APRIL 10/GOLD RISES AGAIN UP $5.25 TO $1342.50/SILVER ALSO UP 8 CENTS TO $16.61/ABE GOVERNMENT IN TROUBLE IN JAPAN FOR LYING : PUTS THEIR QE PROGRAM IN JEOPARDY/DOW UP 428.90 POINTS/NASDAQ UP 143.96 POINTS/MARKETS REACT TO XI’S CONCILIATORY SPEECH WHICH WAS NOTHING BUT A REHASH WHAT WAS SAID IN DAVOS/RUSSIAN ROUBLE CRASHES AS THE SANCTIONS ARE HAVING A DEVASTATING EFFECT ON THE RUSSIAN ECONOMIC SCENE/EU MAY RAISE THEIR INTEREST RATE BY 20 BASIS POINTS AS THEY STOP QE AT THE END OF THIS YEAR/USA PPI RED HOT AND THIS IS A FORERUNNER OF INFLATION/PLETHORA OF SWAMP STORIES TODAY INCLUDING THE DAVID COHEN RAID BY THE FBI/

 

 

GOLD: $1342.50  UP $5.25  (COMEX TO COMEX CLOSINGS)

Silver: $16.61 UP 8 CENTS (COMEX TO COMEX CLOSINGS)

Closing access prices:

Gold $1339.60

silver: $16.57

For comex gold:

APRIL/

NUMBER OF NOTICES FILED TODAY FOR APRIL CONTRACT:0 NOTICE(S) FOR nil OZ.

TOTAL NOTICES SO FAR 657 FOR 65700 OZ (2.043 tonnes)

THE COMEX IS OUT OF GOLD

For silver:

APRIL

121 NOTICE(S) FILED TODAY FOR

605,000 OZ/

Total number of notices filed so far this month: 140 for 700,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $6684/OFFER $6784: down $38(morning)

Bitcoin: BID/ $6778/offer $6878: up $56  (CLOSING/5 PM)

 

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY FELL BUT BY A HUGE 7,732 contracts from 243,411  FALLING TO 235,679  DESPITE YESTERDAY’S 12 CENT RISE IN SILVER PRICING. TODAY WE MOVED AWAY FROM THE NEW ALL TIME RECORD FOR SILVER OPEN INTEREST SET YESTERDAY. WE AGAIN HAD CONSIDERABLE COMEX LIQUIDATION.  BUT DUE TO THE PRICE IN PRICE, WE MUST HAVE WITNESSED SOME COMEX SHORT COVERING AS THE BANKERS ARE QUITE CONCERNED WITH SILVER’S DIZZYING OPEN INTEREST HEIGHT. WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP :  2836 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 2836 CONTRACTS.  WITH THE TRANSFER OF 2836 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 2836 CONTRACTS TRANSLATES INTO 14.180 MILLION OZ  ON TOP OF THE FALL 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:

15,561 CONTRACTS (FOR 7 TRADING DAYS TOTAL 15,561 CONTRACTS) OR 77.805 MILLION OZ: AVERAGE PER DAY: 2223 CONTRACTS OR 11,115 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  77.805 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 11.11% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S796.30 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 HUGE SIZED LOSS IN COMEX OI SILVER COMEX OF 7732  WITH THE DESPITE THE 12 CENT RISE IN SILVER PRICE. WE MUST HAVE HAD CONSIDERABLE SHORTCOVERING BY THE BANKERS.  WE ALSO HAD ANOTHER STRONG SIZED EFP ISSUANCE OF 2836 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 2836  EFP’S  FOR THE  MONTH OF MAY WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE LOST A CONSIDERABLE  4793 OI CONTRACTS ON THE TWO EXCHANGES: i.e. 2836 open interest contracts headed for London (EFP’s) TOGETHER WITH AN DECREASE OF 7732  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE RISE IN PRICE OF SILVER OF 12 CENTS AND A CLOSING PRICE OF $16.52 WITH RESPECT TO YESTERDAY’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. 1.179 BILLION TO BE EXACT or 168% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT APRIL MONTH/ THEY FILED: 121 NOTICE(S) FOR 605,000 OZ OF SILVER

IN SILVER, WE HAVE NOW SET THE NEW RECORD OF OPEN INTEREST AT 243,411 AND AGAIN THIS HAS BEEN SET WITH A LOWE PRICE OF $16.51 WITH TRADING YESTERDAY (APRIL 9.2018).

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  243,411 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 FAIR SIZED 1213 CONTRACTS DOWN TO 493,869 DESPITE THE GOOD SIZED GAIN IN PRICE/YESTERDAY’S TRADING ( GAIN OF $4.05).  WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF APRIL. THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A FAIR SIZED 5634 CONTRACTS :   JUNE SAW THE ISSUANCE OF 5634 CONTRACTS  AND ALL OTHER MONTHS ZERO.  The new OI for the gold complex rests at 493,869. 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: 1213 OI CONTRACTS DECREASED AT THE COMEX AND A FAIR  SIZED 5634 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS  TOTAL OI GAIN: 4421 CONTRACTS OR 442,100 OZ =13.750 TONNES

YESTERDAY, WE HAD 9917  EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF APRIL : 67,176 CONTRACTS OR 6,717,600  OZ OR 208.94 TONNES (7 TRADING DAYS AND THUS AVERAGING: 9,596 EFP CONTRACTS PER TRADING DAY OR 959,600 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 7 TRADING DAYS IN  TONNES: 208.94 TONNES

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

THUS EFP TRANSFERS REPRESENTS 208.94/2550 x 100% TONNES =  8.19% 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 2253.42 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 SMALL SIZED DECREASE IN OI AT THE COMEX WITH THE  GAIN IN PRICE IN GOLD TRADING YESTERDAY ($4.05 GAIN). WE HAD A VERY LARGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 5634 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 5634 EFP CONTRACTS ISSUED, WE HAD A GOOD NET GAIN IN OPEN INTEREST OF 4,421 contracts ON THE TWO EXCHANGES:

5634 CONTRACTS MOVE TO LONDON AND 1213 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 13.750 TONNES).

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

WITH GOLD UP  $5.25 :  WE HAD NO  CHANGES IN GOLD INVENTORY AT THE GLD/

Inventory rests tonight: 859.99 tonnes.

SLV/

WITH SILVER UP 8 CENTS TODAY: NO  CHANGES/ 

/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 FELL BY A CONSIDERABLE 7,732 CONTRACTS from 243,411 DOWN TO 235,679 (AND AWAY FROM THE  NEW COMEX RECORD SET YESTERDAY/APRIL 9/2017). THE PREVIOUS RECORD OTHER THAN WAS ESTABLISHED FRIDAY WAS: 234,787, SET ON APRIL 21.2017 ALMOST ONE YEAR AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.

TODAY’S TRADING WITH THE RATHER LARGE COMEX LOSS OF CONTRACTS, SURPRISINGLY OCCURRED WITH THE  RISE IN PRICE OF SILVER (12 CENTS//). THUS WE MUST HAVE HAD SOME CONSIDERABLE BANKER SHORT COVERING.  OUR BANKERS ALSO USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER 2836 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 LOSS AT THE COMEX OF 7732 CONTRACTS TO THE 2836 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A HUGE LOSS OF 4793  OPEN INTEREST CONTRACTS AND THAT NO DOUBT WAS OUR BANKER SHORTCOVERING.  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN APRIL (SEE BELOW). THE NET LESS IN OI TODAY IN OZ ON THE TWO EXCHANGES:  24.480 MILLION OZ!!!

RESULT: A LARGE SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE  RISE IN SILVER PRICING / YESTERDAY (12 CENTS) . BUT WE ALSO HAD ANOTHER VERY GOOD SIZED 2836 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR MARCH, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)TUESDAY MORNING/MONDAY NIGHT: Shanghai closed UP 52.03 POINTS OR 1.66%  /Hang Sang CLOSED UP 499.16 POINTS OR 1.65%   / The Nikkei closed UP 166.74 POINTS OR 0.54%/Australia’s all ordinaires CLOSED UP .80% /Chinese yuan (ONSHORE) closed UP at 6.2934/Oil UP to 64.55 dollars per barrel for WTI and 69.78 for Brent. Stocks in Europe OPENED IN THE GREEN    .   ONSHORE YUAN CLOSED UP AT 6.2934 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.2912 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING  MUCH STRONGER AGAINST THE DOLLAR /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

Japan’s Abe in trouble after the Finance Ministry admits that Moritomo was told a lie. If Abe goes so does Kuroda and if they are both gone then their flawed QE is in jeopardy

( zerohedge)

3 c CHINA

i)China/USA

Trump reacts to the last “reconciliatory” speech by Xi.  Trump wants China to stop subsidizing their high technology industry and their 2025 Initiative. China has offered to lower USA deficits by 50 billion but to Trump, this is recycled Davos words

( zerohedge)

ii)An excellent article written by Marshall Auerback who basically is stating what Kyle Bass has been pounding the table on China.  China has huge debt and huge excess capacity.  If China closes unwanted excess capacity that will send the country economically into a tailspin something that the leaders do not want so they will try and continue on racking up debt and trying to export their deflation to the rest of the world

( Marshall Auerback)

iii)Trump is not going to like this:  China installs radar scrambles on the Spratly Islands in the South China Seas

( zerohedge)

4. EUROPEAN AFFAIRS

i)GREAT BRITAIN

Not only are the Russians angry but also anger is building up in the uK over their government’s handlingof the Skripal case

( Slane/The BlogMire.com)

ii)GERMANY

a good commentary from Gefira as they state that the German Society will start collapsing by 2020 as their young workers are becoming fewer and fewer.  You can model Germany after Japan

( GEFIRA)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Iran/USA

Iran is warning the USA that it will regret pulling out of the nuclear deal

( zerohedge)

ii)Then this; Iran threatens to restart the Nuclear enrichment program and that they an begin within 4 days:

( zerohedge)

iii)Russia

The rouble crashes 8% due to:

1. sanctions

2 Russia’s confrontation with the uSA over Syria

long bond holders decided it was best to liquidate due to the geopolitical risks

( zerohedge)

iv)Russia/Iran/Turkey

this was a no brainer: Russia is now considering dropping dollar based  and Euro based oil for yuan. No doubt they will be joined by Iran and Turkey
( zerohedge)
v)Russia/USA

Russia is not too enthralled with this USA Navy destroyer approaching Syria without notification
( zerohedge)
vi)LATE THIS AFTERNOONGood reason to knock gold down a few dollars;  Netanyahu states that Trump will very likely order an attack on Syria and he ought to know(courtesy zerohedge)

6 .GLOBAL ISSUES

1)Global debt has now hit a record 237 trillion dollars up  21 trillion dollars from the year before. Also various mature economies like Canada are experiencing a huge household debt to GDP which is worrying to the IMF especially if interest rates continue their rise

( zerohedge)

ii)Not sure what this is about but the EU raids the London headquarters of 21 Century Fox

(courtesy zerohedge)

7. OIL ISSUES

Kinder Morgan halts work on the new pipeline that would sent oil sands  product to the USA.  It seems that the owners are having trouble dealing with the Province of British Columbia who basically wish to scrap the project on environmental grounds.

( Nick Cunningham/OilPrice.com)

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)Correctly this Bloomberg news reporter suggests that by putting America first, the dollar will have to weaken

( Bloomberg/GATA)

ii)Chris Powell comments that Sharp’s Pixley, Ross Norman is probably not a friend of gold

( Chris Powell/GATA/Sharp Pixley/Ross Norman)

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

i)TRADING TODAY/EUROPE
ECB member states that the ECB will end QE by the end of the year but also suggests a 20 basis point rise in the interest rate from -40 basis points to -20 basis points.  That sends the Euro and gold higher
( zerohedge)

ii)Market data USAGold loves this:  producer prices which is a forerunner of future inflation is hotter than ever at 3% with the core coming in at 2.7%

( zerohedge)

iii)A good rise in wholesale inventories as well as a sales rebound will be positive for 1st quarter GDP

( zerohedge)

iv)SWAMP STORIES

a)As I said yesterday,  with the Mueller raid on lawyer Cohen:  “Attorney-Client privilege is dead” /Trump lashes out at the FBI

( zerohedge)

b)Last night, Adam Davidson explains the ramifications to Trump on why the raid will keep him up at night

( Adam Davidson/zerohedge)

c)here are the reasons behind the FBI raid on Michael Cohen:  they want to know payments made to two women:

1. Stormy Daniels

2 Karen MacDougall

(courtesy zerohedge)

d)Terribly conflicted Robert Mueller is investigating a Ukrainian man who gave the Clintons more than 13 million.  The problem here is that this man gave 150,000 dollars to Trump for a speech and that is what Mueller is investigating..not for the 13 million given to Hillary Clinton..shameful.

( zerohedge)

e)Another Trump advisor has resigned:  Tim Bosser.  It is obvious that Bolton’s views differ markedly from Bosser

( zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY FAIR SIZED 1213 CONTRACTS DOWN to an OI level 493,869 DESPITE THE RISE IN THE PRICE OF GOLD ($4.05 GAIN/ 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 5634 FOR  JUNE, AND ZERO FOR ALL OTHER MONTHS:  TOTAL  5634 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: 4421 OI CONTRACTS IN THAT 5634 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST 1213 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 4421 contracts OR 442,100  OZ OR 13.75 TONNES.

Result: A FAIR SIZED DECREASE IN COMEX OPEN INTEREST WITH THE  RISE IN PRICE YESTERDAY  (ENDING UP WITH A GAIN OF $4.05)THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 4421 OI CONTRACTS..

We have now entered the  active contract month of APRIL where we LOST 60 contracts LOWERING TO  1439 contracts.  We had 2 notices served  yesterday, so we lost 58  contracts or an additional 5800 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 29 contracts to stand at 1066. The really big June contract month saw a LOSS of 892 contracts DOWN to 368,544 contracts.   The next big delivery month after June is August and here the OI FELL BY 1542 contracts DOWN to 51,565.

We had 0 notice(s) filed upon today for  nil 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:163,029  contracts

CONFIRMED COMEX VOL. FOR YESTERDAY: 242,636 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 FELL BY A TOTALLY UNEXPECTED 7,732 CONTRACTS FROM 243,411 DOWN TO 235,679 AND AWAY FROM THE NEW RECORD OI FOR SILVER SET APRIL 9.2018  DESPITE OUR 12 CENT RISE IN SILVER PRICING. WE  ALSO WERE ALSO INFORMED THAT WE HAD A STRONG 2836 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: 2836.   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 CONSIDERABLE LONG COMEX SILVER LIQUIDATION WITH OUR RECORD SILVER OPEN INTEREST AND THIS NO DOUBT WAS BANKER SHORT COVERING.  AS A RESULT WE HAVE A GOOD SIZED LOSS 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 LOST 4896 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  7732 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 2836 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS ON THE TWO EXCHANGES:4896 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 116 contract FALLING TO 221 contracts.  We had 121 notices filed upon  so in essence we GAINED 5 contracts or 25,000 additional ounces of silver will  stand for delivery in this non active delivery month of April.

The next big active delivery month for silver will be May and here the OI LOST 9678 contracts DOWN to 137,980. June saw a loss of 2 contracts to stand at 36.  The next big delivery month for silver is July and here the OI ROSE by 3475 contracts UP to 61,214.

We had 121 notice(s) filed for 605,000 OZ for the APRIL 2018 contract for silver

INITIAL standings for APRIL/GOLD

APRIL 10/2018.

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
0 notice(s)
 nil OZ
No of oz to be served (notices)
1439 contracts
(143,900 oz)
Total monthly oz gold served (contracts) so far this month
657 notices
65,700 OZ
2.043 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 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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 (657) x 100 oz or 65,700 oz, to which we add the difference between the open interest for the front month of APRIL. (1439 contracts) minus the number of notices served upon today (0 x 100 oz per contract) equals 209,200 oz, the number of ounces standing in this active month of APRIL (6.506 tonnes)

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

No of notices served (657 x 100 oz or ounces + {(1439)OI for the front month minus the number of notices served upon today (0 x 100 oz )which equals 209,200 oz standing in this  active delivery month of APRIL . THERE IS 12.003 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE LOST 58 COMEX OI CONTRACTS OR 5800 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 10/ 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 914,204.863
  oz
Scotia
CNT
Brinks
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
 1,207,300.809 oz
CNT
JPMorgan
Scotia
No of oz served today (contracts)
121
CONTRACT(S
605,000 OZ)
2 entries
No of oz to be served (notices)
100 contracts
(500,000 oz)
Total monthly oz silver served (contracts) 140 contracts

(700,000 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: 607,531.200 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 did not  deposit  into its warehouses (official) today.

ii) Into CNT:  599,769.609 oz

total deposits today: 1,207,300.809  oz

we had 3 withdrawals from the customer account;

i) Out of Scotia: 80,249.863 oz

ii) Our od Brinks:  995.07 oz

iii) Out of CNT: 832,007.553 oz

total withdrawals;  914,204.863   oz

we had 0 adjustment

total dealer silver:  59.452 million

total dealer + customer silver:  263.583 million oz

The total number of notices filed today for the APRIL. contract month is represented by 121 contract(s) FOR 605,000 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 140 x 5,000 oz = 700,000 oz to which we add the difference between the open interest for the front month of April. (221) and the number of notices served upon today (121 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the APRIL contract month: 140(notices served so far)x 5000 oz + OI for front month of April(221) -number of notices served upon today (121)x 5000 oz equals 1,200,000 oz of silver standing for the April contract month

WE GAINED 5  SILVER CONTRACTS OR 25,000 ADDITIONAL OUNCES WILL   STAND IN THIS NON ACTIVE DELIVERY MONTH OF APRIL BUT SOMEHOW LOST 100 CONTRACTS THE DAY BEFORE AS THESE GUYS MORPHED INTO LONDON BASED FORWARDS. 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 50,666 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 96,357 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 96,357 CONTRACTS EQUATES TO  482 MILLION OZ OR 68.9% 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 -2.31% (APRIL 10/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.47% to NAV (APRIL 10/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.31%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.47%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA): NAV FALLS TO -2.41%: NAV 13.79/TRADING 13.46//DISCOUNT 2.31.

END

And now the Gold inventory at the GLD/

APRIL 10/WITH GOLD UP $5.25/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859.99 TONNES

APRIL 9/WITH GOLD UP$4.50/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859.99 TONNES

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 10/2018/ Inventory rests tonight at 859.99 tonnes

*IN LAST 359 TRADING DAYS: 81.05 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 309 TRADING DAYS: A NET 75.25 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory/

APRIL 10/WITH GOLD UP 8 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

APRIL 9/WITH SILVER UP 12 CENTS/WE HAD NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 320.196 MILLION OZ/

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 10/2018:  A NO CHANGES IN SILVER INVENTORY:  

Inventory 320.196 million oz

end

6 Month MM GOFO 2.02/ and libor 6 month duration 2.49

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

G0FO+ 2.02%

libor 2.49 FOR 6 MONTHS/

GOLD LENDING RATE: .47%

XXXXXXXX

12 Month MM GOFO
+ 2.70%

LIBOR FOR 12 MONTH DURATION: 2.49

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.21

end

Major gold/silver trading /commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Trump Making ‘Major Decisions’ on Syria, Iran and Russia Response ‘Very Quickly’

– Trump & Russia threaten each other as conflict over Syria escalates
– U.S. Navy destroyer armed with tomahawks arrives off Syria, “harassed” by Russian warplanes
– Heightened risk of war between
 Syria, Russia, Israel, UK & the U.S.
– Russia & Iran will pay “big price” for gas attack – Trump
– Trump will decide on response to Syria attacks “very soon”
– Trade and economic war between Russia and U.S. deepening
– Russia warns of “grave” response if U.S. launches strike


Source: Quora.com 

The conflict between the U.S., the UK and Israel and Syria and its allies Iran and Russia looks set to escalate in the coming hours and days.

U.S. missile destroyer USS Donald Cook has quickly sailed to just off Syrian territorial waters and is reportedly being “harassed” by low-flying Russian warplanes. CNN Turkey reports that they have buzzed the “Arleigh Burke” class warship at least four times.

In an ongoing war of words, the U.S. is today expected to call for a U.N. Security Council vote on Tuesday on a proposal for a new inquiry into the responsibility for use of chemical weapons in Syria after reports of the poison gas attack on a rebel-held town in Eastern Ghouta.

The poison gas attack has been pinned on President Bashar al-Assad’s forces by the President Trump, PM May and some other western governments.

Yesterday’s attack on the T4 airbase near Homs was initially blamed on “an American aggression” by the Syrian state news agency, however Moscow quickly asserted that the Israeli airforce was responsible.

The mention of Israel by Russia was an unusual move given they haven’t bothered to do so in previous attacks. Israel has been known to attack Iran-supported areas in Syria. By naming Israel Russia was likely making power play. Had they allowed the US to be blamed they would have been expected to retaliate with some force.

It is important to note that the chemical attack may or may not have happened and we may be caught in a web of tactical power-play.

Reuters said it could not independently verify the reports. Others did the same: The Syrian Observatory said it could not confirm whether chemical weapons had been used in the attack on Saturday.

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

The ‘Big Price’ is unknown

Trump tweeted that Syria and its allies will pay a ‘big price’ for its attacks on civilians. Whilst that price is yet to be known, no-one is in any doubt that some actions will be taken.

US Defense Secretary Jim Mattis yesterday warned “I don’t rule out anything right now.” Trump has told reporters that a response is imminent. We also know that recently appointed Bolton is extremely hawkish and has even been labelled a war monger.

This is now not just about a war between Syrians. Global super and nuclear powers are now involved – Russia, Iran and Israel, the U.S. and indeed the UK.

British Foreign Secretary Boris Johnson hinted at possible military action in Syria following a chat with his French counterpart. Johnson said there should be “no impunity for those that use such barbaric weapons.”

But it isn’t just a war of words anymore as seen in the US Navy’s guided missile destroyer (with 60 Tomahawk cruise missiles on board) has dropped anchor just off Syrian territorial waters.

According to the Washington Examiner’s source:

U.S. military planners have drawn up more than one option for possible military action against Syria, including a strike similar to last year’s attack in which 59 sea-launched cruise missiles inflicted heavy damage on a Syrian Air Force airfield in Homs.

Pentagon officials, speaking on condition of anonymity, said the options now are similar to those presented to President Trump after last year’s chemical attack in northern Syria that killed and injured hundreds of civilians, including women and children.

But officials said the president could decide to choose a more robust option this time, given that Syrian President Bashar Assad didn’t seem to get the message last time.

Syrian ally Russia is well aware that the US may take stronger actions this time around, and they’re getting ready for it:

Circular finger pointing does not point to zero responsibility

Some investors are aware that there are alas few innocent parties in this conflict – besides the innocent civilians caught in the ‘Great Game’ machinations. Whilst Assad and Putin are always blamed for chemical attacks, many believe hawkish elements in the West are using misdirection in order to divert attention from its own destructive role in Syria and the entire Middle East, to demonise their opponents and create ‘a massive perceived external threat.’

It is somewhat reassuring that, ‘No one in the Trump administration—not President Trump, not Defense Secretary James Mattis, neither freshly installed National-Security Adviser John Bolton nor Secretary of State-designate Mike Pompeo—has expressed interest in removing the Assad regime by force and rebuilding the Syrian nation, the way the U.S. overthrew Saddam Hussein in Iraq. But some have advocated pushing back hard against Assad and particularly his Iranian allies in Syria’ as reported in The Atlantic.

But it is also worth remembering the politics of fresh-off-the-boat National Security Advisor John Bolton who in 2015 said that the United States carve out an independent Sunni Muslim state in northeastern Syria and western Iraq.

If “defeating the Islamic State means restoring to power Mr. Assad in Syria and Iran’s puppets in Iraq,” pleasing Russia and Iran at the expense of the United States, Israel, and America’s Arab partners, “that outcome is neither feasible nor desirable.”

Trade sanctions are not just in the background but an early shot fired

Trade sanctions and tariffs may well be named as Movement of the Year by Time magazine should the year continue as it has been. For President Trump such moves are two-fold, firstly to demonstrate how to ‘Make America Great Again’ (see trade tariffs on China) and how it can still control other global powers (see sanctions on Russia).

The problem is countries in the firing line have very large arsenals of their own and may not be afraid to use them if they feel they are being attacked and backed into a corner.

New trade sanctions released on an almost regular basis combined with finger pointing over Syria, has meant a ramping up of geopolitical tensions and an increase in attention to and an uptick in gold.

Investors should remain alert to the fact that there are several leaders involved who will not be seen to give in to any kind of threat, whether military or trade based.

Gold tends to outperform other assets when there is uncertainty and conflict – especially risk assets such as stocks and bonds.

Gold performs well because it is proven safe haven asset that has a track record of retaining value throughout history or rising sharply in value during conflict and war.

We are very lucky that we do not live in a conflict zone such as Syria. However, we are vulnerable to terrorism and acts of war, particularly cyber attacks which we know are likely to be used with dramatic effect in future conflicts.

Investors should not be arrogant enough to believe conflicts in Syria and beyond do not affect them. They do and so portfolio protection with allocated and segregated gold bullion coins and bars is an important financial step.

As we concluded last week on the anniversary of Martin Luther King’s death:

There are many side-effects of wartime, one of the most long-lasting is the financial impact on individuals’ savings. Nowadays ‘war’ does not just means guns and tanks, it can be trade wars or currency wars. Sadly, they’re not exclusive of one another.

Trade wars frequently turn to currency wars. These decimate the capital of companies and the wealth of people and nations. It can also result in stocks and shares losing value sharply and crashing. Governments in any kind of war can be ‘forced’ to devalue people’s savings and in the next crisis, bail-ins will likely see savers’ accounts plundered … all for the public good.

This is where gold bullion comes into its own. Throughout history it has acted as a safe haven during times of protectionism and economic war. 

Further Reading

Martin Luther King Jr. Anniversary: Reminds Us Of Costs Of War To Society and Financial System

Trump Risks Trade and Currency Wars – Protectionism and Economic War Loom

News and Commentary

Gold prices edge up as dollar, Asian stocks ease (Reuters.com)

Stocks Climb After Xi’s Address; Treasuries Slip (Bloomberg.com)

China Is Studying Yuan Devaluation as a Tool in Trade Spat (Bloomberg.com)

China forex reserves rise slightly as U.S. dollar weakness continues (Reuters.com)

Cryptocurrency traders use gold in drive to draw Islamic investors (Reuters.com)


Source: Bloomberg

Why a Trade War Would Hurt Everyone (MoneyWeek.com)

Trump’s ‘America First’ Puts the Dollar Last – Deutsche Bank (Bloomberg.com)

Trump’s power struggle with China isn’t about trade (GulfNews.com)

China has the ‘financial arsenic’ to ruin the US – Will it use it? (SMH.com)

Gold and silver futures were easy targets for spoofers (ComexWeHaveAProblem)

JPMorgan Spots A Rare “Bad Omen” For The Market (ZeroHedge.com)

Illinois Enters Its Death Spiral (DollarCollapse.com)

People Lose. Swamp Wins. (BonnerAndPartners.com)

Preparing for War (InternationalMan.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

09 Apr: USD 1,328.50, GBP 941.91 & EUR 1,082.33 per ounce
06 Apr: USD 1,325.60, GBP 946.08 & EUR 1,082.75 per ounce
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

Silver Prices (LBMA)

09 Apr: USD 16.34, GBP 11.59 & EUR 13.32 per ounce
06 Apr: USD 16.28, GBP 11.61 & EUR 13.30 per ounce
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


Recent Market Updates

– Gold Out Performs Stocks In 2018 and This Century By Ratio Of Two To One
– Jamie Dimon Warns Of Potential ‘Market Panic’
– 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

Mark O’Byrne

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

Correctly this Bloomberg news reporter suggests that by putting America first, the dollar will have to weaken

(courtesy Bloomberg/GATA)

Trump’s ‘America first’ puts dollar last, Deutsche Bank analyst says

 Section: 

By Lananh Nguyen
Bloomberg News
Monday, April 9, 2018

President Donald Trump’s “America First” policy means the dollar will have to weaken, according to Deutsche Bank AG.

The administration’s “irreconcilable” goals of cutting trade imbalances while funding a large fiscal stimulus program pose the biggest challenge to the international monetary system since the breakdown of the Bretton Woods agreement in the 1970s, George Saravelos, global co-head of FX research at Deutsche Bank, wrote in a note. The only way to resolve these conflicting objectives is via a weaker dollar, he said.

That’s because the U.S. will probably struggle to attract sufficient foreign capital to fund its twin deficits, and that lack of appetite will likely translate to more currency weakness, he said. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-04-09/trump-s-america-first..

END

Chris Powell comments that Sharp’s Pixley, Ross Norman is probably not a friend of gold

(courtesy Chris Powell/GATA/Sharp Pixley/Ross Norman)

Is Sharps Pixley’s Ross Norman really a friend of gold, and his clients?

 Section: 

11:19p ET Monday, April 9, 2018

Dear Friend of GATA and Gold:

Ross Norman, proprietor of venerable London bullion dealer Sharps Pixley, writes today, “Gold is struggling to find friends.”

Is Norman himself one? It apparently depends on the day.

He would seem to be one insofar as his firm sells the real stuff, not mere paper claims against it that create the illusion of infinite supply and thereby destroy gold’s very purpose.

 But in his new commentary at Sharps Pixley, headlined “Gold Says ‘Peak Complacency,'” Norman professes to wonder about gold’s being “trapped in narrow trading ranges and unresponsive to geopolitical events,” about the lack of news and substantial commentary about gold, and about the seeming complacency of the financial markets.This is strange, since just a month ago in an interview with Grant Williams for Real Vision’s documentary video report about gold, called to your attention by GATA here —

http://www.gata.org/node/18088

— Norman responded affirmatively to a suggested explanation for gold’s inertia: surreptitious intervention against the gold price by central banks.

Norman was asked by Real Vision if central banks would do that sort of thing. He replied: “You betcha,” because “it’s said that the gold price is the reciprocal of trust in central banks. … Are they doing it? ‘I don’t know’ is the answer.” But he added, “They probably are.”

Excerpts from the Real Vision documentary that include Norman’s comments are posted at You Tube here:

https://www.youtube.com/watch?v=gjw1lduO6xw

Of course gold price suppression may be the longest-running story of modern central banking. Prefacing GATA’s Gold Rush 21 conference in the Yukon back in 2005, South African market analyst and gold advocate Peter George addressed the phenomenon that supposedly baffles Norman today. “In the last 10 years,” George said, “the central banks have effectively shown that when there is a real crisis, gold actually goes down — and it’s so blatant, it’s a joke.” See:

http://www.gata.org/node/20

For years GATA has documented the mechanisms, objectives, and official confirmations of surreptitious intervention in the gold market by central banks:

http://gata.org/taxonomy/term/21

Back in November your secretary/treasurer spoke at the Mines and Money conference in London, not far from the Sharps Pixley showroom, to summarize the last year’s developments in central bank gold price suppression policy:

http://gata.org/node/17836

Norman has attended and spoken at that conference before and, given his comments to Real Vision a month ago, is plainly familiar with the proof. Further, since the financial industry regards Norman as a highly respectable person, unlike anyone connected with GATA, your secretary/treasurer would have been glad if he had joined your secretary/treasurer’s typically fruitless tour of London financial news organizations to supply the documentation and solicit journalistic interest in the issue.

But with his commentary today Norman now professes to have no idea about what is going on with gold.

Were other respectable people appalled by Norman’s candid comments to Real Vision and did they demand a retraction of sorts from him, like his commentary published today, so he might regain his respectability?

In any case, why should investors purchase the monetary metals from a firm whose proprietor now professes not to understand their pricing, just a month after he indicated that he did understand it? Is the regard of other respectable people really worth this betrayal of clients and, really, humanity?

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

 end
Bill Holter latest public commentary
(courtesy Bill Holter/Miles Franklin and Holter-Sinclair collaboration

We are hearing daily about the possibility of “trade wars”. It is this possibility that is being blamed for the increased volatility (read markets dropping), but I do not believe it is the only factor. In fact, equity markets began their upset as interest rates marched higher and prior to any talk of trade wars. Of course other factors exist such as cross currency rates (which directly affect trade) and liquidity, not to mention the gross indebtedness of nations.

Looking at “finance and economics” from a broad view, we can see they are part and parcel of and actually used as tools for outright war. There are many examples of history such as the US civil war where the North embargoed the South, Germany being starved for oil in WWII, and more recently the USSR being forced to overspend militarily and having the ruble undermined leading to their ultimate bankruptcy.

A recent article on Zerohedge discusses several ways China can attack the US financially. We’ve heard many of these before. I would mention that a currency devaluation by China would mean a stronger dollar, not exactly immediately harmful to the US. Dumping US Treasuries is another theoretical attack but the simple answer for the US would be for the Federal Reserve to buy any and all treasuries offered for sale …their balance sheet be damned!

It s also posited China could block US services and stop importing US oil. While both might cause some pain, neither is a knock out punch because they are simply not large enough slices of the overall pie. As for “rare earth” materials, these ARE very significant should a hot (non nuclear) war break out. Most all high tech weapons rely on the use of various rare earth metals. In my opinion, if China wanted a hot war, restricting access to these would be the ticket.

We have spoken and written of what we believe is THE ultimate nuclear option financially for China but get trolled for our efforts. The simplest way for China/Russia et al to implode the West’s entire financial system would be to simply stand for delivery of too much gold or silver. We are already witnessing this as COMEX has been offloading “EFP” a massive number of contracts to London. As it stands, London now faces contractual delivery of nearly a full year’s worth of global gold and silver production from contracts standing in just the first three months of the year!

You see, the banking/financial system is of a fractional reserve basis … which always carries with it the risk of a “bank run”. Bank runs happened quite often in the old days because of the fear the bank had over lent versus the actual gold they held. In present time, “old fashioned” bank runs are not as serious a threat because the Fed can (and does) just lend liquidity where and as needed. As example, the Fed conjured up $16 trillion to lend all over the word in late 2008. I guess you could say no amount is too much …even if your balance sheet is only $50-60 billion?

So from the standpoint of “paper”, the Fed has the bases covered so to speak, but do they really? If China (Russia) were to cause a failure to deliver gold or silver, then what? You see, gold (real physical gold) cannot be digitally conjured up out of thin air, so in essence a failure to deliver would be nothing more than a good old fashioned REAL run on the bank! A run on gold (or silver) would then bring into question the entire fractional reserve nature of the entire system. Failure to deliver …will cause a “run on the bank” everywhere! Notice the word “everywhere”. ALL gold exchanges everywhere in the world will be run, but more importantly the confidence in paper markets, commodity or not will also experience a confidence crisis. A simple example would be any type of contract that offers delivery of anything …real or not. As we have harped on for years, “promises” (all) will be questioned to the point of performing …which is mathematically impossible because there are multiples of promises when compared to “money” outstanding.

In the extreme, let’s look at trade itself. During or after a financial “run”, what if trading partners do not trust each other or are even angered to the point of only accepting their own currency or …gold as settlement? The US runs the largest trade deficit ever imagined in history and at the same time does not have much in the way of foreign reserves (and in reality nor gold). How under these circumstances will the US settle trade? The result will be a sharply lower dollar, much higher prices for imported goods (currently $750 billion worth per year), and most likely shortages that develop quite quickly.

The troll community will tell you gold and silver are plentiful and the above scenario cannot happen. I am here to tell you it mathematically must at some point happen simply because global gold and silver production combined only amount to a little over $100 billion. …And by the way, global gold and silver production has already peaked and looks like it will decline rapidly over the coming years. As gold and silver have been “over sold” to the tune of maybe 500 to one, what do you suppose happens if even 1% of paper holders demand delivery? A sovereign government with the financial clout of China could disrupt this fraud with only today’s lunch money!

To finish, forcing a failure to deliver is probably the cheapest and easiest of all options China has in its arsenal. It is also the most nuclear as it strikes at the core of the West’s fraud …and as bonus it will mark up all the bullion China/Russia has purchased over the last many years! (On the downside, it would most probably lead to a hot war but this looks more likely with each sunrise). So while the markets fret about this tariff or that tariff and go into convulsions, the real threat (and you can 100% bet that Presidents Xi and Putin know this) are the tiny markets of gold and especially silver. Deny this at your own peril as it is extremely simple logic!

Standing watch,
Bill Holter
Holter-Sinclair collaboration

____________________________________________________________________________________

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

 

i) Chinese yuan vs USA dollar/CLOSED UP 6.2934  /shanghai bourse CLOSED UP 52.03 POINTS OR 1.66%   / HANG SANG CLOSED UP 499.16 POINTS OR 1.65%
2. Nikkei closed UP 166,06 POINTS OR 0.54%/  /USA: YEN RISES TO 107.01/  

3. Europe stocks OPENED IN THE GREEN     /USA dollar index FALLS TO 89.79/Euro RISES TO 1.2329

3b Japan 10 year bond yield: FALLS TO . +.036/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.01/ 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:: 64.55  and Brent: 69.78

3f Gold UP/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.512%/Italian 10 yr bond yield UP to 1.781% /SPAIN 10 YR BOND YIELD UP TO 1.254%

3j Greek 10 year bond yield RISES TO : 4.043?????????????????

3k Gold at $1337.35 silver at:16.55     7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 255/100 in roubles/dollar) 63.08

3m oil into the 64 dollar handle for WTI and 69 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 107.01 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 0.9538 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1799 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 +0.512%

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 2.786% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.015% /

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

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

US Futures, Global Stocks Soar On Hope Xi’s “Conciliatory” Speech Ends Trade War

In what has become a daily see-saw pattern in global capital markets where the only variable is whether trade war sentiment du jour is better or worse, US futures have soared along with European and Asian shares after overnight China’s President Xi Jinping struck a “conciliatory tone” on trade during a major address, refusing to retaliate to Trump recent trade war escalation.

As we noted last night, President Xi’s speech at the Boao Forum outlined that the Chinese government intends to make a number of policy changes, including lower import tariffs for automobiles and other products, increase market access for foreign investors, strengthen protection of intellectual property rights, and create a more attractive investment environment for foreign investors. President Xi said implementation should be “as soon as possible” suggesting swifter implementation than before.

More importantly, Xi used his speech to dial down tensions on trade, framing a package of measures to open China’s economy, according to Bloomberg’s Tom Orlik. Still, while many of those steps are not entirely new, and the U.S. will likely want to see deeds, not just words, before it considers softening its protectionist stance, even so, with Xi’s speech positioning China as conciliatory, the chances of a damaging trade war appear somewhat lower.

“China is not interested in a trade war for sure, but the U.S. is not bluffing either,” Hans Goetti, founder of HG Research, told Bloomberg. “The truth is that the U.S. wants to come out on top of this, but I do know at some point there would be negotiations.”

“Markets will welcome this rational, measured response from President Xi,” said Ben Kwong, executive director in Hong Kong at KGI Asia Ltd. “By emphasizing that China will seek cooperation with other countries to achieve a win-win solution, Xi is projecting himself as the gentleman here.”

And yet… as UBS’ chief economist Paul Donovan notes this morning, “President Xi’s economic speech recycled the January Davos remarks” and continues:

China was cast as the grown-up in the trade debate; committed to multilateralism, reducing tariffs, and protecting intellectual property. The speech does not allow the Trump Twitter Feed to report “mission accomplished”. If the US cannot spin a win, trade tensions are likely to continue.

Also, just hours after Xi’ speech, Bloomberg reported that trade talks between the US and China broke down last week after the Trump administration demanded that China curtail support for high-technology industries.  The U.S. demands came after Beijing offered to narrow the trade deficit by $50 billionincluding by importing more liquefied natural gas, agricultural products, semiconductors and luxury goods, according to the person. The plans also included opening the financial sector at a faster rate and giving U.S. companies more access to China’s booming e-commerce market, the person added. At the same time, China has begun dispute procedure challenging President Donald Trump’s steel and aluminum tariffs, according to filing with WTO in Geneva.

And while the newsflow was decidedly mixed, algos remained stuck in euphoric “buy everything” mode thanks to Xi’s speech, and this morning futures and global markets were a sea of green.

… As S&P futures rallied as much as 40 points on the Xi rally and traded near yesterday’s highs.

And even Chinese stocks closed at the highs.

In short, for now the euphoria part of the bipolar market dominates. That will change, however, as soon as Trump starts tweeting and reminds the market that his personal lawyer is now a target of an FBI probe that seeks to turn Trump’s most trusted confidant against him, and potentially result in a constitutional crisis should Trump decide to fire Mueller.

Separately, as Citi notes, potential (geo)political risks continue to loom in the background.  “The weather forecast continues to look cloudy as we await to hear Trump’s response to the latest developments in Syria and the Mueller investigation after the FBI raided the home of his personal lawyer. Additionally US/China trade relations will continue to play out over the foreseeable future.”

“Should you buy the dip?” Citi asks rhetorically?

For now, the answer is yes: in addition to the surge in US futures, European equity markets positive across the board, led by mining sector. Leading sectors include industrials and consumer discretionary. Outperformance has come from individual stock moves in LVMH (+5.2%) with sales figures providing positive signals for the luxury sector, lifting Christian Dior (+3.7%) and Kering (+3.1%) in sympathy.

The strength in the Stoxx Europe 600 Index followed shares from Sydney to Hong Kong higher alongside oil and metals. Australia’s ASX 200 (+0.7%) and Nikkei 225 (+0.6%) were underpinned as markets reacted positively to President Xi’s bullish speech with Japan helped by a weaker currency and as automakers cheered the news of the reduced tariffs. China’s ramping Shanghai Comp. (+1.7%) and Hang Seng (+1.7%) conformed to the optimism.

In macro, the USD is marginally weaker against G-10, with a brief spike lower in USD/JPY after further reports of U.S/China talks having broken down. The pound advanced versus the dollar, touching a two- week high at 1.4179; Bank of England policy maker Ian McCafferty said in a Reuters interview that “we shouldn’t dally when it comes to tightening policy modestly.” The Norwegian krone slipped after inflation missed estimates in March. The Russian ruble tumbled a second day to the weakest level since December 2016 amid heightened geopolitical risks and U.S. sanctions.

Focusing on specific currencies, RUB continues to feel the pain, down as much as 4% for the second day running. The currency has moved more in the last 48 hours than the whole range of 2017 and right now, it’s hard to call the bottom as investor sentiment sours. Amid four CPI prints overnight, NOK is looking especially cloudy after a downside surprise.

Bund futures push higher in early trade due to large block trade, overall core fixed income still within a tight range. Crude futures and metals markets supported by generally positive environment. Material names have also been lifted as a result of the aforementioned improving risk sentiment positively affecting the sector due to their exposure to the tariff effects.

Expected U.S. data include wholesale trade sales and PPI. The ECB’s Nouy and Nowotny are both scheduled to speak. There was a clear effort by the ECB to signal economic strength yesterday. The Eurozone economy is likely to come off its recent highs this year as trend growth reasserts itself.

Away from that, Facebook’s Zuckerberg is due to testify before the combined Senate Judiciary and Commerce committee today following the investigation into the scandal around data protection. He will then face the House Energy and Commerce Committee tomorrow.

Bulletin Headline Summary from RanSquawk

  • US equity futures rebounded into positive territory following comments from President Xi Jinping, paring back losses overnight seen following a probe on President Trump’s lawyer Cohen
  • However, the latest reports suggest that the US have rejected China’s offer to cut their trade deficit by USD 50bln
  • Looking ahead, highlights include US PPI, APIs, ECB’s Visco

Market Snapshot

  • S&P 500 futures up 1.1% to 2,647.00
  • MXAP up 0.7% to 174.12
  • MXAPJ up 0.9% to 570.44
  • Nikkei up 0.5% to 21,794.32
  • Topix up 0.4% to 1,731.94
  • Hang Seng Index up 1.7% to 30,728.74
  • Shanghai Composite up 1.7% to 3,190.32
  • Sensex up 0.3% to 33,893.18
  • Australia S&P/ASX 200 up 0.8% to 5,856.97
  • Kospi up 0.3% to 2,450.74
  • STOXX Europe 600 up 0.6% to 377.58
  • German 10Y yield fell 0.5 bps to 0.499%
  • Euro down 0.02% to $1.2318
  • Brent Futures up 1.2% to $69.50/bbl
  • Italian 10Y yield fell 1.4 bps to 1.517%
  • Spanish 10Y yield rose 0.5 bps to 1.243%
  • Brent Futures up 1.2% to $69.50/bbl
  • Gold spot down 0.2% to $1,334.39
  • U.S. Dollar Index up 0.02% to 89.85

Top Overnight News

  • Chinese President Xi Jinping vowed to open sectors from banking to auto manufacturing, in a speech that also warned against returning to a “Cold War mentality” amid his trade disputes with U.S. counterpart Donald Trump
  • Trade talks between the world’s biggest economies broke down last week after the Trump administration demanded that China take steps to curtail support for high-technology industries, a person familiar with the situation said. China begins dispute procedure challenging President Donald Trump’s steel and aluminum tariffs, according to filing with WTO in Geneva
  • President Donald Trump expressed optimism the U.S. will be able to reach a deal with China that diffuses trade tensions between the world’s two biggest economies.
  • For all the talk that China will respond to a trade war by letting its currency slide, traders in forward markets insist it’s hardly likely. In fact, the market is now pricing in just a 1 percent depreciation within a year
  • FBI agents raided offices of Michael Cohen, the president’s personal attorney. Cohen is a key figure in the U.S. probe into alleged Russian meddling in the 2016 election
  • U.K. household spending grew at the slowest pace in almost two years last month as freezing weather kept shoppers at home
  • ECB Governing Council member Ewald Nowotny says in speech that the euro-area economy today clearly is in the middle of a strong and broad-based cyclical upswing and that “now it is time for a gradual normalization of monetary policy”
  • The U.K. hasn’t yet put forward an alternative “backstop” solution for the Irish border, with Brexit negotiations making slow progress since last month’s summit breakthrough, people familiar with the talks said
  • After suffering unprecedented losses last year, currency-focused hedge funds were hoping a bit of market turbulence would help them get back on track in 2018. Things could hardly have gone worse; a BarclayHedge gauge of foreign-exchange trading programs slumped 2.5% over the first three months of 2018, extending last year’s record 11% plunge

Asia stocks traded higher across the board as the region focused on Chinese President Xi Jinping’s address at the Boao Forum which struck a conciliatory tone as he stated that cold war mentality is out of place and that China will expand the opening up of its economy. Furthermore, President Xi also vowed to lower auto tariffs and repeated the suggestion of a win-win scenario. As such, ASX 200 (+0.7%) and Nikkei 225 (+0.6%) were underpinned as markets reacted positively to President Xi’s bullish speech with Japan helped by a weaker currency and as automakers cheered the news of the reduced tariffs. Elsewhere, Shanghai Comp. (+0.5%) and Hang Seng (+1.2%) conformed to the optimism, while US equity futures also recovered from the selling pressure seen from reports the FBI raided Trump lawyer Michael Cohen amid investigation related to possible bank fraud, campaign finance and the payment made to Stormy Daniels.

Top Asian News

  • U.S.-China Talks Said to Have Stalled Over High-Tech Industry
  • Japan Stocks to Watch: Bic Camera, Hisamitsu, Shikoku Electric
  • Billionaires’ Demand for Art to Jewels in India Lures Sotheby’s
  • Temasek, HNA Explore Partnerships a Year After Swiss Dufry Deal

EU equities trade higher on the back of an improved risk sentiment throughout the market. This comes off the back of positive comments from Chinese president Xi Jinping striking a conciliatory tone and advocating the expansion of the Chinese economy. This allowed for the paring back of losses seen overnight for US equity futures that came as a result of President Trump’s lawyer Cohen being raided in relation to the Stormy Daniels case. US equities however corrected slightly in morning trade as there were mentions of a breakdown in talks between the US and China due to disagreements over the high-tech industry. Leading sectors include industrials and consumer discretionary. Outperformance has come from individual stock moves in LVMH (+5.2%) with sales figures providing positive signals for the luxury sector, lifting Christian Dior (+3.7%) and Kering (+3.1%) in sympathy. Material names have also been lifted as a result of the aforementioned improving risk sentiment positively affecting the sector due to their exposure to the tariff effects. Further individual stock news to note includes the approval of Bayer’s (+4.4%) acquisition of Monsanto which has allowed for a strong DAX in early trade (+1.4%) due to their weighting within the index. Underperformance was noted in Givaudan (-3.4%) due to uninspiring financial results

Top European News

  • McCafferty Says BOE Shouldn’t Dally When It Come to Tightening
  • Nowotny Says It’s Time for a Gradual Normalization of ECB Policy
  • Air France-KLM Traffic Figures Solid, Strikes Weigh; Shares Down
  • EDF Shares Fall; ‘Too Risky to Invest in Currently’: RBC
  • European Autos Outperform as China Vows to Cut Car Import Tax

In FX, the DXY looks top-heavy again having lost momentum after its latest flirtation with the 90.000 pivot, and a breakdown of the basket reveals a distinct revival of appetite for riskier currencies. AUD has reversed relative losses and more vs the USD and NZD in wake of conciliatory remarks from Chinese President Xi on import tariffs and wider economic reforms to leap ahead of its G10  counterparts and clear several major technical obstacles in the process. AUD/USD finally soaked up offers at the 0.7700 level, including option-related supply, and the 20 DMA at 0.7719 on the way to 0.7740, while the Kiwi has crossed 0.7300 vs the Greenback as AUD/NZD holds just below 1.0550. GBP has retained its recent bid tone with the aid of hawkish comments from BoE’s McCafferty and strong May MPC hike expectations, with Cable up above 1.4160 again and EUR/GBP retesting bids/support around 0.8700. CAD/EUR/CHF are all pretty flat vs the Dollar, but with the Loonie still underpinned by NAFTA deal hopes/anticipation and breaching some chart levels after the BoC’s upbeat business survey yesterday. USD/CAD has subsequently slipped down through a Fib at 1.2723, the 55 DMA at 1.2715 and 100 DMA at 1.2691 on its way to a circa 1.2675 low before consolidating. EUR/USD has settled above 1.2300, but appears capped by offers around 1.2330 and 1.2345 resistance, while USD/CHF resides just above 0.9550. JPY The stand-out, but not outsize loser given the broad improvement in risk sentiment, as USD/JPY continues to find 107.00 alluring ahead of hefty option expiry interest at the big figure this week, plus upside technical barriers from 107.10-15 (55 DMA) to 107.50-55 (Fib). No respite for RUB or Russian assets in general, as USD/RUB extends to the upside and peaks just shy of 64.000 at one stage.

In commodities, WTI and Brent crude futures are both trading higher, in-fitting with the global risk picture and amid lingering geopolitical tensions. This comes after US President Trump yesterday condemned the reported chemical attack in Syria and stated that the US is to make a decision on next steps in 24-48 hours; Trump refused to rule out military action. Furthermore, traders will also be mindful of the recent comments from Iran yesterday who threatened a strong response if the US pulls out of the nuclear deal and reapplies sanctions. Upcoming focus for the energy sector will likely centre around any developments on this front and tonight’s API inventory release. In metals markets, spot gold is trading with little in the way of firm direction after Xi-inspired downside overnight has been pared back during European hours. Elsewhere, aluminium prices continue to be lifted by the fallout of Russian  sanctions, whilst Chinese Dalian iron ore futures were seen higher during Asia-Pac hours amid the broader risk sentiment seen overnight.

Looking at the day ahead, the early focus in Europe will likely be the February IP print in France. In the US the most significant release is the March PPI report, while other data due includes the March NFIB small business optimism reading and February wholesale inventories print. Away from that, Facebook’s Zuckerberg is due to testify before the combined Senate Judiciary and Commerce committee today following the investigation into the scandal around data protection. He will then face the House Energy and Commerce Committee tomorrow. The ECB’s Nouy, Nowoty and Visco are also due to speak at separate events.

US Event Calendar

  • 6am: NFIB Small Business Optimism 104.7, est. 107, prior 107.6
  • 8:30am: PPI Final Demand MoM, est. 0.1%, prior 0.2%; Ex Food and Energy MoM, est. 0.2%, prior 0.2%
    • PPI Final Demand YoY, est. 2.9%, prior 2.8%; Ex Food and Energy YoY, est. 2.6%, prior 2.5%
  • 10am: Wholesale Trade Sales MoM, est. 0.1%, prior -1.1%; Wholesale Inventories MoM, est. 0.75%, prior 1.1%

DB’s Jim Reid concludes the overnight wrap

Not even Forest Gump would be able to outrun these markets at the moment. You really have to have eyes in the back of your head to keep up. Indeed if a few days ago you’d have told me that Russian equities would be down nearly 12% (on some indices) on Monday I probably wouldn’t have expected the S&P 500 to be up +1.88% at their peak of the day. However we then saw a late slump after an FBI raid of Mr Trump’s personal lawyer’s (Michael Cohen) office to close only +0.33% higher. Later on, Bloomberg noted the raids signalled the FBI are conducting a criminal investigation involving Cohen, but its’ target is unclear. Elsewhere, President Trump noted the raids as ‘disgraceful” and “an attack on our country in a sense”.

Overall it’s fast becoming a year of divergent trends. As an example there are two significant drivers of credit spreads, one is equity volatility and one is bond volatility. Interesting the VIX remains above 20 but European Government bond volatility is back down towards the rock bottom lows. This actually makes valuing Euro credit tough as on equity vol measures they look expensive (widened too much) but on bond vol measures they look pretty cheap (widened too much). 2018 is not 2017!!

Anyway, back to Russia, using the more liquid blue chip MOEX index, equities fell -8.34% – the largest fall since 2014 – when sanctions were imposed after Moscow’s invasion of Crimea. The rouble fell 4.01% – the largest since April 2015. The catalyst was a double whammy of fresh punitive US sanctions announced on Friday, and Mr Trump’s weekend warning that “President Putin, Russia and Iran are responsible for backing Animal Assad. Big price to pay”. This was in response to the alleged chemical attack on Saturday in the last rebel held town in Syria’s Eastern Ghouta. Mr Trump also said yesterday that the situation was being assessed and “major decisions” would be made within 48 hours. So this story could have big developments to come soon.

Moving onto trade. China’s President Xi seems to have struck a conciliatory tone at the Boao Forum and noted that cold war and zero sum mentalities are “out dated” and “let us dedicate ourselves to openness and win-win outcomes”. He added that China “will enter a new phase of opening up” and will open up sectors such as financial services and auto manufacturing, including “significantly lower the import tariffs for vehicles”. Earlier yesterday, President Trump noted the US will “probably” do a deal with China. He added that it wouldn’t be “nice” of Beijing to target American agriculture in retaliation but “we’ll make it up to (our farmers)”. Elsewhere, Trump said “we are fairly close on NAFTA” while Mexico’s Economy Minister Guajardo noted he sees an 80% chance of an agreement by the first week of May.

This morning in Asia, markets are trading higher with the Nikkei (+0.51%), Kospi (+0.06%), Hang Seng (+1.14%), and Shanghai Comp. (+0.51%) all up, while futures on the S&P are also up c1%.

Now recapping other markets performance. Similar to the S&P, the Dow (+0.19%) and Nasdaq (+0.51%) also pared back earlier gains to close modestly higher, with the Nasdaq up as much as 2.31% at its peak. In Europe, the Stoxx 600 edged up +0.13% while the DAX (+0.17%) and FTSE (+0.15%) also advanced.

Government bonds softened with core 10y bond yields 0.5bp-1bp higher while peripherals slightly outperformed. 10y treasuries reversed a 3.7bp sell off before closing +0.6bp to 2.780% while Bunds were also little changed (+0.8bp).  The US dollar index fell -0.30% while both the Euro and Sterling gained c0.3%. In commodities, WTI rose +2.19% to largely reverse Friday’s losses. Precious metals gained c0.5% (Gold +0.25%; Silver +0.68%), while other LME base metals also advanced, in particular aluminium following the US sanctions on the Russian firm Rusal, which produces c7% of the world’s aluminium (copper +0.90%; nickel +1.24%; aluminium +4.75%).

Turning to ECB speak on economic growth and inflation. It seems that despite the recent slowing in European PMIs, ECB officials have remained fairly upbeat on economic growth. The ECB’s Draghi noted “we expect the pace of economic expansion to remain strong in 2018” while the ECB’s Praet added “…we have seen a softening of a number of indicators, but they’re still fully in line with the good scenario that we have, so we don’t see reasons to change our assessment of our projections”. Further, the ECB’s Coeure also noted “we don’t have worries about Euro zone growth” because it is simply stabilising after last year’s acceleration, although he has conceded that there is “not  enough” inflation.

Elsewhere, the ECB’s Constancio told the EU Parliament that adjustments to QE won’t be negative for growth and that “we should be cautious in order to avoid that some early strongly restrictive policies that could derail” the gradual pick-up in inflation. On Brexit, he noted the EU was not “punishing” London’s financial district as “…that was a consequence of the decision the UK took (to leave the EU and the single market), it’s not our doing”.

Over in the US, the Fed’s Kaplan noted its’ too early to gauge the economic impacts of the proposed tariffs, which is in line with prior comments by his peers. He also reiterated his base case on rates are 2 more hikes for this year. Elsewhere, the Congressional budget office has released its latest projections for the US budget deficit, which is expected to surpass $1trn by 2020, two years earlier than prior estimates. Nearer term, the deficit is expected to be $804bln in fiscal 2018 (vs. $563bln previous) and $981bln in fiscal 2019 (vs. $689bln previous previous). On a GDP basis, the CBO estimates that federal debt will rise to 96% of GDP by 2028 from 76% of GDP last year, which would be the highest level of indebtedness since 1946 and more than twice the average level recorded over the last half-century.

Turning to FX, unnamed sources told Bloomberg yesterday that senior Chinese officials are studying the potential for devaluing the Yuan, with one part of the analysis looking at the effects of using FX as a tool in trade negotiations with the US, while the second part looks at devaluing the Yuan to offset the drags from a trade deal that limits exports. Markets didn’t seemed to be impacted yesterday with the Yuan ending -0.06% lower, although it did weakened as much as -0.23% during the day.

Staying with the FX theme, yesterday Robin Winkler and the FX Strategy team published a report called “America First = Dollar last: a new global order under Trump”. In the note the team argue that the Trump administration faces two irreconcilable objectives: it cannot achieve lower US trade surpluses while  cheaply funding a large fiscal stimulus at the same time. The team argue that these conflicting objectives pose the most severe challenge to the international monetary order since the collapse of Bretton Woods in the 1970s, and in their view the only way to resolve them is via a weaker dollar. You can find a link to the report here.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. The Euro area’s April Sentix investor confidence index continued to decelerate and was at the lowest reading since February last year (19.6 vs. 20.8 expected). Germany’s February trade surplus was also below market at €18.4bln (vs. €20.1bln) as exports fell more than expected at -3.2% mom (vs. 0.4%). Elsewhere, the UK’s March Halifax House price index rose 1.5% mom and on a quarterly basis, growth was above expectations at 2.7% yoy (vs. 2% expected).

Looking at the day ahead, the early focus in Europe will likely be the February IP print in France. In the US the most significant release is the March PPI report, while other data due includes the March NFIB small business optimism reading and February wholesale inventories print. Away from that, Facebook’s Zuckerberg is due to testify before the combined Senate Judiciary and Commerce committee today following the investigation into the scandal around data protection. He will then face the House Energy and Commerce Committee tomorrow. The ECB’s Nouy, Nowoty and Visco are also due to speak at separate events.

3. ASIAN AFFAIRS

i)TUESDAY MORNING/MONDAY NIGHT: Shanghai closed UP 52.03 POINTS OR 1.66%  /Hang Sang CLOSED UP 499.16 POINTS OR 1.65%   / The Nikkei closed UP 166.74 POINTS OR 0.54%/Australia’s all ordinaires CLOSED UP .80% /Chinese yuan (ONSHORE) closed UP at 6.2934/Oil UP to 64.55 dollars per barrel for WTI and 69.78 for Brent. Stocks in Europe OPENED IN THE GREEN    .   ONSHORE YUAN CLOSED UP AT 6.2934 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.2912 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING  MUCH STRONGER AGAINST THE DOLLAR /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

Japan’s Abe in trouble after the Finance Ministry admits that Moritomo was told a lie. If Abe goes so does Kuroda and if they are both gone then their flawed QE is in jeopardy

(courtesy zerohedge)

“I Am Very Ashamed”: Abe Cabinet In Peril After Finance Ministry Official Admits Moritomo Was Told To Lie

For a brief period, it seemed that the Moritomo Gakuen scandal which first swept through the Abe administration in March 2017 and re-emerged one month ago, was about to fade away. On March 27, in much-anticipated sworn testimony at the Diet, a former Finance Ministry official categorically denied Tuesday any involvement of Prime Minister Shinzo Abe, his wife or his top allies in a document falsification scandal that had rocked the government by pushing down voter approval rates in recent media polls.

“It was never reported to the Prime Minister’s Office. It’s something that was conducted internally by the Financial Bureau” at the Finance Ministry, claimed Nobuhisa Sagawa quoted by the Japan Times, a former National Tax Agency head who oversaw the bureau when the document tampering is reported to have occurred — between February and April last year.

Sagawa gave the testimony as a sworn witness, meaning he would be punished if he lied or refused to speak without legitimate reasons. Because of how much was at stake, and because of the solemn nature of his denial, the constant cloud of corruption that had dogged Abe for over a year, seemed to disperse and led to a modest rally in the Nikkei following Sagawa’s testimony.

Unfortunately for Abe, as we predicted in early March when the scandal erupted afresh, the ongoing attempts at covering up the Prime Minister’s lies would backfire, and they did so spectacularly on Monday, when a Japanese Finance Ministry official admitted that nationalist school operator Moritomo Gakuen was instructed to provide false explanations for a deeply discounted land saleigniting further speculation over the role of Prime Minister Shinzo Abe and his wife in the 2016 deal.

“We are now more suspicious that the discount was made in consideration of the Abes,” Kiyomi Tsujimoto, head of Diet affairs for the opposition Constitutional Democratic Party, told reporters Monday according to the Nikkei Asian Review.

The comments Monday from Mitsuru Ota, chief of the ministry’s Financial Bureau, also were cited by others as showing that the ministry knew of the dubious aspects of the sale and was actively involved.

The Japanese government agreed in 2016 to sell a plot in Osaka Prefecture valued at 956 million yen ($8.93 million at current rates) for just 134 million yen to Moritomo Gakuen. The steep discount ostensibly was intended to cover the cost of waste disposal at the site shouldered by Moritomo. Akie Abe, the prime minister’s wife, was appointed an honorary principal of the elementary school to be built on the land.

And here’s where the lies started to pile up.

A Financial Bureau staffer called Moritomo’s lawyer around Feb. 20, 2017, and urged the school operator to claim the disposal process took a lot of money and “thousands of trucks,” Ota told a Diet upper house committee. Opposition parties at that time had noted Moritomo would need to move over 4,000 truckloads of waste to justify the roughly 800 million yen discount.

“I am very ashamed. I am very sorry,” Ota said repeatedly. The land sale and instructions to Moritomo Gakuen occurred before Ota became chief of the Financial Bureau.

Financial Bureau chief Mitsuru Ota, center, appears in front of a Diet committee on April 9.

The unexpected emergence of the truth sparked commotion and shock among opposition lawmakers at the meeting. Even members of the ruling Liberal Democratic Party seemed stunned by the ministry’s actions. One legislator banged on her desk, while another loudly called Ota “an idiot”, perhaps for being dumb enough to tell the truth, and not realizing that the entire fate of Japan’s Abeonomics – and Kuorda’s QE – is not in peril.

The cover up only got worse from here: Ota also said someone from his office told a staffer at the Kinki Local Financial Bureau, which oversaw the land sale, to urge Moritomo to stick to the story. But neither the Kinki bureau nor Moritomo’s lawyer agreed.

Ota also suggested that the abovementioned former National Tax Agency chief Nobuhisa Sagawa bore some fault. Sagawa, who led the Financial Bureau at the time, “spoke to a Diet committee without checking the facts” and “made comments that could be taken the wrong way,” he said.

In other words, he lied under oath.

At a hearing last month, Sagawa said he lacked the power to manipulate land appraisals. But the Board of Audit of Japan in November found insufficient evidence to support the estimated waste disposal costs. Saeko Tani, then an aide to Akie Abe, was also found to have relayed questions from Moritomo to the Finance Ministry and sent the responses via fax.

Meanwhile, some suspect a comment by the prime minister pressured Financial Bureau staffers to ensure they had a plausible reason for the discount.

Worse, now that the cover up has emerged, Abe’s job is in peril: “If I or my wife end up being involved, I will quit as prime minister and a lawmaker,” Abe had said on Feb. 17, 2017.

The Osaka prosecutors office has agreed to investigate the case in response to complaints of possible government misconduct. The Financial Bureau’s apparent attempt to coordinate its story with Moritomo likely was uncovered as part of this process.

* * *

Needless to say, the long-overdue emergence of the truth is a disaster for Abe. Over the weekend, and prior to Ota’s testimony, the disapproval rating for Shinzo Abe’s Cabinet exceeded approval rating for the first time in 6 months in a survey conducted by JNN. According to Bloomberg, the approval rating fell 9.3% to 40%, while the disapproval rating rose 9.5% to 58.4%.

Abe’s latest plunge in approval – for which he apologized earlier in the day to parliament – however came not due to the Moritomo scandal but over another government documents scandal in a month: the most recent scandal relates to Japanese troops’ logs from Iraq, where they were dispatched starting in 2003 to show support for the U.S.-led military campaign. Opposition lawmakers have said Japan Self-Defense Force officers’ failure to inform the defense minister that they had found such documents throws doubt on civilian control over the military.

“This damages trust, not just in the Defense Ministry and the Self-Defense Forces, but the government as a whole,” Abe said Monday in response to questions in parliament. “I want to apologize sincerely to the people.”

And while the people may be willing to forgive the sniveling prime minister – who already quit once as prime minister a decade ago, blaming his resignation on clinical diarrhea – over the Iraq war snafu, getting caught lying in the Moritomo scandal may prove to be the last nail in the coffin of Abe’s political career.

And if Abe goes, so does the BOJ’s Kuroda, and Japan’s grand – if doomed – QE experiment.

end

c) REPORT ON CHINA

China/USA

Trump reacts to the last “reconciliatory” speech by Xi.  Trump wants China to stop subsidizing their high technology industry and their 2025 Initiative. China has offered to lower USA deficits by 50 billion but to Trump, this is recycled Davos words

(courtesy zerohedge)

US- China Trade Talks Break Down After US Rejects “Frustrated” Beijing’s Offer To Cut Deficit

While much of the overnight session was market by the previously discussed buying euphoria that sent futures over 1% higher after Monday’s disappointing close following a “conciliatory” speech by China’s president Xi who – once again – promised to open China’s economy and lower import tariffs, there was a moment of sheer angst when just before 4am ET, Bloomberg almost broke the narrative of Xi trade war “reconciliation” when it reported that trade talks between the US and China broke down last week after the Trump administration demanded that China curtail support for high-technology industries, which in turn spiked the JPY, if only briefly.

As Bloomberg details, the tentative negotiations broke down when Liu He, a vice premier overseeing economics and finance, told officials last Thursday that Beijing had rejected a U.S. request to stop subsidizing industries related to its “Made in China 2025” initiativea key target of Peter Navarro’s ire which he has accused China of using to force companies into transferring technology in areas like robotics, aerospace and artificial intelligence.

Curiously, China’s rejection of U.S. demands came after Beijing had already offered to narrow the trade deficit by $50 billion, including by importing more liquefied natural gas, agricultural products, semiconductors and luxury goods. The plans also included opening the financial sector at a faster rate and giving U.S. companies more access to China’s booming e-commerce market, the person added.

In other words, China was willing to make a major concession in the escalating trade war, but the Trump administration rebuffed it when it considered that Beijing would not taper the “2025” initiative, and also coincides with Trump’s escalated demand last Thursday that called for an addition $100 billion in tariffs.

* * *

After negotiations collapsed, vice premier Liu reportedly said President Xi Jinping was ready to fight back hard if Trump wanted a trade war.

China was open to talks with the U.S., but wouldn’t initiate them under the current conditions, the person said, citing Liu.

What this dust up suggests, is that contrary to the overnight euphoric “hot take” of Xi’s speech, “the trade dispute won’t be resolved quickly, despite Trump’s optimistic tweets and Xi’s conciliatory address to a regional economic forum Tuesday” according to Bloomberg.

In fact, it’s worse: “In recent days, Chinese officials have expressed increased frustration with the U.S., with the foreign ministry on Monday calling talks “impossible” under current conditions.”

To be sure, Xi did all he could to exude a sentiment of optimism during his Boao speech:

Xi pledged a “new phase of opening up.” He reiterated plans to allow more foreign participation in sectors like automobile manufacturing and banking, and said China would strengthen measures to protect intellectual property rights.

Xi also called on countries to export high-technology goods to China, which has been a point of contention with the U.S. A commentary in the official People’s Daily after the speech said Beijing would never open at the expense of its interests — a signal that it would continue supporting “Made in China 2025.”

How did Trump react to the Xi speech? While we have yet to get a tweet from the president on the topic, a White House official who watched Xi’s speech told Bloomberg he welcomed remarks on intellectual property while saying that actions speak louder than words.

Trump’s administration was unified in the view that U.S. jobs were endangered by what it called China’s forced technology transfers and state-directed intellectual property theft, the official said.

And just to underscore what happens next, Bloomberg again repeats that Liu’s remarks  – who is taking the lead on the government’s response to Trump’s trade moves – “suggest the dispute won’t be resolved easily.” The meeting was held before Trump instructed officials to consider tariffs on an additional $100 billion in Chinese imports, bringing the value of the nation’s products set for higher duties to about $150 billion. The U.S.’s bilateral trade deficit was $375 billion last year.

Shortly thereafter, China vowed a harsh response to Trump’s latest threat, helping to spur a selloff that prompted the S&P 500 Index to fall 2.2 percent last Friday. Geng Shuang, a foreign ministry spokesman, said Monday that it was “even more impossible” for trade talks to take place under the current environment.

“This trade conflict was initiated by the U.S. alone and it is entirely the one to blame,” he said. “The U.S. is wielding the big stick of trade sanctions while keeping saying they are willing to talk. I am not sure who the U.S. is putting on such acts for.”

We wonder how long it will take algos to realize that what really matters from the overnight newsflow is this very explicit deterioration in trade talk which guarantees that the trade conflict isn’t going away any time soon, rather than Xi’s speech which, as UBS’ Paul Donovan wrote earlier, recycled his January Davos remarks.”

end

An excellent article written by Marshall Auerback who basically is stating what Kyle Bass has been pounding the table on China.  China has huge debt and huge excess capacity.  If China closes unwanted excess capacity that will send the country economically into a tailspin something that the leaders do not want so they will try and continue on racking up debt and trying to export their deflation to the rest of the world

(courtesy Marshall Auerback)

 

Forget The Trade War, China Has Even Bigger Problems Domestically

Authored by Marshall Auerback via CreditWritedowns.com,

China’s debt build-up has provoked increasing concern amongst Beijing’s policy makers. The resultant excess capacity exports deflation to the rest of the world. This creates pressures for China’s competitors which could engender a tougher response in line with that of Trump. How China deals with these constraints is the big question for their economy.

The transformation of China’s economy, both in terms of GDP growth rate and poverty reduction since it started its transition to the market system in the late 1970s, has arguably been the biggest macroeconomic event of the past half-century. The model that has characterized the country’s high output growth rates has followed in the footsteps of the Asian “tigers“: first, its high growth rates of capital accumulation, driven by high investment-output ratios; second, a marked outward orientation through export-led growth policies; and third, the pursuit of industrialization (in particular the production and export of manufacturing goods), a key ingredient for fast growth and development. By almost every metric, China has advanced from economic backwater to the world’s second-largest GDP (and by some measures, is now the largest economy).

But in spite of signs of renewed economic activity in March, the country’s debt build-up has provoked increasing concern amongst Beijing’s policy makers, as it points to an underlying long-term financial fragility, particularly if trade war pressures intensify. Just last October during the Communist Party Plenary, Zhou Xiaochuan, then head of the country’s central bank, warned of a “Minsky moment“:

“When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified. If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment’. That’s what we should particularly defend against.”

To elaborate on Zhou’s statement, the economist Hyman Minsky described how once the debt “disease” goes metastatic, there will come a “Minsky moment” (a term originally coined by economist Paul McCulley) when euphoria gives way to concern and then to panic liquidation and credit revulsion. When that dynamic is in full flower, policy makers are powerless to avert it, no matter how much they want to bring the punchbowl back. Governor Zhou’s public warning was no doubt in response to recent rapid increase of debt which, according to Professor L. Randall Wray, “increased from 162 percent to 260 percent of GDP between 2008 and 2016,” and remains “a topic of discussion, if not deep concern.”

It may seem odd to warn of a Chinese slowdown, given the recent renewed surge in exports and the corresponding rise in both the manufacturing and non-manufacturing purchasing managing indices (both the manufacturing and service gauges remain above 50, and therefore indicative of robust economic activity). But these gains ought to be viewed against the backdrop of a more hostile external environment for Chinese manufactured goods. Discussing the recently imposed tariffs on steel and aluminum, the New York Times reported that Trump has already provided brief exemptions to “Canada, Mexico, the European Union, Australia, Argentina, Brazil and South Korea” (countries that “account for more than half of the $29 billion in steel sold to the United States in 2017”), which reinforces the idea that it is largely China that remains the major target of Trump’s economic nationalists.

In that context, China’s ramped-up production in March could well be interpreted as an effort to evade the tariffs by exporting products into the U.S. under the wire, suggested economist Raymond Yeung of the ANZ group. If so, that could provoke further aggressive responses from Trump’s trade hawks, especially if it results in an expansion of the bilateral trade surplus with the U.S. Adding to the pressures, Reuters reports that “Top Trump administration officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors in negotiations to avoid plans to slap tariffs on a host of Chinese goods and a potential trade war.”

But how serious are these threats? Are they simply a case of “smoke and mirrors,” as the economist Dani Rodrik has suggestedChina itself appears to be taking the risk of a trade war seriously, imposing retaliatory tariffs of up to 25 percent on 128 food imports from the U.S., an understandable negotiating posture given its position as a major creditor nation. But the very fact of its creditor status might presage problems for Beijing. If anything, history has shown that it is trade surplus nations, not debtors, that tend to be the biggest casualties of trade wars, as this account of America’s ill-fated Smoot-Hawley tariff imposition illustrates:

“World War I… made America the world’s creditor. The center of the financial world moved from London to New York, and billions of dollars were owed to large U.S. banks. The Smoot-Hawley Tariff threw inter-allied war-debt repayment relations into limbo by shutting down world trade. An international moratorium on debtor repayments to the United States froze billions in foreign assets, thus weakening the financial solvency of the American banks. Specifically, over $2 billion worth of German loans were obstructed by Germany’s inability to acquire dollars through trade to repay its debts. This same scenario played out in many other countries as well.”

China today occupies a creditor position comparable to the U.S. in the 1930s. Trump was certainly exaggerating when he suggested that “trade wars are good and easy to win.” But the U.S. is a largely self-sufficient economy; China is not—which is what Trump was implicitly highlighting when he made his comments (albeit, typically oversimplified and ignoring the fact that the U.S. itself still has quasi-bubbleized assets and very high levels of indebtedness).

Even if the trade war threat turns out to be more talk than action, there are other ways in which Beijing might risk a Minsky-style deflation. There is a very old idea from business cycle theory prior to the Second World War that private sector over-investment can become so unsustainably high that even without a fiscal/monetary shock, there could be a fall in autonomous investment. Once that begins, accelerator multiplier dynamics can lead to a cumulative economic contraction even if interest rates plummet and monetary conditions ease.

There are grounds for thinking this is an idea whose time has come again. Though fixed investment is very low in the U.S., it is not so globally, especially in China, which has a condition of over-investment that is historically unprecedented. A decline in global autonomous investment that threatens accelerator and multiplier dynamics should follow.

Some would argue that the global capex overinvestment problem is purely a product of low interest rates, but in China’s case, it is also a product of their economic model. Although the reforms undertaken over the past few decades have given China the appearance of a market economy, it is not in many important aspects, notably in regards to the allocation of capital, which is not market-determined.

In essence, China’s economy is a historical blending of three distinct strands:

First is the old Communist, command-style economy, which, on the most conservative measure, accounts for at least one-third of China’s GDP (and possibly higher, according to some studies). This sector is comprised largely of the old “white elephants,” the state-owned enterprises (SOEs).

Second is the East Asian model, whereby the government directs investment into particular areas via the aegis of private companies, but with considerable state backing. This “dirigisme” is a variant of the old Japanese “MITI administrative model,” wherein the government essentially targets priority sectors (such as agricultural products, high-speed rail, aerospace, semiconductors, robotics, AI, and civil aviation). You can see evidence of this “state-directed capitalism” in the country’s recently published “Made in China 2025” document, an explicit policy of import substitution designed to make the country largely self-sufficient in a broad range of industries by 2025. (Import substitution is a red flag for trade hawks, especially as many of Beijing’s newly designated priority sectors are areas currently dominated by the U.S., and seeking to expand exports into China.)

Essentially, here the Chinese state often acts as “loss leader” as it tries to develop national champions, mobilizing the financial resources of large oligopolistic conglomerates to enable them to make long-term investments in research. (As an aside, this used to be a model embraced by the U.S. until the anti-government attitudes of recent decades took hold; the private sector was thought to be unable to make sufficient large-scale R&D investments because no single company on its own would have the resources/longevity to exploit the potential financial returns.) China has already done this in areas such as solar power, and it is one of the reasons why global solar costs have fallen so precipitously over the past decade (as well as contributing to the bankruptcy of Solyndra here in the U.S. back in 2011).

Third, and finally, is China’s “wild west capitalism,” which has been manifested in areas such as property speculation, “wealth management products,” the shadow banking system, and the country’s comparatively young capital markets (including a newly established oil futures market). Odd that despite the Asian Financial Crisis of 1997/98 and the global meltdown of 2008 (both products of global financial liberalization), China persists in expanding this “third leg,” given the challenges the country has experienced attempting to curb its speculative excesses, while simultaneously seeking to restructure the state sector.

In any case, the challenge for China is clear: If policy makers move too aggressively in countering any one of these vulnerabilities, they risk setting in motion a huge debt deflation dynamic. This is especially dangerous, given that overall capital expenditure in China is still in excess of 40 percent of GDP. By way of comparison during Japan’s bubble years, capex as a percentage of GDP got as high as 32 percent, and that was considered bubble-like territory, while U.S. capital expenditure as a percentage of GDP has typically stood around 15-17 percent.

So China’s policy makers have a fine line to tread. In essence, they have been using the old command economy to arrest any incipient debt deflation dynamics in the free market segment. The problem is that the command economy is home to all of the white elephants, notably construction, heavy machinery, bulk chemicals, steel, coal, and shipbuilding, all of which contribute significantly to global overcapacity. As Jianguang Shen, chief Asia economist at Mizuho Securities Asia, notes:

“SOE reform, debt, overcapacity and ‘zombie companies’ are all deeply connected issues. For private companies in overcapacity industries, after several years of losses there’s no way to continue. The owner will shut them down or sell them off, but at SOEs they can keep getting bank loans or government support.”

Shutting down these companies would create mass unemployment. So the government keeps them going, via subsidies, bailouts, and low interest rate loans. Excess capacity, therefore, gets dumped on China’s trading partners, thereby imparting an ongoing deflationary bias to the global economy, while China builds up global champions at home, which will ultimately squeeze out foreign competition.

This is in effect what Trump is seeking to counter right now via his latest salvo against China. But will the threat of more tariffs prove effective against Beijing? Bear in mind that China’s political imperatives are considerably different than those of the U.S. In the U.S. (as well as most other western democracies), if a governing party screws up, it can be voted out of office. In China, the entire political legitimacy of the Communist Party is tied up with the country’s economic prosperity. They miscalculate, and the party risks losing its monopoly on power, party members get arrested, and probably a few are shot as well. There are limits to political liberalization.

Shutting down excess capacity in the state-owned enterprises in response to tariff threats, then, would likely risk a severe economic downturn in China. It would create the prospect of mass layoffs, heightening domestic turmoil, while simultaneously undermining the political standing of the ruling party. To avert this outcome, we should therefore expect that China’s policy makers will respond as they always have: continuing to guide financing to all of these white elephants, effectively exporting deflation to the rest of the world and risking a trade backlash. Hardly ideal, but understandable, given the competing domestic political imperatives. For all of today’s market chatter about “creeping inflation” in the U.S., then, this will likely prove ephemeral if China continues to dump much of its excess capacity on the rest of the world to offset the political fallout from tackling its own domestic bubbles. The resultant pressures China’s competitors will face could engender a tougher response in line with that of Trump, which is what appears to be happening right now. So while today’s political machinations may well appear to be nothing more than a high-stakes game of poker bluffs, the longer-term dynamics suggest that it could well herald the start of a dangerous dynamic in which China and the rest of the world are fated “to live in interesting times,” as the apocryphal Chinese curse exhorts.

END

Trump is not going to like this:  China installs radar scrambles on the Spratly Islands in the South China Seas

(courtesy zerohedge)

In Direct Rebuke To US, China Installs Radar Scramblers On Spratly Islands

As we’ve documented again and again (and again and again), China’s military buildup in the Pacific, particularly surrounding the Spratly Islands, a collection of small islands, cays and atolls in the South China Sea, is one of the greatest long-term risks to peace and stability in the US and many of China’s neighbors, who have territorial claims in the region that may conflict with China’s.

While the trade disparity between the US and China has garnered most of the attention in the press since then-candidate Trump began railing against the world’s No. 2 economy during the early days of his campaign, military commanders and other experts have repeatedly warned that a military conflict in the region over the coming decades is looking increasingly unavoidable.

Spratly

Roughly two weeks ago, satellite images showed China had deployed its only aircraft carrier, the Liaoning, for a series of live-fire drills in the South China Sea (the ship was flanked by 40 other warships and submarines) – an unprecedented exercise of naval force that immediately prompted a US response (not to be outdone, the Navy sent three aircraft carrier battle groups to the region to try and check Beijing’s influence).

Those drills took place between March 24 and April 5, and were aimed at improving the Navy’s conflict-readiness – though Beijing insisted they weren’t intentionally targeted at any one country. They followed a series of aerial exercises earlier this year involving Su-35s and H-6s over the South China Sea – another unprecedented escalation. Taken together, these are China’s largest military exercises to date.

Spratly

Improving the People’s Liberation Army’s capacity for US-style joint combat operations – involving all the armed services – is one of the main goals of a four-year military-restructuring plan authorized by Xi Jinping.

Amid all of this, the US has engaged in at least one military escalation of its own: The US has already carried out two “freedom of navigation” – or “freeop” – missions in the area. These exercises entail sending a US destroyer or some other warship to sail within 12 miles of the Spratly Islands. That’s compared with four freeops for all of last year. They’re meant to assert the US’s right to travel freely in the South China Sea, but they’ve reportedly angered Beijing.

Now, in the latest galling assertion of its dominance over the region, the Wall Street Journal has reported that China installed equipment on two Spratley outposts capable of scrambling military communications and radar systems used by US ships – a clear rebuke to the US and China’s neighbors.

Maps

The Chinese leadership is sending a clear message to the US: Despite what you might believe, you don’t have the “freedom” to navigate in the South China Sea. The scrambling technology will strengthen China’s ability to assert its extensive territorial claims in the region, while hindering US military operations in a contested region that includes some of the world’s busiest shipping routes.

A US official confirmed to WSJ that “China has deployed military jamming equipment to its Spratley Island outposts.” Furthermore, the equipment was likely installed during the last 90 days.

The U.S. assessment is supported by a photo taken last month by the commercial satellite company DigitalGlobe and provided to The Wall Street Journal. It shows a suspected jammer system with its antenna extended on Mischief Reef, one of seven Spratly outcrops where China has built fortified artificial islands since 2014, moving sand onto rocks and reefs and paving them over with concrete.

China’s Defense Ministry didn’t respond to a request for comment.

The US’s biggest concern regarding China’s Spratleys presence is that building outposts on the islands is allowing it to control crucial trade routs, consolidate its claims to the South China Sea, reduce the US’s capability to defend Taiwan and enable the People’s Liberation Army to launch an attack or counterattack with little or no warning.

Beijing claims “indisputable” sovereignty over all South China Sea islands and their adjacent waters and demarcates its claims with a U-shaped line stretching from the Chinese coast almost as far south as Malaysia.

China says its island-building is for defensive purposes only, but the activity has stirred fears that it could use the outposts to enforce territorial claims that overlap with those of Brunei, Malaysia, Taiwan and Vietnam, as well as the Philippines, which is a U.S. treaty ally. In the last year or so, China has tried to smooth relations with other claimants while continuing work on the islands.

Three of its outposts in the Spratlys—Fiery Cross Reef, Mischief Reef and Subi Reef—now feature 10,000-foot runways, hangars for fighter planes, ammunition bunkers, barracks and deep-water piers for ships.

While Chinese military personnel are at the Spratly outposts and Chinese ships dock there, China has yet to station ground units or fighter planes on the artificial islands, U.S. officials say. Nor have surface-to-air missiles or antiship cruise missiles been deployed in the Spratlys, though spots to install such weapons have been prepared, U.S. officials said.

But China’s ability to quickly shift military assets to the outposts is a serious concern for the Pentagon since it could enable China to control vital trade routes, exclude other claimants from disputed areas and interfere with the U.S. military’s plans to defend Taiwan.

“China has built a massive infrastructure specifically—and solely—to support advanced military capabilities that can deploy to the bases on short notice,” Adm. Harry Harris, the head of the U.S. Pacific Command, told the Senate Armed Services Committee last month.

According to U.S. intelligence, the new jamming equipment was deployed within the past 90 days on Fiery Cross Reef and Mischief Reef.

China has been building up its military presence in the area since Beijing deployed HQ-9 surface-to-air missiles and J-11B jet fighters in the disputed Paracel Islands back in 2016. Those islands are about 500 miles north of the Spratlys. Recently, Beijing established a Southern Theater Command to supervise Chinese forces responsible for controlling the South China Sea.

But aside from bulking up its military forces, China’s escalation in the region has served a political purpose as well.

Timothy R. Heath, a senior analyst at the Rand Corporation, said that while the main purpose of the exercise was to improve the readiness of China’s forces, it was also sending a political message.

“To Chinese domestic audiences, Beijing is signaling strength and readiness to defend the country’s interests, which may bolster nationalist support for the government,” Mr. Heath said. “To the region and the United States, Beijing is signaling that it has been acting with restraint, but that it is willing to meet confrontational policies with its own confrontational policies.”

Maj. Gen. Jin Yinan of China’s National Defense University said the South China Sea drills weren’t connected to the recent U.S. deployment of three aircraft carriers to the region. The USS Theodore Roosevelt arrived in Singapore last Monday. The USS Carl Vinson visited Vietnam last month and did joint exercises with Japan in the South China Sea. The USS Ronald Reagan is currently based in Japan.

“Even if all three carriers came to the South China Sea, what about it?” Gen. Jin told state-run China National Radio. U.S. carrier operations in the area gave China a chance to study their operations and their radar and other electronic signals, he said.

“What else can you do apart from a show of strength? Can you attack me? Do you dare to open fire?” he said.

Given all this, the fallout from another yuan devaluation appears inconsequentially mild

4. EUROPEAN AFFAIRS

GREAT BRITAIN

Not only are the Russians angry but also anger is building up in the uK over their government’s handlingof the Skripal case

(courtesy Slane/The BlogMire.com)

8. EMERGING MARKET

end

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

Euro/USA 1.2329 UP .0009/ REACTING TO MERKEL’S FAILED COALITION/ SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES ALL IN THE GREEN    

USA/JAPAN YEN 107.01 UP  0.252 (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 1.4158 UP .0024  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.2674 DOWN .0030 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 9 basis points, trading now ABOVE the important 1.08 level RISING to 1.2280; / Last night Shanghai composite CLOSED UP 52.03 POINTS OR 1.66% /   Hang Sang CLOSED UP 499,16 POINTS OR 1.65% /AUSTRALIA CLOSED UP .80% / EUROPEAN BOURSES  OPENED IN THE GREEN

The NIKKEI: this TUESDAY morning CLOSED UP 166.06 POINTS OR 0.54%

Trading from Europe and Asia

1/EUROPE OPENED  IN THE GREEN

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 499.16 POINTS OR 1.65%  / SHANGHAI CLOSED UP 52.03 POINTS OR 1.66%   /

Australia BOURSE CLOSED UP .80% 

Nikkei (Japan) CLOSED UP 166,06 POINTS OR 0.54%

INDIA’S SENSEX  IN THE GREEN 

Gold very early morning trading: 1336,50

silver:$16.51

Early TUESDAY morning USA 10 year bond yield: 2.786% !!! UP 0  IN POINTS from MONDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ 

The 30 yr bond yield 3.0150 UP 0  IN BASIS POINTS from MONDAY night. (POLICY FED ERROR)/

USA dollar index early  TUESDAY morning: 89.79 DOWN 5  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 1.726% UP  3  in basis point(s) yield from MONDAY/

JAPANESE BOND YIELD: +.0.036% DOWN 2/5    in basis points yield from MONDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.262% UP 3  IN basis point yield from MONDAY/

ITALIAN 10 YR BOND YIELD: 1.796  up 3  POINTS in basis point yield from MONDAY/

the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD:RISES TO +.516%   IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.2339 UP .0019 (Euro UP 19 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 107.23 UP 0.488 Yen DOWN 49 basis points/

Great Britain/USA 1.4168 UP .0036( POUND UP 36 BASIS POINTS)

USA/Canada 1.2605 DOWN  .0096 Canadian dollar UP 96 Basis points AS OIL ROSE TO $65.26

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This afternoon, the Euro was UP 19 to trade at 1.2339

The Yen FELL to 107.23 for a LOSS of 49 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 36 basis points, trading at 1.4168/

The Canadian dollar ROSE by 96 basis points to 1.2605/ WITH WTI OIL RISING TO : $65.26

The USA/Yuan closed AT 6.2832
the 10 yr Japanese bond yield closed at +.036%  DOWN 2/5   IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1 IN basis points from MONDAY at 2.7936% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.0134  DOWN 3    in basis points on the day /

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

Your closing USA dollar index,89.72  DOWN 12 CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED UP 72.00 POINTS OR 1.00%
German Dax :CLOSED UP 135.57 POINTS OR 1.11%
Paris Cac CLOSED UP 44.57   POINTS OR 0.84%
Spain IBEX CLOSED UP 20.70 POINTS OR 0.21%

Italian MIB: CLOSED UP 119.12 POINTS OR 0.52%

The Dow closed UP 428.90 POINTS OR 1.79%

NASDAQ WAS UP 143.96 Points OR 2.07% 4.00 PM EST

WTI Oil price; 65.26 1:00 pm;

Brent Oil: 70.59 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 63.10 UP 257/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 257 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.516% 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:$65.58

BRENT: $70.94

USA 10 YR BOND YIELD: 2.7991%   THIS RAPID DECENT IN YIELD IS ALSO VERY DANGEROUS/RECESSION COMING

USA 30 YR BOND YIELD: 3.0190%/

EURO/USA DOLLAR CROSS: 1.2354 UP .0034  (UP 34 BASIS POINTS)

USA/JAPANESE YEN:107.18 UP 0.430/ YEN DOWN 43 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: 89.64 down 20 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.4174: UP 0.0042  (FROM LAST NIGHT UP 42 POINTS)

Canadian dollar: 1.2606 UP 96 BASIS pts

German 10 yr bond yield at 5 pm: +0.516%


VOLATILITY INDEX:  20.47  CLOSED  DOWN  1.30

LIBOR 3 MONTH DURATION: 2.338%  ..LIBOR HAS INCREASED FOR 43 CONSECUTIVE DAYS. 

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

TRADING IN GRAPH FORM FOR THE DAY

Xi & Zuck Save The World – Stocks Soar, Bonds Ignore

Tech regulation? meh… Trade Wars? Pffff… Economic data weakness? ha…

China’s Xi sparked the overnight bid in US equity futures which hovered around the cliff-edge from last Thursday’s plunge for the rest of the day…

Cash markets drifted largely sideways from their gap open until Zuck started speaking then everyone got excited…

Small Caps are back in the green year-to-date, joining Nasdaq as Trannies remain the laggards…

All on the back of yet another huge short-squeeze

Facebook ripped higher as soon as Zuck started speaking…

FANGMAN stocks all surged again today but NVDA and AMZN remain red in April still..

Banks extended gains on the day but note that all the gains were overnight and in fact bank stocks ended below their open…

Bonds were not buying the equity market exuberance at all…

Treasury yields were mixed on the day with the long-end outperforming (unch) as the short-end sold off (2Y +3bps)…

Breakevens jumped back to yesterday’s highs as real yields fell…

30Y Yields tested down towards a 2 handle once again…

And the yield curve flattened further with 2s10s back below 50bps…

The Dollar Index fell for the 3rd straight day to 10-day lows…

Cryptos bounced today, with Ethereum up 11% since Friday’s close…

Despite Ethereum suffering a death cross today…

Dollar weakness has helped spark commodity strength but crude stands out…

WTI/RBOB and Energy stock prices soared for a second day…

Finally we note that ‘soft’ survey data has collapsed in recent days as hope tumbles back to ‘hard’ data’s reality…

 end
TRADING TODAY/EUROPE
ECB member states that the ECB will end QE by the end of the year but also suggests a 20 basis point rise in the interest rate from -40 basis points to -20 basis points.  That sends the Euro and gold higher
(courtesy zerohedge)

Euro Surges After ECB’s Nowotny Suggests 20Bps Rate HIke

After a relatively flat overnight session for the common currency, the EURUSD spiked as much as 50 pips higher after Reuters quoted ECB hawk Ewald Nowotny who this morning sounded especially hawkish, suggesting that the ECB could lift the deposit rate from -0.40% to -0.20% to start the process of rate hikes…

  • ECB COULD LIFT DEPOSIT RATE TO -0.2 PCT FROM -0.4 PCT TO START PROCESS OF RATE HIKES – NOWOTNY

… however, it was unclear when said process would begin:

  •  ECB WILL END BOND BUYS THIS YEAR, TOO EARLY TO SAY WHEN RATE HIKES WILL START – NOWOTNYa

In immediate response, the EUR spiked higher, rallying past its 55-DMA, rising as much as 50 pips to 1.2378, but has since tapered some gains and was up 0.3% at 1.2360; it had been trading at around 1.2330 when the Nowotny comments hit the tape. According to Bloomberg, 1.2400 (option strikes) and 1.2422 (March 28 high) are the next resistance levels.

As several desks have noted, while Nowotny is one of the ECB’s most hawkish members, discussion of a 20bps hike to start has been very much taboo until now, and as Citi notes, “is aggressive enough on its own.” In breaking with Draghi’s “measured” tradition, Nowotny said that he would have no problem hiking rates as the first step and as part of a staggered hike, which is a stark comparison to the gradual/cautious ECB official guidance.

Earlier in the day, Nowotny said that now is the time for gradual policy normalization and that “the euro-area economy today clearly is in the middle of a strong and broad-based cyclical upswing.”

Then, in the Reuters interview that followed, Nowotny said that “I would have no problem with moving from -0.4% to -0.2% as a first step and then, as a second step, include the (main refinancing) policy rate,” he said. However do note that Nowotny has given no indication on when – “This is the structure. The exact timing? It’s too early to tell you,” he added.

Following Nowotny’s statement, there has been an immediate squeeze on the headlines, with the EUR move higher likely exaggerated by a short squeeze. The move has also translated into broader USD selling against G10 such as GBP. In fixed income, German 10y bund yields at 0.524% now.

The silver lining: the Stoxx 600 Banks index rose as much as 0.6% after the Reuters report, as it would indicate that, at least in the theory, European bond curves could steepen as a rate hike would suggest and accelerate tapering of QE.

end

Trading NY

Stocks Extend Overnight Gains As Navarro Says “Doors Open” For Trade Talks

Yet another headline proclaiming yet more old news that America is willing to talk about trade tariffs from Peter Navarro and US equity market machines lift stocks to the highs of the day…

Trump trade adviser Peter Navarro was speaking on Bloomberg Radio. He began with his usual aggressive rhetoric…

  • *NAVARRO SAYS CHINA HAS LONG HISTORY OF IP THEFT, TECH TRANSFERS
  • *NAVARRO SAYS U.S. `BEING TAKEN APART’ BY UNFAIR TRADE PRACTICES
  • *NAVARRO: U.S. TO DEFEND ITS FARMERS AGAINST CHINA’S `BULLYING’

But then he said this…

  • *NAVARRO SAYS THERE ARE DOORS OPEN FOR TRADE TALKS WITH CHINA

And added that:

  • *NAVARRO: IT’S DEBATABLE WHETHER TARIFF THREATS HURT MARKETS

And the “news” sparked a rebound off the post-open selling pressure…

With Nasdaq erasing all losses from last Thursday’s plunge…

But bonds remain entirely unimpressed…

 end
Market data USA

Gold loves this:  producer prices which is a forerunner of future inflation is hotter than ever at 3% with the core coming in at 2.7%

(courtesy zerohedge)

Producer Prices Hotter-Than-Expected, Core Hits 7 Year Highs

The headline PPI Final Demand YoY print of 3.0% is higher than expected and back to last year’s highs…

But core PPI surged to 2.7% YoY – the highest since Sept 2011.

Over half of the March increase in the index for final demand goods is attributable to a 31.5-percent jump in prices for fresh and dry vegetables.

A major factor in the March advance in prices for final demand services was the index for outpatient care (partial), which climbed 0.4 percent.

The indexes for machinery, equipment, parts, and supplies wholesaling; cable and satellite subscriber services; airline passenger services; food and alcohol wholesaling; and hospital inpatient care also moved higher. In contrast, margins for automotive fuels and lubricants retailing fell 10.4 percent. The indexes for apparel, footwear, and accessories retailing and wireless telecommunications services also decreased

On Final Demand Services, over 70% of the broad-based advance in March can be traced to the index for final demand services less trade, transportation, and warehousing, which climbed 0.3 percent

 end

A good rise in wholesale inventories as well as a sales rebound will be positive for 1st quarter GDP

(courtesy zerohedge)

Wholesale Inventories Rise Most Since 2013 As Sales Rebound

February’s preliminary wholesale inventories print rose the most since Sept 2012 and while the final print was slightly lower at +1.0% MoM – still the highest since Oct 2013.

However, the inventories-to-sales ratio remained flat at 1.26x as sales also surged (+1.0% MoM vs +0.1% exp) rebounding from January’s drop.

Year-over-year, wholesale sales continue to outpace inventory growth…

The solid inventories print (better than expected) will likely spark modest Q1 GDP upgrades.

end

SWAMP STORIES

As I said yesterday,  with the Mueller raid on lawyer Cohen:  “Attorney-Client privilege is dead” /Trump lashes out at the FBI

(courtesy zerohedge)

“Attorney–Client Privilege Is Dead!”: Trump Lashes Out At FBI After Cohen Raid

President Donald Trump is feeling the heat Tuesday morning.

After the FBI raided the home, office and hotel of longtime Trump personal attorney Michael Cohen – purportedly seizing privileged information regarding communications between Cohen and his clients (a group that, of course, includes the president) – President Donald Trump took some time out from a meeting with military leaders to blast both the special counsel and his own attorney general for allowing the “witch hunt” to proceed.

In a surprisingly intense rebuke, Trump described the raid as “disgraceful,” “a whole new level of unfairness” and even went as far to describe it as “an attack on our country.” Once again, he brought up the fact that “no one is looking at the other side”.

This morning, Trump kept the drumbeat of attacks going with a series of tweets implicitly targeted at Mueller and the prosecutors who carried out the raid. For the nth time, Trump declared Robert Mueller’s investigation “a total witch hunt”…

Donald J. Trump@realDonaldTrump

A TOTAL WITCH HUNT!!!

…And in a tweet that reiterates suspicions that investigators seized privileged communications between Trump and his personal attorney – communications that are privileged for a reason, because they could lead to self-incrimination if publicly exposed – Trump angrily declared that “Attorney-client privilege is dead!”

Donald J. Trump@realDonaldTrump

Attorney–client privilege is dead!

Trump of course, is correct to note that communications between clients and lawyers are usually beyond the reach of law enforcement based on this constitutional privilege, on occasion authorities can waive this provision.

One possible explanation for the unprecedented raid is because prosecutors had decided that “less intrusive” measures have no chance of success. Indeed, the referral to the FBI reportedly came straight from special prosecutor Robert Mueller.  Former federal prosecutor Ken White, in a blog for Reason, wrote: “That’s a very fraught and extraordinary move that requires multiple levels of authorization within the Department of Justice” and an “elaborate review process.”

It also means that Trump will increasingly seek to lash out elsewhere and distract from his growing legal troubles, which almost certainly means another cruise missile attack on Syria is imminent, which in turn could launch a new, and “hot” conflict with Russia.

Markets slumped yesterday during the final minutes of the session on the news FBI agents had raided Cohen’s home. Cohen is reportedly being investigated for bank fraud and campaign finance violations, and he is only the second subject in the Mueller probe to see their home and office raided by the Fed’s. The first was Paul Manafort.

Late on Monday, Trump called Cohen a “good man” and labeled the special counsel Robert Mueller’s team “the most conflicted group of people I have ever seen.”

end

Last night, Adam Davidson explains the ramifications to Trump on why the raid will keep him up at night

(courtesy Adam Davidson/zerohedge)

Here’s Why The Cohen Raid Will Keep The Trumps Up At Night

The FBI raid on the offices of Trump lawyer Michael Cohen – one of the president’s closest and longest-serving confidants – has rattled investors, political analysts and even the president himself as many have determined – correctly, it seems – that these raids represent nothing short of a major turning point in the long-running Mueller probe.

Since investigators must convince a judge that there’s a high possibility they will discover evidence of criminality before receiving approval for a search warrant, the criminal stakes for Cohen – who has been accused by a watchdog group of lying under oath and of violating campaign finance laws in connection with his $130,000 Stormy Daniels payoff – have never been higher.

And in a 13-part twitter thread published this morning, Adam Davidson (the New Yorker staff writer and host of popular podcast Planet Money) explained exactly why the raid on Cohen’s office is such a watershed moment in the probe.

The upshot, is that, other than Don Jr. or Ivanka turning states’ witness against their father, Cohen is the former Trump Organization dealmaker who is most likely to provide investigators with evidence of criminality.

Cohen

As Davidson explains, Cohen’s role within the Trump administration was never that of a typical attorney – the firm had other attorneys who handled the legal grunt work.

Cohen’s role could best be described as “roving dealmaker” – perhaps the only resident dealmaker in the Trump Organization who wasn’t a member of the Trump family.

Because of this, Cohen had a front-row seat when the Trump Organization turned to shady third-tier oligarchs – a group that includes corrupt politicians, sanctions violators and money launderers – for financing after the president rescued his business from the brink of bankruptcy in the 1990s.

If Cohen were to flip, he could provide damning testimony against Don Jr. and Ivanka.

Despite the nature of Cohen’s relationship with Trump and his role in the Trump Organization, Harvard Law professor Alan Dershowitz

warned Monday during an appearance on Fox News that the FBI raid was an assault on the privileged lawyer-client relationship. Dershowitz said the raid was an attempt to turn Cohen against Trump.

“This may be an attempt to squeeze Cohen,” he said. “He’s the lawyer, he’s the guy who knows all the facts about Donald Trump, and to get him to turn against his client.”

“This is a very dangerous day today for lawyer-client relations,” he added.

But most importantly, Cohen said the raid was so dangerous because it gives the FBI the option of deciding which information seized from Cohen should be pursued.

The likelihood that Trump fires Mueller has never been higher, Davidson says. However, Mueller probably anticipated this – that’s why he sought approval from the DOJ to transfer whatever incriminating evidence he had found to prosecutors in New York, who are presumably beyond Trump’s grasp.

But regardless of what happens – if Cohen is swiftly indicted or if this is just the beginning of months of legal wrangling – one thing is for certain: The Cohen raid was a watershed moment.

After more than a year of plodding along, expect developments in the Mueller probe to start occurring at a much faster pace

end

here are the reasons behind the FBI raid on Michael Cohen:  they want to know payments made to two women:

1. Stormy Daniels

2 Karen MacDougall

(courtesy zerohedge)

Reasons Behind FBI Raid On Michael Cohen Revealed

Initial reports about the FBI’s early morning raid of Trump lawyer Michael Cohen’s office, home and hotel room suggested that investigators were looking for evidence of bank fraud and violations of federal elections rules – though it was initially unclear if the raid pertained to Cohen’s $130,000 payment to former adult film actress Stormy Daniels, or if it was related to Cohen’s status as a subject in the Mueller probe.

But rather than let the confusion fester, the New York Times has dispelled the uncertainty with another anonymously sourced report offering more details about the FBI’s goals. As it turns out, FBI agents were searching for records regarding payments made to two women who had claimed they had affairs with President Trump, as well as information pertaining to the publisher of the National Enquirer, and his role in paying off one of the women.

Cohen

As we first learned during the campaign, National Enquirer owner David Pecker reportedly paid off former Playboy model Karen MacDougal, who had an affair with Trump around the time his youngest son, Baron, was born, offering her $150,000, purportedly to write a fitness column for his magazines.

The search warrant carried out by the public corruption unit of the Manhattan federal attorney’s office seeks information about Karen McDougal, an ex-Playboy model who claims she carried on a nearly yearlong affair with Mr. Trump shortly after the birth of his son in 2006. Ms. McDougal was paid $150,000 by American Media Inc., the Enquirer’s parent company, whose chief executive is a friend of Mr. Trump’s.

Agents were also searching Michael D. Cohen’s office for information related to Stephanie Clifford, better known as Stormy Daniels, who says she also had sex with Mr. Trump while he was married. Mr. Cohen has acknowledged that he paid Ms. Clifford $130,000 as part of a nondisclosure agreement to secure her silence just days before the 2016 presidential election.

Mr. Cohen’s lawyer, Stephen Ryan, on Monday called the raids “inappropriate and unnecessary.” In an email on Tuesday, he referred back to that statement.

And while we learned yesterday that Deputy Attorney General Rod Rosenstein had signed off on Special Counsel Robert Mueller’s request to transfer evidence gleaned from the Trump Organization to Geoffrey Berman, the interim US Attorney for the Southern District of New York, today we learned that Rosenstein personally signed off on the FBI’s raid of Cohen’s offices.

As the Times explains, raiding a lawyers’ office and searching their files is incredibly sensitive. Authorizing a search would require approval at the highest levels of the DOJ – particularly given the sensitivity of the subject at hand.

Rod J. Rosenstein, the veteran Republican prosecutor handpicked by Mr. Trump to serve as deputy attorney general, personally signed off on Monday’s F.B.I. decision to raid the office of Mr. Cohen, Mr. Trump’s personal attorney and longtime confidant, several government officials said.

The early-morning searches enraged Mr. Trump, associates said, setting off an angry public tirade Monday evening that continued in private at the White House as the president fumed about whether he should fire Mr. Rosenstein. The episode has deeply unsettled White House aides, Justice Department officials and lawmakers from both parties, who believe the president may use it as a pretext to purge the team leading the investigation into Russia meddling in the 2016 election.

Searching a lawyer’s files is among the most sensitive moves federal prosecutors can make as they pursue a criminal investigation. Mr. Rosenstein’s personal involvement in the decision signals that the evidence seen by law enforcement officials was significant enough to persuade the Justice Department’s second-in-command that such an aggressive move was necessary.

Furthermore, Rosenstein’s involvement – as well as the involvement of top prosecutors and officials in Washington and New York – make it difficult for Trump to cry partisanship because all of the people involved with these decisions are Republicans.

The involvement of Mr. Rosenstein and top prosecutors in New York in the raid of Mr. Cohen’s office makes it harder for Mr. Trump to argue that his legal problems are the result of a witch hunt led by Mr. Mueller. In addition to Mr. Rosenstein, all of the top law enforcement officials involved in the raid are Republicans: Mr. Mueller, Christopher A. Wray, the F.B.I. Director, and Geoffrey Berman, the interim United States attorney in New York.

The raid has increased the likelihood that Trump will fire Mueller – despite the advice of his lawyers. He’s also inching closer to firing Rosenstein, whom he nearly fired last summer. Both Democrats and some Republicans have warned Trump against taking such drastic action – including Chuck Grassley, the Republican head of the Senate Judiciary Committee, who has said it’d be “suicide” for Trump to fire Mueller.

Of course, the Mueller probe could take a backseat once again if Trump decides to authorize a military intervention in Syria that would kill two birds with one stone: It would put to rest suspicions that Trump is being influenced by Russian President Vladimir Putin, while also creating a major spectacle to draw eyeballs away from Mueller.

end

Terribly conflicted Robert Mueller is investigating a Ukrainian man who gave the Clintons more than 13 million.  The problem here is that this man gave 150,000 dollars to Trump for a speech and that is what Mueller is investigating..not for the 13 million given to Hillary Clinton..shameful.
(courtesy zerohedge)

Mueller Reportedly Investigating Trump Links To Ukrainian Who Gave Clintons More Than $13 Million

Right before the close, reports that the FBI had raided the office, home and hotel room of Trump attorney Michael Cohen slammed stocks to their lows of the day. The news provoked a furious response from Trump, who again accused Mueller of conducting a “witch hunt” while slamming senior officials in his own Justice Department, who signed off on Mueller supplying the evidence that led to the raid to the local US attorney’s office.

And now, at 8:30 pm ET on a Monday night, the New York Times has reported that Mueller is investigating a $150,000 donation to the Trump foundation that was given from a pro-European Ukrainian businessman during the early days of his campaign.

The donation, which was reportedly solicited by Trump attorney Michael Cohen, was made in exchange for a 20-minute speech that Trump gave about Ukraine and how the US had failed to stop Russia from victimizing the country.

Pinchuk

We first learned of the donation shortly after the election. However, the fact that Mueller is investigating the donation was not publicly known.

But there’s a catch: Pinchuk, who has a history of supporting a pro-European Ukraine, was also a major Clinton donor.

Don’t forget, the Clinton Foundation received more individual money from Ukrainian donors than any other foreign country.

Clinton

Between 2009 and 2013, including when Mrs. Clinton was secretary of state, the Clinton Foundation received at least $8.6 million from the Victor Pinchuk Foundation, according to that foundation, which is based in Kiev, Ukraine. It was created by Mr. Pinchuk, whose fortune stems from a pipe-making company. He served two terms as an elected member of the Ukrainian Parliament and is a proponent of closer ties between Ukraine and the European Union.

Unsurprisingly, Pinchuk and his family are no angels.

He is the son-in-law of a former president of Ukraine whose administration was marred by endemic corruption and human rights violations – exactly the type of donor who would give to the Clinton Foundation.

“Mr. Pinchuk is the son-in-law of a former president of Ukraine, Leonid Kuchma, who from 1994 to 2005 led a government criticized for corruption, nepotisk and the murder of dissident journalists.

Pinchuk, who has also been accused of – get this – illegally dumping steel became the focus of a minor controversy during the campaign pertaining to his ties to Clinton. In 2008, Pinchuk made a five-year $29 million commitment to the Clinton Global Initiative, according to the Wall Street Journal.

*  * *

All told, Pinchuk gave more than $13 million to the Clinton Foundation since 2006, and promised to give more.

Meanwhile he paid Trump $150,000. That’s roughly 88x more for Clinton than Trump.

Trump made the speech via video at the Yalta European Strategy Conference during August 2015, when he was still the frontrunner but the Republican field was crowded and most considered his bid a long shot. At the time, it received scant news coverage, mostly focusing on Trump’s awkward delivery. It was also one of his first foreign policy speeches of the campaign. During the speech, Trump criticized former President Barack Obama for not doing more to stand up to Russian President Vladimir Putin.

The speech was organized by Doug Schoen, a longtime Republican strategist with ties to Trump. After the speech, Cohen reportedly called Schoen to solicit an “honorarium” donation to the Trump Foundation.

We imagine this won’t be the first leak stemming from the cache of documents that Mueller extracted from the Trump Organization with his subpoena. We know his team is looking into Cohen’s involvement in a deal to build a Trump Tower Moscow which stalled, but not before Cohen reportedly solicited help from a spokesman for the Kremlin.

end

Another Trump advisor has resigned:  Tim Bosser.  It is obvious that Bolton’s views differ markedly from Bosser

(courtesy zerohedge)

Trump’s Homeland Security Advisor Tom Bossert Has Resigned

Update: As we anticipated weeks ago, John Bolton’s arrival in the West Wing is already causing major upheaval among the ranks of the West Wing’s national security and homeland security staffers.

As the Washington Post points out, Bosser’s departure comes a day after Bolton’s first official day on the job. Bossert, who was a staunch ally of HR McMaster, likely knew his days were numbered as soon as McMaster announced his retirement.

Bossert, a favorite of Chief of Staff John Kelly, is leaving one day after national security adviser John Bolton began the job. Bossert, an ally of former national security adviser H.R. McMaster, was believed to be on shaky footing in the Bolton era and he resigned two days after Michael Anton, the National Security Council spokesman, also quit.

Bossert, a longtime government official who was often behind the nuts-and-bolts planning of the administration’s initiatives, wasn’t a marquee name. But he was liked by the president, senior administration officials said, and often defended Trump’s agenda in meetings.

“The president is grateful to Tom’s commitment to the safety and security of our great country,”White House press secretary Sarah Huckabee Sanders said in a statement.

Of course, Bossert isn’t Bolton’s first ouster: Late Sunday, National Security Spokesman Mike Anton told Politico on Monday that he was leaving the administration.

* * *

More turmoil in the White House to start on Tuesday morning, where Bloomberg reports that Trump’s Homeland Security Advisor, Tom Bossert, is said to be resigning.

Prior to his (brief) White House tenure, Bossert was a fellow at the Atlantic Council and prior to that he served as Deputy Homeland Security Advisor to President George W. Bush. In that capacity, he co-authored the 2007 National Strategy for Homeland Security. Prior to that, Bossert held positions at FEMA, the Small Business Administration, the Office of the Independent Counsel, and the House of Representatives.  He also was appointed as the Director of Infrastructure Protection under Bush, overseeing the security of critical U.S. infrastructure, a post he held for two years.

In his latest public appearance, Bossert made the media round this weekend, and in an interview on ABC‘s ‘This Week’ with Martha Raddatz, he questioned the “timing” of the alleged chemical weapons attack in Syria, but he called it “a quite serious problem” and said “all options” remain on the table.

Bossert said the attack falling exactly one year after the U.S. bombed a Syrian airbase over another suspected use of chemical weapons in rebel-held territory “struck” him, but the era where the U.S. acted as world police is over.

“I think the president’s got a point that’s been very clear,’ he said. “For too long and the United States of America has been taken advantage of in their responsibility to provide security for the entire world… putting their resources and their treasure and their boys and girls on the line… American troops aren’t going to fix the six or seven different ongoing conflicts and wars going on in the Middle East or in Syria at this stage.”

Bossert also said that “the pendulum has swung in the wrong direction for too long and the United States of America has been taken advantage of in their responsibility to provide security for the entire world.”

Moments ago, the White House confirmed Bossert’s resignation:

“The president is grateful for Tom’s commitment to the safety and security of our great country. Tom led the White House’s efforts to protect the homeland from terrorist threats, strengthen our cyber defenses, and respond to an unprecedented series of natural disasters. President Trump thanks him for his patriotic service and wishes him well.”

end

Rosenstein personally approved the FBI raid on Trump’s lawyer. Since all the key NY Dept of Justice officials are Republicans it must mean that the evidence must be compelling in order for them to orchestrate a raid.  Berman the lead Dept of Justice lawyer recused himself from the case and that will also infuriate Trump

The question is : who will be fire first, Rosenstein or Mueller

(courtesy zerohedge)

Rod Rosenstein Personally Approved FBI Raid On Trump’s Lawyer: NYT

On Tuesday morning Trump made it quite clear that he was furious with the FBI and Robert Mueller for raiding both the office and house of Michael Cohen, in the process breaching the attorney-client privilege between the president and his personal lawyer. As the NYT further noted, Trump’s advisers “spent the last 24 hours trying to convince the president not to make an impulsive decision that could put the president in more legal jeopardy and ignite a controversy that could consume his presidency.” To be sure, Trump began Tuesday morning with a pair of angry tweets, calling the raids “A TOTAL WITCH HUNT!” and venting that “attorney–client privilege is dead!”

And now, it appears that Trump can split his anger equally between Mueller and his own handpicked deputy AG, because according to the NYT citing three government officials, Rod J. Rosenstein personally signed off on Monday’s F.B.I. decision to raid the office of Michael D. Cohen.

The revelation comes at a sensitive time for Trump’s mental state, just hours after he reportedly engaged in an angry public tirade Monday evening that continued in private at the White House “as the president fumed about whether he should fire Mr. Rosenstein” according to the NYT.

The episode has deeply unsettled White House aides, Justice Department officials and lawmakers from both parties, who believe the president may use it as a pretext to purge the team leading the investigation into Russia meddling in the 2016 election.

There is another major concern for Trump: as the NYT adds, Rosenstein’s personal involvement in the decision signals that the evidence seen by law enforcement officials was significant enough to persuade the Justice Department’s second-in-command that such an aggressive move was necessary.

The revelation will not help the growing animosity between the president and the DOJ’s 2nd in command:

Trump has long been mistrustful of Mr. Rosenstein, the Justice Department’s No. 2 official, who appointed the special counsel, Robert S. Mueller III, and now oversees his investigation into Mr. Trump’s campaign and possible obstruction of justice by the president.

In his remarks Monday night, the NYT notes that the president lashed out at Mr. Rosenstein for having “signed a FISA warrant,” apparently a reference to the role Mr. Rosenstein played in authorizing the wiretap of a Trump associate in the Russia inquiry.

Also, as previously reported, Rosenstein was this close: last summer Trump considered firing Rosenstein, instead, he ordered Mr. Mueller to be fired, then backed down after the White House counsel refused to carry out the order.

Trump is now again telling associates that he is frustrated with Rosenstein, according to one official familiar with the conversations.

Still, while Rosenstein must sign off on all moves that Mr. Mueller makes, that is not necessarily the case for searches that are carried out by other federal law enforcement offices. DOJ regulations require prosecutors to consult with senior criminal prosecutors in Washington – but not necessarily the deputy attorney general – before conducting a search of a lawyer’s files.

Meanwhile, as the NYT points out, Rosenstein’s involvement, including that of top New York prosecutors in the Cohen office raid, “makes it harder for Trump to argue that his legal problems are the result of a witch hunt led by Mueller.” In addition to Mr. Rosenstein, all of the top law enforcement officials involved in the raid are Republicans: Mr. Mueller, Christopher A. Wray, the F.B.I. Director, and Geoffrey Berman, the interim United States attorney in New York.

Separately, as ABC adds, the FBI raid was executed by the US Attorney Office in NY: the man who runs that office, Geoffrey Berman, was appointed by Trump, although as ABC also adds, Berman reportedly recused himself from the Cohen probe, yet another recusal that is certain to infuriate Trump.

Jonathan Karl

@jonkarl

SCOOP: ABC News has learned Geoffrey Berman, the U.S. Attorney for the Southern District of New York, is recused from the Michael Cohen investigation. He had no role in raid of Cohen’s office. Another recusal that will make @realDonaldTrump unhappy.

And now we wait to see whom Trump will fire first: Rosenstein, or Mueller, or both..

end

The witch hunt escalates as Prosecutors ask Trump Organaization for Stormy Daniels’ documents

(courtesy zerohedge)

“Witch Hunt” Escalates As Prosecutors Ask Trump Org For Stormy Daniels’ Documents

Following what we now know was an FBI raid on Trump’s lawayer’s offices  to gather documents related to payments to women who claimed to have an affair with President Trump, The Wall Street Journal reports  that sources say federal prosecutors in New York have asked the Trump Organization for records relating to a $130,000 payment made by his personal lawyer to a former adult-film actress.

The NY Times just confirmed that the raid on Trump’s lawyer’s office was related to payments to various women claiming to have had an affair with the President.

And now WSJ reports that the request of the Trump Organization came in connection with those raids by the Federal Bureau of Investigation Monday on the office, hotel room and home of Trump lawyer Michael Cohen.

As a reminder, Mr. Cohen made the payment to Stephanie Clifford, a former porn star known professionally as Stormy Daniels, less than two weeks before the 2016 presidential election.

The payment was in exchange for Ms. Clifford’s signing a nondisclosure agreementabout an alleged sexual encounter with Mr. Trump in 2006.

Mr. Cohen and White House representatives have denied any sexual encounter took place between Mr. Trump and Ms. Clifford. Mr. Trump said publicly last week he was unaware of the deal Mr. Cohen made with her, and that he didn’t know where the money came from.

Of course, there is no confirmation of this ‘source’:

Mr. Cohen and his lawyer, Steven Ryan, couldn’t immediately be reached for comment. A Trump Organization representative said, “We do not generally comment on such matters, but have and will continue to comply with inquiries from proper authorities.” A spokesman for the Manhattan U.S. attorney’s office declined to comment.

But it seems the “WITCH HUNT” just got more Salem-y.

 END

And now we wait to see whom Trump will fire first: Rosenstein, or Mueller, or both…

I will  see you  WEDNESDAY night

HARVEY

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