of months – will come under greater pressure still.

Optimists may hope that we are simply seeing traditional seasonal weakness, and that once Japanese fiscal year-end
has passed, the pace of buying will pick up again (Figure 16). But to us this seems unlikely. The main driver of Japanese and other foreign investors’ hedge costs is not the cross-currency basis, but the difference in short rates. Even if current Libor and basis pressures were to subside rather than to increase, further Fed rate hikes seem likely to drive hedge costs up – in the case of Japanese investors, from around 2.5% now to over 3% by year end (Figure 17). This consumes almost all of the yield on all but the lowest quality $ investments.

This is something we touched upon two weeks ago when we said that “the rise in dollar funding costs will damage the profitability of hedged investing and lending by foreign financial institutions.”

Second, and this is directly a continuation of what we said last week, the rise in $ money market rates would represent a tightening of financial conditions beyond that intended by the Fed.

LIBOR is still the reference point for the majority of leveraged loans, interest-rate swaps and some mortgages. In addition to that direct effect, higher money market rates and weakness in risk assets are the two conditions most likely to contribute towards mutual fund outflows. If those in turn created a further sell-off in markets, the negative impact on the economy through wealth effects could be greater even than the direct effect from interest rates.

Citi’s third and final point why analysts ignore the blowout in L-OIS at their expense, is that in addition to all these if not anticipated, then at least foreseeable, consequences of tighter $ liquidity, there are quite likely to be additional unanticipated consequences as well.

For example, as shown in the stunning chart below (left side) LIBOR-OIS has in recent years been a very good leading indicator for DXY, with higher spreads leading to a stronger dollar with a 3-month lag (Figure 18). Of course, it is worth noting that $ weakness has been a major contributor to the risk-on environment over the past year (Figure 19) – through its association with stronger emerging markets, through EMFX reserve accumulation contributing to easier global money supply, through its optical contribution to earnings growth at US and global corporates, and through stronger commodity prices.

In other words, if there is indeed a linkage between Libor-OIS and the DXY, then expect a massive spike in the dollar in coming weeks, which in turn would roil risk assets.

In conclusion, King notes that while as a bank Citi is still forecasting a weaker dollar on “fundamental grounds – together with almost everyone else”, if the upcoming funding shortage and dollar liquidity tightening does lead to a stronger dollar, “all of these processes have the ability in principle to run in reverse.”

Translation: the blow out in Libor-OIS not only matters, but could have very direct – and dire – consequence on equities in the coming weeks.

end

This is not good:  a package bound for Austin exploded at a Texas Fed Ex warehouse

(courtesy zerohedge)

“The Bombs Are Connected”: Package Bound For Austin Explodes At Texas FedEx Warehouse

In a disturbing development, a package believed to be headed for Austin, Texas exploded at a FedEx facility in Schertz, Texas – a suburb of San Antonio that’s roughly a 60 mile drive from the state capitol, the Washington Post reported.

The FBI told CBS that it’s “more than possible” the blast is linked to the recent ones in Austin before law enforcement sources confirmed it.

: The FBI says a package explosion at a FedEx facility in Schertz is likely connected to the . No one was injured when it exploded around 12:25 am.

.@CBSNews reports the FBI says it’s “‘more than possible”‘ that the package that exploded at a FedEx facility in Schertz, which was bound for Austin, is connected to the

The explosion occurred at around 12:30 am Tuesday morning (local time). The bomb, which contained nails and shrapnel, wounded at least one woman, FBI Special Agent Michelle Lee told reporters.

Work at the facility, which was staffed by 75 people, has ground to a halt as the FBI and ATF arrived on the scene. A local CBS affiliate received a call from one woman whose husband works at the facility. She told the station that he was not being allowed to leave.

MAJOR INCIDENT SCHERTZ TEXAS AREA. This is what we have gathered unofficially:
Shortly after 12 midnight, a package destined for Austin, Tx detonated at the FedEx distribution facility located at 9935 Doerr Lane. The package was said to have contained nails and shrapnel.

Of the 75 people working at the facility, only one complained of injury described as a non life threatening percussion type injury.
All inbound and outbound packages are in limbo, and transport vehicles are in gridlock. At this hour, ATF and FBI assets are beginning to arrive.

Since March 2, five explosions (including Tuesday morning’s blast) have rocked the Austin area. Police have warned the public that the incidents appear to be linked, and that they are “currently dealing with a serial bomber”.

In addition to the two men who were wounded after Sunday night’s explosion, two black men have been killed and an elderly Hispanic woman has been wounded. Police say they haven’t ruled out the possibility that the attacks – which began on March 2 – were racially motivated. The first three bombs were left on doorsteps. But Sunday’s explosion in Austin was likely triggered by a tripwire, which suggests that the suspects have a higher level of sophistication than police had initially believed. So far, there’s not enough evidence for police to classify the incidents as terrorism or hate crimes.

“We don’t know what the motive behind these may be. We do know that both of the homes that were the recipients of these packages belonged to African Americans, so we cannot rule out that hate crime is at the core of this,” said Austin Police Chief Brian Manley.

Authorities don’t appear to have any leads in a case that’s looking suspiciously like the infamous “unabomber” case from the 1990s.

end

The USA national debt at 21 trillion dollars is growing 36% faster than the uSA economy.  This is a time bomb

(courtesy Simon Black/SovereignMan.com)

At $21 Trillion, The National Debt Is Growing 36% Faster Than The US Economy

Authored by Simon Black via SovereignMan.com,

Well, it happened again.

On Friday afternoon, the national debt of the United States hit another major milestone, soaring past $21 trillion for the first time ever.

Clearly that is an enormous number… it’s actually larger than the size of the entire US economy, which is pretty incredible.

But what’s always been the more important story about America’s pile of debt is how rapidly it’s growing.

For example, in the span of a SINGLE DAY, from Thursday to Friday, the national debt grew by $73 BILLION. In a day.

To put that number in context, $73 billion is larger than the size of most major companies like General Motors, Ford, and Southwest Airlines.

And in the month of February alone, the national debt grew by an astounding $215 billion.

$215 billion is larger than the GDP of New Zealand. Greece. Oregon. More than twice the size of the GDP of New Mexico. Just in a single month.

Most disturbingly, the national debt has grown by more than $1 TRILLION… just in the last SIX MONTHS.

I’m scratching my head right now wondering– where did they spend all that money? Was there a major economic crisis, wave of bank failures, or severe depression that required massive fiscal stimulus?

Nope. It was just business as usual.

Even better, the economy was supposedly doing totally awesome over the last six months.

And yet, even with all that positivity, the government still managed to rack up an extra trillion dollars in debt.

Amazing.

One important point to make is that debt growth is VASTLY outpacing GDP growth. And this is critical to understand.

Last year, for example, the US economy grew by 2.5% in ‘real’ terms, i.e. stripping out inflation.

Even if you include inflation in the calculation, the size of the US economy increased by 4.4%. Yet the national debt grew by 6%.

Now that might not seem like a big difference. But it is. On a proportional basis, the national debt expanded 36% faster than the US economy (even if you include inflation).

Over the course of several years, that effect compounds into something that’s quite nasty.

At the end of 2008, for example, the size of the US economy was $14.5 trillion. A decade later, the size of the economy is $19.7 trillion, 36% greater.

Yet over the past ten years, the national debt has grown from $9.4 trillion to over $21 trillion– a growth rate of 123%!

It’s really, really hard to pretend that this is good news.

But that doesn’t stop people from trying.

We’re constantly being told the same old nonsense that “the debt doesn’t matter” because we owe it to ourselves.

And, sure, it’s true that the US government owes a lot of this money to various institutions across America. Like Social Security. Or the US banking system. Or the Federal Reserve.

I find it difficult to see the good news here… as if it would somehow be beneficial to default on (and hence bankrupt) Social Security. Or the US banking system. Or the Federal Reserve.

Doing so would cause the most drastic financial cataclysm ever before seen in the United States.

So… yeah, the debt does matter.

Yet these major milestones are simply yawned off now, as if trillions of dollars in new debt is just par for the course. And that’s pretty sad.

Most people are in one of three camps when it comes to the debt.

#1: They ignore it altogether, and stick their heads in the sand (or up somewhere else).

#2: They acknowledge the debt, but tell themselves fairy tales that it doesn’t matter… or that the government is going to somehow ‘fix’ it. (which is ridiculous given that the government is the one causing the problem to begin with.)

#3: They view the situation rationally and understand that, maybe, just maybe, at some point in the future, there might possibly be some consequence to arise from the largest debt pile that has ever been accumulated in the history of the world… and they make sensible preparations just in case.

Which group are you in?

And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.

END

Another great commentary from David Stockman on where the uSA economy is heading

(courtesy David Stockman)

Stockman Fears Washington’s Fiscal Folly Will Spark A “Yield Shock Of Biblical Proportions”

Authored by David Stockman via Contra Corner blog,

That didn’t take long. The $20 trillion national debt marker was crossed on September 8th, but it only took another 186 days to vault over the $21 trillion level last Thursday.

Then again, you haven’t seen nothin’ yet. The annual deficit will approach $1.2 trillion in the coming fiscal year; breach the $2.0 trillion market by the middle of the next decade at the latest; and pile a total of $17 trillion onto the national debt over the next 10 years.

Moreover, these numbers are about as locked-in as tomorrow’s sunrise. So it is fair to say that objectively the public debt is already $40 trillion and that’s just within the decade of the 2020s. And as we show below, that monstrous inflation of the public debt could not come at a worse time in the political, demographic and monetary cycle.

Still, we get slightly ahead of the story. What’s relevant in the near term is that every bit of political resistance to the growth of Federal deficits during the Obama era is now over and gone. The nation’s fiscal accounts are now actually in free fall—and for as far as the eye can see into the future.

We have been christening the Donald as the Great Disrupter all along—the political accident that will at last bring the destructive rule of the Wall Street/Washington establishment to a thundering demise. And nowhere is that more evident than with respect to the Donald’s pivotal position at the center of the fiscal calamity now unfolding.

Needless to say, Trump has finally locked-up the gears of fiscal policy tighter than a drum. That’s because he embodies a trifecta of fiscal impulses that amounts to pure madness. To wit, the Donald is pro-Warfare State, pro-Welfare State and has just slashed Uncle’s Sam’s tax take to 16.6% of GDP—-the lowest rate since 1950.

Accordingly, there is exactly zero chance of any legislative action to stem Washington’s exploding red ink (see below) until after the 2020 election, and it will be far too late by then.

That is to say, the Donald is not about to sign legislation that would raise taxes, cut Social Security/Medicare or sharply ratchet back defense spending. Nor is there any possible congressional majority to serve up even a down payment on this necessary fiscal fix in the first place.

Indeed, it is now evident that the Congressional GOP has thrown whatever vestige of fiscal rectitude it held onto during the Obama years to the winds.

In their desperation to show that they can govern apart from the mad man in the Oval Office Congressional Republicans recently passed the most irresponsible, unfunded tax bill since the 1980s at the tail end of what is now nearly the longest business expansion in history; and then moved within weeks to blow the budget sequester caps sky high, thereby adding $300 billion to defense and domestic discretionary spending during the next two years alone—even as they shoveled-out another $120 billion of disaster relief spending with no honest offsets whatsoever.

Of course, the alternative of a bipartisan fiscal responsibility coalition emerging in the foreseeable future is about as likely as vows of chastity being taken in a whore house, and we do not employ that particular metaphor at random.

Indeed, Wolf Richter’s excellent chart below depicts the dismal fiscal cycle that is now operative in the Imperial City. To wit, what used to be called the debt ceiling has effectively become the debt floor.

That is, there is now a cycle in which the statutory borrowing limit remains temporarily in effect (flat areas marked “debt ceiling”) until the Treasury runs low on cash. Then the ceiling is “suspended” (rising squiggly line) as long as necessary for political convenience—during which time the Treasury borrows like crazy.

During the five weeks since the “ceiling” was lifted on February 9, for example, the US treasury borrowed a cool $535 billion; and during the two suspensions combined since last September it has issued a staggering $1.2 trillion in new debt obligations.

Never mind that computes to $6.5 billion per day. After all, as one talking head attempted to school your editor on CNBC last week, the Federal deficit is only 3.5% of GDP. What’s to worry?

Our short answer to this thirty-something hot shot, of course, is just about everything is to worry. That’s because Wall Street is way behind the curve in comprehending that the monstrous fiscal freight train coming down the tracks is no mere statistical factoid at 3.5% of GDP.

To the contrary, the current fiscal equation is sui generis. It embodies a freakish and incendiary confluence of politics, policy, demographics, the business cycle, central banking and global developments that is utterly different—and massively more dangerous—- than anything that has gone before.

So we commence this multi-part series not merely to rebuke the Halftime Report idiot who spoke for much of Wall Street when he averred it was all getting better on the fiscal front because current deficits are far smaller than Obama’s. It seems that the only rebuke perma-bulls like Joe Terranova and his ilk of day traders understand is getting hit upside the head by a 40% stock plunge, anyway.

Still, the Wall Street brokers are making another run at the retail mullets—even trotting out high powered and ordinarily sensible market technicians like JPMorgan’s Marko Kolanovic—to urge one last run at buying the dip.

The Donald’s contretemps to the contrary notwithstanding, the global economy is proceeding just fine, they insist. And besides, the chart points beckon: The 10% February dip–including two 1,000 point plunges on the Dow in the same week— is just August 2015 or February 2016 all over again. That is, a bullish pause that refreshes.

In a word, that is one giant load of Wall Street horse manure. And we are here to tell you that unlike the boy in Ronald Reagan’s favorite story, which we mentioned last week, there ain’t no damn pony anywhere in sight!

The world economy may bump along for a quarter or two, but structurally it’s a monumental mess because it all turns on a hideous freak of world economic history that we call the $40 trillion Red Ponzi. And in the jaws of the thundering monetary/fiscal clash looming just around the corner in the bond pits, there ain’t no stinkin’ trading charts that matter a whit, anyway.

What matters 1000X more than the daily stock charts are the following two epochal force vectors that we shall elaborate upon in the balance of this series. That is, (1) the explosion of giant structural deficits driven by demographics, political dysfunction and the ascendant Warfare State; and (2) the historically unprecedented pivot to quantitative tightening by the central banks or what amounts to a vast de-monetization of the public debt.

In combination, they guarantee a “yield shock” of biblical proportions, which will eventually eviscerate the cap rates upon which the entire towering bubble in the equity market is predicated.

The first vector, of course, is the exploding structural deficit, which will come as a huge shock to Wall Street. That’s because it has been house-trained for so long on the “deficits don’t matter” mantra owing to central bank monetization that it can no longer recognize or assess relevant scale.

To wit, the idea that the upcoming 6% of GDP deficit ($1.2 trillion in FY 2019) is at least not as bad as Obama’s deficits is just plain stupid. The largest Obama deficit was 9.8% of GDP and it occurred at the bottom of the worst US recessioin since the 1930s (FY 2009); it fell steadily from there t0 2.4% of GDP by FY 2015.

Bad as the Obama deficits were, what is materializing now is an altogether different kettle of fish. The huge Trump deficits will hit at the 10th year of what will be a record business expansion that will be 125 months-old by the end of FY 2019.

Stated differently, the Trump deficits stand squarely in harm’s way in front of the next recession; and, worse still, they are growing in size as a structural policy matter owing to the retirement time bomb otherwise known as the 80-million strong Baby Boom generation.

Wall Street’s inability to appreciate the cyclical and demographic context of these erupting deficits, of course, represents just one more case of the recency bias. The central banks have falsified bond yields so egregiously and for so long, that the unprecedented deficit magnitudes now baked into the cake are simply unrecognized.

For instance, the Fed did print the Obama Administration out of its giant deficits, but even then they set all time records. During Barry’s eight year term the Federal deficit averaged 5.8% of GDP, and one single fact points to the aberrational nature of the Obama record.

To wit, Obama’s 8-year deficit average of 5.8% of GDP exceeded the worst Reagan deficit (5.7%) at the very bottom of the deep 1982 recession.

Likewise, it was more than triple the 1.5% annual average during the George W. Bush years, and far above the1% of GDP average during the Clinton years. It also far exceeded the 3.8% of GDP deficit average during the 12-year Reagan-Bush tenure, and also left big spending Jimmy Carter in the dust, whose average deficit amounted to 2.3% of GDP.

So here is the first chart that trumps (so to speak) anything in the short-term stock charts by a country mile. As will be detailed in further installments, the $2.4 trillion deficit projected for FY 2028 is hard-baked into the future, and represents the best case!

The actual deficit by the end of the 2020s will be far larger—once the next recession rips through the fiscal equation.

Still, the $2.4 trillion deficit projected below under Rosy Scenario amounts to 10% of GDP, and at a point that would be 230 months after the last recession!

So we’d say that what we are heading into ain’t no buyable dip. It’s a financial chasm like the world has never known, and one that the central bank pivot to QT (Part 2) will turn into an outright nightmare.

END

Amid a barrage of ethical and legal questions over business practices, the board of Cambridge Analytica has suspended its CEO pending a full investigation.  The company was harvesting data provided by Facebook

(courtesy zerohedge)

Cambridge Analytica Suspends CEO Alexander Nix

Amid a barrage of ethical and legal questions over business practices, the board of Cambridge Analytica has thrown their CEO under the bus suspended CEO Alexander Nix, pending a full, independent investigation.

Alexander Tayler has been asked to serve as Acting-CEO.

Full Statement:

The Board of Cambridge Analytica has announced today that it has suspended CEO Alexander Nix with immediate effect, pending a full, independent investigation.

In the view of the Board, Mr. Nix’s recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation.

We have asked Dr. Alexander Tayler to serve as acting CEO while an independent investigation is launched to review those comments and allegations.

We have asked Julian Malins QC to lead this investigation, the findings of which the Board will share publicly in due course.

The Board will be monitoring the situation closely, working closely with Dr. Tayler, to ensure that Cambridge Analytica, in all of its operations, represents the firm’s values and delivers the highest-quality service to its clients.

*  *  *

Having been ‘caught on tape’ offering bribes and sex workers to entrap political opponents, this is not a total shock

end

Dave Kranzler comments on the poor retail sales number as well as other deteriorating economic fundamentals.  He also highlights Craig Roberts paper on the same subject

(courtesy Kranzler/Roberts)

The Slow Death Of The U.S. Economy

Deteriorating real economic fundamentals – The most important economic report out last week was retail sales for February, which showed at 0.1% decline from January. This was a surprise to Wall Street’s brain trust, which was expecting a 0.4% gain. Keep in mind the 0.1% decline is nominal. After subtracting inflation, the “unit” decline in sales is even worse. This was the third straight month retail sales declined. The decline was led by falling sales of autos and other big-ticket items. In addition, a related report was out that showed wholesale inventories rose more than expected in January as wholesale sales dropped 0.2%, the biggest monthly decline since July 2016.

Retail and wholesale sales are contracting. What happened to the tax cut boost to spending? Based on the huge jump in credit card debt to an all-time high and the decline in the savings rate to a record low in Q4 2017, it’s most likely that the average consumer “pre-spent” the anticipated gain from Trump’s tax cut. Now, consumers have to spend the $95/month on average they’ll get from lower paycheck withholdings paying down credit card debt. As such, retail sales have tanked 3 months in a row.

Paul Craig Roberts published a must-read essay on the slow death of the U.S. economy:

As for the full employment claimed by US government reporting agencies, how does full employment coexist with this reported fact from the Dallas Morning News: 100k Applications For 1000 jobs.

Toyota Motor Company advertised the availability of 1,000 new jobs associated with moving its North American headquarters from southern California to Texas and received 100,000 applications. Where did these applications come from when the US has “full employment?”

Clearly, the US does not have full employment. The US has an extremely low rate of labor force participation, because there are no jobs to be had, and discouraged workers who cannot find jobs are not measured in the unemployment rate. Not measuring the unemployed is the basis of the low reported unemployment rate. The official US unemployment rate is just a hoax.

You can read his full commentary here:    America Is Losing Its Economy

***

SWAMP STORIES

Trump to hand over written documents to Mueller/but provide a narrative of the White House view and not Trump’s personal view

(courtesy zerohedge)

Trump’s Lawyers Hand Over Documents To Limit Scope Of Mueller Interview

Barely a day after President Trump outraged his political opponents by calling out Special Counsel Robert Mueller by name in a series of angry tweets, the Washington Post is reporting that the president’s legal team has provided written descriptions of certain key moments to the Mueller probe as they push to limit the scope of a presidential interview, should they agree to one.

According to the report, Trump has reportedly told aides that he’s “champing at the bit” to sit for an interview. But his lawyers, who are carefully negotiating terms, have sought to restrain the president, worried he might inadvertently perjure himself or – worse – accidentally walk into a perjury trap.

Given the time-sensitive nature of the investigation (Trump and his allies would like it to end as swiftly as possible) Trump on Monday added storied Washington lawyer Joseph diGenova, the husband of former Reagan Justice Department official and former Senate Intelligence Committee chief counsel Victoria Toensing, to his legal team.

Trump

While neither the special counsel nor the White House would comment on the report, lead attorney John Dowd said last week that the back-and-forth with Mueller had been “helpful.”

John Dowd, an attorney for the president, declined to comment on any records provided to the special counsel.

“We have very constructive, productive communications with the special counsel and his colleagues,” he said in an interview Friday.

“We’re blessed to have them,” Dowd said of the conversations with Mueller’s team. “I think it’s helpful to them and of course I think it’s very helpful to us.”

Written materials turned over include summaries of internal memos and correspondence between the president and senior officials. Lawyers with the special counsel’s office have said their questions fall into two separate categories:

The written materials provided to Mueller’s office include summaries of internal White House memos and contemporaneous correspondence about events Mueller is investigating, including the ousters of national security adviser Michael Flynn and FBI Director James B. Comey. The documents describe the White House players involved and the president’s actions.

Special counsel investigators have told Trump’s lawyers that their main questions about the president fall into two simple categories, the two people said: “What did he do?” and What was he thinking when he did it?”

Trump’s lawyers expect Mueller’s team to ask whether Trump knew about Flynn’s communications with Russian Ambassador Sergey Kislyak during the presidential transition, for example, and what instructions, if any, the president gave Flynn about the contact, according to two advisers.

Trump said in February that he fired Flynn because he had misled Vice President Pence about his contact with Kislyak. He said he fired Comey because he had mishandled an investigation of Democratic presidential candidate Hillary Clinton.

The records do not include Trump’s personal version of events but provide a narrative of the White House view, the people said. Trump’s lawyers hope the evidence eliminates the need to ask the president about some episodes.

In recent weeks, there have been conflicting reports about the Mueller probe, with some suggesting that it could wind down over the coming weeks and months, while others hinted at a longer time frame.

However, these reports have largely omitted one crucial detail: The timeline of the probe largely depends on Trump.

END

First Stormy Daniels and now ex Playboy model, McDougal is suing the parent of the National Enquirer, AMI to break the silence on their affair.  In essence she wants to be paid.  The CEO of AMI is a close friend of Donald Trump

(courtesy zerohedge)

Ex-Playboy Model Suing To “Break Silence” On Affair With Trump

A former Playboy model who says she had an affair with President Trump is suing the National Enquirer’s parent company, American Media, so that she can be released from a legal agreement barring her from discussing the relationship.

Karen McDougal

Karen McDougal filed the suit in Los Angeles Superior Court, according to the New York Timesafter she claims the Enquirer paid her $150,000 for the story of her nine-month-long affair between 2006 and 2007, but did not publish it when she gave the account in August 2016, several months before the 2016 U.S. election.

McDougal says that Trump’s personal attorney, Michael D. Cohen, was secretly involved in her negotiations with A.M.I., and that both the media company and her lawyer at the time misled her about the arrangement. After speaking with The New Yorker last month after it obtained notes she kept on her alleged affair, McDougal said she was warned by A.M.I. that “any further disclosures would breach Karen’s contract,” and “cause considerable monetary damages.”

Cohen reportedly paid another Trump accuser, adult film actress Stephanie Clifford (aka Stormy Daniels), $130,000 in exchange for signing an NDA barring her from discussing her experiences with Trump.

Michael D. Cohen

Trump joined a legal effort last week suing Clifford for $20 million over what they claim is a breach of her NDA. Meanwhile, both women’s claims against Trump are being construed by federal watchdog group Common Cause as illegal campaign contributions – arguing that they could constitute in-kind contributions to the Trump campaign.

Ms. Clifford and Ms. McDougal tell strikingly similar stories about their experiences with Mr. Trump, which included alleged trysts at the same Lake Tahoe golf tournament in 2006, dates at the same Beverly Hills hotel and promises of apartments as gifts.Their stories first surfaced in the The Wall Street Journal four days before the election, but got little traction in the swirl of news that followed Mr. Trump’s victory. The women even shared the same Los Angeles lawyer, Keith Davidson, who has long worked for clients who sell their stories to the tabloids. –NYT

“The lawsuit filed today aims to restore her right to her own voice,” McDougal’s attorney, Peter K Stris told the Times“We intend to invalidate the so-called contract that American Media Inc. imposed on Karen so she can move forward with the private life she deserves.”

As the Wall Street Journal reported in November, 2016;

The tabloid-newspaper publisher reached an agreement in early August with Karen McDougal, the 1998 Playmate of the Year. American Media Inc., which owns the Enquirer, hasn’t published anything about what she has told friends was a consensual romantic relationship she had with Mr. Trump in 2006. At the time, Mr. Trump was married to his current wife, Melania.

Quashing stories that way is known in the tabloid world as “catch and kill.” –WSJ

In a written statement, American Media Inc. claims it waasn’t buying McDougal’s story for $150,000 – rather, they were buying two years’ worth of her fitness columns, magazine covers and exclusive life rights to any relationship she has had with a then-married man. “AMI has not paid people to kill damaging stories about Mr. Trump,” reads the statement.

American Media Inc. CEO David J. Pecker is a long-standing friend of President Trump.

David Pecker would be a brilliant choice as CEO of TIME Magazine — nobody could bring it back like David! http://bit.ly/2RFF5n 

“David thought Donald walked on water,” an ex-Enquirer employee told the New Yorker last July, adding that Pecker had been using Trump’s private plane for trips to Florida.

Donald treated David like a little puppy. Donald liked being flattered, and David thought Donald was the king. Both have similar management styles, similar attitudes, starting with absolute superiority over anybody else.”

Gus Wenner, head of Wenner Media’s digital operations, which recently sold US Weekly and Men’s Health titles to American Media, told the New Yorker: “He was painting Donald as extremely loyal to him, and he had no issue being loyal in return. He told me very bluntly that he had killed all sorts of stories for Trump. He hired a girl to be a columnist when she threatened to go public with a story about Donald.” –Newsweek

Last July, Morning Joe hosts Joe Scarborough and Mika Brzezinski claimed they were harassed by Enquirer reporters and Jared Kushner following negative coverage of Trump, and were threatened with negative coverage unless they apologized to the President.

McDougal’s lawsuit claims she didn’t know about Trump and Pecker’s friendship when she began talking to the company in spring, 2016 – shortly after Trump gained the Republican nomination.

Ms. McDougal has said she was ambivalent about selling her story on the tabloid news market, but felt that her hand was forced after a hint of the alleged affair appeared in May 2016 on social media. Convinced something more would come out, she was determined to tell her story on her terms, her suit says.

A mutual friend connected her to Mr. Davidson, who, she said, told her the story could be worth millions. He arranged an interview with Dylan Howard, A.M.I.’s chief content officer, in Los Angeles. Mr. Davidson told her before the interview that A.M.I. would put $500,000 into an escrow account for her, and that “a seven-figure publishing contract awaited her,” the complaint reads. –NYT

In other words, McDougal wants to get paid.

end

I will  see you  WEDNESDAY night

HARVEY

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