NUMBER OF NOTICES FILED TODAY FOR MAY CONTRACT:6 NOTICE(S) FOR 600 OZ.

TOTAL NOTICES SO FAR 630 FOR 63000 OZ (1.9595 tonnes)

For silver:

MAY

95 NOTICE(S) FILED TODAY FOR

475,000 OZ/

Total number of notices filed so far this month: 6039 for 30,195,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $8327/OFFER $8427: DOWN $92(morning)

Bitcoin: BID/ $8237/offer $8337: DOWN $182 (CLOSING/5 PM)

end

First Shanghai gold fix comes at 10 pm est

The second Shanghai gold fix: 2:15 pm

First Shanghai gold fix gold: 10 pm est: 1300.30

NY price at the same time: 1293.95

PREMIUM TO NY SPOT: $6.35

Second gold fix early this morning: 1303.20

USA gold at the exact same time: 1294.95

PREMIUM TO NY SPOT: $8.25

AGAIN, SHANGHAI REJECTS NEW YORK PRICING.

WE WILL NOT PROVIDE LONDON FIXES AS THEY ARE NOT ACCURATE AS TO WHAT IS GOING ON AT THE SAME TIME FRAME.

Let us have a look at the data for today

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In silver, the total OPEN INTEREST SURPRISINGLY AND SHOCKINGLY ROSE BY A HUGE 3183 CONTRACTS FROM 195,298 RISING TO 198,065 DESPITE YESTERDAY’S HUGE 33 CENT LOSS IN SILVER PRICING. WE ARE NOW WITNESSING OUR USUAL AND CUSTOMARY COMEX LONG LIQUIDATION AS WE ENTERED INTO THE ACTIVE DELIVERY MONTH OF MAY AS LONGS PACK THEIR BAGS AND MIGRATE OVER TO LONDON. WE WERE NOTIFIED THAT WE HAD A HUMONGOUS SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP : 4034 EFP’S FOR JULY AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE OF 4034 CONTRACTS. WITH THE TRANSFER OF 4034 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 4034 EFP CONTRACTS TRANSLATES INTO 20,17 MILLION OZ ACCOMPANYING:

1.THE 33 CENT FALL IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES STANDING FOR MAY COMEX DELIVERY. (30.460 MILLION OZ)

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

24,201 CONTRACTS (FOR 12 TRADING DAYS TOTAL 24,201 CONTRACTS) OR 121.005 MILLION OZ: AVERAGE PER DAY: 2016 CONTRACTS OR 10.083 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH: 121.005 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 17.28% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S: 1,266.33 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

ACCUMULATION FOR APRIL 2018: 385.75 MILLION OZ

RESULT: WE HAD A STRONG SIZED INCREASE IN COMEX OI SILVER COMEX OF 3183 DESPITE THE 33 CENT LOSS IN SILVER PRICE. WE HAVE NOW ENTERED THE NEW ACTIVE MONTH OF MAY. THE CME NOTIFIED US THAT IN FACT WE HAD AN GIGANTIC SIZED EFP ISSUANCE OF 4034 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 (SEE COMEX DATA) . FROM THE CME DATA: 4034 EFP CONTRACTS FOR JULY, AND ZERO FOR ALL OVER MONTHS FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS (TOTAL: 4034). TODAY WE GAINED 7217 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: i.e. 4034 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH AN INCREASE OF 3183 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF 33 CENTS AND A CLOSING PRICE OF $16.29 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THIS ACTIVE MAY DELIVERY MONTH. IT SURE LOOKS LIKE A FAILED BANKER SHORT COVERING EXERCISE!!

In ounces AT THE COMEX, the OI is still represented by UNDER 1 BILLION oz i.e. .991 MILLION OZ TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED AT THE COMEX: 95 NOTICE(S) FOR 475,000 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 LOW PRICE OF $16.51 ON APRIL 9.2018.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY (MARCH: 27 MILLION OZ , APRIL: 2.485 MILLION OZ AND MAY: 30.460 MILLION OZ )
HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018
HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ (FINAL)

AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW 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). IT ALSO LOOKS LIKE BANKER CAPITULATION IN SILVER AS THEY STRUGGLE TO REMOVE SOME OF THEIR HUGE OBLIGATIONS.

In gold, the open interest ROSE BY A STRONG 5775 CONTRACTS UP TO 519,958 DESPITE THE LOSS IN THE GOLD PRICE/YESTERDAY’S TRADING (LOSS OF $27.25). WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF MAY. THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED AN ATMOSPHERIC SIZED 20,304 CONTRACTS : JUNE SAW THE ISSUANCE OF 19,954 CONTRACTS , MAY SAW THE ISSUANCE OF 0 CONTRACTS AND AUGUST SAW THE ISSUANCE OF: 350 CONTRACTS WITH ALL OTHER MONTHS ZERO. The new OI for the gold complex rests at 519,958. 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. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A HUMONGOUS SIZED OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES: 5775 OI CONTRACTS INCREASED AT THE COMEX AND AN ATMOSPHERIC SIZED 20,304 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS TOTAL OI GAIN: 26,079 CONTRACTS OR 26,079,000 OZ = 81.11 TONNES. AND ALL OF THIS OCCURRED WITH A LOSS OF $27.25 ???

YESTERDAY, WE HAD 12005 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY : 113,980 CONTRACTS OR 11,398,000 OZ OR 354.52 TONNES (12 TRADING DAYS AND THUS AVERAGING: 9,498 EFP CONTRACTS PER TRADING DAY OR 949,800 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 12 TRADING DAYS IN TONNES: 354.52 TONNES

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

THUS EFP TRANSFERS REPRESENTS 354.52/2550 x 100% TONNES = 13.90% OF GLOBAL ANNUAL PRODUCTION SO FAR IN APRIL ALONE.*** THE ACCUMULATION OF EFP CONTRACTS IS RISING PER MONTH.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE: 3,112.46* TONNES *SURPASSED ANNUAL PROD’N

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 (22 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR APRIL 2018: 713.84 TONNES (21 TRADING DAYS)

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 HUMONGOUS SIZED INCREASE IN OI AT THE COMEX OF 5775 DESPITE THE $27.25 FALL IN PRICE // GOLD TRADING YESTERDAY ($27.25 LOSS). WE ALSO HAD AN ATMOSPHERIC SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 20,304 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED. THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX. 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 20,304 EFP CONTRACTS ISSUED, WE HAD A GIGANTIC SIZED NET GAIN OF 26,079 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:

20,304 CONTRACTS MOVE TO LONDON AND 5775 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 81.11 TONNES). ..AND BELIEVE IT OR NOT BUT ALL OF THESE OCCURRED AT THE COMEX WITH A LOSS OF $27.25 IN TRADING!!!.

we had: 6 notice(s) filed upon for 600 oz of gold at the comex.

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

GLD…

WITH GOLD UP $1.05 /NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 856.17 TONNES

Inventory rests tonight: 856.17 tonnes.

SLV/

WITH SILVER UP 10 CENTS A HUGE CHANGES IN THE SILVER INVENTORY AT THE SLV INVENTORY/ A DEPOSIT OF 1.883 MILLION OZ INTO THE SLV

/INVENTORY RESTS AT 321.474 MILLION OZ/

end

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

1. Today, we had the open interest in SILVER ROSE BY A STRONG SIZED 3183 CONTRACTS from 194,882 UP TO 198,065 (AND, CLOSER TO THE NEW COMEX RECORD SET /APRIL 9/2017 AT 243,411/SILVER PRICE AT THAT DAY: $16.53). THE PREVIOUS RECORD OTHER THAN WAS ESTABLISHED AT: 234,787, SET ON APRIL 21.2017 OVER ONE YEAR AGO. THE PRICE OF SILVER ON THAT DAY: $17.89. OUR CUSTOMARY MIGRATION OF COMEX LONGS MORPH INTO LONDON FORWARDS CONTINUES AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE: , 0 EFP CONTRACTS FOR MAY (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM), AND 4034 EFP’S FOR JULY AND ALL OTHER MONTHS ZERO. TOTAL EFP ISSUANCE: 4034 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. IF WE TAKE THE OI GAIN AT THE COMEX OF 3183 CONTRACTS TO THE 4034 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A HUMONGOUS GAIN OF 7217 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 36.08 MILLION OZ!!! AND THIS OCCURRED WITH THAT HUGE 33 CENT LOSS IN PRICE . THE BANKERS ORCHESTRATED THEIR RAID THROUGHOUT LAST WEEK DESPERATELY TRYING TO PARE THEIR GIGANTIC OPEN INTEREST SHORT ON BOTH EXCHANGES BUT TO NO AVAIL. JUDGING BY THE RECORD NUMBER OF EFP ISSUANCE DURING LAST MONTH OF APRIL AT 385.75 MILLION OZ AND THE TOTAL OI GAIN ON THE TWO EXCHANGES, THE CONSTANT RAIDS, LIKE YESTERDAY ARE NOW BEING CALLED UPON BY OUR BANKER FRIENDS IN AN ATTEMPT TO SHAKE AS MANY SILVER LEAVES FROM THE SILVER TREE AS POSSIBLE AND JUDGING BY THE RESULTS TO YESTERDAYS ACTION THEY WERE NOT AT ALL SUCCESSFUL.

RESULT: A CONSIDERABLE SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 33 CENT FALL IN SILVER PRICING YESTERDAY. BUT WE ALSO HAD ANOTHER STRONG SIZED 4034 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG SIZED AMOUNT OF SILVER OUNCES STANDING FOR APRIL, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY 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

)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 22.55 points or 0 .71% /Hang Sang CLOSED DOWN 41.83 points or 0.13% / The Nikkei closed DOWN 100.79 POINTS OR 0.44% /Australia’s all ordinaires CLOSED UP .15% /Chinese yuan (ONSHORE) closed DOWN at 6.3764/Oil DOWN to 71.19 dollars per barrel for WTI and 77.80 for Brent. Stocks in Europe OPENED MIXED/RED. ONSHORE YUAN CLOSED DOWN AT 6.3764 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3657/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/

/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA

North Korea now threatens to abandon the Trump summit as Kim is furious over the Bolton comments. The question will he do next with his nuclear “mountain” destroyed

( zerohedge)

b) REPORT ON JAPAN

3 c CHINA

i)Good reason to whack gold today: China unleashes an “island encirclement” war drill over Taiwan

( zerohedge)

ii)Looks like the globalists are back in the saddle as Peter Navarro has been removed from Chinese trade talks as he behaved erratically and unprofessional

(courtesy

zerohedge)

4. EUROPEAN AFFAIRS

Italy

i)Quite a platform: cancellation of 250 billion euros of debt, a plan to exit the Euro if the will of the people so desire, stop immigration etc. This is a non starter

( Mish Shedlock/Mishtalk)

ii)As promised, chaos in Italy as the new government to be demands debt writedown a la Greece. Italian bonds skyrocket in yield, (dump in price) amid this political chaos

( zerohedge)

iii This is a surprise: Italian bond futures rise as does the Euro on news of the Italian coalition agreement that was reached Wednesday afternoon

(courtesy zerohedge)

iv)A good one: Is the real target of Iran sanctions Europe:

( Mish Shedlock/Mishtalk)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)IRAQ

A good look at who might lead Iraq and it is the populist Sadr who seems to be in the lead. The USA led coalition is far behind and so is the Iranian faction

( John Rubino/DollarCollapse..com)

ii)IRANIran’s currency, the rial is now past 85,000 per USA dollar as inflation is tearing this country apart. Citizens have spent over $2.5 billion dollars trying to get cash out of the country. Iran officials are trying to arrange curbs against crypto use and other black market operations

( Michael Kern/SafeHaven.com)_

6 .GLOBAL ISSUES

7. OIL ISSUES

Oil and gasoline rise after a larger than expected crude drawdown. We continue with record production out of the USA

( zerohedge)

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)Craig Hemke on yesterday’s raid

(courtesy Craig Hemke/GATA)

ii)As we pointed out to you yesterday, China’s holdings of USA treasuries rises to a 5 month high

(courtesy Bloomberg/GATA)

iii)Vancouver Sun

Ian Telfer of Goldcorp pounds the table that all of the major deposits have been already discovered and thus we have reached peak gold

(courtesy Gabriel Friedman.Vancouver Sun)

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

i)EARLY MORNING DATA

( zerohedge)

b)The higher interest rates caused housing starts to tumble as well as permits in April

( zerohedge)

c)Utilities and mining production growth has now stabilized at 7 year highs but still we need to see higher growth to equal to rise in the Dow. Auto production is down

(courtesy zerohedge)

ii )This afternoon trading

Russel 2000 surges despite USA data disappointment

(zerohedge)

iii)As always, a great commentary from David Stockman of the USA folly of empire building

(courtesy David Stockman)

iv )Is Jeff Bezos going in for the kill; He is offering steep discounts to Prime Members are rising energy prices are squeezing rivals

(courtesy zerohedge)

v)Judge orders an ex Deutsche bank trader to face libor rigging charges. The key sentence: he tried to get off as his “compelled testimony to UK investigators fatally taints a USA criminal case.

( Bloomberg/Voris)

v)SWAMP STORIES

a)Judge Amy Berman kills Manafort’s motion to dismiss. However we still have to hear from that all important judge Ellis

( zerohedge)

b)Congress is reviewing the 2017 GPS testimony on reports of a spy in the Trump campaign

Important..

( zerohedge)

c)John Brennan was feeding President Obama totally unverified information from the Steel dossier and also he contradicted his 2017 testimony many times

(y zerohedge)

d))Trump repaid Cohen the 130,000 dollars in 2017

( zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY A STRONG SIZED 5,775 CONTRACTS UP to an OI level 519,958 DESPITE THE LOSS IN THE PRICE OF GOLD ($27.25 LOSS/ YESTERDAY’S TRADING). FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE. THE CME REPORTS THAT THE BANKERS ISSUED AN ATMOSPHERIC SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 19,954 CONTRACTS ISSUED: FOR JUNE, 350 CONTRACTS ISSUED, FOR AUGUST 0 CONTRACTS AND ZERO FOR ALL OTHER MONTHS: TOTAL 20,304 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 BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 26,079 OI CONTRACTS IN THAT 20,304 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 5775 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 26,079 contracts OR 2,607,900 OZ OR 81.11 TONNES.

Result: A CONSIDERABLE INCREASE IN COMEX OPEN INTEREST DESPITE THE FALL IN PRICE YESTERDAY (ENDING UP WITH AN LOSS OF $27.25). THE TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 26,079 OI CONTRACTS..

We have now entered the non active contract month of MAY where we GAINED 2 contracts RISING TO 106 contracts. We had 3 notices filed upon yesterday, so we GAINED 5 contracts or an additional 500 oz will stand in this non active delivery month of May SO SOMEBODY WAS IN URGENT NEED OF SOME PHYSICAL GOLD AT THIS SIDE OF THE POND.

The really big June contract month saw a LOSS of 647 contracts DOWN to 246,322 contracts. JULY saw a GAIN of 122 contracts to stand at 253. The next big delivery month after June is August and here the OI ROSE BY 5078 contracts UP to 182,929.

We had 6 notice(s) filed upon today for 600 oz at the comex

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

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY: 206,561 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY: 536,892 contracts

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And now for the wild silver comex results.

Total silver OI ROSE BY A HUGE SIZED 3183 CONTRACTS FROM 194,882 DOWN TO 198,065 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS) DESPITE THE 33 CENT FALL IN SILVER PRICING YESTERDAY. SINCE WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF MAY. WE WERE INFORMED THAT WE HAD A GIGANTIC SIZED 4034 EFP CONTRACT ISSUANCE FOR JULY AND ZERO FOR ALL OTHER MONTHS. THESE EFPS WERE ISSUED TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. THE TOTAL EFP’S ISSUED: 4034. ON A NET BASIS WE GAINED 7217 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 3183 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 4034 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES: 7217 CONTRACTS

AMOUNT STANDING FOR SILVER AT THE COMEX

We are now in the active delivery month of MAY and here the front month ADVANCED BY 32 contracts RISING TO 148 contracts. We had 35 notices filed upon yesterday so we SURPRISINGLY GAINED 67 contracts or 335,000 additional ounces will stand for delivery in this active delivery month of May AS SOMEBODY AGAIN WAS DESPERATE FOR PHYSICAL SILVER ON THIS SIDE OF THE POND..

June saw a GAIN of 11 contracts to stand at 795 The next big delivery month for silver is July and here the OI GAINED 1574 contracts UP to 137,494. The next active delivery month after July for silver is September and here the OI ROSE by 797 contracts UP to 26,100

We had 95 notice(s) filed for 475,000 OZ for the MAY 2018 contract for silver

INITIAL standings for MAY/GOLD

MAY 16/2018.

Gold	Ounces
Withdrawals from Dealers* Inventory in oz*	nil oz
Withdrawals from Customer* Inventory in oz*	5021.758 OZ Scotia
Deposits to the Dealer* Inventory in oz*	NIL oz
Deposits to the Customer* Inventory, in oz*	nil OZ
No of oz served (contracts) today	6 notice(s) 600 OZ
No of oz to be served (notices)	100 contracts (10000 oz)
Total monthly oz gold served (contracts) so far this month	630 notices 63000 OZ 1.9595 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

FINALLY AFTER MANY WEEKS, WE HAVE A PULSE AT THE GOLD COMEX TODAY

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 1 withdrawals out of the customer account:

i) Out of Brinks: 198.395 oz

total customer withdrawals: 198.395 oz

we had 0 customer deposit

total customer deposits: nil oz

we had 0 adjustment(s)

For MAY:
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 6 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 4 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the INITIAL total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (630) x 100 oz or 63000 oz, to which we add the difference between the open interest for the front month of MAY. (106 contracts) minus the number of notices served upon today (6 x 100 oz per contract) equals 73,000 oz, the number of ounces standing in this active month of APRIL (2.2706 tonnes)

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

No of notices served (630 x 100 oz) + {(104)OI for the front month minus the number of notices served upon today (6 x 100 oz )which equals 73,000 oz standing in this active delivery month of MAY . THERE ARE 9.0356 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE GAINED 500 OZ OF GOLD (5 CONTRACTS) STANDING IN THIS NON ACTIVE DELIVERY MONTH OF MAY AS SOMEBODY BADLY NEEDED PHYSICAL GOLD AT THIS SIDE OF THE POND..

total registered or dealer gold: 290,495.119 oz or 9.0356 tonnes

total registered and eligible (customer) gold; 9,044,302.590 oz 281.31 tones

THE COMEX IS AGAIN IN STRESS AS ONLY 9.0356 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 73 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE APRIL DELIVERY MONTH

MAY INITIAL standings/SILVER

MAY 16/ 2018

Silver	Ounces
Withdrawals from Dealers* Inventory*	nil oz
Withdrawals from Customer Inventory	995.300 oz Delaware
Deposits to the Dealer* Inventory*	nil oz
Deposits to the Customer Inventory	nil oz
No of oz served today (contracts)	95 CONTRACT(S) (475,000 OZ)
No of oz to be served (notices)	53 contracts (265,000 oz)
Total monthly oz silver served (contracts)	6039 contracts (30,195,000 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 0 deposits into the customer account

i) Into JPMorgan: nil 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 everybody else: 0

total customer deposits today: 0 oz

we had 1 withdrawals from the customer account;

i) out of Delaware: 995.300 oz

total withdrawals; 995.300 oz

we had 0 adjustments

total dealer silver: 69.161 million

total dealer + customer silver: 267.546 million oz

The total number of notices filed today for the MAY. contract month is represented by 95 contract(s) FOR 475,000 oz. To calculate the number of silver ounces that will stand for delivery in MAY., we take the total number of notices filed for the month so far at 6039 x 5,000 oz = 30,195,000 oz to which we add the difference between the open interest for the front month of MAY. (148) and the number of notices served upon today (95 x 5000 oz) equals the number of ounces standing.

Thus the INITIAL standings for silver for the MAY contract month: 6039(notices served so far)x 5000 oz + OI for front month of MAY(148) -number of notices served upon today (95)x 5000 oz equals 30,460,000 oz of silver standing for the MAY contract month

WE GAINED 67 CONTRACTS OR AN ADDITIONAL 335,000 OZ WILL STAND AT THE COMEX AS SOMEBODY WAS IN URGENT NEED OF PHYSICAL SILVER ON THIS SIDE OF THE POND.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 34,094 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 101,096 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 101,096 CONTRACTS EQUATES TO 505 MILLION OZ OR 72.1% 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 FALLS TO -1.72% (MAY16/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.65% to NAV (MAY 16/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -1.72%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.65%/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 -2.15%: NAV 13.40/TRADING 13.10//DISCOUNT 2.15.

END

And now the Gold inventory at the GLD/

MAY 16./WITH GOLD UP $1.05: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 856.17 TONNES

MAY 15/WITH GOLD DOWN $27.35, THE CROOKS WITHDREW 10 TONNES OF GOLD FROM THE GLD WHICH WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 856.17 TONNES

MAY 14/ WITH GOLD DOWN $2.35: A HUGE DEPOSIT OF 4.68 TONNES OF GOLD INTO THE GLD and then a withdrawal of 1.48 tonnes /INVENTORY RESTS AT 866.17

A net gain of 3.2 tonnes of gold.

MAY 11/WITH GOLD DOWN $1.75/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 862.96 TONNES/

MAY 10/WITH GOLD UP $9.60/A WITHDRAWAL OF 1.17 TONNES FROM THE GLD/INVENTORY RESTS AT 862.96 TONNES/SUCH CROOKS

MAY 9/WITH GOLD DOWN $0.55/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.13 TONNES

MAY 8/WITH GOLD DOWN $0.10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.13 TONNES

MAY 7/WITH GOLD DOWN $0.55/ANOTHER WITHDRAWAL OF 1.47 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 864.13 TONNES

MAY 4/WITH GOLD UP $2.05/A WITHDRAWAL OF 1.13 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 865.60 TONNES

MAY 3/WITH GOLD UP $7.05/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 866.77 TONNES

MAY 2/WITH GOLD DOWN $1.15/ A HUGE WITHDRAWAL OF 4.43 TONNES FROM THE GLD/INVENTORY RESTS AT 866.77 TONNES

MAY 1/WITH GOLD DOWN $12.15/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES

APRIL 30/WITH GOLD DOWN $4.05/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES.

APRIL 27./WITH GOLD UP $5.90/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES/

APRIL 26/WITH GOLD DOWN $4.90/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES

APRIL 25/AFTER 9 CONSECUTIVE DAYS OF NO MOVEMENT OF GOLD INTO OUT OF THE GLD, WE HAD A HUGE DEPOSIT OF 5.31 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 871.20 TONNES.

APRIL 24./WITH GOLD UP $9.90, WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

APRIL 23.2018/WITH GOLD DOWN $14.00/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES.

APRIL 20/WITH GOLD DOWN $10.20: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES

APRIL 19/WITH GOLD DOWN $4.25: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

APRIL 18/WITH GOLD UP $3.65: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES

APRIL 17/WITH GOLD DOWN $1.00 NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

April 16/WITH GOLD UP$2.80/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

April 13/WITH GOLD UP $6.15, A HUGE DEPOSIT OF 5.90 TONNES INTO THE GLD INVENTORY/INVENTORY RESTS AT 865.89 TONNES

April 12/WITH GOLD DOWN $17.40/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859.99 TONNES

April 11/WITH GOLD UP $13.85/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859,99 TONNES

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

MAY 16/2018/ Inventory rests tonight at 856.17 tonnes

*IN LAST 383 TRADING DAYS: 84.84 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 333 TRADING DAYS: A NET 71.46 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory/

MAY 16./WITH SILVER UP 10 CENTS/A HUGE DEPOSIT OF 1.883 MILLION OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 321.474 MILLION OZ

MAY 15/WITH SILVER DOWN 33 CENTS, NO CHANGES AT THE SLV; THE CROOKS COULD NOT BORROW ANY SILVER BECAUSE THERE IS NONE: INVENTORY RESTS AT 319.591 MILLION OZ

MAY 14/WITH SILVER DOWN 10 CENTS/A SMALL CHANGES IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 858,000 FROM THE SLV/INVENTORY RESTS AT 319.591 MILLION OZ/

MAY 11/WITH SILVER DOWN 2 CENTS/THE CROOKS WITHDREW A MONSTROUS 2.824 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 320.439 MILLION OZ/

MAY 10/WITH SILVER UP 22 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 323.263 MILLION OZ/

MAY 9/WITH SILVER UP 6 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 323.263 MILLION OZ/

MAY 8/WITH SILVER DOWN 2 CENTS:NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 323.263 MILLION OZ.

MAY 7/WITH SILVER FLAT: A BIG CHANGE IN SILVER INVENTORY AT THE SLV// A WITHDRAWAL OF 942,000 OZ OF SILVER FROM THE SLV INVENTORY/INVENTORY RESTS AT 323.263 MILLION OZ/

MAY4/WITH SILVER UP 5 CENTS/A BIG CHANGES IN SILVER INVENTORY AT THE SLV/ A DEPOSIT OF 1.224 MILLION OZ/INVENTORY RESTS AT 324.205 MILLION OZ/

MAY 2/WITH SILVER UP 24 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV// A DEPOSIT OF 6.082 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 322.981 MILLION OZ/

MAY 1/WITH SILVER DOWN 24 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 30/WITH SILVER DOWN 11 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 27/WITH SILVER DOWN 5 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 26/WITH SILVER DOWN 2 CENT/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316,899 MILLION OZ/

APRIL 25./WITH SILVER DOWN 18 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 24./WITH SILVER UP 8 CENTS/SOMETHING SPOOKED OUR CROOKS TO ADD SOME PAPER SILVER: A DEPOSIT OF 1.601 MILLION OZ/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 23.2018/WITH SILVER DOWN 50 CENTS, ANOTHER HUGE WITHDRAWAL FROM THE SLV INVENTORY: A WITHDRAWAL OF 1.413 MILLION OZ/INVENTORY RESTS AT 315.298 MILLION OZ.

APRIL 20/WITH SILVER DOWN 11 CENTS: ANOTHER HUGE CHANGE IN SILVER INVENTORY: A WITHDRAWAL OF 1.13 MILLION OZ//SLV RESTS TONIGHT AT 316.711 MILLION OZ/

APRIL 19/WITH SILVER UP 3 CENTS TODAY: WE HAD A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.355 MILLION OZ/ MAKES ABSOLUTELY NO SENSE!!/INVENTORY RESTS AT 317.841 MILLION OZ

APRIL 18/WITH SILVER UP 44 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ

APRIL 17/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ

April 16/WITH SILVER UP 7 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

April 13/WITH SILVER UP 17 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ.

April 12/WITH SILVER DOWN 27 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

April 11/2018/WITH SILVER UP 16 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

MAY 16/2018:

Inventory 321.474 million oz

end

6 Month MM GOFO 2.06/ and libor 6 month duration 2.49

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

G0FO+ 2.06%

libor 2.49 FOR 6 MONTHS/

GOLD LENDING RATE: .43%

XXXXXXXX

12 Month MM GOFO
+ 2.75%

LIBOR FOR 12 MONTH DURATION: 2.53

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE = +.22

end

Major gold/silver trading /commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Oil Price Is Going To Keep Rising And Inflation Is Coming

16, May

by Dominic Frisby, Money Week

2018 has been a noisy year so far: stocks have been up, then down, then up, but ultimately gone nowhere.

Precious metals are a little lower than where they started. Bonds are quite a bit lower. Crypto currencies are a lot lower.

Oil supply and demand chart (Money Week)

There’s been babble and squawk about all of them.

But one normally clamorous asset has quietly ground upwards.

And that asset is oil.

The stealth bull market in oil continues
Back in early 2016 I called oil my “trade of the lustrum” (a lustrum is a five-year period – it’s an almost criminally underused word). With West Texas Intermediate oil (WTIC) at $33 a barrel, and Brent crude oil at $36, we said “buy, hold and forget”.

The wager has been a good one. With the usual wobbles along the way, oil has steadily ground higher so that now, two years on, WTIC stands at $71 and Brent at $79.

On revisiting the trade along the way, we’ve noted that this is a stealth bull market, and stealth bull markets are the best kind of bull markets, because few people are talking about them.

But this is the bottom line: it’s a bull market. Bull markets are to be involved in, not stared at. You want to have some oil exposure in your portfolio. It’s that simple.

Previous oil bull markets have been accompanied by powerful narratives: the explosion of the Asian middle class – especially in China – means huge demand. A dearth of new discoveries in readily-accessible locations means the end of cheap oil. Oil production has peaked; it declines from here. We are past Peak Oil.

Instead we’ve seen technological advances which have seen the US become the world’s largest oil producer. Production is no longer such an issue, apparently. New battery technologies and electric cars have been the hot topics. And as for the Asian middle classes and their new-found wealth – they appear to have disappeared, for all you read about them.

Of course, the Asian middle classes have not disappeared. They are now richer than they were during the bull market of the 2000s. There are many more of them. And, despite what you may hear about the vehicles of the future, the vehicles of the present run on oil.

Supply may have increased, but so has demand. Demand is growing all the time and it exceeds supply, as this chart from the International Energy Agency (IEA) shows.

There will be wobbles along the way; there always are. Indeed, measures of momentum such as RSI (relative strength index) and MACD (moving average convergence/divergence) both show oil to be overbought and due a pullback.

But this is a trend, my friends, and my trade-of-the-lustrum advice remains in play: buy, hold, forget.

Oil bull markets end with a great deal of noise. This one has not got noisy yet.

I should say it’s all the more impressive in 2018 for the fact that the oil price has quietly carried on rising, even as the US dollar has strengthened.

By the way, the fact that Treasury bond yields have been rising in the US at the same time as oil makes the macro theory that the financial backdrop has changed from one of deflation to one of inflation all the more credible.

More and more, the theme of inflation seems to be making itself present in our lives once again.

Full Money Morning article including the best way to play rising oil prices here

News and Commentary

Gold crawls up on safe-haven support; dollar limits gains (Reuters.com)

Asian Stocks Decline With U.S. Yield Around 3% (Bloomberg.com)

Dow aims for 8-day win streak as trade worries fade (MarketWatch.com)

U.S. Stocks Mixed as Treasuries Slip, Oil Gains: Markets Wrap (Bloomberg.com)

Eisman of ‘The Big Short’ Fame Recommends Shorting Deutsche Bank (Bloomberg.com)

Source: Bloomberg

Gold Price Manipulation Best Summary – James Rickards (Gata.org)

Credit-Driven Train Crash (GoldSeek.com)

A Crypto Tycoon, Banking Heir and the Mysterious Fight for Gold (Bloomberg.com)

The property market is about to be swept up in a whirlwind (Telegraph.co.uk)

Keep buying gold as long as it’s above this key level (CNBC.com)

Listen on SoundCloud , Blubrry & iTunes. Watch on YouTube below

Gold Prices (LBMA AM)

14 May: USD 1,320.70, GBP 972.30 & EUR 1,101.86 per ounce
11 May: USD 1,324.80, GBP 978.23 & EUR 1,110.45 per ounce
10 May: USD 1,314.80, GBP 969.27 & EUR 1,106.80 per ounce
09 May: USD 1,306.85, GBP 965.11 & EUR 1,102.07 per ounce
08 May: USD 1,310.05, GBP 969.44 & EUR 1,101.88 per ounce
04 May: USD 1,309.35, GBP 965.78 & EUR 1,094.09 per ounce
03 May: USD 1,313.30, GBP 966.19 & EUR 1,094.64 per ounce

Silver Prices (LBMA)

14 May: USD 16.65, GBP 12.25 & EUR 13.89 per ounce
11 May: USD 16.76, GBP 12.35 & EUR 14.04 per ounce
10 May: USD 16.60, GBP 12.24 & EUR 13.97 per ounce
09 May: USD 16.44, GBP 12.12 & EUR 13.84 per ounce
08 May: USD 16.45, GBP 12.17 & EUR 13.85 per ounce
04 May: USD 16.42, GBP 12.10 & EUR 13.72 per ounce
03 May: USD 16.47, GBP 12.12 & EUR 13.74 per ounce

Recent Market Updates

– EU ‘Nightmare Scenario’ As Popular Anti-Euro and Anti-EU Government Takes Power In Italy
– “Oil price highest in 3 years, gold ready to follow”, by Daniel March
– Gold Mining Supply Globally Looks Set To Decline
– Gold Bullion Demand In Iran May Surge On Trump Sanctions
– “Money Is Gold — and Nothing Else”
– U.K. Home Prices Plunge 3.1% In April – Largest Monthly Drop Since Financial Crisis In 2011
– Weekly Gold Update – Gold In Dollars Lower Despite Poor US Jobs and Other Data
– Own Some Gold and Avoid Overvalued Assets
– Gold Demand Falls In Q1 Despite Robust Central Bank and Investment Demand and Surging Demand In Turkey and Iran
– Smart Money Diversifying Into Gold – One Billionaire Invests Half His Net Worth
– “Blood In The Streets” Of U.S. Gold Bullion Market As Sale Of Gold Coins Collapse
– Most Important Chart Of The Century For Investors?
– Gold Mining Shares Are Speculative Making Gold Bullion A Better Investment

goldcore

END

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

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

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

(Andrew Maguire)

Andrew Maguire

2:57 PM (1 hour ago)

to me

Harvey

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

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

Warm regards

Andy

END

Craig Hemke on yesterday’s raid

(courtesy Craig Hemke/GATA)

Craig Hemke at Sprott Money: The gold spec washout begins

Submitted by cpowell on Tue, 2018-05-15 18:32. Section: Daily Dispatches

2:34p ET Tuesday, May 15, 2018

Dear Friend of GATA and Gold:

Craig Hemke of the TF Metals Report, writing today for Sprott Money, says today’s dip in the gold price is a “washout” of speculators by the bullion banks, a predictable development in the long cycle of market manipulation.

According to Hemke, it is also a “fakeout,” and he asks gold investors: “Are you prepared?”

Hemke’s analysis is headlined “The Gold Spec Washout Begins” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/the-gold-spec-washout-begins-craig-hemk…

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

END

As we pointed out to you yesterday, China’s holdings of USA treasuries rises to a 5 month high

(courtesy Bloomberg/GATA)

China’s holdings of U.S. Treasuries rise to a 5-month high

Submitted by cpowell on Tue, 2018-05-15 22:24. Section: Daily Dispatches

By Brendan Murray
Bloomberg News
Tuesday, May 15, 2018

China’s holdings of Treasuries rose to a five-month high in March, underscoring the allure of U.S. government debt even amid trade tensions between the world’s two largest economies.

China’s holdings of U.S. bonds, bills and notes increased by $11 billion to $1.19 trillion in March, according to Treasury Department data released in Washington today. China remained the largest foreign creditor to the U.S., followed by Japan, whose holdings dropped by $16 billion to $1.04 trillion, the lowest level since October 2011. …

Speculation is growing about whether China could use its vast Treasury holdings as a bargaining chip in a trade dispute with the United States. A Chinese delegation is in Washington this week to try to work out the differences, which U.S. Commerce Secretary Wilbur Ross on Monday described as “wide.” The negotiations are easing worries over a trade war. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-05-15/china-s-holdings-of-u…

END

Due to sanctions of Russian Billionaire Victor Vekselberg , the LBMA will not accept metal from his Russian based refiner Renova Group

(courtesy Reuters/GATA)

LBMA suspends Russian precious metals refinery from ‘good delivery’ lists

Submitted by cpowell on Tue, 2018-05-15 23:44. Section: Daily Dispatches

By Peter Hobson
Reuters
Tuesday, May 15, 2018

LONDON — The London Bullion Market Association said today it had suspended the Ekaterinburg Non-Ferrous Metals Processing Plant from its gold and silver good delivery lists due to “ownership-related issues.”

The refinery in Russia is controlled by Moscow-based conglomerate Renova Group, which along with its key shareholder, billionaire Viktor Vekselberg, was sanctioned by the United States on April 6.

The LBMA said in a notice the refinery would be removed from its active good delivery lists from May 14.

The good delivery lists contain refineries whose gold and silver bars meet the required standard for acceptability in the London bullion market, the world’s largest.

The London Bullion Market Association did not comment when asked whether the suspension was linked directly to the sanctions. “Due diligence in regard to the credibility of the lists is continuously reviewed on an ongoing basis,” LBMA chief executive Ruth Crowell said. …

… For the remainder of the report:

https://www.reuters.com/article/usa-russia-sanctions-gold/update-1-lbma-…

end

Vancouver Sun

Ian Telfer of Goldcorp pounds the table that all of the major deposits have been already discovered and thus we have reached peak gold

(courtesy Gabriel Friedman.Vancouver Sun)

‘We’re right at peak gold’: All the major deposits have been discovered, declares Goldcorp chairman

‘Are we not looking for it? Are we bad at finding it? Or have we found it all? My answer is we found it all’

Gabriel Friedman

Published on: May 16, 2018 | Last Updated: May 16, 2018 10:23 AM PDT

Annual gold production from mines has been increasing, albeit incrementally, from 2,744 metric tons in 2010 to 3,298 in 2017. Akos Stiller/Bloomberg

Ian Telfer, chairman of Goldcorp Inc., is the latest industry magnate to predict the world has reached “peak gold,” saying that from here on out, mine production will continue to decline because all the major deposits have been discovered.

“If I could give one sentence about the gold mining business … it’s that in my life, gold produced from mines has gone up pretty steadily for 40 years,” said Telfer. “Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down.”

“We’re right at peak gold here,” he added.

Although gold prices sank two per cent to US$1,289.86 per ounce this week, sliding below the psychologically significant US$1,300 mark for the first time this year, Telfer said that day that he remained “bullish” and predicted gold prices would surpass US$1,500 or US$1,600 per ounce before the end of the year.

Telfer made the comments to the Financial Post while waiting to board a flight from Vancouver to Toronto, where on Thursday he will be inducted into the Canadian Business Hall of Fame. In a wide-ranging interview, he discussed his personal career highlights, market trends and company strategy.

“Are we bad at finding it? Or have we found it all? My answer is we found it all,” says Ian Telfer, chairman of Goldcorp Inc. Peter J. Thompson/National PostIn addition to starting Goldcorp, one of the world’s largest gold mining companies, Telfer has racked up numerous other successes in mining during the past few decades. Many people credit him with inventing the financial structure for streaming — the term for making an upfront payment for long term rights to some or all of the revenues from a specific metal extracted from a mine.

The notion raised by Telfer that the world has hit maximum gold production, or peak gold, is gaining popularity. Last September, the chairman of the World Gold Council, Randall Oliphant, made a similar prediction, echoing what some industry leaders have been saying for years.

According to the WGC, which advocates for the gold industry and compiles research, annual gold production from mines has been increasing, albeit incrementally, from 2,744 metric tons in 2010 to 3,298 in 2017. Last year’s production represented less than a one per cent year over year increase from the 3,274 metric tons produced in 2016.

Ryan Hanley, an analyst with Laurentian Bank Securities in Toronto, said that it’s hard to say whether the world has reached “peak gold.”

Low gold prices in recent years have curtailed exploration among junior mining companies and the majors, he said.

“We really haven’t seen that much exploration in the past few years,” Hanley said. “It’s hard to say we’re running out of deposits, but it’s starting to look that way.”

At Goldcorp, production has dropped off since 2015 when it produced 3.4 million ounces of gold. It produced 2.8 million in 2016 and 2.5 million last year. Industry peers Barrick Gold Corp. and Newmont Mining Corp. have also experienced declines from their peak production earlier this century.

“They’re shrinking fast,” Telfer said about Barrick, which has predicted its gold production will decline over time. “We’re sort of going sideways. Newmont’s going sideways.”

Telfer raised several possible reasons for why there are fewer discoveries. “Are we not looking for it? Are we bad at finding it? Or have we found it all? My answer is we found it all. At US$1,300 (per ounce of) gold, we found it all. I don’t think there are any more mines out there, or nothing significant. And the exploration records indicate that.”

According to the WGC, around two-thirds of the estimated 190,000 tonnes of gold that existed in the world at the end of 2017 was mined after 1950.

Telfer said that he’s seen research that shows the average grade of new gold deposits — meaning the amount of gold per volume of earth extracted — is declining.

Goldcorp has taken a leading edge on applying some of the techniques used by the oil and gas industry to find new deposits. For instance, it is using IBM’s Watson, which uses machine learning algorithms to analyse its exploration data.

Canadian miners are like cockroaches, man, you can’t kill us

Ian Telfer

Luis Canepari, vice president of technology at Goldcorp, said a large part of the process is about making its geologists more efficient at analyzing their data and it could be “transformational.”

“There’s a lot of art in finding gold, and it’s a lot of experience,” said Canepari. “More than a science, it’s an art to find the orebody.”

He declined to give the total budget for the IBM Watson program but said it was a small percentage of the total drilling budget, “perhaps up to $10 million, but it’s not $50 million.”

Telfer says while such technology is helpful, overall the advances in exploration have been “extremely incremental.”

Still, he said the pressure to find new ore bodies will ultimately help gold miners, arguing a declining supply would translate into price increases. “I’m very bullish on the price of gold.”

But the gold industry has plenty of reason for optimism, says Telfer. Even if a shrinking rate of major discoveries means the industry itself has to shrink and consolidate, it would not spell anything like death for the industry. If anything, he said the gold mining industry is tenacious.

“Canadian miners are like cockroaches, man, you can’t kill us,” said Telfer. “These little companies, they find a way to borrow, lease their assets, buy back equipment, do this, do that, you just can’t kill them. They’re survivors.”

For many in the industry, who share his view about shrinking deposits, the answer is to look in lesser explored regions of the world, including areas that have deterred miners in the past because they are geographically remote, politically unstable or where the governments want large portions of the revenues from a mine.

Telfer said Goldcorp was founded on the premise of staying in the Americas for two reasons: it is easier to manage operations that are confined to three time zones, and it’s a calculation of political risks.

“So far we haven’t deviated from that,” he said, “There’s still opportunities in those parts of the world, but as the commodity becomes scarcer, those are the kinds of decisions you have to make.”

-END-

___________________________________________________________________

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

i) Chinese yuan vs USA dollar/CLOSED DOWN 6.3764 /shanghai bourse CLOSED DOWN 22.55 POINTS OR 0 .71% / HANG SANG CLOSED DOWN 41.83 POINTS OR 0.13%
2. Nikkei closed DOWN 100.79 POINTS OR 0.44% / /USA: YEN RISES TO 110.14/

3. Europe stocks OPENED RED/MIXED /USA dollar index RISES TO 93.52/Euro FALLS TO 1.1794

3b Japan 10 year bond yield: RISES TO . +.06/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.51/ 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:: 71.19 and Brent: 77.80

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.62%/Italian 10 yr bond yield UP to 2.05% /SPAIN 10 YR BOND YIELD UP TO 1.38%

3j Greek 10 year bond yield RISES TO : 4.37?????????????????

3k Gold at $1287.30 silver at:16.22 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 17/100 in roubles/dollar) 62.46

3m oil into the 71 dollar handle for WTI and 77 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 110.14 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 1.0014 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1808 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 +0.632%

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 3.07% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.19%

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

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

Easing Bond Rout Stabilizes Global Markets, But

Surging Dollar Keeps Traders On Edge

Following yesterday’s rate spike-driven market rout, S&P futures have steadied alongside European stocks as global markets stabilized thanks to an easing in the bond selloff, leading to speculation that the worst may be over.

US equity futures were all roughly unchanged on Wednesday morning as Europe’s Stoxx 600 Index drifted, pressured by the latest political chaos out of Italy, while Asian stocks dipped slightly, with Japan’s Nikkei and Hong Kong’s Hang Seng declining while Australia’s AX rose 0.2% and Korean stocks were little changed, despite North Korea’s unexpected threat to scuttle the peace process.

The big story, however, was the stabilization in US Treasurys, which after suffering a spectacular drop on Tuesday, some some modest buying, with the yield on the 10Y dipping to 3.06%, once again close to the critical 3.05% level.

10-year Treasury yields will move in a 3%-3.5% range for the rest of the year as the Federal Reserve continues raising interest rates, said Robert Mead, co-head of Asia-Pacific at PIMCO: “We do think this hiking cycle is quite well advanced,” he says, “Nothing is pound-the-table cheap,” but rising yields mean investors can gradually reduce their underweight bond positions, Mead said.

Yesterday’s slump in Treasurys led to a surge in Treasury vol, with the MOVE bond volatility index surging the most since the February volocaust.

And while the pressure on US Treasurys eased, Italian bonds slumped and the country’s stocks underperformed as populist parties set to fomr Italy’s new government discussed a potential €250BN debt write-down from the ECB as noted earlier. As a result, Italian 10Y bonds sold off aggressively from the open, widening spread to bunds by 10bps.

However, in response, the League said the cancellation of Government debt was never in the official draft of the Government programme, proposed debt bought by ECB not be calculated in EU stability pact evaluations for all countries. The denial came too late, however, and Italy’s FTSE MIB also underperformed core European equity markets, led by the bank sector -2.5%. Concerns about Italy also sent the EUR under pressure, with the EUR/USD sliding to session lows below 1.18. A 5 Star spokesman said that the Italian government deal with the League is to be reached today.

Meanwhile, looking at the dollar, there is the possibility that we are merely in the eye of the hurricane, as the recent catalyst behind the entire market move, the dollar, rose a fourth day, helped by Euro weakness and ongoing EM fears. Once again it was the Turkish Lira TRY led EMFX lower in continuation of recent collapse.

For now, however, markets welcome today’s relative stability especially after the latest uncertainty about the U.S.-North Korea summit, which has resurfaced just as violence flares in Gaza, the IMF warns on the threat protectionism poses to global growth, Italy stands on the brink of a euro-skeptic government, and US rates are rising in anticipation of more Fed rate hikes, in the process crushing US consumer loan demand.

Meanwhile, that “other” major risk refuses to go away: while emerging-market equities steadied following Tuesday’s plunge and Argentina’s recent rout, the resumption in the dollar spike pushed developing currencies lower and the lira weakened again. The Thai baht, South Korean won and Indonesian rupiah led Asian declines. The Malaysian ringgit fell for a sixth day after overseas investors pulled out a net $376 million from stocks over Monday and Tuesday in the wake of last week’s election.

In key geopolitical news overnight, North Korea cancelled a high-level meeting with South Korea that was set for today and threatened the cancellation of summit with US amid anger regarding US-South Korea joint military drills. North Korea said it will never engage in economic trade with US in return for dropping nuclear program and that it rejects Libya-style denuclearization for the country, according to state media reports. Furthermore, North Korea added that it will need to reconsider summit with US if it insists on North Korea giving up nuclear program and that US President Trump will remain as failed leader if he chooses to follow along the lines of past US presidents. In response, South Korea Unification Ministry said the decision by North Korea to cancel high-level meeting for today is regrettable and it urged North Korea to return to talks, while the South Korean Defence Ministry said it will go ahead with drills with US as planned.

In central bank news, Riksbank’s Skingsley says the SEK has weakened more than they expected in recent months; the timing for rate hikes remains to be seen in her view, but if economy performs as expected, it is natural to start hiking at end of year. Elsehwhere, ECB’s Constancio (Dovish) said the slowdown is not “such an unexpected or serious matter”; he adds the ECB has not discussed medium-term future of policy.

Responding to the record TRY rout, Turkish central bank says they are closely monitoring the unhealthy price movements in the market; adding that necessary steps will be taken, also considering the impact of these developments on the outlook for inflation.

In a bizarre turn of the tongue, BoE Deputy Governor Broadbent said that the UK economy is approaching a ‘menopausal’ stage after passing peak productivity which risks a once-in-a-century downturn.

Meanwhile, in latest Brexit development, UK Brexit Minister Davis reportedly warned PM May regarding the legality of the customs plan and has reportedly raised the threat of a legal challenge to May in a letter to the PM.

The surprise build in API crude inventories overnight is still weighing on oil, as the fossil fuel is negative for the day, with WTI currently down 0.36% and Brent 0.65% lower. Morgan Stanley (MS) forecasts WTI prices at USD 71/BBL for Q4 2018 and USD 73/BBL for Q1 2019. Safe haven flows and a slightly softer greenback are resulting in Gold trading higher, currently up 0.31% on the day. Chinese Steel and Iron ore futures have undone the gains seen on Tuesday following but still hover close to a 8 week high, with the two metals at USD 577.23/tonne and USD 75.65/tonne respectively. IEA says global oil demand forecast to 1.4mln BPD vs. prev. 1.5mln BPD in prev. month, “too soon” to predict impact on Iranian crude from sanctions, call on OPEC crude to average 32.35mln BPD for 2018, nearly 600K BPD above April output.

Expected data include mortgage applications, housing starts, and industrial production. Cisco, Macy’s, and Take-Two are reporting earnings

Bulletin Headline Summary From RanSquawk

Tensions rising on the Korean peninsula as North Korea cancels summit with safe haven currencies bid
FTSE MIB and BTP’s underperforming in the wake of Italian political concerns
Looking ahead, highlights include US industrial production, DoE’s, ECB’s Draghi, Praet and Constancio, Fed’s Bullard and Bostic

Market Snapshot

STOXX Europe 600 up 0.1% to 392.80
MXAP down 0.1% to 174.51
MXAPJ down 0.03% to 569.34
Nikkei down 0.4% to 22,717.23
Topix down 0.3% to 1,800.35
Hang Seng Index down 0.1% to 31,110.20
Shanghai Composite down 0.7% to 3,169.57
Sensex down 0.3% to 35,430.00
Australia S&P/ASX 200 up 0.2% to 6,106.96
Kospi up 0.05% to 2,459.82
German 10Y yield fell 1.2 bps to 0.633%
Euro down 0.02% to $1.1836
Italian 10Y yield rose 2.5 bps to 1.697%
Spanish 10Y yield rose 1.2 bps to 1.371%

Top Overnight News from Bloomberg

The leader of Italy’s anti-migrant League Matteo Salvini said talks with the anti-establishment Five Star Movement on a populist government have entered their final lap. Italian bonds slumped, driving benchmark yields to a two-month high amid the view that populist parties would seek a debt write-off involving billions of euros
North Korea threatened to walk away from its meeting with President Trump next month if the U.S. made a “one-sided demand” for the regime to surrender its nuclear weapons. Earlier Wednesday, North Korea abruptly canceled talks with South Korea
Turkish central-bank governor to meet President Erdogan, NTV reports; central bank says it will take “necessary steps”
The U.S. 10-year yield rose as high as 3.093% on Tuesday, climbing the most in three months to surpass the intraday peak from Jan. 2, 2014. Traders are now looking at the 3.2% area, which would match the highs seen in mid-2011, just before S&P Global Ratings downgraded the U.S.
The European Union set out to identify “practical solutions” for salvaging the Iran nuclear accord within weeks, as the bloc strives to contain the fallout from President Donald Trump’s decision to pull the plug from the landmark deal.
U.K. Prime Minister Theresa May will publish a detailed plan for the country’s post-Brexit relationship with Europe next month, setting a deadline for her warring Cabinet to agree on a common stance. The policy document, known as a white paper, will be released in June, according to a government official; The upper house of the U.K. Parliament will seek to inflict a final defeat on May’s flagship piece of Brexit legislation on Wednesday
The Trump administration is delivering the World Trade Organization “three hard blows” that could destroy the body’s ability to regulate global commerce, China’s ambassador to the Geneva-based body said
Federal Reserve Bank of San Francisco President John Williams said he’s “very positive” about the economic outlook and reiterated that three to four interest-rate increases this year was appropriate

Top Asian News

Asian stocks were mostly negative on the spillover selling from US where the DJIA snapped an 8-day win streak and stocks posted their worst performance in around 3 weeks amid rising yields as markets priced the chances of 4 hikes this year. Furthermore, Nikkei 225 (-0.4%) was also dampened by disappointing GDP data from Japan which contracted for the first time in over 2 years and the KOSPI (+0.2%) was kept subdued for most the session by a withering of the geopolitical climate after North Korea cancelled a high-level inter-Korean meeting in resentment to US-South Korea joint military drills and also threatened to reconsider summit with US if they insist on North Korea giving up its nuclear program. Elsewhere, the widespread downbeat tone overshadowed a firm liquidity injection by the PBoC which ensured the Shanghai Comp. (-0.3%) and Hang Seng (-0.1%) conformed to the losses, while ASX 200 (+0.5%) bucked the trend with gains seen across a broad range of sectors and after subdued wage growth data added to the case for the RBA to continue holding off on rate adjustments. Finally, 10yr JGBs were relatively flat and held near the prior day’s lows as yields attempted to track the upside in US counterparts after the US 10yr briefly approached 3.1% and its highest in around 7 years.

China’s Holdings of U.S. Treasuries Rise to Five-Month High
Japan’s Two-Year Growth Streak Snapped as Economy Contracts
Thailand Doesn’t Feel Pressure to Join Global Tightening
Elliott Wins Allies in Blocking Hyundai Motor’s Restructure Plan
Didi Shakes Up Car Pooling Safety After Passenger Murdered

European bourses trade mixed (Eurostoxx 50 -0.1%) with Italy’s FTSE MIB (-1.6%) underperforming in light of recent political developments including a potential leadership rotation between the League and 5SM, as well as a leaked document which revealed potential policy proposals from the ongoing negotiations which included a EUR 250bln debt write-off (which was then disregarded by the League). Later reports stated that the populist parties proposed debt bought by ECB not be calculated in EU stability pact evaluations for all countries. As a result, Italian banks including Ubi Banca (-1.9%), Bper Banca (-1.0%). Finecobank (-2.3%), UniCredit (-2.6%), Banca Mediolanum (-3.0%) and Banco BPM (-2.7%) are all resting at the bottom of the index. Elsewhere, material names are benefitting from the firmer base metal prices with the sector outperforming its peers. In terms of individual movers, Micro Focus (+8.8%) is at the top of the FTSE following expectations of better earnings than shown in their guidance. Paddy Power (+5.8%) is also riding high after reports the company is in talks to acquire FanDuel amid the sudden lifting of federal ban on sports betting in the US.

Top European News

Fatal Tesla Crash in Switzerland Probed by Ticino Prosecutors
Goldman Gets Flashback to Yukos as Russia’s Recovery Falters
Repsol Said to End Hunt for Oil Growth in Clean Energy Tilt
The Worst Day Since 2011 Leaves Pandora A/S Investors in Shock
Merkel Calls for Euro Reform as ECB Policy Won’t Last Forever

In FX, the DXY has now climbed above 93.500 and tested major chart resistance just above, largely at the expense of extended EUR weakness as the single currency sinks to the bottom of the G10 pile. Eur/Usd held above 1.1800 for a while amidst reported barrier option interest, but big figure psychological and sentimental support have way relatively quickly after that with market contacts also noting sell stops in the Eur cross vs AUD. Note, the Aud was an overnight laggard on softer than forecast Aussie wage data that highlights RBA guidance based on benign pay trends and the impact on inflation overall. Moving back to the DXY it remains firmly underpinned and on course for further upside technically, while the fundamental backdrop also looks supportive as US Treasury yields consolidate close to their highs. However, NK’s decision to postpone its meeting with South Korea and dithering over a summit with the US is a potential counterweight along with ongoing heightened tensions with Iran. GBP: Also on a weaker footing as Cable retreats below 1.3500 again amidst more negative Brexit headlines. NZD: Conversely, the Kiwi is the biggest G10 winner by virtue of short covering with Nzd/Usd hovering near the upper end of a 0.6895-50 range. JPY: Somewhat caught between conflicting impulses in wake of unexpectedly weak Japanese GDP data overnight (1st contraction in 2 years) and safe-haven demand due to the breakdown in NK-SK/US ‘entente cordiale’, with Usd/Jpy above 110.00, but not yet breaking up/out of the 200 DMA resistance zone.

In commodities, the surprise build in API crude inventories overnight is still weighing on oil, as the fossil fuel is negative for the day, with WTI currently down 0.36% and Brent 0.65% lower. Morgan Stanley (MS) forecasts WTI prices at USD 71/BBL for Q4 2018 and USD 73/BBL for Q1 2019. Safe haven flows and a slightly softer greenback are resulting in Gold trading higher, currently up 0.31% on the day. Chinese Steel and Iron ore futures have undone the gains seen on Tuesday following but still hover close to a 8 week high, with the two metals at USD 577.23/tonne and USD 75.65/tonne respectively. IEA says global oil demand forecast to 1.4mln BPD vs. prev. 1.5mln BPD in prev. month, “too soon” to predict impact on Iranian crude from sanctions, call on OPEC crude to average 32.35mln BPD for 2018, nearly 600K BPD above April output.

Looking at the day ahead, the main focus is likely to be on the April industrial production print (+0.6% mom expected) along with capacity utilization. April housing starts and building permits data is also due. An ECB conference this afternoon in Frankfurt has President Draghi giving the welcome address, along with comments from officials Coeure and Praet. Over at the Fed, Bostic is due to give an economic update at 1.30pm BST and Bullard is scheduled to speak to media at 10.30pm BST.

US Event Calendar

7am: MBA Mortgage Applications, prior -0.4%
8:30am: Fed’s Bostic to Give Economic Update
8:30am: Housing Starts, est. 1.31m, prior 1.32m; Housing Starts MoM, est. -0.68%, prior 1.9%
- Building Permits, est. 1.35m, prior 1.35m; Building Permits MoM, est. -2.1%, prior 2.5%
9:15am: Industrial Production MoM, est. 0.6%, prior 0.5%; Manufacturing (SIC) Production, est. 0.5%, prior 0.1%
10am: Mortgage Delinquencies, prior 5.17%; MBA Mortgage Foreclosures, prior 1.19%
5:30pm: Fed’s Bullard Speaks to Media

DB’s Jim Reid concludes the overnight wrap

Given that 10 year US Treasuries hit their highest level for seven years (+7.0bps to 3.073% and 3.093% at the intra-day highs) yesterday I can’t help but wonder where they would be today if we hadn’t had the softer than expected US average hourly earnings and CPI data over the last two weeks and also if there wasn’t such a large short base out there. Probably breaking well through 3.25% I’d imagine. Don’t panic bond bulls though as whenever we remind readers of our note from early this year entitled “Why yields and rates are rising and why they’ll continue to?” bonds immediately rally.

One of the significant things about yesterday’s move was that 10yr USTs crossed the intraday taper-tantrum high of 3.052% from the start of 2014 and this morning are holding around 3.061%. After failing to hold above 3% numerous times, could this mean that they’ve finally crossed the Rubicon? It’s also worth noting that 30y yields were +6.6bps higher yesterday at 3.201%, while the 2s30s curve steepened +4.1bps. For comparisons sake, back in 2011 when 10 year yields were last at these levels 2yr yields were around 0.4% and 30yr yields were around 4.3% so today’s level are a testament to how much flattening the curve has still seen in recent years as 10yrs have returned to the same level. For reference 10yr Bunds were around 3% back then so that continues to be one of the most crazy global financial markets. They did climb 3.3bps to 0.641% yesterday as most core European 10yr yields climbed 2-3bps with Gilts (+4.6bp) the regional under-performer perhaps on the back of firm wages (see below).

A hat-tip to DB’s Alan Ruskin who pointed out that not only does the US have the highest 2y, 5y and 10y yields in all of the G10, but its 5y yield is now higher than any available 10y yield in other G10 countries. Even the US 3y yield (2.737%) is higher than all G10 countries’ 10y yields except Australia’s 10y (2.869%).

As for what triggered yesterday’s move, yield rises, dollar strength and risk off all really started to get going after the solid but not necessarily spectacular US retail sales report and also similarly solid data from the manufacturing sector (more on both of that below). Again what would have happened had retail sales been a bumper report? Elsewhere 10y US Breakevens also nudged up a couple of basis points and are back to YTD highs and near 4 year highs while the USD index rallied +0.68% and also to a new year-to-date high. The market-implied probability of 4 Fed rate hikes (or a further 3) also broke above 40%. Bear in mind that this was as low as 18% back in April.

The combination of that bond sell-off and a stronger USD was a perfect cocktail for weakness across riskier assets though. As has been the trend lately, this was most pertinent in EM, especially early in the US session immediately after US retail sales, higher yields and a stronger dollar. However a 50bps rally from the highs for the session actually left 10yr Argentina debt 23bp tighter on the day after the market drew some confidence from getting a bond auction away and the complex came off its worst levels for the session. Bonds were generally still weak as Brazilian 10yr notes were 12bps higher.

It was a similar weaker story for EM FX with currencies in Colombia, South Africa, Turkey, Chile and Poland all falling 1-2%. Turkey continuing its recent weakness as President Erdogan suggested that he’ll take more control of monetary policy if he won an election next month. In fact if there’s one asset class where the ‘sell in May and go away’ phrase holds true this year its EM currencies. The woes in Argentina are well known and the Peso has depreciated a remarkable -13.33% so far in May despite a +4.09% rally yesterday, while the Turkish Lira is down -8.11%, Mexican Peso -4.45%, Brazilian Real -3.78%, Polish Zloty -3.33% and Hungarian Forint -2.95%. Indeed it’s been difficult to hide although the Russian Ruble can take some comfort for being up +1.36% in May – making it the only EM currency to buck the trend.

Meanwhile, the broader equity complex also sold-off in tow yesterday. The S&P 500 finished last night -0.68% and the Dow -0.78% – the latter snapping a run of 8 consecutive positive daily returns. Europe also wiped out early gains with the Stoxx 600 just in positive territory after a late rally to end +0.05% with most other continental bourses either side of the flat line. WTI Oil initially soared +1.60% before retail sales, then slumped a couple of percent late US morning time before closing around unchanged, seemingly being held back by the Dollar move. Interestingly Gold (-1.75%) also sold-off despite the broader risk-off tone, so there didn’t appear to be anywhere to hide.

This morning in Asia markets have also had to contend with the latest North Korea developments which broke last night. North Korea’s vice foreign minister, Kim Kye Gwan, has called the US demands to surrender its nuclear weapons “one-sided” and also as driving North Korea “into a corner”. Subsequently, Kim Kye Gwan said that North Korea will be forced to reconsider proceeding to a possible summit with President Trump next month. In fairness markets haven’t appeared to be greatly worried by the comments with the Kospi in particular up +0.05%. The Nikkei (-0.15%) and Shanghai Comp (-0.28%) are only modestly in the red too. Meanwhile bond markets in Asia have followed the lead from the US yesterday. Yields in the antipodeans are up +5bps while yields in the likes of Malaysia and Indonesia are between +4bps and +5bps higher too. In line with EM weakness yesterday, Asia FX is also softer with the Thai Bhat (-0.47%) and Indonesian Rupiah (-0.40%) leading losses.

Back to yesterday, given the packed schedule, economic data was always likely to be a factor for markets. In the US the April retail sales report was seen as fairly solid when taking into account the upward revisions to prior months. Of particular significance was the control group component which rose +0.4% mom and in line with expectations, albeit with March and February data both revised up a tenth which could be taken as a positive for potential upward revisions to Q1 growth. Meanwhile the May Empire Manufacturing print came in at 20.1 (vs. 15.0 expected) which was an increase of 4.3pts. The prices paid components again confirmed other surveys this year and rose to the highest level in several years.

In Europe there were no final surprises from the second revision to Q1 GDP for the Euro area at +0.4% qoq and +2.5% yoy, however Germany was a slight downside surprise at +0.3% qoq (vs. +0.4% expected). Our economists do however expect growth to rebound in Q2 to +0.5% qoq and have a 2018 forecast of +2.0% yoy.

Where there was some good news however was in the UK where the March earnings numbers came in fairly solid. As expected, weekly earnings ex bonuses rose a tenth to +2.9% yoy, implying a pickup in the run rate again. The unemployment rate also held steady at 4.2% while Q1 employment rose a healthy 197k (vs. 125k expected). So that data should comfort the BoE somewhat. Sterling was actually weaker yesterday (-0.40%) albeit more due to the broad Dollar strength.

Staying with the UK, it was announced yesterday that PM May will publish a Brexit white paper next month ahead of the EU Summit on June 28th, representing something of a key milestone for May’s cabinet to come to a unified stance with the customs union debate likely to be the focus. So another potentially important Brexit date to be aware of.

In terms of the day ahead, this morning the early focus will be in Germany where the final April CPI revisions are due to be made, although no change from the -0.1% mom flash estimate is expected. Shortly after that we have the broader April CPI report for the Euro area which is expected to confirm the seasonally-impacted +0.7% yoy core reading. Over in the US the main focus is likely to be on the April industrial production print (+0.6% mom expected) along with capacity utilization. April housing starts and building permits data is also due. Away from the data the BoE’s Sarah John is scheduled to speak in a few hours’ time in Liverpool at a conference I spoke at yesterday (I’m not sure my comments got any attention), before an ECB conference this afternoon in Frankfurt has President Draghi giving the welcome address, along with comments from officials Coeure and Praet. Over at the Fed, Bostic is due to give an economic update at 1.30pm BST and Bullard is scheduled to speak to media at 10.30pm BST.

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 22.55 points or 0 .71% /Hang Sang CLOSED DOWN 41.83 points or 0.13% / The Nikkei closed DOWN 100.79 POINTS OR 0.44% /Australia’s all ordinaires CLOSED UP .15% /Chinese yuan (ONSHORE) closed DOWN at 6.3764/Oil DOWN to 71.19 dollars per barrel for WTI and 77.80 for Brent. Stocks in Europe OPENED MIXED/RED. ONSHORE YUAN CLOSED DOWN AT 6.3764 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3657/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER 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/usa

North Korea now threatens to abandon the Trump summit as Kim is furious over the Bolton comments. The question will he do next with his nuclear “mountain” destroyed

(courtesy zerohedge)

North Korea Threatens To Abandon Trump Summit, Furious Over Bolton Comments

North Korea has threatened to pull out of next month’s peace summit with Washington if the US insists on the peninsula hurriedly giving up its nuclear weapons without offering immediate sanctions relief.

After blaming joint South Korean-US military exercises for the country’s decision yesterday to cancel a planned summit with the South and to suspend talks, the North revealed another source of anger: National Security Advisor John Bolton’s comments from his appearance Sunday on CNN’s State of the Union, where he suggested that North Korea must “commit to denuclearization“ to help it “become a normal nation.”

Kim Kye Gwan, a vice foreign minister and a top North Korea disarmament negotiator, said the regime was disappointed by the US’s articulation of its goals for the summit, according to a statement published Wednesday by the state-run Korean Central News Agency via Bloomberg. Kim expressed anger toward Bolton and other US officials, adding that the North rejects the “Libya model” where a state surrenders its weapons first then receives incentives like sanctions relief.

“If the U.S. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the DPRK-U.S. summit,” Kim said. He added that Trump risked becoming a “more tragic and unsuccessful president than his predecessors” if he didn’t accept North Korea as a nuclear power.

Kim Kye Gwan said the North had already declared its willingness to denuclearize the peninsula – but that it must not be counted on to act first.

“If the Trump administration corners us and tries to force us to give up nuclear [weapons] unfairly,” it says, “we will not be interested in such talks anymore and cannot help but reconsider having the upcoming DPRK-U.S. summit.”

North Korea added that it wouldn’t be satisfied with “complete, verifiable and irreversible” denuclearization as well as the dismantling of nuclear and chemical arms, per Nikkei.

One North Korea expert said observers shouldn’t panic: The sharp rhetoric is more likely a negotiating tactic than a legitimate threat to scrap the talks.

Jin Chang-soo, president at the Sejong Institute, said North Korea’s remarks are more like jockeying ahead of the summit with the U.S., and not a serious threat to pull out of the meeting.

“North Korea and the U.S. agreed on the big picture, but they still have different ideas on a detailed process.Pyongyang is trying to boost its negotiation power with such actions,” Jin said.

In a statement, the South Korean government said North Korea’s decision to suspend talks was “regrettable.”

“It is regrettable that the North has suspended inter-Korean high-level talks with no consultation with us,”said Baik Tae-hyun, a spokesman for South Korea’s Unification Ministry. “The government has a firm will to carry out the Panmunjom Declaration faithfully, and urges the North side to come to the table quickly for the peace and prosperity of the Korean Peninsula.”

China, meanwhile, called on both sides to “avoid further provocation.”

“The amelioration of the situation on the Korean Peninsula is hard won and should be cherished,” foreign ministry spokesman Lu Kang told reporters in Beijing.

For now Kim’s gambit appears to be working: on Tuesday night, the US said that it would consider withholding B-52 bombers from its joint military drills with South Korea in a bid to appease the North. Should Pyongyang say it demands more, will Trump – visions of a Nobel Peace Prize dancing in his head – appease Kim again, and if so, how?

END.

3 b JAPAN AFFAIRS

end

c) REPORT ON CHINA/HONG KONG

Good reason to whack gold today: China unleashes an “island encirclement” war drill over Taiwan

(courtesy zerohedge)

China Unleashes “Island Encirclement” War Drills Over Taiwan

It is an uncomfortable time for Taiwan. China’s People’s Liberation Army (PLA) began a dangerous “island encirclement” war drill around the country, which on Friday saw bombers and fighter jets simulating strikes on Taiwanese targets for the first time. It seems as Beijing will not wait for reunification; it wishes to intimidate the island into submission beforehand.

China’s air force carried out an operation in its eastern and southern theaters, dispatching bombers and reconnaissance planes around Taiwan on Friday. It was the first time for Su-35 fighter jets to fly over the Bashi Channel in formation with H-6K bombers, a spokesperson said. (Source: People’s Daily, China)

Defense experts told the South China Morning Post that China’s military would increase pressure on Taiwan, with more war drills designed to send a warning message to Taiwan President Tsai Ing-wen and her ruling Democratic Progressive Party (DPP).

“To reinforce the warning to Tsai Ing-wen’s administration, the mainland military would conduct targeted joint operational drills involving ground forces, the navy and the air force to strengthen its presence in the Taiwan Strait,” Song Zhongping, a former member of the PLA’s second artillery corps, the rocket wing’s predecessor.

There is a significant risk that China’s President Xi Jinping could be slowly walking his armed forces into a shooting war with Tawian. In an era of modernizing his military, President Jinping has given PLA generals fancy new weapons and hardware for war preparation purposes.

Military strategiest said Beijing showcased their “precision strike” capabilities and the understanding that the PLA air force has “upgraded deterrence” to the island’s independence-leaning president.

Since the end of the Chinese Civil war in 1949, mainland and Taiwan have had a significant degree of separation. “Taiwan is not like the two Koreas issue, with both sides being seen as equals and allowed to coexist. The message [the air force] wants to send to Taipei is that Taiwan is part of China and should be reunified with Beijing one day,” Beijing-based military expert Zhou Cheming explained.

“The increasing encirclement flights around Taiwan have warned the island’s independence-leaning forces that if they are going to make trouble, the mainland will take more radical moves to take them out,” he added.

Propaganda footage released by the PLA air force over the weekend revealed bombers, and fighter jets crossed the Bashi Channel between Taiwan and the northern islands of the Philippines for an “innovative joint operation” on Friday, said the South China Morning Post.

The PLA air force conducted patrol circling China’s island of Taiwan on Friday, during which Su-35 fighter jets flew over the Bashi Channel in formation with the H-6Ks for the first time. (Source: China News)

Song said, “the PLA air force’s footage showed the H-6K bombers carrying CJ-20 or long sword cruise missiles – a long-range weapon that can hit precision targets on land and sea from a distance of over 2,000km (1,200 miles).”

Chinese PLA air force H-6K bomber conducts island patrol during war drill. (Source: China News)

“The CJ-20 is one of the options the PLA might use in the event of war … because it has several purposes, including destroying Taiwan’s key military facilities or decapitate important human targets like Tsai and [Prime Minister William] Lai,” Song warned.

“This cruise missile could also threaten the US’s naval base in Guam [if Washington wants to intervene] when the mainland decides to attack Taiwan,” he added.

WATCH: PLA air force conducts war drill around Taiwan on Friday.

The South China Morning Post indicates that the PLA air force did not enter Taiwan’s airspace during the war drill, because “a provocative move risks immediate conflict” with Taiwan armed forces.

“Beijing has reinforced its ‘carrots and sticks’ approach to dealing with Taiwan’s ordinary people and independent forces, with the air force’s intensive island encirclement drills reflecting its coercion policy against the ruling party,” Song explained.

If it came to a cross-strait showdown, China would decimate Taiwan, and probably seize the island. However, such a move would drag the United States into a shooting war with China…

end

Looks like the globalists are back in the saddle as Peter Navarro has been removed from Chinese trade talks as he behaved erratically and unprofessional

(courtesy zerohedge)

Peter Navarro “Who Behaved Erratically And Unprofessionally”, To Be Excluded From China Talks

Back in late February, we noted something that few at the time noticed: Trump had just promoted “populist” trade-hawk Peter Navarro to the rank of assistant to the president. What happened shortly thereafter shook the administration, as first Gary Cohn resigned in very short order, and just days later Trump launched trade war against China and many other nations with which the US has had a trade deficit.

We went so far as to declare a victory for the populists over the globalists in the Trump inner circle.

Well, not even three months later, following some behind the scenes discussions between Trump and Beijing which have yet to be disclosed, it appears that the globalists are back in control as Trump’s main China trade adviser, author of “Death by China” and “Crouching Tiger: What China’s Militarism Means for the World” and unrepentant trade hawk, Peter Navarro, has been excluded from talks tomorrow with China’s top economic envoy aimed at defusing a brewing trade war with the U.S., Bloomberg reported citing two administration officials.

As we reported this morning, Vice Premier Liu He, who is also Xi Jinping’s special envoy, will meet with Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross.

So why is Navarro, arguably the architect of Trump’s entire China trade policy, being left out? According to Bloomberg’s sources, Navarro has “lately behaved erratically and unprofessionally” and “his exclusion from the meeting marks another downturn in his White House career, where he was long isolated by other top officials before the president promoted him earlier this year to his top rank of aides.”

Navarro didn’t immediately respond to a request for comment. The two officials didn’t elaborate on Navarro’s behavior.

The officials said Navarro wasn’t a team player when the U.S. sent a delegation led by Mnuchin earlier this month to Beijing to meet with He. President Donald Trump has proposed at least $50 billion in tariffs on Chinese goods to punish the country for what he considers unfair trade behavior, including its acquisition of U.S. technologies. China has threatened to retaliate for the tariffs, which could be imposed after a public comment period ends May 22.

Navarro’s sudden exclusion would also explain Trump’s sudden U-turn on ZTE, and – all else equal – would suggest that the “globalists” are back in control of US trade policy, which means that first China, then the EU, will gradually be able to normalize trade relations with the US, as Trump’s threats of tariffs quietly fade away into nothing.

4. EUROPEAN AFFAIRS

Quite a platform: cancellation of 250 billion euros of debt, a plan to exit the Euro if the will of the people so desire, stop immigration etc. This is a non starter

(courtesy Mish Shedlock/Mishtalk

Five Star And Lega Ask ECB To Cancel €250 Billion In

Debt!

Authored by Mike Shedlock via MishTalk,

An agreement reached today between M5S and Lega contains an explosive request: Debt Cancellation!

Rumors last night the coalition was about to collapse seem to be false. Explosive details emerge today as noted in these Tweets.

Ferdinando Giugliano

✔@FerdiGiugliano

17h

+++ A copy of the draft 5 Star/League agreement (dated yesterday) has been leaked to @HuffPostItalia – I am going to tweet the most relevant sections. Full link below. https://www.huffingtonpost.it/2018/05/15/un-comitato-di-conciliazione-parallelo-al-consiglio-dei-ministri_a_23435353/?utm_hp_ref=it-homepage …

Ferdinando Giugliano

✔@FerdiGiugliano

1) Five Star and the League expect the @ecb to forgive 250 billion euros in Italian bonds bought via quantitative easing, in order to bring down Italy’s debt

Details

Five Star and the League expect the ECB to forgive 250 billion euros in Italian bonds bought via quantitative easing, in order to bring down Italy’s debt
The two parties want to re-open European Treaties and to “radically reform” the stability and growth pact. The coalition would also want to reconsider Italy’s contribution to the EU budget.
According to @HuffPostItalia, the 5 Star/League draft agreement would include an opt-out mechanism to leave the euro in an “agreed manner” were there to be a “clear popular will” to do so.
The draft document says Italy should stay in Nato, but asks for an immediate withdrawal of sanctions vs Russia, so that Moscow can return to be a “strategic partner” in conflict zones
According to @HuffPostItalia, the 5 Star/League draft document says there would be a “flat tax”… but with several tax rates and deductions
taly’s pension reform would be dismantled: workers would be able to retire when the sum of their retirement age and years of contribution is at least 100.
The draft coalition agreement of a 5 Star/Lega government leaked to @HuffPostItalia calls for a revision of the Dublin regulation on immigration and for compulsory relocation of asylum seekers across the EU

This cannot possibly fly, but that’s the platform.

Yesterday, Italian President Sergio Mattarella warned Lega and Five Star against an anti-EU platform.

Last night, there were rumors the coalition would collapse.

Today we see this agreement as outlined on Huffington Italy and as described above.

Addendum

Ferdi Guigliano who made the above translations now posts this:

Ferdinando Giugliano

✔@FerdiGiugliano

16h

Replying to @FerdiGiugliano

7) The draft coalition agreement of a 5 Star/Lega government leaked to @HuffPostItalia calls for a revision of the Dublin regulation on immigration and for compulsory relocation of asylum seekers across the EU

Ferdinando Giugliano

✔@FerdiGiugliano

+++ The 5 Star Movement and the League have just issued a joint statement saying that this is an “old” version of the coalition agreement, which has been abundantly revised, for example making it clear that Italy would stay in the euro (h/t @adealdis @ARoldering)

I do not know what the revised deal includes.

Addendum Two

Draft confirmed except for exit of Euro

end

As promised, chaos in Italy as the new government to be demands debt writedown a la Greece. Italian bonds skyrocket in yield, (dump in price) amid this political chaos

(courtesy zerohedge)

Italian Bonds Tumble Amid Political Chaos, Debt

Writedown Fears

The Northern League and Five Star Movement (M5S), who have been struggling to form a government since the country’s March elections, are on the cusp of reaching a deal that would open the door to a joint government, and that appears to finally be shocking Italian markets which are not happy this morning.

Matteo Salvini, the head of the League, said negotiations were in the “final straight,” and that an agreement would likely be reached Wednesday. A M5S representative offered similar assurances. A “government contract” will likely be released tomorrow, they said.

And while representatives for both parties have since denied that it was ever part of their platform, reports that the new government had been planning to ask the European Central Bank to cancel 250 billion euros in Italian debt have rattled the country’s sovereign bond market, pushing yields on the 10-year BTPs over 12 basis points higher, the biggest one-day move since July 2017.

The long-overdue BTP selling, previewed by Goldman one week ago in “Italy’s political risk increases, and yet the markets remain complacent“, has sent the Italy-Germany 10Y spread to 147 bps, the widest since the March 4 elections.

Jason Simpson, a strategist at SocGen, told Bloomberg that “this is all fairly disruptive stuff for Italian bonds…the markets had been assuming that they would tone down some of their more radical views.”

As a reminder, the ECB has been the only buyer of Italian bonds in recent years.

Several other difficult issues also need to be ironed out. League leader Matteo Salvini and M5S leader Luigi Di Maio must still decide who will become the country’s next prime minister. Local media reported that they had discussed several options, including alternating at the helm, or having different party members take turns.

Debt cancellation wouldn’t be the only swipe taken at the European establishment. Claudio Borghi, the League’s economic spokesman, said his party would like to “abolish the fiscal compact” that restricts EU members from blowing out their budget deficits.

“We want to abolish the fiscal compact…We want to overcome the misunderstanding that there is no money given that France went on for the last 10 years in exceeding the deficit-to-GDP limit and both France and Spain already have a public debt higher than 60 percent of GDP.”

Italian President Sergio Mattarella, the official caretaker of the government, has agreed to an extension for the talks as the two sides try to iron out policy differences like whether to roll back changes recently made to pensions. But he too has expressed concerns about the party’s pledges on fiscal and foreign policy.

The parties’ draft policies so far echo their key campaign proposals – a flat tax for the League, and Five Star’s citizen’s income for the poor.

Analysts have voiced concern about certain spending proposals that have been bandied about – including a plan to slash the main tax rate for companies and individuals to as low as 15% – could run into obstacles in Parliament since they would further destabilize the country’s public finances.

The latest media reports citing sources within M5S said a government contract between the League and M5S would be released “as soon as tomorrow” – though this wouldn’t be the first time that an agreement has been just around the corner, only for talks to fall apart once again.

end

This is a surprise: Italian bond futures rise as does the Euro on news of the Italian coalition agreement that was reached Wednesday afternoon

(courtesy zerohedge)

Italian Bond Futures, Euro Climb As Italian Coalition Agreement Reached

The culmination of months of negotiations between the anti-immigrant Northern League and the anti-establishment Five Star Movement has arrived Wednesday afternoon in the form of a forty page comprehensive policy agreement reached between the two parties, according to Ansa, the Italian newswire.

Northern League Deputy Claudio Borghi confirmed in a tweet that negotiations have produced an agreement that must now be approved by party leaders Matteo Salvini, who represents the Northern League, and Luigi di Maio, who represents the Five Star Movement.

While the document hasn’t been publicly released since six or so of its provisions are still awaiting approval, while the rest have been formally closed, Ansa reported. Importantly, the agreement omitted a provision setting out a plan for Italy possibly exiting the euro bloc.

Instead of the euro provision, the document only advocated revising certain provisions in some of the European Union’s founding treaties, like the Maastricht Treaty.

Di Maio and Salvini are planning a meeting tonight to take stock of the last remaining disagreements in the program contract.

Italian bond yields jumped on the news as investors worried about the impact of the euroskeptic government’s leadership – even though party leaders denied earlier reports that Five Star would petition the European Central Bank to forgive 250 billion euros of Italian debt.

The euro also climbed on the news.

END

A good one: Is the real target of Iran sanctions Europe:

(courtesy Mish Shedlock/Mishtalk)

What’s Trump’s Real Trade Target: China Or Europe?

Authored by Mike Shedlock via MishTalk,

Do Trump’s endless trade volleys and sanctions have a clear target? Consider the possibility it’s the EU, not China.

Out of the blue, and with open rebuke form Democrats and Republicans,Trump reversed sanctions on China.

This was peculiar in and of itself, but his rationale raised more than a few eyebrows.

All of a sudden. Trump is concerned about “too many jobs lost in China”!

One can rationalize this is about Rotting Cherries, Spoiled Pork, and Car Inspections, but could it be there is more than meets the eye?

Iran Sanctions

Bloomberg reports Iran’s Door to the West Is Slamming Shut, and That Leaves China.

China is “already the winner,’’ said Dina Esfandiary, a fellow at the Centre for Science and Security Studies at King’s College in London, and co-author of the forthcoming ‘Triple Axis: Iran’s Relations With Russia and China’.

Turning East

EU Disharmony

CNBC says Trump’s Iran sanctions will aggravate the French-German discord on EU reforms.

5,000 German Corporations Hit By Trump Policy

One can rationalize this all away, but a translation from Spiegel Online underscores the key idea: Trump’s Policies Hit Nearly 5,000 German Companies.

Sanctions on Europe. Not Iran

Eurointelligence fills in some blanks.

Over the last three days it gradually dawned on the Germans that Donald Trump’s sanctions against Iran are in reality sanctions against Europe, and Germany in particular. The combination of third-party sanctions and changes to US tax laws has led to a situation where a large number of German companies now have an overwhelming interest to shift their business to the US, according to Spiegel Online.

FAZ notes that the helplessness of the German government is becoming increasingly evident, both economically and politically. The paper notes that even Angela Merkel is casting doubt on whether it is possible to maintain the Iran nuclear agreement after Trump’s decision.

Goodbye Europe

The cover of Der Spiegel this week this week, “Goodbye Europe” says it all.

Politico reports Europe’s ultimate Trump strategy: Appeasement.

Intent or Collateral Damage?

China responded to Trump tariffs by inspecting fruit to the point it rotted, pork until it spoiled, and Ford autos in such a manner that it required disassembly. Trump changed tactics.

It’s easy to make a case that the only thing Trump understands is force.

It’s also possible Trump is totally clueless and he is ruled only by spur of the moment decisions.

Finally, one can make a case that Trump’s true intent all along was to bust up EU solidarity and everything else is just a sideshow.

It’s easy to make that case even though Occam’s Razor suggests the alternatives are more likely.

Regardless, the EU’s roll over and play dead response to the sanctions is a sure loser for the EU and a sure winner for China.

Ball in Play

EU, the ball is in your court.

Last week Merkel stated it’s time for “Europe to take its destiny into its own hands.”

OK – Do it!

Staring at the ball as it rolls over you does not win points.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

IRAQ

A good look at who might lead Iraq and it is the populist Sadr who seems to be in the lead. The USA led coalition is far behind and so is the Iranian faction

(courtesy John Rubino/DollarCollapse..com)

Iraq Gets A Modern Political System: Low Turnout, Surging Populism, Potential Chaos

Authored by John Rubino via DollarCollapse.com,

Remember when Iraqis were first able to vote in national elections back in the 2000s, and huge numbers braved terrorist threats to go to the polls and celebrated afterwards? Their enthusiasm contrasted sharply with US elections where turnout was low and the voters that did show up tended towards ambivalence.

But fast forward a decade and Iraqis seem to have figured out that in the modern world of hyper-indebtedness and overpopulation no politician can keep their promises and life might therefore not get better after all. So why bother voting – and if you do vote why not swing for the fences with out-of-the mainstream candidates willing to take on the establishment? From today’s Wall Street Journal:

Firebrand Cleric Moqtada al-Sadr Gains in Iraqi Elections

MOSUL, Iraq—Iraqi voters appeared to deal a blow to Prime Minister Haider al-Abadi in this weekend’s election, giving surprisingly strong support to an unlikely coalition of communists and followers of populist cleric Moqtada al-Sadr in partial preliminary results.

Mr. Sadr, a firebrand whose militias once fought openly with U.S. forces and were implicated in sectarian bloodshed, has since entered the political mainstream. His new alliance with Iraq’s communists did well in a contest in which many Iraqis stayed home and those who did vote said they wanted to shake up a political status quo known for corruption and bad governance.

With preliminary results counted in 10 of Iraq’s 18 provinces, Mr. Sadr’s coalition came in first in four of them, including the country’s most populous city, Baghdad, and was near the top in all of them, according to preliminary results.

Mr. Abadi’s coalition didn’t come first in any of the provinces for which results were released, suggesting his chances of re-election may be slim even after his government led the country to victory over Islamic State last year. Neither Mr. Abadi’s coalition, seen as being implicitly supported by the U.S., nor Iran-backed groups were as successful as Mr. Sadr.

What does this mean for Iraq?

Probably the same thing recent elections mean for Italy, where a coalition of left and right-wing populists just formed a government with – to put it mildly – unpredictable consequences. Or for the US where a populist government is tearing up treaties and throwing allies into confusion (see US threatens European companies with sanctions after Iran deal pull-out). Or for that matter Argentina, where an ostensibly rock-solid business friendly government has failed to stabilize the financial system and is now begging the IMF for help to avert a currency collapse.

Political/financial turmoil is simply the new normal in a world where debt has been allowed to explode, leaving only unpalatable choices. Picture a family that has maxed out a series of credit cards, car loans, student loans and mortgages to the point that interest eats the income that used to go to gasoline, food, and private school tuition for the kids. Then imagine the dinner table conversation as everyone gets the news that their necessities are being cut to cover the costs of the parents’ previous bad decisions.

Now expand that emotional atmosphere to entire countries and you have modern political life.

This wasn’t inevitable. It’s the more-or-less direct result of the US decision to break the final link between the dollar – and by implication all the world’s major currencies — and gold in 1971.

A society with a currency on this trajectory is absolutely guaranteed to descend into chaos eventually.

END

IRAN

Iran’s currency, the rial is now past 85,000 per USA dollar as inflation is tearing this country apart. Citizens have spent over $2.5 billion dollars trying to get cash out of the country. Iran officials are trying to arrange curbs against crypto use and other black market operations

(courtesy Michael Kern/SafeHaven.com_

Iran Looks To Bitcoin As Rial Tumbles

Authored by Michael Kern via SafeHaven.com,

Amid sanctions fears, Iranians have reportedly spent over $2.5 billion on cryptocurrencies to get their cash out of the country in a new form of digital capital flight.

The Iranian version aired on state-run media was buried at the bottom on a long discourse on cryptocurrencies, and downplayed as to its significance, but it comes as the Iranian rial plunges to new lows against the U.S. dollar, the climax of which has been Trump’s formal announcement of a withdrawal from the nuclear deal.

“No virtual national currency has been designed in the country at the present and based on the existing data few people in Iran are cryptocurrencies’ customer and more than 2.5 billion dollars has been sent out of the country for buying digital currencies, added point most of the digital currency activists enter this arena because of the huge benefits and speculation” Chairman of the Economic Commission of the Parliament Mohammad Reza Pourebrahimi said.

Shortly after Trump’s announcement last week, the rial nose-dived to 85,000 to 1 US dollar, down from 57,500 rials to 1 US dollar at the end of April, and 42,890 at the end of last year.

Since April, Iran has been attempting to get in front of a sell-off, first unifying official and free-market exchange rates and freezing the rate at 42,000, while banning all other trading in the currency, under threat of arrest.

The rial is expected to dive further on news Tuesday that the U.S. has sanctioned Iran’s central bank head.

Late last week, the U.S. levied sanctions on a financing network, accusing the Iranian central bank of helping funnel U.S. dollars to its Quds Force elite military unit, which is on a U.S. blacklist.

This was followed by another move on Tuesday that saw terror sanctions slapped on the head of the Iranian central bank, Valiollah Seif, whom Washington has accused of secretly funneling millions of dollars through an Iraqi bank to help Hezbollah. The sanctions also include bank senior official Ali Tarzali. Both have been listed as “specially designated global terrorists”.

At the same time, Iranian government moves to head off a currency crisis could lead to further capital flight via cryptocurrencies.

On Monday, the Central Bank issued a new directive setting stricter limits on the amount of foreign cash travelers can take with them out of the country. Travelers can leave Iran by air now with only $5,980 (5,000 euros, or the equivalent in any foreign currency). The new amount halves the previous amount allowed. Leaving by land, rail or sea has a limit of $2,392 per person.

Also in April, the central bank banned the country’s banks from offering services to cryptocurrency firms or from dealing in cryptocurrencies domestically. This has led to a flourishing business for cross-border crypto deals with Iranian citizens desperate to get their money out.

While the initial justification for the ban was to thwart money-laundering and terrorism financing, the Iranian Financial Tribune quoted an Iranian official as saying that the move was intended to stop capital flight.

“The ban on trade of cryptocurrencies such as Bitcoin by CBI, as the financial and currency regulator of the country, is to prevent the flight of foreign currency under the current circumstances of the country.”

Now that the original ban has backfired and possibly led to increased capital flight, the government seems to be wavering, suggesting that the policy might not be set in stone and a new regulatory framework should be in place by the third quarter of this year.

In the meantime, capital flight will be hard to stop, especially considering that all of the government’s recent actions undo their liberal economic policy making of the past years.

end

6 .GLOBAL ISSUES

7. OIL ISSUES

Oil and gasoline rise after a larger than expected crude drawdown. We continue with record production out of the USA

(courtesy zerohedge)

WTI/RBOB Bounce After Crude Draw Despite New Record Production

WTI/RBOB prices traded lower since last night’s API-reported surprise crude draw but a 1.404mm draw (and bid gasoline draw) reported by DOE prompted a buying knee-jerk in prices. Production continued to rise to a new record high.

Ahead of the data, Bloomberg explained that the number to watch today will be gasoline exports, which can typically drift lower this time of year as more product goes to domestic customers in advance of the summer driving season. If growing U.S. production and high refinery runs churning out gasoline are met with clues that domestic demand isn’t matching up to expectations, the crude price that has a lot of geopolitics baked in may falter still.

API

Crude +4.845mm (-1.75mm exp)
Cushing +62k (+550k exp)
Gasoline -3.369mm
Distillates -768k

DOE

Crude -1.404mm (-2.00mm exp.. BBG users +1.13mm exp)
Cushing +53k (+550k exp)
Gasoline -3.79mm
Distillates -92k

DOE reports a draw – smaller than expected, but dramatically different from API’s surprise build. Gasoline stocks continued to slide but distillates draw seems to have stalled…

U.S. Fuel demand fell 1.12% in past four weeks, but gasoline exports jumped last week…

Dramatically different from the seasonal norms…

Crude production continues to surge – up 20k b/d to a new record high last week – but there have been signs out of the Permian basin that pipelines are full and rail shipments aren’t making up the difference in getting barrels out of West Texas to markets.

Overnight gains from the kneejerk lower after API faded this morning ahead of DOE but bounced on the surprise crude draw…

However, as Bloomberg notes, despite oil’s surge to near $80 a barrel, some corners of the market that reflect the trading of actual barrels are weakening fast.

The nearest Brent time-spread weakened its backwardation to as little as 6 cents on Wednesday, compared with about 60 cents a month ago. That’s in part because for the coming months cheaper U.S. crude is set to flood across the Atlantic, while demand for Brent grades from traditional buyers in Asia has been muted, according to Citigroup Inc. analyst Chris Main.

end

8. EMERGING MARKET

ARGENTINA

end

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

Euro/USA 1.1791 DOWN .0029/ 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 MIXED

USA/JAPAN YEN 110.14 DOWN 0.153 (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/

GBP/USA 1.3468 DOWN 0.0031 (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.2858 UP .0014 (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 WEDNESDAY morning in Europe, the Euro FELL by 43 basis points, trading now ABOVE the important 1.08 level RISING to 1.1889; / Last night Shanghai composite CLOSED DOWN 22.55 POINTS OR 0.71% / Hang Sang CLOSED DOWN 41.83 POINTS OR 0.13% /AUSTRALIA CLOSED UP .15% / EUROPEAN BOURSES MIXED/ RED

The NIKKEI: this WEDNESDAY morning CLOSED DOWN 100.79 OR 0.44%

Trading from Europe and Asia

1/EUROPE OPENED MIXED/RED

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 41.83 POINTS OR 0.13% / SHANGHAI CLOSED DOWN 22.55 POINTS OR 0.71% /

Australia BOURSE CLOSED UP .15%

Nikkei (Japan) CLOSED DOWN 100.79 POINTS OR 0.44%

INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1290.55

silver:$16.25

Early WEDNESDAY morning USA 10 year bond yield: 3.07% !!! UP 0 IN POINTS from TUESDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

The 30 yr bond yield 3.19 UP 0 IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early MONDAY morning: 93.52 UP 30 CENT(S) from YESTERDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 1.807% UP 7 in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.0.53% DOWN 7/10 in basis points yield from TUESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.412% UP 6 IN basis point yield from TUESDAY/

ITALIAN 10 YR BOND YIELD: 2.117 UP 17 POINTS in basis point yield from TUESDAY/

the Italian 10 yr bond yield is trading 71 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS TO +.606% IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1785 DOWN .0035(Euro DOWN 35 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.167 DOWN 0.125 Yen UP 13 basis points/

Great Britain/USA 1.3476 DOWN .0023( POUND DOWN 23 BASIS POINTS)

USA/Canada 1.2825 DOWN .0047 Canadian dollar UP 47 Basis points AS OIL ROSE TO $71.01

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This afternoon, the Euro was DOWN 35 to trade at 1.1785

The Yen ROSE to 110.167 for a GAIN of 13 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND FELL BY 23 basis points, trading at 1.3476/

The Canadian dollar ROSE by 47 basis points to 1.2825/ WITH WTI OIL FALLING TO : $71.01

The USA/Yuan closed AT 6.3715
the 10 yr Japanese bond yield closed at +.053% DOWN 7/10 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 1 IN basis points from TUESDAY at 3.0816% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.206 UP 1 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, 93.50 UP 28 CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED UP 12.00 POINTS OR 0.16%
German Dax :CLOSED DOWN 7.67 POINTS OR 0.06%
Paris Cac CLOSED UP 12.48 POINTS OR .23%
Spain IBEX CLOSED DOWN 50.20 POINTS OR 0.49%

Italian MIB: CLOSED UP 75.70 POINTS OR 0,31%

The Dow closed UP 62.52 POINTS OR 0.25%

NASDAQ closed UP 46.67 Points OR 0.63.% 4.00 PM EST

WTI Oil price; 71,01 1:00 pm;

Brent Oil: 78.20 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 61.69 DOWN 60/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 60 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.606% 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:$71.58

BRENT: $79.25

USA 10 YR BOND YIELD: 3.10% THIS RAPID RISE IN YIELD IS ALSO VERY DANGEROUS/RECESSION COMING/DERIVATIVES FRY!!

USA 30 YR BOND YIELD: 3.22%/DEADLY

EURO/USA DOLLAR CROSS: 1.1808 DOWN .0014 (DOWN 14 BASIS POINTS)

USA/JAPANESE YEN:110.39 UP 0.097 YEN DOWN 10 BASIS POINTS/ .

USA DOLLAR INDEX: 93.37 UP 15 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.3482 down 0.0024 (FROM YESTERDAY NIGHT down 24 POINTS)

Canadian dollar: 1.2789 DOWN 83 BASIS pts

German 10 yr bond yield at 5 pm: +0.606%

VOLATILITY INDEX: 13.42 CLOSED DOWN 1.21`

LIBOR 3 MONTH DURATION: 2.320% .

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

TRADING IN GRAPH FORM FOR THE DAY

SWAMP STORIES

Judge Amy Berman kills Manafort’s motion to dismiss. However we still have to hear from that all important judge Ellis

(courtesy zerohedge)

Washington Judge Kills Manafort’s Motion To Dismiss, Setting Stage For September Trial

A Washington judge on Tuesday refused to dismiss the charges pending against former Trump campaign executive Paul Manafort, partially dashing his hopes of walking away just as the investigation is entering what many expect will be its home stretch.

US District Judge Amy Berman Jackson rejected the dismissal motion filed by Manafort’s legal team on Tuesday.

Berman’s opinion should not be confused with that of another judge, just across the state line in Virginia, where a parallel suit is taking place. Recall that two weeks ago, Eastern District of Virginia Judge T.S. Ellis, a Reagan appointee, said Mueller shouldn’t have “unfettered power” to prosecute Manafort on charges that have nothing to do with Russia.

Ellis added that he’s concerned Mueller is only pursuing charges against Manafort to pressure him into turning on Trump. The Judge added that the charges brought against Manafort didn’t appear to stem from Mueller’s collusion probe. Instead, they resulted from an older investigation carried out by the Obama Justice Department that was eventually abandoned, Bloomberg reported.

Ellis also required Mueller’s prosecutors to turn over an unredacted version of the August 2, 2017 memo that Deputy AG Rod Rosenstein used to describe the criminal allegations Mueller’s team could investigate.

Yet Judge Berman Jackson said it was within Mueller’s mandate to investigate “any links” between Trump campaign people and Russia.

“It was logical and appropriate for investigators tasked with the investigation of ‘any links’ between the Russian government and individuals associated with the campaign to direct their attention to him,” Jackson wrote in her ruling.

Her decision will clear the way for Manafort to stand trial in September, absent some unexpected development out of Ellis and the Virginia Court.

Manafort is charged in Virginia with financial violations related to his lobbying work in Ukraine – work that occurred long before he joined the Trump campaign. Other charges are being heard in federal court.

As one Bloomberg editorial writer pointed out on Twitter, not one of the charges filed against Manafort has anything to do with collusion.

END

Congress is reviewing the 2017 GPS testimony on reports of a spy in the Trump campaign

Important..

(courtesy zerohedge)

Congress Reviewing 2017 Fusion GPS Testimony After Reports Of Spy In Trump’s Campaign

Congressional investigators are reviewing 2017 testimony by Fusion GPS founder Glenn Simpson, who said that “a human source from inside the Trump organization” had “decided to pick up the phone and report something” to the FBI.

Fusion GPS is a Democrat-linked opposition research firm which produced the infamous anti-Trump “Steele Dossier,” compiled from a series of memos provided by former MI6 spy Christopher Steele and paid for in part by the Clinton campaign.

Simpson told Congressional investigators on August 22 that Steele told him the FBI had corroborated parts of his dossier with “a human source from inside the Trump organization.”

As the Daily Caller‘s Chuck Ross notes, Fusion’s allies quickly began to backpedal from Simpson’s statement, telling news outlets that there was no mole…

“Instead, he was referring to George Papadopoulos, a Trump campaign adviser whose encounter with an Australian diplomat in May 2016 was reportedly the catalyst for the FBI’s counterintelligence investigation. The diplomat, Alexander Downer, reportedly claimed that Papadopoulos discussed Russian dirt on former Secretary of State Hillary Clinton.” –Daily Caller

That’s all out the window now…

In light of last week’s bombshell that the DOJ was forced to hand over intelligence to House Intel Committee Chair Devin Nunes which points to a mole within the Trump campaign, both House and Senate oversight panels are taking a fresh look at Simpson’s testimony about that “human source.”

In other words – did Steele tell Simpson about the FBI’s alleged mole in the Trump campaign?

Simpson’s lawyer said in a January letter to the Senate Judiciary Committee that his initial testimony was accurate.

Mr. Simpson stands by his testimony,” said Joshua Levy, Fusion’s attorney in the January 18 letter. Levy had been asked in a January 11 letter whether Simpson’s testimony about the whistleblower (and now potential mole) within the Trump campaign was a mischaracterization, as news reports claimed.

“Glenn Simpson said that in what was closed testimony. Then it became public. Now he’s confirmed that he was telling Congress the truth, which is probably a good idea,” California Rep. Devin Nunes said on “Fox & Friends” Tuesday. “We believe he was telling the truth. And what we’re trying to do is get the documents to figure out — did they actually have, what methods were used to open this counter intelligence investigation?”

“I think if the campaign was somehow set up, I think that would be a problem. Right? If they were somehow meetings that occurred and all of this was a setup,” Nunes said, adding. “Because we have yet to see any credible evidence or intelligence that led to the opening of this investigation.”

Last month Nunes revealed that after waiting eight months for the DOJ to turn over the “electronic communication” (EC) – the document which the FBI used to launch the original counterintelligence investigation against the Trump campaign, that no intelligence was shared with the U.S. from any of the members of the “Five Eyes” agreement – that being Canada, the UK, Australia, New Zealand and the USA.

“We are not supposed to spy on each other’s citizens, and it’s worked well,” he said. “And it continues to work well. And we know it’s working well because there was no intelligence that passed through the Five Eyes channels to our government. And that’s why we had to see that original communication.”

This is relevant because the FBI says that the Trump investigation was kicked off after Australian diplomat Alexander Downer told the FBI that Trump campaign associate George Papadopoulos drunkenly admitted in a London pub that the Russians had “dirt” on Hillary Clinton. The New York Times reported last December that “Australian officials passed the information about Mr. Papadopoulos to their American counterparts, according to four current and former American and foreign officials with direct knowledge of the Australians’ role.”

This was clearly not true according to the EC, which states that no intelligence passed through Five Eyes official channels.

To summarize: it appears that the counterintelligence investigation launched against Donald Trump and his team was not based on any type of official intelligence, as many have speculated over the past year, and that the FBI had a mole in the Trump campaign – which Christopher Steele knew about.

END

John Brennan was feeding President Obama totally unverified information from the Steel dossier and also he contradicted his 2017 testimony many times

(courtesy zerohedge)

Brennan Was Feeding Obama Unverified Info From Steele Dossier, Contradicting 2017 Testimony

Two former colleagues of ex-CIA Director John Brennan have contradicted his claim that the unverified “Steele Dossier” was not part of the US Intelligence Community Assessment (ICA) on Russian interference in the 2016 election, reports Paul Sperry of RealClear Investigations.

Central to the controversy is a statement by recently retired National Security Agency Director Michael Rogers, who stated in a classified letter to Congress that the anti-Trump memos which made up the dossier did factor in to the IC assessment – which was reinforced in a CNN interview by James Clapper, former Director of National Intelligence who said that the assessment was based on “some of the substantive content of the dossier,” and that the IC was “able to corroborate” certain dossier allegations.

In a March 5, 2018, letter to House Intelligence Committee Chairman Devin Nunes, Adm. Rogers informed the committee that a two-page summary of the dossier — described as “the Christopher Steele information” — was “added” as an “appendix to the ICA draft,” and that consideration of that appendix was “part of the overall ICA review/approval process.”

His skepticism of the dossier may explain why the NSA parted company with other intelligence agencies and cast doubt on one of its crucial conclusions: that Vladimir Putin personally ordered a cyberattack on Hillary Clinton’s campaign to help Donald Trump win the White House. –RealClear Investigations

What’s more, Brennan was feeding some of the dossier material to President Obama and passing it off as credible, reports Sperry.

“Brennan put some of the dossier material into the PDB [presidential daily briefing] for Obama and described it as coming from a ‘credible source,’ which is how they viewed Steele,” said the source familiar with the House investigation. “But they never corroborated his sources.” –RCI

View image on Twitter

Undercover Huber@JohnWHuber

I’ll just leave this here

3/5/18: Retiring NSA Director Mike Rogers sends classified letter to HPSCI Chair @DevinNunes: https://www.realclearinvestigations.com/articles/2018/05/14/2_colleagues_contradict_brennan_on_use_of_dossier.html …

4/19/18: @DevinNunes reveals publicly the DJT-Russia investigation wasn’t started with “official” intel: https://twitter.com/JohnWHuber/status/987490744104636416 …

Undercover Huber@JohnWHuber

BOMBSHELL from HPSCI chairman @DevinNunes, who says the original FBI investigation into the Trump campaign was *started* using “phony” “Five Eyes” information that “DID NOT EXIST”, a “lie” from the beginning

(Of note, some suspect Rogers warned Trump that he was being spied on shortly after the 2016 US election. You can read that analysis here.)

Brennan testified in May 2017 to the House Intelligence Committee that the Steele Dossier was “not in any way used as the basis for the intelligence community’s assessment” of Russia’s involvement in the 2016 election – a claim he has repeated several times, including a February appearance on Meet the Press.

Rogers said during testimony that while he was convinced that Russia wanted to harm Clinton politically, he wasn’t of the opinion that they wanted to help Trump, as his CIA and FBI counterparts claimed. The assessment “didn’t have the same level of sourcing and the same level of multiple sources,” Rogers said.

The dossier, which is made up of 16 opposition research-style memos on Trump underwritten by the Democratic National Committee and Clinton’s own campaign, is based mostly on uncorroborated third-hand sources. Still, the ICA has been viewed by much of the Washington establishment as the unimpeachable consensus of the U.S. intelligence community. Its conclusions that “Vladimir Putin ordered” the hacking and leaking of Clinton campaign emails “to help Trump’s chances of victory” have driven the “Russia collusion” narrative and subsequent investigations besieging the Trump presidency. –RCI

That said, the ICA did not in fact reflect the Intelligence Community’s concensus.

Clapper broke with tradition and decided not to put the assessment out to all 17 U.S. intelligence agencies for review. Instead, he limited input to a couple dozen chosen analysts from just three agencies — the CIA, NSA and FBI. Agencies with relevant expertise on Russia, such as the Department of Homeland Security, Defense Intelligence Agency and the State Department’s intelligence bureau, were excluded from the process. –RCI

On other words, the assessment of Russia’s interference was shielded from government experts who might be able to poke holes in the (literal) conspiracy theory. The House Intelligence Committee found that the ICA did not appropriately describe the “quality and credibility of underlying sources,” and that it was “not independent of political considerations.”

Furthermore, the report is missing any dissenting views whatsoever, as would normally be included.

“Traditionally, controversial intelligence community assessments like this include dissenting views and the views of an outside review group,” said Fred Fleitz, who Real Clear Investigations reports worked as a CIA analyst for 19 years and helped draft national intelligence estimates at Langley. “It also should have been thoroughly vetted with all relevant IC agencies,” he added. “Why were DHS and DIA excluded?”

Fleitz suggests that the Obama administration limited the number of players involved in the analysis to skew the results. He believes the process was “manipulated” to reach a “predetermined political conclusion” that the incoming Republican president was compromised by the Russians.

“I’ve never viewed the ICA as credible,” the CIA veteran added.

A source close to the House investigation said Brennan himself selected the CIA and FBI analysts who worked on the ICA, and that they included former FBI counterespionage chief Peter Strzok.

“Strzok was the intermediary between Brennan and [former FBI Director James] Comey, and he was one of the authors of the ICA,” according to the source. -RCI

Strzok, of course, was reassigned to another department within the FBI after anti-Trump and pro-Clinton text messages were uncovered by DOJ Inspector General Michael Horowitz. Strzok remains under investigation by the IG, while his FBI “lovebird” Lisa Page resigned (was fired) in early May.

Strzok spearheaded the FBI’s early investigation into Russian collusion with the Trump campaign in 2016 – until former FBI Director James Comey was fired, and his infamous “memos” suggesting obstruction kicked off special counsel Robert Mueller’s investigation.

Brennan swears the dossier was not used “in any way” as a basis for the ICA – explaining that he only “heard snippets” from the press in the summer of 2016.

“Brennan’s claims are impossible to believe,” Fleitz asserted.

“Brennan was pushing the Trump collusion line in mid-2016 and claimed to start the FBI collusion investigation in August 2016,” he said. “It’s impossible to believe Brennan was pushing for this investigation without having read the dossier.”

end

Trump repaid Cohen the 130,000 dollars in 2017

(courtesy zerohedge)

Trump 2018 Financial Report Released, Shows Cohen Payment

President Trump’s latest annual financial disclosure form released on Wednesday revealed something that was not disclosed on Trump’s previous financial disclosure form: the President’s reimbursement of his then-attorney Michael Cohen.

Trump’s financial disclosure, released by the Office of Government Ethics (OGE), did not list the specific reason for the payment, but Cohen has said he paid porn star Stormy Daniels $130,000 in exchange for her silence about her accusations she had a sexual encounter with Trump.

“In the interest of transparency, while not required to be disclosed as “reportable liabilities” on Part 8, in 2016 expenses were incurred by one of Donald J. Trump’s attorneys, Michael Cohen. Mr Cohen sought reimbursement of those expenses and Mr. Trump fully reimbursed Mr. Cohen in 2017. The category of the value would be $100,001 – $250,000 and the interest rate would be zero.”

As The Hill notes, the OGE suggested the payment should have been included on the disclosure form Trump filed last year, which showed his assets and liabilities from the previous 16 months.

“OGE has concluded that the information related to the payment made by Mr. Cohen is required to be reported and that the information provided meets the disclosure requirement for a reportable liability.”

This means that while the Ethics office deemed that the payment to Cohen, made in 2016, should have been reported last year, Trump’s representatives disagreed, writing on the form they were not required to disclose the payment but were doing so “in the interest of transparency.”

The form was filed late on Tuesday, just ahead of the deadline to submit it. OGE reviewed the document and made it public Wednesday afternoon.

The issue of the reimbursement reemerged after Rudy Giuliani, Trump’s newest personal attorney, revealed the payment in a shock interview with Fox News’ Sean Hannity earlier this month. Trump seemed to confirm the claim on Twitter the following morning. But then Trump said Giuliani was new to the team and would “get his facts straight.” Weeks earlier, Mr. Trump had said he was unaware Cohen paid adult film star Stormy Daniels $130,000 shortly before the election.

The disclosure form details Mr. Trump’s financial interests, and is 92 pages long, due to Mr. Trump’s vast business empire. In addition to the Cohen payment, the disclosed that Trump’s golf clubs also had substantial revenue, with CBS reporting that his golf club in Jupiter, Florida had $14 million in revenue. Bedminster brought in $15 million and Mar-a-Lago, $25 million (down from $37 million the prior year.) Turnberry, $20 million, among others. His Doral club, as was the case last year, dwarfed the rest of his golf properties, with revenues of almost $75 million.

The Trump Hotel in Washington, D.C., which opened during his presidential campaign in 2016, saw $40 million in revenues.

He is also still picking up a Screen Actors Guild pension of nearly $65,000 from his years as a reality TV host.

First Lady Melania Trump made money, too — she earned royalties from Getty Images between $100,000 and $1 million for its use of photos of her.

Trump listed liabilities of at least $250 million, with Deutsche Bank as his biggest creditor. Trump also owes Ladder Capital at least $110 million.

Full filing below (pdf link)

https://www.scribd.com/embeds/379422344/content?start_page=1&view_mode=scroll&access_key=key-631MEGGwa7TTScmbbTWr&show_recommendations=true

end

HARVEY

NUMBER OF NOTICES FILED TODAY FOR MAY CONTRACT:6 NOTICE(S) FOR 600 OZ.

95 NOTICE(S) FILED TODAY FOR

475,000 OZ/

Bitcoin: BID $8327/OFFER $8427: DOWN $92(morning)

Bitcoin: BID/ $8237/offer $8337: DOWN $182 (CLOSING/5 PM)

First Shanghai gold fix gold: 10 pm est: 1300.30

Second gold fix early this morning: 1303.20

3. ASIAN AFFAIRS

/NORTH KOREA/SOUTH KOREA

b) REPORT ON JAPAN

3 c CHINA

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7. OIL ISSUES

8. EMERGING MARKET

9. PHYSICAL MARKETS

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

Let us head over to the comex:

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY: 206,561 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY: 536,892 contracts

INITIAL standings for MAY/GOLD

And now for silver

AND NOW THE APRIL DELIVERY MONTH

MAY INITIAL standings/SILVER

Inventory 321.474 million oz

Major gold/silver trading /commentaries for WEDNESDAY

Andrew Maguire

Craig Hemke at Sprott Money: The gold spec washout begins

China’s holdings of U.S. Treasuries rise to a 5-month high

LBMA suspends Russian precious metals refinery from ‘good delivery’ lists

Canadian miners are like cockroaches, man, you can’t kill us

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

Easing Bond Rout Stabilizes Global Markets, But

Surging Dollar Keeps Traders On Edge

3. ASIAN AFFAIRS

3 a NORTH KOREA/USA

North Korea Threatens To Abandon Trump Summit, Furious Over Bolton Comments

3 b JAPAN AFFAIRS

c) REPORT ON CHINA/HONG KONG

China Unleashes “Island Encirclement” War Drills Over Taiwan

Peter Navarro “Who Behaved Erratically And Unprofessionally”, To Be Excluded From China Talks

4. EUROPEAN AFFAIRS

Five Star And Lega Ask ECB To Cancel €250 Billion In

Debt!

Details

Addendum

Addendum Two

M5S e Lega confermano la bozza e fanno marcia indietro sull’euro

Italian Bonds Tumble Amid Political Chaos, Debt

Writedown Fears

Italian Bond Futures, Euro Climb As Italian Coalition Agreement Reached

What’s Trump’s Real Trade Target: China Or Europe?

Iran Sanctions

Turning East

EU Disharmony

Sanctions on Europe. Not Iran

Goodbye Europe

Intent or Collateral Damage?

Ball in Play

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Iraq Gets A Modern Political System: Low Turnout, Surging Populism, Potential Chaos

Firebrand Cleric Moqtada al-Sadr Gains in Iraqi Elections

Iran Looks To Bitcoin As Rial Tumbles

6 .GLOBAL ISSUES

7. OIL ISSUES

WTI/RBOB Bounce After Crude Draw Despite New Record Production

8. EMERGING MARKET

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

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

Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:

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

TRADING IN GRAPH FORM FOR THE DAY

Dollar Drops, Yields Pop As Small Caps Squeeze To New Record High

Mortgage Refi Applications Plunge To 10 Year Lows As

Fed Hikes Rates

Housing Starts, Permits Tumble In April

Industrial Production Growth Stabilizes At 7-Year

Highs