April 6/DOW DOWN 575 POINTS ON ANOTHER TRUMP TARIFF ORDER ON CHINA: PROBLEM NOT ENOUGH GOODS SHIPPED TO CHINA FOR TARIFFS OVER THERE!CHINA MAY INITIATE A PLUNGING YUAN AND LIQUIDATE USA TREASURIES/GOLD RISES $7.50 TO $1332.70/SILVER IS UP 4 CENTS TO $16.40/NON FARM PAYROLLS DISAPPOINT THE STREET BADLY/

 

 

GOLD: $1332.70  UP $7.50  (COMEX TO COMEX CLOSINGS)

Silver: $16.40 UP 4 CENTS (COMEX TO COMEX CLOSINGS)

Closing access prices:

Gold $1333.70

silver: $16.40

For comex gold:

APRIL/

NUMBER OF NOTICES FILED TODAY FOR APRIL CONTRACT:60 NOTICE(S) FOR 6000 OZ.

TOTAL NOTICES SO FAR 655 FOR 65500 OZ (2.0373 tonnes)

THE COMEX IS OUT OF GOLD

For silver:

APRIL

0 NOTICE(S) FILED TODAY FOR

nil OZ/

Total number of notices filed so far this month: 19 for 90,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $6571/OFFER $6671: DOWN $144(morning)

Bitcoin: BID/ $6552/offer $6652: DOWN $163  (CLOSING/5 PM)

 

end

 for Monday:
GOLD OI GAIN:  5459 CONTRACTS TO 498,776
SILVER OI GAIN:  902 CONTRACTS AND A NEW RECORD: 243,797
EFP ISSUANCE:
GOLD 9917 CONTRACTS
SILVER: 1470 CONTRACTS

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest SURPRISINGLY  ROSE  AGAIN BY 1760 contracts from 241,135  RISING TO 242,895  WITH YESTERDAY’S TINY  6 CENT RISE IN SILVER PRICING. TODAY WE SET ANOTHER NEW ALL TIME RECORD FOR SILVER OPEN INTEREST . OBVIOUSLY, WE AGAIN HAD ZERO COMEX LIQUIDATION.  ALSO WE WITNESSED ZERO COMEX SHORT COVERING AS THE RAID FAILED TRYING TO SHAKE SOME OF THE SILVER LEAVES FROM THE SILVER TREE. WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP :  2261 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 2261 CONTRACTS.  WITH THE TRANSFER OF 2261 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 2261 CONTRACTS TRANSLATES INTO 11.309 MILLION OZ  ON TOP OF THE RISE IN OPEN INTEREST IN SILVER AT THE COMEX AND THE STRONG AMOUNT OF SILVER OUNCES STANDING FOR APRIL COMEX DELIVERY.

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF APRIL:

11,255 CONTRACTS (FOR 5 TRADING DAYS TOTAL 11,255 CONTRACTS) OR 56.28 MILLION OZ: AVERAGE PER DAY: 2251 CONTRACTS OR 11.255 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  56.28 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 8.04% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S774.77 MILLION OZ.

ACCUMULATION FOR JAN 2018:                        236.879 MILLION OZ

ACCUMULATION FOR FEB 2018:                        244.95 MILLION OZ

ACCUMULATION FOR MARCH 2018:                236.67 MILLION OZ

RESULT: WE HAD A GIGANTIC SIZED GAIN IN COMEX OI SILVER COMEX OF 4511  DESPITE THE tiny 6 CENT RISE IN SILVER PRICE.   WE ALSO HAD ANOTHER STRONG SIZED EFP ISSUANCE OF 2261 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 2261  EFP’S  FOR THE  MONTH OF MAY WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE GAINED A STRONG  4021 OI CONTRACTS ON THE TWO EXCHANGES: i.e. 2261 open interest contracts headed for London (EFP’s) TOGETHER WITH AN INCREASE OF 1760  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE TINY RISE IN PRICE OF SILVER OF 6 CENTS AND A CLOSING PRICE OF $16.36 WITH RESPECT TO THURSDAY’S TRADING. YET WE STILL HAVE A GOOD AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THIS NON ACTIVE APRIL DELIVERY  MONTH.

In ounces AT THE COMEX, the OI is still represented by just OVER 1 BILLION oz i.e. 1.215 BILLION TO BE EXACT or 173% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT APRIL MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER

IN SILVER, WE HAVE NOW SET THE NEW RECORD OF OPEN INTEREST AT 242,895 AND AGAIN THIS HAS BEEN SET WITH A  LOWE PRICE.  THE PREVIOUS RECORD WAS YESTERDAY AT 241,135 CONTRACTS WITH A SILVER PRICE CLOSING OF $16.36.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH 27 MILLION OZ AND APRIL 1.8 MILLION OZ)
  2. HUGE OPEN INTEREST IN SILVER  242,895 CONTRACTS (OR 1.217 BILLION OZ/
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION

AND YET WE HAVE A CONTINUAL LOWE PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND.  TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN  (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT)

In gold, the open interest  FELL BY A CONSIDERABLE SIZED 6393 CONTRACTS DOWN TO 493,317 ACCOMPANYING THE GOOD SIZED FALL IN PRICE/YESTERDAY’S TRADING ( LOSS OF $8.20).  WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF APRIL. THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A RATHER LARGE SIZED 11,895 CONTRACTS :   JUNE SAW THE ISSUANCE OF 11,895 CONTRACTS  AND ALL OTHER MONTHS ZERO.  The new OI for the gold complex rests at 493,317. 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 GOOD  OI GAIN IN CONTRACTS ON THE TWO EXCHANGES: 6393 OI CONTRACTS DECREASED AT THE COMEX AND A STRONG  SIZED 11,895 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS  TOTAL OI GAIN: 5502 CONTRACTS OR 550,200 OZ =17.113 TONNES

YESTERDAY, WE HAD 12098  EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF APRIL : 51,625 CONTRACTS OR 5,162,500  OZ OR 160.57 TONNES (5 TRADING DAYS AND THUS AVERAGING: 10,325 EFP CONTRACTS PER TRADING DAY OR 1,032,500 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 5 TRADING DAYS IN  TONNES: 160.57 TONNES

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

THUS EFP TRANSFERS REPRESENTS 160.57/2550 x 100% TONNES =  6.29% OF GLOBAL ANNUAL PRODUCTION SO FAR IN MARCH ALONE.*** THE ACCUMULATION OF EFP CONTRACTS IS RISING PER MONTH.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE 2205.06 TONNES

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

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY 2018:         649.45 TONNES

ACCUMULATION OF GOLD EFP’S FOR MARCH 2018:                741.89 TONNES

WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS.  ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM.  IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE

Result: A LARGE SIZED DECREASE IN OI AT THE COMEX WITH THE GOOD SIZED FALL IN PRICE IN GOLD TRADING YESTERDAY ($8.20 LOSS). WE HAD A VERY LARGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 11,895 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 11895 EFP CONTRACTS ISSUED, WE HAD A GOOD NET GAIN IN OPEN INTEREST OF 5502 contracts ON THE TWO EXCHANGES:

11,895 CONTRACTS MOVE TO LONDON AND 6393 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 17.113 TONNES).

we had: 60 notice(s) filed upon for 6000 oz of gold.

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

GLD

WITH GOLD UP  $7.50 :  WE HAD  A HUGE CHANGE IN GOLD INVENTORY AT THE GLD/ A DEPOSIT OF 5.90 TONNES

Inventory rests tonight: 859.99 tonnes.

SLV/

WITH SILVER UP 4 CENTS TODAY: A HUGE  CHANGE/ A MASSIVE DEPOSIT OF 1.319 MILLION OZ INTO THE SLV

/INVENTORY RESTS AT 320.196 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 AN STRONG 1760 CONTRACTS from 241,135 UP TO 242,895 (AND A  NEW COMEX RECORD SET TODAY/APRIL 6/2017. THE PREVIOUS RECORD OTHER THAN WAS ESTABLISHED YESTERDAY WAS 234,787 SET ON APRIL 21.2017 ALMOST ONE YEAR AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89).  THIS ALL OCCURRED SURPRISINGLY WITH THE TINY  RISE IN PRICE OF SILVER (6 CENTS//  YESTERDAY’S TRADING).   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER 2261 EFP CONTRACTS FOR MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD AGAIN ZERO COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI GAIN AT THE COMEX OF 1760 CONTRACTS TO THE 2261 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN AN GIGANTIC  GAIN OF 4021  OPEN INTEREST CONTRACTS.  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN APRIL (SEE BELOW). THE NET GAIN TODAY IN OZ ON THE TWO EXCHANGES:  20.105 MILLION OZ!!!

RESULT: A STRONG SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE TINY RISE IN SILVER PRICING / YESTERDAY (6 CENTS) . BUT WE ALSO HAD ANOTHER VERY GOOD SIZED 2261 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)FRIDAY MORNING/THURSDAY NIGHT: Shanghai closed HOLIDAY  /Hang Sang CLOSED HOLIDAY   / The Nikkei closed DOWN 77,90 POINTS OR 0.36%/Australia’s all ordinaires CLOSED DOWN .02% /Chinese yuan (ONSHORE) closed UP at 6.3033/Oil DOWN to 63.09 dollars per barrel for WTI and 67.83 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED   .   ONSHORE YUAN CLOSED UP AT 6.3033 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3198 /ONSHORE YUAN TRADING STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING  MUCH WEAKER AGAINST THE DOLLAR CHINA ON HOLIDAY TODAY/CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/

SOUTH KOREA/NORTH KOREA

 

i)North Korea/South Korea

b) REPORT ON JAPAN

3 c CHINA

i)LAST NIGHT 6 PM

the markets do not like this:  Trump orders consideration of new 100 billion in Chinese tariffs as he intensifies the tariffs wars

( zerohedge)

ii)THIS MORNING 2 AM

China vows to attack the Trump tariffs at any cost.  China urges the EU to join in the fight against the USA.  The real problem:  there is just not enough USA goods entering China that could be subject to tariffs:

( zerohedge)

iii)The global markets will not like this: the off shore yuan weakens by 300 basis points and this is the first step that China will initiate as they respond to Trump’s tariffs.  The lower yuan makes Chinese goods cheaper vs Europe and everybody else.

( zerohedge)

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Russia/USAI can assure you that Putin is angry as the USA unveils sanctions against 7 Russian oligarchs and 17 top Russian officials.  One is Putin’s son in law and the other is Deripaska who was the one that Paul Manafort dealt with

( zerohedge)

ii)ISRAEL/GAZA
Palestinians all over the world demand the right to return to Israel and become Israeli citizens something that Israel will never allow with their tiny population
( zerohedge
iii)Russia/UK/UN
Russia in an emergency meeting of the UN security council describes and demolishes the “hoax” of the Skripal poisoning

( Alex Christoforou/The Duran.com)

6 .GLOBAL ISSUES

6AM THIS MORNING:
BILL BLAIN’S TAKE ABOUT THE EUROPEAN MARKETS THIS MORNING AND THE USA MARKETS WHICH ARE ABOUT TO OPEN

( BILL BLAIN/MINTPARTNERS)

7. OIL ISSUES

With the loans given by China to Venezuela, it looks like  China will be the new operators of those oil assets.  They are orchestrating this in order than their loans are repaid.  Venezuela has another 9 billion on bond payments due this year and if they default here, then the nation will be under tremendous chaos

( Nick Cunningham/OilPrice.com

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)It seems that China is now using Singapore as a source of gold supply as well as Switzerland as London is drying up. Actually again China through its international operation exported 11 tonnes of gold to London

Gold demand according to Koos is around 2,000 tonnes,  made up of approximately 430 tonnes of Chinese mining, 1100 tonnes of net SGE withdrawals and the rest scrap.

a must read…

( Koos Jansen)

ii)India’s central bank shuts down crypto currencies

(Times of India/GATA)

ii b)And now Japan orders 2 unlicensed crypto exchanges to halt operations

( zerohedge)

iii)Very important, Aussie Allan Flynn writes a blog called, “Comex, We have a Problem”.  He highlights how easy it is to spoof the gold/silver markets something that I have highlighted to you several times a year.  Allan is planning to attend the hearing of one of traders caught spoofing and he is collecting funds to help him with his expedititon

( GATA/Allan Flynn)

iv)Alasdair explains why the dollar collapse is inevitable..as the dollar falls so does all other currencies linked to it

( Alasdair Macleod/GATA)

v)Ambrose Evans Pritchard explains why this latest trade disputes with China is very dangerous as each seek to become the dominant power

( Ambrose Evans Pritchard/GATA)

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

i)USA morning data

i. Jobs report

A huge miss/first the general report of only 103,000 jobs added but the hourly earnings rose to .3%.  The miss was a Sigma 3 miss.

( zerohedge)

ii)Of the job growth, it mainly occurred in the high end.  The minimum wage sector saw a drop

(courtesy zerohedge)
iii)From the surveys, we get more data which suggests that full time jobs declined by 311,000 but part time jobs increased by 310,000 for no real gain.  However the quality of part timers is not in close to full time jobs in measuring strength in the USA economy

( zerohedge)

iv)Initial reaction to the Chinese retaliation:the manipulators spiked the futures northbound to counter the negative effects of an immediate retaliation from the Chinese

( zerohedge)

v)This morning’s trading

Stocks tumble as China urges American citizens to rise up against an unscrupulous President Trump

( zerohedge)

v b)Afternoon trading/

Dow dumps 500 points as Powell fails to save to day
( zerohedge)
v  c) in late afternoon trading: Dow dumps 600 points

(zerohedge)

v  d) At :315 with 3/4 hr to go: S and P below its 200 day moving averag(zerohedge)

vi)Not good:  Trump warns that “we may take a hit”  and prepare for “pain” in the markets with the trade wars

( zerohedge)

viii)Nine West is now preparing for bankruptcy protection

( zerohedge)

ix)We knew that this would become inevitable:  the tapped out USA consumer has hit a brick wall as total consumer credit plunged to one of its lowest readings in 3 years. Student loans and auto loans however did pick up again and their total is record 2.836 trillion dollars.  The consumer is 70% of GDP and this will be a huge negative to first quarter GDP and then onto 2nd quarter.

( zerohedge)

x)SWAMP STORIES
a)Moron and ultra buffoon Kudlow states that the USA tariffs are not a bluff and that China’s response is highly unsatisfactory

( zerohedge)

b)oh OH! this is going to be interesting!!  It seems that Mueller has evidence that Erik Prince and brother of Education Sec. Betsy De Voes has “lied” about meeting a Russian sovereign wealth fund head at the Seychelles.  The meeting was held a few days before Trump was inaugurated.  It is perfectly legal for him to has these meetings and if legal no reason to lie!

( zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY STRONG SIZED 6393 CONTRACTS DOWN to an OI level 493,317  ACCOMPANYING THE GOOD SIZED FALL IN THE PRICE OF GOLD ($8.20 LOSS/ YESTERDAY’S TRADING).   FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE.   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 11,895 FOR  JUNE, AND ZERO FOR ALL OTHER MONTHS:  TOTAL  11,895 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 THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 5502 OI CONTRACTS IN THAT 11,895 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST 6393 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 5502 contracts OR 550,200  OZ OR 17.113 TONNES.

Result: A STRONG SIZED DECREASE IN COMEX OPEN INTEREST WITH THE  FALL IN PRICE YESTERDAY  (ENDING UP WITH A LOSS OF $8.20)THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 5502 OI CONTRACTS..

We have now entered the  active contract month of APRIL where we LOST 72 contracts LOWERING TO  1635 contracts.  We had 0 notices served yesterday, so we lost 72  contracts or an additional 7200 oz will not stand for delivery in this active delivery month of April and these lost contracts will morph into EXCHANGE FOR PHYSICAL (EFP’S) ONCE THEY HAVE BEEN NEGOTIATED, WRITTEN UP AND SEALED. (i.e. London based forwards)

May saw A LOSS of 13 contracts to stand at 1143. The really big June contract month saw a LOSS of 7252 contracts DOWN to 369,625 contracts..  The next big delivery month after June is August and here the OI LOST 433 contracts DOWN to 52,674.

We had 60 notice(s) filed upon today for  6000 oz

THERE IS NO QUESTION THAT THE COMEX DOES NOT HAVE ANY APPRECIABLE GOLD TO SATISFY UPON OUR LONGS.

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY:353,217  contracts

CONFIRMED COMEX VOL. FOR YESTERDAY: 289,042 contracts

comex gold volumes are RISING AGAIN

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

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

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

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And now for the wild silver comex results.

Total silver OI ROSE BY AN STRONG 1760  CONTRACTS FROM 241,135 UP TO 242,895 AND A NEW RECORD OI FOR SILVER,  WITH OUR 6 CENT RISE IN SILVER PRICING/ YESTERDAY).   ALSO,WE WERE ALSO INFORMED THAT WE HAD A STRONG  2261 EMERGENCY EFP’S FOR MAY 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: 2261.   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  SURPRISINGLY AND SHOCKINGLY HAD ZERO LONG COMEX SILVER LIQUIDATION.  WE ALSO HAVE A GIGANTIC 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  NON ACTIVE OF APRIL AS WELL AS THE 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 4021 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  2250 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 2261 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:4021 CONTRACTS 

AMOUNT STANDING FOR SILVER AT THE COMEX

We are now in the non active delivery month of April and here the front month LOST 1 contract LOWERING TO 336 contracts.  We had 0 notices filed upon (CME correction last Thursday night) so in essence we lost 1 contract or 5,000 additional ounces of silver will NOT stand for delivery in this non active delivery month of April.(AND THESE GUYS MORPHED INTO LONDON BASED FORWARDS)

The next big active delivery month for silver will be May and here the OI LOST 1510 contracts DOWN to 151,047. June saw a loss of 1 contract to stand at 42.  The next big delivery month for silver is July and here the OI rose by 1936 contracts up to 54,207.

We had 0 notice(s) filed for NIL OZ for the APRIL 2018 contract for silver

INITIAL standings for APRIL/GOLD

APRIL 6/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
nil oz
Deposits to the Dealer Inventory in oz NIL oz
Deposits to the Customer Inventory, in oz  nil OZ
No of oz served (contracts) today
60 notice(s)
 6000 OZ
No of oz to be served (notices)
1575 contracts
(157,500 oz)
Total monthly oz gold served (contracts) so far this month
655 notices
65,500 OZ
2.0373 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz
***
we had 0 kilobar transaction/
We had 0 inventory movement at the dealer accounts
total inventory deposit into the dealer accounts:  NIL  oz
total inventory withdrawals out of dealer accounts; nil oz
we had 0 withdrawals out of the customer account:
total withdrawal:  nil   oz
we had 0 customer deposit
total customer deposits: nil oz
we had 0 adjustment(s)

For APRIL:
Today, 0 notice(s) were issued from JPMorgan dealer account and 59 notices were issued from their client or customer account. The total of all issuance by all participants equates to 60 contract(s) of which 31 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the APRIL. contract month, we take the total number of notices filed so far for the month (655) x 100 oz or 65,500 oz, to which we add the difference between the open interest for the front month of APRIL. (1635 contracts) minus the number of notices served upon today (60 x 100 oz per contract) equals 223,000 oz, the number of ounces standing in this active month of APRIL (6.936 tonnes)

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

No of notices served (655 x 100 oz or ounces + {(1635)OI for the front month minus the number of notices served upon today (60 x 100 oz )which equals 223,000 oz standing in this  active delivery month of APRIL . THERE IS 12.003 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE LOST 72 COMEX OI CONTRACTS OR 7200 OZ OF GOLD WILL NOT STAND BUT  THESE GUYS  MORPHED INTO LONDON BASED FORWARDS.

total registered or dealer gold:  385,923.014 oz or 12.003 tonnes
total registered and eligible (customer) gold;   9,062,198.720 oz 281.87 tones
THE COMEX IS AGAIN IN STRESS AS ONLY 12.003 TONNES OF GOLD ARE LEFT TO SERVICE DELIVERIES. THERE IS HARDLY ANY GOLD AT THE COMEX TO SERVE UPON LONGS AND THUS THE REASON FOR THE EFP TRANSFER OVER TO LONDON.

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

end

And now for silver

AND NOW THE APRIL DELIVERY MONTH

APRIL INITIAL standings/SILVER

APRIL 6/ 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 633,255.380
  oz
Scotia
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
669,516.53oz
 JPMorgan
Scotia
No of oz served today (contracts)
0
CONTRACT(S
NIL OZ)
No of oz to be served (notices)
336 contracts
(1,680,000 oz)
Total monthly oz silver served (contracts) 19 contracts

(95,000 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 2 deposits into the customer account

i) Into JPMorgan: 605,295.100 oz

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

JPMorgan now has 140 million oz of  total silver inventory or 53.4% of all official comex silver. (140 million/263 million)

JPMorgan  deposited  into its warehouses (official) today.

ii) Into Scotia: 64,221.430 oz

total deposits today:  669,516.53  oz

we had 1 withdrawals from the customer account;

i) Out of Scotia: 633,255.380 oz

total withdrawals;  633,255.380   oz

we had 0 adjustment

total dealer silver:  58.8561 million

total dealer + customer silver:  263.369 million oz

The total number of notices filed today for the APRIL. contract month is represented by 0 contract(s) FOR NIL oz. To calculate the number of silver ounces that will stand for delivery in APRIL., we take the total number of notices filed for the month so far at 19 x 5,000 oz = 95,000 oz to which we add the difference between the open interest for the front month of April. (336) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the APRIL contract month: 19(notices served so far)x 5000 oz + OI for front month of April(336) -number of notices served upon today (0)x 5000 oz equals 1,775,000 oz of silver standing for the April contract month

WE  LOST 1  SILVER CONTRACTS OR 5,000 ADDITIONAL OUNCES WILL NOT STAND IN THIS NON ACTIVE DELIVERY MONTH OF APRIL AND THESE GUYS MORPHED INTO LONDON BASED FORWARDS. 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 88,023 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 85,557 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 85,557 CONTRACTS EQUATES TO  427 MILLION OZ OR 61.12% 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 -2.48% (APRIL 6/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.78% to NAV (APRIL 6/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.48%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.78%/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 -2.48%: NAV 13.70/TRADING 13.29//DISCOUNT 2.48.

END

And now the Gold inventory at the GLD/

APRIL 6/WITH GOLD UP $7.50 ,A HUGE CHANGE IN INVENTORY AT THE GLD/ A DEPOSIT OF 5.90 TONNES/INVENTORY RESTS AT 859.99 TONNES

APRIL 5/WITH GOLD DOWN $8.20 WE HAD TWO ENTRIES: 1) TINY WITHDRAWAL OF .28 TONNES TO PAY FOR FEES AND 2) A DEPOSIT OF 2.06 TONNES//INVENTORY RESTS AT 854.09 TONNES

April 4/WITH GOLD UP $2.90 WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.31 TONNES

APRIL 3./WITH GOLD DOWN $9.30 WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.31 TONNES

APRIL 2/WITH GOLD UP $19.50, WE HAD A BIG  CHANGES IN GOLD INVENTORY AT THE GLD A DEPOSIT OF 6.19 TONNES/INVENTORY RESTS AT 852.31 TONNES

MARCH 29/WITH GOLD DOWN $3.20 AND OPTIONS EXPIRY FINISHED, WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS A 846.12 TONNES

March 28/WITH GOLD DOWN $16.70, ANOTHER RAID ORCHESTRATED, AGAIN NO SURPRISES AS WE WITNESS ANOTHER 1.18 TONNES OF GOLD REMOVED/INVENTORY RESTS AT 846.12 TONNES

MARCH 27/WITH GOLD DOWN $11.70 AND A RAID INITIATED, IT WAS NO SURPRISE TO SEE THAT A MASSIVE WITHDRAWAL OF 3.24 TONNES WAS USED IN THE ABOVE RAID/INVENTORY RESTS AT 847.30 TONNES

MARCH 26./WITH GOLD UP $4.60/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.54 TONNES

MARCH 23/WITH GOLD UP $23.30/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.54 TONNES

MARCH 22.WITH GOLD UP $5.90, NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.54 TONNES/

MARCH 21/WITH GOLD UP $9.65 NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.54 TONNES

March 20/WITH GOLD DOWN $5.75, A SURPRISING HUMONGOUS DEPOSIT OF 10.32 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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

APRIL 6/2018/ Inventory rests tonight at 859.99 tonnes

*IN LAST 357 TRADING DAYS: 81.05 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 307 TRADING DAYS: A NET 75.25 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory/

APRIL 6/WITH SILVER UP 4 CENTS, WE HAD A HUGE DEPOSIT OF 1.319 MILLION OZ INTO THE SLV INVENTORY/INVENTORY RESTS AT 320.196 MILLION OZ

APRIL 5/WITH SILVER UP 6 CENTS/NO CHANGES IN INVENTORY AT THE SLV/INVENTORY RESTS AT 318.877 MILLION OZ/

April 4/WITH SILVER DOWN 11 CENTS/A SMALL CHANGE IN SILVER INVENTORY AT THE SLV/ A WITHRAWAL OF 135,000 OZ AND THIS IS PROBABLY TO PAY FOR FEES/INVENTORY RESTS AT 318.877 MILLION OZ/

APRIL 3./WITH SILVER DOWN 16 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ/

APRIL 2/WITH SILVER UP 34 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ/

MARCH 29/WITH SILVER UP 6 CENTS, THE CROOKS DECIDED THAT THEY HAD BETTER ADD SOME 943,000 PAPER OZ TO THEIR INVENTORY/INVENTORY RESTS AT 319.012 MILLION OZ

March 28/WITH SILVER DOWN 27 CENTS/AGAIN NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ

MARCH 27/WITH SILVER DOWN 14 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ/

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

MARCH 23/WITH SILVER UP 19 CENTS, A HAD A BIG WITHDRAWAL OF 1.602 MILLION OZ.INVENTORY RESTS AT 318.069 MILLION OZ/

MARCH 22/WITH SILVER DOWN ONE CENT, NO CHANGE IN SLV INVENTORY/INVENTORY RESTS AT 319.671 MILLION OZ/

March 21/WITH SILVER UP 21 CENTS/NO CHANGE IN SLV INVENTORY/INVENTORY RESTS AT 319.671 MILLION OZ/

March 20/WITH SILVER DOWN 13 CENTS/NO CHANGE IN SLV INVENTORY/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./

HAD ANOTHER HUGE ADDITION OF 1.315 MILLION OZ/INVENTORY RESTS AT 316.590 MILLION OZ/

APRIL 6/2018:  A HUGE CHANGES IN SILVER INVENTORY:  A DEPOSIT OF 1.319 MILLION OZ.

Inventory 320.196 million oz

end

6 Month MM GOFO 1.96/ and libor 6 month duration 2.47

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

G0FO+ 1.96%

libor 2.47 FOR 6 MONTHS/

GOLD LENDING RATE: .51%

XXXXXXXX

12 Month MM GOFO
+ 2.70%

LIBOR FOR 12 MONTH DURATION: 2.45

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.35

IT COSTS MORE TO LEND GOLD OUT.

end

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
234,677 68,088 52,011 162,608 351,473 449,296 471,572
Change from Prior Reporting Period
-24,355 12,410 -11,385 5,165 -32,330 -30,575 -31,305
Traders
180 68 73 47 57 261 168
 
Small Speculators  
Long Short Open Interest  
43,845 21,569 493,141  
-5,974 -5,244 -36,549  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, April 3, 2018

At 3:30 pm we receive a totally useless report, the COT which gives position levels of our major players.  If the use of a huge number of EFP’s every day, I for life of me see any value in them.  However for completeness I will provide it for you

OUR LARGE SPECULATORS

those large specs that have been long in gold pitched (transferred through EFP) 24,355 contracts

those large specs that have been short in gold added a net 12,410 contracts to their short side

OUR COMMERICALS

those commercials that have been long in gold added 5165 contracts to their long side

those commercials that have been short in gold transferred (covered) a huge 32,330 contracts from their short side. my guess is that all of these obligations transferred to London.

OUR SMALL SPECULATORS.

those small specs that have been long in gold pitched (transferred through EFP) 5,974 contracts from their long side.

those small specs that have been short in gold covered (transferred) through EFP their obligation to London or just covered probably the former.

Conclusion

there is only one word to describe the above: FRAUD

AND NOW SILVER COT

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
65,969 82,934 47,964 86,416 89,053
5,183 8,491 5,509 4,329 -386
Traders
112 62 51 46 34
Small Speculators Open Interest Total
Long Short 232,682 Long Short
32,333 12,731 200,349 219,951
-1,857 -450 13,164 15,021 13,614
non reportable positions Positions as of: 185

INTERESTING!

OUR LARGE SPECULATORS

those large specs that have been long in silver added 5183 contracts on a net basis to their long side

those large specs that have been short in silver added 8491 contracts to their short side.

OUR COMMERCIALS

those commercials that have been long in silver added a net 4329 contracts to their long side

those commercials that have been short in silver covered (transferred) a net 386 contracts from their short side.

OUR SMALL SPECULATORS.

those small specs that have been long in silver added 5063 contracts to their long side

those small specs that have been short in silver added a huge 8259 contracts to their short side??

Conclusions:

same as gold.

Major gold/silver trading /commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Jamie Dimon Warns Of Potential ‘Market Panic’

Jamie Dimon Warns Of Potential ‘Market Panic’

– JPMorgan Chase CEO Jamie Dimon sees ‘chance of market panic’
– In annual letter to shareholders Dimon warns of increased inflation and interest rates
– Concerned QE unwinding could cause chaos as ‘markets will get more volatile’
– Hard to look at the last 20 years in America “and not think that it has been getting increasingly worse.”
– Positive about US economy over next year, but ignores record levels of world and government debt
– Believes major buyers of US debt (e.g. China) could reduce their purchases of US government debt
– Investors can protect portfolios with gold and silver bullion 
– U.S. debt and dollar crisis coming which will propel gold higher (see chart)

The following has been taken from Simon Black’s SovereignMan.com.

The most powerful banker in the world, JPMorgan Chase CEO Jamie Dimon, just released his annual letter to shareholders.

Behind Warren Buffett’s annual missive, Dimon’s letter is probably the most read and deliberated executive report out there.

For one, Dimon is one of the most connected and respected men in finance.

And given his bank’s massive size (it earned $24.4 billion on $103.6 billion in revenue last year) and reach (it’s a giant in consumer/commercial banking, investment banking and wealth management), Dimon has incredible visibility and intel on what’s going on around the world.

This year Dimon used a large chunk of his 46-page letter to share his thoughts on government and public policy, saying it’s hard to look at the last 20 years in America “and not think that it has been getting increasingly worse.”

And if you’d like to hear how Dimon suggests we fix regulation, immigration, taxation, infrastructure, education and every other problem in America today, it’s all in there.

I’m not really interested in his political views. Dimon runs one of the biggest banks in the world, so I’m much more interested in his insights into the economy and financial markets.

Fortunately, Dimon didn’t waste all of his letter on politics.

He says the US economy seems healthy today and he’s bullish for the “next year or so.”

He sees lower unemployment, higher capital spending, wage growth, low housing supply and “relatively strong” consumer and corporate credit aiding growth.

Well, it’s easy to have rose-colored lenses when your profits come from lending money… because there’s more debt in the world today than ever before.

Both corporations and consumers are sitting on a record amount of debt. And as I pointed out earlier this week, the fastest growing bank asset last year was subprime loans… meaning that the quality of debt is getting worse and worse.

Then there’s the US government, whose debts just passed $21 trillion for the first time in history.

And they’re projecting adding another trillion dollars of debt each year into the foreseeable future.

Later in his letter, Dimon admits that the US is facing some serious economic headwinds today.

For one, he’s concerned the unwinding of quantitative easing (QE) could have unintended consequences.

Remember- QE is just a fancy name for the trillions of dollars that the Federal Reserve conjured out of thin air.

According to Dimon [my emphasis added]:

Since QE has never been done on this scale and we don’t completely know the myriad effects it has had on asset prices, confidence, capital expenditures and other factors, we cannot possibly know all of the effects of its reversal.

We have to deal with the possibility that at one point, the Federal Reserve and other central banks may have to take more drastic action than they currently anticipate – reacting to the markets, not guiding the markets.

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

To that point, the Dow dropped over 700 points intraday Monday. Then it dropped over 500 points on Wednesday, before ending the day slightly higher.

But this extreme volatility does suggest the bull market is nearing its end… if it hasn’t ended already.

And if we see the bottom fall out in stocks, you can be sure the Fed will change course, as Dimon suggests.

While nobody has a crystal ball when it comes to the markets, Dimon seems pretty sure we’re in for more volatility and higher interest rates. Again, given his position, he knows what he’s talking about.

One scenario that would require higher rates from the Fed is higher inflation:

If growth in America is accelerating, which it seems to be, and any remaining slack in the labor markets is disappearing – and wages start going up, as do commodity prices – then it is not an unreasonable possibility that inflation could go higher than people might expect.

As a result, the Federal Reserve will also need to raise rates faster and higher than people might expect. In this case, markets will get more volatile as all asset prices adjust to a new and maybe not-so-positive environment.

Now– here’s the important part. For the past ten years, the largest buyer of US government debt was the Federal Reserve.

But now that QE has ended, the US government just lost its biggest lender.

Dimon thinks other major buyers, including foreign central banks, the Chinese, etc. could also reduce their purchases of US government debt.

That, coupled with the US government’s ongoing trade deficits (which will be funded by issuing debt), could also lead to higher rates…

So we could be going into a situation where the Fed will have to raise rates faster and/or sell more securities, which certainly could lead to more uncertainty and market volatility. Whether this would lead to a recession or not, we don’t know.

We’ll leave you with one final point from Jamie Dimon. He acknowledges markets have a mind of their own, regardless of what the fundamentals say.

And he sees a real risk “that volatile and declining markets can lead to a market panic.

The most powerful banker in the world believes we’ll see more volatility and higher interest rates in the future. And he sees a chance of an all-out panic.

The above was taken from Simon Black’s SovereignMan.com.

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Concluding comments

In the words of Sovereign Man Simon Black, ‘Countries whose economic models are based on debt and consumption will suffer’.

When the US does suffer (as Dimon clearly believes it will) it will not be a contained event, the whole world will feel the pinch as we are so intertwined with U.S., their policies and currency.

Another crisis may well be in the pipeline, so bad it is that banks whose models run on debt are giving out warnings. Dimon’s warnings could be a strong signal for investors to allocate a part of their portfolios to gold and silver. These assets have historically held their value in times of economic contraction.

This risk underlines the importance of owning physical gold to protect against geo-political risks, stock and bond market bubbles and the continuing devaluation of the dollar and all fiat currencies.

Recommended reading

Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver”

Global Debt Crisis II Cometh

Gold A Store Of Value – Protect From $217 Trillion Global Debt Bubble

News and Commentary

Gold settles lower as trade-war tensions cool, dollar strengthens (MarketWatch.com)

Gold prices drop as U.S.-China trade tensions ease (Reuters.com)

U.S. trade deficit sticks to nearly 10-year high (MarketWatch.com)

ASIA GOLD-India demand up ahead of festival, subdued buying elsewhere (Reuters.com)

N. American gold ETF inflows up in March; Europe saw outflows for second month -WGC (Reuters.com)

Euro-Area Data Maze Leaves Economists Puzzled Over Way Out (Bloomberg.com)

Silver Finally Starts To Catch Up With Gold (SilverSeek.com)

Gold Price Seen ‘Moving North’ as World Fails to Replace Output (Bloomberg.com)

BofA’s Striking Admission: Markets Will Soon Begin To Panic About Debt Sustainability (ZeroHedge.com)

Two Mines Supply Half Of U.S. Silver Production & The Real Cost To Produce Silver (ZeroHedge.com)

Gold Prices (LBMA AM)

05 Apr: USD 1,327.05, GBP 943.67 & EUR 1,080.75 per ounce
04 Apr: USD 1,343.15, GBP 955.52 & EUR 1,092.79 per ounce
03 Apr: USD 1,336.60, GBP 949.65 & EUR 1,085.99 per ounce
29 Mar: USD 1,323.90, GBP 941.69 & EUR 1,075.80 per ounce
28 Mar: USD 1,341.05, GBP 946.24 & EUR 1,082.23 per ounce
27 Mar: USD 1,350.65, GBP 954.64 & EUR 1,087.41 per ounce
26 Mar: USD 1,348.40, GBP 949.27 & EUR 1,086.95 per ounce

Silver Prices (LBMA)

05 Apr: USD 16.31, GBP 11.59 & EUR 13.28 per ounce
04 Apr: USD 16.46, GBP 11.72 & EUR 13.40 per ounce
03 Apr: USD 16.52, GBP 11.78 & EUR 13.44 per ounce
29 Mar: USD 16.28, GBP 11.58 & EUR 13.21 per ounce
28 Mar: USD 16.46, GBP 11.63 & EUR 13.28 per ounce
27 Mar: USD 16.64, GBP 11.79 & EUR 13.41 per ounce
26 Mar: USD 16.61, GBP 11.67 & EUR 13.39 per ounce


Recent Market Updates

– Silver Bullion: Should We Be Worried About Silver?
– Martin Luther King Jr. Anniversary: Reminds Us Of Costs Of War To Society and Financial System
– Gold Outperforms Stocks In Q1, 2018
– Brexit, Stagflation Pressures UK High Street
– Gold Is Money While Currencies Today Are “IOU Nothings”
– “Stars Are Slowly Aligning For Gold” – Frisby
– Uncle Sam Issuing $300 Billion In New Debt This Week Alone
– Eurozone Faces Many Threats Including Trade Wars and “Eurozone Time-Bomb” In Italy
– Silver Futures Report and JP Morgan Record Silver Bullion Holding Is Extremely Bullish
– London House Prices Falling Sharply – UK’s Much Needed Wake-Up Call
– Global Trade War Fears See Precious Metals Gain And Stocks Fall
– Gold +1.8%, Silver +2.5% As Fed Increases Rates And Trade War Looms
– Credit Concerns In U.S. Growing As LIBOR OIS Surges to 2009 High

janskoyles

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

India’s central bank shuts down crypto currencies

(Times of India/GATA)

India’s central bank shuts down crypto-currencies

 Section: 

Your Bank Will Not Allow You to Buy Bitcoins Anymore

By Preeli Motiani
The Times of India, Mumbai
Thursday, April 5, 2018

You will not be able to buy cryptocurrency via banks or e-wallets etc. in India anymore as the Reserve Bank of India has banned them with immediate effect from “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies.”

At it its first bi-monthly monetary policy meeting, the RBI has announced that any entity regulated by the central bank such as banks, wallets, etc., shall not deal with or provide services to any individual or business entities for buying or selling of cryptocurrency such as bitcoins. If banks, e-wallets, and any other entities regulated by the RBI are not allowed to facilitate sale or purchase of cryptocurrencies, obviously individuals will not be able to transfer money from their bank accounts to their crypto-trading wallets. …

… For the remainder of the report:

https://economictimes.indiatimes.com/wealth/personal-finance-news/your-b…

END

And now Japan orders 2 unlicensed crypto exchanges to halt operations

(courtesy zerohedge)

Japan Orders 2 Unlicensed Crypto Exchanges To Temporarily Halt Operations

In a sign that Japan’s crackdown on crypto firms might be coming to an end, the Financial Services Agency announced penalties against three unlicensed exchanges that will force two of them to suspend operations.

According to Bloomberg, the FSA issued a “business improvement order” against FSHO, Eternal Link and LastRoots. FSHO and Eternal Link were also ordered to suspend operations, with FSHO ordered to shut down between April 8 and June 7, and Eternal Link from April 6 to June 7.

Coin

The exchanges were ordered to make improvements in bookkeeping, systems risk management and anti-money laundering and terrorism controls. Inspections into the country’s 16 unlicensed crypto exchanges are ongoing.

Japan launched its probe after CoinCheck, one of the country’s largest unlicensed crypto exchanges, was attacked by hackers, who stole more than $500 million worth of NEM tokens in what has been described as the largest crypto heist of all time. The FSA had earlier ordered CoinCheck to firm up its consumer protection and money laundering controls.

On Thursday, Japanese online brokerage firm Monex Group announced it would buy Coincheck Inc. for 3.6 billion yen ($33.6 million) after assuring the FSA that it would implement the improvements mandated by the agency as it plans for an eventual IPO of CoinCheck – what could be the first IPO of a crypto exchange, per Reuters.

Cryptocurrency prices have continued to slide in April after notching their worst quarterly performance ever during Q1.

 end

It seems that China is now using Singapore as a source of gold supply as well as Switzerland as London is drying up. Actually again China through its international operation exported 11 tonnes of gold to London

Gold demand according to Koos is around 2,000 tonnes,  made up of approximately 430 tonnes of Chinese mining, 1100 tonnes of net SGE withdrawals and the rest scrap.

a must read…

(courtesy Koos Jansen)

Koos Jansen: China’s secret gold supplier is Singapore

 Section: 

9:40a HKT Friday, April 6, 2018

Dear Friend of GATA and Gold:

Singapore, Bullion Star gold researcher Koos Jansen writes today, has become a major source of gold supply for China since 2013 and those exports are increasing. Jansen writes: “Singapore net-exported 102 tonnes to China in 2017, a record year and up 177 percent from 2016.” Jansen’s analysis is headlined “China’s Secret Gold Supplier Is Singapore” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/koos-jansen/chinas-secret-gold-supplie…

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

END

Very important, Aussie Allan Flynn writes a blog called, “Comex, We have a Problem”.  He highlights how easy it is to spoof the gold/silver markets something that I have highlighted to you several times a year.  Allan is planning to attend the hearing of one of traders caught spoofing and he is collecting funds to help him with his expedititon

(courtesy GATA/Allan Flynn)

Allan Flynn: Gold and silver futures were easy targets for spoofers

 Section: 

11:55a HKT Friday, April 6, 2018

Dear Friend of GATA and Gold:

Allan Flynn, who runs the “Comex, We Have a Problem” blog, this week posted a fascinating review of the traders who are the major targets of the recent investigation by the U.S. Justice Department and Commodity Futures Trading Commission of “spoofing” in the monetary metals futures markets.

Two details that may be of special interest:

1) The traders seemed to find “spoofing” exceedingly easy. So one may wonder how much easier market manipulation may be for governments with access to infinite money and more advanced technology and programming — especially since U.S. law fully authorizes the U.S. government to rig surreptitiously any market in the world.

2) The government’s first investigation of manipulation of the monetary metals markets failed to identify the evidence developed by the class-action anti-trust lawsuits brought against bullion banks in federal court in New York. The government’s second investigation has caused a long delay in those lawsuits.

Flynn’s report is headlined “U.S. Gold and Silver Futures Markets: ‘Easy’ Targets” and it’s posted at “Comex, We Have a Problem” here:

http://comexwehaveaproblem.blogspot.hk/2018/04/us-gold-silver-futures-ma…

Flynn, an Australian, is hoping to attend and report about the upcoming trial of one of the traders charged, which will be held in Connecticut soon, and is seeking to raise money for his expedition at GoFundMe here:

https://www.gofundme.com/Gold-Spoofing-Trial

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

END

Ambrose Evans Pritchard explains why this latest trade disputes with China is very dangerous as each seek to become the dominant power

(courtesy Ambrose Evans Pritchard/UKTelegraph/GATA)

Ambrose Evans-Pritchard: Trump’s power struggle with China isn’t about trade

 Section: 

By Ambrose Evans-Pritchard
The Telegraph, London
via Gulf News, Dubai
Friday, April 6, 2018

U.S. Dresident Donald Trump’s declaration of tariff warfare against China has little to do with trade. It is about raw power, a struggle over which of the two sparring hegemons will dominate technology and run the world in the 21st century.

The pretense of cordial coexistence has all but ended in the Hobbesian era of Trumpism. The latest U.S. national security strategy report for the first time names China as a strategic rival that seeks to “challenge American power, influence, and interests, attempting to erode American security and prosperity.” It is the poisonous-diplomatic context that makes this week’s trade skirmish so dangerous.

A Wall Street crash is perhaps the only deterrent that Trump really fears as the mid-term elections approach and Democrats threaten to gain control of impeachment powers on Capitol Hill. China could — if it chose — trigger this with large sales of its $1.2 trillion holding of U.S. Treasuries. Yet it is a perilous game for China as well. …

… For the remainder of the commentary:

http://gulfnews.com/opinion/thinkers/trump-s-power-struggle-with-china-i…

END

Alasdair explains why the dollar collapse is inevitable..as the dollar falls so does all other currencies linked to it

(courtesy Alasdair Macleod/GATA)

Alasdair Macleod: Why a dollar collapse is inevitable

 Section: 

10:30a HKT Friday, April 5, 2018

Dear Friend of GATA and Gold:

The export of so many U.S. dollars around the world makes another collapse of the currency inevitable, GoldMoney research director Alasdair Macleod argues in his new commentary.

Macleod concludes: “When the overvaluation of the dollar is corrected, the downside of a dollar collapse is far greater than it was in the early 1930s or the early 1970s. All other fiat currencies take their value from the dollar, not gold. So the destabilizing forces on the dollar, the other unexpected side of Triffin’s dilemma, could take down the whole fiat complex as well.”

Macleod’s commentary is headlined “Why a Dollar Collapse Is Inevitable” and it’s posted at GoldMoney here:

https://www.goldmoney.com/research/goldmoney-insights/why-a-dollar-colla…

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

ALASDAIR MACLEOD……

 _

Why A Dollar Collapse Is Inevitable

“Naturally, the smooth termination of the gold-exchange standard, the restoration of the gold standard, and supplemental and interim measures that might be called for, in particular with a view to organizing international credit on this new basis, will have to be deliberately agreed upon between countries, in particular those on which there devolves special responsibility by virtue of their economic and financial capabilities.” 

General Charles de Gaulle, February 1965

We have been here before – twice. The first time was in the late 1920s, which led to the dollar’s devaluation in 1934. And the second was 1966-68, which led to the collapse of the Bretton Woods System. Even though gold is now officially excluded from the monetary system, it does not save the dollar from a third collapse and will still be its yardstick.

This article explains why another collapse is due for the dollar. It describes the errors that led to the two previous episodes, and the lessons from them relevant to understanding the position today. And just because gold is no longer officially money, it will not stop the collapse of the dollar, measured in gold, again.

General de Gaulle made himself very unpopular with the international monetary establishment by holding the press conference from which the opening quote was taken. Yet, his prophecy, that the gold exchange standard of Bretton Woods would end in tears unless its shortcomings were addressed by a return to a gold standard, turned out to be correct shortly after. What the establishment did not like was the bald implication that it was wrong, and that the correct thing to do was to reinstate the gold standard. Plus ça change, as he might say if he was still with us.

Those of us who argue the case for a new gold standard, and not some sort of half-way house such as a gold exchange standard to address the obvious failings of the current monetary system, are in a similar position today. The first task is that which faced General de Gaulle and Jacques Rueff, his economic advisor, which is to explain the difference between the two.[i] It is now forty-seven years since all forms of monetary gold were banished by the monetary authorities, and today few people in finance understand its virtues.

Furthermore, in the main, historians educated as Keynesians and monetarists do not understand the economic history of money, let alone the difference between a gold standard and a gold-exchange standard. These similar sounding monetary systems must be defined and the differences between them noted, for anyone to have the slimmest chance of understanding this vital subject, and its relevance to the situation today.

Defining the role of gold

To modern financial commentators, there is little or no significant difference between a gold standard and a gold exchange standard. Keynes’s famous quip, that the gold standard was a barbarous relic, was made in his Tract on Monetary Reform, published in 1923, before the gold exchange standard really got going, yet it is quoted as often as not indiscriminately in the context of the latter.

Yet, they are as different as chalk and cheese. The gold exchange standard evolved in the 1920s as America and Britain went to the aid of European countries, struggling in the wake of the Great War. It allowed the expansion of national currencies under the guise of them being as good as gold. It was not. In modern terms, it was as different as paper gold futures are to the possession of physical gold today.

A gold standard is commodity money, where gold is money, and monetary units are defined as a certain fixed fineness and weight of gold. The monetary authority is obliged by law to exchange without restriction gold against monetary units and vice-versa, and there are no restrictions on the ownership and movement of gold.

Under a gold exchange standard, the only holder of monetary gold is the issuer of the domestic monetary unit as a substitute for gold. The monetary authority undertakes to maintain the relationship between the substitute and gold at a fixed rate. Only money substitutes (bank notes and token coins – gold being the money) circulate in the domestic economy. The monetary authority exchanges all imports of monetary gold and foreign currency into money substitutes for domestic circulation at the fixed gold exchange rate. The monetary authority holds any foreign exchange which is also convertible into gold on a gold exchange standard at a fixed parity, and treats it to all extents and purposes as if it is gold.

The essential difference between a gold standard and a gold exchange standard is that with the latter, the monetary authority has added flexibility to expand the quantity of money substitutes in circulation without having to buy gold. A gold standard may start, for example, with 50% gold and 50% government bonds backing for money units, but all further issues of monetary units will require the monetary authority to purchase gold to fully cover them. This was the monetary regime in Britain and many other countries before the First World War.

As stated above, gold exchange standards evolved after the First World War, in the early 1920s.[ii] It was the taking in of foreign currencies, also on gold exchange standards themselves, and booking them as if they were the equivalent of gold, that allowed central banks to expand the quantity of monetary units domestically. To understand how this operated in practice requires us to work through an example between two countries on gold exchange standards. We will take the entirely hypothetical example of two countries, America and Italy, both of which have monetary gold in their reserves and operate on a gold exchange standard.

America lends Italy dollars by crediting its central bank’s account at the Fed with the dollars loaned. But while ownership has changed to Italy, dollars never leave America. And dollars, when drawn down by the Banca d’Italia are recycled into America’s banking system.

The economic sacrifice to America of lending money to Italy is therefore zero. America has simply created a loan out of its own currency, and in the process increased the quantity of dollars in circulation. And because in practice Italy does not encash dollars for gold, America expects to preserve its gold reserves.

Meanwhile, The Banca d’Italia has expanded its balance sheet by the inclusion of America’s dollar loan to it as a liability, and the dollars themselves as an asset regarded as the equivalent of gold. Because dollars are not permitted to circulate in Italy’s domestic economy, they can be used by Banca d’Italia, either to settle other foreign obligations, or as a gold substitute to back the issue of further lira. Meanwhile, the Banca d’Italia’s dollars are reinvested in US Treasuries, which give a yield. Banca d’Italia has little incentive to exchange its dollars for physical gold, because gold yields nothing and is costs to store.

If Banca d’Italia uses dollars to discharge a foreign obligation with another country, that third party will also end up investing the dollars gained in US Treasuries, assuming it also prefers yielding assets to physical gold. Alternatively, if the dollars are used by the Banca d’Italia to back an increase in the quantity of lira or to subscribe for government debt, the effect in the domestic Italian economy is an inflation of prices.

Therefore, the effect of a gold exchange standard is the opposite of a gold standard. A gold standard puts the requirements for the quantity of money in circulation entirely in the hands of the market, to which the central bank mechanically responds. A gold exchange standard allows a lending central bank to inflate its money supply through inward investment, and a borrowing central bank to inflate its money supply on the presumption the monetary substitutes borrowed to back it are monetary units of gold.

The gold exchange standard in the 1920s

After the First World War, both sterling and dollars were made available under the Dawes Plan of 1924, which provided non-domestic capital for Germany after her hyperinflation. France suffered a currency crisis in July 1926, which was successfully dealt with by the Poincaré government through raising taxes. The Bank of France was then enabled to borrow dollars and sterling and to issue francs and subscribe for government debt.

To summarise, these loans bolstered the balance sheets of the Reichsbank and the Bank of France, which invested the sterling and dollars borrowed in gilts and Treasuries respectively. If instead France and Germany had taken gold under the gold exchange provisions, they would have had an asset with no yield, though France did opt increasingly for some gold towards the end of the decade and beyond – by December 1932 she had accumulated 3,257 tonnes. So, by lending their monetary units, the creditor nations achieved finance for their own governments, as well as providing capital for foreign central banks. It was seen to be a win-win for all the central banks involved.

The accumulation of dollars in foreign hands from 1922 onwards accompanied and fuelled bank credit expansion in the US. This gave the roaring twenties an inflationary impetus, dramatically reflected in its stock market bubble. However, the increasing quantity of dollars in foreign ownership became an accident waiting to happen. There had been a mild thirteen-month recession from October 1926 to November 1927, after which the stock market boomed. The Fed was compelled to reverse earlier interest rate cuts and increased the discount rate from 3 ½% to 5% by July 1928.

French investors began to repatriate capital en masse, and the Bank of France’s gold reserves rocketed from 711 tonnes in 1926 to 2,099 tonnes by 1930.[iii]The gold exchange standard had spectacularly failed, and redemption of dollars for gold, being deflationary, exacerbated the Wall Street Crash. It certainly rhymed with Robert Triffin’s dilemma: the export of dollars into foreign ownership was monetary magic, until it reversed at the first sign of trouble.

The gold exchange standard of Bretton Woods

In 1944, the monetary panjandrums of the day, led by Harry Dexter-White for the US and Lord Keynes for the UK, designed the post-war gold exchange standard of Bretton Woods. No doubt, Dexter-White fully understood the advantage to the US of forcing all countries to accept dollars with a yield, or gold with none. When American payments abroad exceeded receipts, the difference was generally reflected in dollars issued to foreign central banks, kept on deposit in New York, or invested in US Treasuries.

Throughout the ‘fifties, America recorded a surplus on goods and services, which declined as European manufacturing recovered. But other factors, such as investment abroad and the Korean war resulted in an overall balance of payments deficit totalling $21.41bn, the equivalent of 19,024 tonnes of gold at $35 per ounce. However, US gold reserves declined only 4,457 tonnes between 1950 and 1960, which tells us that the balance was indeed invested in US bank deposits and US Government notes and bonds.[iv]

The respective figures for the 1960s were total payment deficits of $32bn, the equivalent of 28,437 tonnes of gold, and an actual decline in gold reserves of 5,283 tonnes.[v]

The accelerating increase of foreign ownership of dollars over these two decades meant the world, ex-America, was awash with dollars by the mid-1960s. By the end of that decade, America’s gold reserves had declined from 20,279.3 tonnes in 1950, two-thirds of the world’s monetary gold, to 10,538.7 tonnes, 29% of the world’s monetary gold in 1970.

The effect was to remove trade settlement disciplines on net importing nations, and to cause inflation in net exporting nations, the opposite of the disciplines of a pre-WW1 gold standard on global trade. It was this effect that was central to the second Triffin dilemma, whereby dollars became wildly over-valued in gold terms through their excessive issuance.

In the mid-sixties, Washington became increasingly alarmed that foreigners weren’t playing by the assumed rule that they should take dollars and not redeem them for gold. By then, France and Germany between them had increased their gold holdings from 487.1 tonnes in 1948 to 7,089 tonnes at the time of de Gaulle’s press conference. General de Gaulle’s press conference, from which this article’s opening quote is taken, had touched some very raw nerves.

It was clear that the dollar, with the overhang of foreign ownership, had become horribly overvalued, and so should have been devalued, perhaps to over $50 or $60 per ounce, for a gold peg to stick. A devaluation of this magnitude might have been sufficient at that time to stem the outflow of gold.

Both Washington and American public opinion were set strongly against any devaluation. Instead, the London gold pool, designed to ensure the major central banks supported the Bretton Woods System, collapsed in 1968, when France withdrew from it. A dollar devaluation to $42.2222 shortly after was simply not enough, and in 1971 President Nixon suspended the Bretton Woods System, and the new regime of floating exchange rates that is still with us to this day began.

The situation today

Following the Nixon shock, official monetary policy towards gold was to ignore it, and to persuade other central banks and financial markets it was irrelevant to the modern monetary system. To this day, the Fed still books the gold note from the Treasury at $42.2222 per ounce, even though the price has risen to over $1300.

We can simplistically value the dollar in terms of gold, which is certainly a valid, perhaps the most valid approach. But to merely conclude that the dollar has collapsed since 1971, while true, side-steps an analysis that points to the risk that even today’s value may still be too high. Furthermore, with the dollar acting as the world’s reserve currency, all other fiat currencies, which are priced with reference to it rather than gold, are to a greater or lesser extent in the same boat.

Taking a cue from our analysis of the workings of cross-border monetary flows, which allows America to have its privilege of foreigners financing its deficits, we can estimate the approximate extent of the accumulated imbalances that could lead to the dollar’s collapse.

We know that the US balance of payments deteriorated from 1992 onwards, though those figures did not include military spending abroad, which has been a significant and unrecorded addition to dollars both in cash circulation outside America, and also to estimates of the balance of payments.[vi] Official balance of payments figures are therefore understated and have been for at least a quarter of a century.

More recently, from September 2008 the Fed began expanding its balance sheet by policies designed to increase commercial bank reserves, as a response to the financial crisis. That August, they were $10.5bn, increased to $67.5bn the following month, and peaked at $2,786.9bn in August 2014, since when there has been a modest decline. From our analysis of the run-ups to the two previous dollar crises, we know we should try to estimate how much of the increase was effectively funded from abroad. Treasury TIC Data gives us a fairly good steer to what extent this has happened. We find that between those dates, (August 2008 – August 4014) foreign ownership of dollars increased by $6,237.7bn, over twice as much as the increase in the Fed’s record of commercial bank reserves.[vii]

This is Triffin at its most fast and furious. Since then, foreign ownership of dollars has increased a further $2,142.4bn to a record $18,694.1, even though bank reserves declined by $572bn.[viii] In other words, the accumulation of dollars in foreign hands now stands at over 95% of US GDP.

Another way of looking at it is to assess the market values of US securities held by foreigners and relate that to GDP, though this information is less timely,. This is shown in the following chart.

Forign invest gdp

The build-up of foreign investment in America, in large measure the counterpart of dollar loans to foreigners, has been remarkable. At the time of the dot-com bubble, it had jumped to 35% of GDP, from less than 20% in the nineties and considerably less before. At over 90% of GDP in recent years, there can be no doubt that the next financial event, whether it be derived from a rise in interest rates or a general weakness in the dollar, can be expected to trigger a substantial flight out of the dollar.

The pricing of financial assets, and today’s extraordinarily low interest rates indicate that a flight from the dollar is the last thing expected in financial markets. If they were still alive, de Gaulle and his economic advisor, Jacques Rueff, would be instructing the ECB, as successor to the Bank of France, to dump all dollars for gold immediately. And probably to dump all other foreign fiat currencies for gold as well. However, today, it is likely that other actors will blow the whistle on the dollar, such as the Chinese, and the Russians.

For it is clear that when the over-valuation of the dollar is corrected, the downside of a dollar collapse is far greater than it was in the early-thirties or the early-seventies. All other fiat currencies take their value from the dollar, not gold. So, the destabilising forces on the dollar, the other unexpected side of Triffin’s dilemma, could take down the whole fiat complex as well.

[i] This article draws upon Rueff’s account of the issues that led to the dollar crisis between 1968-71, in his book The Monetary Sin of the West, translated by Roger Glémet (Macmillan, NY)

[ii] A gold exchange standard existed in a number of European countries between 1922 and 1930, as the basis of loans to them in US dollars, when the dollar was convertible into gold. The system recommenced in 1945 and formed the basis of the Bretton Woods Agreement.

[iii] See The International Gold Standard and US Monetary Policy from World War I to the New Deal, by Leland Crabbe, of the Division of Research and Statistics at the Fed, 1962.

[iv] See St Louis Fed’s Review, Vol 43 No 3 March 1961 Table 2 Column (3). Gold reserve figures supplied by the World Gold Council.

[v] See US Balance of Payments Problems and Policies in 1971, by Christopher Bach, Table IV (Published by St Louis Fed.)

[vi] See sub-heading “Imports by military agencies”, page A-4 at https://www.census.gov/foreign-trade/Press-Release/current_press_release/explain.pdf

[vii] Derived from TIC data: https://www.treasury.go/resource-center/data-chart-center/tic/Pages/ticpress.aspx

[viii] Ibid. Reserves held at the Fed correct at January 2018.

END
____________________________________________________________________________________

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

 

i) Chinese yuan vs USA dollar/CLOSED UP 6.3033  /shanghai bourse CLOSED   / HANG SANG CLOSED
2. Nikkei closed DOWN 77.90 POINTS OR 0.36%/  /USA: YEN RISES TO 107.34/  

3. Europe stocks OPENED DEEPLY IN THE RED     /USA dollar index RISES TO 90.25/Euro FALLS TO 1.2263

3b Japan 10 year bond yield: RISES TO . +.046/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.08/ 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:: 63.09  and Brent: 67.83

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 DOWN for WTI and DOWN FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.516%/Italian 10 yr bond yield UP to 1.800% /SPAIN 10 YR BOND YIELD UP TO 1.247%

3j Greek 10 year bond yield RISES TO : 4.012?????????????????

3k Gold at $1322.85 silver at:16.29     7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 19/100 in roubles/dollar) 57.89

3m oil into the 63 dollar handle for WTI and 68 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 107.34 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 0.9638 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1796 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 +0.521%

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 2.821% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.0633% /

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

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

Futures Tumble Amid Tariff, Payrolls, Powell Chaos

When summarizing yesterday’s market action, which saw the market surge for the third consecutive day and culminated with Europe’s best day since June 2016, we said that it all boiled down to one question: Trade war or no trade war?”

Until 6pm, the answer was the latter, however with one announcement Trump flipped everything on its head, and just as the president called for an additional $100 billion in Chinese tariffs, futures tumbled, with Dow futs plunging over 400 points as escalating trade war with China was back front and center.

China promptly responded, with the Chinese state-run tabloid Global Times said the new tariff threat reflects  arrogance on issues to China and that Trump’s administration is totally wrong about the nature of current US-China trade relations, while China’ official press agency Xinhua stated the US proposal of USD 100bln tariffs violates international trade regulations and that China keeps the door open regarding trade discussions with the US.

Meanwhile there is today’s main event: March payrolls, where consensus is pegged for a 185k print (following that bumper 313k print in February). Still, as DB notes, March has been a tricky month for employment forecasters as the median consensus estimate has overestimated the initial March nonfarm payrolls print in four of the last five years by an average of 62k. Interestingly, the consensus has underestimated nonfarm payrolls by an average of 66k over the past two months.

Fed Chair Powell will also be speaking at 1:30pm ET. Consensus expects Powell to reiterate the upbeat outlook he presented at the March 21 FOMC meeting. However, since Powell will not be speaking on behalf of the Committee, we will be looking to get a sense of his own take on the latest data. There is Q&A so that will be closely watched.

And so, with both payrolls and Powell looming big on today’s event calendar, the market is once again obsessed with the ongoing trade war between the US and China, and stoically waiting for China’s retaliation, which is 100% assured and which will be a tit-for-tat increase in the amount of US imports subject to tariffs rising to $150 billion or… all of them, as the US exports just under $150 in goods and services to China, suggesting China will have to do “something else” to fully match the US response, with choices including devaluing the Yuan, selling Treasurys, blocking US oil exports, and others.

Or perhaps this is just more negotiating bluster, and neither the US nor China will do anything. To be sure, this is the theory preferred by the market, and is also why once again global stocks and US futures have recouped much of the overnight losses.

The ECB’s Coeure also felt the need to chime in and claimed that the ECB’s studies show US tariffs would be significantly negative for the economy globally. He also said drop in equity prices and uncertainty over tariffs retaliation already show adverse impact on economy, which of course is great news for central banks as it means they don’t have to hike rates.

Still, despite the rebound from the lows, both Asian and European shares fell alongside the U.S. futures dump Trump’s latest threat to target Chinese imports. Predictably, Treasuries rose and commodities, especially China-heavy industrials, fell. Also helping risk sentiment is today’s payrolls report (which Trump hinted could be “fantastic”), and Powell’s speech at 1:30pm in which the question – of course – will be “three or four.”

Digging through the carnage – at least until some 17 year old hedge fund manager decides that if $50BN in tariffs was good for 1000 Dow Points higher, then $150BN should be enough for 3,000 – carmakers and miners were the biggest losers in Europe’s Stoxx 600 Index. Almost all European sectors are in the red with the exception of utilities. Material names are underperforming amid the weakness in base metals. In terms of individual stocks, DAX heavyweight Daimler (-5.7%) shares are seen lower following company going ex-dividend. On the flip side, UK-based
Shire (+1.6%) is again at the top of the FTSE 100 after continued speculation in UK press that the Co. could be subject to a takeover attempt by Japanese Takeda Pharmaceuticals.

While China was closed for the day, the offshore yuan slid, with the USDCNH rising 250pips amid rising concerns China may retaliate by devaluing the currency…

zerohedge@zerohedge

CNY puts looking real cheap right about now

… after Beijing said it would counter U.S. protectionism “to the end, and at any cost.”

And yet despite the new trade war – and tape – bomb, Asian equities traded indecisive. Pressure in ASX 200 (unch) was contained and later reversed amid commodity sector strength in Australia and JPY weakness. KOSPI (-0.3%) was lower with index heavyweight Samsung Electronics failing to benefit from better than expected prelim. Q1 operating profit, as it also missed on revenue while some cited participants selling on the news and booking profits after the prior day’s rally.

Meanwhile for those who are about to lose track of everything that is going on, here is a handy recap courtesy of Bloomberg:

  • The war of words on trade is escalating, with China saying it would counter U.S. protectionism “to the end, and at any cost.” The statement from Beijing came after Trump ordered his administration to consider tariffs on an additional $100 billion in Chinese goods on Thursday, sending U.S. stock futures tumbling. Meanwhile, China has signaled what could be next on its own tariff target list after American farmers: the U.S. shale industry
  • With investors around the world are getting tired of the tit-for-tat in trade, U.S. Fed Chair Jerome Powell is facing off with U.S. payrolls as the days’ biggest potential headline- maker. Payrolls-wise, an increase of 185,000 new jobs is forecast, with hourly earnings also expected to show a slight pick-up. Five hours later, Powell to due give speech on the economic outlook during a visit to Chicago
  • European Central Bank Executive Board member Benoit Coeure said the trade spat risks increasing the burden on central banks — as well as hurting the poor — by dimming global growth prospects
  • U.K. productivity, which has been puzzling economists since the crisis, may be showing signs of picking up. The Office for National Statistics said Friday that the gauge, as measured by output per hour, rose 0.7 percent in the fourth quarter, a second period of growth

In FX, the Japanese yen handed back earlier gains, while the dollar headed for a second weekly advance. Commodities were mostly subdued overnight in which WTI crude futures briefly slipped to below USD 63.00/bbl. Esewhere, gold prices whipsawed after early safe-haven flows propped up the precious metal, which was then later pared as the greenback recovered and Asia risk sentiment somewhat improved, while copper was lacklustre on the trade fears and with its largest consumer closed for holiday

Bulletin Headline Summary from Ransquawk

  • European bourses broadly in the red as risk-aversion due to trade wars resurfaces
  • DXY underpinned, but CAD defensive ahead of US and Canadian jobs data
  • Looking ahead, highlights include the US NFP and Canadian labour report, BoE’s Carney, Fed’s Powell and Williams

Market Snapshot

  • S&P 500 futures down 0.8% to 2,641.75
  • MSCI Asia Pac down 0.08% to 171.60
  • MSCI Asia Pac ex Japan up 0.09% to 561.33
  • Nikkei down 0.4% to 21,567.52
  • Topix down 0.3% to 1,719.30
  • Hang Seng Index up 1.1% to 29,844.94
  • Shanghai Composite down 0.2% to 3,131.11
  • Sensex down 0.07% to 33,574.89
  • Australia S&P/ASX 200 unchanged at 5,788.74
  • Kospi down 0.3% to 2,429.58
  • STOXX Europe 600 down 0.5% to 374.20
  • German 10Y yield fell 1.4 bps to 0.51%
  • Euro down 0.08% to $1.2230
  • Brent Futures down 0.4% to $68.06/bbl
  • Italian 10Y yield rose 5.1 bps to 1.539%
  • Spanish 10Y yield rose 1.5 bps to 1.249%
  • Brent Futures down 0.4% to $68.06/bbl
  • Gold spot down 0.1% to $1,324.65
  • U.S. Dollar Index up 0.05% to 90.50

Top Overnight News

  • China vowed to defend its national interests against U.S. trade actions and protectionism, the official Xinhua News Agency said following Trump’s order to consider imposing additional tariffs on Chinese imports; The Asian nation called on the European Union to aid it in rejecting protectionism from the U.S. and upholding the international trade order
  • China’s commerce ministry will hold a briefing at 1pm London time on Friday about trade relations
  • German industrial production unexpectedly fell in February as construction slumped and output of investment goods dropped; factory output slid 1.6% m/m, the biggest monthly decline since August 2015, compared with estimates in a Bloomberg survey for a 0.2% gain
  • Falls in equity prices in response to the U.S. announcement to impose a tariff on steel and aluminum, and prevailing uncertainty on the scope of any retaliatory measures, have already contributed to tighter financial conditions, ECB Executive Board member Benoit Coeure said in a speech. Adds in a later CNBC interview that the central bank can look through the market impact of the trade spat

Asian equity markets traded somewhat indecisive as the region pondered over US trade policies in which recent efforts by US officials to ease trade concerns which helped Wall St notch a 3rd consecutive gain, was thwarted after President Trump ordered to consider an additional USD 100bln of tariffs against China. This latest announcement was in response to China’s retaliation and dragged US stock index futures, while pressure in ASX 200 (unch) was contained and later reversed amid commodity sector strength in Australia and JPY weakness. KOSPI (-0.3%) was lower with index heavyweight Samsung Electronics failing to benefit from better than expected prelim. Q1 operating profit, as it also missed on revenue while some cited participants selling on the news and booking profits after the prior day’s rally. Elsewhere, mainland China remained shut and Hang Seng (+1.0%) bucked the trend to trade firmly higher as it played catch up to the gains during the holiday closure. Finally, 10yr JGBs were uneventful amid an indecisive risk tone in Japan and following a tepid Rinban announcement, with the BoJ in the market for just over JPY 600bln in up to 5yr JGBs.

Top Asian News

  • ‘It’s Becoming Childish’: Investors React as Trump Ups the Ante
  • Malaysia’s Opposition Candidate Envisions 6% GDP Growth, No GST
  • A $60 Billion Manager Mulls Selling All U.S. Assets on Trade War
  • China Vows to Fight Trump Tariffs ‘to the End’ as Tension Rises
  • Philippine Foreign Reserves Fall to Lowest Since December 2014

European bourses opened on the backfoot (Eurostoxx 50 -0.8%) as cautious sentiment resurfaces amid the escalating trade tensions. This follows US President Trump’s instruction to US Trade Representatives to consider USD 100bln of additional tariffs on Chinese products. Almost all the sectors are in the red with the exception of utilities, supported by Suez (+1.8%), benefiting from an upgrade at Raymond James. Material names are underperforming amid the weakness in base metals. In terms of individual stocks, DAX heavyweight Daimler (-5.7%) shares are seen lower following company going ex-dividend. On the flip side, UK-based Shire (+1.6%) is again at the top of the FTSE 100 after continued speculation in UK press that the Co. could be subject to a takeover attempt by Japanese Takeda Pharmaceuticals. Finally, Dufry (+3.0%) surged higher after the Co. proposed a dividend and announced the launch of a share buyback programme.

Top European News

  • German Feb. Ind. Production Falls 1.6% m/m; Est. +0.2% M/m
  • CD Projekt, KGHM ‘Negative Surprise,’ GetBack: Eastern EU Stocks
  • Swedish Krona Decisive for Inflation, Riksbank Rates: Nordea
  • Wirecard Says Talk of Interest in Ingenico ‘Pure Speculation’
  • Coeure Says U.S. Trade Tariffs Have Tightened Market Conditions

Currencies:

  • DXY: Although the Greenback is somewhat mixed vs G10 peers overall, net gains vs high beta/riskier counterparts compared to losses vs safer-havens are sufficient to keep the index on an upward trajectory ahead the latest monthly US jobs data. Indeed, the DXY has probed above 90.500 again within a 90.600-300 range and remains on course to close the 1st week of April and Q2 on a firmer footing.
  • NZD: The Kiwi has gone from recent hero to bottom of the G10 pile as repeated failures to rally through 0.7300 vs the Usd has resulted in a loss of momentum, while the Nzd has also unwound relative gains vs the AUD, as the cross rebounds towards 1.0600. Note, however, Aud/Usd continues to reject 0.7700 and above advances with macro supply seen at 0.7690.
  • CAD: The Loonie has lost some of its NAFTA-related positivity within a 1.2790-45 band vs its US rival, with a more cautious tone evident in the run up to Canada’s employment update and perhaps a bit more spill-over in wake of Thursday’s wider than forecast trade deficit.
  • JPY: Risk-off sentiment due to a ramp up in US-China trade hostilities only partially underpinning the Jpy, as the headline pair trades between 107.00-45 parameters amidst reports underlying bids from Tokyo fund managers and charts flagging the 107.00-30 area as pivotal on a closing basis.

In commodities, trade was mostly subdued overnight in which WTI crude futures briefly slipped to below USD 63.00/bbl as markets were spooked by President Trump’s announcement of a possible USD 100bln of additional tariffs on China. Elsewhere, gold prices whipsawed after early safe-haven flows propped up the precious metal, which was then later pared as the greenback recovered and Asia risk sentiment somewhat improved, while copper was lacklustre on the trade fears and with its largest consumer closed for holiday

Looking at the day ahead, the main release will of course be the March employment report in the US including nonfarm payrolls and average hourly earnings data. Two hours following this, Fed Chair Powell will speak on the Economic Outlook. Prior to this in Europe the only  data of note is February industrial production data in Germany and February trade data in France. Finally the ECB’s Coeure is due to speak at a conference.

US Event Calendar

  • 8:30am: Change in Nonfarm Payrolls, est. 185,000, prior 313,000
    • Unemployment Rate, est. 4.0%, prior 4.1%
    • Average Hourly Earnings MoM, est. 0.28%, prior 0.1%; YoY, est. 2.7%, prior 2.6%
    • Average Weekly Hours All Employees, est. 34.5, prior 34.5
    • Labor Force Participation Rate, prior 63.0%
  • 1:30pm: Fed Chairman Powell to Give Speech on Economic Outlook
  • 3pm: Consumer Credit, est. $15.5b, prior $13.9b
  • 4pm: Fed’s Williams Speaks on the Economic Outlook

DB’s Jim Reid concludes the overnight wrap

2 data months ago today we were still in the age of innocence where US equities went up all the time (having just completed a record 15 successive positive return months after seeing +5.7% in January alone) and volatility only stayed low, extremely low or absurdly low. However then we saw the outsized average hourly earnings print on the first Friday of February and everything changed. First the inverse VIX ETPs/ETFs blew up, the VIX increased to one of the highest levels on record and then we soon moved to evidence of weaker data, trade wars and the major tech sector woes. Quite rightly the market now goes into every employment report with all eyes on average hourly earnings. If we’re right, the probabilities are that this number will have more upside surprises over the coming months whatever today’s reading is.

Indeed our economists expect the unemployment rate to fall to 3.4% by year-end (4% expected today – from 4.1% last month and to the lowest since 2000) which if right over the coming months should result in more noticeable  wage pressures as the labour market tightens well below full employment. It’s obviously the average hourly earnings figure which will get all the focus with both the market consensus and our economists expecting a +0.3% mom print. However as DB’s Alan Ruskin points out nearly half the forecasts are for 0.2% and none for 0.4% so the median forecast is slightly misleading. Our colleagues note that should earnings come in as they expect, the year over year rate will rise by about 13bps to 2.74%, still about 3bps below January’s recent high of 2.77% – the release that caused all the early Feb vol.

For payrolls, consensus is pegged for a 185k print (following that bumper 313k print in February). Our US economists  forecast 200k however. They also note that March has been a tricky month for employment forecasters as the median consensus estimate has overestimated the initial March nonfarm payrolls print in four of the last five years by an average of 62k. Interestingly, the consensus has underestimated nonfarm payrolls by an average of 66k over the past two months.

Fed Chair Powell will also be speaking around two hours after Friday’s employment report. In general, our economists expect Powell to reiterate the upbeat outlook he presented at the March 21 FOMC meeting. However, since Powell will not be speaking on behalf of the Committee, we will be looking to get a sense of his own take on the latest data. There is Q&A so that will be closely watched.

Before that, equities consolidated further yesterday as trade tensions eased. However just as the market thought that we might move from the harsh rhetoric to the negotiation table, overnight President Trump has issued a statement noting “in light of China’s unfair retaliation, I’ve instructed the USTR to consider whether tariffs (on an additional $100bn of goods) would be appropriate under section 301…”. He also added that the US is “still prepared to have discussions in further support of our commitment to achieve….reciprocal trade….” On the other side, China has vowed to defend its interests “against new US actions”. Elsewhere on Amazon, when asked if he wanted to make policy changes related to the company, Trump said “we’re going to take a very serious look at that” without elaborating more.

This morning in Asia, markets are trading mixed with the Nikkei (+0.44%) and ASX 200 (+0.10%) up slightly while the Kospi is down -0.63%. The Hang Seng is up +1.26% after trading resumed while Chinese bourses are still shut for  holidays. Elsewhere, the futures on the S&P are down c1% on the back of the overnight tariff story while the YEN is broadly flat as we type. Before this yesterday the Stoxx 600 jumped the most since late June 2016 (+2.40%) in part playing catch up to the positive US lead on Wednesday, while the DAX (+2.90%) and FTSE (+2.35%) also rallied.

The S&P rose for the third consecutive day (+0.69%) to be almost back to flat on an YTD basis while the Dow (+0.99%) and Nasdaq (+0.49%) also advanced. The risk on tone seemed to be helped by more conciliatory rhetoric from the US with President Trump calling President Xi a “friend”, while his top economic adviser Mr Kudlow noted “I think we’re going to come to agreements” and that “at the end of the rainbow, there’s a pot of gold”. Elsewhere, White House trade adviser Navarro noted that Treasury Secretary Mnuchin will hold talks with Beijing on the US tariffs on Chinese imports soon and there’s room to make a deal. The VIX fell 5.6% to 18.94.

Now recapping other markets performance from yesterday. Government bonds weakened with core 10y bond yields 2-5bp higher with the rise led by Gilts despite a weaker than expected services PMI print. The yield on UST 10y was up 2.9bp ahead of today’s payrolls while Bunds rose back up to 0.52% (+2.4bp). In FX, the US dollar index gained 0.35% while the Euro and Sterling fell -0.31% and -0.54% respectively. Elsewhere, WTI oil edged up 0.27% while  Gold dipped -0.50%.

Moving onto Fed speak on inflation and rates. The Fed’s Bostic who is a voter this year noted “I think we have a little ways to go” before neutral rates and then once we get to neutral “we should take a pause and see how the economy responds”. On inflation, he sees the strong US economy lifting inflation to 2% “sometime in the next quarter or two” but he is “actually very comfortable going above the 2% by some amount, 2.2%, 2.3%, I don’t think that is a crisis of overheating”.

Then on the dot plots, he noted it does not lock the Fed into a policy path, rather “the value of the plots is to give a sense of the distribution of the responses” by FOMC members.

In credit, Michal in our team has published a report “IG Strategy Data Flash: No Let-Up in European Credit Outflows as US Flows Improve” which provides charts and commentary on the latest IG bond fund flows and puts them in the broader context of flows in other asset classes. You can download it here.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the February trade deficit was wider than expected and the highest in c9.5 years (-$57.6bln vs. -$56.8bln expected) as exports rose 6.6% yoy while imports were up 10.9% yoy off a larger base. The weekly initial jobless claims was above market and the highest in c3 months (242k vs. 225k expected) while continuing claims was below expectations (1,808k vs. 1,843k). Overall, the Atlanta Fed now estimate Q1 GDP growth of 2.3% saar (vs. 2.8% previous), in line with our US economists’ 2.2% estimate.

The Euro area’s February PPI edged up 0.1% mom (vs. 0% expected), leading to an annual growth of 1.6% yoy, while the February retail sales print was below expectations at 0.1% mom (vs. 0.5%). Elsewhere, Germany’s February factory orders rebounded less than expected at 0.3% mom (vs. 1.5% expected). The final reading of the Euro area’s services and composite PMI were revised -0.1pt lower to 54.9 and 55.2 respectively, with the latter still at a level that suggests annual GDP growth of about 2.5%. Across the region, Germany’s composite PMI was revised down by -0.3pt to 55.4 while France was revised up 0.1pt to 56.3.

For flash PMIs, Italy’s composite PMI was weaker than expected (53.5 vs. 54.9 expected). In the UK, the services PMI print was the lowest since July 2016 (51.7 vs. 54 expected), partly impacted by harsh weather in the month while the composite PMI was also below expectations at 52.5 (vs. 54).

Looking at the day ahead, the main release will of course be the March employment report in the US including nonfarm payrolls and average hourly earnings data. Two hours following this, Fed Chair Powell will speak on the Economic Outlook. Prior to this in Europe the only  data of note is February industrial production data in Germany and February trade data in France. Finally the ECB’s Coeure is due to speak at a conference.

3. ASIAN AFFAIRS

i)FRIDAY MORNING/THURSDAY NIGHT: Shanghai closed HOLIDAY  /Hang Sang CLOSED HOLIDAY   / The Nikkei closed DOWN 77,90 POINTS OR 0.36%/Australia’s all ordinaires CLOSED DOWN .02% /Chinese yuan (ONSHORE) closed UP at 6.3033/Oil DOWN to 63.09 dollars per barrel for WTI and 67.83 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED   .   ONSHORE YUAN CLOSED UP AT 6.3033 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3198 /ONSHORE YUAN TRADING STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING  MUCH WEAKER AGAINST THE DOLLAR CHINA ON HOLIDAY TODAY/CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/

3 a NORTH KOREA/USA

North Korea/South Korea

 

3 b JAPAN AFFAIRS

end

c) REPORT ON CHINA

LAST NIGHT 6 PM

the markets do not like this:  Trump orders consideration of new 100 billion in Chinese tariffs as he intensifies the tariffs wars

(courtesy zerohedge)

Futures Tumble After Trump Orders Consideration Of $100 Billion In New China Tariffs

Yesterday, just as the market soared by over 700 points from session lows because some 17-year-old hedge fund manager somewhere created the idiotic narrative that both China and the US publishing their lists of $50 billion in tariffs, that this somehow indicated easing trade tensions, we said the opposite, namely that “A green close is just what Trump needs to launch another round of tariffs.

zerohedge@zerohedge

A green close is just what Trump needs to launch another round of tariffs

Just over 24 hours later, we were spot on because moments ago – emboldened by the market surge on Wednesday and Thursday – Trump just ordered the US Trade Representative to consider doubling the amount of Chinese import tariffs to $100, to wit:

In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs,” President Trump says in statement.

Trump also instructed the Agriculture Secretary “with the support of other members of my  Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests” while adding that the US is “still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal  trade and to protect the technology and intellectual property of American companies and American people.”

Trump’s full statement below:

Statement from President Donald J. ‘Frump on Additional Proposed Section 301 Remedies

Following a thorough investigation under section 301 of the Trade Act of 1974, the United States Trade Representative (USTR) determined that China has repeatedly engaged in practices to unfairly obtain America’s intellectual property. The practices detailed in the USTR’s investigation have caused concern around the world. China’s illicit trade practices — ignored for years by Washington — have destroyed thousands of American factories and millions of American jobs. On April 3, 2018, the USTR announced approximately $50 billion in proposed tariffs on imports from China as an initial means to obtain the elimination of policies and practices identified in the investigation.

Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers. In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs. I have also instruct. the Secretary of Agriculture, with the support of other members of my Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests.

Notwithstanding these actions, the United States is still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade and to protect the technology and intellectual property of American companies and American people. Trade barriers must be taken down to enhance economic growth in America and around the world. I am committed to enabling American companies and workers to compete on a level playing field around the world, and 1 will never allow unfair trade practices to undermine American interests.

And this is what Trade War officially looks like:

* * *

In support of Trump’s decision, the US Trade Representative Robert Lighthizer issued a statement, saying that “China has chosen to respond thus far with threats to impose unjustified tariffs on billions of dollars in U.S. exports, including our agricultural products.  Such measures would undoubtedly cause further harm to American workers, farmers, and businesses.  Under these circumstances, the President is right to ask for additional appropriate action to obtain the elimination of the unfair acts, policies, and practices identified in USTR’s report.”

And perhaps due to concerns that it may crash the market, the USTR also clarified that “any additional tariffs proposed will be subject to a similar public comment process as the proposed tariffs announced on April 3, 2018. No tariffs will go into effect until the respective process is complete.”

Full statement below:

USTR Robert Lighthizer Statement on the President’s Additional Section 301 Action

Washington, D.C. – U.S. Trade Representative Robert Lighthizer today released the following statement in support of the President’s direction that the Office of the United States Trade Representative (USTR) consider additional measures under Section 301 of the Trade Act of 1974 regarding China’s unfair acts related to technology transfer, intellectual property, and innovation:

President Trump is proposing an appropriate response to China’s recent threat of new tariffs.  After a detailed investigation, USTR found overwhelming evidence that China’s unreasonable actions are harming the U.S. economy.  In the light of such evidence, the appropriate response from China should be to change its behavior, as China’s government has pledged to do many times.  Economies around the world – including China’s own – would benefit if China would implement policies that truly reward hard work and innovation, rather than continuing its policies that distort the vital high-tech sector.

Unfortunately, China has chosen to respond thus far with threats to impose unjustified tariffs on billions of dollars in U.S. exports, including our agricultural products.  Such measures would undoubtedly cause further harm to American workers, farmers, and businesses.  Under these circumstances, the President is right to ask for additional appropriate action to obtain the elimination of the unfair acts, policies, and practices identified in USTR’s report.”

Any additional tariffs proposed will be subject to a similar public comment process as the proposed tariffs announced on April 3, 2018. No tariffs will go into effect until the respective process is complete.

In short, once again the market – dominated by algos and pre-pubescent math PhDs who have no idea what a trade war looks like, or even a bear market for that matter – was dead wrong, and the result is that the world is now on the verge of nuclear trade war.

* * *

“Shockingly” the market isn’t surging on this news – perhaps because it’s nap time for the 17-year-old hedge fund managers and algos who sent the Dow 1000 points higher because “trade tensions de-escalated” in the past two days – and instead the S&P is down over 1% to start the overnight futures session.

And since it is after midnight in Switzerland and the SNB is not out there buying everything to prevent a panic, all other risk assets are plunging too.

And now we wait for China to retaliate. It took it about 9 hours on Wednesday to revert. We expect this time it will be faster

END.

THIS MORNING 2 AM

China vows to attack the Trump tariffs at any cost.  China urges the EU to join in the fight against the USA.  The real problem:  there is just not enough USA goods entering China that could be subject to tariffs:

(courtesy zerohedge)

China Vows To “Attack” Trump Tariffs “To The End At Any Cost”, Urges EU To Join Fight Against US

Update: During a scheduled press briefing, the Chinese envoy just said the European Union and China “must act together” to counter US protectionism.

It appears to have reminded the machines to stop buying the dip…

*  *  *

China has responded to President Trump’s calls for an additional $100 billion in tariffs, saying that it would counter U.S. protectionism “to the end, and at any cost.”

“The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” the Commerce Ministry said in a statement on its website on Friday.

“We don’t want a trade war, but we are not afraid of one.”

President Trump’s decision to push for a more trade tariffs may well be the tipping point for the US dollar as global reserve currency since it leaves Beijing with limited tit-for-tat retaliation… forcing the cornered nation to ‘get creative’.

As Bloomberg reports,China acted swiftly this week to announce reciprocal tariffs on $50 billion worth of American imports, unveiling a match for the Trump administration’s move against Chinese imports less than 12 hours before.

Now that U.S. President Donald Trump has ordered a review of measures on $100 billion of additional Chinese goods, China will have to get creative to keep up the like-for-like rhetoric.

There aren’t enough American goods imports to target…

Of course, China could still take other measures – like curbing package tours or student transfers to the U.S., or steps against American companies’ operations in China; or the final threat of ‘going nuclear’ by withdrawing from US Treasury auctions, devaluing its currency (think Aug 2015 turmoil), or a more petrodollar-focused retaliation.

As Petromatrix managing director Olivier Jakob wrote in a recent reports, if the trade war between U.S. and China continues “there is a risk for oil prices that China uses the bazooka option it has on U.S. crude oil exports,” which would be to curb shipments from America.

China is one of the biggest importers of U.S. crude at ~400k b/d, so any counter-tariffs on crude could become very heavy for the U.S. supply and demand picture, and would weigh on U.S. prices and spill over to global oil pricing.

Jakob concluded that the market needs to start balancing downward price risk of trade-war escalations with upside risk of Iran sanctions as oil flows could be about the same.

For now the market is proceeding as normal when faced with a potentially damaging global economy blow – it’s buying the dip…

“This is starting to feel like the beginnings of a trade war, if simply each proposal is matched with a retaliation,” said Patrick Bennett, a Hong Kong-based strategist at Canadian Imperial Bank of Commerce. “The U.S. risks isolating itself from global trade in this process and we think the U.S., USD and U.S. asset markets have more to lose.”

END

The global markets will not like this: the off shore yuan weakens by 300 basis points and this is the first step that China will initiate as they respond to Trump’s tariffs.  The lower yuan makes Chinese goods cheaper vs Europe and everybody else.

(courtesy zerohedge)

Stealth Retaliation? Yuan Weakens 300 Pips Since Trump Doubled-Down On China Tariffs

The last time offshore yuan was this strong relative to the US Dollar, China devalued its currency, sending a ripple of broken carry-trades through the financial markets and raising volatility everywhere.

In the 12 hours or so since President Trump announced plans for $100 billion in additional tariffs on China, offshore yuan has tumbled 300 pips…

Is this the start of a stealthy devaluation? Remember, China is hitting its limit in tit-for-tat trade responses.

end
Here are 5 options for China in a nuclear war with the USA.  No 5:  stopping the shipment of rare earths which is used in many technologies would absolutely kill the USA
(courtesy zerohedge)

Here Are China’s Five Options For “Nuclear” Trade War

After Trump ordered the USTR to consider an additional $100BN in tariffs, something we said on Wednesday would happen if the market was dumb enough to allow Trump to think he had a trade war victory by closing green…

zerohedge@zerohedge

S&P 500 EXTENDS GAIN ABOVE FRIDAY’S CLOSE, UP AS MUCH AS 1.15%

Seeing favorable market response, Trump next raises China tariffs to $100BN

…China has suddenly found itself in a quandary: as we showed first thing this morning, if Beijing were to continue responding to the US in a “tit-for-tat”, it would be unable to retaliate to the latest Trump salvo of a total $150 billion in tariffs for the simple reason that the US does not export $150 billion in products to China.

Which doesn’t mean that China is out of options; quite the contrary. The problem is that virtually everything and anything else that Beijing can do, would be a significant escalation. In fact, the five most frequently cited options are all considered “nuclear” and would promptly lead to an even more aggressive response from Washington.

Here are the five “nuclear” options that China is currently contemplating:

  1. A Currency Depreciation. A sharp, one-time yuan devaluation, like the one Beijing unexpectedly carried out in August 2015, could be used to offset some of the effect of tariffs.
  2. Sales of US Treasurys. Chinese authorities could sell some of its large official-sector holdings of US Treasuries, which would lead to a tightening of US financial conditions.
  3. Block US services. Chinese authorities could limit access for US companies to the Chinese domestic market, particularly in the services sector, where the US exports $56 billion in services annually and runs a $38 billion surplus
  4. Curb US oil shipments. According to Petromatrix, China is one of the biggest importers of U.S. crude oil at 400kb/d, so any counter-tariffs on crude could become very heavy for the U.S. supply and demand picture. Such a move would weigh on U.S. prices and spill over to global oil pricing. As Petromatrix adds, the market would need to start balancing downward price risk of trade-war escalations with upside risk of Iran sanctions as oil flows could be about the same.

All of the above are mostly self-explanatory. The fifth option is one we first previewed back last August, in “Rare Earths Are China’s Most Potent Weapon In A Trade War.” Here is a quick reminder:

In October 1973, the world shuddered when the Arab members of the Organization of Petroleum Exporting Countries imposed an oil embargo on the United States and other nations that provided military aid to Israel in the Yom Kippur war. At the same time, they ramped up prices. The United States realized it was dependent on imported oil — and much of that came from the Middle East, with Saudi Arabia the big swing producer. It shook the nation. How had a few foreign powers put a noose around the neck of the world’s largest economy?

Well, it could happen again and very soon. The commodity that could bring us to our knees isn’t oil, but rather a group of elements known as rare earths, falling between 21 and 71 on the periodic table.

This time, just one country is holding the noose: China.

China controls the world’s production and distribution of rare earths. It produces more than 92 percent of them and holds the world in its hand when it comes to the future of almost anything in high technology.

Rare earths are great multipliers and the heaviest are the most valuable. They make the things we take for granted, from the small motors in automobiles to the wind turbines that are revolutionizing the production of electricity, many times more efficient. For example, rare earths increase a conventional magnet’s power by at least fivefold. They are the new oil.

Rare earths are also at work in cell phones and computers. Fighter jets and smart weapons, like cruise missiles, rely on them. In national defense, there is no substitute and no other supply source available.

Today, The Week‘s Jeff Spross picks up on this topic, and in an article “How China can win a trade war in 1 move” writes that “if things do spiral into all-out trade war, it’s worth noting China has a nuclear option. I’m referring to rare earth metals.”

These are elements like dysprosium, neodymium, gadolinium, and ytterbium. They aren’t actually rare, but they do play crucial roles in everything from smart phones to electric car motors, hard drives, wind turbines, military radar, smart bombs, laser guidance, and more. They’re also quite difficult to mine and process.

Some more details, and the reason why none of this is new to those who have been following the rare earth space and China’s brief trade war with Japan back in 2010/2011:

Basically, if China really wanted to mess with America, it could just clamp down on these exports. That would throw a massive wrench into America’s supply chain for high-tech consumer products, not to mention much of our military’s advanced weapons systems.

In fact, China isn’t just America’s major supplier of rare earth metals; it’s the rest of the globe’s major supplier as well. And in 2009, China began significantly clamping down on its rare metal exports. Once, China briefly cut Japan off entirely after an international incident involving a collision between two ships. This all eventually led to a 2014 World Trade Organization spat, with America, Japan, and other countries on one side, and China on the other.

How did we get to this position where China has a near monopoly on rare earths:

Much of the story centers around Magnequench, an American company that emerged out of General Motors in the 1980s. It specialized in the magnets that account for most of the final components created from rare earth metals. But in 1995 Magnequench was bought out by a consortium that included two Chinese firms who took a controlling 62 percent majority share in the company. They also bought a big rare earth magnet plant in Indiana. Eventually, Magneuquench’s manufacturing capacities were moved to China, and the Indiana plant was shut down.

Executive branch regulators do wield power over foreign investment in and buyouts of American companies, particularly through the Committee on Foreign Investment in the U.S. (CFIUS). But this was the post-Cold War 1990s, when optimistic enthusiasm for globalized free market trade was at a peak. CFIUS approved the initial takeover of Magnequench in 1995 under the Clinton administration, as well as the later shutdown of the Indiana plant in 2003 under the Bush administration.

Lawmakers and the Government Accountability Office criticized the agency and both administrations for their lackadaisical approach to the issue. Hillary Clinton even struck a rather Trump-ian note in 2008, trying to turn Magequench’s sale to China into a campaign issue. But it was a tricky topic, given how her husband’s administration got the ball rolling. So rare earth metals have occasionally turned into a political hot potato, but usually for only brief periods.

Which then takes us back to our August preview of precisely where we are today:

At present, the rare earths threat from China is serious but not critical. If President Donald Trump — apparently encouraged by his trade adviser Peter Navarro, and his policy adviser Steve Bannon — is contemplating a trade war with China, rare earths are China’s most potent weapon.

A trade war moves the rare earths threat from existential to immediate.

In a strange regulatory twist the United States, and most of the world, won’t be able to open rare earths mines without legislation and an international treaty modification. Rare earths are often found in conjunction with thorium, a mildly radioactive metal, which occurs in nature and doesn’t represent any kind of threat.

However, it’s a large regulatory problem. The Nuclear Regulatory Commission and the International Atomic Energy Agency have defined thorium as a nuclear “source material” that requires special disposition. Until these classifications, thorium was disposed of along with other mine tailings. Now it has to be separated and collected. Essentially until a new regime for thorium is found, including thorium-powered reactors, the mining of rare earths will be uneconomic in the United States and other nuclear non-proliferation treaty countries.

Congress needs to look into this urgently, ideally before Trump’s trade war gets going, according to several sources familiar with the crisis. A thorium reactor was developed in the 1960s at the Oak Ridge National Laboratory in Tennessee. While it’s regarded by many nuclear scientists as a superior technology, only Canada and China are pursuing it at present.

Meanwhile, future disruptions from China won’t necessarily be in the markets. It could be in the obscure but vital commodities known as rare earths: China’s not quite secret weapon.

Of course, there is no way of knowing if China will proceed with a rare earth export ban as its response, or whether it will pick any of these options. However, for those who are growing concerned – or convinced – that it’s only going to get worse from here, there is good news: the VanEck Rare Earth ETF REMX makes it easy to make a substantial profit from the first nuclear trade war, should China clamp down on rare earth metals, sending their price to where they traded when China waged a brief trade war with Japan in 2011, when the ETF hit an all time high of $114. Needless to say, should China lock out the US, the price of rare earths would soar orders of magnitude higher.

 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 FRIDAY morning 7:00 am

Euro/USA 1.2237 DOWN .0012/ 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 DEEPLY IN THE RED   

USA/JAPAN YEN 107.08 UP  0.279 (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 1.4044 DOWN .0053  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.2772 UP .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 FRIDAY morning in Europe, the Euro FELL by 29 basis points, trading now ABOVE the important 1.08 level RISING to 1.2280; / Last night Shanghai composite CLOSED HOLIDAY  Hang Sang CLOSED HOLIDAY /AUSTRALIA CLOSED DOWN .02% / EUROPEAN BOURSES  OPENED DEEPLY IN THE RED

The NIKKEI: this FRIDAY morning CLOSED DOWN 77.90 POINTS OR 0.36%

Trading from Europe and Asia

1/EUROPE OPENED DEEPLY IN THE RED

2/ CHINESE BOURSES / : Hang Sang CLOSED HOLIDAY  SHANGHAI CLOSED HOLIDAY   /

Australia BOURSE CLOSED DOWN .02% 

Nikkei (Japan) CLOSED UP 77.90 POINTS OR 0.36%

INDIA’S SENSEX  IN THE RED 

Gold very early morning trading: 1323,30

silver:$16.30

Early FRIDAY morning USA 10 year bond yield: 2.821% !!! DOWN 1  IN POINTS from THURSDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ 

The 30 yr bond yield 3.0633 DOWN 1  IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/

USA dollar index early  FRIDAY morning: 90.46 UP 1  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 1.691% UP  2  in basis point(s) yield from THURSDAY/

JAPANESE BOND YIELD: +.0.046% UP 0    in basis points yield from THURSDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.237% UP 1/2  IN basis point yield from THURSDAY/

ITALIAN 10 YR BOND YIELD: 1.786  DOWN 1  POINTS in basis point yield from THURSDAY/

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

GERMAN 10 YR BOND YIELD:FALLS TO +.497%   IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.2273 UP .0025 (Euro UP 25 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 107.07 UP 0.288 Yen DOWN 29 basis points/

Great Britain/USA 1.4090 UP .0085( POUND UP 85 BASIS POINTS)

USA/Canada 1.2765 DOWN  .0005 Canadian dollar UP 5 Basis points AS OIL FELL TO $62.26

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This afternoon, the Euro was UP 25 to trade at 1.2273

The Yen FELL to 107.07 for a LOSS of 29 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND ROSE BY 85 basis points, trading at 1.4090/

The Canadian dollar ROSE by 5 basis points to 1.2765/ WITH WTI OIL FALLING TO : $62.26

The USA/Yuan closed AT 6.3033
the 10 yr Japanese bond yield closed at +.046%  UP 0   IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 5 IN basis points from THURSDAY at 2.786% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.033  DOWN 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,90.16  DOWN 30 CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED DOWN 15.86 POINTS OR 0.22%
German Dax :CLOSED DOWN 63.92 POINTS OR 0.52%
Paris Cac CLOSED DOWN 18.43   POINTS OR 0.35%
Spain IBEX CLOSED DOWN 58.10 POINTS OR 0.60%

Italian MIB: CLOSED DOWN 39.63 POINTS OR 0.17%

The Dow closed DOWN 572.46 POINTS OR 2.34%

NASDAQ WAS DOWN 161.44 Points OR 2.28% 4.00 PM EST

WTI Oil price; 62.26 1:00 pm;

Brent Oil: 67.33 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 58.11 UP 41/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 41 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.497% 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:$61.95

BRENT: $66.94

USA 10 YR BOND YIELD: 2.7735%   THIS RAPID DECENT IN YIELD IS ALSO VERY DANGEROUS/RECESSION COMING

USA 30 YR BOND YIELD: 3.0190%/

EURO/USA DOLLAR CROSS: 1.2281 UP .0032  (UP 32 BASIS POINTS)

USA/JAPANESE YEN:106.92 UP 0.126/ YEN DOWN 13 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: 90.11 down 35 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.40887: UP 0.0083  (FROM LAST NIGHT UP 83 POINTS)

Canadian dollar: 1.2764 UP 6 BASIS pts

German 10 yr bond yield at 5 pm: +0.497%


VOLATILITY INDEX:  21.49  CLOSED  UP 2.55

LIBOR 3 MONTH DURATION: 2.331%  ..LIBOR HAS INCREASED FOR 41 CONSECUTIVE DAYS. 

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

TRADING IN GRAPH FORM FOR THE DAY

Market Volatility Jumps To 7 Year High As Global Economic Data Slumps

“There could be some fluctuations in stock market values as a result of the China trade dispute…” – The White House

Cliff…

For the first time since July, the global macro data surprise index has turned negative…

It was quite a week with massive swings pushing realized volatility to its highest since 2011

Futures show the equity market swings best as many out of cash session hours…

But the cash markets all ended red on the week…

As Gluskin-Sheff’s David Rosenberg notes, barely over 3 months into the year and already no fewer than 22 sessions with intra-day moves in the Dow of 400+ points. We had 1 all of last year. The only other time in the past have we seen so many 400 point moves bunched into such a short period — Oct 2008 to Jan 2009.

The Dow retraced 61.8% Fib of its Wednesday panic-bid… then rebounded back to 50%…

The S&P traded down to its 200DMA once again…

Trannies tumbled to their 200DMA – today was their worst day since Brexit (2016)

All major index vols jumped on the week after collapsing on Wednesday…

All major US equity indices went red for the year again…

Tech and Financials tumbled back into the red for the week today…

All the FANGMAN stocks ended red on the week…

TSLA stocks and bonds squeezed higher this week but stocks over-ran bonds…

Treasury yields ended the week marginally higher but tumbled today as bonds were bid when stocks tanked…

10Y yields dropped back below 2.80% once again…

Despite weakness today, the dollar index ended the week higher…

Crude tumbled on the week as Copper and PMs largely trod water…

Cryptos ended the week lower once again (despite a solid jump early in the week)…

Finally, don’t forget, there was a Black Friday before Black Monday…

END

USA morning data

i. Jobs report

A huge miss/first the general report of only 103,000 jobs added but the hourly earnings rose to .3%.  The miss was a Sigma 3 miss.

(courtesy zerohedge)

March Payroll Miss Huge: Only 103K Jobs Added; Hourly Earnings Rise

Going into today’s payroll number, the whisper number was for a substantial miss because as Deutsche Bank noted this morning,” consensus estimate has overestimated the initial March nonfarm payrolls print in four of the last five years by an average of 62k.” Well, that almost exactly how much the consensus estimate of 185K was missed by, because in March, the BLS reported that only 103K jobs were added, a 3 sigma miss to consensus, and roughly 66% drop from February’s upward revised 320K.

As shown in the chart below, this was the weakest payrolls month since exactly one year ago: March 2017.

The print, as noted, was a 3-sigma miss to consensus.

This time the seasonal adjustment was not a factor:

There was a reason for the miss however: as Goldman warned yesterday, inclement weather kept many away from their jobs; in fact, according to the BLS 159K Americans were unable to work due to weather.

Labor force participation dipped fractionally, from 63.0% to 62.9% as the number of people Employed (per the Household Survey) was barely changed (from 155.215K to 155.178K) as the labor force shrank modestly as well. The number of Americans not in the labor force increased by 323K to 95.335K, just in case there is any confusion why there is no wage growth.

And while the headline payroll number may have been a miss following major prior revisions (January was revised down from +239,000 to +176,000, February was revised up from +313,000 to +326,000, for a net 50,000 fewer jobs than previously reported), what markets really cared about was the hourly earnings, which at 0.3% M/M and 2.7% came precisely in line as expected, and above the 0.1% and 2.6% in February, respectively.

There was some disappointment in the unemployment rate, which remained unchanged at 4.1%, missing expectations of a drop to 4.0%.

Some more details from the report:

Total nonfarm payroll employment edged up by 103,000 in March, following a large gain in February (+326,000). In March, employment grew in manufacturing, health care, and mining.

The change in total nonfarm payroll employment for January was revised down from +239,000 to +176,000, and the change for February was revised up from +313,000 to +326,000. With these revisions, employment gains in January and February combined were 50,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 202,000 over the last 3 months.

  • In March, employment in manufacturing rose by 22,000, with all of the gain in the durable goods component.  Employment in fabricated metal products increased over the month (+9,000). Over the year, manufacturing has added 232,000 jobs; the durable goods component accounted for about three-fourths of the jobs added.
  • In March, health care added 22,000 jobs, about in line with its average monthly gain over the prior 12 months. Employment continued to trend up over the month in ambulatory health care services (+16,000) and hospitals (+10,000).
  • Employment in mining increased by 9,000 in March, with gains occurring in support activities for mining (+6,000) and in oil and gas extraction (+2,000). Mining employment has risen by 78,000 since a recent low in October 2016.
  • Employment in professional and business services continued to trend up in March (+33,000) and has risen by 502,000 over the year.
  • Retail trade employment changed little in March (-4,000), after increasing by 47,000 in February. In March, employment declined by 13,000 in general merchandise stores, offsetting a gain of the same size in February. Over the year, employment in retail trade has shown little net change.
  • In March, employment in construction also changed little (-15,000), following a large gain in February (+65,000).
  • Employment changed little over the month in other major industries, including wholesale trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in March. In manufacturing, the workweek edged down by 0.1 hour to 40.9 hours; overtime edged down by 0.1 hour to 3.6 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.7 hours.

And last, but certainly not least, the average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $26.82. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent. Average hourly earnings for private-sector production and nonsupervisory employees increased by 4 cents to $22.42 in March.

end

From the surveys, we get more data which suggests that full time jobs declined by 311,000 but part time jobs increased by 310,000 for no real gain.  However the quality of part timers is not in close to full time jobs in measuring strength in the USA economy

(courtesy zerohedge)

Part-Time Jobs Added: 310K; Full-Time Jobs Lost: -311K

One look at recent trends in the payrolls data, especially the important numbers beneath the headlines, and one will be left with the impression that there is an unprecedented amount of (political) data goalseeking, if not outright manipulation, taking place at the Bureau of Labor Services.

Case in point, last month we reported that in addition to the strong Establishment Survey payrolls number, which was revised even higher to 326K this month, there was an even more impressive number: a record 1 million full and part-time jobs were added according to the Household Survey.

One month later you can scratch all of that, because according to the latest data, the 729K full-time jobs added in February was a fluke, and in March, the number actually declined by 311K; in fact in recent months it has been swinging so hard, a simple regression model suggests that it is more based on noise than any underlying signal.

Meanwhile, as full-time jobs tumbled, part-time jobs continued to rise, and as shown in the chart below, they increased just enough to offset the drop in full-time jobs: Part-Time jobs up 310K; Full-Time jobs down 311K.

And a longer-term perspective.

 end
Of the job growth, it mainly occurred in the high end.  The minimum wage sector saw a drop
(courtesy zerohedge)

Where The Jobs Were In March: Who’s Hiring And Who Isn’t

While March was expected to see a jump in hourly earnings from February – which happened as expected, thanks to a 0.3% increase in hourly take home pay, and 2.7% Y/Y to $26.82 – payrolls were set to slide, if perhaps not as aggressively as the 326K to 103K drop revealed. Still, March marked the 90th straight month of U.S. job growth, the longest such streak on record.

So with strong wage growth once again taking place, which sectors were responsible? Not surprisingly, it was all of the high paying jobs while minimum wage industries barely contributed.

  • Professional Business Services (ex temp help): +33.6K
  • Manufacturing: +22K
  • Healthcare: +22K (Ambulatory Care: +16K, Hospitals +10K)
  • Wholesale Trade: +11.4
  • Transportation and warehousing: +9.8K

Even the traditional laggards, financial services and information, added 2K jobs each.

At the same time, the minimum wage retail trade and temp help saw a drop in employment in March.

Commenting on the composition and wage growth, Southbay Research had this to say:

Hourly Earnings y/y crept up from 2.6% to 2.7%: In a related fashion, Overtime Hours held at cyclically high levels, although down a bit from February (it fell from 3.7 hours to 3.6 hours). The slight dip in overtime is likely snowstorm related: the biggest drop came in the Construction sector.  But if you believe, as I do, that Overtime Hours is the strongest indicator of pending wage pressure, then the trend needs to be watched.

Employers are absolutely resisting wage increases because it’s a slippery slope; once started, it’s hard to reverse.  For that reason they prefer to offer existing workers overtime rather than hire new workers.  (It’s been said that employers are resorting to overtime because they can’t get qualified workers.  That’s less true than reported.)

Wage pressure will remain softer than expected because of the use of teenage labor (which is minimum wage labor).  For this age group, both the participation rate and the employment rate have increased.

Finally, the Bloomberg chart below shows how shifts in employment have coincided with changes in average hourly pay from one month to the next.

 end
Initial reaction to the Chinese retaliation:the manipulators spiked the futures northbound to counter the negative effects of an immediate retaliation from the Chinese

(courtesy zerohedge)

US Equities Spike After China Threatens Immediate Retaliation, Withdraws From Negotiation

In the new normal world where The Dow spike 1000 points on no volume following headlines about the worst trade war since the great depression, it should not be surprising that the first reaction following escalating headlines from China is a vertical panic-buying attempt by the machines…

The post-payrolls disappointment dip was followed by a panic-bid as China’s commerce ministry threatens immediate and very detailed retaliation to Trump’s $100 billion tariff proposal and said that “under these conditions, the two sides cannot conduct any negotiations.”

China will “retaliate immediately, intensively, without any hesitation” if the U.S. releases new list of tariffs on $100b additional imports, Chinese Ministry of Commerce spokesman Gao Feng says.

Now if that does not sound like a buying opportunity, we don’t know what is.

end

This morning’s trading

Stocks tumble as China urges American citizens to rise up against an unscrupulous President Trump

(courtesy zerohedge)

Stocks Tumble As China Urges Americans To Rise Up Against “Unscrupulous” President

The war of words between President Trump and ‘everyone else’ continues to heat up, with market conniptions managed for now by Kudlow’s “good cop” headlines to Trump’s “bad cop” histrionics.

In his latest salvo in the trade war, following China’s ‘fight them on the beaches’ rhetoric, Trump turned his attention to the World Trade Organization, lambasting their lack of action as “unfair.”

Donald J. Trump@realDonaldTrump

China, which is a great economic power, is considered a Developing Nation within the World Trade Organization. They therefore get tremendous perks and advantages, especially over the U.S. Does anybody think this is fair. We were badly represented. The WTO is unfair to U.S.

But it appears China’s Xinhua news – unofficial mouthpiece of the Party – has sparked some more concerns as an op-ed calls for open rebellion against President Trump…

US President Donald Trump’s latest threat to impose tariffs on an additional $100 billion in imports from China was quickly rebuked by China’s Ministry of Commerce and Ministry of Foreign Affairs in a more resolute way. The two ministries said China will listen and observe what Washington will do next, while showing contempt to the unreasonable US. They said China will fight to the end at any cost, which is an unusual response.

We Chinese do disdain that Washington, which is in no position to initiate a trade war with China, persists in wielding the tariff baton. We are fully able to inflict as same losses on the US as those on China. The US will have to repay whatever loss and harm it has caused on China with huge economic and political cost.

The White House’s latest proposal will hit Chinese exports to the US, and in response China will make a sweeping counter attack at US exports to China. China can retaliate at a wide range of areas including US goods exports to China, service exports and the US’ highly profitable investment in China.

It takes both strength and willpower to engage in a large-scale China-US trade war. While the two countries are about evenly matched in trade power, the future is on China’s side. The trade war will cause pain for China, but in the meantime it can force China to speed up its economic transformation. What the US is losing in this process is its future. Many leading US companies will lose the Chinese market and thereby lose their edge. The US’ modern agriculture industry will be dealt a heavy blow.

China won’t back off. The Chinese society will unite around the Party and the government to weather through the hardships, which is unparalleled for the US. More importantly, in the trade war launched by the US, China is on the righteous side safeguarding multilateral trade rules and our own rights on this basis.

Chinese are aware that the only option now is to hit the US hard enough so that it will remember the pain. Otherwise Washington will go more recklessly and cause more losses.

When Zhu Guangyao, China’s vice finance minister, and Wang Shouwen, vice commerce minister, announced proportionate tariffs on $50 billion US goods exported to China at a press conference on April 4, the short video got more than 2 million likes in two days. That is how Chinese people feel.

It is not only the Chinese government’s decision, but the choice of society to firmly strike back against the US pressuring moves at any cost. Chinese society has been mad at repeated threats from the US in these years. Even if the Trump administration wants to take the trade war to the direction that bilateral trade and investment is suppressed to zero, China will meet all the challenges.

Based on information we have received, Chinese authorities have made detailed response plan with many specific measures. Relevant Chinese government departments are fully confident in our ability to hit back at Washington, safeguard China’s interest and defend the multilateral system.

Most Americans have their life linked with China-US trade.

As the tensions escalate, we want to expand the trade war to all Americans so that they have to choose whether to support Trump’s unscrupulous move or to hold the president accountable.

Not even Kudlow’s chalk-strip-suit-wearing smile can save the market this time…

end
Afternoon trading/
Dow dumps 500 points as Powell fails to save to day
(courtesy zerohedge)

Dow Dumps 500 Points As Powell Fails To Save The Day

The Dow is down over 500 points as the hope that Fed Chair Jerome Powell would rescue the world with a few brief dovish words… is crushed.

Fed Chairman Jerome Powell, in his prepared remarks, points out the FOMC at the last meeting upgraded its forecasts and expects a “strengthening in the medium term outlook.” It’s really interesting that he points out that strong global growth has boosted U.S. exports without at all mentioning the elephant in the room: the possibility of a disruptive trade war with China and perhaps other countries. As Bloomberg notes, the fact that he is not focused on this publicly is very consistent with the idea that the Fed will raise rates in June and several times this year.

Half the Wednesday surge has evaporated…

All major indices are in the red for the week…

 end
then in late afternoon trading: Dow dumps 600 points
(zerohedge)

Dow Dumps 600 Points After White House Warns “There Could Be Some Market Fluctuations”

“Kitchen sink”?

The White House warns…

“There could be some fluctuations in stock market values as a result of the China trade dispute…”

And The Dow dumps 600 points…

Pushing realized volatility to its highest since 2011…

And the S&P 500 is back near its 200DMA…

end

At :315 with 3/4 hr to go: S and P below its 200 day moving averag

(zerohedge)

S&P Plunges Through Critical Technical Support, Nasdaq Negative For Year

All major equity indices are now red for 2018 as Nasdaq just broke down…

and S&P 500 broke below its 200DMA…

Will it bounce or hold?

end

Not good:  Trump warns that “we may take a hit”  and prepare for “pain” in the markets with the trade wars

(courtesy zerohedge)

“We May Take A Hit”: Trump Warns Investors To Prepare For “Pain” In The Market

Two days ago, when we commented on the early morning plunge in stocks (which was subsequently fully reversed by the close in a historic 800 point Dow reversal), we said that a long-standing question – will Trump pick plunging stocks or trade war – had finally gotten its answer when CNBC’s Eamon Javers said that a “White House official said the the WH recognizes that Trump’s actions are hitting the stock market, but this is “a longer term thing,” and the president has to follow through on a key campaign promise.”

Moments ago, Trump himself confirmed that when in a radio interview on Friday morning, the president said that U.S. markets could face some “pain’’ from the trade standoff with China and other countries, but – like on Wednesday – asserted that in the long-run, Americans would be better off due to his protectionist actions.

Speaking on WABC Radio’s “Bernie & Sid in the Morning’’ program, Trump said “I’m not saying there won’t be a little pain so we might lose a little of it but we’re going to have a much stronger country when we’re finished, and that’s what I’m all about.’

“We have to do things that other people wouldn’t do. So we may take a hit, but you know what, ultimately we’re going to be much stronger for it,’’ Trump said during the radio interview on Friday. “It’s something we had to do, and ultimately if you take a look it’s not only trade with China – it’s everybody.”

To be sure, stocks have fluctuated dramatically in the past few weeks when Trump drastically intensified trade actions and jawboning against several countries, mostly China. Indicating that he is willing to accept some notable losses in the S&P, Trump said in the interview Friday that “the market’s gone up 40% or 42%.” Which suggests that the president would be ok with a drop of 20% or so if it means winning trade war against China.

Meanwhile, as reported earlier, in response to Trump’s latest tariff announcement, China said it would counter U.S.  protectionism “to the end, and at any cost,” as a war of words over Trump’s proposed tariffs on Chinese imports escalated.

“The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” the Commerce Ministry said in a statement on its website on Friday.

Finally, recall that China yesterday admitted that “squeezing” the US stock market is perhaps its biggest leverage. It now has a green light from the president himself to do just that…

… and between that, and Trump’s admission that stocks are going lower, it may be time to sit on the sidelines for a while.

end

We knew that this would become inevitable:  the tapped out USA consumer has hit a brick wall as total consumer credit plunged to one of its lowest readings in 3 years. Student loans and auto loans however did pick up again and their total is record 2.836 trillion dollars.  The consumer is 70% of GDP and this will be a huge negative to first quarter GDP and then onto 2nd quarter.

(courtesy zerohedge)

America’s Credit-Card Fueled Spending Spree Hits A Brick Wall

Last month was bad, this month it’s the worst it’s been in almost five years.

Exactly one month ago we showed  that after the record debt-fueled spending spree in late 2017, US credit card usage in the first month of 2018 posted a sharp slowdown even as auto and student loan issuance maintained its feverish “drunken sailor” spending pace. Well, fast forward to today, when according to the latest NY Fed consumer credit report, the tapped out US consumer, whose personal savings rate recently hit an all time low, America’s credit card-fueled spending binge just hit a brick wall as total consumer credit was one of the lowest in the past three years.

Of note, with only $148 million in additional credit card borrowings in the month of February, this was the weakest month in revolving credit growth going back almost five years, to November 2013, the last month in which credit card borrowing declined (with the exception of the December 2015 series revision).

Still, even with the nominal increase of just $0.1BN, total revolving credit rose to a new all time high of $1.031 trillion.

The silver lining was to be found in the non-revolving credit data set – used to pay for just two things, autos and “college” – which with the exception of one definition change month, has not gone down since 2011, also hit a new all time high of $2.836 trillion, following the latest monthly increase of $10.6 billion, which however was also a slowdown to recent trends, and the lowest since September 2016.

What about its components? With everything else going for record highs, if at a far slower rate, we doubt it will be a surprise to anyone that both student debt and auto loans hit a new all time high in the quarter ending December 2017, with $1.491 trillion for the former, and $1.12 trillion for the latter (the next monthly update will take place next month, when the Q1 data is released).

Credit and auto loan debt aside, the sharp slowdown, and borderline negative print, in credit card debt is the latest red flag for the US economy, which as a reminder ended 2017 with a record 13-week annualized surge in credit-funded spending.

And now that the hangover from the holiday spending spree is over, and credit card companies demand payment, US consumers – those whose personal saving rate is already near record lows – have not only retrenched, but have substantially slowed down their credit card usage, which for an economy in which 70% of GDP is consumer spending suggests more negative surprises for Q1 GDP.

end

Nine West is now preparing for bankruptcy protection

(courtesy zerohedge)

Nine West Bankruptcy Filing Is Imminent

As we initially anticipated less than three months agoReuters reports that Nine West Holdings – which has been in talks with its creditors over a possible deal to restructure its debt for months now – intends to file for bankruptcy, possibly as soon as Friday.

The 30-day countdown to Nine West’s bankruptcy filing started in March after the company missed a debt payment, entering its grace period.

To help make its creditors whole, the failed retailer plans to sell the intellectual property of its flagship footwear brand to Authentic Brands Group, the company that, among other acquisitions, bought the flagging Juicy Couture brand back in 2013. However, Reuters cautioned that the deal with Authentic Brands hasn’t been finalized just yet, which is said to be in talks with a partner to orchestrate the deal.

The plan, according to Reuters, is that the IP sales will help Nine West pay down its debt, increasing the likelihood that it eventually emerges from bankruptcy. Luckily for the company’s creditors, it still has a few profitable business lines, including a denim line that’s sold in mass-market retailers like Walmart, and which can actually be monetized if need be.

Nine West

The fate of Nine West is only the latest in a seemingly endless stream of retail bankruptcies that have left malls around the country pockmarked with vacancies. Recently, retail vacancies jumped 8.4% in Q1 2018 – a six year high.

Retail bankruptcies accelerated in 2017 with at least 30 retailers filing and more than 8,500 retail outlets closing. But according to the latest Moody’s research report on the sector, the rating agency now forecasts at least six retail and apparel issuers defaulting over the next 12 months, with most of these occurring in the first half of the year.

With the long-feared “retail apocalypse” in full swing, even the CEO of Urban Outfitters, admitted a year ago that the “retail bubble has now burst.”

If there is a silver lining for the retail industry, it’s that the industry’s default rate is expected to peak at just over 12% this March; still,  Moody’s cautioned that the still-high default forecast for the remainder of 2018 points to more pain before this lower ratings rung stabilizes. But Moody’s assessment could be too optimistic, as the list of retail corporate debt – yes, Nine West is among it – coming due would suggest.

Retailer

The proceeds from the sale will pay down some of Nine West’s approximately $1.5 billion in debt, increasing the chances that the company will emerge from a planned bankruptcy, the sources said.

END

SWAMP STORIES:

Moron and ultra buffoon Kudlow states that the USA tariffs are not a bluff and that China’s response is highly unsatisfactory

(courtesy zerohedge)

Kudlow: US Tariffs Are “Not A Bluff”, China’s Response Is “Highly Unsatisfactory”

Echoing comments by Treasury Secretary Steven Mnuchin made during an early-afternoon interview on CNBC, National Economic Council head Larry Kudlow told a group of reporters at the White House Friday that China’s response to the first round of US tariffs announced was “highly unsatisfactory” and that, while he hopes the trade dispute doesn’t result in tariffs, that outcome remains a possibility.

That is in sharp contrast to Kudlow’s attempt on Wednesday to assuage the fears of nervous investors by promising them that the US will likely get a deal with China to avert the trade barriers threatened by both sides.

Still, a solution to the US-China trade spat could come within three months – but the Trump administration’s saber-rattling over trade barriers “is not a bluff”. And while the US isn’t currently in a trade war with China – any foreign policy “could go awry.”

Kudlow’s about-face notably comes as the White House has put its foot down on Friday and warned investors to expect some “some fluctuations” in the stock market as the trade dispute plays out.

He also raised the possibility that the US could provide a “list of suggestions” to China, per the Hill.

“The U.S. may provide a list of suggestions to China,” White House National Economic Council Director Larry Kudlow told a group of reporters at the White House, adding that resolving the trade dispute between Washington and Beijing is “eminently doable.”

These latest comments come after Kudlow gave a contentious interview with Bloomberg earlier Friday where he said that serious talks to avert a trade crisis “have not really begun yet” while clarifying that Trump had discussed the issue with Chinese President Xi Jinping and that other senior administration officials had discussed trade policy with their Chinese counterparts.

“Perhaps there will be some fruitful negotiations,” he said. “But I would say they have been unsatisfactory, so we will see”. The US is considering a second round of tariffs, but nothing has been decided yet.

But regardless of the outcome, Kudlow has insisted that “China is the problem” and that “President Trump is the solution.”

However, investors would have good reason to ignore Kudlow’s comments, as the advisor admitted that he first found out “last night” about Trump’s threat to slap tariffs on $100 billion in Chinese assets. Those followed China’s announcement of tariffs on $50 billion of US goods, including, crucially, the US soybeans, which China relies on to feed its livestock.

“This is not a trade war,” Kudlow said Friday. “This process, it may include tariffs at the end of the day. It may also not. It may be solved by negotiation,” according to Politico.

After Bloomberg hammered Kudlow about the White House’s “communication problem,” Kudlow’s admission that he was out of the loop regarding the latest round of tariffs prompted some twitter users to question whether Kudlow has as much influence with the president as the market believes…

Ivan the K™@IvanTheK

Holy crap. Larry is making suggestions to Trump via Bloomberg TV. Can’t he just walk into the Oval Office and tell him? Oh, wait.

end

oh OH! this is going to be interesting!!  It seems that Mueller has evidence that Erik Prince and brother of Education Sec. Betsy De Voes has “lied” about meeting a Russian sovereign wealth fund head at the Seychelles.  The meeting was held a few days before Trump was inaugurated.  It is perfectly legal for him to has these meetings and if legal no reason to lie!

(courtesy zerohedge)

Mueller Reportedly Has Evidence Trump Ally Lied About Meeting Russian Sovereign Wealth Fund Head

In an exclusive report by ABC that we believe is nothing short of a trial balloon warning of Special Counsel Robert Mueller’s next major indictment (or, alternatively, the turning of another valuable witness), the network reported that the special counsel has obtained evidence that Erik Prince, the brother of Education Secretary Betsy DeVoes, lied to Congressional investigators about the circumstances surrounding his meeting with Russian Sovereign Wealth Fund CEO Kirill Dmitriev.

According to leaks that emerged last year, Prince told the House Intelligence Committee that his meeting with Dmitriev during a trip to the Seychelles just days before President Trump’s inauguration was a chance encounter, and that he met with Dmitriev only at the behest of “one of the brothers” of United Arab Emirates leader Crown Prince Mohammed Bin Zayed al-Nayhan.

Prince

But according to George Nader, a Lebanese business man with a shadowy record that includes a 1991 conviction on child pornography charges in the US – for which he served only six months in a halfway house thanks to his role in helping to free American hostages in Beirut. More recently, Nader reportedly played a role in facilitating Trump’s trip to the Kingdom of Saudi Arabia last year.

Nader has become a key witness and cooperator in the Mueller probe. And while the full breadth and scope of what he’s told Mueller remains unclear, the information he provided about Prince appears to be damning.

Specifically, Nader reportedly told Mueller that he met with Prince in New York City a week before the Seychelles meeting to brief him on the encounter, then provided Prince with a dossier of information about Dmitriev.

Also, Nader told Mueller that he attended the meeting with Prince and Dmitriev. But during his interview with Congressional investigators, Prince only said that Dmitriev’s wife was in attendance.

Nader said the goal of the meeting would’ve been to establish a backchannel between the Russian government and the Trump administration.

Sources tell ABC News Nader met with Prince at New York’s Pierre Hotel a week before the Jan. 11, 2017 meeting in the Seychelles, and later sent Prince biographical information about Dmitriev, which, according to those sources, noted that Dmitriev had been appointed by Putin to oversee the state-run sovereign wealth fund.

Nader says he then facilitated and personally attended the meetings, including one between Prince and Dmitriev, at a resort owned by MBZ off the coast of East Africa, the sources told ABC News. One of the primary goals of the meeting, Nader told investigators, was to discuss foreign policy and to establish a line of communication between the Russian government and the incoming Trump administration, sources told ABC News.

Nader — who Prince said in a 2010 lawsuit deposition had once represented his military contractor business in Iraq — was not mentioned in Prince’s congressional testimony despite Prince being asked by lawmakers who was present. Prince said only that Dmitriev’s wife was there but she left after a few minutes while they discussed terrorism and oil prices.

A spokesperson for Prince told ABC News on Thursday that “Erik has said all there is to say to the committee and has nothing further to add.” Prince has said that the Seychelles meeting was leaked to the news media last year in an illegal “unmasking” of his identity in U.S. signals intelligence intercepts.

While this might look like an ironclad case of perjury on the surface, we imagine the truth is much murkier. For one, even if Prince did attend the meeting with the goal of establishing a channel between Trump and Russia, establishing such an informal line of communication wouldn’t have been illegal because it happened during the transition – when incoming administrations are expected to establish these types of relationships. If it had happened during the campaign, it would’ve become fodder for Mueller’s collusion investigation. But it didn’t.

Furthermore, this isn’t the first time we’ve learned about investigators’ interest in Prince’s meeting – and, more importantly, whether the characterization he provided to Congress was accurate. There have been several leaks.

The other question is, since attending such a meeting wouldn’t have been illegal, why would Prince have lied about it and risked a perjury charge to hide behavior that wasn’t even illegal.

The answer, we imagine, will be found somewhere in Nader’s past. His motivations for cooperating with Mueller remain mysterious, and his past criminal convictions raise questions about his credibility.

And if Mueller truly did have proof that Prince blatantly broke the law, we imagine he would’ve arrested him by now.

So, we imagine this will result in one of three things: Prince will soon be indicted, after being approached by Mueller, Prince will turn state’s witness or Nader – who was formerly employed by Prince at Prince-run military contractor Blackwater – is the one who is doing the misleading.

For what it’s worth, ABC says Prince has yet to appear before the grand jury Mueller set up to secure his convictions – so that would seem to eliminate option one.

Whatever’s missing here, we imagine we’ll learn more during the coming days and weeks.

END

Let’s close out the week as usual with this offering courtesy of Greg Hunter

(courtesy Greg Hunter/USAWatchdog)

Fake News is Real, Trump Not Criminal Target, Trade War or Negotiation?

By Greg Hunter On April 6, 2018 In Weekly News Wrap-Ups

By Greg Hunter’s USAWatchdog.com (WNW 329 4.6.18)

A new Poll uncovers that 77% of Americans think the legacy media, or mainstream media (MSM) like CNN and the New York Times (among others), regularly reports news that is not true. Sometimes the stories are just plain fake news, and other times the MSM just lies by omission and covers Stormy Daniels and omits that the country is “missing” $21 trillion.

Special Prosecutor Robert Mueller came out this week and said that President Trump is not the target of a criminal investigation. This is the exact same thing former FBI Director James Comey told President Trump before he was fired. Famed legal scholar Alan Dershowitz says the Mueller team has been on the case for more than a year and “there is nothing there” and that Mueller is “inventing a crime.”

Trump slaps China with $50 billion in tariffs, and China slaps back with $50 billion of their own tariffs on soybeans, whiskey, cars, aircraft and chemicals. Trump is considering slapping back another $100 billion in additional tariffs against China. Is this going to turn into a full blown trade war or is this just one very high stakes negotiation tactic by the man who wrote the book called “The Art of the Deal.” The stock market is very nervous about the possible trade war.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

(To Donate to USAWatchdog.com Click Here)

After the Interview:

Renowned market and geopolitical cycle expert Charles Nenner will be the guest for the “Early Sunday Release.”

Video Link

https://usawatchdog.com/fake-news-is-real-trump-not- criminal-target-trade-war-or-negotiation/

 end

I will  see you  MONDAY night

HARVEY

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One comment

  1. David Gunter · · Reply

    Can you explain how EFP’s do or do not result in actual physical delivery? If they do, surely London warehouse available gold declines. If they do not, what does it mean, other than a moveable feast for short-sellers. Thanks.

    Liked by 1 person

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